Document:

exv10w19

 

Exhibit 10.19

 

KOMAG, INCORPORATED,

AS ISSUER

AND

U.S. BANK NATIONAL ASSOCIATION,

AS TRUSTEE

2.125% CONVERTIBLE SUBORDINATED NOTES DUE 2014

INDENTURE

DATED AS OF MARCH 28, 2007

 

 

 

CROSS-REFERENCE TABLE*

	 	 	 
	TIA Indenture Section	 	Section
	Section 310(a)(1)
	 	8.09
	(a)(2)
	 	8.09
	(a)(3)
	 	N.A.**
	(a)(4)
	 	N.A.
	(a)(5)
	 	8.09
	(b)
	 	8.09
	(c)
	 	N.A.
	Section 311(a)
	 	8.13
	(b)
	 	8.13
	(c)
	 	N.A.
	Section 312(a)
	 	2.05
	(b)
	 	12.03
	(c)
	 	12.03
	Section 313(a)
	 	8.15
	(b)(1)
	 	N.A.
	(b)(2)
	 	8.15
	(c)
	 	8.15; 12.02
	(d)
	 	8.15
	Section 314(a)
	 	5.02; 5.03
	(b)
	 	N.A.
	(c)(1)
	 	12.04(a)
	(c)(2)
	 	12.04(a)
	(c)(3)
	 	N.A.
	(d)
	 	N.A.
	(e)
	 	12.04(b)
	(f)
	 	N.A.
	Section 315(a)
	 	8.01(a); 8.01(b)(i)
	(b)
	 	8.14; 12.02
	(c)
	 	8.01(a)
	(d)
	 	8.01(b)
	(e)
	 	7.11
	Section 316(a) (last sentence)
	 	2.09
	(a)(1)(A)
	 	7.05
	(a)(1)(B)
	 	Section 7.04
	(a)(2)
	 	N.A.
	(b)
	 	7.07
	(c)
	 	12.05
	Section 317(a)(1)
	 	Section 7.08; 12.01
	(a)(2)
	 	Section 7.09; 12.01
	(b)
	 	Section 2.04; 12.01
	Section 318(a)
	 	12.01
	(b)
	 	N.A.
	(c)
	 	Section 12.01

 

			
	*	 	Cross-Reference Table shall not, for any purpose, be deemed a part of this Indenture.
	 
	**	 	N.A. means Not Applicable.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	 
	 	 	 	 
	Section 1.01. Definitions.
	 	 	1	 
	Section 1.02. Trust Indenture Act Provisions.
	 	 	8	 
	Section 1.03. Rules of Construction.
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 2 THE SECURITIES
	 	 	10	 
	 
	 	 	 	 
	Section 2.01. Form and Dating.
	 	 	10	 
	Section 2.02. Execution and Authentication.
	 	 	11	 
	Section 2.03. Registrar, Paying Agent and Conversion Agent.
	 	 	11	 
	Section 2.04. Paying Agent to Hold Money and Securities in Trust.
	 	 	12	 
	Section 2.05. Securityholder Lists.
	 	 	12	 
	Section 2.06. Transfer and Exchange.
	 	 	12	 
	Section 2.07. Replacement Securities.
	 	 	13	 
	Section 2.08. Outstanding Securities.
	 	 	14	 
	Section 2.09. Treasury Securities.
	 	 	14	 
	Section 2.10. Temporary Securities.
	 	 	15	 
	Section 2.11. Cancellation.
	 	 	15	 
	Section 2.12. Legend; Additional Transfer and Exchange Requirements.
	 	 	15	 
	Section 2.13. CUSIP Numbers.
	 	 	20	 
	Section 2.14. Ranking.
	 	 	21	 
	Section 2.15. Persons Deemed Owners.
	 	 	21	 
	Section 2.16. Defaulted Interest.
	 	 	21	 
	 
	 	 	 	 
	ARTICLE 3 REPURCHASE OF SECURITIES AT OPTION OF HOLDERS
	 	 	21	 
	 
	 	 	 	 
	Section 3.01. Purchase of Securities at Option of the Holder upon a Fundamental Change.
	 	 	21	 
	Section 3.02. Effect of Fundamental Change Purchase Notice.
	 	 	25	 
	Section 3.03. Deposit of Fundamental Change Purchase Price.
	 	 	26	 
	Section 3.04. Securities Purchased in Part.
	 	 	26	 
	Section 3.05. Repayment to the Company.
	 	 	26	 
	Section 3.06. Compliance with Securities Laws upon Purchase of Securities.
	 	 	26	 
	 
	 	 	 	 
	ARTICLE 4 CONVERSION
	 	 	27	 
	 
	 	 	 	 
	Section 4.02 Conversion Rate.
	 	 	27	 
	Section 4.03. Conversion Procedure.
	 	 	28	 
	Section 4.04. Taxes on Conversion.
	 	 	29	 
	Section 4.05. Company to Provide Stock.
	 	 	29	 
	Section 4.06. Adjustment of Conversion Rate.
	 	 	29	 
	Section 4.07. No Adjustment.
	 	 	36	 
	Section 4.08. Stockholder Rights Plans.
	 	 	36	 
	Section 4.09. Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege.
	 	 	36	 
	Section 4.10. Other Adjustments.
	 	 	37	 
	Section 4.11. Notice of Adjustment.
	 	 	37	 
	Section 4.12. Trustee’s Disclaimer.
	 	 	37	 
	Section 4.13. Settlement Upon Conversion.
	 	 	38	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 5 COVENANTS
	 	 	38	 
	 
	 	 	 	 
	Section 5.01. Payment of Securities.
	 	 	38	 
	Section 5.02. Reports and Certain Information.
	 	 	39	 
	Section 5.03. Compliance Certificates.
	 	 	39	 
	Section 5.04. Maintenance of Corporate Existence.
	 	 	39	 
	Section 5.05. Stay, Extension and Usury Laws.
	 	 	39	 
	Section 5.06. Maintenance of Office or Agency of the Trustee, Registrar, Paying
Agent and Conversion Agent.
	 	 	40	 
	Section 5.07. Notice of Default.
	 	 	40	 
	Section 5.08. Additional Interest Notice.
	 	 	40	 
	 
	 	 	 	 
	ARTICLE 6 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	40	 
	 
	 	 	 	 
	Section 6.01. Company May Consolidate, etc., Only on Certain Terms.
	 	 	40	 
	Section 6.02. Successor Substituted.
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 7 DEFAULT AND REMEDIES
	 	 	41	 
	 
	 	 	 	 
	Section 7.01. Events of Default.
	 	 	41	 
	Section 7.02. Acceleration.
	 	 	42	 
	Section 7.03. Other Remedies.
	 	 	43	 
	Section 7.04. Waiver of Defaults and Events of Default.
	 	 	43	 
	Section 7.05. Control by Majority.
	 	 	43	 
	Section 7.06. Limitations on Suits.
	 	 	43	 
	Section 7.07. Rights of Holders to Receive Payment and to Convert.
	 	 	44	 
	Section 7.08. Collection Suit by Trustee.
	 	 	44	 
	Section 7.09. Trustee May File Proofs of Claim.
	 	 	44	 
	Section 7.10. Priorities.
	 	 	44	 
	Section 7.11. Undertaking for Costs.
	 	 	45	 
	Section 7.12. Delay or Omission Not Waiver.
	 	 	45	 
	 
	 	 	 	 
	ARTICLE 8 TRUSTEE
	 	 	45	 
	 
	 	 	 	 
	Section 8.01. Certain Duties and Responsibilities of Trustee.
	 	 	45	 
	Section 8.02. Certain Rights of Trustee.
	 	 	46	 
	Section 8.03. Trustee Not Responsible for Recitals or Issuance or Securities.
	 	 	48	 
	Section 8.04. May Hold Securities.
	 	 	48	 
	Section 8.05. Moneys Held in Trust.
	 	 	48	 
	Section 8.06. Compensation and Reimbursement.
	 	 	48	 
	Section 8.07. Reliance on Officers’ Certificate.
	 	 	49	 
	Section 8.08. Disqualification: Conflicting Interests.
	 	 	49	 
	Section 8.09. Corporate Trustee Required; Eligibility.
	 	 	49	 
	Section 8.10. Resignation and Removal; Appointment of Successor.
	 	 	49	 
	Section 8.11. Acceptance of Appointment By Successor.
	 	 	50	 
	Section 8.12. Merger, Conversion, Consolidation or Succession to Business.
	 	 	51	 
	Section 8.13. Preferential Collection of Claims Against the Company.
	 	 	51	 
	Section 8.14. Notice of Defaults.
	 	 	51	 
	Section 8.15. Reports by Trustee.
	 	 	51	 
	Section 8.16. Preferential Collection of Claims.
	 	 	52	 
	 
	 	 	 	 
	ARTICLE 9 SUBORDINATION
	 	 	52	 
	 
	 	 	 	 
	Section 9.01. Agreement to Subordinate.
	 	 	52	 
	Section 9.02. Liquidation, Dissolution, Bankruptcy.
	 	 	52	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Section 9.03. Default on Senior Debt and/or Designated Senior Debt.
	 	 	52	 
	Section 9.04. Acceleration of Securities.
	 	 	53	 
	Section 9.05. When Distribution Must Be Paid Over.
	 	 	53	 
	Section 9.06. Notice by Company.
	 	 	54	 
	Section 9.07. Subrogation.
	 	 	54	 
	Section 9.08. Relative Rights.
	 	 	54	 
	Section 9.09. Subordination May Not Be Impaired by Company.
	 	 	54	 
	Section 9.10. Distribution or Notice to Representative.
	 	 	54	 
	Section 9.11. Rights of Trustee and Paying Agent.
	 	 	55	 
	Section 9.12. Authorization to Effect Subordination.
	 	 	55	 
	Section 9.13. Article Applicable to Paying Agents.
	 	 	55	 
	Section 9.14. Senior Debt Entitled to Rely.
	 	 	55	 
	Section 9.15. Permitted Payments.
	 	 	55	 
	Section 9.16. No Waiver of Subordination Provisions.
	 	 	55	 
	Section 9.17. Certain Conversions Deemed Payment.
	 	 	56	 
	 
	 	 	 	 
	ARTICLE 10 AMENDMENTS, SUPPLEMENTS AND WAIVERS
	 	 	56	 
	 
	 	 	 	 
	Section 10.01. Without Consent of Holders.
	 	 	56	 
	Section 10.02. With Consent of Holders.
	 	 	57	 
	Section 10.03. Compliance with Trust Indenture Act.
	 	 	58	 
	Section 10.04. Revocation and Effect of Consents.
	 	 	58	 
	Section 10.05. Notation on or Exchange of Securities.
	 	 	58	 
	Section 10.06. Trustee to Sign Amendments, Etc.
	 	 	58	 
	Section 10.07. Effect of Supplemental Indentures.
	 	 	59	 
	 
	 	 	 	 
	ARTICLE 11 SATISFACTION AND DISCHARGE
	 	 	59	 
	 
	 	 	 	 
	Section 11.01. Satisfaction and Discharge of the Indenture.
	 	 	59	 
	Section 11.02. Repayment to the Company.
	 	 	59	 
	 
	 	 	 	 
	ARTICLE 12 MISCELLANEOUS
	 	 	60	 
	 
	 	 	 	 
	Section 12.01. Trust Indenture Act Controls.
	 	 	60	 
	Section 12.02. Notices.
	 	 	60	 
	Section 12.03. Communications by Holders with Other Holders.
	 	 	60	 
	Section 12.04. Certificate and Opinion as to Conditions Precedent.
	 	 	61	 
	Section 12.05. Record Date for Vote or Consent of Securityholders.
	 	 	61	 
	Section 12.06. Rules by Trustee, Paying Agent, Registrar and Conversion Agent.
	 	 	61	 
	Section 12.07. Legal Holidays.
	 	 	61	 
	Section 12.08. Governing Law; Jury Trial Waiver.
	 	 	62	 
	Section 12.09. No Adverse Interpretation of Other Agreements.
	 	 	62	 
	Section 12.10. No Recourse Against Others.
	 	 	62	 
	Section 12.11. Successors.
	 	 	62	 
	Section 12.12. Multiple Counterparts.
	 	 	62	 
	Section 12.13. Separability.
	 	 	62	 
	Section 12.14. Calculations in Respect of the Securities.
	 	 	62	 
	Section 12.15. Table of Contents, Headings, Etc.
	 	 	62	 

iii

 

	 	 	 
	Exhibit A

	 	Form of Note:
	 

	 	- Assignment Form
	 

	 	- Form of Conversion Notice
	 

	 	- Form of Fundamental Change Purchase Notice
	 

	 	- Form of Certificate to be Delivered upon Exchange or Registration of Transfer of
Restricted Securities
	Exhibit B

	 	Table showing the Increase in Conversion Rate in connection with a Make-Whole Fundamental

Change

iv

 

     THIS INDENTURE, dated as of March 28, 2007, is between KOMAG, INCORPORATED, a Delaware
corporation (the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as
trustee (in such capacity and not in its individual capacity, the “Trustee”).

     In consideration of the premises and the purchase of the Securities by the Holders thereof,
the parties hereto agree as follows for the equal and ratable benefit of the Holders of the
Securities.

ARTICLE 1

Definitions and Incorporation by Reference

Section 1.01. Definitions.

     “Additional Interest” has the meaning set forth in Section 5(a) of the Registration Rights
Agreement. Unless the context otherwise requires, all references herein or in the Securities to
“interest” accrued or payable as of any date shall include, without duplication, any Additional
Interest accrued or payable as of such date as provided in the Registration Rights Agreement.

     “Additional Interest Notice” has the meaning specified in Section 5.08.

     “Additional Securities” has the meaning specified in Section 2.02(d).

     “Additional Shares” has the meaning specified in Section 4.02(b).

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.

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

     “Agent Members” has the meaning specified in Section 2.01(d).

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

     “Applicable Stock Price” has the meaning specified in Section 4.02(a).

     “Bankruptcy Law” has the meaning specified in Section 7.01.

     “Base Conversion Rate” has the meaning specified in Section 4.02(a).

     “Base Conversion Price” has the meaning specified in Section 4.02(a).

     “beneficial owner” has the meaning specified in Section 3.01(a).

     “Board of Directors” means the board of directors of the Company or, except as used in the
definition of Fundamental Change and except where the context otherwise requires, any duly
authorized committee of such board of directors.

 

 

     “Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking
institutions in The City of New York, New York or the City of San Jose, California or the city in
which the Corporate Trust Office is located are authorized or obligated by law or executive order
to close.

     “capital stock” has the meaning specified in Section 3.01(a).

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

     “Close of Business” means 5:00 p.m. New York City time.

     “Certificated Security” means a Security that is in substantially the form attached hereto as
Exhibit A and that does not include the information or the schedule called for by footnotes 1 and 5
thereof.

     “Closing Price” means, on any Trading Day, the reported last sale price per share of the
Common Stock (or, if no last sale price is reported, the average of the bid and ask prices per
share or, if more than one in either case, the average of the average bid and the average ask
prices per share) on such date reported by the Nasdaq or, if the Common Stock is not quoted or
listed for trading on the Nasdaq, as reported by the principal national or regional securities
exchange on which the Common Stock is listed or otherwise as provided in this Indenture.

     “Common Stock” means, subject to Section 4.09, shares of common stock of the Company, par
value $0.01 per share, at the date of this Indenture 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 shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.

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

     “Company Order” has the meaning specified in Section 2.02(d).

     “continuing director” has the meaning specified in Section 3.01(a).

     “Conversion Agent” has the meaning specified in Section 2.03.

     “Conversion Date” has the meaning specified in Section 4.03(a).

     “Conversion Notice” has the meaning specified in Section 4.03(a).

     “Conversion Price” means, at any time, an amount equal to $1,000 divided by the Conversion
Rate in effect at such time, rounded to the nearest cent.

     “Conversion Rate” means the number of shares of Common Stock issuable upon conversion of each
$1,000 principal amount of Securities.

2

 

     “Conversion Value” means the Closing Price of the Common Stock on any date of determination
multiplied by the Conversion Rate of the Securities in effect on such date.

     “Corporate Trust Office” means the office of the Trustee at which at any time the trust
created by this Indenture shall be principally administered, which office at the date of the
execution of this Indenture is located at 633 West 5th Street, 24th Floor, Los Angeles, CA 90071,
Attention: Corporate Trust Services (Komag 2.125% Convertible Subordinated Notes due 2014), or such
other office as the Trustee may designate by written notice to the Company.

     “Current Market Price” means (i) in the case of the paragraph preceding the formula in Section
4.06(e), the Closing Price on the specified date and (ii) in the case of the definition of SP’ in
Section 4.06(e), the average of the Closing Prices of the Common Stock over the 10 consecutive
Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange
offer expires.

     “Custodian” has the meaning specified in Section 7.01.

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

     “Depositary” has the meaning specified in Section 2.01(b).

     “Designated Senior Debt” means the obligations of the Company under any Senior Debt in which
the instrument creating or evidencing the same or any related agreements or documents to which the
Company is a party expressly provides that such Senior Debt shall be “Designated Senior Debt” for
purposes of this Indenture; provided that the instrument, agreement or other document may place
limitations and conditions on the right of the Senior Debt to exercise the rights of Designated
Senior Debt.

     “Distributed Property” has the meaning specified in Section 4.06(c).

     “Effective Date” has the meaning specified in Section 4.02(b).

     “Event of Default” has the meaning specified in Section 7.01.

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

     “Ex Date” means (i) when used with respect to any dividend or distribution, the first date on
which the Common Stock trades, regular way, on the relevant exchange or in the relevant market from
which the sale price was obtained without the right to receive such dividend or distribution; and
(ii) when used with respect to any tender offer or exchange offer, the first date on which the
Common Stock trades, regular way, on the relevant exchange or in the relevant market from which the
sale price was obtained after the expiration time.

     “Existing Shareholders” has the meaning specified in Section 3.01(a).

     “Fundamental Change” has the meaning specified in Section 3.01(a).

     “Fundamental Change Company Notice” has the meaning specified in Section 3.01(b).

     “Fundamental Change Purchase Date” has the meaning specified in Section 3.01(a).

     “Fundamental Change Purchase Notice” has the meaning specified in Section 3.01(c).

3

 

     “Fundamental Change Purchase Price” has the meaning specified in Section 3.01(a).

     “GAAP” means generally accepted accounting principles in the United States as set forth in the
opinions and pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession in the United States, which are in effect from
time to time and consistently applied.

     “Global Security” means a permanent Global Security that is in substantially the form attached
hereto as Exhibit A and that includes the information and schedule called for by footnotes 1 and 5
thereof and which is deposited with the Depositary or its custodian and registered in the name of
the Depositary or its nominee.

     “Holder” or “Securityholder” means the person in whose name a Security is registered in the
Register.

     “Incremental Share Factor” has the meaning specified in Section 4.02(a).

     “Indebtedness” means, with respect to any Person:

          (a) all of such Person’s indebtedness, obligations and other liabilities, contingent
or otherwise, (i) for borrowed money, including overdrafts, foreign exchange contracts, currency
exchange agreements, interest rate protection agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments, or (ii) evidenced by credit or loan
agreements, bonds, debentures, notes or similar instruments, whether or not the recourse of the
lender is to the whole of the assets of such Person or to only a portion thereof;

          (b) all of such Person’s reimbursement obligations and other liabilities, contingent
or otherwise, with respect to letters of credit, bank guarantees or bankers’ acceptances;

          (c) all of such Person’s obligations and other liabilities, contingent or otherwise,
in respect of leases required, in conformity with GAAP, to be accounted for as capitalized lease
obligations on such Person’s balance sheet;

          (d) all of such Person’s obligations and other liabilities, contingent or otherwise,
under any lease or related document, including a purchase agreement, conditional sale or other
title retention agreement, in connection with the lease of real property or improvements thereon
(or any personal property included as part of any such lease) which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the leased property or pay
an agreed upon residual value of the leased property, including any such obligations under such
lease or related document to purchase or cause a third party to purchase such lease property or pay
an agreed upon residual value of the leased property to the lessor;

          (e) all of such Person’s obligations, contingent or otherwise, with respect to an
interest rate or other swap, cap, floor or collar agreement or hedge agreement, forward contract or
other similar instrument or agreement or foreign currency hedge, exchange, purchase or similar
instrument or agreement;

          (f) all of such Person’s direct or indirect guarantees or similar agreements in
respect of, and all obligations or liabilities to purchase or otherwise acquire or otherwise assure
a creditor against loss in respect of, indebtedness, obligations or liabilities of another Person
of the kinds described in clauses (a) through (e); and

4

 

          (g) any and all deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or liability of the kinds
described in clauses (a) through (f).

     The amount of Indebtedness of any Person at any date shall be (i) the outstanding principal
amount of all unconditional obligations described above, as such amount would be reflected on a
balance sheet prepared in accordance with GAAP, and the maximum liability at such date of such
Person for any contingent obligations described above, (ii) the accreted value thereof, in the case
of any Indebtedness issued with original issue discount, and (iii) the principal amount thereof,
together with any interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.

     “Indenture” means this Indenture as amended or supplemented from time to time pursuant to the
terms of this Indenture, including the provisions of the TIA that are explicitly incorporated in
this Indenture by reference to the TIA.

     “Initial Purchasers” means Credit Suisse Securities (USA) LLC, Bear, Stearns & Co., Inc.,
Citigroup Global Markets Inc. and Piper Jaffray & Co.

     “Initial Securities” means the Securities issued on the date hereof in the aggregate principal
amount of $250,000,000, and any Securities issued in replacement thereof.

     “Interest Payment Date” has the meaning set forth in the Securities.

     “Interest Payment Record Date” has the meaning set forth in the Securities.

     “Legal Holiday” has the meaning specified in Section 12.07.

     “Make-Whole Fundamental Change” has the meaning specified in Section 3.01(a).

     “Market Disruption Event” means (a) a failure by the primary exchange or quotation system on
which the Common Stock trades or is quoted to open for trading during its regular trading session
or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Trading Day for
the Common Stock of an aggregate one half hour period, of any suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the stock exchange or
otherwise) in the Common Stock or in any options, contracts or future contracts relating to the
Common Stock.

     “Maturity Date” means April 1, 2014.

     “Merger Event” has the meaning specified in Section 4.09.

     “Nasdaq” means the Nasdaq Stock Market.

     “Notice of Default” has the meaning specified in Section 7.01.

     “NYSE” means the New York Stock Exchange.

     “Offering Circular” means the Confidential Offering Circular dated March 22, 2007, relating to
the Securities.

     “Officer” means, with respect to any Person, the Chairman or any Co-Chairman of the Board, any
Vice Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the Chief
Legal Officer, the

5

 

Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Assistant Secretary or any Vice President of such Person.

     “Officers’ Certificate” means a certificate signed by at least two Officers of the Company;
provided, however, that for purposes of Section 4.09 and Section 5.03, “Officers’ Certificate”
means a certificate signed by the principal executive officer, principal financial officer or
principal accounting officer of the Company and at least one other Officer of the Company.

     “Opinion of Counsel” means a written opinion from legal counsel containing, as applicable, the
information specified in Section 12.04. The counsel may be an employee of or counsel to the
Company who is reasonably satisfactory to the Trustee.

     “Paying Agent” has the meaning specified in Section 2.03.

     “Payment Blockage Notice” has the meaning specified in Section 9.03(b).

     “Payment Blockage Period” has the meaning specified in Section 9.03(b).

     “Payment Default” has the meaning specified in Section 9.03(a).

     “Person” or “person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, statutory trust, unincorporated
organization, government or any agency or political subdivision thereof.

     “Principal Amount” of a Security means the Principal Amount as set forth on the face of the
Security.

     “QIB” means a qualified institutional buyer as defined in Rule 144A.

     “Record Date” means (i) with respect to any payment of interest on the Securities, each March
15 and September 15 (whether or not a Business Day) and (ii) with respect to the events specified
in Section 4.06, the meaning specified in Section 4.06.

     “Reference Property” has the meaning specified in Section 4.09.

     “Register” has the meaning specified in Section 2.03.

     “Registrar” has the meaning specified in Section 2.03.

     “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date
hereof, among the Company and the Initial Purchasers.

     “Responsible Officer”, when used with respect to the Trustee, means any officer within the
Corporate Trust Office of the Trustee and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject and who shall have direct responsibility for the
administration of this Indenture.

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

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

     “Restricted Legend” has the meaning specified in Section 2.12(f).

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     “Restricted Security” means a Security required to bear the Restricted Legend called for by
footnotes 2 and 3 to the form of Security set forth in Exhibit A of this Indenture.

     “Rule 144” means Rule 144 under the Securities Act or any successor to such rule, as it may be
amended from time to time.

     “Rule 144A” means Rule 144A under the Securities Act or any successor to such rule, as it may
be amended from time to time.

     “Rule 144A Information” has the meaning specified in Section 5.02(b).

     “SEC” means the United States 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 the SEC is not existing and performing the duties now assigned to it under the TIA, then
the body performing such duties at such time.

     “Security” or “Securities” means the Company’s 2.125% Convertible Subordinated Notes due 2014,
as amended or supplemented from time to time pursuant to the terms of this Indenture, that are
issued under this Indenture.

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

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

     “Senior Debt” means the principal of, premium, if any, interest, including any interest
accruing after the commencement of any bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowed as a claim in the proceeding, and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due on or in connection
with, Indebtedness of the Company whether secured or unsecured, absolute or contingent, due or to
become due, outstanding on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company, including all deferrals, renewals, extensions,
or refundings of, or amendments, modifications or supplements to, the foregoing. “Senior Debt”
does not include:

     (a) Indebtedness that expressly provides that such Indebtedness shall not be senior in
right of a payment to the Securities or expressly provides that such Indebtedness is on the
same basis or junior to the Securities;

     (b) any Indebtedness to any Subsidiary, other than Indebtedness to a Subsidiary arising
by reason of guarantees by the Company of Indebtedness of such Subsidiary to a Person that
is not a Subsidiary; and

     (c) any Indebtedness with respect to the Company’s 2.0% Convertible Subordinated Notes
due 2024.

     “Significant Subsidiary” means any Subsidiary of the Company which has: (i) consolidated
assets or in which the Company and its other Subsidiaries have investments equal to or greater than
10% of the Company’s total consolidated assets; or (ii) consolidated gross revenue equal to or
greater than 10% of the Company’s consolidated gross revenue, measured as at the end of the
Company’s most recently completed

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fiscal year in the case of consolidated assets or investments or for the most recently
completed fiscal year in case of consolidated gross revenue.

     “Specified Indebtedness” has the meaning specified in Section 7.01(f).

     “Spin-Off” has the meaning specified in Section 4.06(c).

     “Spin-Off Securities” has the meaning specified in Section 4.06(c).

     “Stock Price” has the meaning specified in Section 4.02(b).

     “Subsidiary” means, in respect of any Person, any corporation, association, partnership or
other business entity of which more than 50% of the outstanding voting stock (as defined in Section
3.01) or other interests (including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers, general partners or
trustees thereof, or persons performing similar functions, is at the time owned or controlled,
directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such
Person; or (iii) one or more Subsidiaries of such Person.

     “TIA” means the United States Trust Indenture Act of 1939, as amended, and the rules and
regulations thereunder as in effect on the date of this Indenture; provided, however, that in the
event the Trust Indenture Act of 1939 is amended after such date, then “TIA” means, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.

     “Trading Day” means a day during which (i) trading in the Common Stock generally occurs and
(ii) there is no Market Disruption Event.

     “Trigger Event” has the meaning specified in Section 4.06(c).

     “Trust Officer” means, with respect to the Trustee, any officer within the Corporate Trust
Services department (or any successor department) of the Trustee located at the Corporate Trust
Office of the Trustee, who shall have direct responsibility for the administration of this
Indenture, and also means, with respect to any particular corporate trust matter, any other officer
of the Trustee to whom such corporate trust matter is referred because of such officer’s knowledge
of and familiarity with the particular subject.

     “Trustee” means U.S. Bank National Association, not in its individual capacity, but solely in
its capacity as trustee hereunder, until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor Trustee.

     “Unrestricted Certificated Security” means a Certificated Security that is not a Restricted
Security.

     “Unrestricted Global Security” means a Global Security that is not a Restricted Security.

     “Vice President” when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
“vice president.”

     “voting stock” has the meaning specified in Section 3.01(a).

     Section 1.02. Trust Indenture Act Provisions. Whenever this Indenture refers to a
provision of the TIA, that provision is incorporated by reference in and made a part of this
Indenture. The Indenture shall also include those provisions of the TIA required to be included
herein by the provisions of the TIA. The following TIA terms used in this Indenture have the
following meanings:

8

 

“Commission” means the SEC;

“indenture securities” means the Securities;

“indenture security Holder” means a Securityholder;

“indenture to be qualified” means this Indenture;

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

“obligor” on the indenture securities means the Company and any
successor obligor on the Securities.

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

     Section 1.03. Rules of Construction. Unless the context otherwise requires:

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

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

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

     (d) provisions apply to successive events and transactions;

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

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

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

     (h) references to “interest” include Additional Interest;

     (i) “herein,” “hereof,” “hereunder,” “hereinafter” and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other subdivision;

     (j) unless context otherwise requires, any reference to an “Article” or a “Section” refers to
an Article or Section, as the case may be, of this Indenture;

     (k) “or” is not exclusive; and

     (l) “including” means including without limitation.

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ARTICLE 2

The Securities

     Section 2.01. Form and Dating. (a) The Securities and the corresponding Trustee’s
certificate of authentication shall be substantially in the respective forms set forth in Exhibit
A, which Exhibit is incorporated in and made part of this Indenture. The Securities may have
notations, legends or endorsements required by law, exchange rule, Applicable Procedures or usage.
The Company shall provide any such notations, legends or endorsements to the Trustee in writing.
Each Security shall be dated the date of its authentication.

     The terms and provisions contained in the Securities shall constitute, and are hereby
expressly made, a part of this Indenture and 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;
provided, however, to the extent permitted by applicable law, if any provision of any Security
conflicts with the express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.

     (b) Restricted Global Securities. All of the Securities shall be issued initially in
the form of one or more Restricted Global Securities, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian, as custodian for
the depositary, The Depository Trust Company (such depositary, or any successor thereto, being
hereinafter referred to as the “Depositary”), and registered in the name of its nominee, Cede &
Co., or as otherwise instructed by the Depositary, duly executed by the Company and authenticated
by the Trustee as hereinafter provided. The aggregate principal amount of the Restricted Global
Securities may from time to time be increased or decreased by adjustments made on the records of
the Securities Custodian and the Depositary as hereinafter provided, subject in each case to
compliance with the Applicable Procedures and the provisions of this Indenture.

     (c) Global Securities In General. Each Global Security shall represent such of the
out-standing Securities as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time endorsed thereon and
that the aggregate amount of outstanding Securities represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges, purchases or conversions of such
Securities, in each case in accordance with this Indenture. Any adjustment of the aggregate
principal amount of a Global Security to reflect the amount of any increase or decrease in the
amount of outstanding Securities represented thereby shall be made by the Trustee in accordance
with instructions given by the Holder thereof as required by Section 2.12 hereof, or otherwise in
accordance with this Indenture, and shall be made on the records of the Trustee and the Depositary.

     The Company shall issue and the Trustee shall, upon receipt of a Company Order, authenticate
and deliver in accordance with Section 2.02, initially one or more Global Securities that (i) shall
be registered in the name of Cede & Co. or as otherwise instructed by the Depositary, (ii) shall be
delivered by the Trustee to the Depositary or to the Securities Custodian pursuant to the
Depositary’s instructions and (iii) shall bear legends required for Global Securities as set forth
in Exhibit A hereto.

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

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     None of the Company, the Trustee, the Registrar, any Paying Agent or any agent of any of them
shall have any responsibility or liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests in the Securities, for maintaining, supervising
or reviewing any records relating to such beneficial owner interests, or for any acts or omissions
of a Depositary or for any transactions between a Depositary and any beneficial owner or between or
among beneficial owners. No owner of a beneficial interest in the Securities shall have any rights
under this Indenture, and the Depositary or its nominee, if any, shall be deemed and treated by the
Company, the Trustee, the Registrar, any Paying Agent or any agent of any of them as the absolute
owner and holder of such Securities for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee, the Registrar, any Paying Agent or any agent
of any of them from giving effect to any written certification, proxy or other authorization
furnished by a Depositary, or any of its members and any other Person on whose behalf such member
may act.

     (e) Certificated Securities. Certificated Securities shall be issued only under the
circumstances provided in Section 2.12(a)(i).

     Section 2.02. Execution and Authentication. (a) A duly authorized Officer of the
Company shall sign the Securities for the Company by manual or facsimile signature.

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

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

     (d) The Trustee shall initially authenticate and make available for delivery Securities for
original issue in the aggregate principal amount of up to $250,000,000 upon receipt of a written
order or orders of the Company signed by an Officer of the Company (a “Company Order”). The
Company may, without the consent of the Holders, issue additional Securities (the “Additional
Securities”) with the same terms and with the same CUSIP number as the Securities in an unlimited
aggregate principal amount; provided, however that no such Additional Securities may be issued
unless fungible with the notes offered hereby for U.S. federal income tax purposes. The Trustee
shall authenticate Additional Securities thereafter in unlimited aggregate principal amount (so
long as permitted by the terms of this Indenture) for original issue upon a Company Order of the
Company in aggregate principal amount as specified in such order (except as provided in Section
2.07). Each such Company Order shall specify the amount of Securities to be authenticated and the
date on which the Securities are to be authenticated. Such Additional Securities shall have
identical terms to the Initial Securities except for issuance dates and prices and with respect to
interest accruing prior to their date of issuance, and will constitute the same series as the
Initial Securities for all purposes hereunder, including, without limitation, waivers, amendments
and offers to purchase.

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

     The Securities shall be issuable only in registered form without coupons and only in
denominations of $1,000 principal amount and any integral multiple thereof.

     Section 2.03. Registrar, Paying Agent and Conversion Agent. The Company shall
maintain an office or agency where Securities may be presented for registration of transfer or for
exchange (“Registrar”), an

11

 

office or agency in the United States where Securities may be presented for
purchase or payment (“Paying Agent”), an office or agency where Securities may be presented for
conversion (“Conversion Agent”), and an office or agency where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The Registrar shall keep a
register of the Securities (“Register”) and of their transfer and exchange.

     The Company may have one or more co-registrars, one or more additional paying agents, and one
or more additional conversion agents. The term “Registrar” includes any co-registrar, including
any named pursuant to Section 5.06. The term “Paying Agent” includes any additional paying agent,
including any named pursuant to Section 5.06. The term “Conversion Agent” includes any additional
conversion agent, including any named pursuant to Section 5.06.

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

     The Company hereby initially appoints the Trustee as Registrar, Paying Agent and Conversion
Agent in connection with the Securities.

     Section 2.04. Paying Agent to Hold Money and Securities in Trust. Prior to 11:00
a.m., New York City time, on each due date of payments in respect of, or delivery of Cash or shares
of Common Stock, as applicable and as provided herein, the Company shall deposit with the Paying
Agent Cash (in immediately available funds if deposited on the due date) or with the Conversion
Agent such number of shares of Common Stock or other consideration sufficient to make such payments
or deliveries when so becoming due. The Company shall require each Paying Agent or Conversion
Agent, as applicable (other than the Trustee), to agree in writing that such Agent shall hold in
trust for the benefit of Securityholders or the Trustee all Cash, Common Stock or other
consideration, as applicable, held by such Agent for the making of payments or deliveries in
respect of the Securities and shall notify the Trustee in writing of any default by the Company in
making any such payment or delivery. If the Company or an Affiliate of the Company acts as Paying
Agent or Conversion Agent, as applicable, it shall segregate the Cash, Common Stock and other
consideration, as applicable, held by it as Paying Agent or Conversion Agent, as applicable, and
hold it as a separate trust fund.

     The Company at any time may require a Paying Agent or Conversion Agent, as applicable, to pay
all Cash, Common Stock or other consideration, as applicable, held by it to the Trustee, and the
Trustee may at any time during the continuance of any Default, upon written request to the Paying
Agent or the Conversion Agent, as applicable, require such Paying Agent or Conversion Agent, as
applicable, to pay forthwith to the Trustee all Cash, Common Stock or other consideration, as
applicable, so held in trust by such Paying Agent or Conversion Agent. Upon doing so, the Paying
Agent or the Conversion Agent, as applicable, shall have no further liability for such Cash, Common
Stock or other consideration, as applicable.

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

     Section 2.06. Transfer and Exchange. (a) Subject to compliance with any
applicable additional requirements contained in Section 2.12, when a Security is presented to a
Registrar with a request to
register a

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transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the transfer or make the
exchange as requested; provided, however, that every Security presented or surrendered for
registration of transfer or exchange shall, if such Security is a Certificated Security, be duly
endorsed or accompanied by an assignment form, in the form included in Exhibit A attached hereto
and, if applicable, a transfer certificate, in the form included in Exhibit A attached hereto, and
in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or its
attorney duly authorized in writing. To permit registration of transfers and exchanges, upon
surrender of any Security for registration of transfer or exchange at an office or agency
maintained pursuant to Section 2.03, the Company shall execute and the Trustee shall, upon receipt
of a Company Order, authenticate Securities of a like aggregate principal amount at the Registrar’s
request. Any exchange or transfer shall be without charge, except that the Company or the
Registrar may require payment of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto, other than exchanges pursuant to
Section 2.10, Section 10.05, Article 3 or Article 4, in each case, not involving any transfer.

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

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

     (b) Any Registrar appointed pursuant to Section 2.03 or Section 5.06 hereof shall provide to
the Trustee such information as the Trustee may reasonably request in connection with the delivery
by such Registrar of Securities upon transfer or exchange of Securities.

     The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Security (including any transfers between or among Agent
Members or other beneficial owners of interests in any Global Security) other than to require
delivery of such opinions of counsel, 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
(including if so requested by the Company exercising a right to require the delivery of such
items), and to examine the same to determine substantial compliance as to form with the express
requirements hereof.

     Any Holder of a Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only through a book-entry
system maintained by the Depositary (or its agent), and that ownership of a beneficial interest in
a Global Security shall be required to be reflected in a book-entry system.

     Section 2.07. Replacement Securities. If (a) any mutilated security is
surrendered to the Company, a Registrar or the Trustee, or (b) the Company, the Registrar and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security,
and, in either case, there is delivered to the Company, the Registrar and the Trustee such security
or indemnity as shall be reasonably required by them to save each of them harmless, then, in the
absence of notice to the Company, such Registrar or the Trustee that such Security has been
acquired by a bona fide or protected purchaser, the Company shall issue, and the Trustee shall,
upon receipt of a Company Order (which the Company agrees to deliver promptly), authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or
stolen Security, a new Security of like tenor and principal amount, bearing a number not
contemporaneously outstanding.

13

 

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

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

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

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

     Section 2.08. Outstanding Securities. Securities outstanding at any time are all
Securities authenticated by the Trustee, except for those canceled by it, those paid or repurchased
pursuant to Section 2.07, those delivered to it for cancellation and those described in this
Section 2.08 as not outstanding.

     If a Security is replaced pursuant to Section 2.07 (other than a mutilated Security
surrendered for replacement), it ceases to be outstanding unless the Trustee receives, subsequent
to the new Security’s authentication, proof satisfactory to the Company that the replaced Security
is held by a bona fide or protected purchaser. A mutilated Security ceases to be outstanding upon
surrender and replacement thereof pursuant to Section 2.07.

     If the Paying Agent holds, in accordance with the terms of this Indenture, prior to 11:00
a.m., New York City time, on the Maturity Date or on a Fundamental Change Purchase Date, as the
case may be, Cash sufficient to pay all Initial Securities and all Additional Securities then
payable, then on and after such Maturity Date or Fundamental Change Purchase Date, as the case may
be, such Securities shall cease to be outstanding and interest on such Securities shall cease to
accrue.

     If a Security is converted in accordance with Article 4, then on the Conversion Date, such
Security shall cease to be outstanding and interest on such Security shall cease to accrue, unless
there shall be a default in the delivery of the consideration payable hereunder upon such
conversion.

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

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

14

 

obligor on the Securities or any Affiliate of the Company or of such other obligor.
If requested by the Trustee, the Company agrees to notify the Trustee in writing of the existence
of any such Treasury Securities or Securities owned by the Company, any other obligor on the
Securities, or, to the knowledge of the Company, any Affiliate of the Company.

     Section 2.10. Temporary Securities. Until definitive Securities are ready for
delivery, the Company may prepare and execute, and, upon receipt of a Company Order, the Trustee
shall authenticate and deliver, temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company reasonably considers
appropriate for temporary Securities. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon surrender of the
temporary Securities at the office or agency of the Company designated for such purpose pursuant to
Section 2.03, without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall, upon receipt of a Company
Order (which the Company agrees to deliver promptly), authenticate and deliver in exchange therefor
a like principal amount of definitive Securities of authorized denominations. Until so exchanged
the temporary Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.

     Section 2.11. Cancellation. The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall forward
to the Trustee or its agent any Securities surrendered to them for transfer, exchange, payment or
conversion. The Trustee and no one else shall cancel, in accordance with its standard procedures,
all Securities surrendered for transfer, exchange, payment, conversion or cancellation and shall
deliver the canceled Securities to the Company. The Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article 4.

     All Securities that are purchased pursuant to Article 3 or otherwise acquired by the Company
shall be delivered to the Trustee for cancellation. If the Company shall acquire any of the
Securities, such acquisition shall not operate as a repurchase or satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the Trustee for
cancellation.

     Section 2.12. Legend; Additional Transfer and Exchange Requirements. (a)
Transfer and Exchange of Global Securities.

          (i) Certificated Securities shall be issued in exchange for interests in the Global Securities
only (x) if the Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Securities or if it at any time ceases to be a “clearing agency”
registered under the Exchange Act, if so required by applicable law or regulation, and a successor
Depositary is not appointed by the Company within 90 days of such notice or (y) if an Event of
Default has occurred and is continuing, each of clauses (x) and (y) in accordance with the
Applicable Procedures. In any such case, the Company shall execute, and the Trustee shall, upon
receipt of a Company Order (which the Company agrees to deliver promptly), authenticate and deliver
Certificated Securities in an aggregate principal amount equal to the principal amount of such
Global Securities in exchange therefor. Only Restricted Certificated Securities shall be issued in
exchange for beneficial interests in Restricted Global Securities, and only Unrestricted
Certificated Securities shall be issued in exchange for beneficial interests in Unrestricted Global
Securities. Certificated Securities issued in exchange for beneficial interests in Global
Securities shall be registered in such names and shall be in such authorized denominations as the
Depositary, pursuant to instructions from its Agent Members or otherwise in accordance with the
Applicable Procedures, shall instruct the Trustee. The Trustee shall deliver or cause to be
delivered such Certificated Securities to the Persons in whose name such Securities are so
registered. Such exchange shall be effected in accordance with the Applicable Procedures. In the
event that the Certificated Securities are not issued to each such beneficial owner promptly after
the Registrar has received a request from the Depositary to issue such Certificated Securities, the
Company expressly acknowledges, with respect to the right of any

15

 

Holder to pursue a remedy pursuant to Section 7.06 or 7.07 hereof, the right of any beneficial
holder of Securities to pursue such remedy with respect to the portion of the Global Security that
represents such Beneficial Owner’s Securities as if such Certificated Securities had been issued.

          (ii) Notwithstanding any other provisions of this Indenture other than the provisions set
forth in Section 2.12(a)(i), a Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.

     (b) Transfer and Exchange of Certificated Securities. In the event that Certificated
Securities are issued in exchange for beneficial interests in Global Securities in accordance with
Section 2.12(a)(i), and, on or after such event, Certificated Securities are presented by a Holder
to the Registrar with a request:

     (x) to register the transfer of the Certificated Securities to a person who shall take
delivery thereof in the form of Certificated Securities only; or

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

such Registrar shall register the transfer or make the exchange as requested; provided, however,
that the Certificated Securities presented or surrendered for register of transfer or exchange:

     (i) shall be duly endorsed or accompanied by a written instrument of transfer
in accordance with the proviso to the first sentence of Section 2.06(a); and

     (ii) in the case of a Restricted Certificated Security, such request shall be
accompanied by the following additional information and documents, as applicable:

     (A) if such Restricted Certificated Security is being delivered to
the Registrar by a Holder for registration in the name of such Holder, without
transfer, or such Restricted Certificated Security is being transferred to the
Company or a Subsidiary of the Company, a certification to that effect from such
Holder (in substantially the form set forth in Exhibit A);

     (B) if such Restricted Certificated Security is being transferred to
a person the Holder reasonably believes is a QIB in accordance with Rule 144A, or
pursuant to an effective registration statement under the Securities Act or in
compliance with Regulation S under the Securities Act, a certification to that
effect from such Holder (in substantially the form set forth in Exhibit A); or

     (C) if such Restricted Certificated Security is being transferred
pursuant to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144 or pursuant to and in compliance with another exemption
from the registration requirements under the Securities Act, a certification to that
effect from the Holder (in substantially the form set forth in Exhibit A) and, if
the Company or the Registrar so requests, an Opinion of Counsel, certificates and
other information reasonably acceptable to the Company to the effect that such
transfer does not require registration under the Securities Act.

     (c) Transfer of a Beneficial Interest in a Restricted Global Security for a Beneficial
Interest in an Unrestricted Global Security. Any person having a beneficial interest in a
Restricted Global Security may upon request, subject to the Applicable Procedures, transfer such
beneficial interest to a Person who is required or

16

 

permitted to take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Security. Upon receipt by the Trustee of written instructions, or such other form of
instructions as is customary for the Depositary, from the Depositary or its nominee on behalf of
any Person having a beneficial interest in a Restricted Global Security and the following
additional information and documents in such form as is customary for the Depositary from the
Depositary or its nominee on behalf of the Person having such beneficial interest in the Restricted
Global Security (all of which may be submitted by facsimile or electronically):

     (i) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certification to that effect from the
Holder (in substantially the form set forth in Exhibit A); or

     (ii) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance with Rule
144, a certification to that effect from the Holder (in substantially the form set forth in
Exhibit A) and, if the Company or the Trustee so requests, an Opinion of Counsel,
certificates and other information reasonably acceptable to the Company to the effect that
such transfer does not require registration under the Securities Act;

the Registrar shall reduce or cause to be reduced the aggregate principal amount of the Restricted
Global Security by the appropriate principal amount and shall increase or cause to be increased the
aggregate principal amount of the Unrestricted Global Security by a like principal amount. Such
transfer shall otherwise be effected in accordance with the Applicable Procedures. If no
Unrestricted Global Security is then outstanding, the Company shall execute and the Trustee shall,
upon receipt of a Company Order (which the Company agrees to deliver promptly), authenticate and
deliver an Unrestricted Global Security.

     (d) Transfer of a Beneficial Interest in an Unrestricted Global Security for a Beneficial
Interest in a Restricted Global Security. Any person having a beneficial interest in an
Unrestricted Global Security may upon request, subject to the Applicable Procedures, transfer such
beneficial interest to a person who is required or permitted to take delivery thereof in the form
of a beneficial interest in a Restricted Global Security. Upon receipt by the Trustee of written
instructions, or such other form of instructions as is customary for the Depositary, from the
Depositary or its nominee on behalf of any person having a beneficial interest in an Unrestricted
Global Security and the following additional information and documents in such form as is customary
for the Depositary, from the Depositary or its nominee on behalf of the person having such
beneficial interest in the Unrestricted Global Security (all of which may be submitted by facsimile
or electronically):

     (i) a certification from the Holder (in substantially the form set forth in
Exhibit A) to the effect that such beneficial interest is being transferred to a person that
the transferor reasonably believes is a QIB in accordance with Rule 144A;

     (ii) a certification from the Holder (in substantially the form set forth in
Exhibit A) to the effect that such beneficial interest is being transferred in compliance
with Regulation S under the Securities Act;

     (iii) if such beneficial interest in such Unrestricted Global Security is
being transferred in compliance with any other exemption from registration under the
Securities Act, certification to that effect from such Holder (in substantially the form set
forth in Exhibit A) and if the Company or the Trustee so requests, an Opinion of Counsel,
certificates and other information reasonably acceptable to the Company to the effect that
such transfer does not require registration under the Securities Act; or

     (iv) a certification (in substantially the form set forth in Exhibit A) to
the effect that such beneficial interest is being transferred to the Company or a Subsidiary
of the Company,

17

 

the Registrar shall reduce or cause to be reduced the aggregate principal amount of the
Unrestricted Global Security by the appropriate principal amount and shall increase or cause to be
increased the aggregate principal amount of the Restricted Global Security by a like principal
amount. Such transfer shall otherwise be effected in accordance with the Applicable Procedures.
If no Restricted Global Security is then outstanding, the Company shall execute and the Trustee
shall, upon receipt of a Company Order (which the Company agrees to deliver promptly), authenticate
and deliver a Restricted Global Security.

     (e) Transfers of Certificated Securities for Beneficial Interest in Global Securities.
In the event that Certificated Securities are issued in exchange for beneficial interests in
Global Securities and, thereafter, the events or conditions specified in Section 2.12(a)(i) which
required such exchange shall cease to exist, the Company shall mail notice to the Trustee and to
the Holders (i) stating that Holders may exchange Certificated Securities for interests in Global
Securities by complying with the procedures set forth in this Indenture and (ii) briefly describing
such procedures and the events or circumstances requiring that such notice be given. Thereafter,
if Certificated Securities are presented by a Holder to a Registrar with a request:

     (x) to register the transfer of such Certificated Securities to a Person who will take
delivery thereof in the form of a beneficial interest in a Global Security, which request
shall specify whether such Global Security will be a Restricted Global Security or an
Unrestricted Global Security; or

     (y) to exchange such Certificated Securities for an equal principal amount of
beneficial interests in a Global Security, which beneficial interests will be owned by the
Holder transferring such Certificated Securities (provided that in the case of such an
exchange, Restricted Certificated Securities may be exchanged only for Restricted Global
Securities and Unrestricted Certificated Securities may be exchanged only for Unrestricted
Global Securities),

the Registrar shall register the transfer or make the exchange as requested by canceling such
Certificated Security and causing the aggregate principal amount of the applicable Global Security
to be increased accordingly and, if no such Global Security is then outstanding, the Company shall
issue and the Trustee shall, upon receipt of a Company Order (which the Company agrees to deliver
promptly) authenticate and deliver a new Global Security; provided, however, that the Certificated
Securities presented or surrendered for registration of transfer or exchange:

     (i) shall be duly endorsed or accompanied by a written instrument of transfer in
accordance with the proviso to the first sentence of Section 2.06(a);

     (ii) in the case of a Restricted Certificated Security to be transferred for a
beneficial interest in an Unrestricted Global Security, such request shall be accompanied by
the following additional information and documents, as applicable:

     (A) if such Restricted Certificated Security is being transferred
pursuant to an effective registration statement under the Securities Act, a
certification to that effect from such Holder (in substantially the form set forth
in Exhibit A); or

     (B) if such Restricted Certificated Security is being transferred
pursuant to an exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certification to that effect from such Holder (in
substantially the form set forth in Exhibit A) and an Opinion of Counsel,
certificates and other information reasonably acceptable to the Company to the
effect that such transfer does not require registration under of the Securities Act;

18

 

     (iii) in the case of a Restricted Certificated Security to be transferred to another
person for a beneficial interest in a Restricted Global Security, such request shall be
accompanied by the following information and documents, as applicable:

     (A) if such Restricted Certificated Security is being transferred to
a person the Holder reasonably believes is a QIB in accordance with Rule 144A, a
certification to that effect from such Holder (in substantially the form set forth
in Exhibit A); or

     (B) if such Restricted Certificated Security is being transferred in
compliance with Regulation S under the Securities Act, certification to that effect
from such Holder (in substantially the form set forth in Exhibit A);

     (iv) in the case of an Unrestricted Certificated Security to be transferred or
exchanged for a beneficial interest in an Unrestricted Global Security, or in the case of a
Restricted Certificated Security to be exchanged (and not transferred) for a beneficial
interest in a Restricted Global Security, such request need not be accompanied by any
additional information or documents; and

     (v) in the case of an Unrestricted Certificated Security to be transferred or exchanged
for a beneficial interest in a Restricted Global Security, such request shall be accompanied
by the following additional information and documents, as applicable:

     (A) if such Unrestricted Certificated Security is being transferred
to a person the Holder reasonably believes is a QIB (which, in the case of an
exchange, shall be such Holder) in accordance with Rule 144A, a certification to
that effect from such Holder (in substantially the form set forth in Exhibit A);

     (B) if such Unrestricted Certificated Security is being transferred
in compliance with Regulation S under the Securities Act, certification to that
effect from such Holder (in substantially the form set forth in Exhibit A);

     (C) if such Unrestricted Certificated Security is being transferred
in compliance with any other exemption from registration under the Securities Act,
certification to that effect from such Holder (in substantially the form set forth
in Exhibit A) and an Opinion of Counsel, certificates and other information
reasonably acceptable to the Company to the effect that such transfer does not
require registration under the Securities Act; or

     (D) if such Unrestricted Certificated Security is being transferred
to the Company or a Subsidiary of the Company, a certification to that effect from
such Holder (in substantially the form set forth in Exhibit A).

     (f) Legends. (i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Global Security and Certificated Security (and all Securities issued in exchange
therefor or upon registration of transfer or replacement thereof) shall bear a legend in
substantially the form called for by Exhibit A attached hereto (the “Restricted Legend”), for so
long as it is required by this Indenture to bear such legend.

     (ii) Upon any sale or transfer of a Restricted Security (x) after the expiration of the
holding period applicable to sales of the Securities under Rule 144(k) of the Securities
Act, (y) pursuant to Rule 144 or (z) pursuant to an effective registration statement under
the Securities Act:

     (A) in the case of any Restricted Certificated Security, each
Registrar shall permit the Holder thereof to transfer such Restricted Certificated
Security to a transferee who, unless

19

 

such transferee is an Affiliate of the Company, shall take such Security in the
form of an Unrestricted Certificated Security or (under the circumstances described
in Section 2.12(e)) an Unrestricted Global Security, and in each case shall rescind
any restriction on the transfer of such Security; provided, however, that the Holder
of such Restricted Certificated Security shall, in connection with such exchange or
transfer, comply with the other applicable provisions of this Section 2.12; and

     (B) in the case of a Restricted Global Security, each Registrar shall
permit the Holder thereof to transfer such beneficial interest in a Restricted
Global Security to a transferee who, unless such transferee is an Affiliate of the
Company, shall take such Security in the form of a beneficial interest in an
Unrestricted Global Security and shall rescind any restriction on transfer of such
Security; provided, however, that such Unrestricted Global Security shall continue
to be subject to the provisions of Section 2.12(a)(ii); and provided further,
however, that the owner of such beneficial interest shall, in connection with such
transfer, comply with the other applicable provisions of this Section 2.12.

If the Applicable Procedures so require, prior to the removal of any restrictive legend at the end
of the holding period applicable to sales of the Securities under Rule 144(k) of the Securities
Act, such requesting Holder shall deliver an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that the restrictions on transfer contained herein and the restrictive
legend are no longer required in order to maintain compliance with the Securities Act.

     (iii) Upon the exchange, registration of transfer or replacement of Securities not
bearing the Restricted Legend, the Company shall issue, and the Trustee shall, upon receipt
of a Company Order (which the Company agrees to deliver promptly), authenticate and deliver,
Securities that do not bear such Restricted Legend.

     (iv) After the expiration of the holding period pursuant to Rule 144(k) of the
Securities Act, the Company may with the consent of any Holder of a Restricted Global
Security or a Restricted Certificated Security that is not an Affiliate of the Company,
remove any restriction of transfer on such Security, and the Company shall issue, and the
Trustee shall, upon receipt of a Company Order (which the Company agrees to deliver
promptly), authenticate and deliver Securities that do not bear the Restricted Legend.

     (v) Until the expiration of the holding period applicable to sales of the Securities
under Rule 144(k) of the Securities Act or a transfer pursuant to Rule 144 or pursuant to an
effective registration statement under the Securities Act, the shares of Common Stock issued
upon conversion of the Securities shall bear a legend substantially to the same effect as
the Restricted Legend; provided that all Securities held by Affiliates of the Company shall
bear the Restricted Legend at all times.

     (g) Transfers to the Company. Nothing contained in this Indenture or in the
Securities shall prohibit the sale or other transfer of any Securities (including beneficial
interests in Global Securities) to the Company, or any of its Subsidiaries or any of its
Affiliates.

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

20

 

omission of such numbers. The Company shall promptly notify the Trustee
of any change in the “CUSIP,” “ISIN” or other similar numbers.

     Section 2.14. Ranking. The obligations of the Company arising under or in
connection with this Indenture and every outstanding Security issued under this Indenture from time
to time constitutes and shall constitute an unsecured general obligation of the Company, ranking
subordinate in right of payment to all Senior Debt as more fully set forth in Article 9 of this
Indenture.

     Section 2.15. Persons Deemed Owners. Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may
treat the person in whose name such Security is registered, which shall initially be the
Depositary, as the owner of such Security for the purpose of receiving payment of principal of,
Fundamental Change Purchase Price and interest on the Security, for the purpose of receiving Common
Stock or Cash and for all other purposes, including without limitation, for purposes of giving
notices hereunder, whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the
contrary. The registered Holder of a Global Security may grant proxies and otherwise authorize any
person, including Agent Members and persons that may hold interests through Agent Members, to take
any action that a Holder is entitled to take under this Indenture or the Securities.

     Section 2.16. Defaulted Interest. If the Company defaults on a payment of
interest on the Securities, it shall pay the defaulted interest, plus (to the extent permitted by
law) any interest payable on the defaulted interest, in accordance with the terms hereof, to the
Persons who are Holders on a subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Company shall fix such special record date and
payment date in a reasonable manner. At least 10 days before such special record date, the Company
shall mail to each Holder a notice that states the special record date, the payment date and the
amount of defaulted interest, and interest payable on defaulted interest, if any, to be paid. The
Company may make payment of any defaulted interest in any other lawful manner not inconsistent with
the requirements (if applicable) of any securities exchange on which the Securities may be listed
and, upon such notice as may be required by such exchange.

ARTICLE 3

Repurchase of Securities at Option of Holders

     Section 3.01. Purchase of Securities at Option of the Holder upon a Fundamental
Change. (a) In the event a Fundamental Change shall occur at any time when any Securities remain
outstanding, each Holder shall have the right, at such Holder’s option, to require the Company to
purchase all of such Holders’ Securities or any portion of the principal amount thereof that is
equal to $1,000 or an integral multiple thereof on a date specified by the Company (the
“Fundamental Change Purchase Date”) that is not less than 15 nor more than 45 Business Days after
the date the Company mails the Fundamental Change Company Notice pursuant to Section 3.01(b), at a
purchase price in Cash equal to 100% of the principal amount of the Securities tendered for
purchase, plus accrued and unpaid interest (including Additional Interest, if any) to, but not
including, the Fundamental Change Purchase Date (the “Fundamental Change Purchase Price”), subject
to satisfaction by or on behalf of any Holder of the requirements set forth in Section 3.01(c).

     A “Fundamental Change” shall be deemed to have occurred upon the occurrence of any of the
following:

     (i) any “person” or “group” (other than the Company or its employee benefit plans)
becomes the “beneficial owner,” directly or indirectly, of shares of the Company’s voting
stock representing 50% or more of the total voting power of all outstanding classes of the
Company’s voting

21

 

stock or has the power, directly or indirectly, to elect a majority of the members of
the board of directors of the Company and (a) such person or group files a Schedule 13D or
Schedule TO, or any successor schedule, form or report under the Exchange Act, disclosing
the same or (b) the Company otherwise becomes aware of any such person or group;

     (ii) the Company consolidates with, or merges with or into, another Person or, in a
single transaction or a series of transactions, the Company sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of the Company’s assets,
or any Person consolidates with, or merges with or into, the Company, provided, however,
that a transaction described in this clause (ii) will be deemed not to be a Fundamental
Change so long as such transaction (A) both (1) does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of the Company’s voting stock and
(2) the Persons (the “Existing Shareholders”) that “beneficially owned,” directly or
indirectly, shares of the Company’s voting stock immediately prior to such transaction
beneficially own, directly or indirectly, shares of voting stock representing a majority of
the total voting power of all outstanding classes of voting stock of the surviving or
transferee person or (B) which is effected solely for the purpose of changing the Company’s
jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of Common Stock, if at all, solely into shares of the surviving entity or
a direct or indirect parent of the surviving entity;

     (iii) the Common Stock into which the Securities are then convertible ceases to be
listed on the NYSE, the Nasdaq or another national securities exchange and is not then
quoted on an established automated over-the-counter trading market in the United States and
no American Depositary Shares or similar instruments for the Common Stock are so listed or
quoted in the United States;

     (iv) continuing directors cease to constitute a majority of the Company’s board of
directors; or

     (v) the Company’s stockholders approve any plan or proposal for the Company’s
liquidation or dissolution.

     A “Make-Whole Fundamental Change” shall be deemed to have occurred upon the occurrence of a
Fundamental Change described in clauses (i), (ii), (iii) and (v) above.

     Notwithstanding anything to the contrary set forth in this Indenture, a merger or
consolidation described in clause (ii) above shall be deemed not to constitute a Fundamental Change
or Make-Whole Fundamental Change if at least 90% of all the consideration (excluding Cash payments
for fractional shares and Cash payments pursuant to dissenters’ appraisal rights) in the merger or
consolidation constituting the Fundamental Change consists of common stock traded on the NYSE,
Nasdaq or another national securities exchange (or which shall be so traded when issued or
exchanged in connection with such merger or consolidation) and as a result of such transaction or
transactions the Securities become convertible solely into such shares of common stock.

     For purposes of this Section 3.01:

	 	(a)	 	“person” and “group” shall have the meanings given to them for purposes of
Sections 13(d) and 14(d) of the Exchange Act or any successor provisions, and the term
“group” includes any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act, or any
successor provision;
	 
	 	(b)	 	a “beneficial owner” shall be determined in accordance with Rule 13d-3 under
the Exchange Act, as in effect on the date of this Indenture;

22

 

	 	(c)	 	“beneficially own” and “beneficially owned” have meanings correlative to that
of beneficial owner;
	 
	 	(d)	 	“board of directors” means the board of directors or other governing body
charged with the ultimate management of any person;
	 
	 	(e)	 	“capital stock” means: (i) in the case of a corporation, corporate stock; (ii)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;
(iii) in the case of a partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; or (iv) any other interest or
participation that confers on a person the right to receive a share of the profits and
losses of, or distributions of assets of, the issuing person;
	 
	 	(f)	 	“continuing director” means a director who either was a member of the Company’s
board of directors on March 22, 2007, or who becomes a member of the board of directors
subsequent to that date and whose election, appointment or nomination for election by
the Company’s stockholders is duly approved by a majority of the continuing directors
on the Company’s board of directors at the time of such approval, either by a specific
vote or by approval of the proxy statement issued by the Company on behalf of the
Company’s entire board of directors in which such individual is named as a nominee for
director; and
	 
	 	(g)	 	“voting stock” means any class or classes of capital stock or other interests
then outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of the board of directors.

     (b) Notice of Fundamental Change. Within 30 Business Days after the effective date of
each Fundamental Change, the Company shall notify the Trustee of the Fundamental Change Purchase
Date and shall mail a written notice of the Fundamental Change (the “Fundamental Change Company
Notice”) to each Holder (and to beneficial owners as required by applicable law) in accordance with
Section 12.02. The notice shall include the form of a Fundamental Change Purchase Notice to be
completed by the Holder and shall state, as applicable:

     (i) the events causing such Fundamental Change and the date of such Fundamental Change;

     (ii) that the Holder has a right to require the Company to purchase the Holder’s
Securities;

     (iii) the date by which the Fundamental Change Purchase Notice must be delivered to the
Paying Agent in order for a Holder to exercise the Fundamental Change purchase right;

     (iv) the Fundamental Change Purchase Date;

     (v) the Fundamental Change Purchase Price;

     (vi) the procedures that the Holder must follow to exercise its Fundamental Change
purchase right under this Section 3.01;

     (vii) the names and addresses of the Paying Agent and the Conversion Agent;

     (viii) that the Securities must be surrendered to the Paying Agent to collect payment
of the Fundamental Change Purchase Price;

23

 

     (ix) that the Fundamental Change Purchase Price for any Security as to which a
Fundamental Change Purchase Notice has been duly given and not withdrawn shall be paid
promptly following the later of the Fundamental Change Purchase Date and the time of
surrender of such Security;

     (x) the Conversion Rate (after giving effect to any change in the Conversion Rate that
resulted from the Fundamental Change);

     (xi) that the Securities with respect to which a Fundamental Change Purchase Notice has
been given may be converted pursuant to Article 4 of this Indenture only if either (i) the
Fundamental Change Purchase Notice has been withdrawn in accordance with the terms of this
Indenture or (ii) there shall be a default in the payment of the Fundamental Change Purchase
Price;

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

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

     (xiv) the CUSIP number(s) of the Securities.

     If any of the Securities are in the form of a Global Security, then the Company shall modify
such notice to the extent necessary to accord with the Applicable Procedures for repurchases.

     At the Company’s request, the Trustee shall give the Fundamental Change Company Notice on
behalf of the Company and at the Company’s expense; provided, however, that the Company makes such
request at least three Business Days (unless a shorter period shall be consented to by the Trustee)
prior to the date by which such Fundamental Change Company Notice must be given to the Holders in
accordance with this Section 3.01(b); provided further, however, that the text of such notice shall
be prepared by the Company.

     (c) Fundamental Change Purchase Notice. A Holder may exercise its right specified in
Section 3.01(a) upon delivery of a written notice (which shall be in substantially the form
included in Exhibit A hereto and which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance with the Applicable
Procedures) of the exercise of such rights (a “Fundamental Change Purchase Notice”) to and actually
received by a Paying Agent at any time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Fundamental Change Purchase Date. The Fundamental Change Purchase Notice
must state:

     (i) if Certificated Securities are to be delivered, the certificate numbers of the
Securities that the Holder shall deliver to be purchased;

     (ii) the portion of the principal amount of the Securities that the Holder shall
deliver to be purchased, which portion must be in principal amounts of $1,000 or an integral
multiple thereof; and

     (iii) that such Securities are being tendered for and shall be purchased by the Company
on the Fundamental Change Purchase Date pursuant to the terms and conditions specified in
this Indenture.

     The delivery of such Security to any Paying Agent (together with all necessary endorsements)
at the office of such Paying Agent shall be a condition to the receipt by the Holder of the
Fundamental Change Purchase Price; provided, however, that such Fundamental Change Purchase Price
shall be paid pursuant to this

24

 

Section 3.01 only if the Security so delivered to the Paying Agent shall conform in all
material respects to the description thereof in the related Fundamental Change Purchase Notice.

     The Company shall purchase from the Holder thereof, pursuant to this Section 3.01, a portion
of a Security if the principal amount of such portion is $1,000 or an integral multiple of $1,000.
Provisions of this Section 3.01 that apply to the purchase of all of a Security also apply to the
purchase of such a portion of such Security.

     Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by this Section 3.01(c) shall have the right to
withdraw such Fundamental Change Purchase Notice at any time prior to 5:00 p.m., New York City
time, on the Business Day immediately preceding the Fundamental Change Purchase Date by delivery of
a written notice of withdrawal to the Paying Agent in accordance with Section 3.02(b).

     A Paying Agent shall promptly notify the Company once each Business Day of the receipt by it
of any Fundamental Change Purchase Notices or written notices of withdrawal thereof.

     (d) Notwithstanding anything herein to the contrary, in the case of Global Securities, any
Fundamental Change Purchase Notice may be delivered or withdrawn, and such Securities may be
surrendered or delivered for purchase, in accordance with the Applicable Procedures.

     Section 3.02. Effect of Fundamental Change Purchase Notice. (a) Upon receipt by
any Paying Agent of a Fundamental Change Purchase Notice, the Holder of the Security in respect of
which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change
Purchase Notice is withdrawn as specified below) thereafter be entitled to receive the Fundamental
Change Purchase Price with respect to such Security. Such Fundamental Change Purchase Price shall
be paid to such Holder promptly following the later of (i) the Fundamental Change Purchase Date
(provided such Holder has satisfied the conditions in Section 3.01(c) with respect to such
Security) and (ii) the time of delivery of such Security to a Paying Agent by the Holder thereof in
the manner required by Section 3.01(c). A Security in respect of which a Fundamental Change
Purchase Notice has been given by the Holder thereof may not be converted pursuant to Article 4
hereof on or after the date of the delivery of such Fundamental Change Purchase Notice, unless
either (i) such Fundamental Change Purchase Notice has first been validly withdrawn in accordance
with Section 3.02(b); or (ii) there shall be a default in the payment of the Fundamental Change
Purchase Price, provided, that the conversion right with respect to such Security shall terminate
at 5:00 p.m., New York City time, on the date such default is cured and such Security is purchased
in accordance herewith.

     (b) A Fundamental Change Purchase Notice may be withdrawn by any Holder delivering such
Fundamental Change Purchase Notice upon delivery of a written notice of withdrawal (which may be
delivered by mail, overnight courier, hand delivery, facsimile transmission or in any other written
form and, in the case of Global Securities, may be delivered electronically or by other means in
accordance with the Applicable Procedures) to and actually received by Paying Agent at any time
prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental
Change Purchase Date, specifying:

     (i) if Certificated Securities are to be withdrawn, the certificate numbers of the
Securities in respect of which such notice of withdrawal is being submitted;

     (ii) the principal amount of the Securities in respect of which such notice of
withdrawal is being submitted, which principal amount must be $1,000 or an integral multiple
thereof; and

25

 

     (iii) the principal amount, if any, of the Securities that remains subject to the
original Fundamental Change Purchase Notice and that has been or shall be delivered for
purchase by the Company.

     Section 3.03. Deposit of Fundamental Change Purchase Price. Prior to 10:00 a.m.,
New York City time, on a Fundamental Change Purchase Date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate of the Company is acting as the Paying Agent, shall
segregate and hold in trust as provided in Section 2.04) an amount in Cash (in immediately
available funds if deposited on such Fundamental Change Purchase Date) sufficient to pay the
aggregate Fundamental Change Purchase Price of all the Securities or portions thereof that are to
be purchased on that Fundamental Change Purchase Date.

     If a Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City
time, on a Fundamental Change Purchase Date, Cash sufficient to pay the aggregate Fundamental
Change Purchase Price of all Securities for which a Fundamental Change Purchase Notice has been
delivered and not validly withdrawn in accordance with this Indenture, then, on and after such
Fundamental Change Purchase Date, such Securities shall cease to be outstanding and interest
(including Additional Interest) on such Securities shall cease to accrue, whether or not such
Securities are delivered to the Paying Agent, and the rights of the Holders in respect thereof

shall terminate (other than the right to receive the Fundamental Change Purchase Price upon
delivery of such Securities by their Holders to the Paying Agent).

     Section 3.04. Securities Purchased in Part. Any Certificated Security that is to
be purchased only in part shall be surrendered at the office of a Paying Agent (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form
reasonably satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such
Holder’s attorney duly authorized in writing), and promptly after a Fundamental Change Purchase
Date, the Company shall issue and the Trustee shall, upon receipt of a Company Order (which the
Company agrees to deliver promptly), authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of such authorized denomination or
denominations as may be requested by such Holder, in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so surrendered that is not
purchased.

     Section 3.05. Repayment to the Company. To the extent that the aggregate amount
of Cash deposited by the Company pursuant to Section 3.03 exceeds the aggregate Fundamental Change
Purchase Price of the Securities or portions thereof that the Company is obligated to purchase on
the Fundamental Change Purchase Date, then, within one day after the Fundamental Change Purchase
Date, the Paying Agent shall return any such excess Cash to the Company.

     Section 3.06. Compliance with Securities Laws upon Purchase of Securities. When
complying with the provisions of Article 3 hereof (provided that such offer or purchase constitutes
an “issuer tender offer” for purposes of Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:

     (a) comply with Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act
that may then be applicable; and

     (b) otherwise comply with all federal and state securities laws so as to permit the rights and
obligations in connection with any purchase pursuant to this Article 3 to be exercised in the time
and in the manner specified herein.

26

 

ARTICLE 4

Conversion

     Section 4.01 Conversion Privilege. The Securities shall be convertible in
accordance with their terms and in accordance with and subject to this Article 4 into a number of
shares of Common Stock equal to the Conversion Rate, subject to the provisions of Section 4.02
regarding fractional shares, on any Trading Day on or before the Close of Business on the Business
Day immediately preceding the Maturity Date.

     Section 4.02 Conversion Rate. (a) If the Applicable Stock Price is less than or
equal to the Base Conversion Price, the Conversion Rate will be the Base Conversion Rate.

     If the Applicable Stock Price is greater than the Base Conversion Price, the Conversion Rate
will be determined in accordance with the following formula:

     The Conversion Rate, including any additional shares added to the Conversion Rate in
connection with a Make-Whole Fundamental Change, will not exceed 30.525 (which is equal to a
conversion price of $32.76 per share), however such maximum Conversion Rate will be appropriately
adjusted for conversion rate adjustments as described in Section 4.06 hereof.

     The “Base Conversion Rate” is 17.2414, subject to adjustment as described in Section 4.06
hereof. The “Base Conversion Price” is a dollar amount derived by dividing $1,000 by the Base
Conversion Rate. The “Incremental Share Factor” is 13.2836, subject to the same proportional
adjustments as the Base Conversion Rate. The “Applicable Stock Price” is equal to the average of
the Closing Prices of the Common Stock over the five Trading Day period starting the third Trading
Day following the Conversion Date of the Securities, provided that with respect to the Securities
surrendered for conversion during the ten Trading Day period prior to the Maturity Date, the
Applicable Stock Price shall be equal to the average of the Closing Prices of the Common Stock over
the five-Trading Day period ending on the Maturity Date.

     A Holder of a Security otherwise entitled to a fractional share will receive cash in an amount
equal to the value of such fractional share based on the Applicable Stock Price.

     A Security for which a Holder has delivered a Fundamental Change Purchase Notice requiring us
to purchase the Securities may be surrendered for conversion only if such notice is withdrawn in
accordance with this Indenture.

     (b) If a Holder elects to convert its Securities in connection with a Make-Whole Fundamental
Change, then the Conversion Rate of the Securities being converted by such Holder shall be
increased by an additional number of shares of Common Stock (the “Additional Shares”) set forth in
Exhibit B. For the avoidance of doubt, the increases provided for in this Section 4.02(b) shall
only be made with respect to the Securities being converted in connection with such Make-Whole
Fundamental Change and shall not be effective as to any Securities not so converted. For purposes
of this Section 4.02, a conversion shall be deemed to be “in connection” with a Make-Whole
Fundamental Change to the extent that such conversion is effected at any time from and after the
public announcement of, or within ten (10) Trading Days after the Effective Date of, such
Make-Whole Fundamental Change.

     The increase in the Conversion Rate, expressed as a number of Additional Shares to be received
per $1,000 principal amount of Securities, will be determined by the Company by reference to the
table attached as Exhibit B hereto, based on the date the Make-Whole Fundamental Change occurs or
becomes effective (the

27

 

“Effective Date”) and the price paid or deemed to be paid per share of Common Stock in the
transaction constituting the Make-Whole Fundamental Change (the “Stock Price”); provided that if a
Holder of the Common Stock receives only Cash in connection with a Fundamental Change described in
clause (ii) of the definition thereof contained in Section 3.01(a), the Stock Price shall be the
Cash amount paid per share. In all other cases, the Stock Price will be the average of the Closing
Price of the Common Stock over the five consecutive Trading Day period ending on the Trading Day
preceding the Effective Date, provided that if the Stock Price is between two Stock Price amounts
in the table or the Effective Date is between two Effective Dates in the table, the Company shall
determine the increased Conversion Rate by a straight-line interpolation between the number of
Additional Shares set forth for the next higher and next lower Stock Price amounts and the next
earliest and next latest Effective Dates, based on a 365 day year, as applicable. If (1) the Stock
Price is greater than $300.00 per share of Common Stock (subject to adjustment as of any date on
which the Conversion Rate is adjusted pursuant to Section 4.06), no Additional Shares will be added
to the Conversion Rate, and (2) the Stock Price is less than $32.76 per share (subject to
adjustment in the same manner as set forth in Section 4.06), no Additional Shares will be added to
the Conversion Rate. An adjusted Stock Price pursuant to the foregoing clause (1) will equal the
Stock Price applicable immediately prior to such adjustment, multiplied by a fraction, the
numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the
Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted.

     Section 4.03. Conversion Procedure. (a) The right of conversion attaching to any
Security may be exercised at any time during which conversion is permitted in accordance with
Section 4.01 (i) if such Security is represented by a Global Security, by book-entry transfer to
the Conversion Agent through the facilities of the Depositary in accordance with the Applicable
Procedures, or (ii) if such Security is represented by a Certificated Security, by delivery of such
Security at the specified office of the Conversion Agent, accompanied, in either case, by: (1) a
duly signed and completed conversion notice, in the form as set forth on the reverse of Security
attached hereto as Exhibit A (a “Conversion Notice”); (2) if such Certificated Security has been
lost, stolen, destroyed or mutilated, a notice to the Conversion Agent in accordance with Section
2.07 regarding the loss, theft, destruction or mutilation of the Security; (3) appropriate
endorsements and transfer documents if required by the Conversion Agent; and (4) payment of any tax
or duty, in accordance with Section 4.04, which may be payable in respect of any transfer involving
the issue or delivery of the Common Stock in the name of a Person other than the Holder of the
Security. The date on which the Holder satisfies all of those requirements is the “Conversion
Date.” The Securities will be deemed to be converted immediately prior to the Close of Business on
the Conversion Date. The Company shall deliver to the Holder through a Conversion Agent a
certificate for the number of whole shares of Common Stock issuable upon the conversion (and Cash
in lieu of any fractional shares pursuant to Section 4.02(a)) as promptly as practicable after the
Conversion Date, but in no event later than the third Business Day after the Conversion Date.

     (b) The person in whose name the Security is registered shall be deemed to be a stockholder of
record on the Conversion Date; provided, however, that no surrender of a Security or satisfaction
of the other conditions in Section 4.03(a) on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled to receive the
shares of Common Stock upon such conversion as the record holder or holders of such shares of
Common Stock on such date, but such surrender shall, provided that all such conditions have been
satisfied, be effective to constitute the person or persons entitled to receive such shares of
Common Stock as the record holder or holders thereof for all purposes at the Close of Business on
the next succeeding day on which such stock transfer books are open. Upon conversion of a
Security, such person shall no longer be a Holder of such Security. No separate payment or
adjustment will be made for accrued and unpaid interest on a converted Security or for dividends or
distributions on shares of Common Stock issued upon conversion of a Security. By delivering to the
holder the shares of Common Stock issuable upon conversion, together with a cash payment in lieu of
any fractional shares, the Company will satisfy its obligation with respect to the conversion of
the Securities. Accordingly, any accrued but unpaid interest will be deemed paid in full upon
conversion, rather than cancelled, forfeited or extinguished.

28

 

     (c) Upon surrender of a Security that is converted in part, the Company shall execute, and the
Trustee shall, upon receipt of a Company Order, authenticate and deliver to the Holder, a new
Security equal in principal amount of the unconverted portion of the Security surrendered.

     Section 4.04. Taxes on Conversion. If a Holder converts a Security, the Company
shall pay any documentary, stamp or similar issue or transfer taxes or duties relating to the
issuance or delivery of shares of Common Stock upon exercise of such conversion rights. However,
the Holder shall pay any tax or duty which may be payable relating to any transfer involving the
issuance or delivery of shares of Common Stock in a name other than the Holder’s name. The
Conversion Agent may refuse to deliver the certificate representing shares of Common Stock being
issued in a name other than the Holder’s name until the Conversion Agent receives a sum sufficient
to pay any tax or duties which will be due because the shares are to be issued in a name other than
the Holder’s name. Nothing herein shall preclude any tax withholding required by law or
regulation.

     Section 4.05. Company to Provide Stock. (a) The Company shall, prior to the
issuance of any Securities hereunder, and from time to time as may be necessary, reserve at all
times and keep available, free from preemptive rights, out of its authorized but unissued Common
Stock, a sufficient number of shares of Common Stock deliverable upon conversion of all of the
Securities.

     (b) All shares of Common Stock that may be issued upon conversion of the Securities shall be
newly issued shares or shares held in the treasury of the Company, shall be duly authorized,
validly issued, fully paid and nonassessable and shall be free of any preemptive rights and free of
any lien or adverse claim.

     (c) The Company shall comply with all applicable securities laws regulating the offer and
delivery of any Common Stock upon conversion of Securities and, if the Common Stock is then listed
or quoted on the NYSE, the Nasdaq or any other United States national or regional securities
exchange or other market, shall list or cause to have quoted and keep listed and quoted the shares
of Common Stock issuable upon conversion of the Notes to the extent permitted or required by the
rules of such exchange or market; provided, however, that, if the rules of such automated quotation
system or exchange permit the Company to defer the listing of such Common Stock until the first
conversion of the Securities into Common Stock in accordance with the provisions of this Indenture,
the Company covenants to list such Common Stock issuable upon conversion of the Securities in
accordance with the requirements of such automated quotation system or exchange at such time.

     (d) Notwithstanding anything herein to the contrary, nothing herein shall give to any Holder
any rights as a creditor in respect solely of its right to conversion.

     Section 4.06. Adjustment of Conversion Rate. The Conversion Rate shall be
adjusted from time to time by the Company if any of the following events occur, except that the
Company will not make any adjustment if Holders of Securities may participate, as a result of
holding the Securities, in the transactions described without having to convert their Securities:

     (a) If the Company, at any time or from time to time while any of the Securities are
outstanding, issues shares of its Common Stock as a dividend or distribution on shares of Common
Stock, or if the Company effects a share split or share combination in respect of the Common Stock,
then the Conversion Rate shall be adjusted based on the following formula:

29

 

     where

	 	 	 	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect immediately prior to the Ex Date of such
dividend or distribution, or effective date of such subdivision or combination, as
applicable;
	 
	 	 	 	 	 	 
	 

	 	CR’
	 	=
	 	the Conversion Rate in effect on and after the Ex Date or effective date;
	 
	 	 	 	 	 	 
	 

	 	OS0
	 	=
	 	the number of shares of Common Stock outstanding immediately prior to the
Ex Date or effective date; and
	 
	 	 	 	 	 	 
	 

	 	OS’
	 	=
	 	the number of shares of Common Stock outstanding on and after the Ex Date or
effective date.

     Such adjustment shall become effective immediately after 9:00 a.m., New York City time, on the
Business Day following the record date for such dividend or distribution, or the date fixed for
determination for such share split or share combination. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in treasury by the Company. If any dividend
or distribution of the type described in this Section 4.06(a) is declared but not so paid or made,
or the outstanding shares of Common Stock are not subdivided or combined, as the case may be, the
Conversion Rate shall again be adjusted to the Conversion Rate which would then be in effect if
such dividend, distribution, subdivision or combination had not been declared.

     (b) If the Company, at any time or from time to time while any of the Securities are
outstanding, issues to all holders of its outstanding shares of Common Stock any rights or warrants
entitling them for a period of not more than 45 calendar days to subscribe for or purchase shares
of Common Stock at a price per share less than the average of the Closing Price for the five
consecutive Trading Day period ending on the Business Day immediately preceding the date of
announcement of such issuance, the Conversion Rate shall be adjusted based on the following
formula:

     where

	 	 	 	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect immediately prior to the Ex Date for such issuance;
	 
	 	 	 	 	 	 
	 

	 	CR’
	 	=
	 	the Conversion Rate in effect on and after the Ex Date for such issuance;
	 
	 	 	 	 	 	 
	 

	 	OS0
	 	=
	 	the number of shares of Common Stock outstanding on and after the Ex Date
for such issuance;
	 
	 	 	 	 	 	 
	 

	 	X
	 	=
	 	the total number of shares of Common Stock issuable pursuant to such rights
or warrants; and
	 
	 	 	 	 	 	 
	 

	 	Y
	 	=
	 	the number of shares of Common Stock equal to the aggregate price payable to
exercise such rights or warrants divided by the average of the Closing Price for the
five consecutive Trading Day period ending on the Business Day immediately preceding
the date of announcement of the issuance of such rights or warrants.

     Such adjustment shall be successively made whenever any such rights or warrants are issued and
shall become effective immediately after 9:00 a.m., New York City time, on the Business Day
following the record

30

 

date of such issuance. To the extent that shares of Common Stock are not delivered pursuant
to such rights or warrants upon the expiration or termination of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the basis of the
delivery of only the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if the announcement with respect to such rights,
warrants or convertible securities had not been made.

     In determining whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than the average of the Closing Price for the five consecutive
Trading Day period ending on the Business Day immediately preceding the date of announcement of
such issuance, and in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise thereof, the value of such consideration, if other than
Cash, to be determined in good faith by the Board of Directors.

     (c) In case the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock shares of any class of capital stock of the Company (other than Common Stock as
covered by Section 4.06(a)), evidences of its Indebtedness or other assets or property of the
Company (including securities, but excluding (i) dividends and distributions and rights or warrants
covered by Section 4.06(a), Section 4.06(b) or Section 4.06(e) (for which an adjustment is made to
the Conversion Rate), (ii) cash covered by Section 4.06(d) and (iii) to the extent provided in
Section 4.08, rights distributed pursuant to a stockholder rights plan) (any of such shares of
Capital Stock, Indebtedness, or other assets or property hereinafter in this Section 4.06(c) called
the “Distributed Property”), then, in each such case the Conversion Rate shall be adjusted based on
the following formula:

     where

	 	 	 	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect immediately prior to the Ex Date for such distribution;
	 
	 	 	 	 	 	 
	 

	 	CR’
	 	=
	 	the Conversion Rate in effect on and after the Ex Date for such distribution;
	 
	 	 	 	 	 	 
	 

	 	SP0
	 	=
	 	the average of the Closing Price over the five consecutive Trading Day
period ending on the Trading Day immediately preceding the Ex Date for such
distribution; and
	 
	 	 	 	 	 	 
	 

	 	FMV
	 	=
	 	the fair market value (as determined by the Company’s Board of Directors) of
the shares of capital stock of the Company, evidences of Indebtedness, assets or
property distributed with respect to each outstanding share of Common Stock on the Ex
Date for such distribution.

     Such adjustment shall become effective immediately prior to 9:00 a.m., New York City time, on
the Business Day following the date fixed for the determination of stockholders entitled to receive
such distribution; provided that if the then fair market value (as so determined) of the portion of
the Distributed Property so distributed applicable to one share of Common Stock is equal to or
greater than SP0 as set forth above, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive, for each $1,000
principal amount of Securities upon conversion, the amount of Distributed Property such holder
would have received had such holder owned a number of shares of Common Stock equal to the
Conversion Rate 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 record

31

 

date had not been fixed. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 4.06(c) by reference to the actual or when issued
trading market for any securities, it shall in doing so consider the prices in such market over the
same period used in computing the average of the Closing Price of the Common Stock.

     With respect to an adjustment pursuant to this Section 4.06(c) where there has been a payment
of a dividend or other distribution on the Common Stock consisting of shares of capital stock of
any class or series, or similar equity interest, of or relating to a Subsidiary or other business
unit of the Company (a “Spin-Off,” and any such dividend or distribution of Common Stock, shares of
capital stock or equity interests being “Spin-Off Securities”), the Conversion Rate in effect
immediately before 5:00 p.m., New York City time, on the fifteenth Trading Day immediately
following, and including, the Ex Date for the distribution of the Spin-Off Securities shall be
increased based on the following formula:

     where

	 	 	 	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect immediately prior to the Close of Business on
the fifteenth Trading Day immediately following, and including, the Ex Date for the
distribution of the Spin-Off Securities;
	 
	 	 	 	 	 	 
	 

	 	CR’
	 	=
	 	the Conversion Rate in effect from and after the Close of Business on the
fifteenth Trading Day immediately following, and including, the Ex Date for the
distribution of the Spin-Off Securities;
	 
	 	 	 	 	 	 
	 

	 	FMV0
	 	=
	 	the average of the Closing Price of the capital stock or similar equity
interest distributed to holders of Common Stock applicable to one share of Common Stock
over the first 10 consecutive Trading Day period commencing on, and including, the
fifth Trading Day after the Ex Date for such distribution; and
	 
	 	 	 	 	 	 
	 

	 	MP0
	 	=
	 	the average of the Closing Price of Common Stock over the first 10
consecutive Trading Day period commencing on, and including, the fifth Trading Day
after the Ex Date for such distribution.

     Such adjustment shall occur at the Close of Business on the fifteenth Trading Day from, and
including, the Ex Date for the distribution of the Spin-Off Securities; provided, however, that the
Company may in lieu of the foregoing adjustment elect to make adequate provision so that each
Holder of Securities shall have the right to receive upon conversion thereof the amount of such
Spin-Off Securities that such Holder of Securities would have received if such Securities had been
converted on the record date with respect to such distribution.

     Rights or warrants distributed by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for, purchase or convert into 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”): (x) are deemed to be transferred with such
shares of Common Stock; (y) are not exercisable; and (z) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for purposes of this
Section 4.06(c), (and no adjustment to the Conversion Rate under this Section 4.06(c), will be
required) until the occurrence of the earliest Trigger Event, whereupon such rights or warrants
shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 4.06(c). 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

32

 

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 4.06(c) 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 Stock with respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock 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 or warrants had not been issued.

     For purposes of this Section 4.06(c), Section 4.06(a) and Section 4.06(b), any dividend or
distribution to which this Section 4.06(c) is applicable that also includes shares of Common Stock,
or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 4.06(a)
or 4.06(b) applies (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 shares of Common Stock
or rights or warrants to which Section 4.06(a) or 4.06(b) applies (and any Conversion Rate
adjustment required by this Section 4.06(c) with respect to such dividend or distribution shall
then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock
or such rights or warrants to which Section 4.06(a) or 4.06(b) applies (and any further Conversion
Rate adjustment required by Section 4.06(a) and 4.06(b) with respect to such dividend or
distribution shall then be made), except (A) the Ex Date of such dividend or distribution shall be
substituted for “the Ex Date,” “the Ex Date or effective date,” “the day following the record date
for such dividend or distribution, or the date fixed for determination for such share split or
share combination,” “the Ex Date for such issuance” and “the date fixed for the determination of
stockholders entitled to receive such rights and warrants” within the meaning of Section 4.06(a)
and Section 4.06(b) and (B) any shares of Common Stock included in such dividend or distribution
shall not be deemed “outstanding immediately prior to the Ex Date or effective date” within the
meaning of Section 4.06(a).

     (d) If a cash dividend or distribution is made to all holders of Common Stock (other than (i)
in connection with the Company’s liquidation, dissolution or winding up or (ii) distributions
described in Section 4.06(e)), the Conversion Rate shall be adjusted based on the following
formula:

     where

	 	 	 	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect at the Close of Business on the Business Day
immediately prior to the Ex Date for such dividend or distribution;
	 
	 	 	 	 	 	 
	 

	 	CR’
	 	=
	 	the Conversion Rate in effect on and after the Ex Date for such distribution;
	 
	 	 	 	 	 	 
	 

	 	SP0
	 	=
	 	the average Closing Price of the Common Stock for the five consecutive
Trading Day period ending on the Trading Day immediately preceding the Ex Date for such
dividend or distribution; and

33

 

	 	 	 	 	 	 	 
	 

	 	C
	 	=
	 	the amount in cash per share the Company dividends or distributes to holders
of Common Stock.

     Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the
record date for such dividend or distribution; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than SP0 as
set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive, for each $1,000 principal amount upon conversion, the
amount of cash such Holder would have received had such Holder owned a number of shares of Common
Stock equal to the Conversion Rate 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.

     For the avoidance of doubt, for purposes of this Section 4.06(d), in the event of any
reclassification of the Common Stock, as a result of which the Securities become convertible into
more than one class of Common Stock, if an adjustment to the Conversion Rate is required pursuant
to this Section 4.06(d), references in this Section to one share of Common Stock or Closing Price
of one share of Common Stock shall be deemed to refer to a unit or to the price of a unit
consisting of the number of shares of each class of Common Stock into which the Securities are then
convertible equal to the numbers of shares of such class issued in respect of one share of Common
Stock in such reclassification. The above provisions of this paragraph shall similarly apply to
successive reclassifications.

     (e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or
exchange offer for all or any portion of the Common Stock, to the extent that the cash and value of
any other consideration included in the payment per share of Common Stock validly tendered or
exchanged exceeds the Current Market Price of the Common Stock on the tenth Trading Day next
succeeding the last date on which tenders or exchanges may be made pursuant to such tender or
exchange offer (as it may be amended), the Conversion Rate shall be increased based on the
following formula:

     where

	 	 	 	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect immediately before the Close of Business on
the expiration date;
	 
	 	 	 	 	 	 
	 

	 	CR’
	 	=
	 	the Conversion Rate in effect on and after the effective date of the
adjustment;
	 
	 	 	 	 	 	 
	 

	 	AC
	 	=
	 	the aggregate value of all cash and any other consideration (as determined in
good faith by the Company’s Board of Directors) paid or payable for shares purchased in
such tender or exchange offer;
	 
	 	 	 	 	 	 
	 

	 	OS0
	 	=
	 	the number of shares of Common Stock outstanding immediately prior to the
date such tender or exchange offer expires (including any shares validly tendered and
not withdrawn pursuant to the tender or exchange offer but excluding shares held in
treasury);
	 
	 	 	 	 	 	 
	 

	 	OS’
	 	=
	 	the number of shares of Common Stock outstanding as of the last time tenders
or exchanges could have been made pursuant to such tender or exchange offer (not
including any shares validly tendered and not withdrawn pursuant to the tender or
exchange offer or shares held in treasury); and

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	 	SP’
	 	=
	 	the Current Market Price.

     The adjustment to the Conversion Rate under this Section 4.06(e) shall occur on the tenth
Trading Day from, and including, the Trading Day next succeeding the date such tender or exchange
offer expires.

     If the Company is obligated to repurchase shares pursuant to any such tender or exchange
offer, but the Company is permanently prevented by applicable law from effecting any such purchases
or all or any portion of 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 or had only been made in respect of the purchases that had been effected.

     (f) For purposes of this Section 4.06 the term “record date” shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of Common Stock have the
right to receive any cash, securities or other property or in which the Common Stock (or other
applicable security) is exchanged 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).

     (g) If application of the formulas provided in Sections 4.06(a), 4.06(b), 4.06(c), 4.06(d) or
4.06(e) would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate
shall be made except in the case of a subdivision or split of the Common Stock.

     (h) In any case in which this Section 4.06 shall require that an adjustment be made following
a record date or Expiration Date, as the case may be, established for purposes of this Section
4.06, the Company may elect to defer (but only until five Business Days following the filing by the
Company with the Trustee of the certificate described in Section 4.11) issuing to the Holder of any
Security converted after such record date or Expiration Date the shares of Common Stock and other
capital stock of the Company, evidences of indebtedness or other non-Cash assets or rights or
warrants issuable upon such conversion over and above Cash payable, or the shares of Common Stock
and other capital stock of the Company, evidences of indebtedness or other non-Cash assets or
rights or warrants issuable, upon such conversion only on the basis of the Conversion Rate prior to
adjustment; and, in lieu of the shares, evidences of indebtedness or other non-Cash assets or
rights or warrants the issuance of which, or Cash the payment of which, is so deferred, the Company
shall issue or cause its transfer agents to issue due bills or other appropriate evidence prepared
by the Company of the right to receive such shares or Cash, as the case may be. If any
distribution in respect of which an adjustment to the Conversion Rate is required to be made as of
the record date or Expiration Date therefor is not thereafter made or paid by the Company for any
reason, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in
effect if such record date had not been fixed or such effective date or Expiration Date had not
occurred.

     (i) In the event of any adjustment to the Conversion Rate pursuant to clauses (b), (c), (d)
and (e) above or as the result of or in connection with a Make-Whole Fundamental Change pursuant to
Section 4.02(b) that would or could reasonably be expected to result in the Securities, in the
aggregate, becoming convertible into shares of Common Stock in excess of limits established by the
Nasdaq that would require stockholder approval of the issuances of such shares of Common Stock upon
such conversion, the Company will, at its option, either obtain stockholder approval of such
issuances or deliver cash in lieu of any shares otherwise deliverable upon conversions in excess of
such limitations (based on the Closing Price of the Common Stock on the Trading Day immediately
prior to the date when such shares would otherwise be required to be distributed).

     (j) If one or more events occur requiring an adjustment be made to the Conversion Rate for a
particular period, adjustments to the Conversion Rate shall be determined by the Company’s Board of
Directors

35

 

to reflect the combined impact of such Conversion Rate adjustments, as set out in this Section
4.06, during such period.

     Section 4.07. No Adjustment. No adjustment in the Conversion Rate shall be
required unless the adjustment would result in a change in the Conversion Rate of at least 1.00%;
provided, however, that any adjustment which by reason of this Section 4.07 is not required to be
made shall be carried forward and taken into account in subsequent adjustments and in connection
with any conversion of Securities. All calculations under this Article 4 shall be made to the
nearest one-ten thousandth (1/10,000) of a cent or to the nearest one-ten thousandth (1/10,000) of
a share, as the case may be.

     No adjustment in the Conversion Rate need be made for (i) issuances of Common Stock pursuant
to any present or future Company plan for reinvestment of dividends or interest payable on the
Company’s securities or the investment or additional optional amounts thereunder in shares of
Common Stock, (ii) upon the issuance of any shares of Common Stock or options or rights to purchase
shares of Common Stock pursuant to any present or future employee, director or consultant benefit
plan or program of or assumed by the Company or any of its Subsidiaries or (iii) upon the issuance
of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable
or convertible security outstanding as of the date the Securities were first issued.

     No adjustment to the Conversion Rate need be made pursuant to Section 4.06 for a transaction
if Holders are permitted to participate in the transaction without conversion on a basis and with
notice that the Board of Directors of the Company determines in good faith to be fair and
appropriate in light of the basis and notice on which holders of Common Stock participate in the
transaction.

     No adjustment to the Conversion Rate need be made for accrued and unpaid interest, including
Additional Interest, if any.

     Whenever a provision of the Indenture requires the calculation of an average of the Closing
Price over a span of multiple days, the Company will make appropriate adjustments to account for
any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment
to the Conversion Rate that becomes effective, or any event requiring an adjustment to the
Conversion Rate where the Ex Date of the event occurs, at any time during the period from which the
average is to be calculated.

     Section 4.08. Stockholder Rights Plans. Upon conversion of the Securities, the
Holders shall receive, in addition to any shares of Common Stock issuable upon such conversion, any
associated rights issued under any future stockholder rights plan the Company adopts that provides
that each share of Common Stock issued upon conversion of the Securities at any time prior to the
distribution of separate certificates representing such rights will be entitled to receive such
rights unless, prior to conversion, the rights have separated from the Common Stock, expired,
terminated or been redeemed or exchanged in accordance with such rights plan, and no adjustment
shall be made to the Conversion Rate pursuant to Section 4.06. If the rights have separated from
the Common Stock, the Conversion Rate shall be adjusted at the time of separation as if the Company
distributed to all holders of Common Stock, shares of Capital Stock, evidences of Indebtedness or
assets as described in Section 4.06(c), subject to readjustment in the event of the expiration,
termination or redemption of such rights.

     Section 4.09. Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege. If (1) there shall occur (a) any reclassification of the Company’s Common
Stock (other than a change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination); (b) a statutory share exchange,
consolidation, merger or combination involving the Company other than a merger in which the Company
is the continuing corporation and which does not result in any reclassification of, or change
(other than in par value, or from par value to no par value, or from no par value to

36

 

par value, or as a result of a subdivision or combination) in, outstanding shares of Common
Stock; or (c) a sale or conveyance as an entirety or substantially as an entirety of the property
and assets of the Company, directly or indirectly, to another Person; and (2) pursuant to such
reclassification, statutory share exchange, consolidation, merger, combination, sale or conveyance,
holders of outstanding shares of Common Stock would be entitled to receive stock (other than Common
Stock), other securities, other property, assets or Cash (or any combination thereof) for such
shares of Common Stock (any such event a “Merger Event”), then the Company, or such successor or
surviving, purchasing or transferee Person, as the case may be, shall, as a condition precedent to
such Merger Event, execute and deliver to the Trustee a supplemental indenture providing that, at
the effective time of the Merger Event, the right to convert a Security will be changed into a
right to convert it into the kind and amount of shares of stock, other securities or other property
or assets (including Cash or any combination thereof) that a holder of a number of shares of Common
Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been
entitled to receive (the “Reference Property”) upon such transaction (assuming for such purposes
that such conversion were settled entirely in Common Stock and without giving effect to any
adjustment to the Conversion Rate with respect to a Make-Whole Fundamental Change) immediately
prior to such Merger Event, except that such Holders will not be entitled to an increase in the
Conversion Rate if such Holder does not convert its Securities “in connection with” the relevant
Fundamental Change. If the Merger Event causes the Common Stock to be converted into the right to
receive more than a single type of consideration (determined based in part upon any form of
stockholder election), the Reference Property into which the Securities will be convertible will be
deemed to be the weighted average of the types and amounts of consideration received by the holders
of Common Stock that affirmatively make such an election. None of the foregoing provisions shall
affect the right of a holder of Securities to convert its Securities in accordance with the
provisions of this Article 4 prior to the effective date of such Merger Event. Such supplemental
indenture shall provide for adjustments of the Conversion Rate which shall be as nearly equivalent
as may be practicable to the adjustments of the Conversion Rate provided for in this Article 4.
The provisions of this Section 4.09 shall similarly apply to successive Merger Events.

     Section 4.10. Other Adjustments. Subject to applicable stock exchange rules and
listing standards, the Company shall be entitled to increase the Conversion Rate by any amount for
a period of at least 20 days if the Board of Directors determines that such increase would be in
the best interests in the Company, provided the Company has given to Holders at least 15 days’
prior notice, in accordance with Section 12.02, of any such increase in the Conversion Rate.
Subject to applicable stock exchange rules and listing standards, the Company shall be entitled to
increase the Conversion Rate, in addition to the events requiring an increase in the Conversion
Rate pursuant to Section 4.06, as it in its discretion shall determine to be advisable in order to
avoid or diminish any tax to stockholders in connection with any stock dividends, subdivisions of
shares, distributions of rights to purchase stock or securities or distributions of securities
convertible into or exchangeable for stock hereafter made by the Company to its stockholders.

     Section 4.11. Notice of Adjustment. Whenever the Conversion Rate or conversion
privilege is adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment in accordance with Section 12.02, and file with the Trustee an Officers’ Certificate
briefly stating the Conversion Rate, the facts requiring the adjustment and the manner of computing
it. Unless and until the Trustee shall receive an Officers’ Certificate setting forth an
adjustment of the Conversion Rate, the Trustee may assume without inquiry that the Conversion Rate
has not been adjusted and that the last Conversion Rate of which it has knowledge remains in
effect.

     Section 4.12. Trustee’s Disclaimer. The Trustee shall have no duty to determine
when an adjustment under this Article 4 should be made, how it should be made or what such
adjustment should be, but may accept as conclusive evidence of that fact or the correctness of any
such adjustment set forth in, and shall be protected in relying upon, an Officers’ Certificate,
including the Officers’ Certificate with respect thereto which the Company is obligated to file
with the Trustee pursuant to Section 4.11. The Trustee makes no representation as

37

 

to the validity or value of any securities or assets issued upon conversion
of Securities, and the Trustee shall not be responsible for the Company’s failure to comply with
any provisions of this Article 4.

     The Trustee shall not be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture executed pursuant to Section 4.09, but may
accept as conclusive evidence of the correctness thereof, and shall be fully protected in relying
upon, the Officers’ Certificate and Opinion of Counsel with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 4.09.

     Section 4.13. Settlement Upon Conversion. If Securities are surrendered for
conversion after 5:00 p.m., New York City time, on a Record Date for the payment of interest but
prior to the corresponding Interest Payment Date, a Holder of such Securities at 5:00 p.m., New
York City time, on such Record Date will receive the interest payable on such Securities on the
corresponding Interest Payment Date notwithstanding the conversion, assuming such Holder was the
holder of record of such Securities at the Close of Business on such Record Date; provided,
however, that each Holder agrees, by accepting a Security, that if the Holder surrenders any
Securities for conversion during such period, such Holder must pay the Company at the time such
Holder surrenders its Securities for conversion interest in accordance with the next sentence.
Securities surrendered for conversion during the period from 5:00 p.m., New York City time, on any
Record Date to 9:00 a.m., New York City time, on the immediately following Interest Payment Date,
must be accompanied by funds equal to the amount of interest (including Additional Interest, if
any) payable on such Interest Payment Date on the Securities so converted; provided that no such
payment need be made (a) if the Company has specified a Fundamental Change Purchase Date in respect
of the Securities that is after a Record Date and on or prior to the corresponding Interest Payment
Date; (b) in respect of any conversion which occurs after the Record Date for the interest payment
due on April 1, 2014 or (c) to the extent of any overdue interest, if any such amount exists at the
time of conversion with respect to such Security.

ARTICLE 5

Covenants

     Section 5.01. Payment of Securities. The Company shall promptly make all payments
in respect of the Securities on the dates and in the manner provided in the Securities and this
Indenture, including payments of Cash and shares of Common Stock due upon conversion. The
principal amount and Fundamental Change Purchase Price and accrued and unpaid interest shall be
considered paid on the date it is due if the Paying Agent holds by 10:00 a.m., New York City time,
on such date, in accordance with this Indenture, Cash designated and sufficient for the payment of
all such amounts then due. The Company shall, to the fullest extent permitted by law, pay interest
on overdue principal and overdue installments of interest at the rate borne by the Securities per
annum. Unless explicitly excluded, all references in this Indenture or the Securities to interest
shall be deemed to include Additional Interest, if any, payable pursuant to the Registration Rights
Agreement.

     The Company shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue amounts from time to time on demand at the rate then in effect; it shall
pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace periods) from time to time
on demand at the same rate to the extent lawful. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.

     Each installment of accrued and unpaid interest and Additional Interest, if any, on the
Securities due on any Interest Payment Date may be paid by mailing checks for the amount payable to
or upon the written order
of the Securityholders entitled thereto as they shall appear on the registry books of the
Company, provided that,

38

 

with respect to any Securityholder with an aggregate principal amount in
excess of $2,000,000, at the application of such Holder in writing to the Registrar not later than
the relevant record date accrued and unpaid interest and Additional Interest, if any, on such
Holder’s Securities shall be paid by wire transfer in immediately available funds to such Holder’s
account in the United States supplied by such Holder from time to time to the Trustee and Paying
Agent (if different from Trustee); provided further that payment of accrued and unpaid interest and
Additional Interest, if any, made to the Depositary shall be paid by wire transfer in immediately
available funds in accordance with such wire transfer instructions and other procedures provided by
the Depositary from time to time.

     Section 5.02. Reports and Certain Information. (a) The Company shall file with
the Trustee, within 15 days after it files them with the SEC, copies of its annual report and the
information, documents and other reports which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act; provided that any such reports, information or
documents filed with the SEC pursuant to its Electronic Date Gathering, Analysis and Retrieval (or
EDGAR) system shall be deemed filed with the Trustee. The Company shall comply with the provisions
of TIA Section 314(a), whether or not the Company is required to file reports with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act. Notwithstanding anything to the contrary herein, the
Trustee shall have no duty to review such documents for purposes of determining compliance with any
provisions of this Indenture or any applicable law.

     (b) At any time when the Securities are Restricted Securities, and the Company is not subject
to, or is not in compliance with, Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder or the holder of shares of Common Stock issued upon conversion of Securities, the Company
shall promptly furnish or cause to be furnished Rule 144A Information (as defined below) to such
Holder or such holder of shares of Common Stock issued upon conversion of Securities, or to a
prospective purchaser of any such security designated by any such Holder or holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act in connection with the resale of any such security. “Rule 144A Information” shall
mean such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act or any
successor provision.

     (c) The Company shall notify the Trustee of any changes to its fiscal year.

     Section 5.03. Compliance Certificates. The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Company ending after the date hereof, an
Officers’ Certificate signed by the principal executive officer, principal financial officer or
principal accounting officer of the Company and at least one other Officer of the Company, as to
his or her knowledge of the Company’s compliance with all terms, conditions and covenants under
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 status
thereof of which he or she may have knowledge.

     Section 5.04. Maintenance of Corporate Existence. The Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect its corporate
existence or, following any consolidation, merger, conveyance, transfer or lease in accordance with
Section 6.01, its legal existence as a Person permitted to be the resulting, surviving or
transferee Person in accordance with Section 6.01.

     Section 5.05. Stay, Extension and Usury Laws. The Company covenants, to the
extent 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 amount
or Fundamental Change Purchase Price in respect of Securities, or any interest (including any
Additional Interest) on the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the
performance of this Indenture, and the Company, to the extent it may lawfully do so, hereby
expressly waives all benefit or

39

 

advantage of any such law and covenants that it shall not, by
resort to any such law, hinder, delay or impede the execution of any power herein granted to the
Trustee or any Agent, but shall suffer and permit the execution of every such power as though no
such law had been enacted.

     Section 5.06. Maintenance of Office or Agency of the Trustee, Registrar, Paying
Agent and Conversion Agent. The Company shall maintain an office or agency of the Trustee,
Registrar, Paying Agent and Conversion Agent in the United States where Securities may be presented
or surrendered for payment, where Securities may be surrendered for registration of transfer,
exchange, purchase or conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company hereby designates the Corporate Trust
Office as one such office or agency for all of the aforesaid purposes. The Company shall give
prompt written notice to the Trustee of the location, and of any change in the location, of any
such office or agency (other than a change in the location of the Corporate Trust Office of the
Trustee). If at any time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee set forth in Section 12.02.

     Section 5.07. Notice of Default. In the event that any Default or Event of
Default shall occur, the Company shall give prompt (and in any event within thirty (30) days after
the Company becomes aware of such Default or Event of Default) written notice by an Officers’
Certificate of such Default or Event of Default, and any remedial action proposed to be taken, to
the Trustee.

     Section 5.08. Additional Interest Notice. In the event that the Company is
required to pay Additional Interest to the Securityholders pursuant to the Registration Rights
Agreement, the Company will provide written notice (“Additional Interest Notice”) to the Trustee of
its obligation to pay Additional Interest no later than fifteen (15) days prior to the proposed
payment date for the Additional Interest, and the Additional Interest Notice shall set forth the
amount of Additional Interest 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 Securityholders to determine the
Additional Interest, or with respect to the nature, extent or calculation of the amount of
Additional Interest when made, or with respect to the method employed in such calculation of the
Additional Interest.

ARTICLE 6

Consolidation, Merger, Conveyance, Transfer or Lease

     Section 6.01. Company May Consolidate, etc., Only on Certain Terms. The Company
shall not consolidate with or merge into any other Person or convey, transfer or lease all or
substantially all of the Company’s properties and assets to any successor Person, unless:

     (a) either:

     (i) the resulting, surviving or transferee Person is the Company; or

     (ii) the resulting, surviving or transferee Person is a corporation, limited liability
company, partnership or trust organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all of the obligations of the Company under the
Securities and this Indenture;

     (b) immediately after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; and

40

 

     (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel (upon which the Trustee may conclusively rely), each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied with.

     Section 6.02. Successor Substituted. Upon any consolidation of the Company with,
or merger of the Company into, any other Person or any conveyance, transfer or lease of all or
substantially all of the properties and assets of the Company in accordance with Section 6.01, the
successor Person formed by such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.

ARTICLE 7

Default and Remedies

     Section 7.01. Events of Default. An “Event of Default” shall occur if:

     (a) the Company defaults in the payment of any principal of any of the Securities when the
same becomes due and payable (whether at maturity, on a Fundamental Change Purchase Date or
otherwise), whether or not such payment is prohibited by the subordination provisions set forth in
Article 9;

     (b) the Company defaults in the payment of any accrued and unpaid interest (including
Additional Interest, if any) when due and payable, and such default continues for a period of 30
days, whether or not such payment is prohibited by the subordination provisions of Article 9;

     (c) the Company fails to deliver all shares of Common Stock when such Common Stock is required
to be delivered upon conversion of any Securities, and such default continues for 5 days;

     (d) the Company fails to provide the Fundamental Change Company Notice when required by this
Indenture;

     (e) the Company fails to comply with any of its other agreements contained in the Securities
or in this Indenture (other than a covenant or warranty or default whose performance or breach is
elsewhere in this Section 7.01 specifically provided for) and such failure continues for 60 days
after receipt by the Company of a Notice of Default, provided, however, that the Company shall have
120 days after receipt of a Notice of Default to remedy, or receive a waiver for, any failure to
comply with the Company’s obligation to file annual, quarterly and current reports in accordance
with this Indenture or to comply with the requirements of Section 314(a)(1) of the Trust Indenture
Act so long as the Company is attempting to cure such failure as promptly as reasonably
practicable;

     (f) (i) the Company fails to make any payment by the end of any applicable grace period after
maturity of principal or accrued interest with respect to any obligations (other than nonrecourse
obligations) of the Company for borrowed money or evidenced by bonds, notes or similar instruments
(“Specified Indebtedness”), where the amount of such unpaid and due principal and/or accrued
interest is in an aggregate amount in excess of $35.0 million, or (ii) the acceleration of
principal or accrued interest with respect to Specified Indebtedness, where the amount of such
accelerated principal and interest is in an amount in excess of $35.0 million because of a default
with respect to such Specified Indebtedness, in any such case of (i) or (ii),

41

 

without such Specified Indebtedness having been paid or discharged or such acceleration having
been cured, waived, rescinded or annulled within a period of 30 days after receipt by the Company
of a Notice of Default. However, if any such failure or acceleration referred to in (i) or (ii) of
this clause (f) shall cease or be cured, waived, rescinded or annulled, then the event of default
by reason thereof shall be deemed not to have occurred and any acceleration as a result of the
related event of default shall be automatically rescinded;

     (g) the Company, or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law: commences a voluntary case or proceeding; consents to the entry of an order for
relief against it in an involuntary case or proceeding or the commencement of any case against it;
consents to the appointment of a Custodian of it or for any substantial part of its property; or
makes a general assignment for the benefit of its creditors; or

     (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
is for relief against the Company or a Significant Subsidiary in an involuntary case or
proceeding; appoints a Custodian of the Company or a Significant Subsidiary for any substantial
part of the property of the Company or such Significant Subsidiary; or orders the winding up or
liquidation of the Company or a Significant Subsidiary; and in each case of this subclause (h) the
order or decree remains unstayed and in effect for 60 consecutive days.

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

     A default under clause (e) or (f) above is not an Event of Default until the Trustee notifies
the Company, or the Holders of at least 25% in aggregate principal amount of the Securities then
outstanding notify the Company and the Trustee, in writing of the Default, and the Company does not
cure the Default (and such Default is not waived) within the time period specified in clauses (e)
or (f) above, as applicable, after actual receipt of such notice. The notice given pursuant to
this Section 7.01 must specify the Default, demand that it be remedied and state that the notice is
a “Notice of Default.” When any Default under this Section 7.01 is cured in accordance herewith,
it shall cease to be a Default.

     The Trustee shall not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to a Trust Officer at the Corporate Trust Office of the Trustee by
the Company (including, without limitation, pursuant to Section 5.03), a Paying Agent, any Holder
or any agent of any Holder, which notice references the Securities and this Indenture.

     Section 7.02. Acceleration. If an Event of Default (other than an Event of
Default with respect to the Company specified in clauses (g) or (h) of Section 7.01) occurs and is
continuing, the Trustee may, by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding may, by notice to the Company and the Trustee,
declare all unpaid principal of, plus interest (including Additional Interest, if any) accrued and
unpaid through the date of such declaration on, all the Securities then outstanding to be due and
payable upon any such declaration, and the same shall thereupon become and be immediately due and
payable.

     If an Event of Default with respect to the Company specified in clause (g) or (h) of Section
7.01 occurs, all unpaid principal of, plus interest (including Additional Interest, if any) accrued
and unpaid through the date of such default on, all the Securities then outstanding shall ipso
facto become and be immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.

     The Holders of a majority in aggregate principal amount of the Securities then outstanding or
the Holders originally causing the acceleration by notice to the Trustee may rescind an
acceleration of Securities

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and its consequences before a judgment or decree for the payment of money has been obtained by
the Trustee if (a) the rescission would not conflict with any existing order or decree, (b) all
existing Events of Default, other than the nonpayment of the principal of, plus accrued and unpaid
interest on, the Securities that has become due solely by such declaration of acceleration, have
been cured or waived and (c) all payments due to the Trustee and any predecessor Trustee under
Section 8.06 have been made. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.

     Section 7.03. Other Remedies. If an Event of Default occurs and is continuing,
the Trustee may, but shall not be obligated to, pursue any available remedy by proceeding at law or
in equity to collect the payment of the principal of or accrued and unpaid interest on the
Securities, the payment of Cash and, if applicable, shares of Common Stock upon conversion or to
enforce the performance of any provision of the Securities or this Indenture.

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

     Section 7.04. Waiver of Defaults and Events of Default. Subject to Section 7.07
and 10.02, the Holders of a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may waive an existing or future Default or Event of Default
and its consequences, except a Default or Event of Default in the payment of the principal of, or
any interest (including Additional Interest, if any) on any Security, or the payment of any
applicable Fundamental Change Purchase Price, or a failure by the Company to deliver shares of
Common Stock (and Cash in lieu of any fractional shares) upon conversion in accordance with Article
4 or any Default or Event of Default in respect of any provision of this Indenture or the
Securities that, under Section 10.02, cannot be modified or amended without the consent of the
Holders of each outstanding Security. When a Default or Event of Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent
right. This Section 7.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) is hereby expressly excluded from this Indenture, as permitted by the TIA.

     Section 7.05. Control by Majority. The Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising any trust or power
conferred on it under this Indenture. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of another Holder or the Trustee, or that may involve the Trustee in personal liability
unless the Trustee is offered security or indemnity reasonably satisfactory to it; provided that
the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with
such direction. This Section 7.05 shall be in lieu of Section 316(a)(1)(A) of the TIA and such
Section 316(a)(1)(A) is hereby expressly excluded from this Indenture, as permitted by the TIA.

     Section 7.06. Limitations on Suits. Subject to Section 7.07, a Holder of a
Security may not pursue any remedy with respect to this Indenture or the Securities unless:

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

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

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

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

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

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

     Section 7.07. Rights of Holders to Receive Payment and to Convert.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to
receive payment in Cash of the principal amount, Fundamental Change Purchase Price or interest
(including Additional Interest, if any) on any Security, on or after the respective due dates
expressed in the Security and this Indenture, receive shares of Common Stock (and Cash in lieu of
fractional shares) upon conversion in accordance with Article 4 and to bring suit for the
enforcement of any such payment on or after such respective dates or the right to convert, is
absolute and unconditional and shall not be impaired or affected without the consent of the Holder.

     Section 7.08. Collection Suit by Trustee. If an Event of Default in the payment
of principal or interest or Additional Interest specified in clause (a) or (b) of Section 7.01
occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an
express trust against the Company or another obligor on the Securities for the whole amount owing
with respect to the Securities and the amounts provided for in Section 8.06.

     Section 7.09. Trustee May File Proofs of Claim. The Trustee may file such proofs
of claim and other papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any money or other property
payable or deliverable on any such claims and to distribute the same, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 8.06, and to the extent that such payment of the reasonable compensation, expenses,
disbursements and advances in any such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other property which the Holders may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or
consent to or, on behalf of any Holder, to authorize, accept or adopt any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

     Section 7.10. Priorities. Any money or property collected by the Trustee pursuant
to this Article 7, and after an Event of Default, any money or other property distributable in
respect of the Company’s obligations under this Indenture shall be paid out in the following order:

     First, to the Trustee (including any predecessor Trustee) for amounts due under Section 8.06;

44

 

     Second, to Securityholders for amounts due and unpaid on the Securities for the principal
amount, interest (including Additional Interest, if any), the Fundamental Change Purchase Price,
amounts due upon conversion (including amounts resulting from a Make-Whole Fundamental Change), as
the case may be, ratably, without preference or priority of any kind, according to such amounts due
and payable on the Securities; and

     Third, the balance, if any, to the Company.

     The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 7.10. At least 15 days before such record date, the Trustee shall mail to each Holder and
the Company a notice that states the record date, the payment date and the amount to be paid.

     Section 7.11. Undertaking for Costs. In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 7.11 does not apply to a suit made by the Trustee, a suit by a Holder
pursuant to Section 7.07, or a suit by Holders of more than 10% in aggregate principal amount of
the Securities then outstanding.

     Section 7.12. Delay or Omission Not Waiver. No delay or omission of the Trustee
or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 7 or by law to the Trustee or
to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.

ARTICLE 8

Trustee

     Section 8.01. Certain Duties and Responsibilities of Trustee. (a) In case an
Event of Default with respect to the Securities has occurred (that has not been cured or waived),
the Trustee shall exercise with respect to the Securities 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 or her own affairs.

     (b) Prior to the occurrence of an Event of Default with respect to the Securities and after
the curing or waiving of all such Events of Default with respect to the Securities that may have
occurred:

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

     (ii) in the absence of bad faith 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
that by any provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine

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whether or not they conform on their face to the requirements of this Indenture (but
need not confirm or investigate the accuracy of any mathematical calculations or other facts
stated therein).

     (c) 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:

     (i) this subsection shall not be construed to limit the effect of Section 8.01(b);

     (ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer or Trust Officers, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;

     (iii) 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 direction of the Holders of not less than a
majority in principal amount of the Securities at the time Outstanding (determined as
provided in Section 2.08) 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 with respect to the Securities; and

     (iv) 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 liability is not
reasonably assured to it under the terms of this Indenture or adequate indemnity against
such risk is not reasonably assured to it.

     (d) Whether or not expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability or affording protection to the Trustee (in any capacity,
including Paying Agent, Registrar or Conversion Agent) shall be subject to the provisions of this
Section.

     Section 8.02. Certain Rights of Trustee. Except as otherwise provided in Section
8.01:

     (a) The Trustee may conclusively rely and shall be fully protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, security or other paper or document (whether in 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. The Trustee need not investigate any fact or matter stated in any
such document;

     (b) Any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a resolution of the Company’s Board of Directors or an instrument signed
in the name of the Company, by one or more Officers thereof (unless other evidence in respect
thereof is specifically prescribed herein);

     (c) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee
may consult with counsel of its own selection and the advice of such counsel and Opinions of
Counsel with respect to legal matters relating to this Indenture and the Securities shall be full
and complete authorization and protection from liability in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;

     (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 Securityholders, pursuant to
the provisions of this

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Indenture, unless such Securityholders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities that may be incurred
therein or thereby;

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

     (f) 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, consent,
order, approval, bond, security, or other papers or documents, but the Trustee, in its discretion,
may make even further inquiry or investigation into such facts or matters as it may see fit; and,
if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the Company, personally or by agent or attorney at
the sole cost of the Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation;

     (g) 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 with
due care by it hereunder;

     (h) The Trustee shall not be deemed to have knowledge or be charged with knowledge of an Event
of Default except (i) if the Trustee is acting as Paying Agent, any Default or Event of Default
occurring pursuant to Sections 5.01, 7.01(a) or 7.01(b) and (ii) any Default or Event of Default of
which the Trustee shall have received written notification which references the Securities and this
Indenture or of which a Trust Officer shall have obtained actual knowledge. Delivery of reports,
information and documents to the Trustee under Section 5.02 is for informational purposes only and
the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates, except as otherwise provided herein);

     (i) The rights, privileges, protections, immunities and benefits given to the Trustee pursuant
hereto, 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 by the Trustee to act hereunder;

     (j) The permissive right of the Trustee to take or refrain from taking any actions enumerated
in this Indenture shall not be construed as a duty;

     (k) 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;

     (l) Anything in this Indenture notwithstanding, in no event shall the Trustee be liable for
special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but
not limited to loss of profit), even if the Trustee has been advised as to the likelihood of such
loss or damage and regardless of the form of action; and

     (m) The Trustee shall not be responsible or liable for any failure or delay in the performance
of its obligations under this Indenture arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without limitation, acts of God;
earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics;
riots; interruptions; loss or malfunctions of utilities, computer

47

 

(hardware or software) or communication services; accidents; labor disputes; acts of
civil or military authority and governmental action.

     Section 8.03. Trustee Not Responsible for Recitals or Issuance or Securities. (a)
The recitals contained herein and in the Securities shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for the correctness of the same.

     (b) The Trustee makes no representations as to the validity or sufficiency of this Indenture
or of the Securities.

     (c) The Trustee or any Authorized Agent shall not be accountable for the use or application by
the Company of any of the Securities or of the proceeds of such Securities, or for the use or
application of any moneys paid over by the Trustee in accordance with any provision of this
Indenture or established pursuant to Section 2.01, or for the use or application of any moneys
received by any Paying Agent other than the Trustee.

     Section 8.04. May Hold Securities. The Trustee or any Paying Agent or Registrar,
in its individual or any other capacity, may become the owner or pledgee of Securities and, subject
to Section 8.16, may otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent or Registrar.

     Section 8.05. Moneys Held in Trust. Subject to the provisions of Section 7.05, all
moneys received by the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated from other funds except
to the extent required by law. The Trustee shall be under no liability for interest on any moneys
received by it hereunder except such as it may agree in writing with the Company to pay thereon.

     Section 8.06. Compensation and Reimbursement. (a) The Company covenants and agrees
to pay to the Trustee, and the Trustee shall be entitled to, such compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an express trust), as
the Company and the Trustee may from time to time agree in writing for all services rendered by it
in the execution of the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the
Company shall pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with any of the provisions
of this Indenture (including the reasonable 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 gross negligence, bad faith or willful misconduct. The
Company covenants and agrees to indemnify the Trustee (and its officers, agents, directors,
stockholders and employees) for, and to hold it harmless against, any loss, liability or expense
(including, without limitation, reasonable attorney’s fees and expenses) incurred without gross
negligence or bad faith or willful misconduct on the part of the Trustee and arising out of or in
connection with the acceptance or administration of this trust, including the reasonable costs and
expenses of defending itself against any claim of liability in the premises.

     (b) The obligations of the Company under this Section to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a
lien prior to that of the Securities upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the Holders.

     (c) When the Trustee incurs expenses or renders services after an Event of Default specified
in Section 7.01(g) or (h) occurs, the expenses and the compensation for the services are intended
to constitute expenses of administration under any Bankruptcy Law.

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     (d) For the purposes of this Section 8.06, the “Trustee” shall include any predecessor
Trustee; provided, however, that the gross negligence, bad faith or willful misconduct of any
Trustee or other indemnified party hereunder shall not affect the rights of any other Trustee
hereunder.

     (e) The provisions of this Section shall survive the discharge of this Indenture and
resignation or removal of the Trustee.

     Section 8.07. Reliance on Officers’ Certificate. Except as otherwise provided in
Section 8.01, 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 suffering
or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers’ Certificate or Opinion of Counsel
delivered to the Trustee and such certificate, in the absence of bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken
by it under the provisions of this Indenture upon the faith thereof.

     Section 8.08. Disqualification: Conflicting Interests. If the Trustee has or shall
acquire any “conflicting interest” within the meaning of Section 310(b) of the TIA, the Trustee and
the Company shall in all respects comply with the provisions of Section 310(b) of the TIA.

     Section 8.09. Corporate Trustee Required; Eligibility. There shall at all times be
a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation
organized and doing business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other Person permitted to act
as trustee by the SEC, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus, or being a member of a bank holding company with a combined capital
and surplus, of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. The Company may not, nor may any
Person directly or indirectly controlling, controlled by, or under common control with the Company,
serve as Trustee. In case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.10.

     Section 8.10. Resignation and Removal; Appointment of Successor. (a) The Trustee
or any successor hereafter appointed may at any time resign as Trustee with respect to the
Securities by giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first class postage prepaid, to the Securityholders, as their names and
addresses appear upon the Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to the Securities by or pursuant to a resolution
of the Board of Directors. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a successor trustee with
respect to the Securities, or any Securityholder who has been a bona fide holder of a Security or
Securities for at least six months may on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee, in either case at the sole cost
and expense of the Company. 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 one of the following shall occur:

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     (i) the Trustee shall fail to comply with the provisions of Section 8.08 after written
request therefor by the Company or by any Securityholder who has been a bona fide holder of
a Security or Securities for at least six months;

     (ii) the Trustee shall cease to be eligible in accordance with the provisions of
Section 8.09 and shall fail to resign after written request therefor by the Company or by
any such Securityholder; or

     (iii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of
its property shall be appointed or consented to, 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 with respect to all Securities and
appoint a successor trustee by or pursuant to a resolution of the Board of Directors, or, unless
the Trustee’s duty to resign is stayed as provided herein, subject to Section 7.11, any
Securityholder who has been a bona fide holder of a Security or Securities for at least six months
may, on behalf of that Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the 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 Securities at the time
outstanding may at any time remove the Trustee by so notifying the Trustee and the Company and may
appoint a successor Trustee with the consent of the Company. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after such notification of removal
by the Holders, the Trustee to be removed may petition any court of competent jurisdiction for the
appointment of a successor trustee with respect to the Securities, or any Securityholder who has
been a bona fide holder of a Security or Securities for at least six months may on behalf of
himself and all others similarly situated, petition any such court for the appointment of a
successor trustee, in either case at the sole cost and expense of the Company. Such court may, as
it may deem proper prescribe or appoint a successor trustee.

     (d) Notwithstanding anything herein to the contrary, any resignation or removal of the Trustee
and appointment of a successor trustee with respect to the Securities pursuant to any of the
provisions of this Section shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.11.

     (e) So long as no event which is, or after notice or lapse of time, or both, would become, an
Event of Default shall have occurred and be continuing, and except with respect to a Trustee
appointed by the Holders of a majority in principal amount of the Securities at that time
outstanding pursuant to Subsection (c) of this Section, if the Company shall have delivered to the
Trustee (i) a resolution of the Board of Directors appointing a successor Trustee, effective as of
a date specified therein, and (ii) an instrument of acceptance of such appointment, effective as of
such date, by such successor Trustee in accordance with Section 8.11, the Trustee shall be deemed
to have resigned as contemplated in subsection (a) of this Section, the successor Trustee shall be
deemed to have been appointed by the Company pursuant to subsection (a) of this Section and such
appointment shall be deemed to have been accepted as contemplated in Section 8.11, all as of such
date, and all other provisions of this Section and Section 8.11 shall be applicable to such
resignation, appointment and acceptance except to the extent inconsistent with this subsection (e).

     (f) At any time there shall be only one Trustee with respect to the Securities.

     Section 8.11. Acceptance of Appointment By Successor. (a) In case of the
appointment hereunder of a successor trustee with respect to the Securities, every such successor
trustee so appointed shall
execute,

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acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall
become effective and such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor trustee, such retiring Trustee shall, upon payment of its
charges and all other amounts payable to it hereunder, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor trustee all property and money held
by such retiring Trustee hereunder, subject to the lien provided for in Section 8.06(b).

     (b) Upon request of any such successor trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) of this Section.

     (c) No successor trustee shall accept its appointment unless at the time of such acceptance
such successor trustee shall be qualified and eligible under this Article 8.

     (d) Upon acceptance of appointment by a successor trustee as provided in this Section, the
Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Register. If
the Company fails to transmit such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be transmitted at the expense
of the Company.

     Section 8.12. Merger, Conversion, Consolidation or Succession to Business. Any
corporation or other business entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation or other business entity resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or
other business entity succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation or other business entity shall
be qualified under the provisions of Section 8.08 and eligible under the provisions of Section
8.09, without the execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such successor Trustee had
itself authenticated such Securities.

     Section 8.13. Preferential Collection of Claims Against the Company. The Trustee
shall comply with Section 311(a) of the TIA, excluding any creditor relationship described in
Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section
311(a) of the TIA to the extent included therein.

     Section 8.14. Notice of Defaults. If a Default or Event of Default occurs and is
continuing hereunder and if it is actually known to a Trust Officer of the Trustee, the Trustee
shall mail to each Holder notice of the Default or Event of Default within 90 days after such
Default or Event of Default. Except in the case of a default in payment of principal of or
interest (including Additional Interest, if any) on any Security, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is not opposed to the interest of the Holders of such Securities.

     Section 8.15. Reports by Trustee. (a) Within sixty (60) days after May 15 of each
year commencing with the year 2007, the Trustee shall transmit to Securityholders such reports
dated as of May 15 of the year in which such report is made concerning the Trustee and its actions
under this Indenture as may be required pursuant to the TIA, including, without limitation, Section
313(a) thereof, at the times and in the manner provided pursuant thereto. In the event that, on
any such reporting date, no events have occurred under
the

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applicable sections of the TIA within the 12 months preceding such reporting date, the
Trustee shall be under no duty or obligation to provide such reports. The Trustee shall also
comply with TIA Section 313(b)(2). The Trustee shall transmit by mail all reports as required by
TIA Section 313(c).

     (b) A copy of each such report shall, at the time of such transmission to Securityholders, be
delivered to the Company and filed by the Trustee with each stock exchange upon which the
Securities are listed and with the SEC in accordance with TIA Section 313(d). The Company shall
notify the Trustee when the Securities are listed on any stock exchange and of any delisting
thereof.

     Section 8.16. Preferential Collection of Claims. If and when the Trustee shall be
or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall
be subject to the provisions of the TIA regarding the collection of claims against the Company (or
any such other obligor).

ARTICLE 9

Subordination

     Section 9.01. Agreement to Subordinate. The Company agrees, and each holder of
Securities by accepting a Security agrees, that the indebtedness evidenced by the Security is
subordinated in right of payment, to the extent and in the manner provided in this Article 9, to
the prior payment in full in cash or other consideration satisfactory to holders of Senior Debt of
all Senior Debt (whether outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of Senior Debt.

     Section 9.02. Liquidation, Dissolution, Bankruptcy. Upon any distribution to
creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the Company or its
property, any assignment for the benefit of creditors or any marshaling of the Company’s assets and
liabilities:

     (a) holders of Senior Debt shall be entitled to receive payment in full of all obligations due
in respect of such Senior Debt (including interest accruing after, or which would accrue but for,
the commencement of any such proceeding at the rate specified in the applicable Senior Debt,
whether or not the claim for such interest would be allowed) in cash or other consideration
satisfactory to the holders of the Senior Debt before holders of Securities shall be entitled to
receive any payment with respect to the Securities; and

     (b) until all Senior Debt is paid in full in cash or other consideration satisfactory to the
holders of the Senior Debt, any distribution to which holders of Securities would be entitled but
for this Article 9 shall be made to holders of Senior Debt, as their interests may appear.

     Section 9.03. Default on Senior Debt and/or Designated Senior Debt.

     (a) In the event of any default in payment of the principal of or premium, if any, or interest
on, or any other payment obligation under any Senior Debt beyond any applicable grace period with
respect thereto (a “Payment Default”), then, until all such payments due in respect of such Senior
Debt have been paid in full in cash or other consideration satisfactory to holders of Senior Debt
or such default shall have been cured or waived or shall have ceased to exist, no payment shall be
made by the Company with respect to the principal of, or interest on the Securities or to acquire
any of the Securities (including any repurchase pursuant to the repurchase right of a Holder
pursuant to Article 3).

     (b) In addition, if the Trustee shall receive written notice from one or more holders of
Designated Senior Debt or one or more representatives of such holder or holders that there has
occurred and is continuing

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under such Designated Senior Debt, or any agreement pursuant to which such Designated Senior
Debt is issued, any default (other than a Payment Default), which default shall not have been cured
or waived, giving the holders of such Designated Senior Debt the right to declare such Designated
Senior Debt immediately due and payable (a “Payment Blockage Notice”), then, anything contained in
this Indenture to the contrary notwithstanding, no payment on account of the principal of or
interest on the Securities, and no repurchase or other acquisition of the Securities, shall be made
by or on behalf of the Company during the period (the “Payment Blockage Period”) commencing on the
date of receipt of the Payment Blockage Notice and ending on the earlier of 179 calendar days
thereafter or the date on which such non-Payment Default is cured or waived or shall have ceased to
exist.

     Notwithstanding the provisions described in the immediately preceding sentence (but subject to
the provisions contained in Section 9.01 and the first sentence of this Section 9.03), unless the
holder(s) of such Designated Senior Debt or the representative(s) of such holder(s) shall have
accelerated the maturity of such Designated Senior Debt, the Company may resume payments on the
Securities after the end of such Payment Blockage Period. No new Payment Blockage Period may be
commenced unless 365 calendar days have elapsed since the effectiveness of the prior Payment
Blockage Notice. No default under Designated Senior Debt that is not a Payment Default that
existed or was continuing on the date of delivery of any Payment Blockage Notice delivered to the
Trustee shall be, or be made, the basis of a subsequent Payment Blockage Notice.

     (c) In the event any judicial proceeding shall be pending with respect to any Payment Default
with respect to Senior Debt or non-payment default with respect to Designated Senior Debt, then,
anything contained in this Indenture to the contrary notwithstanding, no payment on account of the
principal of or interest on the Securities, and no repurchase or other acquisition of the
Securities, shall be made by or on behalf of the Company.

     Section 9.04. Acceleration of Securities. In the event of the acceleration of the
Securities because of an Event of Default, the Company may not make any payment or distribution to
the Trustee or any holder of Securities in respect of obligations with respect to Securities and
may not acquire or purchase from the Trustee or any holder of Securities any Securities until all
Senior Debt has been paid in full in cash or other consideration satisfactory to holders of Senior
Debt or such acceleration has been rescinded in accordance with the terms of this Indenture.

     If payment of the Securities is to be accelerated because of an Event of Default (other than
an Event of Default with respect to the Company specified in Section 7.01(g) or (h)), the Company
shall promptly notify holders of Senior Debt or trustee(s) of such Senior Debt before the
acceleration.

     Section 9.05. When Distribution Must Be Paid Over. In the event that the Trustee,
any holder of Securities or any other person receives any payment or distribution of assets of the
Company of any kind with respect to the Securities in contravention of any terms contained in this
Indenture, whether in cash, property or securities, including, without limitation, by way of
set-off or otherwise, then such payment or distribution shall be held by the recipient in trust for
the benefit of holders of Senior Debt, and shall be immediately paid over and delivered to the
holders of Senior Debt or their representative(s), to the extent necessary to make payment in full
in cash or other consideration satisfactory to such holders of all Senior Debt remaining unpaid,
after giving effect to any concurrent payment or distribution or provision therefor, to or for the
holders of Senior Debt; provided, that the foregoing shall apply to the Trustee only if a
Responsible Officer of the Trustee has actual knowledge (as determined in accordance with Section
8.02) that such payment or distribution is prohibited by this Indenture.

     With respect to the holders of Senior Debt, the Trustee undertakes to perform only such
obligations on the part of the Trustee as are specifically set forth in this Article 9, and no
implied covenants or obligations with

53

 

respect to the holders of Senior Debt shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall
not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of
holders of Securities or the Company or any other person money or assets to which any holders of
Senior Debt shall be entitled by virtue of this Article 9, except if such payment or distribution
is made as a result of the willful misconduct or negligence of the Trustee.

     Section 9.06. Notice by Company. The Company shall promptly notify the Trustee of
any facts known to the Company that would cause a payment of any obligations with respect to the
Securities or the purchase of any Securities by the Company to violate this Article 9, but failure
to give such notice shall not affect the subordination of the Securities to the Senior Debt as
provided in this Article 9.

     Section 9.07. Subrogation. After all Senior Debt is paid in full and until the
Securities are paid in full, holders of Securities shall be subrogated (equally and ratably with
all other Indebtedness pari passu with the Securities) to the rights of holders of Senior Debt to
receive distributions applicable to Senior Debt to the extent that distributions otherwise payable
to the holders of Securities have been applied to the payment of Senior Debt. A distribution made
under this Article 9 to holders of Senior Debt that otherwise would have been made to holders of
Securities is not, as between the Company and holders of Securities, a payment by the Company on
the Securities.

     Section 9.08. Relative Rights. This Article 9 defines the relative rights of
holders of Securities and holders of Senior Debt. Nothing contained in this Indenture shall
otherwise:

     (a) impair, as between the Company and holders of Securities, the obligation of the Company,
which is absolute and unconditional, to pay principal of and interest on the Securities in
accordance with their terms;

     (b) affect the relative rights of holders of Securities and creditors (other than with respect
to Senior Debt) of the Company, other than their rights in relation to holders of Senior Debt; or

     (c) prevent the Trustee or any holder of Securities from exercising its available remedies
upon a Default or Event of Default, subject to the notice requirements of Section 7.02 and to the
rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable
to holders of Securities.

     If the Company fails because of this Article 9 to pay principal of or interest on a Security
on the due date, the failure is still a Default or Event of Default.

     Section 9.09. Subordination May Not Be Impaired by Company. No right of any holder
of Senior Debt to enforce the subordination of the indebtedness evidenced by the Securities shall
be impaired by any act or failure to act by the Company or any holder of Securities or by the
failure of the Company or any such holder to comply with this Indenture.

     Section 9.10. Distribution or Notice to Representative. Whenever a distribution is
to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice
given to their representative(s).

     Upon any payment or distribution of assets of the Company referred to in this Article 9, the
Trustee and the holders of Securities shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction or upon any certificate of such representative or of the
liquidating trustee or agent or other person making any distribution to the Trustee or to the
holders of Securities for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 9.

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     Section 9.11. Rights of Trustee and Paying Agent. The Company shall give prompt
written notice to the Trustee of any fact known to the Company that would prohibit the making of
any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article 9 or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee (other than pursuant to Section 8.04), and the Trustee may continue to
make payments on the Securities, unless a Responsible Officer shall have received at least two
Business Days prior to the date of such payment or distribution written notice of facts that would
cause such payment or distribution with respect to the Securities to violate this Article 9. Only
the Company or the holder or representative of any class of Senior Debt may give such notice.

     Nothing contained in this Article 9 shall impair the claims of, or payments to, the Trustee
under or pursuant to Section 8.06.

     The Trustee in its individual or any other capacity may hold Senior Debt with the same rights
it would have if it were not Trustee. Any Agent may do the same with like rights.

     Section 9.12. Authorization to Effect Subordination. Each holder of a Security by
such holder’s acceptance thereof authorizes and directs the Trustee on the holder’s behalf to take
such action as may be necessary or appropriate to effectuate the subordination as provided in this
Article 9, and appoints the Trustee to act as the holder’s attorney-in-fact for any and all such
purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 7.09 at least 30 days before the expiration of
the time to file such claim, the holders of any Senior Debt or their representatives are hereby
authorized to file an appropriate claim for and on behalf of the holders of the Securities.

     Section 9.13. Article Applicable to Paying Agents. In case at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder,
the term “Trustee” as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within its meaning as fully
for all intents and purposes as if such Paying Agent were named in this Article in addition to or
in place of the Trustee.

     Section 9.14. Senior Debt Entitled to Rely. The holders of Senior Debt shall have
the right to rely upon this Article 9, and no amendment or modification of the provisions contained
herein shall diminish or adversely affect the rights of such holders of Senior Debt outstanding at
the time of such amendment or modification unless such holders shall have agreed in writing
thereto.

     Section 9.15. Permitted Payments. Notwithstanding anything to the contrary
contained in this Article 9, the holders of Securities may receive and retain at any time on or
prior to the Maturity Date (a) securities that are subordinated to at least the same extent as the
Securities to (i) Senior Debt and (ii) any securities issued in exchange for Senior Debt and (b)
payments and other distributions made from any trust created pursuant to Section 11.01.

     Section 9.16. No Waiver of Subordination Provisions. No right of any present or
future holder of any Senior Debt to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of the Company, or by
any non-compliance by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise charged with.

     Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Debt may, at any time and from time to time, without the consent of or notice to the Trustee or the
holders of the Securities, without incurring responsibility to the holders of the Securities and
without impairing or releasing the subordination provided in this Article 9 or the obligations
hereunder of the holders of the Securities to the

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holders of Senior Debt, do any one or more of the following, subject to any rights of the
Company in respect thereof: (i) change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, Senior Debt, or otherwise amend or supplement in any manner Senior
Debt or any instrument evidencing the same or any agreement under which Senior Debt is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any person liable in any manner for the collection of Senior
Debt; and (iv) exercise or refrain from exercising any rights against the Company and any other
person.

     Section 9.17. Certain Conversions Deemed Payment. For the purposes of this Article
9 only, (i) the issuance and delivery of junior securities upon conversion of Securities in
accordance with Article 4 shall not be deemed to constitute a payment or distribution on account of
the principal of or premium or interest on Securities or on account of the purchase or other
acquisition of Securities, and (ii) the payment, issuance or delivery of Cash (except in
satisfaction of fractional shares pursuant to Section 4.02(a)), property or securities (other than
junior securities) upon conversion of a Security shall be deemed to constitute payment on account
of the principal of such Security. For the purposes of this Section, the term “junior securities”
means (a) shares of any stock of any class of the Company and securities into which the Securities
are convertible pursuant to Article 4 and (b) securities of the Company which are subordinated in
right of payment to all Senior Debt which may be outstanding at the time of issuance or delivery of
such securities to substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article 9. Nothing contained in this Article 9 or
elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the Securities, the
right, which is absolute and unconditional, of the Holder of any Security to convert such Security
in accordance with Article 4.

ARTICLE 10

Amendments, Supplements and Waivers

     Section 10.01. Without Consent of Holders. The Company and the Trustee may amend
or supplement this Indenture or the Securities without notice to, or consent of, any
Securityholder:

     (a) to cure any ambiguity, omission, defect or inconsistency, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture, provided that such action pursuant to this
clause (a) shall not adversely affect the interests of the Holders in any material respect;

     (b) to provide for uncertificated Securities in addition to or in place of Certificated
Securities;

     (c) to provide for the assumption of the Company’s obligations to Holders of Securities in the
case of a share exchange, merger or consolidation or sale of all or substantially all of the
Company’s assets;

     (d) to make any change that would provide any additional rights or benefits to the Holders of
Securities or that does not adversely affect in any material respect the legal rights under this
Indenture of any Securityholder;

     (e) to add a guarantor;

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

     (g) to secure the Securities;

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     (h) to comply with the rules of any applicable securities depositary, including the
Depositary;

     (i) to increase the Conversion Rate;

     (j) to execute a supplemental indenture in accordance with Section 4.09;

     (k) to conform the text of this Indenture or the Securities to any provision of the
“Description of the Notes” contained in the Offering Circular to the extent that the text of the
“Description of the Notes” was intended by the Company and the Initial Purchasers to be a
recitation of the text of this Indenture or the Securities as represented by the Company to the
trustee in an Officers’ Certificate;

     (l) to provide for a successor Trustee in accordance with the terms of this Indenture or to
otherwise comply with any requirement of this Indenture;

     (m) to add to the covenants listed in Article 5 for the benefit of the Holders or surrender
any right or power conferred upon the Company;

     (n) to provide for the issuance of Additional Securities, to the extent that the Company and
the Trustee deem such amendment or supplement necessary or advisable in connection with such
issuance; provided that no such amendment or supplement shall impair the rights or interests of any
Holder of Initial Securities; or

     (o) to modify the restrictions and procedures for resale and other transfers of Securities or
Common Stock pursuant to law, regulation or practice relating to the resale or transfer of
restricted securities generally.

     However, no modification or amendment may be made to the subordination provisions in Article 9
of this Indenture that adversely affects the rights of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof authorized to give a
consent) consent to such change.

     Section 10.02. With Consent of Holders. The Company and the Trustee may amend or
supplement the Securities or this Indenture with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding. Subject to Section 7.04 and
Section 7.07, the Holders of at least a majority in aggregate principal amount of the Securities
then outstanding may, without notice to the Holders of Securities, waive compliance in any instance
by the Company with any provision of the Securities or this Indenture or waive any past default
under this Indenture and its consequences, except a default in the payment of any amount due, or in
the obligation to deliver Common Stock, with respect to any Security or in respect of any provision
which under this Indenture cannot be modified or amended without the consent of the Holder of each
Security affected. However, notwithstanding the foregoing but subject to Section 10.04, without
the consent of the Holders of each Security then outstanding, an amendment, supplement or waiver
may not:

     (a) change the stated maturity of the principal of or the payment date of any installment of
interest (including Additional Interest, if any) on or with respect to the Securities;

     (b) reduce the principal amount of, the Fundamental Change Purchase Price of, or the
Conversion Rate (except as provided in this Indenture) or rate of interest or Additional Interest
on, any Security;

     (c) reduce the amount of principal payable upon acceleration of the maturity of any Security;

     (d) change the currency in which payment of principal of, the Fundamental Change Purchase
Price of, or interest with respect to, the Securities is payable;

57

 

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

     (f) modify the provisions with respect to the repurchase rights of Holders as provided in
Article 3 in a manner adverse to Holders;

     (g) adversely affect the right of Holders to convert Securities in any material respect, other
than as provided in this Indenture;

     (h) modify the subordination provisions in Article 9 hereof in a manner adverse to Holders;

     (i) reduce the percentage in principal amount of the outstanding Securities, the consent of
whose Holders is required to take specific actions including, but not limited to, the waiver of
past defaults or the modification or amendment of this Indenture; or

     (j) alter the manner of calculation or rate of accrual of interest or Additional Interest or
Fundamental Change Purchase Price or the Conversion Rate (except as permitted under Section
10.01(i)) on any Security or extend the time for payment of any such amount.

     It shall not be necessary for the consent of the Holders under this Section 10.02 to approve
the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if
such consent approves the substance thereof.

     After an amendment, supplement or waiver under Section 10.01 or this Section 10.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such amendment,
supplement or waiver.

     Section 10.03. Compliance with Trust Indenture Act. Every amendment to or
supplement of this Indenture or the Securities shall comply with the TIA as in effect at the date
of such amendment or supplement.

     Section 10.04. Revocation and Effect of Consents. Until an amendment, supplement
or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and
every subsequent Holder of a Security or portion of a Security that evidences the same debt as the
consenting Holder’s Security, even if notation of the consent is not made on any Security.
However, any such Holder or subsequent Holder may revoke the consent as to its Security or portion
of a Security if the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.

     After an amendment, supplement or waiver becomes effective, it shall bind every applicable
Securityholder.

     Section 10.05. Notation on or Exchange of Securities. If an amendment, supplement
or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee. The Trustee may place an appropriate notation on the Security about the
changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate
a new Security that reflects the changed terms.

     Section 10.06. Trustee to Sign Amendments, Etc. The Trustee shall sign any
amendment or supplemental indenture authorized pursuant to this Article 10 if the amendment or
supplemental indenture does not adversely affect the rights, duties, liabilities or immunities of
the Trustee in any material respect. If it does adversely affect the rights, duties, liabilities
or immunities of the Trustee in any material respect, the Trustee

58

 

may, in its sole discretion, but
need not sign it. In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be provided with and, subject to Section 8.01, shall be fully protected in relying
upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment or
supplemental indenture is authorized or permitted by this Indenture and that all conditions
precedent to the effectiveness of such amendment or supplement have been satisfied or duly waived.

     Section 10.07. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

ARTICLE 11

Satisfaction and Discharge

     Section 11.01. Satisfaction and Discharge of the Indenture. This Indenture shall
cease to be of further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture, when

     (a) either

     (i) all Securities theretofore authenticated and delivered (other than Securities that
have been destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.07) have been delivered to the Trustee for cancellation; or

     (ii) all such Securities not theretofore delivered to the Trustee for cancellation have
become due and payable whether at the Maturity Date, upon acceleration, with respect to any
Fundamental Change Purchase Date, upon conversion or otherwise and the Company deposits with
the Paying Agent or Conversion Agent, as the case may be, Cash, Common Stock or other
consideration, or a combination thereof, as applicable hereunder, sufficient to pay on such
date all amounts due and owing on all outstanding Securities (other than Securities replaced
pursuant to Section 2.07) on such date;

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

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

     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 8.06 and, if money shall have been deposited with the Trustee
pursuant to Section 11.01(a)(ii), the obligations of the Trustee under Section 11.02 shall survive
such satisfaction and discharge.

     Notwithstanding anything herein to the contrary, Article 4, Article 11, and Section 2.04,
Section 2.06, Section 2.07, Section 2.08, Section 2.14, Section 5.01, Section 5.05, Section 5.06
and Section 8.06 shall survive any discharge of this Indenture until such time as there are no
Securities outstanding.

     Section 11.02. Repayment to the Company. The Trustee, the Paying Agent and the
Conversion Agent shall return to the Company upon written request any Cash or securities held by
them for the payment of any amount with respect to the Securities that remains unclaimed for two
years, subject to applicable unclaimed property law. After return to the Company, Holders entitled
to the Cash or securities must look to the Company

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for payment as general creditors unless an
applicable abandoned property law designates another person and the Trustee, the Paying Agent and
the Conversion Agent shall have no further liability to the Securityholders with respect to such
Cash or securities for that period commencing after the return thereof.

ARTICLE 12

Miscellaneous

     Section 12.01. Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with another provision which is required to be included in this
Indenture by the TIA, including, without limitation, the duties imposed by TIA Section 318(c), the
required provision of the TIA shall control.

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

     If to the Company, to:

Komag, Incorporated

1710 Automation Parkway

San Jose, California 95131

Attention: Chief Financial Officer

Facsimile No.: (408) 944-9255

     If to the Trustee, to:

U.S. Bank National Association

633 West 5th Street, 24th Floor

Los Angeles, CA 90071

Attention: Corporate Trust Services

(Komag 2.125% Convertible Subordinated Notes due 2014)

Fax: (213) 615-6197

     Such notices or communications to the Trustee shall be effective when received.

     The Company or the Trustee by notice to the other in the manner prescribed above may designate
additional or different addresses or facsimile numbers for subsequent notices or communications.

     Any notice or communication mailed to a Securityholder shall be mailed by first-class mail,
postage prepaid, or delivered by hand or by an overnight delivery service to it at its address
shown on the Register and shall be sufficiently given if so mailed or delivered within the time
prescribed. Any notice or communication shall also be mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA.

     Failure to mail a notice or communication to a Securityholder or any defect in it shall not
affect its sufficiency with respect to other Securityholders. Except as set forth above as to the
Trustee, if a notice or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.

     Section 12.03. Communications by Holders with Other Holders. Securityholders may
communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights
under this Indenture or

60

 

the Securities. The Company, the Trustee, the Registrar, the Paying Agent,
the Conversion Agent and any other Person shall have the protection of TIA Section 312(c).

     Section 12.04. Certificate and Opinion as to Conditions Precedent. (a) Upon any
request or application by the Company to the Trustee to take any action under this Indenture, the
Company shall furnish to the Trustee at the request of the Trustee:

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

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

     (b) Each Officers’ Certificate and Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture (other than an Officers’ Certificate provided
pursuant to Section 5.03) shall include:

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

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

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

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

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

     Section 12.05. Record Date for Vote or Consent of Securityholders. The Company may
set a record date for purposes of determining the identity of Holders entitled to vote or consent
to any action by vote or consent authorized or permitted under this Indenture, which record date
shall not be more than 30 days prior to the date of the commencement of solicitation of such
action. Notwithstanding the provisions of Section 10.04, if a record date is fixed, those persons
who were Holders of Securities at the close of business on such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such action by vote or
consent or to revoke any vote or consent previously given, whether or not such persons continue to
be Holders after such record date.

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

     Section 12.07. Legal Holidays. A “Legal Holiday” is a Saturday, Sunday or a day on
which state or federally chartered banking institutions in New York, New York are not required to
be open. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day
that is not a Legal Holiday, and no

61

 

interest shall accrue for the intervening period. If an
Interest Payment Record Date or other record date is a Legal Holiday, the record date shall not be
affected.

     Section 12.08. Governing Law; Jury Trial Waiver. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of New York.

     EACH OF THE COMPANY AND THE TRUSTEE HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE.

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

     Section 12.10. No Recourse Against Others. No recourse for the payment of the
principal of, or accrued and unpaid interest (including Additional Interest, if any), on, any
Security, 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 Security, or because of the creation of any Indebtedness represented thereby,
shall be had against any past, present or future incorporator, stockholder, employee, agent,
officer or director or Subsidiary of the Company as such 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 Securities.

     Section 12.11. Successors. All agreements of the Company in this Indenture and the
Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind
its successor.

     Section 12.12. Multiple Counterparts. The parties may sign multiple counterparts
of this Indenture. Each signed counterpart shall be deemed an original, but all of them together
shall represent the same agreement.

     Section 12.13. Separability. In case any provisions in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

     Section 12.14. Calculations in Respect of the Securities. The Company or its
agents shall make all calculations under this Indenture and the Securities in good faith. In the
absence of manifest error, such calculations shall be final and binding on all Holders. The
Company or its agents shall provide a copy of such calculations to the Trustee as required
hereunder, and the Trustee shall be entitled to rely on the accuracy of any such calculation
without independent verification.

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

[SIGNATURE PAGE FOLLOWS]

62

 

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

	 	 	 	 	 
	 	KOMAG, INCORPORATED 

 	 
	 	By:  	/s/ Timothy D. Harris
 	 
	 	 	Name:  	Timothy D. Harris 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, not in its

individual capacity, but solely as Trustee,

 	 
	 	By:  	/s/ Paula Oswald
 	 
	 	 	Name:  	Paula Oswald 	 
	 	 	Title:  	Vice President 	 
	 

(Signature page to Indenture)

 

EXHIBIT A

[FORM OF NOTE]

 

EXHIBIT A

[FORM OF FACE OF SECURITY]

     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 AN INTEREST HEREIN. THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.1

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

     THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND
THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATE IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES,
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER
HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS
SECURITY EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.3

 

			
	1	 	This legend to be included only if the
Security is a Global Security.
	 
	2	 	This legend to be included only if the
Security is a Restricted Security.
	 
	3	 	This legend to be included only if the
Security is a Restricted Security.

1

 

KOMAG, INCORPORATED

2.125% CONVERTIBLE SUBORDINATED NOTES DUE 2014

	 	 	 	 	 
	No. [•]

	 	CUSIP:
	 	U.S. $[•]
	 

	 	ISIN:	 	 

     KOMAG, INCORPORATED, a Delaware corporation (the “Company,” which term shall include any
successor Person under the Indenture referred to on the attached “Terms of the Notes”), promises to
pay to Cede & Co., or registered assigns, the principal amount of [• ] Million Dollars
($[• ]) on April 1, 2014, and to pay interest thereon, in arrears, from and including the most
recent Interest Payment Date to which interest has been paid or duly provided for (or if no
interest has been paid, from, and including March 28, 2007), to, but excluding, April 1 and October
1 of each year (each, an “Interest Payment Date”), beginning on October 1, 2007, at a rate of
2.125% per annum until the principal hereof is paid or made available for payment at April 1, 2014,
or upon acceleration, or until such date on which this security is converted or purchased as
provided herein. The interest so payable and punctually paid or duly provided for on any Interest
Payment Date shall, as provided in the Indenture (as hereinafter defined), be paid to the Person in
whose name this Security is registered at the close of business on the regular record date for such
interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case
may be, immediately preceding the relevant Interest Payment Date (each, an “Interest Payment Record
Date”); provided, however, that interest shall be paid to a Person other than the
Person in whose name this Security is registered at the close of business on the Interest Payment
Record Date as provided herein.

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

[Signature page follows]

2

 

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

Dated: March 28, 2007

	 	 	 	 	 
	 	 	KOMAG, INCORPORATED,
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

Trustee’s Certificate of Authentication: This is one of the Securities referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, not in its individual
capacity, but solely as Trustee,
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

3

 

[FORM OF REVERSE OF SECURITY]

KOMAG, INCORPORATED

2.125% CONVERTIBLE SUBORDINATED NOTES DUE 2014

     This Security is one of a duly authorized issue of 2.125% Convertible Subordinated Notes
due 2014 (the “Securities”) of KOMAG, INCORPORATED, a Delaware corporation (including any successor
corporation under the Indenture hereinafter referred to as, the “Company”), issued under an
Indenture, dated as of March 28, 2007 (the “Indenture”), between the Company and U.S. Bank National
Association, as trustee (the “Trustee”). The terms of the Security include those stated in the
Indenture, those made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the “TIA”), and those set forth in this Security. This Security is subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of all such terms. To
the extent permitted by applicable law, if any provision of this Security conflicts with the
express provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. Capitalized terms used but not defined herein have the meanings assigned to them in
the Indenture unless otherwise indicated.

1. Interest.

     The Company promises to pay interest on the principal amount of this Security at the rate per
annum shown above. The Company will pay interest, payable semi-annually in arrears, on April 1 and
October 1 of each year, with the first payment to be made on October 1, 2007. Interest on the
Securities will accrue on the principal amount from, and including, the most recent date to which
interest has been paid or provided for or, if no interest has been paid, from, and including, March
28, 2007, in each case to, but excluding, the next interest payment date or Maturity Date, as the
case may be. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

2. Method of Payment.

     Payment of the principal of, and interest on, the Securities shall be made at the office of
the Paying Agent in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. The Holder must surrender this Security
to a Paying Agent to collect payment of principal. Payment of interest on Certificated Securities
shall be made by check mailed to the address of the Person entitled thereto as such address appears
in the Register; provided, however, that Holders with Securities in an aggregate principal amount
in excess of $2.0 million shall be paid, at their written election, by wire transfer of immediately
available funds. Notwithstanding the foregoing, so long as the Securities are registered in the
name of a Depositary or its nominee, all payments with respect to the Securities shall be made by
wire transfer of immediately available funds to the account of the Depositary or its nominee.

4

 

3. Paying Agent, Registrar, Conversion Agent.

     Initially, the Trustee shall act as Paying Agent, Registrar and Conversion Agent. The Company
or any Affiliate of the Company may act as Paying Agent, Registrar or Conversion Agent, subject to
the terms of the Indenture.

4. Indenture.

     The Securities are general subordinated unsecured obligations of the Company initially limited
to $250,000,000 aggregate principal amount. The Company may, without consent of the
Securityholders, issue additional Securities under the Indenture with the same terms as the notes
offered hereby in an unlimited aggregate principal amount. The Indenture does not limit other debt
of the Company, secured or unsecured.

5. Purchase by the Company Upon a Fundamental Change.

     Subject to the terms and conditions set forth in Article 3 of the Indenture, each Holder shall
have the option to require the Company to repurchase its Securities upon the occurrence of a
Fundamental Change.

6. Conversion.

     Subject to the terms and conditions set forth in Article 4 of the Indenture, the Securities
shall be convertible into shares of Common Stock. In addition, upon the occurrence of a Make-Whole
Fundamental Change, we may increase the Conversion Rate for Securities converted in connection with
a Make-Whole Fundamental Change.

7. Denominations; Transfer; Exchange.

     The Securities are in registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000. A Holder may register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain taxes, assessments or other
governmental charges that may be imposed in relation thereto by law or permitted by the Indenture.

8. Persons Deemed Owners.

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

9. Unclaimed Money or Securities.

     The Trustee and the Paying Agent shall return to the Company upon written request any Cash or
securities held by them for the payment of any amount with respect to the Securities that remains
unclaimed for two years, subject to applicable unclaimed property law. After return to the
Company, Holders entitled to the Cash or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.

5

 

10. Amendment, Supplement and Waiver.

     Subject to certain exceptions, the Securities or the Indenture may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and, subject to certain exceptions, an existing or future Default or
Event of Default with respect to the Securities and its consequences or compliance with any
provision of the Securities or the Indenture may be waived with the consent of the Holders of at
least a majority in aggregate principal amount of the Securities then outstanding. Subject to the
terms of the Indenture, without the consent of or notice to any Holder, the Company and the Trustee
may amend or supplement the Indenture or the Securities to, among other things, cure any ambiguity,
defect or inconsistency or make any change that does not adversely affect in any material respect
the interests under the Indenture of any Holder.

11. Defaults and Remedies.

     Subject to certain exceptions set forth in the Indenture, if an Event of Default (excluding an
Event of Default specified in Sections 7.01(g) or 7.01(h) of the Indenture with respect to the
Company) occurs and is continuing, the Trustee may, by notice to the Company, or the Holders of at
least twenty five percent (25%) in aggregate principal amount of the Securities then outstanding,
by notice to the Company and the Trustee, declare the Securities to be due and payable. Upon such
declaration, the principal of, and accrued and unpaid interest on, all Securities then outstanding
shall be due and payable immediately. If an Event of Default specified in Sections 7.01(g) or
7.01(h) of the Indenture with respect to the Company occurs, the principal of, and accrued and
unpaid interest on, all the Securities then outstanding shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee or any Holder.

12. Subordination.

     The indebtedness evidenced by the Securities is, to the extent and in the manner provided in
the Indenture, expressly subordinate and subject in right of payment to the prior payment in full
of all Senior Debt of the Company, as defined in the Indenture, whether outstanding at the date of
the Indenture or thereafter incurred, and this Security is issued subject to the provisions of the
Indenture with respect to such subordination. Each Holder of this Security, by accepting the same,
agrees to and shall be bound by such provisions and authorizes the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney-in-fact for such purpose.

13. Trustee Dealings with the Company.

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

6

 

14. No Recourse Against Others.

     No recourse under or upon any obligation, covenant or agreement of the Company contained in
the Indenture, or in this Security, or because of any indebtedness evidenced thereby or hereby,
shall be had against any incorporator, as such, or against any past, present or future employee,
stockholder, officer or director, as such, of the Company or of any successor, either directly or
through the Company or any successor, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Securities by the Holders
and as part of the consideration for the issuance of the Securities.

15. Authentication.

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

16. Abbreviations.

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

17. INDENTURE TO CONTROL; GOVERNING LAW.

     TO THE EXTENT PERMITTED BY APPLICABLE LAW, IF ANY PROVISION OF THIS SECURITY CONFLICTS WITH
THE EXPRESS PROVISIONS OF THE INDENTURE, THE PROVISIONS OF THE INDENTURE SHALL GOVERN AND BE
CONTROLLING. THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

18. Copies of Indenture.

     The Company shall furnish to any Holder, upon written request and without charge, a copy of
the Indenture. Requests may be made to: Komag, Incorporated, 1710 Automation Parkway, San Jose,
California 95131, Facsimile: (408) 944-9255, Attention: Chief Financial Officer.

[Remainder of the page left intentionally blank.]

7

 

SCHEDULE OF EXCHANGES OF SECURITIES4

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

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	PRINCIPAL
	 	 	 	 	 	 	 	 	AMOUNT OF
	 	 	 	 	DECREASE IN	 	INCREASE IN	 	THIS GLOBAL
	 	 	 	 	PRINCIPAL	 	PRINCIPAL	 	SECURITY
	DATE OF	 	AUTHORIZED	 	AMOUNT OF	 	AMOUNT OF	 	FOLLOWING
	DECREASE OR	 	SIGNATORY OF	 	THIS GLOBAL	 	THIS GLOBAL	 	SUCH DECREASE
	INCREASE	 	SECURITIES	 	SECURITY	 	SECURITY	 	OR INCREASE
	 

	 	 
	 	 
	 	 
	 	 

 

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

 

ASSIGNMENT FORM5

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

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

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

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

Dated:                                         

	 	 	 	 	 
	 

	 	Your Signature:	 	 
	 

	 	 	 	 
	 

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

Signature Guaranteed

Participant in a Recognized Signature

Guarantee Medallion Program

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 

	 	 
	 

	 	Authorized Signatory	 	 

 

			
	5	 	This Form and the following Forms to be
included only if the Security is a Certificated Security.

 

 

FORM OF CONVERSION NOTICE

     To convert the entire principal amount represented by this Security into shares of Common
Stock and Cash in lieu of any fractional shares, and as provided in the Indenture check the box
o

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

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

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

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

     The undersigned (the “Applicant”) hereby makes application for the issuance of record to
the name of the Applicant of shares of Common Stock.

Dated:                     

	 	 	 	 	 
	 

	 	Your Signature:	 	 
	 

	 	 	 	 
	 

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

Signature Guaranteed

Participant in a Recognized Signature

Guarantee Medallion Program

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 

	 	 
	 

	 	Authorized Signatory	 	 

 

 

FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

U.S. Bank National Association

633 West 5th Street, 24th Floor

Los Angeles, CA 90071

Attention: Corporate Trust Services

(Komag 2.125% Convertible Subordinated Notes due 2014)

			
	                                                                          
                                              Re:	 	Komag, Incorporated (the “Company”)

2.125% Convertible Subordinated Notes due 2014

     This is a Fundamental Change Purchase Notice as defined in Section 3.01(c) of the Indenture,
dated as of March 28, 2007 (the “Indenture”), between the Company and U.S. Bank National
Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to
them in the Indenture.

     Certificate No(s). of Securities:                                                             

     I intend to deliver the following aggregate principal amount of Securities for purchase by the
Company pursuant to Section 3.01(a) of the Indenture (in multiples of $1,000):

     $                                                            

     I hereby agree that the Securities shall be purchased on the Fundamental Change Purchase Date
pursuant to the terms and conditions specified in paragraph 5 of the Securities and in Article 3 of
the Indenture.

Print Name of Holder:                                                             

Signature:                                                             

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

 

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES

			
	                                                                                                                        Re:	 	2.125% Convertible Subordinated Notes due 2014

(the “Securities”) of Komag, Incorporated

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

     o book-entry or            o definitive form

by                                                                        
         (the “Transferor”).

     The Transferor has requested a Registrar or the Trustee to exchange or register the transfer
of such Securities. In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer restrictions relating
to the Securities as provided in Section 2.12 of the Indenture, dated as of March 28, 2007, between
Komag, Incorporated, as issuer, and U.S. Bank National Association, as trustee (the “Indenture”),
and either the transfer of such Security is being made pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”) (check applicable
box) or the transfer or exchange, as the case may be, of such Security does not require
registration under the Securities Act because (check applicable box):

	 	o	 	Such Security is being transferred pursuant to an effective registration statement
under the Securities Act.
	 
	 	o	 	Such Security is being acquired for the Transferor’s own account, without transfer.
	 
	 	o	 	Such Security is being transferred to the Company or a Subsidiary (as defined in the
Indenture) of the Company.
	 
	 	o	 	Such Security is being transferred to a person the Transferor reasonably believes is
a “qualified institutional buyer” (as defined in Rule 144A or any successor provision
thereto (“Rule 144A”) under the Securities Act) to whom notice has been given that the
transfer is being made in reliance on such Rule 144A, in reliance on Rule 144A.
	 
	 	o	 	Such Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements under the Securities Act in accordance with Rule 144
(or any successor thereto) (“Rule 144”) under the Securities Act.
	 
	 	o	 	Such Security is being transferred to a non-U.S. Person in an offshore transaction
in compliance with Regulation S under the Securities Act (or any successor thereto).
	 
	 	o	 	Such Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act (other than an exemption
referred to above).

 

 

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

Dated:                                                             

	 	 	 	 	 
	 

	 	Signature(s) of Transferor:	 	 
	 

	 	 	 	 
	 

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

Signature Guaranteed

Participant in a Recognized Signature

Guarantee Medallion Program

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Authorized Signatory	 	 

2

 

EXHIBIT B

     The following table sets forth the increase in the Conversion Rate, expressed as a number of
additional shares of Common Stock to be received per $1,000 principal amount of Securities, upon a
conversion in connection with a Fundamental Change that occurs in the corresponding period.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Effective Date	 
	 	 	March 28,	 	 	April 1,	 	 	April 1,	 	 	April 1,	 	 	April 1,	 	 	April 1,	 	 	April 1,	 	 	April 1,	 
	Stock Price	 	2007	 	 	2008	 	 	2009	 	 	2010	 	 	2011	 	 	2012	 	 	2013	 	 	2014	 
	 
	$32.76
	 	 	13.28	 	 	 	13.28	 	 	 	13.28	 	 	 	13.28	 	 	 	13.28	 	 	 	13.28	 	 	 	13.28	 	 	 	13.28	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$35.00
	 	 	12.60	 	 	 	12.15	 	 	 	11.68	 	 	 	11.20	 	 	 	10.72	 	 	 	10.31	 	 	 	10.22	 	 	 	11.31	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$40.00
	 	 	11.50	 	 	 	10.95	 	 	 	10.35	 	 	 	9.68	 	 	 	8.95	 	 	 	8.16	 	 	 	7.42	 	 	 	7.74	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$45.00
	 	 	10.81	 	 	 	10.21	 	 	 	9.53	 	 	 	8.76	 	 	 	7.88	 	 	 	6.84	 	 	 	5.63	 	 	 	4.97	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$50.00
	 	 	10.37	 	 	 	9.75	 	 	 	9.04	 	 	 	8.22	 	 	 	7.25	 	 	 	6.08	 	 	 	4.58	 	 	 	2.75	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$55.00
	 	 	10.11	 	 	 	9.48	 	 	 	8.75	 	 	 	7.92	 	 	 	6.92	 	 	 	5.70	 	 	 	4.06	 	 	 	0.98	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$60.00
	 	 	9.51	 	 	 	8.88	 	 	 	8.17	 	 	 	7.34	 	 	 	6.34	 	 	 	5.11	 	 	 	3.46	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$65.00
	 	 	8.44	 	 	 	7.83	 	 	 	7.13	 	 	 	6.32	 	 	 	5.35	 	 	 	4.15	 	 	 	2.56	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$70.00
	 	 	7.56	 	 	 	6.97	 	 	 	6.29	 	 	 	5.51	 	 	 	4.57	 	 	 	3.43	 	 	 	1.94	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$75.00
	 	 	6.83	 	 	 	6.26	 	 	 	5.61	 	 	 	4.86	 	 	 	3.97	 	 	 	2.89	 	 	 	1.51	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$80.00
	 	 	6.21	 	 	 	5.67	 	 	 	5.04	 	 	 	4.32	 	 	 	3.48	 	 	 	2.47	 	 	 	1.22	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$85.00
	 	 	5.68	 	 	 	5.16	 	 	 	4.57	 	 	 	3.89	 	 	 	3.09	 	 	 	2.15	 	 	 	1.02	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$90.00
	 	 	5.23	 	 	 	4.74	 	 	 	4.17	 	 	 	3.52	 	 	 	2.77	 	 	 	1.89	 	 	 	0.88	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$95.00
	 	 	4.84	 	 	 	4.37	 	 	 	3.83	 	 	 	3.21	 	 	 	2.51	 	 	 	1.69	 	 	 	0.77	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$100.00
	 	 	4.50	 	 	 	4.05	 	 	 	3.54	 	 	 	2.95	 	 	 	2.29	 	 	 	1.53	 	 	 	0.69	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$125.00
	 	 	3.28	 	 	 	2.93	 	 	 	2.53	 	 	 	2.08	 	 	 	1.59	 	 	 	1.05	 	 	 	0.49	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$150.00
	 	 	2.55	 	 	 	2.26	 	 	 	1.94	 	 	 	1.59	 	 	 	1.21	 	 	 	0.81	 	 	 	0.39	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$175.00
	 	 	2.06	 	 	 	1.82	 	 	 	1.57	 	 	 	1.28	 	 	 	0.98	 	 	 	0.66	 	 	 	0.32	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$200.00
	 	 	1.71	 	 	 	1.51	 	 	 	1.30	 	 	 	1.07	 	 	 	0.82	 	 	 	0.55	 	 	 	0.27	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$225.00
	 	 	1.44	 	 	 	1.28	 	 	 	1.10	 	 	 	0.91	 	 	 	0.70	 	 	 	0.47	 	 	 	0.23	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$250.00
	 	 	1.24	 	 	 	1.10	 	 	 	0.95	 	 	 	0.78	 	 	 	0.60	 	 	 	0.41	 	 	 	0.20	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$275.00
	 	 	1.08	 	 	 	0.96	 	 	 	0.82	 	 	 	0.68	 	 	 	0.53	 	 	 	0.36	 	 	 	0.18	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	$300.00
	 	 	0.94	 	 	 	0.84	 	 	 	0.72	 	 	 	0.60	 	 	 	0.46	 	 	 	0.32	 	 	 	0.15	 	 	 	0.00exv10w20

 

Exhibit 10.20

KOMAG, INCORPORATED

2.125% Convertible Subordinated Notes due 2014

REGISTRATION RIGHTS AGREEMENT

March 28, 2007

Credit Suisse Securities (USA) LLC

Bear, Stearns & Co. Inc.

Citigroup Global Markets Inc.

Piper Jaffray & Co.

c/o Credit Suisse Securities (USA) LLC

     Eleven Madison Avenue

     New York, New York 10010-3629

Dear Sirs:

     Komag, Incorporated, a Delaware corporation (the “Company”), proposes to issue and sell to
Credit Suisse Securities (USA) LLC, Bear, Stearns & Co. Inc., Citigroup Global Markets Inc., and
Piper Jaffray & Co. (collectively, the “Initial Purchasers”), upon the terms set forth in a
purchase agreement, dated as of March 22, 2007 (the “Purchase Agreement”), $220 million aggregate
principal amount (plus up to an additional $30 million principal amount if the Initial Purchasers
exercise their overallotment option in full pursuant to the terms of the Purchase Agreement) of its
2.125% Convertible Subordinated Notes due 2014 (the “Initial Securities”). The Initial Securities
will be convertible into shares of common stock, par value $0.01 per share, of the Company (the
“Common Stock”) at the conversion rate set forth in the Offering Circular dated March 22, 2007 (the
“Offering Circular”). The Initial Securities will be issued pursuant to an Indenture, dated as of
March 28, 2007 (the “Indenture”), between the Company and U.S. Bank National Association, as
trustee (the “Trustee”). As an inducement to the Initial Purchasers to purchase the Initial
Securities pursuant to the Purchase Agreement, the Company agrees with the Initial Purchasers, for
the benefit of (i) the Initial Purchasers and (ii) the holders of the Initial Securities and the
Common Stock issuable upon conversion of the Initial Securities (collectively, the “Securities”)
from time to time until such time as such Securities have been sold pursuant to a Shelf
Registration Statement (as defined below) (each of the forgoing a “Holder” and collectively the
“Holders”), as follows:

     1. Shelf Registration.

     (a) The Company shall, at its cost, prepare and, as promptly as practicable (but in no event
more than 120 days after the first date of original issuance of the Initial Securities) file with
the United States Securities and Exchange Commission (the “Commission”) and thereafter use its
commercially reasonable efforts to cause to be declared effective as soon as practicable (unless it
becomes effective automatically upon filing) a registration statement (the “Shelf Registration
Statement”) on Form S-3 (or other appropriate form), which if the Company is then eligible shall be
an automatic shelf registration statement, relating to the offer and sale of the Transfer
Restricted Securities (as defined in Section 5 hereof) by the Holders thereof from time to time in
accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule
415 under the Securities Act of 1933, as amended (the
“Securities Act”) (hereinafter, the “Shelf Registration”); provided, however,
that no Holder shall be entitled to have the Securities held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to

 

 

be bound by all the provisions of
this Agreement applicable to such Holder and such Holder delivers the information required pursuant
to Section 2(a) and 2(l) hereof.

     (b) The Company shall use its commercially reasonable efforts, subject to Section 1(d) below,
to keep the Shelf Registration Statement continuously effective in order to permit the prospectus
included therein (the “Prospectus”) to be lawfully delivered by the Holders of the relevant
Securities, for a period of two years from the latest date of original issuance of the Initial
Securities or such shorter period that will terminate when all the Securities covered by the Shelf
Registration Statement (i) have been sold pursuant thereto, (ii) are no longer restricted
securities (as defined in Rule 144(k) under the Securities Act, or any successor rule thereof),
assuming for this purpose that the Holders thereof are not affiliates of the Company or (iii) the
date on which all Transfer Restricted Securities cease to be outstanding (in any such case, such
period being called the “Shelf Registration Period”). The Company shall be deemed not to have used
its commercially reasonable efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in Holders of Securities
covered thereby not being able to offer and sell such Securities during that period, unless such
action is (i) required by applicable law or (ii) taken by the Company in good faith and
contemplated by Section 2(b)(v) below, and the Company thereafter complies with the requirements of
Section 2(h).

     (c) Notwithstanding any other provisions of this Agreement to the contrary, the Company shall
cause the Shelf Registration Statement and the Prospectus and any amendment or supplement thereto,
as of its respective effective date, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.

     (d) During the Shelf Registration Period, the Company may suspend the availability of the
Shelf Registration Statement, upon written notice to the Initial Purchasers and the Holders of
Transfer Restricted Securities (which notice shall be accompanied by an instruction to suspend the
use of any prospectus), for one or more periods not to exceed 90 days in the aggregate in any
consecutive twelve-month period (each such period, a “Suspension Period”) due to the occurrence or
existence of any pending corporate development or other similar event with respect to the Company
(not including the avoidance of any obligations hereunder) or any filing with the Commission that,
in the Company’s discretion, makes it appropriate to suspend the availability of the Shelf
Registration Statement and Prospectus.

     (e) Each Holder agrees not to sell any Securities pursuant to the Shelf Registration
Statement without delivering, or causing to be delivered, a Prospectus to the purchaser thereof
and, following termination of the Shelf Registration Period, to notify the Company, within 10
business days of a written request by the Company, of the amount of Securities sold pursuant to the
Shelf Registration Statement and, in the absence of a response, the Company may assume that all of
such Holder’s Securities have been so sold; provided, however, that the Company shall use
reasonable efforts to confirm that all of such Holder’s Securities have been so sold prior to such
assumption.

     2. Registration Procedures. In connection with the Shelf Registration contemplated by
Section 1 hereof, the following provisions shall apply:

     (a) The Company shall (i) provide fifteen business days prior written notice to the Holders
of the Securities of the Company’s intention to file the Shelf Registration Statement, which notice
shall be provided to the Holders in the manner in which the Company would give notice to holders of
the Initial
Securities under the Indenture; (ii) furnish to Credit Suisse Securities (USA) LLC, as
representative of the Initial Purchasers, prior to the initial filing thereof with the Commission,
a copy of the Shelf Registration Statement and upon request by Credit Suisse Securities (USA) LLC,
as representative of the Initial Purchasers, each amendment thereof and each supplement (other than
amendments and supplements that do nothing more than name Holders and provide information with
respect thereto), if any, to the prospectus

2

 

included therein and, in the event that an Initial
Purchaser (with respect to any portion of an unsold allotment from the original offering) is
participating in the Shelf Registration Statement, shall use its commercially reasonable efforts to
reflect in each such document, when so filed with the Commission, such comments as such Initial
Purchaser reasonably may propose; and (iii) include in the prospectus included in the Shelf
Registration Statement (or, if permitted by Commission Rule 430B(b), in a prospectus supplement
that becomes a part thereof pursuant to Commission Rule 430B(f)) that is delivered to any Holder
pursuant to Section 2(d) and (e) the names of the Holders who propose to sell Securities pursuant
to the Shelf Registration Statement as selling securityholders and who shall have submitted to the
Company the completed questionnaire included as Annex A to the Offering Circular (the
“Questionnaire”) or any other information required by Section 2(l). For the purposes of this
Section 2(a), an amendment or supplement to the Shelf Registration Statement or the prospectus
included therein, shall not include a filing by the Company pursuant to the Exchange Act (as
defined below).

     (b) The Company shall give written notice to the Initial Purchasers and the Holders of the
Securities included within coverage of the Shelf Registration Statement (or all Holders in the case
of notice of effectiveness of the Shelf Registration Statement) (which notice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the Prospectus until
the requisite changes have been made):

     (i) when the Shelf Registration Statement or any amendment thereto (other than
amendments that do nothing more than name Holders and provide information with respect
thereto) has been filed with the Commission and when the Shelf Registration Statement or
any post-effective amendment thereto (other than amendments that do nothing more than name
Holders and provide information with respect thereto) has become effective; provided that
for the purposes of this Section 2(b)(i), an amendment or post-effective amendment to the
Shelf Registration Statement shall not include a filing by the Company pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”);

     (ii) of any request by the Commission for amendments or supplements (other than
amendments that do nothing more than name Holders and provide information with respect
thereto) to the Shelf Registration Statement or the prospectus included therein, after the
initial filing of the Shelf Registration Statement and prior to its effectiveness, or for
additional information with respect to the Shelf Registration Statement; provided that for
the purposes of this Section 2(b)(ii), an amendment, post-effective amendment or supplement
to the Shelf Registration Statement or the prospectus included therein, shall not include a
filing by the Company pursuant to the Exchange Act;

     (iii) of the issuance by the Commission of any stop order suspending the effectiveness
of the Shelf Registration Statement or the initiation of any proceedings for that purpose,
of the issuance by the Commission of a notification of objection to the use of the form on
which the Registration Statement has been filed, and of the happening of any event that
causes the Company to become an “ineligible issuer,” as defined in Commission Rule 405;

     (iv) of the receipt by the Company or its legal counsel of any notification with
respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening (in writing) of any proceeding for such
purpose; and

     (v) of the happening of any event that requires the Company to make changes in the
Shelf Registration Statement or the Prospectus in order that the Shelf Registration
Statement or the Prospectus does not contain an untrue statement of a material fact nor
omit to state a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading.

3

 

     (c) The Company shall make every reasonable effort to obtain the withdrawal at the earliest
practicable time, of any order suspending the effectiveness of the Shelf Registration Statement.

     (d) The Company shall furnish to each Holder of Securities included within the coverage of
the Shelf Registration, without charge and upon request, at least one copy (either in written or
electronic form) of the Shelf Registration Statement and any post-effective amendment or supplement
thereto, including financial statements and schedules, and, if the Holder so requests in writing,
all exhibits thereto (including those, if any, incorporated by reference). The Company shall not,
without the prior consent of Credit Suisse Securities (USA) LLC on behalf of the Initial
Purchasers, make any offer relating to the Securities that would constitute a “free writing
prospectus,” as defined in Commission Rule 405. Each Holder represents and agrees that, unless it
obtains the prior consent of the Company, it will not make any offer relating to the Securities
that would constitute a “free writing prospectus,” as defined in Rule 405, required to be filed
with the Commission.

     (e) The Company shall, during the Shelf Registration Period, deliver to each Holder of
Securities included within the coverage of the Shelf Registration, without charge, as many copies
of the Prospectus (including each preliminary prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such person may reasonably request. The
Company consents, subject to the provisions of this Agreement, to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of the Securities in connection with
the offering and sale of the Securities covered by the Prospectus, or any amendment or supplement
thereto, included in the Shelf Registration Statement.

     (f) Prior to any public offering of the Securities pursuant to the Shelf Registration
Statement, the Company shall use its commercially reasonable efforts to register or qualify or
cooperate with the Holders of the Securities included therein and their respective counsel in
connection with the registration or qualification of the Securities for offer and sale under the
securities or “blue sky” laws of such states of the United States as any Holder of the Securities
reasonably requests in writing and do any and all other acts or things necessary or advisable to
enable the offer and sale in such jurisdictions of the Securities covered by such Registration
Statement; provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then so qualified or (ii) take any
action which would subject it to general service of process or to taxation in any jurisdiction
where it is not then so subject.

     (g) The Company shall cooperate with the Holders of the Securities to facilitate the timely
preparation and delivery of certificates representing the Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations and registered in
such names as the Holders may request a reasonable period of time prior to sales of the Securities
pursuant to the Shelf Registration Statement.

     (h) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section
2(b) above during the period for which the Company is required to maintain an effective Shelf
Registration Statement, the Company shall promptly use its commercially reasonable efforts prepare
and file a post-effective amendment to the Shelf Registration Statement or an amendment or
supplement to the Prospectus and any other required document so that, as thereafter delivered to
Holders or purchasers of the Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. If the Company notifies the
Initial Purchasers and the Holders in accordance with paragraphs (ii) through (v) of Section 2(b)
above to suspend the use of the Prospectus until the requisite changes to the Prospectus have been
made, then the Initial Purchasers and the Holders shall suspend use of such prospectus.

4

 

     (i) Not later than the effective date of the Shelf Registration Statement, the Company will
provide CUSIP numbers for the Initial Securities and the Common Stock registered under the Shelf
Registration Statement, and provide the Trustee with printed certificates for the Initial
Securities, in a form eligible for deposit with The Depository Trust Company.

     (j) The Company will comply in all material respects with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf Registration and will make
generally available to its security holders (or otherwise provide in accordance with Section 11(a)
of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such
period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter
commencing after the effective date of the Shelf Registration Statement, which statement shall
cover such 12-month period.

     (k) The Company shall use its commercially reasonable efforts to cause the Indenture to be
qualified under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), in a
timely manner and containing such changes, if any, as shall be necessary for such qualification.
In the event that such qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions
of the Indenture.

     (l) In addition to the Questionnaire, the Company may require each Holder of Securities to be
sold pursuant to the Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of the Securities as the Company may from time to time
reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude
from such registration the Securities of any Holder that unreasonably fails to furnish such
information within a reasonable time after receiving such request.

     (m) The Company shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other actions, if any, as any Holder
shall reasonably request in order to facilitate the disposition of the Securities pursuant to the
Shelf Registration.

     (n) The Company shall (i) make reasonably available for inspection by the Holders, any
underwriter participating in any disposition pursuant to the Shelf Registration Statement and any
attorney, accountant or other agent retained by the Holders or any such underwriter, all relevant
financial and other records, pertinent corporate documents and properties of the Company and (ii)
use its commercially reasonable efforts to cause the Company’s officers, directors, employees,
accountants and auditors to supply all relevant information reasonably requested by the Holders or
any such underwriter, attorney, accountant or agent in connection with the Shelf Registration
Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a
reasonable investigation within the meaning of Section 11 of the Securities Act; provided,
however, that the foregoing inspection and information gathering shall be coordinated on
behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel
designated by and on behalf of such other parties as described in Section 3 hereof; provided
further, that if any such information is identified by the Company in good faith as being
confidential or proprietary, each person receiving such information shall take such actions as are
reasonably necessary to protect the confidentiality of such information, except to the extent such
information is ordered to be released pursuant to a subpoena or other order from a court of
competent
jurisdiction, is required to be released under applicable law or is or becomes generally
available to the public.

     (o) If any of the Securities covered by the Shelf Registration Statement are to be sold in an
underwritten offering, the Company, if requested by any Holder of Securities covered by the Shelf
Registration Statement, shall cause (i) its counsel to deliver an opinion relating to the
Securities in customary form addressed to the managing underwriters, if any, thereof, covering
matters customarily covered in opinions requested in underwritten offerings of comparable
securities; (ii) its officers to execute and deliver all customary documents and certificates and
updates thereof requested by the

5

 

underwriters of the Securities and (iii) its independent public
accountants and the independent public accountants with respect to any other entity for which
financial information is provided in the Shelf Registration Statement to provide to the selling
Holders of the applicable Securities and the underwriters therefor a comfort letter in customary
form and covering matters of the type customarily covered in comfort letters in connection with
primary underwritten offerings, subject to receipt of appropriate documentation as contemplated,
and only if permitted, by Statement of Auditing Standards No. 72.

     (p) In the event that any broker-dealer registered under the Exchange Act shall underwrite
any Securities or participate as a member of an underwriting syndicate or selling group or “assist
in the distribution” (within the meaning of the Conduct Rules (the “Rules”) of the National
Association of Securities Dealers, Inc. (“NASD”)) thereof, whether as a Holder of such Securities
or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or
otherwise, the Company will use its commercially reasonable efforts to assist such broker-dealer in
complying with the requirements of such Rules, including, without limitation, by (i) if such Rules,
including Rule 2720, shall so require, engaging a “qualified independent underwriter” (as defined
in Rule 2720) to participate in the preparation of the Shelf Registration Statement relating to
such Securities, to exercise usual standards of due diligence in respect thereto and, if any
portion of the offering contemplated by such Registration Statement is an underwritten offering or
is made through a placement or sales agent, to recommend the yield of such Securities, (ii)
indemnifying any such qualified independent underwriter to the extent of the indemnification of
underwriters provided in Section 5 hereof and (iii) providing such information to such
broker-dealer as may be required in order for such broker-dealer to comply with the requirements of
the Rules.

     (q) From and after the date the Shelf Registration Statement is declared effective, each
Holder of Securities wishing to sell its Securities pursuant to the Shelf Registration Statement
and Prospectus will deliver a Questionnaire to the Company at least 10 business days prior to any
intended distribution. Within five business days after the later of receipt of a Questionnaire or
the expiration of any Suspension Period in effect when such Questionnaire is delivered, the Company
will file, if required by applicable law, a post-effective amendment to the Shelf Registration
Statement or a supplement to the Prospectus. In no event shall the Company be required to file
more than one post-effective amendment in any calendar quarter with respect to any amendment that
does nothing more than name new Holders and provide information with respect thereto or to file a
supplement or post-effective amendment to the Shelf Registration Statement during any Suspension
Period.

     (r) The Company shall use its commercially reasonable efforts to take all other steps
necessary to effect the registration of the Securities covered by a Shelf Registration Statement
contemplated hereby.

     3. Registration Expenses. (a) All expenses incident to the Company’s performance of and
compliance with this Agreement will be borne by the Company, regardless of whether a Registration
Statement is ever filed or becomes effective, including without limitation;

     (i) all registration and filing fees and expenses;

     (ii) all fees and expenses of compliance with federal securities and state “blue sky”
or securities laws;

     (iii) all expenses of printing (including printing certificates for the Securities to
be issued and printing of Prospectuses), messenger and delivery services and telephone;

     (iv) all fees and disbursements of counsel for the Company;

     (v) all application and filing fees in connection with listing the Securities on a
national securities exchange or automated quotation system pursuant to the requirements
hereof; and

6

 

     (vi) all fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters required by or
incident to such performance).

The Company will bear its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties), the expenses of any
annual audit and the fees and expenses of any person, including special experts, retained by the
Company. Notwithstanding the foregoing, each Holder shall pay all underwriting discounts and
commissions, broker fees and commissions, and transfer taxes, if any, relating to the sale or
disposition of such Holder’s Securities pursuant to the Shelf Registration Statement.

     (b) In connection with the Shelf Registration Statement required by this Agreement, the
Company will reimburse the Initial Purchasers and the Holder of Securities covered by the Shelf
Registration Statement, for the reasonable fees and disbursements of not more than one counsel,
designated by the Holders of a majority in principal amount of the Securities covered by the Shelf
Registration Statement (provided that Holders of Common Stock issued upon the conversion of the
Initial Securities shall be deemed to be Holders of the aggregate principal amount of Initial
Securities from which such Common Stock was converted) to act as counsel for the Holders in
connection therewith.

     4. Indemnification. (a) The Company agrees to indemnify and hold harmless each Holder and
each person, if any, who controls such Holder within the meaning of the Securities Act or the
Exchange Act (each Holder, and such controlling persons are referred to collectively as the
“Indemnified Parties”) from and against any losses, claims, damages or liabilities, joint or
several, or any actions in respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the Shelf Registration
Statement or prospectus including any document incorporated by reference therein, or in any
amendment or supplement thereto or in any preliminary prospectus or “issuer free writing
prospectus,” as defined in Commission Rule 433 (“Issuer FWP”), relating to the Shelf Registration,
or arise out of, or are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, and
shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that the Company shall
not be liable in any such case to the extent that such loss, claim, damage or liability arises out
of or is based upon any untrue statement or alleged untrue statement or omission or alleged
omission made in the Shelf Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus or Issuer FWP relating to the Shelf Registration in
reliance upon and in conformity with written information pertaining to such Holder and furnished to
the Company by or on behalf of such Holder specifically for inclusion therein; provided
further, however, that this indemnity agreement will be in addition to any
liability which the Company
may otherwise have to such Indemnified Party. The Company shall also indemnify underwriters,
their officers and directors and each person who controls such underwriters within the meaning of
the Securities Act or the Exchange Act to the same extent as provided above with respect to the
indemnification of the Holders of the Securities if requested by such Holders.

     (b) Each Holder, severally and not jointly, will indemnify and hold harmless the Company, its
officers and directors and each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or
any actions in respect thereof, to which the Company or any such controlling person may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Shelf Registration Statement or prospectus or
in any amendment or supplement thereto or

7

 

in any preliminary prospectus or Issuer FWP relating to
the Shelf Registration, or arise out of or are based upon the omission or alleged omission to state
therein a material fact necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or omission or alleged untrue statement or omission
was made in reliance upon and in conformity with written information pertaining to such Holder and
furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and,
subject to the limitation set forth immediately preceding this clause, shall reimburse, as
incurred, the Company for any legal or other expenses reasonably incurred by the Company or any
such controlling person in connection with investigating or defending any loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in addition to any
liability which such Holder may otherwise have to the Company or any of its controlling persons.

     (c) Promptly after receipt by an indemnified party under this Section 4 of notice of the
commencement of any action or proceeding (including a governmental investigation), such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying party under this
Section 4, notify the indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have under subsection (a) or
(b) above except to the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have to an indemnified
party otherwise than under subsection (a) or (b) above. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this Section 4 for any legal
or other expenses, other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on any claims that are the
subject matter of such action, and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.

     (d) If the indemnification provided for in this Section 4 is unavailable or insufficient to
hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above in such proportion as is appropriate to reflect the relative fault of the indemnifying party
or parties on the one
hand and the indemnified party on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as
well as any other relevant equitable considerations. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or

8

 

alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Holder or such other indemnified party, as the case
may be, on the other, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in the first sentence
of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any action or claim which
is the subject of this subsection (d). Notwithstanding any other provision of this Section 4(d),
the Holders shall not be required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Securities pursuant to the Shelf
Registration Statement exceeds the amount of damages which such Holders have otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange Act shall have the
same rights to contribution as the Company.

     (e) The agreements contained in this Section 4 shall survive the sale of the Securities
pursuant to the Shelf Registration Statement and shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement or any investigation made by or on behalf of
any indemnified party.

     5. Additional Interest Under Certain Circumstances. (a) Additional interest (the
“Additional Interest”) with respect to the Initial Securities shall be assessed as follows if any
of the following events occur (each such event in clauses (i) through (iv) below being herein
called a “Registration Default”):

     (i) the Shelf Registration Statement has not been filed with the Commission by the
120th day after the first date of original issuance of the Initial Securities;

     (ii) the Shelf Registration Statement has not become effective by the
180th day after the first date of original issue of the Initial Securities;

     (iii) the Shelf Registration Statement becomes effective but (A) the Shelf
Registration Statement thereafter ceases to be effective or (B) the Shelf Registration
Statement or the Prospectus ceases to be usable by the Holders in connection with resales
of Transfer Restricted Securities (as defined below) for a period of time (including any
Suspension Period) which exceeds 90 days in the aggregate in any consecutive twelve-month
period because either (1) any event occurs as a result of which the Prospectus forming part
of such Shelf Registration Statement would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, (2) it shall be necessary to
amend such Shelf Registration Statement or supplement the related prospectus, to comply
with the Securities Act or the Exchange Act or the respective rules thereunder, or (3) such
Registration Statement is a Shelf Registration Statement that has expired before a
replacement Shelf Registration Statement has become effective; or

     (iv) any Suspension Period exceeds 90 days in the aggregate in any consecutive
twelve-month period.

Each of the foregoing will constitute a Registration Default whatever the reason for any such event
and whether it is voluntary or involuntary or is beyond the control of the Company or pursuant to
operation of law or as a result of any action or inaction by the Commission.

     Additional Interest shall accrue on the Initial Securities affected thereby over and above the
interest set forth in the title of the Initial Securities from and including the date on which any
such Registration Default shall occur to but excluding the date on which all such Registration
Defaults have been cured, at a rate of 0.25% per annum (the “Additional Interest Rate”) for the
first 90-day period immediately following the occurrence of such Registration Default. The
Additional Interest Rate shall increase by an additional 0.25% per annum from and after the
91st day following such Registration Default until all Registration Defaults have been
cured. Upon the cure of all Registration Defaults then continuing, the accrual of Additional
Interest will automatically cease and the interest rate borne by the Securities will revert to the
original interest rate at such time. Holders who have converted Initial Securities into Common
Stock will not be entitled to receive any Additional Interest with respect to such Common Stock or
the Initial Securities converted. Notwithstanding the foregoing, in no event will Additional
Interest accrue at a

9

 

rate per annum exceeding 0.50%. Notwithstanding the foregoing, the parties
agree that the sole damages payable for a violation of the terms of this Agreement with respect to
which Additional Interest is expressly provided shall be such Additional Interest.

     (b) Any amounts of Additional Interest due pursuant to Section 5(a) will be payable in cash
on the regular interest payment dates with respect to the Initial Securities. The amount of
Additional Interest will be determined by multiplying the applicable Additional Interest Rate by
the principal amount of the Initial Securities, further multiplied by a fraction, the numerator of
which is the number of days such Additional Interest Rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator
of which is 360.

     (c) “Transfer Restricted Securities” means each Security until (i) the date on which such
Security has been effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (ii) the date on which such Security is distributed to the
public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act (in each case assuming the holder thereof is not an affiliate of the Company).

     6. Rules 144 and 144A. The Company shall use its commercially reasonable efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner
and, if at any time the Company is not required to file such reports, it will, upon the request of
any Holder, make publicly available other information so long as necessary to permit sales of their
securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further
action as any Holder may reasonably request, all to the extent required from time to time to enable
such Holder to sell Transfer Restricted Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements
of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers
of Securities identified to the Company by the Initial Purchasers upon request. Upon the request
of any Holder, the Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements. Notwithstanding the foregoing, nothing in this Section 6 shall be
deemed to require the Company to register any of its securities pursuant to the Exchange Act.

     7. Underwritten Registrations. If any of the Transfer Restricted Securities covered by the
Shelf Registration are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will administer the offering (“Managing Underwriters”) will be
selected by the holders of a majority in aggregate principal amount of such Transfer Restricted
Securities to be included in such offering, provided that holders of Common Stock issued upon
conversion of the Initial
Securities shall not be deemed holders of Common Stock, but shall be deemed to be holders of
the aggregate principal amount of Initial Securities from which such Common Stock was converted.

     No person may participate in any underwritten registration hereunder unless such person (i)
agrees to sell such person’s Transfer Restricted Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve such arrangements
and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such underwriting
arrangements.

10

 

     8. Miscellaneous.

     (a) Remedies. The Company acknowledges and agrees that any failure by the Company to comply
with its obligations under Section 1 hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required to specifically
enforce the Company’s obligations under Sections 1 hereof. The Company further agrees to waive the
defense in any action for specific performance that a remedy at law would be adequate.

     (b) No Inconsistent Agreements. The Company will not on or after the date of this Agreement
enter into any agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company’s securities under any agreement in effect on
the date hereof.

     (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof may not be given,
except by the Company and the written consent of the holders of a majority in principal amount of
the Securities affected by such amendment, modification, supplement, waiver or consents (provided
that holders of Common Stock issued upon conversion of Initial Securities shall not be deemed
holders of Common Stock, but shall be deemed to be holders of the aggregate principal amount of
Initial Securities from which such Common Stock was converted). Without the consent of the Holder
of each Initial Security, however, no modification may change the provisions relating to the
payment of Additional Interest.

     (d) Notices. All notices and other communications provided for or permitted hereunder shall
be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which
guarantees overnight delivery:

     (1) if to a Holder of the Securities, at the most current address given by such
Holder to the Company in a Questionnaire provided by such Holder or by means of a notice
given in accordance with the provisions of this Section 8(d).

     (2) if to the Initial Purchasers;

Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010-3629

Fax No.: (212) 325-8278

Attention: LCD-IBD Group

     with a copy to:

Morrison & Foerster LLP

755 Page Mill Road

Palo Alto, CA 94304

Fax No.: (650) 251-3830

Attention: Justin Bastian

     (3) if to the Company, at its address as follows:

11

 

Komag, Incorporated

1710 Automation Parkway

San Jose, CA 95131

Fax No.: (408) 944-9255

Attention: Kathleen A. Bayless

     with a copy to:

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, CA 94304-1050

Fax No. (650) 493-6811

Attention: Page Mailliard

     All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; three business days after being deposited in the mail,
postage prepaid, if mailed; when receipt is acknowledged by recipient’s facsimile machine operator,
if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next business day delivery.

     (e) Third Party Beneficiaries. The Holders shall be third party beneficiaries to the
agreements made hereunder between the Company, on the one hand, and the Initial Purchasers, on the
other hand, and shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights or the rights of Holders
hereunder.

     (f) Successors and Assigns. This Agreement shall be binding upon the Company and its
successors and assigns.

     (g) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

     By the execution and delivery of this Agreement, the Company submits to the nonexclusive
jurisdiction of any federal or state court in the State of New York.

     (j) Severability. If any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

     (k) Securities Held by the Company. Whenever the consent or approval of Holders of a
specified percentage of principal amount of Securities is required hereunder, Securities held by
the Company or its affiliates (other than subsequent Holders of Securities if such subsequent
Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall
not be counted in determining whether such consent or approval was given by the Holders of such
required percentage.

12

 

     If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the several Initial Purchasers and the Company in accordance
with its terms.

	 	 	 	 	 
	 	Very truly yours,

Komag, Incorporated

 	 
	 	by	 	   /s/  Timothy D. Harris
 	 
	 		 	Name:  Timothy D. Harris 	 
	 		 	Title:  Chief Executive Officer 	 
	 

The foregoing Registration

Rights Agreement is hereby confirmed

and accepted as of the date first

above written.

Credit Suisse Securities (USA) LLC

Bear, Stearns & Co. Inc.

Citigroup Global Markets Inc.

Piper Jaffray & Co.

By: Credit Suisse Securities (USA) LLC

	 	 	 	 	 
	by
	 	 	 	 
	 

	 	/s/ John Metz
 

	 	  
	 

	 	Name: John Metz	 	 
	 

	 	Title: Managing Director

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