Document:

Exhibit 10.4

AMENDMENT
TWO

TO THE

CASCADE NATURAL GAS CORPORATION

SEVERANCE PAY PLAN

2005
Restatement

September
1, 2006

	
  Cascade Natural Gas Corporation

  	
   

  
	
  a Washington corporation

  	
   

  
	
  222 Fairview Avenue North

  	
   

  
	
  Seattle, Washington 98109

  	
  Company

  

 

The Company
sponsors the Severance Pay Plan to provide eligible employees of the Company
with severance benefits in a defined set of severance pay and benefits.  The Company amended the Plan to provide for
payment of retention awards to key employees of the Company who are not
officers in the event the Company terminates a key employee’s employment
following a change in control.  The
Company adopts this amendment to extend retention awards to key employees whose
employment terminates within twelve months following a change in control and to
permit the chief executive officer to waive the requirement of six months of
continuous employment to receive severance pay or a retention award.

1.             Retention
Payments

a.             Section A.2.1 of Appendix A to the
Plan is amended to read as follows:

A.2-1      Retention payments shall
be made to any Eligible Employee who has received a written retention award
letter that has not been withdrawn or modified by the Company in the amount set
forth in the award letter if the employee is terminated by the Company within
twelve (12) months after the occurrence of the last event that constitutes a
Change in Control under A.3.

b.             Section 2.01-2(b) of the Plan is
amended to read as follows:

       (b) 
Subject to 2.01-3, an employee who has not completed at least six months
of continuous service with the Company.

c.             A new section 2.01-3 of the Plan is
added to read as follows:

2.01-3    An employee who has
completed less than six months of continuous service with the Company will be
treated as an Eligible Employee if both of the following apply:

(a)  The employee would satisfy all requirements
to be treated as an Eligible Employee other than the requirement to complete at
least six months of continuous service.

 

(b) The chief executive
officer of the Company has waived the requirement of six months of continuous
service in the employee’s written retention supplement award letter under A.2-1
of Appendix A.

2.             Effective
Dates

The changes in section 1 shall be effective on
September 1, 2006, and shall apply to all retention award letters in effect on
or after September 1, 2006.

	
  Adopted: September 14, 2006

  	
  CASCADE NATURAL GAS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ David W. Stevens

  
	
   

  	
   

  	
     David W. Stevens, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Executed: September 14, 2006Exhibit 4.1

 

 

NEW PLAN EXCEL
REALTY TRUST, INC.,

and

U.S.
BANK TRUST NATIONAL ASSOCIATION,

Trustee

 

FIRST SUPPLEMENTAL INDENTURE

Dated as of September 19, 2006

 

3.70% Convertible Senior
Notes due 2026

 

 

 

FIRST
SUPPLEMENTAL INDENTURE

THIS FIRST SUPPLEMENTAL INDENTURE (this “First Supplemental Indenture”) is entered into as of
September 19, 2006 between NEW PLAN EXCEL REALTY TRUST, INC., a Maryland
corporation (the “Company”),
having its principal place of business at 420 Lexington Avenue, New York, New
York 10170, and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking
association duly organized and existing under the laws of the United States, as
Trustee hereunder (the “Trustee”),
having a Corporate Trust Office at 100 Wall Street, Suite 1600, New York, New
York 10005.

WHEREAS, the Company and the Trustee entered into that
certain Indenture dated as of January 30, 2004 (the “Original
Indenture”), relating to the Company’s senior debt securities;

WHEREAS, pursuant to Section 901 of the
Indenture, the Company and the Trustee may enter into supplemental indentures
to establish the terms and provisions of a series of Securities issued pursuant
to the Indenture;

WHEREAS, pursuant to Section 301 of the Indenture,
the Company and the Trustee desire to establish the terms of a series of
Securities entitled the “3.70% Convertible Senior Notes due 2026” (the “Notes”); and

WHEREAS, the Company and the Trustee have duly
authorized the execution and delivery of this instrument to establish the terms
of the Notes set forth herein and have done all things necessary to make this
instrument (together with the Original Indenture, the “Indenture”)
a valid agreement of the parties hereto, in accordance with its terms;

NOW, THEREFORE, in consideration of the premises and
the covenants and agreements contained herein, and for other good and valuable
consideration the receipt of which is hereby acknowledged, and for the equal
and proportionate benefit of the Holders of the Securities, the Company and the
Trustee agree as follows:

ARTICLE ONE

DEFINITIONS

Section 1.01.          Definitions.  Capitalized terms used in this instrument and
not otherwise defined herein shall have the meanings assigned to such terms in
the Original Indenture, as supplemented by the First Supplemental Indenture, or
in the form of Note attached as Exhibit A hereto.

“Additional Notes”
has the meaning provided in Section 2.02 hereof.

“Additional Interest”
has the meaning specified for Liquidated Damages in the Registration Rights
Agreement.

“Additional Interest
Notice” has the meaning specified in Section 2.26.

“Additional Shares”
has the meaning specified in Section 2.10.

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“Applicable Conversion
Period” means, with respect to a conversion of Notes, the 10
consecutive Trading Day period commencing on the third Trading Day following
the date the Notes are tendered for conversion.

“Average Price”
means, with respect to a conversion of Notes, an amount equal to the average of
the Closing Sale Prices of Common Stock for each Trading Day in the Applicable
Conversion Period.

“Business Day”
means, with respect to any Note, any day, other than a Saturday, Sunday or any
other day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to close.

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

(1) consummation of
any transaction or event (whether by means of a share exchange or tender offer
applicable to Common Stock, a liquidation, consolidation, recapitalization,
reclassification, combination or merger of the Company or a sale, lease or
other transfer of all or substantially all of the consolidated assets of the
Company) or a series of related transactions or events pursuant to which all of
the outstanding shares of Common Stock are exchanged for, converted into or
constitute solely the right to receive, cash, securities or other property;

(2) any “person” or “group”
(as such terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act, whether or not applicable), other than the Company or any
majority-owned subsidiary of the Company or any employee benefit plan of
the Company or such subsidiary, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
more than 50% of the total voting power in the aggregate of all classes of
shares of capital stock of the Company then outstanding entitled to vote
generally in elections of the Company’s directors; or

(3) during any
period of 12 consecutive months after the date of original issuance of the
Notes, persons who at the beginning of such 12-month period constituted
the Board of Directors of the Company, together with any new persons whose
election was approved by a vote of a majority of the persons then still
comprising the Board of Directors of the Company who were either members of the
Board of Directors of the Company at the beginning of such period or whose
election, designation or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board of Directors of the
Company.

Notwithstanding the foregoing, even if any of the
events specified in the preceding clauses (1) through (3) have occurred, except
as specified in clause (x), a Change in Control will not be deemed to have
occurred if either:

(x) the Closing Sale
Price per share of Common Stock for any five Trading Days within (i) the
period of 10 consecutive Trading Days ending immediately after the later of the
Change in Control or the public announcement of the Change in Control, in the
case of a Change in Control relating to an acquisition of capital shares, or
(ii) the period of 10 consecutive Trading Days ending immediately after
the Change in Control, in the case of

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a Change in Control
relating to a merger, consolidation or asset sale, equals or exceeds 105% of
the Conversion Price applicable to the Notes in effect on each of those Trading
Days; provided, however, that the exception to
the definition of “Change in Control” specified in this clause (x) shall not
apply in the context of a Change in Control for purposes of Section 2.10 or
Section 2.11(d); or

(y) at least 90% of the
consideration (excluding cash payments for fractional shares and cash payments
made pursuant to dissenters’ appraisal rights) in a merger, consolidation or
other transaction otherwise constituting a Change in Control consists of common
stock (or depositary receipts or other certificates representing common equity
interests) traded on a U.S. national securities exchange or quoted on an
automated over-the-counter trading market in the United States (or
will be so traded or quoted immediately following such merger, consolidation or
other transaction) and as a result of the merger, consolidation or other
transaction the Notes become convertible into such shares of common stock (or
depositary receipts or other certificates representing common equity
interests).

 For the
purposes of this definition, “person” includes any syndicate or group that
would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

“Change in Control Purchase
Date” has the meaning provided in Section 2.09 hereof.

“Change in Control Purchase
Notice” has the meaning provided in Section 2.09 hereof.

“Change in Control Purchase
Price” has the meaning provided in Section 2.09 hereof.

“Closing Sale Price”
of the shares of Common Stock or other capital shares or similar equity
interests or other publicly traded securities on any date means the closing
sale price per share (or, if no closing sale price is reported, the average of
the closing bid and ask prices or, if more than one in either case, the average
of the average closing bid and the average closing ask prices) on such date as
reported on the principal U.S. securities exchange on which the Common Stock or
such other capital shares or similar equity interests or other securities are
traded or, if the Common Stock or such other capital shares or similar equity
interests or other securities are not listed on a U.S. national or regional
securities exchange, as reported by the National Quotation Bureau Incorporated
or another established over-the-counter trading market in the
United States. The Closing Sale Price shall be determined without regard to
after-hours trading or extended market making. In the absence of the
foregoing, the Company shall determine the Closing Sale Price on such basis as
it considers appropriate.

“Common Stock”
means common stock, par value $0.01 per share, of the Company.

“Company” has
the meaning provided in the first paragraph of this instrument until a
successor Person shall have become such pursuant to the applicable provisions
of the Indenture, and thereafter “Company” shall mean such successor Person.

“Company Notice”
has the meaning provided in Section 2.09 hereof.

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“Conversion Agent”
means the office or agency designated by the Company where the Notes may be
presented for conversion.

“Conversion Price”
means, as of any date of determination, for $1,000 principal amount of Notes,
the quotient of $1,000 divided by the Conversion Rate in effect as of such
date, rounded to the nearest $0.01, with $0.005 rounded upward.

“Conversion Rate”
means the number of shares of Common Stock by reference to which the Conversion
Value shall be determined, which shall be initially 30.5506 shares of Common
Stock for each $1,000 principal amount of Notes and as the same shall be
adjusted from time to time in accordance with the provisions hereof and of the
Notes.

“Conversion Value”
means, for each $1,000 principal amount of Notes, the product of (a) the
applicable Conversion Rate, multiplied by (b) the Average Price.

“Daily Share Amount” has the
meaning provided in Section 2.12 hereof.

“Depositary” has
the meaning provided in Section 2.03 hereof.

“Effective Date”
has the meaning specified in Section 2.10.

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

“Expiration Time”
has the meaning specified in Section 2.14.

“Initial Purchasers”
means each of Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Banc of
America Securities LLC, BNY Capital Markets Inc. and KeyBanc Capital Markets, a
division of McDonald Investments Inc. (each, an “Initial Purchaser”).

“interest”
means, when used with reference to the Notes, any interest payable under the
terms of the Notes, including Additional Interest, if any, payable under the
terms of the Registration Rights Agreement.

“Indenture” has
the meaning provided in the preamble of this instrument.

“Interest Payment Date”
has the meaning provided in Section 2.05 hereof.

“Net Amount” has
the meaning provided in Section 2.12 hereof.

“Net Cash Amount”
has the meaning provided in Section 2.12 hereof.

“Net Shares” has
the meaning provided in Section 2.12 hereof.

“Notes” has the
meaning provided in Section 2.01 hereof which shall be substantially in the
form attached as Exhibit A hereto.

“Optional Repurchase Date”
has the meaning provided in Section 2.08 hereof.

“Optional Repurchase Notice”
has the meaning provided in Section 2.08 hereof.

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“Optional Repurchase Price”
has the meaning provided in Section 2.08 hereof.

“PORTALSM Market” means The PORTAL Market operated
by the Nasdaq Stock Market or any successor thereto.

“Principal Return”
has the meaning provided in Section 2.12 hereof.

“Purchase Agreement”
means the Purchase Agreement, dated September 13, 2006, among the Company and
the Initial Purchasers.

“Redemption Date”
means, with respect to any Note or portion thereof to be redeemed in accordance
with the provisions of Section 2.07 hereof, the date fixed for such redemption
in accordance with the provisions of Section 2.07 hereof.

“Redemption Price”
has the meaning provided in Section 2.07 hereof.

“Reference Dividend”
has the meaning specified in Section 2.14.

“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of
September 19, 2006, among the Company and the Initial Purchasers, as amended
from time to time in accordance with its terms.

“Regular Record Date”
has the meaning provided in Section 2.05 hereof.

“Restricted Securities”
has the meaning specified in Section 2.24.

“Rule 144A”
means Rule 144A as promulgated under the Securities Act as it may be amended
from time to time hereafter.

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

 “Spin-Off” has the meaning specified in
Section 2.14.

“Stated Maturity”
has the meaning provided in Section 2.04 hereof.

“Stock Price”
has the meaning specified in Section 2.10.

“Trading Day”
means a day during which trading in securities generally occurs on the New York
Stock Exchange or, if the Common Stock is not then listed on the New York Stock
Exchange, on the principal other U.S. national or regional securities exchange
on which the Common Stock is then listed or, if the Common Stock is not then
listed on a U.S. national or regional securities exchange, on the principal
other market on which shares of Common Stock are then traded.

“Trading Price”
means, with respect to the Notes on any date of determination, the average of
the secondary market bid quotations per $1,000 principal amount of Notes
obtained by the Trustee for a $5,000,000 principal amount of Notes at
approximately 3:30 p.m., New York City time, on such determination date from
two independent nationally recognized securities dealers selected by the
Company, which may include one or more of the Initial

 6
 

 

Purchasers or any
successor to such entities.  If at least
two such bids cannot reasonably be obtained by the Trustee, but one such bid
can reasonably be obtained by the Trustee, then one bid shall be used. If the
Trustee cannot reasonably obtain at least one bid for a $5,000,000 principal
amount of Notes from a nationally recognized securities dealer or, in the
reasonable judgment of the Company, the bid quotations are not indicative of
the secondary market value of the Notes, then the Trading Price per $1,000
principal amount of Notes shall be deemed to be less than 98% of the product of
the Closing Sale Price of the Common Stock and the Conversion Rate on such
determination date.

“Trust Indenture Act”
means the Trust Indenture Act of 1939, as amended.

ARTICLE TWO

TERMS

Section 2.01.          Title.  The Notes shall constitute a series of
Securities designated as the “3.70% Convertible Senior Notes due 2026” of the
Company.

Section 2.02.          Aggregate
Principal Amount.  The aggregate
principal amount of Notes which may be authenticated and delivered under this
First Supplemental Indenture is initially limited in aggregate principal amount
to $200,000,000, except for Notes authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Sections 304, 305, 306, 906, 1107 or 1203 of the Indenture and except for any
Notes which, pursuant to Section 303 of the Indenture, are deemed never to have
been authenticated and delivered thereunder; provided that the Company may from
time to time, without the consent of the Holders of the Notes, increase the
principal amount of the Notes by issuing additional Securities in the future
(the “Additional Notes”) having
the same terms and ranking equally and ratably with the Notes in all respects
and with the same CUSIP number as the Notes, except for the difference in the
issue price and interest accrued prior to the issue date of such Additional
Notes, provided that such Additional Notes constitute part of the same issue as
the Notes for U.S. federal income tax purposes. 
Any Additional Notes will be treated as a single series with the Notes
under the Indenture and shall have the same terms as to status, redemption,
repurchase, conversion and otherwise as the Notes.

Section 2.03.          Registered
Securities in Book-Entry Form. 
The Notes shall be issuable in the form of one or more global Securities
registered in the name of The Depository Trust Company’s nominee, and shall be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York (the “Depositary”). The Notes
may be surrendered for registration of transfer and for conversion at the
office or agency of the Company (including the Trustee) maintained for such
purpose in the Borough of Manhattan, The City of New York, or at any other
office or agency maintained by the Company for such purpose.

Section 2.04.          Stated
Maturity of Principal.  The Stated
Maturity of the principal of the Notes shall be September 15, 2026.

Section 2.05.          Interest.  The Notes shall bear interest at the rate of
3.70% per annum from September 19, 2006, or from the most recent Interest
Payment Date to which interest has been paid or provided for, as the case may
be, and will be payable semi-annually in arrears on March 15

 7
 

 

and September 15 of each year (each, an “Interest Payment Date”), commencing on March 15, 2007, until
the principal thereof is paid or duly made available for payment, to the
Persons in whose names such Notes are registered at the close of business on
the February 28 or August 31 (whether or not a Business Day) immediately
preceding the applicable Interest Payment Date (each, a “Regular Record Date”).  Interest payable on each Interest Payment
Date shall equal the amount of interest accrued for the period commencing on
and including the immediately preceding Interest Payment Date in respect of
which interest has been paid (or commencing on and including September 19,
2006, if no interest has been paid) and ending on and including the day
immediately preceding such Interest Payment Date.  Interest on the Notes will be computed on the
basis of a 360-day year consisting of twelve 30-day months.

If the Company shall redeem the Notes in accordance
with the provisions of Section 2.07 hereof, or if a Holder shall surrender a
Note for repurchase by the Company in accordance with the provisions of 2.08 or
2.09 hereof, subject to the next succeeding sentence, accrued and unpaid
interest (including Additional Interest, if any) shall be payable to each
Holder that shall have surrendered such Note for redemption or repurchase, as
the case may be. However, if an Interest Payment Date shall fall on or prior to
the Redemption Date or Optional Repurchase Date or Change in Control Purchase
Date, as the case may be, for a Note and after the related Regular Record Date,
accrued and unpaid interest (including Additional Interest, if any) due on such
Interest Payment Date shall be payable instead to the Person in whose name such
Note is registered at the close of business on the related Regular Record Date.

Section 2.06.          Place
of Payment.  The principal of and the interest on the
Notes shall be payable at the office or agency of the Company (including the
Trustee) maintained for such purpose in the Borough of Manhattan, The City of
New York in the in the manner specified in the Indenture.

Section 2.07.          Redemption.  The
Company shall not have the right to redeem any Notes prior to September 20,
2011, except to preserve the Company’s status as a real estate investment
trust.  If, at any time, the Company
determines it is necessary to redeem the Notes in order to preserve the Company’s
status as a real estate investment trust, the Company may, upon not less than
30 nor more than 60 days’ prior written notice by mail to the Holders of the
Notes, redeem the Notes in whole or in part, for cash equal to 100% of the
principal amount of the Notes to be redeemed plus unpaid interest (including
Additional Interest, if any) accrued thereon to the Redemption Date. In such
case, the Company shall provide the Trustee with an Officers’ Certificate
evidencing that the Board of Directors of the Company has, in good faith, made
the determination that it is necessary to redeem the Notes in order to preserve
the Company’s status as a real estate investment trust, on which the Trustee may
conclusively rely.

The Company shall have the right to redeem the Notes,
in whole or in part at any time or from time to time, on or after September 20,
2011 upon not less than 30 nor more than 60 days’ prior written notice by mail
to the Holders of the Notes, at a redemption price (“Redemption
Price”) for cash equal to 100% of the principal amount of the Notes
to be redeemed plus unpaid interest (and Additional Interest, if any) accrued
thereon to the Redemption Date. If less than all the Notes are to be redeemed,
the Trustee shall select the Notes to be redeemed (in principal amounts of
$1,000 and integral multiples thereof) on a pro rata basis
or by such other method the Trustee considers fair and appropriate.  The Trustee shall make the selection at least
30 days

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but not more than 60 days
before the Redemption Date from Outstanding Notes not previously called for
redemption.  Notes and portions of the
principal amount thereof selected for redemption shall be in integral multiples
of $1,000.  The Trustee shall notify the
Company promptly of the Notes or portions of the principal amount thereof to be
redeemed.  If the Trustee selects a
portion of a Note for partial redemption and a Holder converts a portion of the
same Note in accordance with the provisions of Section 2.11 hereof before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed to be from the
portion selected for redemption.  Notes
that have been converted during a selection of Notes to be redeemed shall be
treated by the Trustee as Outstanding for the purpose of such selection.

In the event of any redemption in part, the Company
shall not be required to: (i) issue or register the transfer or exchange of any
Note during a period beginning at the opening of business 15 days before any
selection of Notes for redemption and ending at the close of business on the
earliest date on which the relevant notice of redemption is deemed to have been
given to all Holders of Notes to be so redeemed, or (ii) register the
transfer or exchange of any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.

In addition to those matters set forth in Section 1104
of the Indenture, a notice of redemption sent to the Holders of Notes to be
redeemed in accordance with the provisions of the two preceding paragraphs
shall state:

(a)           the name of the Paying Agent and
Conversion Agent;

(b)           the then current Conversion Rate;

(c)           that Notes called for redemption may
be converted at any time prior to the close of business on the second Business
Day immediately preceding the Redemption Date; and

(d)           that Holders who wish to convert
Notes must comply with the procedures relating thereto specified in Section
2.13 hereof.

The Company shall notify
the Trustee of any redemption of Notes within the time period specified in
Section 1102 of the Indenture.

Section 2.08.          Repurchase
Rights.  A Holder of Notes shall have the right to
require the Company to repurchase such Holder’s Notes, in whole or in part (in
principal amounts of $1,000 or an integral multiple thereof), on each of
September 20, 2011, September 15, 2016 and September 15, 2021 (each, an “Optional Repurchase Date”) for cash equal
to 100% of the principal amount of the Notes to be repurchased plus unpaid
interest (including Additional Interest, if any) accrued thereon to the
Optional Repurchase Date (such amount, the “Optional
Repurchase Price”), subject to satisfaction by or on behalf of the
Holder of the requirements set forth below.

On or before the 30th day prior to each Optional
Repurchase Date, the Company shall provide a written notice by first-class
mail to the Trustee, any Paying Agent and all Holders (and

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to beneficial owners to
the extent required by applicable law). 
The notice shall include a form of Optional Repurchase Notice to be
completed by the Holder and shall state:

(a)           the date by which the Optional
Repurchase Notice must be delivered to the Paying Agent;

(b)           the Optional Repurchase Date;

(c)           the Optional Repurchase Price;

(d)           the name and address of the Trustee,
the Paying Agent and the Conversion Agent;

(e)           that Notes must be surrendered to the
Paying Agent to collect payment of the Optional Repurchase Price;

(f)            that the Optional Repurchase Price
for any Note as to which an Optional Repurchase Notice has been duly given will
be paid within two Business Days after the later of the Optional Repurchase
Date or the time at which such Notes are surrendered for repurchase;

(g)           that, unless the Company defaults in
making payment of the Optional Repurchase Price, interest on Notes surrendered
for repurchase will cease to accrue on and after the Optional Repurchase Date;

(h)           that Notes in respect of which an
Optional Repurchase Notice is provided by a Holder shall not be convertible in
accordance with their terms even if otherwise convertible unless such Holder
validly withdraws such Optional Repurchase Notice in accordance with the
provisions of this Section 2.08; and

(i)            the CUSIP number of the Notes.

The Company shall also disseminate a press release
through Dow Jones & Company, Inc. or Bloomberg Business News containing the
information specified in such notice or publish such information in a newspaper
of general circulation in The City of New York or on the Company’s website, or
through such other public medium as the Company shall deem appropriate at such
time.

A Holder may exercise its rights specified in this
Section 2.08 upon delivery of a written notice of repurchase (an “Optional Repurchase Notice”) to the Paying Agent during the
period beginning at any time from the opening of business on the date that is
30 days prior to the applicable Optional Repurchase Date until the close of
business on the third Business Day prior to such Optional Repurchase Date,
stating:

(a)           if
such Notes are in certificated form, the certificate number(s) of the Notes
which the Holder will deliver to be repurchased;

 

 10

 

(b)           the
portion of the principal amount of the Notes to be repurchased, in integral
multiples of $1,000, provided that the remaining principal amount of Notes is
in an authorized denomination; and

(c)           that
such Notes shall be repurchased pursuant to the applicable provisions hereof
and the Notes.

The Paying Agent shall promptly notify the Company in
writing of the receipt by it of any Optional Repurchase Notice.

Book-entry transfer of Notes in book-entry
form in compliance with appropriate procedures of the Depositary or delivery of
Notes in certificated form, together with all necessary endorsements, to the
Paying Agent on or after the Optional Repurchase Date at the offices of the
Paying Agent shall be a condition to the receipt by the Holder of the Optional
Repurchase Price therefor.  Holders
electing to require the Company to repurchase Notes must effect such transfer
or delivery to the Paying Agent prior to the Optional Repurchase Date to
receive payment of the Optional Repurchase Price on or within two Business Days
after the Optional Repurchase Date.  The
Company shall pay the Optional Repurchase Price within two Business Days after
the later of the Optional Repurchase Date or the time of such transfer or
delivery of the Notes.

An Optional Repurchase Notice may be withdrawn in
whole or in part by a Holder by means of a written notice of withdrawal
delivered to the office of the Paying Agent prior to the close of business on
the third Business Day prior to the Optional Repurchase Date specifying:

(a)           the
Holder’s name;

(b)           the
principal amount of Notes in respect of which the Optional Repurchase Notice is
being withdrawn, which must be an integral multiple of $1,000;

(c)           if
the Notes subject to the notice of withdrawal are in certificated form, the
certificate number(s) of all Notes subject to the notice of withdrawal; and

(d)           the
principal amount of Notes, if any, that remains subject to the Optional
Repurchase Notice, which must be an integral multiple of $1,000.

If Notes subject to the notice of withdrawal are in
book-entry form, the above notices must also comply with the applicable
procedures of the Depositary.

On or before 10:00 a.m. (New York City time) on the
Optional Repurchase 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) money sufficient to pay the aggregate
Optional Repurchase Price of the Notes to be repurchased pursuant to this
Section 2.08. If the Paying Agent holds, in accordance with the terms of the
Indenture, money sufficient to pay the Optional Repurchase Price of such Notes
on the Optional Repurchase Date, then on and after such date, such Notes shall
cease to be Outstanding and interest on such Notes shall cease to accrue, and
all rights of the Holder of such Notes shall terminate (other than the right to
receive the Optional Repurchase Price after delivery or transfer of the
Notes).  Such will be the

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case whether or not book-entry
transfer of the Notes in book-entry form is made and whether or not Notes
in certificated form, together with the necessary endorsements, are delivered
to the Paying Agent.

Notwithstanding the foregoing, no Notes may be
repurchased by the Company in accordance with the provisions of this Section
2.08 if there has occurred and is continuing an Event of Default with respect
to the Notes (other than a default in the payment of the Optional Repurchase
Price).

To the extent legally required in connection with a
repurchase of Notes, the Company shall comply with the provisions of Rule 13e-4
and other tender offer rules under the Exchange Act then applicable, if any,
and will file a Schedule TO or any other schedule required under the Exchange
Act.

The Company may arrange for a third party to purchase
Notes for which the Company has received a valid Optional Repurchase Notice
that has not been properly withdrawn, in the manner and otherwise in compliance
with the requirements set forth herein and in the Notes (including, without
limitation, any applicable restrictions on transfer); provided that the Company
shall give written notice to the Trustee of such arrangement not less than one
Business Day prior to the Optional Repurchase Date, which notice shall, at a
minimum, identify such third party and identify the Notes to be so purchased
(and which shall continue to be Outstanding, as provided in the next sentence).
If a third party purchases any Notes under such circumstances, then interest
will continue to accrue on the Notes and such Notes will continue to be
Outstanding after the Optional Repurchase Date for all purposes of the
Indenture and will be fungible with all other Notes then Outstanding.

Section 1.01.          Repurchase
at Option of Holders upon a Change in Control.  If a Change in
Control occurs at any time prior to September 20, 2011, a Holder of Notes shall
have the right to require the Company to repurchase such Holder’s Notes, in
whole or in part (in principal amounts of $1,000 or an integral multiple
thereof) for cash equal to 100% of the principal amount of the Notes to be
repurchased, plus unpaid interest (including Additional Interest, if any)
accrued thereon to the Change in Control Purchase Date (such amount, the “Change in Control Purchase Price”), subject
to satisfaction by or on behalf of the Holder of the requirements set forth
below.  If a Change in Control occurs on
or after September 20, 2011, Holders of Notes will not have any right to
require the Company to repurchase its Notes, except in accordance with
Section 2.08.

Within 30 days after the occurrence of a Change in
Control, the Company shall mail a written notice of the particular Change in
Control and of the repurchase right arising as a result of such Change in
Control (the “Company Notice”) by first-class
mail to the Trustee, any Paying Agent and to each Holder (and to beneficial
owners to the extent required by applicable law).  The notice shall include a form of Change in
Control Purchase Notice (defined below) to be completed by the Holder and shall
state:

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

 12
 

 

(b)           the date by which the Change in
Control Purchase Notice must be delivered to the Paying Agent;

(c)           the date on which the Company will
repurchase Notes upon a Change in Control, which must be not less than 15 days
nor more than 30 days after the date of the Company Notice (such date, the “Change in Control Purchase Date”);

(d)           the Change in Control Purchase Price;

(e)           the name and address of the Trustee,
the Paying Agent and the Conversion Agent;

(f)            that Notes in respect of which a
Change in Control Purchase Notice is provided by a Holder shall not be
convertible unless such Holder validly withdraws such Change in Control
Purchase Notice in accordance with the provisions of this Section 2.09;

(g)           that Notes must be surrendered to the
Paying Agent to collect payment of the Change in Control Purchase Price;

(h)           that the Change in Control Purchase
Price for any Note as to which a Change in Control Purchase Notice has been
duly given will be paid within two Business Days after the later of the Change
in Control Purchase Date or the time at which such Notes are surrendered for
repurchase;

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

(j)            the CUSIP number of the Notes.

The Company shall also disseminate a press release
through Dow Jones & Company, Inc. or Bloomberg Business News announcing the
occurrence of such Change in Control or publish such information in a newspaper
of general circulation in The City of New York or on the Company’s website, or
through such other public medium as the Company shall deem appropriate at such
time.

A Holder may exercise its rights specified in this
Section 2.09 upon delivery of a written notice of such Holder’s exercise of its
repurchase right (a “Change in Control Purchase
Notice”) to the Paying Agent at any time prior to the close of business
on the third Business Day prior to the Change in Control Purchase Date,
stating:

(a)           if
such Notes are in certificated form, the certificate number(s) of the Notes
which the Holder will deliver to be repurchased;

(b)           the
portion of the principal amount of the Notes to be repurchased, in multiples of
$1,000, provided that the remaining principal amount of Notes is in an
authorized denomination; and

 13
 

 

(c)           that
such Note shall be repurchased pursuant to the applicable provisions hereof and
of the Notes.

The Paying Agent shall promptly notify the Company in
writing of the receipt by it of any Change in Control Purchase Notice.

Book-entry transfer of Notes in book-entry form in
compliance with appropriate procedures of the Depositary or delivery of Notes
in certificated form (together with all necessary endorsements) to the Paying
Agent on or after the Change in Control Purchase Date at the offices of the
Paying Agent shall be a condition to the receipt by the Holder of the Change in
Control Purchase Price therefor.  Holders
electing to require the Company to repurchase Notes must effect such transfer
or delivery to the Paying Agent prior to the Change in Control Purchase Date to
receive payment of the Change in Control Purchase Price on or within two
Business Days after the Change in Control Purchase Date. The Company shall pay
the Change in Control Purchase Price within two Business Days after the later
of the Change in Control Purchase Date or the time of such transfer or delivery
of the Notes.

A Change in Control Purchase Notice may be withdrawn
in whole or in part by a Holder by means of a written notice of withdrawal
delivered to the office of the Paying Agent prior to the close of business on
the third Business Day prior to the Change in Control Purchase Date specifying:

(a)           the
Holder’s name;

(b)           the
principal amount of Notes in respect of which the Change in Control Purchase
Notice is being withdrawn, which must be an integral multiple of $1,000;

(c)           if
the Notes subject to the notice of withdrawal are in certificated form, the
certificate number(s) of all Notes subject to the notice of withdrawal; and

(d)           the
principal amount of Notes, if any, that remains subject to the Change in
Control Purchase Notice, which must be an integral multiple of $1,000.

If Notes subject to the notice of withdrawal are in
book-entry form, the above notices must also comply with the applicable
procedures of the Depositary.

On or before 10:00 a.m. (New York City time) on the
Change in Control 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) money sufficient to pay the aggregate
Change in Control Purchase Price of the Notes to be repurchased pursuant to this
Section 2.09. If the Paying Agent holds, in accordance with the terms of this
Indenture, money sufficient to pay the Change in Control Purchase Price of such
Notes on the Change in Control Purchase Date, then, on and after such date,
such Notes shall cease to be Outstanding and interest on such Notes shall cease
to accrue and all rights of the Holders of such Notes shall terminate (other
than the right to receive the Change in Control Purchase Price after delivery
or transfer of the Notes).  Such will be
the case whether or not book-entry transfer of the Notes in book-entry
form is made and whether or not Notes in certificated form, together with the
necessary endorsements, are delivered to the Paying Agent.

 14
 

 

Notwithstanding the foregoing, no Notes may be
repurchased by the Company in accordance with the provisions of this Section
2.09 if there has occurred and is continuing an Event of Default with respect
to the Notes (other than a default in the payment of the Change in Control
Purchase Price).

To the extent legally required in connection with a
repurchase of Notes, the Company shall comply with the provisions of Rule 13e-4
and other tender offer rules under the Exchange Act then applicable, if any,
and will file a Schedule TO or any other schedule required under the Exchange
Act.

The Company may arrange for a third party to purchase
Notes for which the Company has received a valid Change in Control Purchase
Notice that has not been properly withdrawn, in the manner and otherwise in
compliance with the requirements set forth herein and in the Notes (including,
without limitation, any applicable restrictions on transfer); provided that the
Company shall give written notice to the Trustee of such third party
arrangement not less than one Business Day prior to the Change in Control
Purchase Date, which notice shall, at a minimum, identify such third party and
identify the Notes to be so purchased (and which shall remain Outstanding as
provided in the next sentence). If a third party purchases any Notes under such
circumstances, then interest will continue to accrue on the Notes and such
Notes will continue to be Outstanding after the Change in Control Purchase Date
for all purposes of the Indenture and will be fungible with all other Notes
then Outstanding.

Section 2.10.          Make
Whole Amount.  If a Change in Control occurs prior to
September 20, 2011 as a result of a transaction or event described in clauses
(1) or (2) of the definition of Change in Control and a Holder elects to
convert its Notes in connection with such Change in Control pursuant to Section
2.11(d) hereof, the Company shall increase the applicable Conversion Rate for
such Notes surrendered for conversion by a number of additional shares of
Common Stock (the “Additional Shares”)
as specified below.  A conversion of
Notes shall be deemed for these purposes to be “in connection with” such a
Change in Control if the notice of conversion of the Notes is received by the
Conversion Agent on any date from and including the date that is the Effective
Date (as defined below) of such Change in Control up to and including the 30th
Business Day following the Effective Date of such Change in Control.

The number of Additional Shares will be determined by
reference to the table below and is based on the date on which such Change in
Control transaction becomes effective (the “Effective
Date”) and the price (the “Stock Price”)
paid per share of Common Stock in such Change in Control transaction.  If holders of Common Stock receive only cash
in a Change in Control transaction, the Stock Price shall be the cash amount
paid per share of Common Stock.  In all
other cases, the Stock Price shall be the average of the Closing Sale Prices of
the Common Stock on the 10 consecutive Trading Days up to but excluding the
Effective Date.

The Stock Prices set forth in the first row of the
table (i.e., the column headers) will be adjusted as of any date on which the
Conversion Rate of the Notes is adjusted. 
The adjusted Stock Prices will equal the Stock Prices applicable
immediately prior to such adjustment multiplied by a fraction, the numerator of
which is the Conversion Rate immediately prior to the adjustment giving rise to
the Stock Price adjustment and the denominator of which is the Conversion Rate
as so adjusted.  In addition, the number
of Additional Shares will be subject to

 15
 

 

adjustment in the same
manner as the Conversion Rate in accordance with the provisions of Section 2.14
hereof.

The following table sets
forth the Stock Price and number of Additional Shares to be received per $1,000
principal amount of Notes:

	
  Effective

  	
   

  	
  Stock Price

  	
   

  
	
  Date

  	
   

  	
  $26.83

  	
   

  	
  $30.00

  	
   

  	
  $35.00

  	
   

  	
  $40.00

  	
   

  	
  $45.00

  	
   

  	
  $50.00

  	
   

  	
  $55.00

  	
   

  	
  $60.00

  	
   

  	
  $65.00

  	
   

  	
  $70.00

  	
   

  	
  $75.00

  	
   

  
	
  September 19, 2006

  	
   

  	
  6.7211

  	
   

  	
  4.4633

  	
   

  	
  2.3559

  	
   

  	
  1.2604

  	
   

  	
  0.6867

  	
   

  	
  0.3801

  	
   

  	
  0.2115

  	
   

  	
  0.1167

  	
   

  	
  0.0622

  	
   

  	
  0.0355

  	
   

  	
  0.0195

  	
   

  
	
  September 15, 2007

  	
   

  	
  6.7211

  	
   

  	
  4.4066

  	
   

  	
  2.2109

  	
   

  	
  1.1075

  	
   

  	
  0.5557

  	
   

  	
  0.2786

  	
   

  	
  0.1356

  	
   

  	
  0.0610

  	
   

  	
  0.0285

  	
   

  	
  0.0132

  	
   

  	
  0.0052

  	
   

  
	
  September 15, 2008

  	
   

  	
  6.7211

  	
   

  	
  4.2665

  	
   

  	
  1.9872

  	
   

  	
  0.8984

  	
   

  	
  0.3957

  	
   

  	
  0.1645

  	
   

  	
  0.0595

  	
   

  	
  0.0198

  	
   

  	
  0.0058

  	
   

  	
  0.0009

  	
   

  	
  0.0000

  	
   

  
	
  September 15, 2009

  	
   

  	
  6.7211

  	
   

  	
  4.0108

  	
   

  	
  1.6483

  	
   

  	
  0.6205

  	
   

  	
  0.2085

  	
   

  	
  0.0527

  	
   

  	
  0.0087

  	
   

  	
  0.0004

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
  September 15, 2010

  	
   

  	
  6.7211

  	
   

  	
  3.5431

  	
   

  	
  1.0979

  	
   

  	
  0.2513

  	
   

  	
  0.0283

  	
   

  	
  0.0002

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
  September 20,
  2011

  	
   

  	
  6.7211

  	
   

  	
  2.7828

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  

 

The exact Stock Prices and Effective Dates may not be
set forth in the table, in which case:

(a)           if the Stock Price is between two
Stock Price amounts in the table or the Effective Date is between two dates in
the table, the Additional Shares will be determined by straight-line
interpolation between the number of Additional Shares set forth for the higher
and lower Stock Price amounts and the two dates, as applicable, based on a 365-day
year;

(b)           if the Stock Price is equal to or in
excess of $75.00 per share of Common Stock (subject to adjustment as specified
in the second preceding paragraph), no Additional Shares will be issued upon a
conversion of Notes; and

(c)           if the Stock Price is less than
$26.83 per share of Common Stock (subject to adjustment as specified in the
second preceding paragraph), no Additional Shares will be issued upon a
conversion of Notes.

Notwithstanding the foregoing, in no event shall the
total number of shares of Common Stock issuable upon a conversion of Notes
exceed 37.2717 shares per $1,000 principal amount of Notes, subject to
adjustment in the same manner as the Conversion Rate pursuant to Section 2.14
hereof.

Section 2.11.          Conversion
Rights.

Subject to the restrictions on ownership of the Common
Stock as set forth in Section 2.15 hereof and to the conditions set forth
herein, Holders may surrender their Notes for conversion for cash and, if
applicable, shares of Common Stock, at the applicable Conversion Rate prior to
the close of business on the second Business Day immediately preceding the
Stated Maturity of the Notes at any time on or after September 15, 2025 and
also under any of the circumstances set forth in this Section 2.11.

(a)  Conversion Upon Satisfaction of Market Price
Condition.  A Holder may
surrender any of its Notes for conversion during any calendar quarter beginning
after December 31, 2006 (and only during such calendar quarter) if, and
only if, the Closing Sale Price of the shares of

 16
 

 

Common Stock for at least
20 Trading Days (whether or not consecutive) in the period of 30 consecutive
Trading Days ending on the last Trading Day of the preceding calendar quarter
is more than 130% of the Conversion Price per share of Common Stock in effect
on the applicable Trading Day.  The Board
of Directors of the Company shall make appropriate adjustments, in its good
faith determination, to account for any adjustment to the Conversion Rate that
becomes effective, or any event requiring an adjustment to the Conversion Rate where
the ex-dividend date of the event occurs, during that 30 consecutive
Trading-Day period.

(b)  Conversion Upon Satisfaction of Trading Price
Condition.  A Holder may
surrender any of its Notes for conversion during the five consecutive Trading
Day period following any five consecutive Trading Days in which the Trading
Price per $1,000 principal amount of Notes (as determined following a
reasonable request by a Holder of the Notes) was less than 98% of the product
of the Closing Sale Price of the shares of Common Stock multiplied by the
Conversion Rate.

The Trustee shall have no obligation to determine the
Trading Price of the Notes unless the Company shall have requested such
determination, and the Company shall have no obligation to make such request unless
a Holder provides the Company with written reasonable evidence that the Trading
Price per $1,000 principal amount of the Notes would be less than 98% of the
product of the Closing Sale Price of the Common Stock and the Conversion Rate,
whereupon the Company shall instruct the Trustee to determine the Trading Price
of the Notes beginning on the next Trading Day and on each successive Trading
Day until the Trading Price is greater than or equal to 98% of the product of
the Closing Sale Price of the Common Stock and the Conversion Rate.

 (c)  Conversion Upon Notice of
Redemption.  A Holder may
surrender for conversion any of the Notes called for redemption at any time
prior to the close of business on the second Business Day prior to the
Redemption Date, even if the Notes are not otherwise convertible at such
time.  The right to convert Notes
pursuant to this clause (c) will expire after the close of business on the
second Business Day prior to the Redemption Date unless the Company defaults in
making the payment due upon redemption. 
A Holder may convert fewer than all of its Notes so long as the Notes
converted are an integral multiple of $1,000 principal amount and the remaining
principal amount of Notes is in an authorized denomination. However, if a Holder
has already delivered an Optional Repurchase Notice or a Change in Control
Purchase Notice with respect to a Note, such Holder may not surrender such Note
for conversion until it has withdrawn such notice in accordance with the
applicable provisions of Section 2.08 or 2.09 hereof, as the case may be.

(d)  Conversion Upon Specified Transactions.  If the Company elects to:

(i)            distribute to all holders of Common
Stock rights entitling them to purchase, for a period expiring within 45 days,
shares of Common Stock at less than the Closing Sale Price of the Common Stock
on the Trading Day immediately preceding the declaration date of the
distribution; or

(ii)           distribute to all holders of Common
Stock assets, debt securities or certain rights to purchase securities of the
Company, which distribution has a per

 17
 

 

share value (as determined by the Company’s
Board of Directors in good faith) exceeding 15% of the Closing Sale Price of
the Common Stock on the Trading Day immediately preceding the declaration date
of such distribution,

the Company shall notify the Holders of the Notes in
writing at least 20 days prior to the ex-dividend date for such
distribution.  Following the giving of
such notice, Holders may surrender their Notes for conversion at any time until
the earlier of the close of business on the Business Day immediately prior to
the ex-dividend date or an announcement that such distribution will not
take place; provided, however, that a Holder may not
exercise this right to convert if the Holder may participate, on an as-converted
basis (assuming for such purposes that the Notes are convertible solely into
shares of Common Stock at the then applicable Conversion Rate), in the
distribution without a conversion of Notes. The ex-dividend date is the
first date upon which a sale of the shares of Common Stock does not
automatically transfer the right to receive the relevant distribution from the
seller of shares of Common Stock to its buyer.

In addition, if the Company is party to a
consolidation, merger or binding share exchange pursuant to which all of the
Common Stock would be exchanged for cash, securities or other property that is
not otherwise a Change in Control, a Holder may surrender Notes for conversion
at any time from and including the date that is 15 Business Days prior to the
Effective Date of the transaction up to and including five Business Days after
the actual date of such transaction.  The
Company shall notify Holders as promptly as practicable following the date it
publicly announces such transaction (but in no event less than 15 Business Days
prior to the anticipated effective time of such transaction).

If a Change in Control occurs as a result of a
transaction described in clauses (1) or (2) of the definition of “Change in
Control,” a Holder will have the right to convert its Notes at any time from
and including the Effective Date of such transaction up to and including the
30th Business Day following the Effective Date of the transaction, provided
that, if a Holder has already delivered an Optional Repurchase Notice or a
Change in Control Purchase Notice with respect to a Note, such Holder may not
surrender such Note for conversion until it has withdrawn such notice in
accordance with the applicable provisions of Section 2.08 or 2.09 hereof, as
the case may be. The Company will notify Holders as promptly as practicable
following the date that it publicly announces such Change in Control (but in no
event later than five Business Days prior to the Effective Date of such Change
in Control).

If the Company is a party to a consolidation, merger
or binding share exchange (including, without limitation, by way of a
recapitalization, reclassification or change of Common Stock (other than
changes resulting from a subdivision or combination) or a sale, lease or
transfer to a third party of the Company’s and the Company’s subsidiaries’
consolidated assets substantially as an entirety) pursuant to which all of the
Common Stock is exchanged for cash, securities or other property, then at the
Effective Date of the transaction any conversion of Notes and the Conversion
Value will be based on, and determined by reference to, the kind and amount of
cash, securities or other property that the Holder would have received if such
Holder had converted its Notes into shares of Common Stock immediately prior to
the Effective Date of the transaction. 
For purposes of the foregoing, where a consolidation, merger or binding
share exchange involves a transaction that causes Common Stock to be exchanged
into the right to receive more than a single type of consideration based upon
any form of shareholder election,

 18
 

 

such consideration 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. If a Change of Control occurs prior to September 20, 2011 as a result
of a transaction described in clauses (1) or (2) of the definition thereof, the
Company will adjust the Conversion Rate for Notes surrendered for conversion in
connection with such a Change in Control transaction, as described in Section
2.10 hereof.

(e)  Conversion Upon Delisting of the Common Stock. A Holder of
Notes may surrender any of its Notes for conversion at any time beginning on
the first Business Day after the Common Stock has ceased to be listed on a U.S.
national or regional securities exchange for a 30 consecutive Trading Day
period.

Section 2.12.          Conversion
Settlement.  Upon a conversion of Notes, the Company shall
deliver, in respect of each $1,000 principal amount of Notes surrendered for
conversion in accordance with their terms:

(a)           cash in an amount (the “Principal Return”) equal to the lesser of
(1) the principal amount of the Notes surrendered for conversion and (2) the
Conversion Value, and

(b)           if the Conversion Value is greater
than the Principal Return, an amount (the “Net
Amount”) in cash or shares of Common Stock, at the Company’s option,
with an aggregate value equal to the difference between the Conversion Value
and the Principal Return.

The Company may elect to deliver any portion of the
Net Amount in cash (the “Net Cash Amount”)
or shares of Common Stock, and any portion of the Net Amount the Company elects
to deliver in shares of Common Stock (the “Net Shares”)
will be the sum of the Daily Share Amounts for each Trading Day during the
Applicable Conversion Period.  Prior to
the close of business on the second Trading Day following the date on which
Notes are surrendered for conversion, the Company shall inform Holders of such
Notes of its election to pay cash for all or a portion of the Net Amount and,
if applicable, the portion of the Net Amount that will be paid in cash and the
portion that will be delivered in the form of Net Shares.

The Company shall deliver cash in lieu of any
fractional shares of Common Stock issuable in connection with payment of the
Net Shares based upon the Average Price.

The “Daily Share Amount”
for each $1,000 principal amount of Notes and each Trading Day in the
Applicable Conversion Period is equal to the greater of:

(a)           zero;
and

(b)           a
number of shares of Common Stock determined by the following formula:

 19

 

where

CSP means the Closing
Sale Price of the Common Stock on such Trading Day, and

CR means the applicable
Conversion Rate.

The Company will determine the Conversion Value,
Principal Return, Net Amount, Net Cash Amount and the number of Net Shares, as
applicable, promptly after the end of the Applicable Conversion Period.  The Company shall pay the Principal Return
and cash in lieu of fractional shares, and deliver Net Shares or pay the Net
Cash Amount, as applicable, no later than the third Business Day following the
last Trading Day of the Applicable Conversion Period.

Section 2.13.          Conversion
Procedures.  To convert Notes, a Holder must satisfy the
requirements set forth in this Section 2.13.

To convert the Notes, a Holder must (a) complete
and manually sign the irrevocable conversion notice on the reverse of the Note
(or complete and manually sign a facsimile of such notice) and deliver such
notice to the Conversion Agent at the office maintained by the Conversion Agent
for such purpose, (b) with respect to Notes which are in certificated
form, surrender the Notes to the Conversion Agent, or, if the Notes are in book-entry
form, comply with the appropriate procedures of the Depositary,
(c) furnish appropriate endorsements and transfer documents if required by
the Conversion Agent, the Company or the Trustee and (d) pay any transfer
or similar tax, if required. The date on which the Holder satisfies all such
requirements shall be deemed to be the date on which the applicable Notes shall
have been tendered for conversion.

Notes in respect of which a Holder has delivered an
Optional Repurchase Notice or Change in Control Purchase Notice may be
converted only if such notice is withdrawn in accordance with the terms of
Section 2.08 or Section 2.09, as the case may be.

In case any Note shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to, or upon the written order of, the Holder of the Note so
surrendered, without charge to such Holder, a new Note or Notes in authorized
denominations in an aggregate principal amount equal to the portion of the
surrendered Notes not surrendered for conversion.  A Holder may convert fewer than all of such
Holder’s Notes so long as the Notes converted are an integral multiple of
$1,000 principal amount.

Upon surrender of a Note for conversion by a Holder,
such Holder shall deliver to the Company cash equal to the amount that the
Company is required to deduct and withhold under applicable law in connection
with the conversion; provided, however,
if the Holder does not deliver such cash, the Company may deduct and withhold
from the amount of consideration otherwise deliverable to such Holder the
amount required to be deducted and withheld under applicable law.

 20
 

 

Upon conversion of a Note, a Holder will not receive
any cash payment representing accrued and unpaid interest (including original
issue discount) on such Note, except as specified in the immediately following
paragraph.  Instead, upon a conversion of
Notes, the Company will deliver to the surrendering Holder only the
consideration specified in Section 2.12. Delivery of cash and shares of Common
Stock, if any, upon a conversion of Notes will be deemed to satisfy the Company’s
obligation to pay the principal of the Notes and any accrued and unpaid
interest (including original issue discount) thereon.  Accordingly, upon a conversion of Notes, any
accrued and unpaid interest (including original issue discount) will be deemed
paid in full rather than cancelled, extinguished or forfeited.  In no event will the Conversion Rate be
adjusted to account for accrued and unpaid interest (including original issue
discount) on the Notes.

Holders of Notes at the close of business on a Regular
Record Date for an interest payment will receive payment of interest payable on
the corresponding Interest Payment Date notwithstanding the conversion of such
Notes at any time after the close of business on the applicable Regular Record
Date.  Notes surrendered for conversion
by a Holder after the close of business on any Regular Record Date for an
interest payment and on or prior to the corresponding Interest Payment Date
must be accompanied by payment of an amount equal to the interest that such
Holder is to receive on such Notes on such Interest Payment Date; provided, however, that no such payment shall be required to
be made (1) if such Notes have been called for redemption on a Redemption Date
that is after such Regular Record Date and on or prior to such Interest Payment
Date or (2) with respect to overdue interest (including Additional Interest),
if any overdue interest is due and owing at the time of conversion with respect
to such Notes.

Upon conversion of a Note, the Company, if it elects
to deliver Net Shares, will pay any documentary, stamp or similar issue or
transfer tax due on the issue of the Net Shares upon such conversion unless the
tax is due because the Holder requests the Net Shares to be issued or delivered
to a Person other than the Holder, in which case the Holder must pay the tax
due prior to the delivery of such Net Shares. Certificates representing shares
of Common Stock will not be issued or delivered unless all taxes and duties, if
any, payable by the Holder have been paid.

A Holder of Notes, as such, shall not be entitled to
any rights of a holder of Common Stock. 
Such Holder shall only acquire such rights upon the delivery by the
Company, at its option, of Net Shares in accordance with the provisions of
Section 2.12 upon a conversion of Notes by a Holder.

If a Holder converts more than one Note at the same
time, the number of Net Shares, if any, issuable upon the conversion shall be
based on the total principal amount of the Notes surrendered for conversion.

The Company shall, prior to issuance of any Notes
hereunder, and from time to time as may be necessary, reserve out of its
authorized but unissued shares of Common Stock a sufficient number of shares
Common Stock to permit the conversion of the Notes at the applicable Conversion
Rate.  Any Common Stock delivered upon a
conversion of Notes shall be newly issued shares or treasury shares, shall be
duly and validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.

 21
 

 

The Company shall endeavor promptly to comply with all
federal and state securities laws regulating the issuance and delivery of
Common Stock, if any, upon a conversion of Notes and shall cause to have listed
or quoted all such Common Stock on each U.S. national securities exchange or
over-the-counter or other domestic market on which the Common Stock
is then listed or quoted.

Except as set forth herein, no other payment or
adjustment for interest shall be made upon conversion of Notes.

In no event shall a Holder be entitled to convert
Notes after the close of business on the second Business Day prior to September
15, 2025.

Section 2.14.          Conversion
Rate Adjustments.  The Conversion Rate shall be adjusted from
time to time as follows:

(a)           If the Company issues shares of
Common Stock as a dividend or distribution on shares of Common Stock to all
holders of Common Stock, or if the Company effects a share split or share
combination, the Conversion Rate will be adjusted based on the following
formula:

CR1 = CR0 x OS1/OS0

where

CR0 =              the Conversion Rate
in effect immediately prior to the adjustment relating to such event

CR1 =              the new Conversion
Rate in effect taking such event into account

OS0 =              the number of shares
of Common Stock outstanding immediately prior to such event

OS1 =              the number of shares
of Common Stock outstanding immediately after such event.

Any adjustment made
pursuant to this clause (a) shall become effective on the date that is
immediately after (x) the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution or (y) the date on
which such split or combination becomes effective, as applicable. If any
dividend or distribution described in this clause (a) is declared but not so
paid or made, the new Conversion Rate shall be readjusted to the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.

(b)           If the Company issues to all holders
of Common Stock any rights, warrants, options or other securities entitling
them for a period of not more than 45 days after the date of issuance thereof
to subscribe for or purchase shares of Common Stock, or if the Company issues
to all holders of Common Stock securities convertible into shares of Common
Stock for a period of not more than 45 days after the date of issuance

 22
 

 

thereof, in
either case at an exercise price per share of Common Stock or a conversion
price per share of Common Stock less than the Closing Sale Price of the Common
Stock on the Business Day immediately preceding the time of announcement of
such issuance, the Conversion Rate will be adjusted based on the following
formula:

CR1 = CR0 x
(OS0+X)/(OS0+Y)

where

CR0 =     the Conversion Rate in effect immediately
prior to the adjustment relating to such event

CR1 =     the new Conversion Rate taking such event
into account

OS0 =              the number of shares
of Common Stock outstanding immediately prior to such event

X =                             the
total number of shares of Common Stock issuable pursuant to such rights,
warrants, options, other securities or convertible securities

Y =                            the
number of shares of Common Stock equal to the quotient of (A) the
aggregate price payable to exercise such rights, warrants, options, other
securities or convertible securities and (B) the average of the Closing
Sale Prices of the Common Stock for the 10 consecutive Trading Days prior to
the Business Day immediately preceding the date of announcement for the
issuance of such rights, warrants, options, other securities or convertible
securities.

For purposes of this
clause (b), in determining whether any rights, warrants, options, other
securities or convertible securities entitle the holders to subscribe for or
purchase, or exercise a conversion right for, shares of Common Stock at less
than the applicable Closing Sale Price of the Common Stock, and in determining
the aggregate exercise or conversion price payable for such shares of Common
Stock, there shall be taken into account any consideration received by the
Company for such rights, warrants, options, other securities or convertible
securities and any amount payable on exercise or conversion thereof, with the
value of such consideration, if other than cash, to be determined by the Board
of Directors of the Company.  If any
right, warrant, option, other security or convertible security described in this
clause (b) is not exercised or converted prior to the expiration of the
exercisability or convertibility thereof, the new Conversion Rate shall be
readjusted to the Conversion Rate that would then be in effect if such right,
warrant, option, other security or convertible security had not been so issued.

(c)           If the Company distributes capital
shares, evidences of indebtedness or other assets or property of the Company to
all holders of Common Stock, excluding:

(i)            dividends, distributions, rights,
warrants, options, other securities or convertible securities referred to in
clause (a) or (b) above,

 23
 

 

(ii)           dividends or distributions paid
exclusively in cash, and

(iii)          Spin-Offs described below in
this clause (c),

then the Conversion Rate
will be adjusted based on the following formula:

CR1 =                CR0 x SP0/(SP0-FMV)

where

CR0 =              the Conversion Rate
in effect immediately prior to the adjustment relating to such event

CR1 =              the new Conversion
Rate taking such event into account

SP0 =                the average of the
Closing Sale Prices of the Common Stock on the 10 consecutive Trading Days
prior to the Business Day immediately preceding the earlier of the record date
or the ex-dividend date for such distribution

FMV=              the fair market
value (as determined in good faith by the Board of Directors of the Company) of
the capital shares, evidences of indebtedness, assets or property distributed
with respect to each outstanding share of Common Stock on the earlier of the
record date or the ex-dividend date for such distribution.

An adjustment to
the Conversion Rate made pursuant to the immediately preceding clause shall be
made successively whenever any such distribution is made and shall become
effective on the ex-dividend date for such distribution.

If the Company
distributes to all holders of Common Stock capital shares 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”),
the Conversion Rate in effect immediately before the close of business on the
date fixed for determination of holders of Common Stock entitled to receive
such distribution will be adjusted based on the following formula:

CR1 =                CR0 x
(FMV0+MP0)/MP0

where

CR0 =                the Conversion
Rate in effect immediately prior to the adjustment relating to such event

CR1 =                the new Conversion
Rate taking such event into account

FMV0 =                             the
average of the Closing Sale Prices of the capital shares or similar equity
interest distributed to holders of Common Stock

 24
 

 

                                                                        applicable
to one share of Common Stock over the first 10 consecutive Trading Days after
the effective date of the Spin-Off

MP0 =                                   the
average of the Closing Sale Prices of the Common Stock over the first 10
consecutive Trading Days after the effective date of the Spin-Off.

An adjustment to
the Conversion Rate made pursuant to the immediately preceding clause will
occur on the 10th Trading Day from and including the effective date of the Spin-Off.

If any such
dividend or distribution described in this clause (c) is declared but not paid
or made, the new Conversion Rate shall be readjusted to be the Conversion Rate
that would then be in effect if such dividend or distribution had not been
declared.

(d)           If the Company pays or makes any cash
dividend or distribution in respect of any of its quarterly fiscal periods
(without regard to when paid) to all holders of Common Stock in an aggregate
amount that, together with other cash dividends or distributions made in
respect of such quarterly fiscal period, exceeds the product of $0.3125 (the “Reference Dividend”) multiplied by the
number of shares of Common Stock outstanding on the record date for such
distribution, the Conversion Rate will be adjusted based on the following
formula:

CR1 =                CR0 x SP0/(SP0-C)

where

CR0 =                the Conversion
Rate in effect immediately prior to the adjustment relating to such event

CR1 =                the new Conversion
Rate taking such event into account

SP0 =                  the average of
the Closing Sale Prices of Common Stock on the 10 consecutive Trading Days
prior to the Business Day immediately preceding the earlier of the record date
or the ex-dividend date for such distribution

C =                              the
amount in cash per share of Common Stock that the Company distributes to
holders of Common Stock in respect of such quarterly fiscal period that exceeds
the Reference Dividend.

An adjustment to
the Conversion Rate made pursuant to this clause (d) shall become effective on
the ex-dividend date for such dividend or distribution.  If any dividend or distribution described in
this clause (d) is declared but not so paid or made, the new Conversion Rate
shall be readjusted to the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared.

 25
 

 

Notwithstanding
anything to the contrary in this Section 2.14(d), if an adjustment to the
Conversion Rate is required to be made as a result of a distribution that is
not a quarterly dividend either in whole or in part, the Reference Dividend
shall be deemed to be zero for purposes of determining the adjustment to the
Conversion Rate as a result of such distribution.

The Reference
Dividend shall be subject to adjustment in a manner that is inversely
proportional to adjustments to the Conversion Rate; provided,
however, that no adjustments shall be made to the Reference Dividend
for any adjustment made to the Conversion Rate pursuant to this Section
2.14(d).

(e)           If the Company or any of its
subsidiaries makes a payment in respect of a tender offer or exchange offer for
shares of Common Stock to the extent that the cash and value of any other
consideration included in the payment per share of Common Stock exceeds the
Closing Sale Price of Common Stock on the Trading Day next succeeding the last
date on which tenders or exchanges may be made pursuant to such tender or
exchange offer (the “Expiration Time”),
the Conversion Rate will be adjusted based on the following formula:

CR1 = CR0 x (AC + (SP1 x
OS1))/(SP1 x OS0)

where

CR0 =                the Conversion
Rate in effect immediately prior to the adjustment relating to such event

CR1 =                the new Conversion
Rate taking such event into account

AC =                    the aggregate
value of all cash and any other consideration (as determined by the Board of
Directors of the Company) paid or payable for shares of Common Stock 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

OS1 =                the number of
shares of Common Stock outstanding immediately after such tender or exchange
offer expires (after giving effect to the purchase or exchange of shares pursuant
to such tender or exchange offer)

SP1 =                  the average of
the Closing Sale Prices of Common Stock for the 10 consecutive Trading Days
commencing on the Trading Day next succeeding the date such tender or exchange
offer expires.

If the application
of the foregoing formula would result in a decrease in the Conversion Rate, no
adjustment to the Conversion Rate will be made.

 26
 

 

Any adjustment to
the Conversion Rate made pursuant to this clause (e) shall become effective on
the date immediately following the determination of the average of the Closing
Sale Prices of Common Stock for purposes of SP1 above. If the Company or one of
its subsidiaries is obligated to purchase shares of Common Stock pursuant to
any such tender or exchange offer but the Company or such subsidiary is
permanently prevented by applicable law from effecting any such purchase or all
such purchases are rescinded, the new Conversion Rate shall be readjusted to be
the Conversion Rate that would be in effect if such tender or exchange offer
had not been made.

(f)            Notwithstanding the foregoing, in
the event of an adjustment to the Conversion Rate pursuant to clause (d) or (e)
above, in no event will the Conversion Rate exceed 37.2717 per $1,000 principal
amount of Notes, subject to adjustment pursuant to clauses (a), (b) and (c)
above.

(g)           If the Company has in effect a rights
plan while any Notes remain Outstanding, Holders of Notes will receive, upon a
conversion of Notes in respect of which the Company has elected to deliver Net
Shares, in addition to such Net Shares, rights under the Company’s shareholder
rights agreement unless, prior to conversion, the rights have expired,
terminated or been redeemed or unless the rights have separated from the Common
Stock. If the rights provided for in the rights plan adopted by the Company
have separated from the Common Stock in accordance with the provisions of the
applicable shareholder rights agreement so that Holders of Notes would not be
entitled to receive any rights in respect of Common Stock that the Company
elects to deliver as Net Shares upon conversion of Notes, the Conversion Rate
will be adjusted at the time of separation as if the Company had distributed to
all holders of Common Stock capital shares, evidences of indebtedness or other
assets or property pursuant to clause (c) above, subject to readjustment upon
the subsequent expiration, termination or redemption of the rights. In lieu of
any such adjustment, the Company may amend such applicable shareholder rights
agreement to provide that upon a conversion of Notes the Holders will receive,
in addition to shares of Common Stock that the Company elects to deliver as Net
Shares upon such conversion, the rights which would have attached to such
shares of Common Stock if the rights had not become separated from the Common
Stock under such applicable shareholder rights agreement.

In addition to the
adjustments pursuant to clauses (a) through (g) above, the Company may increase
the Conversion Rate in order to avoid or diminish any income tax to holders of
Common Stock resulting from any dividend or distribution of capital shares (or
rights to acquire shares of Common Stock) or from any event treated as such for
income tax purposes.  The Company may
also, from time to time, to the extent permitted by applicable law, increase
the Conversion Rate by any amount for any period if the Company has determined
that such increase would be in the best interests of the Company.  If the Company makes such determination, it
will be conclusive and the Company will mail to Holders of the Notes a notice
of the increased Conversion Rate and the period during which it will be in
effect at least fifteen (15) days prior to the date the increased Conversion
Rate takes effect in accordance with applicable law.

 27
 

 

If, in connection
with any adjustment to the Conversion Rate as set forth in this Section 2.14 a
Holder shall be deemed for U.S. federal tax purposes to have received a
distribution, the Company may set off any withholding tax it reasonably
believes it is required to collect with respect to any such deemed distribution
against cash payments of interest in accordance with the provisions of Section
2.05 hereof or from cash and shares of Common Stock, if any, otherwise
deliverable to a Holder upon a conversion of Notes in accordance with the
provisions of Section 2.12 hereof or a redemption or repurchase of a Note in
accordance with the provisions of Section 2.07, 2.08 or 2.09 hereof.

The Company will
not make any adjustment to the Conversion Rate if Holders of the Notes are permitted
to participate, on an as-converted basis (assuming for this purpose that
the Notes were convertible solely into shares of Common Stock at the then
applicable Conversion Rate), in the transactions described above.

Notwithstanding
anything to the contrary contained herein, in addition to the other events set
forth herein on account of which no adjustment to the Conversion Rate shall be
made, the applicable Conversion Rate shall not be adjusted for:

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

(ii)           the issuance of any shares of Common
Stock or options or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan, employee agreement or
arrangement or program of the Company;

(iii)          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 Notes were first issued;

(iv)          a change in the par value of the
Common Stock;

(v)           accumulated and unpaid dividends or
distributions; and

(vi)          as a result of a tender offer solely
to holders of fewer than 100 shares of Common Stock.

No adjustment in the Conversion Price will be required
unless the adjustment would require an increase or decrease of at least 1% of
the Conversion Price. If the adjustment is not made because the adjustment does
not change the Conversion Price by at least 1%, then the adjustment that is not
made will be carried forward and taken into account in any future
adjustment.  All required calculations
will be made to the nearest cent or 1/1000th of a share, as the case may
be.  Notwithstanding the foregoing, if
the Notes are called for redemption, all adjustments not previously made will
be made on the applicable Redemption Date.

 

 28

 

Whenever the Conversion Rate is adjusted as herein
provided, the Company shall, as promptly as reasonably practicable, file with
the Trustee and any Conversion Agent other than the Trustee, an Officers’
Certificate setting forth the Conversion Rate after such adjustment and setting
forth a brief statement of the facts requiring such adjustment, on which the
Trustee may conclusively rely.  Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate
and the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Rate to the Holders of the Notes
within 20 Business Days of the effective date of such adjustment.  Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.

For purposes of this Section 2.14, the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock.

Notwithstanding anything in this Section 2.14 to the
contrary, in no event shall the Conversion Rate be adjusted so that the Conversion
Price would be less than $0.01.

Section 2.15.          Ownership
Limit; Withholding.  Notwithstanding
any other provision of the Notes or the instructions contained herein, no
Holder of Notes shall be entitled to convert such Notes for shares of Common
Stock to the extent that receipt of such shares would cause such Holder
(together with such Holder’s affiliates) to exceed the ownership limit
contained in the Articles of Incorporation and bylaws of the Company as in
effect from time to time.

At the Maturity of the principal of the Notes, whether
at Stated Maturity or upon earlier redemption or repurchase of Notes or
otherwise, and as otherwise required by law, the Company may deduct and
withhold from the amount of consideration otherwise deliverable to such Holder
the amount required to be deducted and withheld under applicable law.

Section 2.16.          Merger,
Consolidation or Sale.

Section 801 of the
Indenture is modified for purposes of the Notes, to add the following as clause
(iii):

“(iii)  if as a
result of such transaction the Notes become exchangeable into common stock or
other securities issued by a third party, such third party shall assume or
fully and unconditionally guarantee all obligations under the Notes and the
Indenture.”

Section 2.17.          Satisfaction
and Discharge.  The provisions of
ARTICLE FOURTEEN of the Indenture shall not be applicable to the Notes.  The Company may satisfy and discharge its
obligations under the Indenture in accordance with the provisions of ARTICLE
FOUR by delivering to the Trustee for cancellation all Outstanding Notes or by
depositing with the Trustee, the Paying Agent or the Conversion Agent, if
applicable, after the Notes have become due and payable, whether on the date of
the Stated Maturity of the principal amount of the Notes, any Redemption Date,
Optional Repurchase Date or Change in Control Purchase Date or upon conversion
or otherwise, cash or Common Stock in accordance with the terms hereof
sufficient to pay all of the Outstanding Notes and paying all other sums payable
under the Notes and the Indenture in respect of the Notes.

 29
 

 

Section 2.18.          Events
of Default; Waiver of Past Defaults.

(a)           Section 501 of the
Indenture is modified and amended solely for purposes of the Notes to add the
following Event of Default as clause (11):

“failure of the Company to provide a Company Notice
after the occurrence of a Change in Control as provided in Section 2.09 of the
First Supplemental Indenture.”

(b)           Clause (5) of
Section 501 of the Indenture is modified and amended solely for purposes of the
Notes to delete the reference to “$5,000,000” and substitute “$25,000,000” in
its place.

(c)           Clause (8) of
Section 501 of the Indenture is modified and amended in its entirety solely for
purposes of the Notes to read as follows:

“default in
the delivery when due of the Conversion Value, on the terms set forth herein
and in the Notes, upon exercise of a Holder’s conversion right in accordance
with the terms hereof and of the Notes and the continuation of such default for
10 days.”

(d)           Section 508 of the
Indenture is modified and amended solely for purposes of the Notes to read as
follows:

“Notwithstanding any other provision in this
Indenture, the Holder of any Note shall have the right which is absolute and
unconditional to receive payment of the principal of, and (subject to Sections
305 and 307) interest on, and the Conversion Value in respect of, such Note on
the respective due dates expressed in such Note and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.”

(e)           Clause (2) of Section 513 of the
Indenture is modified and amended in its entirety solely for purposes of the
Notes to read as follows:

“in the delivery of amounts owing upon conversion of a
Note, or”

Section 2.19.          Modification.

(a)         Section 901 of the
Indenture is modified and amended solely for purposes of the Notes to add the
following as clause (11):

“to provide for
conversion rights of Holders of Notes if any reclassification or change of
Common Stock or any consolidation, merger or sale of all or substantially all
of the property or assets of the Company shall occur.”

(b)           Clause (10) of Section 901 of the
Indenture is modified and amended solely in its entirety for purposes of the
Notes to read as follows:

“to supplement any
of the provisions of this Indenture to such extent as shall be necessary to
facilitate the discharge of the Notes pursuant to Section 401; provided that
any such action shall not adversely affect the interests of the Holders of Notes
in any material respect.”

 30
 

 

(c)         Section 902 of the
Indenture is modified and amended solely for purposes of the Notes to add the
following as clauses (5) and (6):

“(5) make any change that impairs or
adversely affects the rights of a Holder to convert Notes in accordance with
the terms of the Indenture, or

(6) impair the
right to institute suit for the enforcement of the delivery of the Conversion
Value as required by the Indenture upon the conversion of Notes.”

Section 2.20.          Certain
Covenants Not Applicable to the Notes. 
The Notes shall not be entitled to the benefits of the covenants set
forth in Section 1004 of the Indenture (and any failure to comply with the
terms thereof shall not constitute a Default or Event of Default in respect of
the Notes).

Section 2.21.          Calculations
in Respect of the Notes.  Except as otherwise specifically
stated herein or in the Notes, all calculations to be made in respect of the
Notes shall be the obligation of the Company. 
All calculations made by the Company or its agent as contemplated
pursuant to the terms hereof and of the Notes shall be made in good faith and
be final and binding on the Company and the Holders absent manifest error.  The Company shall provide a schedule of calculations
to the Trustee, and the Trustee shall be entitled to rely upon the accuracy of
the calculations by the Company without independent verification.  The Trustee shall forward calculations made
by the Company to any Holder of Notes upon written request within 20 Business
Days after the effective date of any adjustment.

Section 2.22.          Authorized
Denominations.  The Notes shall be issued in
denominations of $1,000 and integral multiples thereof and payments of
principal, interest (including Additional Interest) and Additional Amounts, if
any, on the Notes shall be made in U.S. dollars.

Section 2.23.          Conversion
Agent, Paying Agent and Securities Registrar.  U.S. Bank Trust
National Association is hereby appointed as Conversion Agent, Paying Agent and
the Security Registrar for the Notes. The Security Register for the Notes will
be maintained by the Security Registrar at the Trustee’s Corporate Trust
Office.  The Conversion Agent shall not
have any duties or obligations other than those expressly set forth herein as
duties on its part to be performed.  The
rights, privileges, protections, immunities and benefits given to the Trustee
pursuant to the Indenture, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities with respect to the Notes.

Section 2.24.          Restrictions
on Transfer.  (a) Every Note (and all
Notes issued in exchange therefor or in substitution thereof) that bears or is
required under this Section 2.24(a) to bear the legend set forth in this
Section 2.24(a) (together with any Common Stock issued upon conversion of the
Notes, collectively, the “Restricted
Securities”) shall be subject to the restrictions on transfer set
forth in this Section 2.24(a) (including those set forth in the legend below)
unless such restrictions on transfer shall be waived by written consent of the
Company, and the Holder of each such Restricted Security, by such Holder’s
acceptance thereof, agrees to be bound by all such restrictions on
transfer.  As used in this Section
2.24(a), the term “transfer” means any sale, pledge, loan, transfer or other
disposition whatsoever of any Restricted Security or any interest therein.

 31
 

 

Until the expiration of the holding period applicable
to sales of Restricted Securities under Rule 144(k) under the Securities Act
(or any successor provision), any certificate evidencing a Restricted Security
shall bear a legend in substantially the following form, unless such Restricted
Security has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or sold pursuant to Rule 144 under the Securities Act or
any similar provision then in force, or unless otherwise agreed by the Company
in writing, with written notice thereof to the Trustee:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE.  BY ITS ACQUISITION
HEREOF, THE HOLDER:

(1)           REPRESENTS
THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT), IS AWARE THAT THE TRANSFER TO IT IS BEING MADE IN
RELIANCE ON RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS SECURITY
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT;

(2)           AGREES
THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF
THIS SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF
WAS THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY OR
THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH RESALE OR TRANSFER; AND

(3)           AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. 
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE LAST DATE ON
WHICH THE COMPANY OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE).  IF
THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH

 32
 

 

TO THE TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.  THIS LEGEND WILL BE REMOVED UPON
THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(C) OR 2(D)
ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE LATER OF THE ORIGINAL ISSUE DATE
OF THIS SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF
WAS THE OWNER OF THIS SECURITY.

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF,
AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION
RIGHTS AGREEMENT.

Any Notes that are Restricted Securities and as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to conditions for removal of the foregoing legend set forth therein
have been satisfied may, upon surrender of such Note for exchange to the
Securities Registrar in accordance with the provisions of this Section 2.24, be
exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this Section
2.24(a).  If such Restricted Security
surrendered for exchange is represented by a global Note bearing the legend set
forth in this Section 2.24(a), the principal amount of the legended global Note
shall be reduced by the appropriate principal amount and the principal amount
of a global Note without the legend set forth in this Section 2.24(a) shall be
increased by an equal principal amount. 
If a global Note without the legend set forth in this Section 2.24(a) is
not then Outstanding, the Issuer shall execute and the Trustee shall authenticate
and deliver an unlegended global Note to the Depositary.

In the event Rule 144(k) under the Securities Act (or
any successor provision) is amended to shorten the two-year period under
Rule 144(k), then, the references in the restrictive legends set forth above to
“TWO YEARS,” and in the corresponding transfer restrictions described above,
and in the Notes and the Common Stock will be deemed to refer to such shorter
period, from and after receipt by the Trustee of an Officers’ Certificate and
an Opinion of Counsel to that effect.  As
soon as reasonably practicable after the Company knows of the effectiveness of
any such amendment to shorten the two-year period under Rule 144(k),
unless such changes would otherwise be prohibited by, or would otherwise cause
a violation of, the federal securities laws applicable at the time, the Company
will provide to the Trustee an Officers’ Certificate and an Opinion of Counsel
as to the effectiveness of such amendment and the effectiveness of such change
to the restrictive legends and transfer restrictions.

(b)  Any
Restricted Securities, prior to the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), purchased or owned by the Company or any Affiliate thereof may not
be resold by the Company or such Affiliate and will be surrendered to the
Trustee for cancellation.  Upon
expiration of the holding period applicable to Restricted Securities under Rule
144(k) under the Securities Act (or any

 33
 

 

successor provision), the
Notes may, to the extent permitted by applicable law, be reissued or sold or
may be surrendered to the Trustee for cancellation.  Any Notes surrendered for cancellation may
not be reissued or resold and will be canceled promptly by the Trustee.

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

Section 2.25.          Rule
144A Information Requirement.  Within
the period prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
provision), the Company covenants and agrees that it shall, during any period
in which it is not subject to Section 13 or 15(d) under the Exchange Act, make
available to any Holder or beneficial owner of Notes or any Common Stock issued
upon conversion thereof which continue to be Restricted Securities in
connection with any sale thereof and any prospective purchaser of Notes or such
shares of Common Stock designated by such Holder or beneficial owner, the
information required pursuant to Rule 144A(d)(4) under the Securities Act upon
the request of any Holder or beneficial owner of the Notes or such shares of
Common Stock, all to the extent required to enable such Holder or beneficial
owner to sell its Notes or shares of Common Stock without registration under
the Securities Act within the limitation of the exemption provided by Rule
144A.

Section 2.26.          Additional
Interest Notice.  In the event that
the Company is required to pay Additional Interest to Holders of Notes 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)
calendar days prior to the proposed payment date for 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 Holder of Notes 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.

Section 2.27.          The
Trustee.  Section 601 of the
Indenture is modified for purposes of the Notes by adding to the first proviso
after the words “...any Additional Amounts with respect to any Security of such
series,” the following: “or in the delivery of amounts owing upon conversion of
a Security.”

ARTICLE TWO

FORM OF NOTES

Section 3.01.          Form
of Notes.  The Notes and the Trustee’s
certificate of authentication to be borne by such Notes shall be substantially
in the form set forth in Exhibit A hereto. Any of the Notes may have such
letters, numbers or other marks of identification and such notations, legends,
endorsements or changes as the officers executing the same may approve
(execution  thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions

 34
 

 

of the Indenture, or as may be required by the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
eligible for trading on The PORTALSM Market or as may be required for the Notes to
be tradable on any other market developed for trading of securities pursuant to
Rule 144A or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.

ARTICLE THREE

MISCELLANEOUS

Section 4.01.          Relation
to Original Indenture.  This First
Supplemental Indenture supplements the Original Indenture and shall be a part
of and subject to all the terms thereof. 
Except as supplemented hereby, all of the terms, provisions and
conditions of the Original Indenture and the Securities issued thereunder shall
continue in full force and effect.

Section 4.02.          Concerning
the Trustee.  The Trustee shall not
be responsible for any recital herein, as such recitals shall be taken as
statements of the Company, or the validity of the execution by the Company of
this First Supplemental Indenture. The Trustee makes no representations as to
the validity or sufficiency of this instrument.

Section 4.03.          Effect
of Headings.  The Article and Section
headings herein are for convenience of reference only and shall not affect the
construction hereof.

Section 4.04.          Counterparts.  This instrument may be executed in counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.

Section 4.05.          Governing
Law.  This instrument shall be
governed by and construed in accordance with the laws of the State of New York.

[signature page
follows]

 35
 

 

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

	
  

  	
   

  	
  NEW PLAN EXCEL REALTY TRUST, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ John B. Roche

  
	
   

  	
   

  	
   

  	
   

  	
  Name: John B. Roche

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  Chief Financial Officer and
  Executive Vice President

  

 

	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Steven F. Siegel

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Steven F. Siegel

  	
   

  	
   

  
	
   

  	
   

  	
  Title:  General Counsel, Executive Vice President
  and Secretary

  	
   

  	
   

  

 

	
  

  	
   

  	
  U.S. BANK TRUST NATIONAL ASSOCIATION

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Thomas E. Tabor

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Thomas E. Tabor

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  Vice President

  

 

	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ K. Wendy Kumar

  	
   

  	
   

  
	
   

  	
   

  	
  Name: K. Wendy Kumar

  	
   

  	
   

  
	
   

  	
   

  	
  Title:  Vice President

  	
   

  	
   

  

 

 36

 

Exhibit A

[FORM OF NOTE]

[Include only for
Global Notes]

UNLESS THIS NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE 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.

UNLESS AND UNTIL THIS
NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A
NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE
TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

[Include only for
Notes that are Restricted Securities]

THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE.  BY
ITS ACQUISITION HEREOF, THE HOLDER:

(1)           REPRESENTS THAT IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT),
IS AWARE THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE
SECURITIES ACT AND IS PURCHASING THIS SECURITY IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT;

(2)           AGREES THAT IT WILL NOT, WITHIN TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST
DATE ON WHICH NEW PLAN EXCEL REALTY TRUST, INC. (THE “COMPANY”) OR AN AFFILIATE
THEREOF WAS THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS
SECURITY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT
(A) TO THE COMPANY OR ANY  OF ITS
SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH RESALE OR TRANSFER; AND

 A-1
 

 

(3)           AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(C) OR 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.  IN CONNECTION WITH ANY TRANSFER
OF THIS SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF
THIS SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF
WAS THE OWNER OF THIS SECURITY, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS SECURITY TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE).  IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.  THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE
2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE LATER OF THE
ORIGINAL ISSUE DATE OF THIS SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR
AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY.

[Include only for Notes that are Restricted
Securities]

THE HOLDER OF THIS
SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS
SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND,
BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

 A-2
 

 

 

	
  NO. _____

  	
   

  	
  PRINCIPAL AMOUNT

  
	
   

  	
   

  	
   

  
	
  CUSIP NO. 648053
  AG 1

  	
   

  	
  $200,000,000

  

 

 

 

NEW PLAN EXCEL REALTY TRUST, INC.

3.70% Convertible Senior Note due 2026

NEW PLAN EXCEL REALTY
TRUST, INC., a Maryland corporation (the “Company,” which term shall include
any successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or its registered assigns, the
principal sum of Two Hundred Million Dollars ($200,000,000) on September 15,
2026 unless redeemed, repurchased or converted prior to such date in accordance
with the terms hereof and of the Indenture.

This Note shall bear
interest as specified on the reverse hereof. 
This Note is convertible for the consideration specified on the reverse
hereof.  This Note is subject to
redemption by the Company at its option and to repurchase by the Company at the
option of the Holder as specified on the reverse hereof.

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

This Note shall not be
entitled to the benefits of the Indenture or be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
signed by the Trustee.

 A-3
 

 

IN WITNESS WHEREOF, the
Company has caused this Note to be signed manually or by facsimile by an
authorized signatory.

Dated:
September 19, 2006

	
  

  	
   

  	
  NEW PLAN EXCEL REALTY TRUST, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  

 

	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the
Securities of the series designated therein referred to in the within-mentioned
Indenture.

	
  

  	
   

  	
  U.S. BANK TRUST NATIONAL ASSOCIATION

  
	
   

  	
   

  	
     as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Authorized Signatory

  

 

 

 A-4
 

 

NEW PLAN EXCEL REALTY TRUST, INC.

3.70% Convertible Senior Note due 2026

This Note is one of a
duly authorized issue of notes, debentures, bonds, or other evidences of
indebtedness of the Company (hereinafter called the “Securities”) of the series
hereinafter specified, all issued or to be issued under and pursuant to an
Indenture, dated as of January 30, 2004 (as supplemented by the First
Supplemental Indenture, dated as of September 19, 2006, and as further
amended or supplemented from time to time, the “Indenture”), duly executed and
delivered by New Plan Excel Realty Trust, Inc., a Maryland corporation (the “Company”),
to U.S. Bank Trust National Association, as trustee (the “Trustee,” which term
includes any successor trustee under the Indenture with respect to the series
of Securities of which this Note is a part), and reference is hereby made to
the Indenture, and all modifications and amendments and indentures supplemental
thereto relating to the Notes, for a description of the rights, limitations of
rights, obligations, duties, and immunities thereunder of the Trustee, the
Company, and the Holders of the Notes and the terms upon which the Notes are
authenticated and delivered.  The Securities
may be issued in one or more series, which different series may be issued in
various aggregate principal amounts, may mature at different times, may accrue
interest (if any) at different rates or formulas and may otherwise vary as
provided in the Indenture.  This Note is
one of a series of Securities designated as the “3.70% Convertible Senior Notes
due 2026” of the Company, initially limited (except as permitted under the
Indenture) in aggregate principal amount to $200,000,000.  Terms used herein without definition and
which are defined in the Indenture have the meanings assigned to them in the
Indenture.

1.                                       INTEREST

The Notes shall bear
interest at the rate of 3.70% per annum from September 19, 2006 or from
the most recent Interest Payment Date (as defined below) to which interest has
been paid or duly provided for, as the case may be, payable semi-annually in
arrears on March 15 and September 15 of each year (each, an “Interest
Payment Date”), commencing on March 15, 2007, until the principal hereof is
paid or duly made available for payment. 
Interest payable on each Interest Payment Date shall equal the amount of
interest accrued for the period commencing on and including the immediately
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or commencing on and including September 19, 2006, if
no interest has been paid or duly provided for) and ending on and including the
day immediately preceding such Interest Payment Date.  Interest on the Notes will be computed on the
basis of a 360-day year consisting of twelve 30-day months.

2.                                       METHOD
OF PAYMENT

Except as provided in the
Indenture, the Company shall pay interest on the Notes to the Persons who are
Holders of record of Notes at the close of business (whether or not a Business
Day) on the February 28 and August 31 immediately preceding the applicable
Interest Payment Date (each, a “Regular Record Date”).  Holders must surrender Notes to a Paying
Agent and comply with the other terms of the Indenture to collect the principal
amount, Redemption Price,

 A-5
 

 

Optional
Repurchase Price or Change in Control Purchase Price of the Notes, plus, if
applicable, accrued and unpaid interest (including Additional Interest, if any)
payable as herein provided at maturity, upon redemption at the Company’s
option, or in order to preserve the status of the Company as a real estate
investment trust, or repurchase at the Holder’s option upon a Change in
Control.  The Company shall pay, in money
of the United States that at the time of payment is legal tender for payment of
public and private debts, all amounts due in cash with respect to the Notes on
the dates and in the manner provided in this Note and the Indenture.

3.                                       PAYING
AGENT, CONVERSION AGENT AND SECURITY REGISTRAR

Initially, the Trustee
shall act as Paying Agent, Conversion Agent and Security Registrar.  The Company hereby initially designates the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York as the office to be maintained by it where this Note may be presented
for payment, registration of transfer or exchange, where notices or demands to
or upon the Company in respect of this Note or the Indenture may be served and
where the Notes may be surrendered for conversion in accordance with the
provisions of paragraph 6 hereof and the Indenture.  The Company may appoint and change any Paying
Agent, Conversion Agent, Security Registrar or co-registrar or approve a change
in the office through which any Paying Agent acts without notice, other than
notice to the Trustee.

4.                                       REDEMPTION
BY THE COMPANY

The Company shall not
have the right to redeem any Notes prior to September 20, 2011, except to
preserve the status of the Company as a real estate investment trust.  If the Company determines it is necessary to
redeem the Notes in order to preserve the status of the Company as a real
estate investment trust, the Company may redeem the Notes then Outstanding, in
whole or in part, at 100% of the principal amount of the Notes to be redeemed
plus unpaid interest (including Additional Interest, if any) accrued thereon to
the Redemption Date.

The Company shall have
the right to redeem the Notes for cash, in whole or in part at any time or from
time to time, on or after September 20, 2011 at 100% of the principal amount of
the Notes to be redeemed plus unpaid interest (including Additional Interest,
if any) accrued thereon to the Redemption Date (the “Redemption Price”).

Notice of redemption at
the option of the Company shall be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Notes to be redeemed at the
Holder’s registered address. Notes in denominations larger than $1,000
principal amount may be redeemed in part but only in integral multiples of
$1,000 principal amount.

5.                                       OPTIONAL
REPURCHASE RIGHTS;

REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL

(a)           Subject to the terms
and conditions of the Indenture, a Holder shall have the right to require the
Company to repurchase all of its Notes, or any portion of the principal amount
thereof that is equal to $1,000 or an integral multiple thereof, on each of
September 20, 2011, September 15, 2016 and September 15, 2021 (each,
an “Optional Repurchase Date”) for cash equal to 100% of the principal amount
of the Notes to be repurchased plus unpaid interest (including Additional
Interest, if any) accrued thereon to such Optional Repurchase Date (the

 A-6
 

 

“Optional
Repurchase Price”), upon delivery to the Paying Agent of an Optional Repurchase
Notice containing the information set forth in the Indenture, from the opening
of business on the date that is 30 days prior to such Optional Repurchase Date
until the close of business on the third Business Day prior to such Optional
Repurchase Date and upon compliance with the other terms of the Indenture.

(b)           If a Change in
Control occurs prior to September 20, 2011, a Holder shall have the right, at
such Holder’s option and subject to the terms and conditions of the Indenture,
to require the Company to repurchase all or any of such Holder’s Notes having a
principal amount equal to $1,000 or an integral multiple thereof on the date
(the “Change in Control Purchase Date”) specified by the Company in the Company
Notice (which date shall be no earlier than 15 days and no later than 30 days
after the date of such Company Notice) for cash equal to the 100% of the
principal amount of the Notes to be repurchased plus unpaid interest (including
Additional Interest, if any) accrued thereon to the Change in Control Purchase
Date (the “Change in Control Purchase Price”).

(c)           Holders have the
right to withdraw any Optional Repurchase Notice or Change in Control Purchase
Notice, as the case may be, by delivery to the Paying Agent of a written notice
of withdrawal in accordance with the provisions of the Indenture.

(d)           If the Paying Agent
holds, in accordance with the terms of the Indenture, money sufficient to pay
the Optional Repurchase Price or Change in Control Purchase Price of such Notes
on the Optional Repurchase Date or Change in Control Purchase Date, as the case
may be, then, on and after such date, such Notes shall cease to be Outstanding
and interest on such Notes shall cease to accrue, and all other rights of the
Holder shall terminate (other than the right to receive the Optional Repurchase
Price or Change in Control Purchase Price upon delivery or transfer of the
Notes).

6.                                       CONVERSION

The Notes shall be
convertible into the consideration specified in the Indenture at such times,
upon compliance with such conditions and upon the terms set forth in the
Indenture.

The initial Conversion
Rate shall be 30.5506 shares of Common Stock per $1,000 principal amount of
Notes, subject to adjustment in certain circumstances as specified in the
Indenture.  Notes tendered for conversion
by a Holder after the close of business on any Regular Record Date for an
interest payment and on or prior to the corresponding Interest Payment Date
must be accompanied by payment of an amount equal to the interest that such
Holder is to receive on such Notes on such Interest Payment Date; provided, however, that no such payment shall be required
(1) if such Notes have been called for redemption on a Redemption Date that is
after such Regular Record Date and on or prior to such Interest Payment Date or
(2) with respect to overdue interest, if any overdue interest is due and owing
at the time of conversion with respect to such Notes.

The Conversion Rate
applicable to each Note a notice of conversion in respect of which is received
by the Conversion Agent from and including the Effective Date of a Change in
Control resulting from a transaction described in clauses (1) or (2) of the
definition of Change in Control up to and including the 30th Business Day
following the Effective Date of such Change in Control shall be increased by the
number of Additional Shares specified in the Indenture.

 A-7
 

 

To convert this Note, the
Holder must (a) complete and manually sign the irrevocable conversion
notice set forth below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent at the office
maintained by the Conversion Agent for such purpose, (b) if this Note is in
certificated form, surrender such Note to the Conversion Agent,
(c) furnish appropriate endorsements and transfer documents if required by
the Conversion Agent, the Company or the Trustee and (d) pay any transfer
or similar tax, if required. The date on which the Holder satisfies all such
requirements shall be deemed to be the date on which this Note shall have been
surrendered for conversion.

If the Holder has
delivered an Optional Repurchase Notice or a Change in Control Purchase Notice
requiring the Company to repurchase all or a portion of this Note pursuant to
paragraph 5 hereof, then this Note (or portion hereof subject to such Optional
Repurchase Notice or Change in Control Purchase Notice) may be converted only
if the Optional Repurchase Notice or Change in Control Purchase Notice is
withdrawn in accordance with the terms of the Indenture.

7.                                       RANKING

The Notes are senior
unsecured obligations of the Company and shall rank pari passu in right of
payment with all other senior unsecured senior indebtedness of the Company from
time to time outstanding.

8.                                       DEFAULTED
INTEREST

Except as otherwise
specified herein or in the Indenture, any Defaulted Interest on this Note shall
forthwith cease to be payable to the Holder hereof on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company as provided for in Section 307 of the Indenture.

9.                                       DENOMINATIONS;
TRANSFER; CONVERSION

This
Note is issuable only in fully registered form, without coupons, in
denominations of $1,000 and integral multiples thereof.  This Note may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations at the
office or agency of the Company in The City of New York, in the manner and
subject to the limitations provided herein and in the Indenture, but without
the payment of any charge except for any tax or other governmental charge
imposed in connection therewith. Upon due presentment for registration of
transfer of this Note at the office or agency of the Company in The City of New
York, one or more new Notes of authorized denominations in an equal aggregate
principal amount will be issued to the transferee in exchange therefor, and
bearing such restrictive legends as may be required by the Indenture, but
without payment of any charge except for any tax or other governmental charge
imposed in connection therewith.  In the
event of any redemption in part, the Company shall not be required to: (i)
issue or register the transfer or exchange of any Note during a period
beginning at the opening of business 15 days before any selection of Notes for
redemption and ending at the close of business on the earliest date on which
the relevant notice of redemption is deemed to have been given to all Holders
of Notes to be so redeemed, or (ii) register the transfer or exchange of
any Note so selected for redemption, in whole or in part, except the unredeemed
portion of any Note being redeemed in part.

 A-8
 

 

10.                                 PERSONS
DEEMED OWNERS

The Holder of this Note
may be treated as the owner of this Note for all purposes, and neither the
Company or the Trustee nor any authorized agent of the Company or the Trustee
shall be affected by any notice to the contrary, except as required by law.

11.                                 ADDITIONAL
RIGHTS OF HOLDERS

In addition to the rights
provided to Holders of Notes under the Indenture, Holders shall have all the
rights set forth in the Registration Rights Agreement, dated as of
September 19, 2006, among the Company and the Initial Purchasers named
therein.

12.                                 MODIFICATION
AND AMENDMENT; WAIVER

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities under the Indenture at any time by the Company
and the Trustee with the consent of the Holders of a majority in the aggregate
principal amount of all Outstanding Securities affected thereby (voting
together as a single class).  The
Indenture also provides that certain amendments or modifications may not be
made without the consent of each Holder to be affected thereby.  Furthermore, provisions in the Indenture permit
the Holders of a majority in the aggregate principal amount of the Outstanding
Securities of any series, in certain instances, to waive, on behalf of all of
the Holders of Securities of such series, certain past defaults under the
Indenture and their consequences.  Any
such waiver by the Holder of this Note shall be conclusive and binding upon
such Holder and upon all future Holders of this Note and other Notes issued
upon the registration of transfer hereof or in exchange hereof, or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.

13.                                 DEFAULTS
AND REMEDIES

If an Event of Default
occurs and is continuing, the Trustee, or the Holders of not less than 25% in
aggregate principal amount of the Notes at the time Outstanding, may declare
the principal amount and any accrued and unpaid interest, of all the Notes to
be due and payable in the manner and with the effect provided in the
Indenture.  For an Event of Default
pursuant to clause (6) or (7) of Section 501 of the Indenture, acceleration of
maturity of the Notes is automatic.

Events of Default in
respect of the Notes are set forth in Section 501 of the Indenture. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.

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14.                                 CONSOLIDATION,
MERGER, AND SALE OF ASSETS

In the event of a
consolidation or merger of the Company or a sale, lease or conveyance of all or
substantially all of the assets of the Company, or if the Notes are
exchangeable into the common stock or other securities of a third party, as
described in ARTICLE EIGHT of the Indenture, the successor entity to the
Company shall succeed to and be substituted for the Company and may exercise
the rights and powers of the Company under the Indenture, and thereafter,
except in the case of a lease, the Company shall be relieved of all obligations
and covenants under the Indenture and the Notes.

15.                                 CERTAIN
COVENANTS NOT TO APPLY

The Notes shall
not be entitled to the benefits of the covenants set forth in Section 1004 of
the Indenture.

16.                                 TRUSTEE
AND AGENT DEALINGS WITH THE COMPANY

The Trustee, Paying
Agent, Conversion Agent and Securities Registrar under the Indenture, each in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with and collect obligations owed to it by the Company
or its Affiliates and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee, Paying Agent,
Conversion Agent or Registrar.

17.                                 CALCULATIONS
IN RESPECT OF THE NOTES

Except as otherwise
specifically stated herein or in the Indenture, all calculations to be made in
respect of the Notes shall be the obligation of the Company.  All calculations made by the Company or its
agent as contemplated pursuant to the terms hereof and of the Indenture shall
be final and binding on the Company and the Holders absent manifest error. The
Company shall provide a schedule of calculations to the Trustee, and the
Trustee shall be entitled to rely upon the accuracy of the calculations by the
Company without independent verification. 
The Trustee shall forward calculations made by the Company to any Holder
of Notes upon written request.

18.                                 GOVERNING
LAW

The Indenture and this
Note shall be governed by and construed in accordance with the laws of the
State of New York.

 A-10
 

 

ASSIGNMENT

	
  FOR VALUE RECEIVED, the
  undersigned hereby sell(s), assign(s) and transfer(s) unto ________________________________________________________________________________________________.

  

 

	
  PLEASE INSERT SOCIAL
  SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

  

 

	
  

  

 

	
  

  
	
  (Please print or Typewrite Name and Address

  
	
  Including Postal Zip Code of Assignee)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  the within Note
  and all rights thereunder, and hereby irrevocably constitutes and appoints

  
	
   

  

 

to transfer said Note on the books of the Company,
with full power of substitution in the premises.

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

o                                    To
New Plan Excel Realty Trust, Inc. or any of its subsidiaries; or

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

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

o                                    Pursuant
to a registration statement which has been declared effective under the
Securities Act of 1933, as amended, and which continues to be effective at the
time of transfer.

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

 A-11
 

 

 

	
  Dated:__________________________________

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NOTICE:
  Signature must be guaranteed by an eligible Guarantor Institution (banks,
  stockbrokers, savings and loan associations and credit unions) with
  membership in an approved signature guarantee medallion program pursuant to
  Securities and Exchange Commission Rule 17Ad-15.

  	
   

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

  

 

 A-12
 

 

CONVERSION NOTICE

To convert this Note as provided in the Indenture,
check the box:  o

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

If, in the event the Company delivers Net Shares and
you want the stock certificate made out in another Person’s name, fill in the
form below:

	
  

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

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

	
  

  	
   

  	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the

  
	
   

  	
   

  	
   

  	
   

  	
  other side of this Note)

  

 

(1) Signature
guaranteed by:

	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1)           Signature must be guaranteed by an
eligible Guarantor Institution (banks, stockbrokers, savings and loan
associations and credit unions) with membership in an approved signature guarantee
medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.

 

 A-13

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