Document:

Exhibit 4.1
    

    

    

    
      PIER 1 IMPORTS, INC.,
    

    
      THE SUBSIDIARY GUARANTORS PARTIES HERETO,
    

    
      AND
    

    
      THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
    

    
      AS TRUSTEE
    

    
      9.0% Convertible Senior Notes due 2036
    

    

    

    

    

    
      INDENTURE
    

    
      Dated as of August [  ], 2009
    

    

    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      TABLE OF CONTENTS
    

    
      Page
    

    
    	
          ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
        	
          1
        
	

        	
           
        
	
           
        	
          Section 1.01. Definitions.
        	
          1
        
	

        	
          Section 1.02. Other Definitions.
        	
          8
        
	

        	
          Section 1.03. Incorporation by Reference of Trust Indenture Act
        	
          9
        
	

        	
          Section 1.04. Rules of Construction
        	
          10
        
	

        	
          Section 1.05. Section 382 Interpretive Provisions
        	
          10
        
	

        	

        	
           
        
	
          ARTICLE 2 THE SECURITIES
        	
          10
        
	

        	
           
        
	

        	
          Section 2.01. Title; Amount and Issue of Securities; Principal
          and Interest
        	
          10
        
	

        	
          Section 2.02. Form of Securities.
        	
          12
        
	

        	
          Section 2.03. Legends.
        	
          12
        
	

        	
          Section 2.04. Execution and Authentication
        	
          13
        
	

        	
          Section 2.05. Registrar and Paying Agent
        	
          14
        
	

        	
          Section 2.06. Paying Agent to Hold Money in Trust
        	
          15
        
	

        	
          Section 2.07. Securityholder Lists
        	
          15
        
	

        	
          Section 2.08. General Provisions Relating to Transfer and
          Exchange
        	
          15
        
	

        	
          Section 2.09. Book-Entry Provisions for the Global Securities
        	
          16
        
	

        	
          Section 2.10. New Securities Upon Partial Conversion or After
          the Conversion Rights Termination Date
        	
          18
        
	

        	
          Section 2.11. Mutilated, Destroyed, Lost or Stolen Securities
        	
          18
        
	

        	
          Section 2.12. Outstanding Securities
        	
          19
        
	

        	
          Section 2.13. Temporary Securities
        	
          19
        
	

        	
          Section 2.14. Cancellation
        	
          20
        
	

        	
          Section 2.15. Payment of Interest; Defaulted Interest
        	
          20
        
	

        	
          Section 2.16. Computation of Interest and Make-Whole Payment
        	
          21
        
	

        	
          Section 2.17. Cusip and ISIN Numbers
        	
          21
        
	

        	

        	
           
        
	
          ARTICLE 3 COVENANTS
        	
          21
        
	

        	
           
        
	

        	
          Section 3.01. Payment of Securities.
        	
          21
        
	

        	
          Section 3.02. Financial Statements
        	
          22
        
	

        	
          Section 3.03. Maintenance of Office or Agency
        	
          22
        
	

        	
          Section 3.04. Corporate Existence
        	
          23
        
	

        	
          Section 3.05. Payment of Taxes and Other Claims
        	
          23
        
	

        	
          Section 3.06. Compliance Certificate
        	
          23
        
	

        	
          Section 3.07. Further Instruments and Acts
        	
          23
        
	

        	
          Section 3.08. Statement by Officers as to Default
        	
          23
        
	

        	

        	
           
        
	
          ARTICLE 4 SUCCESSOR COMPANY
        	
          24
        
	

        	
           
        
	

        	
          Section 4.01. Consolidation, Merger and Sale of Assets
        	
          24
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          ARTICLE 5 REDEMPTION OF SECURITIES
        	
          24
        
	

        	
           
        
	
           
        	
          Section 5.01. Optional Redemption
        	
          24
        
	

        	
          Section 5.02. Election to Redeem; Notice to Trustee
        	
          25
        
	

        	
          Section 5.03. Selection by Trustee of Securities to be Redeemed
        	
          25
        
	

        	
          Section 5.04. Notice of Redemption
        	
          25
        
	

        	
          Section 5.05. Deposit of Redemption Price
        	
          26
        
	

        	
          Section 5.06. Securities Payable on Redemption Date
        	
          27
        
	

        	
          Section 5.07. Securities Redeemed in Part
        	
          27
        
	

        	

        	
           
        
	
          ARTICLE 6 DEFAULTS AND REMEDIES
        	
          27
        
	

        	
           
        
	

        	
          Section 6.01. Events of Default
        	
          27
        
	

        	
          Section 6.02. Acceleration
        	
          29
        
	

        	
          Section 6.03. Other Remedies
        	
          29
        
	

        	
          Section 6.04. Waiver of Past Defaults
        	
          30
        
	

        	
          Section 6.05. Control by Majority
        	
          30
        
	

        	
          Section 6.06. Limitation on Suits
        	
          30
        
	

        	
          Section 6.07. Rights of Holders to Receive Payment
        	
          31
        
	

        	
          Section 6.08. Collection Suit by Trustee
        	
          31
        
	

        	
          Section 6.09. Trustee May File Proofs of Claim
        	
          31
        
	

        	
          Section 6.10. Priorities
        	
          31
        
	

        	
          Section 6.11. Restoration of Rights and Remedies
        	
          32
        
	

        	
          Section 6.12. Undertaking of Costs
        	
          32
        
	

        	

        	
           
        
	
          ARTICLE 7 TRUSTEE
        	
          32
        
	

        	
           
        
	

        	
          Section 7.01. Duties of Trustee
        	
          32
        
	

        	
          Section 7.02. Rights of Trustee
        	
          33
        
	

        	
          Section 7.03. Individual Rights of Trustee
        	
          34
        
	

        	
          Section 7.04. Trustee’s Disclaimer
        	
          35
        
	

        	
          Section 7.05. Notice of Defaults
        	
          35
        
	

        	
          Section 7.06. Reports by Trustee to Holders
        	
          35
        
	

        	
          Section 7.07. Compensation and Indemnity
        	
          35
        
	

        	
          Section 7.08. Replacement of Trustee
        	
          36
        
	

        	
          Section 7.09. Successor Trustee by Merger
        	
          37
        
	

        	
          Section 7.10. Eligibility; Disqualification
        	
          37
        
	

        	
          Section 7.11. Preferential Collection of Claims Against Company
        	
          37
        
	

        	
          Section 7.12. Trustee’s Application for Instruction from the
          Company
        	
          37
        
	

        	

        	
           
        
	
          ARTICLE 8 DISCHARGE OF INDENTURE
        	
          38
        
	

        	
           
        
	

        	
          Section 8.01. Discharge of Liability on Securities
        	
          38
        
	

        	
          Section 8.02. Reinstatement
        	
          38
        
	

        	
          Section 8.03. Officers’ Certificate; Opinion of Counsel
        	
          39
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          ARTICLE 9 AMENDMENTS
        	
          39
        
	

        	
           
        
	

        	
          Section 9.01. Without Consent of Holders
        	
          39
        
	

        	
          Section 9.02. With Consent of Holders
        	
          40
        
	

        	
          Section 9.03. Compliance with Trust Indenture Act
        	
          41
        
	

        	
          Section 9.04. Revocation and Effect of Consents and Waivers
        	
          41
        
	

        	
          Section 9.05. Notation on or Exchange of Securities
        	
          41
        
	

        	
          Section 9.06. Trustee to Sign Amendments
        	
          42
        
	

        	

        	
           
        
	
          ARTICLE 10 SUBSIDIARY GUARANTEE
        	
          42
        
	

        	
           
        
	

        	
          Section 10.01. Subsidiary Guarantee
        	
          42
        
	

        	
          Section 10.02. Limitation on Liability; Termination, Release
          and Discharge Upon Merger or Consolidation; Termination on Conversion
        	
          43
        
	

        	
          Section 10.03. Right of Contribution
        	
          45
        
	

        	
          Section 10.04. No Subrogation
        	
          45
        
	

        	

        	
           
        
	
          ARTICLE 11 PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE;
          PURCHASE AT THE OPTION OF HOLDERS
        	
          45
        
	

        	
           
        
	

        	
          Section 11.01. Purchase at the Option of the Holder Upon a
          Fundamental Change
        	
          45
        
	

        	
          Section 11.02. Purchase of Securities at the Option of the
          Holder.
        	
          47
        
	

        	
          Section 11.03. Further Conditions and Procedures for Purchase
          at the Option of the Holder Upon a Fundamental Change and Purchase
          of Securities at the Option of the Holder
        	
          49
        
	

        	

        	
           
        
	
          ARTICLE 12 CONVERSION
        	
          52
        
	

        	
           
        
	

        	
          Section 12.01. Conversion of Securities.
        	
          52
        
	

        	
          
            Section 12.02. Adjustments to Conversion Rate
          

        	
          55
        
	

        	
          Section 12.03. [Reserved].
        	
          61
        
	

        	
          Section 12.04. [Reserved].
        	
          61
        
	

        	
          Section 12.05. Effect of Reclassification, Consolidation,
          Merger or Sale.
        	
          61
        
	

        	
          Section 12.06. Responsibility of Trustee
        	
          62
        
	

        	
          Section 12.07. Notice to Holders Prior to Certain Actions
        	
          63
        
	

        	
          Section 12.08. Stockholder Rights Plan
        	
          64
        
	

        	
          Section 12.09. Additional Conversion Provisions.
        	
          64
        
	

        	
          Section 12.10. Termination of Conversion and Additional
          Post-Termination Conversion Provisions.
        	
          65
        
	

        	
          Section 12.11. 5% Shareholder Limitations
        	
          68
        
	

        	
          Section 12.12. Waiver of 5% Shareholder Provisions.
        	
          68
        
	

        	
          Section 12.13. Limitation on Issuances of Common Stock.
        	
          69
        
	

        	

        	
           
        
	
          ARTICLE 13 MISCELLANEOUS
        	
          70
        
	

        	
           
        
	

        	
          Section 13.01. Trust Indenture Act Controls
        	
          70
        
	

        	
          Section 13.02. Notices
        	
          70
        
	

        	
          Section 13.03. Communication by Holders with other Holders
        	
          71
        
	

        	
          Section 13.04. Certificate and Opinion as to Conditions
          Precedent
        	
          71
        
	

        	
          Section 13.05. Statements Required in Certificate or Opinion
        	
          72
        
	

        	
          Section 13.06. When Securities Disregarded
        	
          72
        
	

        	
          Section 13.07. Rules by Trustee, Paying Agent and Registrar
        	
          72
        
	

        	
          Section 13.08. Legal Holidays
        	
          72
        
	

        	
          Section 13.09. Governing Law; Waiver of Jury Trial
        	
          73
        
	

        	
          Section 13.10. No Recourse Against Others
        	
          73
        
	

        	
          Section 13.11. Successors
        	
          73
        
	

        	
          Section 13.12. Multiple Originals
        	
          73
        
	

        	
          Section 13.13. Table of Contents; Headings
        	
          73
        
	

        	
          Section 13.14. Severability Clause
        	
          73
        
	

        	
          Section 13.15. Force Majeure
        	
          73
        
	

        	

        	
           
        
	
          EXHIBIT A
        	
          Form of the Security
        	

        
	

        	

        	
           
        
	
          EXHIBIT B
        	
          Form of Indenture Supplement to Add Subsidiary Guarantors
        	

        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      INDENTURE dated as of August [  ], 2009, among PIER 1 IMPORTS, INC., a
      Delaware corporation (the “Company”), THE SUBSIDIARY
      GUARANTORS (as defined herein) and THE BANK OF NEW YORK MELLON TRUST
      COMPANY, N.A., as Trustee (the “Trustee”).
    

    
      Each party agrees as follows for the benefit of the other parties and
      for the equal and ratable benefit of the Holders of the Company’s 9.0%
      Convertible Senior Notes due 2036 (the “Securities”) on the
      date hereof and the guarantees thereof by the Subsidiary Guarantors.
    

    
      ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
    

    
      Section 1.01.  Definitions.  
    

    
      “5% Shareholder” has the meaning ascribed to “5-percent
      shareholder” in Section 382.
    

    
      “Additional Voluntary Conversion Interest Payment” means,
      upon a conversion pursuant to Section 12.01(a)(i) of the Indenture, in
      respect of the Securities to be converted pursuant to such Section, a
      payment in an amount equal to the lesser of (i) the remaining scheduled
      interest payments at the interest rate specified herein attributable to
      such Securities from the last day through which interest has been paid
      on such Securities through and including the date that is two and
      one-half years after the Conversion Date and (ii) the remaining
      scheduled interest payments at the interest rate specified herein
      attributable to such Securities from the last day through which interest
      has been paid on such Securities through and including February 15,
      2013.  The Company may, at its option, make the Additional Voluntary
      Conversion Interest Payment in cash, Common Stock, or a combination
      thereof; provided that all interest accrued from the last date through
      which interest was paid on the converted Securities through and
      including the Conversion Date shall be paid in cash.   In the event that
      the Company elects to make any portion of the Additional Voluntary
      Conversion Interest Payment in Common Stock, such Common Stock shall be
      valued at the higher of (i) $1.50 per share and (ii) the Make-Whole Five
      Day VWAP.
    

    
      “Additional Post-Termination Interest Payment” means, upon
      a conversion pursuant to Section 12.01(a)(ii) of the Indenture, in
      respect of the Securities to be converted pursuant to such Section, a
      payment in an amount equal to the lesser of (i) the remaining scheduled
      interest payments at the interest rate specified herein attributable to
      such Securities from the last day through which interest has been paid
      on such Securities through and including the date that is one and
      one-half years after the Conversion Date and (ii) the remaining
      scheduled interest payments at the interest rate specified herein
      attributable to such Securities from the last day through which interest
      has been paid on such Securities through and including February 15,
      2013.  The Company may, at its option, make the Additional
      Post-Termination Interest Payment in cash, Common Stock, or a
      combination thereof; provided that all interest accrued from the last
      date through which interest was paid on the converted Securities through
      and including the Conversion Date shall be paid in cash.  In the event
      that the Company elects to make any portion of the Additional
      Post-Termination Interest Payment in Common Stock, the Common Stock will
      be valued at 90% of the Termination Conversion Price in effect at that
      time.
    

    
      “Affiliate” of any specified Person means any other Person
      directly or indirectly controlling, controlled by or under direct or
      indirect common control with such specified Person.  For the purposes of
      this definition, “control” when used with respect to any
      specified Person means the power to direct the management and policies
      of such Person, directly or indirectly, whether through the ownership of
      voting securities, by contract or otherwise, and the terms “controlling”
      and “controlled” have meanings correlative to the
      foregoing; provided, however, that the existence of a management
      contract by the Company or an Affiliate of the Company to manage another
      entity shall not be deemed to be control.
    

    
      “Bankruptcy Law” means Title 11 of the United States Code
      or any similar federal or state law for the relief of debtors.
    

    
      “Beneficial Owner” shall mean any person who is considered
      a beneficial owner of a security in accordance with Rule 13d-3
      promulgated by the SEC under the Exchange Act.
    

    
      “Board of Directors” means, as to any Person, the board of
      directors of such Person or any duly authorized committee thereof.
    

    
      “Board Resolution” means a copy of a resolution certified
      by the Secretary or Assistant Secretary of a Person to have been duly
      adopted by the Board of Directors of such Person and to be in full force
      and effect on the date of such certification, and delivered to the
      Trustee.
    

    
      “Business Day” means each day that is not a Saturday,
      Sunday or other day on which banking institutions in New York, New York,
      Dallas, Texas or Houston, Texas are authorized or required by law to
      close.   
    

    
      “Capital Stock” of any Person means any and all shares,
      interests, rights to purchase, warrants, options, participations or
      other equivalents of or interests in (however designated) equity of such
      Person, including any Preferred Stock, but excluding any debt securities
      convertible into such equity.
    

    
      “Code” means the Internal Revenue Code of 1986, as amended.
    

    
      “Common Equity” of any Person means Capital Stock of such
      Person that is generally entitled to (1) vote in the election of
      directors of such Person or (2) if such Person is not a corporation,
      vote or otherwise participate in the selection of the governing body,
      partners, managers or others that will control the management or
      policies of such Person.
    

    
      “Common Stock” means the Company’s common stock, par value
      $0.001 per share.
    

    
      “Company” means Pier 1 Imports, Inc. or its successors and
      assigns.
    

    
      “Company Stock” means Common Stock and, to the extent
      specified in a notice from the Company to any Holder prior to any
      conversion, any other interest in the Company that the Company
      determines will be treated as stock of the Company for purposes of
      applying Section 382 to the Company.
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
      “Continuing Director” means a director who either was a
      member of the Company’s board of directors on August [  ], 2009, or who
      becomes a director of the Company subsequent to that date and whose
      election, appointment or nomination for election by stockholders of the
      Company, is duly approved by a majority of the Continuing Directors on
      the board of directors of the Company at the time of such approval,
      either by a specific vote or by approval of the proxy statement issued
      by the Company on behalf of the entire board of directors of the Company
      in which such individual is named as nominee for director.
    

    
      “Conversion Agent” means the office or agency appointed by
      the Company where Securities may be presented for conversion.  The
      Conversion Agent appointed by the Company shall initially be the Trustee.
    

    
      “Conversion Notice” means the form of conversion notice
      attached to the back of the Securities.
    

    
      “Conversion Price” means, in respect of each $1,000
      principal amount of Securities, $1,000 divided by the Conversion Rate,
      as may be adjusted from time to time as set forth herein.
    

    
      “Conversion Rate” means, in respect of each $1,000
      principal amount of Securities, initially 399.2016 shares of Common
      Stock, subject to adjustments as set forth herein.
    

    
      “Conversion Shares” means the Common Stock issuable upon
      conversion of the Securities in accordance with Section 12.01(c).
    

    
      “Custodian” means any receiver, trustee, assignee,
      liquidator, custodian or similar official under any Bankruptcy Law.
    

    
      “Daily VWAP” means the per share volume-weighted average
      price as displayed under the heading “Bloomberg VWAP” on Bloomberg page
      “PIR<equity> AQR”, or any successor page, in respect of the period from
      9:30 a.m.  to 4:00 p.m., New York City time on such Trading Day (or if
      such volume-weighted average price is unavailable, the market value of
      one share of Common Stock on such Trading Day as the Board of Directors
      determines in good faith using a volume-weighted method).
    

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

    
      “Definitive Securities” means certificated Securities that
      are not Global Securities.
    

    
      “DTC” means The Depository Trust Company, its nominees and
      their respective successors and assigns, or such other depository
      institution hereinafter appointed by the Company pursuant to the terms
      of this Indenture.
    

    
      “Ex-Dividend Date” means, in respect of a dividend or
      distribution to holders of Common Stock, the first date upon which a
      sale of the Common Stock does not automatically transfer the right to
      receive the relevant dividend or distribution from the seller of the
      Common Stock to its buyer.
    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    
      “Excess of Specified Percentage Certifications” means the
      certifications, set forth in Item 2 or Item 3 of the Conversion Notice,
      that, for purposes of applying Section 382 to the Company, the Holder or
      any of its Related Persons (i) is or was a 5% Shareholder with respect
      to the Company at any time during the Section 382 Testing Period ending
      on the applicable Conversion Date or (ii) would as a result of the
      conversion of the Securities the subject of such Conversion Notice
      become a 5% Shareholder with respect to the Company.
    

    
      “Exchange Act” means the Securities Exchange Act of 1934,
      as amended, and the rules and regulations of the SEC promulgated
      thereunder.
    

    
      “Fair Market Value” means the amount that a willing buyer
      would pay a willing seller in an arm’s length transaction.
    

    
      “Five Day VWAP” means the arithmetic average of the Daily
      VWAP for the five consecutive Trading Days ending two Trading Days prior
      to the applicable Conversion Date.
    

    
      A “Fundamental Change” shall be deemed to have occurred at
      such time after the original issuance of the Securities as any of the
      following occurs:
    

    
      (1)       any “person” or “group” within the meaning of Section 13(d) of
      the Exchange Act, other than the Company, any Subsidiary of the Company
      or any employee benefit plan of the Company or any such Subsidiary,
      files a Schedule TO or any other schedule, form or report under the
      Exchange Act disclosing that such person or group has become the direct
      or indirect Beneficial Owner of Common Equity of the Company
      representing more than 50% of the voting power of the Company’s Common
      Equity;
    

    
      (2)       consummation of any share exchange, consolidation or merger of
      the Company pursuant to which the Common Stock will be converted into
      cash, securities or other property or any sale, lease or other transfer
      (in one transaction or a series of transactions) of all or substantially
      all of the consolidated assets of the Company and its Subsidiaries,
      taken as a whole, to any Person other than one of the Company’s
      Subsidiaries; provided, however, that a transaction where the holders of
      more than 50% of all classes of the Company’s Common Equity immediately
      prior to such transaction own, directly or indirectly, more than 50% of
      all classes of Common Equity of the continuing or surviving corporation
      or transferee immediately after such event shall not be a Fundamental
      Change;
    

    
      (3)       Continuing Directors cease to constitute at least a majority
      of the Company’s board of directors;
    

    
      (4)       the stockholders of the Company approve any plan or proposal
      for the liquidation or dissolution of the Company; or
    

    
      (5)       the Company’s Common Stock is neither listed on a national
      securities exchange nor quoted on an established electronic
      over-the-counter trading market in the United States;
    

    
      
        

        

      

      
        
          4
        

        
          

        

      

      
        

        

      

    

    
      provided, however, that a Fundamental Change shall not be deemed to have
      occurred if at least 90% of the consideration, excluding cash payments
      for fractional shares, in the transaction or transactions constituting
      the Fundamental Change consists of shares of common stock traded on a
      national securities exchange or which shall be so traded or quoted when
      issued or exchanged in connection with such Fundamental Change (such
      securities being referred to as “Publicly Traded Securities”)
      and as a result of such transaction or transactions the Securities
      become convertible into such Publicly Traded Securities (excluding cash
      payments for fractional shares) pursuant to the terms of this Indenture.
    

    
      “GAAP” means generally accepted accounting principles set
      forth in the opinions and pronouncements of the Accounting Principles
      Board of the American Institute of Certified Public Accountants and
      statements and pronouncements of the Financial Accounting Standards
      Board or in such other statements by such other entity as may be
      approved by a significant segment of the accounting profession as in
      effect from time to time.
    

    
      “Global Securities” means certificated Securities in global
      form, without interest coupons, substantially in the form of Exhibit A
      hereto and registered in the name of DTC or a nominee of DTC.
    

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

    
      “Indenture” means this Indenture, as amended or
      supplemented from time to time.
    

    
      “Issue Date” means August [  ], 2009.
    

    
      “Last Reported Sale Price” of the Common Stock on any date
      means the closing per-share sale price (or if no closing per-share sale
      price is reported, the average of the last bid and ask prices or, if
      more than one in either case, the average of the average last bid and
      the average last ask prices) on that date as reported on the New York
      Stock Exchange or, if the Common Stock is not listed on the New York
      Stock Exchange, then as reported by the NASDAQ Stock Market or the
      principal other national or regional securities exchange on which the
      shares of the Common Stock are then traded or, if the Common Stock is
      not listed or approved for trading on the NASDAQ Stock Market or another
      national or regional securities exchange, on the principal market
      (including any established electronic over-the-counter trading market in
      the United States) on which shares of the Common Stock are then traded.
      If the Common Stock is not so traded, the “Last Reported Sale Price” of
      the Common Stock will be the average of the midpoint of the last bid and
      ask prices for shares of the Common Stock on the relevant date from each
      of at least three nationally recognized independent investment banking
      firms selected by the Company for this purpose.
    

    
      “Make-Whole Five Day VWAP” means the arithmetic average of
      the Daily VWAP for the five consecutive Trading Days ending on the sixth
      Trading Day after the applicable Conversion Date.
    

    
      “Make-Whole Payment” means the Additional Voluntary
      Conversion Interest Payment and the Additional Post-Termination Interest
      Payment, as applicable.
    

    
      
        

        

      

      
        
          5
        

        
          

        

      

      
        

        

      

    

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

    
      “Officer” means the Chief Executive Officer, the President,
      the Chief Financial Officer, any Vice President, the Treasurer or the
      Secretary of the Company.  The term Officer of any Subsidiary Guarantor
      has a correlative meaning.
    

    
      “Officers’ Certificate” means a certificate signed by
      two Officers or attorneys-in-fact or by an Officer and either an
      Assistant Treasurer or an Assistant Secretary of the Company or the
      Subsidiary Guarantors, as applicable.
    

    
      “Opinion of Counsel” means a written opinion from legal
      counsel who is acceptable to the Trustee.  The counsel may be an
      employee of or counsel to the Company.
    

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

    
      “Preferred Stock”, as applied to the Capital Stock of any
      corporation, means Capital Stock of any class or classes (however
      designated) which is preferred as to the payment of dividends, or as to
      the distribution of assets upon any voluntary or involuntary liquidation
      or dissolution of such corporation, over shares of Capital Stock of any
      other class of such corporation.
    

    
      “Publicly Traded Securities” has the meaning provided in
      the definition of Fundamental Change in this Section 1.01.
    

    
      “Record Date” means, in respect of a dividend or
      distribution to holders of Common Stock, the date fixed for
      determination of holders of Common Stock entitled to receive such
      dividend or distribution.
    

    
      “Redemption Date” means, with respect to any redemption of
      Securities, the date of redemption with respect thereto.
    

    
      “Regular Record Date” for the payment of interest on the
      Securities, means the February 1 (whether or not a Business Day) next
      preceding an interest payment date on February 15 and the August 1
      (whether or not a Business Day) next preceding an interest payment date
      on August 15.
    

    
      “Related Person” means, with respect to any Holder, any
      Person that would be treated as owning shares of Company Stock owned by
      such Holder at any time during the Section 382 Testing Period ending on
      the Conversion Date, applying the attribution rules in Section 382, but
      such term shall not include a “public group” as defined in Treasury
      Regulation Section 1.382-2T(f)(13).
    

    
      
        

        

      

      
        
          6
        

        
          

        

      

      
        

        

      

    

    
      “SEC” means the United States Securities and Exchange
      Commission.
    

    
      “Section 382” means Section 382 of the Code and the
      Treasury Regulations promulgated thereunder.
    

    
      “Section 382 Testing Period” has the meaning ascribed to
      “testing period” in Section 382, as applied to the Company.
    

    
      “Securities” has the meaning ascribed to it in the second
      introductory paragraph of this Indenture.
    

    
      “Securities Custodian” means the custodian with respect to
      the Global Security (as appointed by DTC), or any successor Person
      thereto and shall initially be the Trustee.
    

    
      “Securities Register” means the register of Securities,
      maintained by the Registrar, pursuant to Section 2.05.
    

    
      “Senior Credit Facility” means (i) the Credit Agreement
      dated as of November 22, 2005, among Pier 1 Imports (U.S.), Inc., as
      borrower, Bank of America, N.A., as administrative and collateral agent,
      and the lenders named therein and (ii) any amendment, modification,
      renewal, extension or refinancing thereof.
    

    
      “Significant Subsidiary” means any Subsidiary that would be
      a “Significant Subsidiary” of the Company within the
      meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
    

    
      “Specified Percentage Certifications” means the
      certifications, set forth in Item 1 of the Conversion Notice, that, for
      purposes of applying Section 382 to the Company, the Holder and each of
      its Related Persons, (i) is not and was not a 5% Shareholder with
      respect to the Company at any time during the Section 382 Testing Period
      ending on the applicable Conversion Date and (ii) would not as a result
      of the conversion of the Securities the subject of such Conversion
      Notice become a 5% Shareholder with respect to the Company.
    

    
      “Stated Maturity” means, with respect to any security, the
      date specified in such security as the fixed date on which the payment
      of principal of such security is due and payable, including pursuant to
      any mandatory redemption provision, but shall not include any contingent
      obligations to repay, redeem or repurchase any such principal prior to
      the date originally scheduled for the payment thereof.
    

    
      “Stock Price” means, in respect of a Fundamental Change,
      the price per share of Common Stock paid in connection with such
      Fundamental Change, which shall be equal to (i) if such Fundamental
      Change is a transaction set forth in clause (2) of the definition
      thereof, and holders of Common Stock receive only cash in such
      transaction, the cash amount paid per share of Common Stock and (ii) in
      all other cases, the average of the Last Reported Sale Prices of Common
      Stock over the five Trading-Day period ending on the Trading Day
      preceding the effective date of such Fundamental Change.
    

    
      
        

        

      

      
        
          7
        

        
          

        

      

      
        

        

      

    

    
      “Subsidiary” of the Company means (i) a corporation a
      majority of whose Capital Stock with voting power, under ordinary
      circumstances, to elect directors is at the time, directly or
      indirectly, owned by the Company, by the Company and one or more
      Subsidiaries of the Company or by one or more Subsidiaries of the
      Company or (ii) any other Person (other than a corporation) in which the
      Company, one or more Subsidiaries of the Company or the Company and one
      or more Subsidiaries of the Company, directly or indirectly, at the date
      of determination thereof, has greater than a 50% ownership interest.
    

    
      “Subsidiary Guarantee” means, individually, the guarantee
      of payment of the Securities by a Subsidiary Guarantor pursuant to the
      terms of this Indenture and any supplemental indenture hereto (including
      pursuant to Exhibit B), and, collectively, all such guarantees.  Each
      such Subsidiary Guarantee will be in the form prescribed by this
      Indenture.
    

    
      “Subsidiary Guarantor” means each Subsidiary of the Company
      that is a party to the Senior Credit Facility as of the date hereof, as
      set forth in Schedule A hereto, and any other Subsidiary that executes a
      Subsidiary Guarantee in accordance with the provisions of this
      Indenture; provided, however, that upon the release and discharge of any
      Person from its Subsidiary Guarantee in accordance with this Indenture,
      such Person shall cease to be a Subsidiary Guarantor;
    

    
      “Termination Conversion Price” means, in respect of each
      $1,000 of Securities, 125% of the Conversion Price.
    

    
      “TIA” or “Trust Indenture Act” means the
      Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa 77bbbb), as in effect on
      the date of this Indenture, except as provided in Section 9.03.
    

    
      “Trading Day” means a day during which (i) trading in the
      Common Stock generally occurs, (ii) there is no Market Disruption Event
      and (iii) a Last Reported Sale Price for the Common Stock may be
      obtained for that day.
    

    
      “Trustee” means the party named as such in this Indenture
      until a successor replaces it and, thereafter, means the successor.
    

    
      “Trust Officer” means, when used with respect to the
      Trustee, the officer within the corporate trust department of the
      Trustee having direct responsibility for the administration of this
      Indenture.
    

    
      “UCC” means the Uniform Commercial Code as in effect in the
      State of New York.
    

    
      Section 1.02.  Other Definitions.  
    

    
    	
          
            Term
          

        	
          
            Defined in Section
          

        
	

        	
           
        
	
          “5% Shareholder Provision Waiver Notice”
        	
          12.12
        
	
          “Adjustment Event”
        	
          12.02(l)
        

    

    
      
        

        

      

      
        
          8
        

        
          

        

      

      
        

        

      

    

    
    	
          “Agent”
        	
          3.03
        
	
          “Agent Members”
        	
          2.09
        
	
          “Authenticating Agent”
        	
          2.04
        
	
          “Certificate of Destruction”
        	
          2.14
        
	
          “Company Notice”
        	
          11.03(a)
        
	
          “Company Notice Date”
        	
          11.03(a)
        
	
          “Company Order”
        	
          2.04
        
	
          “Conversion Date”
        	
          12.01(b)
        
	
          “Conversion Rights Termination Date”
        	
          12.10
        
	
          “Conversion Termination Notice”
        	
          12.10(a)
        
	
          “cross acceleration provision”
        	
          6.01
        
	
          “Defaulted Interest”
        	
          2.15
        
	
          “Determination Date”
        	
          12.02(l)
        
	
          “Event of Default”
        	
          6.01
        
	
          “Expiration Time”
        	
          12.02(e)
        
	
          “Fundamental Change Purchase Date”
        	
          11.01
        
	
          “Fundamental Change Purchase Notice”
        	
          11.01(b)
        
	
          “Fundamental Change Purchase Price”
        	
          11.01
        
	
          “Global Security Legend”
        	
          2.03
        
	
          “Indenture Shares”
        	
          12.13(a)
        
	
          “Initial Dividend Rate”
        	
          12.02(d)
        
	
          “judgment default provision”
        	
          6.01
        
	
          “Legal Holiday”
        	
          13.08
        
	
          “Maximum Shares”
        	
          12.13(a)
        
	
          “Obligations”
        	
          10.01
        
	
          “Old Notes”
        	
          12.13(a)
        
	
          “Paying Agent”
        	
          2.05
        
	
          “Post-Termination Preservation of Conversion Rights Legend”
        	
          2.03
        
	
          “Purchase Date”
        	
          11.02(a)
        
	
          “Purchase Notice”
        	
          11.02(a)(i)
        
	
          “Purchase Price”
        	
          11.02(a)
        
	
          “Reorganization Event”
        	
          12.05(a)
        
	
          “Reference Property”
        	
          12.05(a)
        
	
          “Registrar”
        	
          2.05
        
	
          “Redemption Price”
        	
          5.01
        
	
          “Settlement Amount”
        	
          12.01(c)
        
	
          “Special Interest Payment Date”
        	
          2.15(a)
        
	
          “Special Record Date”
        	
          2.15(a)
        
	
          “Spin-Off”
        	
          12.02(c)
        
	
          “Successor Company”
        	
          4.01(a)
        

    

    
      Section 1.03.  Incorporation by Reference of
      Trust Indenture Act.  Whenever this Indenture
      incorporates a provision of the TIA, the provision is incorporated by
      reference in and made a part of this Indenture. To the extent
      applicable, the following TIA terms used in this Indenture have the
      following meanings:
    

    
      “Commission” means the SEC.
    

    
      
        

        

      

      
        
          9
        

        
          

        

      

      
        

        

      

    

    
      “indenture securities” means the Securities.
    

    
      “indenture security holder” means a Securityholder.
    

    
      “indenture to be qualified” means this Indenture.
    

    
      “indenture trustee” or “institutional trustee”
      means the Trustee.
    

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

    
      All other TIA terms used in this Indenture that are defined by the TIA,
      defined in the TIA by reference to another statute or defined by SEC
      rule have the meanings assigned to them by such definitions.
    

    
      Section 1.04.  Rules of Construction.  Unless
      the context otherwise requires:
    

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

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

    
      (c)       “or” is not exclusive;
    

    
      (d)       “including” means including without limitation; and
    

    
      (e)       words in the singular include the plural and words in the
      plural include the singular.
    

    
      Section 1.05.  Section 382 Interpretive Provisions.  For
      purposes of this Indenture:
    

    
      (a)       ownership of Company Stock shall be determined using the rules
      applicable to the Company under Section 382;
    

    
      (b)       the Securities shall not be treated as having been converted
      for purposes of Section 382 prior to the actual conversion thereof; and
    

    
      (c)       Article 12 shall be interpreted and applied in a manner
      consistent with the intent of eliminating increases in the ownership of
      Company Stock by 5% Shareholders other than public groups as determined
      for purposes of applying Section 382 to the Company.
    

    
      ARTICLE 2
THE SECURITIES
    

    
      Section 2.01.  Title; Amount and Issue of
      Securities; Principal and Interest.  (a) The Securities shall be
      known and designated as the “9.0% Convertible Senior Notes due 2036” of
      the Company.  The aggregate principal amount of Securities which may be
      authenticated and delivered under this Indenture is initially limited to
      $86.059 million, except for Securities authenticated and delivered upon
      registration of, transfer of, or in exchange for, or in lieu of other
      Securities pursuant to Section 2.04, Section 2.08, 2.09, 2.10, 2.11,
      2.13, 5.07, 9.05, 11.03, 12.01, 12.09 or 12.10; provided that additional
      Securities may be issued in an unlimited aggregate principal amount from
      time to time thereafter as set forth pursuant to Section 2.04.  The
      Securities shall be issuable in denominations of $1,000 or integral
      multiples thereof.
    

    
      
        

        

      

      
        
          10
        

        
          

        

      

      
        

        

      

    

    
      (b)       The Securities shall mature on February 15, 2036.
    

    
      (c)       Interest on the Securities shall accrue from and including the
      date specified on the face of such Securities until the principal
      thereof is paid or made available for payment.  Interest shall be
      payable semi-annually in arrears on February 15 and August 15 in each
      year, commencing February 15, 2010.
    

    
      (d)       A Holder of any Security after 5:00 p.m., New York City time,
      on a Regular Record Date shall be entitled to receive interest, on such
      Security on the corresponding interest payment date.  Holders of
      Securities after 5:00 p.m., New York City time, on a Regular Record Date
      will receive payment of interest payable on the corresponding interest
      payment date notwithstanding the conversion of such Securities at any
      time after the close of business on such Regular Record
      Date.  Securities surrendered for conversion during the period after
      5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m.,
      New York City time, on the corresponding interest payment date must be
      accompanied by payment of an amount equal to the interest that the
      Holder is to receive on the Securities.  Notwithstanding the foregoing,
      no such payment of interest need be made by any converting Holder (i) if
      the Company has specified a Redemption Date that is after a Regular
      Record Date and on or prior to the third Trading Day after the
      corresponding interest payment date, (ii) if the Company has specified a
      Fundamental Change Purchase Date during such period, or (iii) to the
      extent of any overdue interest existing at the time of conversion of
      such Security.  Except where Securities surrendered for conversion must
      be accompanied by payment as described above, no interest on converted
      Securities will be payable by the Company on any interest payment date
      subsequent to the date of conversion and delivery of the cash and shares
      of Common Stock, if applicable, pursuant to Article 12 hereunder,
      together with any cash payment for any fractional share, upon conversion
      will be deemed to satisfy the Company’s obligation to pay the principal
      amount of the Securities and accrued and unpaid interest, if any, to,
      but not including, the related Conversion Date.
    

    
      (e)       Principal of (and any portion of the Make-Whole Payment and
      Settlement Amount payable in cash, if any) and interest on, Global
      Securities shall be payable to DTC in immediately available funds.
    

    
      (f)       Principal on Definitive Securities shall be payable at the
      office or agency of the Company maintained for such purpose in the
      Borough of Manhattan, The City of New York, and the Company initially
      designates as such office the office of the Trustee acting through The
      Bank of New York Mellon at 101 Barclay Street, 7 East, New York, NY
      10286, Attention: Corporate Trust.  Interest (and any portion of the
      Make-Whole Payment and Settlement Amount payable in cash, if any) on
      Definitive Securities will be payable (i) to Holders having an aggregate
      principal amount of $5,000,000 or less, by check mailed to the Holders
      of these Securities and (ii) to Holders having an aggregate principal
      amount of more than $5,000,000, either by check mailed to each Holder
      or, upon application by a Holder to the Registrar not later than the
      relevant Regular Record Date, by wire transfer in immediately available
      funds to that Holder’s account within the United States, which
      application shall remain in effect until the Holder notifies, in
      writing, the Registrar to the contrary.
    

    
      
        

        

      

      
        
          11
        

        
          

        

      

      
        

        

      

    

    
      Section 2.02.  Form of Securities.
    

    
      (a)       Except as otherwise provided pursuant to this Section 2.02,
      the Securities are issuable in fully registered form without coupons in
      substantially the form of Exhibit A hereto, with such applicable legends
      as are provided for in Section 2.03.  The Securities are not issuable in
      bearer form.  The terms and provisions contained in the form of Security
      shall constitute, and are hereby expressly made, a part of this
      Indenture and to the extent applicable, the Company, the Subsidiary
      Guarantors and the Trustee, by their execution and delivery of this
      Indenture, expressly agree to such terms and provisions and to be bound
      thereby; provided, that to the extent that any provision of the
      Securities conflicts with the express provisions of this Indenture, this
      Indenture shall govern and be controlling.  Any of the Securities may
      have such letters, numbers or other marks of identification and such
      notations, legends and endorsements 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 of this
      Indenture, or as may be required to comply with any 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
      Securities may be listed or designated for issuance, or to conform to
      usage.
    

    
      (b)       The Securities shall be issued initially in the form of one or
      more permanent Global Securities, with the applicable legends as
      provided in Section 2.03.  Each Global Security shall be duly executed
      by the Company and authenticated and delivered by the Trustee, and shall
      be registered in the name of DTC or its nominee and retained by the
      Trustee, as Securities Custodian, at its corporate trust office, for
      credit to the accounts of the Agent Members holding the Securities
      evidenced thereby.  The aggregate principal amount of the Global
      Securities may from time to time be increased or decreased by
      adjustments made on the records of the Trustee, as Securities Custodian,
      and of DTC or its nominee, as hereinafter provided.
    

    
      Section 2.03.  Legends.
    

    
      (a)       Global Security Legend
    

    
      Each Global Security shall bear the following legend (the “Global
      Security Legend”) on the face thereof:
    

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

    
      
        

        

      

      
        
          12
        

        
          

        

      

      
        

        

      

    

    
      TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
      WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
      SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
      SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
      RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO IN THE TERMS OF
      SECURITIES ATTACHED HERETO.”
    

    
      (b)       Legend for Definitive Securities
    

    
      Definitive Securities shall bear a legend substantially in the following
      form:
    

    
      “THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL
      INTEREST IN A GLOBAL SECURITY UNLESS THE HOLDER OF THIS SECURITY,
      SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO SECURITIES.”
    

    
      (c)       Post-Termination Preservation of Conversion Rights Legend
    

    
      In the event that after the date of delivery of the Conversion
      Termination Notice and prior to the Conversion Rights Termination Date,
      a Holder submits a Conversion Notice in respect of which such Holder
      provides the Excess of Specified Percentage Certifications, any
      Securities that such Holder consequently cannot convert shall bear a
      legend in substantially the following form:
    

    
      “THE HOLDER OF THIS SECURITY CONTINUES TO POSSESS THE RIGHT TO CONVERT
      THIS SECURITY INTO COMMON STOCK ON AND AFTER THE CONVERSION RIGHTS
      TERMINATION DATE IN ACCORDANCE WITH THE TERMS OF ARTICLE 12 OF THE
      INDENTURE.”
    

    
      Section 2.04.  Execution and Authentication.  One
      Officer shall sign the Securities for the Company by manual or facsimile
      signature.  If an Officer whose signature is on a Security no longer
      holds that office at the time the Trustee authenticates the Security,
      the Security shall be valid nevertheless.
    

    
      A Security shall not be valid until an authorized signatory of the
      Trustee manually authenticates the Security.  The signature of the
      Trustee on a Security shall be conclusive evidence that such Security
      has been duly and validly authenticated and issued under this
      Indenture.  A Security shall be dated the date of its authentication.
    

    
      At any time and from time to time after the execution and delivery of
      this Indenture, the Company may deliver Securities executed by the
      Company in an unlimited aggregate principal amount to the Trustee for
      authentication, together with a written order of the Company signed by
      two Officers or by an Officer and either an Assistant Treasurer or an
      Assistant Secretary of the Company (the “Company Order”)
      for the authentication and delivery of such Securities, and the Trustee
      in accordance with such Company Order shall authenticate and deliver
      such Securities as in this Indenture provided and not otherwise.  All
      Securities issued on the Issue Date shall be identical in all respects
      with any such Securities authenticated and delivered thereafter, other
      than issue dates, the date from which interest accrues, appropriate
      CUSIP numbers or other identifying notations and any changes relating
      thereto.  Notwithstanding anything to the contrary contained in this
      Indenture, subject to Section 2.12, all Securities issued under this
      Indenture shall vote and consent together on all matters as one class
      and no series of Securities will have the right to vote or consent as a
      separate class on any matter.
    

    
      
        

        

      

      
        
          13
        

        
          

        

      

      
        

        

      

    

    
      The Trustee may appoint an agent (the “Authenticating Agent”)
      reasonably acceptable to the Company to authenticate the
      Securities.  Initially, the Trustee will act as the Authenticating
      Agent.  Any such instrument shall be evidenced by an instrument signed
      by a Trust Officer of the Trustee, a copy of which shall be furnished to
      the Company.  Unless limited by the terms of such appointment, any such
      Authenticating Agent may authenticate Securities whenever the Trustee
      may do so.  Each reference in this Indenture to authentication by the
      Trustee includes authentication by the Authenticating Agent.  An
      Authenticating Agent has the same rights as any Registrar, Paying Agent
      or agent for service of notices and demands.
    

    
      In case the Company or any Subsidiary Guarantor, pursuant to Article 4
      or Section 10.02, shall be consolidated or merged with or into any other
      Person or shall convey, transfer, lease or otherwise dispose of its
      properties and assets substantially as an entirety to any Person, and
      the successor Person resulting from such consolidation, or surviving
      such merger, or into which the Company or any Subsidiary Guarantor shall
      have been merged, or the Person which shall have received a conveyance,
      transfer, lease or other disposition as aforesaid, shall have executed
      an indenture supplemental hereto with the Trustee pursuant to Article 4,
      any of the Securities authenticated or delivered prior to such
      consolidation, merger, conveyance, transfer, lease or other disposition
      may, from time to time, at the request of the successor Person, be
      exchanged for other Securities executed in the name of the successor
      Person with such changes in phraseology and form as may be appropriate,
      but otherwise in substance of like tenor as the Securities surrendered
      for such exchange and of like principal amount; and the Trustee, upon
      Company Order of the successor Person, shall authenticate and deliver
      Securities as specified in such order for the purpose of such
      exchange.  If Securities shall at any time be authenticated and
      delivered in any new name of a successor Person pursuant to this Section
      2.04 in exchange or substitution for or upon registration of transfer of
      any Securities, such successor Person, at the option of the Holders but
      without expense to them, shall provide for the exchange of all
      Securities at the time outstanding for Securities authenticated and
      delivered in such new name.
    

    
      Section 2.05.  Registrar and Paying Agent.  The
      Company shall maintain an office or agency where Securities may be
      presented for registration of transfer or for exchange (the “Registrar”)
      and an office or agency where Securities may be presented for payment
      (the “Paying Agent”).  The Company shall cause each of the
      Registrar and the Paying Agent to maintain an office or agency in the
      Borough of Manhattan, The City of New York, and the Company initially
      designates as Registrar and Paying Agent the Trustee acting through The
      Bank of New York Mellon at 101 Barclay Street, 7 East, New York, NY
      10286, Attention: Corporate Trust.  The Registrar shall keep a register
      of the Securities and of their transfer and exchange (the “Securities
      Register”).  The Company may have one or more co-registrars and one
      or more additional paying agents.  The term “Paying
      Agent” includes any additional paying agent and the term “Registrar”
      includes any co-registrar.
    

    
      
        

        

      

      
        
          14
        

        
          

        

      

      
        

        

      

    

    
      The Company shall enter into an appropriate agency agreement with any
      Registrar, Paying Agent or co-registrar not a party to this Indenture,
      which shall incorporate the terms of the TIA.  The agreement shall
      implement the provisions of this Indenture that relate to such agent.
      The Company shall notify the Trustee of the name and address of each
      such agent.  If the Company fails to maintain a Registrar or Paying
      Agent, the Trustee shall act as such and shall be entitled to
      appropriate compensation therefor pursuant to Section 7.07.  The Company
      or any of its domestically organized, wholly owned Subsidiaries may act
      as Paying Agent, Registrar, co registrar or transfer agent.
    

    
      The Company may remove any Registrar or Paying Agent upon written notice
      to such Registrar or Paying Agent and to the Trustee; provided, however,
      that no such removal shall become effective until (i) acceptance of any
      appointment by a successor as evidenced by an appropriate agreement
      entered into by the Company and such successor Registrar or successor
      Paying Agent, as the case may be, and delivered to the Trustee or (ii)
      notification to the Trustee that the Trustee shall serve as Registrar or
      Paying Agent until the appointment of a successor in accordance with
      clause (i) above.  The Registrar or Paying Agent may resign at any time
      upon written notice to the Company and the Trustee.
    

    
      Section 2.06.  Paying Agent to Hold Money in Trust.  By
      no later than 11:00 a.m., New York City time, on the date on which any
      principal of or interest on any Security or any Additional Voluntary
      Conversion Interest Payment or Additional Post-Termination Interest
      Payment thereon is due and payable, the Company shall deposit with the
      Paying Agent a sum sufficient in immediately available funds to pay such
      principal or interest, Additional Voluntary Conversion Interest Payment
      or Additional Post-Termination Interest Payment when due.  The Company
      shall require each Paying Agent (other than the Trustee) to agree in
      writing that such Paying Agent shall hold in trust for the benefit of
      Securityholders or the Trustee all money held by such Paying Agent for
      the payment of principal of or interest on, or Additional Voluntary
      Conversion Interest Payment or Additional Post-Termination Interest
      Payment in respect of, the Securities and shall notify the Trustee in
      writing of any default by the Company or any Subsidiary Guarantor in
      making any such payment.  If the Company or a Subsidiary acts as Paying
      Agent, it shall segregate the money held by it as Paying Agent and hold
      it as a separate trust fund.  The Company at any time may require a
      Paying Agent (other than the Trustee) to pay all money held by it to the
      Trustee and to account for any funds disbursed by such Paying
      Agent.  Upon complying with this Section 2.06, the Paying Agent (if
      other than the Company or a Subsidiary) shall have no further liability
      for the money delivered to the Trustee.  Upon any bankruptcy,
      reorganization or similar proceeding with respect to the Company, the
      Trustee shall serve as Paying Agent for the Securities.
    

    
      Section 2.07.  Securityholder Lists.  The
      Trustee shall preserve in as current a form as is reasonably practicable
      the most recent list available to it of the names and addresses of
      Securityholders and shall otherwise comply with TIA Section 312(a).  If
      the Trustee is not the Registrar, or to the extent otherwise required
      under the TIA, the Company, on its own behalf and on behalf of each of
      the Subsidiary Guarantors, shall furnish or cause the Registrar to
      furnish to the Trustee, in writing at least five Business Days before
      each interest payment date and at such other times as the Trustee may
      request in writing, a list in such form and as of such date as the
      Trustee may reasonably require of the names and addresses of
      Securityholders and the Company shall otherwise comply with TIA Section
      312(a).
    

    
      
        

        

      

      
        
          15
        

        
          

        

      

      
        

        

      

    

    
      Section 2.08.  General Provisions Relating to Transfer
      and Exchange.  The Securities are issuable only in
      registered form.  A Holder may transfer a Security only by written
      application to the Registrar stating the name of the proposed transferee
      and otherwise complying with the terms of this Indenture.  No such
      transfer shall be effected until, and such transferee shall succeed to
      the rights of a Holder only upon, final acceptance and registration of
      the transfer by the Registrar in the Securities Register.  Furthermore,
      any Holder of a Global Security shall, by acceptance of such Global
      Security, agree that transfers of beneficial interests in such Global
      Security may be effected only through a book-entry system maintained by
      the Holder of such Global Security (or its agent) and that ownership of
      a beneficial interest in the Global Security shall be required to be
      reflected in a book-entry.
    

    
      When Securities are presented to the Registrar with a request to
      register the transfer or to exchange them for an equal aggregate
      principal amount of Securities of other authorized denominations, the
      Registrar shall register the transfer or make the exchange as requested
      if its requirements for such transactions are met (including that such
      Securities are duly endorsed or accompanied by a written instrument of
      transfer duly executed by the Holder thereof or by an attorney who is
      authorized in writing to act on behalf of the Holder).  Subject to
      Section 2.04, to permit registrations of transfers and exchanges, the
      Company shall execute and the Trustee shall authenticate Securities at
      the Registrar’s request.  No service charge shall be made for any
      registration of transfer or exchange or redemption of the Securities,
      but the Company may require payment of a sum sufficient to cover any
      transfer tax or similar governmental charge payable in connection
      therewith (other than any such transfer taxes or other similar
      governmental charge payable upon exchanges in connection with which a
      Security is issued to a Person other than the Holder submitting the
      Security for exchange).
    

    
      Neither the Company nor the Registrar shall be required to exchange or
      register a transfer of any Securities:
    

    
      (a)       for a period of 15 days prior to the mailing of a notice of
      redemption of Securities selected for redemption under Article 5;
    

    
      (b)       so selected for redemption or, if a portion of any Security is
      selected for redemption, the portion thereof selected for redemption; or
    

    
      (c)       surrendered for conversion or, if a portion of any Security is
      surrendered for conversion, the portion thereof surrendered for
      conversion.
    

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

    
      Section 2.09.  Book-Entry Provisions for the Global
      Securities.  (a) The Global Securities initially shall:
    

    
      
        

        

      

      
        
          16
        

        
          

        

      

      
        

        

      

    

    
      (i)       be registered in the name of DTC (or a nominee thereof);
    

    
      (ii)      be delivered to the Trustee as custodian for DTC; and
    

    
      (iii)     bear the Global Security Legend set forth in 2.03(a).
    

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

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

    
      (c)       A Global Security may not be transferred, in whole or in part,
      to any Person other than DTC (or a nominee thereof), and no such
      transfer to any such other Person may be registered.  Beneficial
      interests in a Global Security may be transferred in accordance with the
      rules and procedures of DTC.
    

    
      (d)       If at any time:
    

    
      (i)       DTC notifies the Company in writing that it is unwilling or
      unable to continue to act as depositary for the Global Securities and a
      successor depositary for the Global Securities is not appointed by the
      Company within 90 days of such notice;
    

    
      (ii)      DTC ceases to be registered as a “clearing
      agency” under the Exchange Act and a successor depositary for the
      Global Securities is not appointed by the Company within 90 days of such
      cessation;
    

    
      (iii)     the Company, at its option, notifies the Trustee in writing
      that it elects to cause the issuance of the Definitive Securities under
      this Indenture in exchange for all or any part of the Securities
      represented by a Global Security or Global Securities, subject to the
      procedures of DTC; or
    

    
      (iv)      an Event of Default has occurred and is continuing and the
      Registrar has received a request from DTC for the issuance of Definitive
      Securities in exchange for such Global Security or Global Securities;
    

    
      DTC shall surrender such Global Security or Global Securities to the
      Trustee for cancellation and the Company shall execute, and the Trustee,
      upon receipt of an Officers’ Certificate and Company Order for the
      authentication and delivery of Securities, shall authenticate and
      deliver in exchange for such Global Security or Global Securities,
      Definitive Securities in an aggregate principal amount equal to the
      aggregate principal amount of such Global Security or Global
      Securities.  Such Definitive Securities shall be registered in such
      names as DTC shall identify in writing as the beneficial owners of the
      Securities represented by such Global Security or Global Securities (or
      any nominee thereof).
    

    
      
        

        

      

      
        
          17
        

        
          

        

      

      
        

        

      

    

    
      (e)       Notwithstanding the foregoing, in connection with any transfer
      of beneficial interests in a Global Security to the beneficial owners
      thereof pursuant to Section 2.09(d), the Registrar shall reflect on its
      books and records the date and a decrease in the principal amount of
      such Global Security in an amount equal to the principal amount of the
      beneficial interests in such Global Security to be transferred.
    

    
      Section 2.10.  New Securities Upon Partial Conversion or
      After the Conversion Rights Termination Date.  In the event
      that a Holder delivers Securities for conversion but is only able to
      convert a portion of such Securities pursuant the terms of this
      Indenture, the Company shall execute and the Trustee or the
      Authenticating Agent shall authenticate new Securities as set forth in
      Section 12.09(c) and Section 12.10(f).  In addition, the Company shall
      also execute and the Trustee or the Authenticating Agent shall also
      authenticate new Securities in the event that a Holder preserves its
      conversion rights in respect of its Securities on and after the
      Conversion Rights Termination Date in accordance with Section 12.10(h).
    

    
      Section 2.11.  Mutilated, Destroyed, Lost or Stolen
      Securities.  If a mutilated Security is surrendered to
      the Registrar or if the Holder of a Security claims that the Security
      has been lost, destroyed or wrongfully taken, the Company shall issue
      and the Trustee shall authenticate a replacement Security if the
      requirements of Section 8-405 of the UCC are met, such that the
      Securityholder (a) satisfies the Company or the Trustee within a
      reasonable time after such Securityholder has notice of such loss,
      destruction or wrongful taking and the Registrar has not registered a
      transfer prior to receiving such notification, (b) makes such request to
      the Company or Trustee prior to the Security being acquired by a
      protected purchaser as defined in Section 8-303 of the UCC and (c)
      satisfies any other reasonable requirements of the Trustee.  Such Holder
      shall furnish an indemnity bond sufficient in the judgment of the
      Company and the Trustee to protect the Company, the Trustee, the Paying
      Agent and the Registrar from any loss which any of them may suffer if a
      Security is replaced, and, in the absence of notice to the Company, any
      Subsidiary Guarantor or the Trustee that such Security has been acquired
      by a bona fide purchaser, the Company shall execute and upon Company
      Order the Trustee shall authenticate and make available for delivery, in
      exchange for any such mutilated Security or in lieu of any such
      destroyed, lost or stolen Security, a new Security of like tenor and
      principal amount, bearing a number not contemporaneously outstanding.
    

    
      In case any such mutilated, destroyed, lost or stolen Security has
      become due and payable, the Company in its discretion may, instead of
      issuing a new Security, pay such Security.
    

    
      Upon the issuance of any new Security under this Section 2.11, the
      Company may require the payment by the Holder of a sum sufficient to
      cover any tax or other governmental charge that may be imposed in
      relation thereto and any other expenses (including the fees and expenses
      of the Trustee) in connection therewith.
    

    
      
        

        

      

      
        
          18
        

        
          

        

      

      
        

        

      

    

    
      Every new Security issued pursuant to this Section 2.11 in lieu of any
      mutilated, destroyed, lost or stolen Security shall constitute an
      original additional contractual obligation of the Company, any
      Subsidiary Guarantor (if applicable) and any other obligor upon the
      Securities, whether or not the mutilated, destroyed, lost or stolen
      Security shall be at any time enforceable by anyone, and shall be
      entitled to all benefits of this Indenture equally and ratably with any
      and all other Securities duly issued hereunder.
    

    
      The provisions of this Section 2.11 are exclusive and shall preclude (to
      the extent lawful) all other rights and remedies with respect to the
      replacement or payment of mutilated, destroyed, lost or stolen
      Securities.
    

    
      Section 2.12.  Outstanding Securities.  Securities
      outstanding at any time are all Securities authenticated by the Trustee
      except for those cancelled by it, those delivered to it for cancellation
      and those described in this Section 2.12 as not outstanding.  A Security
      does not cease to be outstanding in the event the Company or a
      Subsidiary of the Company holds the Security; provided, however, that
      (i) for purposes of determining which Securities are outstanding for
      consent or voting purposes hereunder, the provisions of Section 13.06
      shall apply and (ii) in determining whether the Trustee shall be
      protected in making a determination whether the Holders of the requisite
      principal amount of outstanding Securities are present at a meeting of
      Holders of Securities for quorum purposes or have consented to or voted
      in favor of any request, demand, authorization, direction, notice,
      consent, waiver, amendment or modification hereunder, or relying upon
      any such quorum, consent or vote, only Securities which a Trust Officer
      of the Trustee actually knows to be held by the Company or an Affiliate
      of the Company shall not be considered outstanding.
    

    
      If a Security is replaced or paid pursuant to Section 2.11, it ceases to
      be outstanding unless the Trustee and the Company receive proof
      satisfactory to them that the replaced Security is held by a bona fide
      purchaser.
    

    
      If the Paying Agent segregates and holds in trust, in accordance with
      this Indenture, on a Redemption Date or at Stated Maturity, money
      sufficient to pay all principal and interest payable on that date with
      respect to the Securities (or portions thereof) to be redeemed or
      maturing, as the case may be, and the Paying Agent is not prohibited
      from paying such money to the Securityholders on that date pursuant to
      the terms of this Indenture, then on and after that date such Securities
      (or portions thereof) cease to be outstanding and interest on them
      ceases to accrue.
    

    
      Section 2.13.  Temporary Securities.  In the
      event that Definitive Securities are to be issued under the terms of
      this Indenture, until such Definitive Securities are ready for delivery,
      the Company may prepare and upon receipt of a Company Order the Trustee
      shall authenticate temporary Securities.  Temporary Securities shall be
      substantially in the form of Definitive Securities but may have
      variations that the Company considers appropriate for temporary
      Securities.  Without unreasonable delay, the Company shall prepare and
      upon receipt of a Company Order the Trustee shall authenticate
      Definitive Securities.  After the preparation of Definitive Securities,
      the temporary Securities shall be exchangeable for Definitive Securities
      upon surrender of the temporary Securities at any office or agency
      maintained by the Company for that purpose and such exchange shall be
      without charge to the Holder.  Upon surrender for cancellation of any
      one or more temporary Securities, the Company shall execute, and the
      Trustee shall authenticate and make available for delivery in exchange
      therefor, one or more Definitive Securities representing an equal
      principal amount of Securities.  Until so exchanged, the Holder of
      temporary Securities shall in all respects be entitled to the same
      benefits under this Indenture as a Holder of Definitive Securities.
    

    
      
        

        

      

      
        
          19
        

        
          

        

      

      
        

        

      

    

    
      Section 2.14.  Cancellation.  The Company
      at any time may deliver Securities to the Trustee for cancellation.  The
      Registrar and the Paying Agent shall forward to the Trustee any
      Securities surrendered to them for registration of transfer, exchange or
      payment.  The Trustee and no one else shall cancel all Securities
      surrendered for registration of transfer, exchange, payment or
      cancellation and dispose of such Securities in accordance with its
      internal policies and customary procedures including delivery of a
      certificate (a “Certificate of Destruction”) describing
      such Securities disposed (subject to the record retention requirements
      of the Exchange Act) or deliver canceled Securities to the Company
      pursuant to written direction by an Officer.  The Company may not issue
      new Securities to replace Securities it has paid for or delivered to the
      Trustee for cancellation for any reason other than in connection with a
      transfer or exchange.
    

    
      At such time as all beneficial interests in a Global Security have
      either been exchanged for Definitive Securities, transferred, redeemed,
      repurchased or canceled, such Global Security shall be returned by DTC
      to the Trustee for cancellation or retained and canceled by the
      Trustee.  At any time prior to such cancellation, if any beneficial
      interest in a Global Security is exchanged for Definitive Securities,
      transferred in exchange for an interest in another Global Security,
      redeemed, repurchased or canceled, the principal amount of Securities
      represented by such Global Security shall be reduced and an adjustment
      shall be made on the books and records of the Trustee (if it is then the
      Securities Custodian for such Global Security) with respect to such
      Global Security, by the Trustee or the Securities Custodian, to reflect
      such reduction.
    

    
      Section 2.15.  Payment of Interest; Defaulted Interest.  Interest
      on any Security which is payable, and is punctually paid or duly
      provided for, on any interest payment date shall be paid to the Person
      in whose name such Security (or one or more predecessor Securities) is
      registered at the close of business on the Regular Record Date for such
      payment at the office or agency of the Company maintained for such
      purpose pursuant to Section 2.05.
    

    
      Any interest on any Security which is payable, but is not paid when the
      same becomes due and payable and such nonpayment continues for a period
      of 30 days, shall forthwith cease to be payable to the Holder on the
      Regular Record Date, and such defaulted interest and (to the extent
      lawful) interest on such defaulted interest at the rate borne by the
      Securities (such defaulted interest and interest thereon herein
      collectively called “Defaulted Interest”) shall be paid by
      the Company, at its election in each case, as provided in clause (a) or
      (b) below:
    

    
      (a)       The Company may elect to make payment of any Defaulted
      Interest to the Persons in whose names the Securities (or their
      respective predecessor Securities) are registered at the close of
      business on a Special Record Date (as defined below) for the payment of
      such Defaulted Interest, which shall be fixed in the following
      manner.  The Company shall notify the Trustee in writing of the amount
      of Defaulted Interest proposed to be paid on each Security and the date
      (not less than 30 days after such notice) of the proposed payment (the “Special
      Interest Payment Date”), and at the same time the Company shall
      deposit with the Trustee an amount of money equal to the aggregate
      amount proposed to be paid in respect of such Defaulted Interest or
      shall make arrangements satisfactory to the Trustee for such deposit
      prior to the date of the proposed payment, such money when deposited to
      be held in trust for the benefit of the Persons entitled to such
      Defaulted Interest as in this clause provided.  Thereupon the Trustee
      shall fix a record date (the “Special Record Date”) for the
      payment of such Defaulted Interest which shall be not more than 15 days
      and not less than 10 days prior to the Special Interest Payment Date and
      not less than 10 days after the receipt by the Trustee of the notice of
      the proposed payment.  The Trustee shall promptly notify the Company of
      such Special Record Date, and in the name and at the expense of the
      Company, shall cause notice of the proposed payment of such Defaulted
      Interest and the Special Record Date and Special Interest Payment Date
      therefor to be given in the manner provided for in Section 13.02, not
      less than 10 days prior to such Special Record Date.  Notice of the
      proposed payment of such Defaulted Interest and the Special Record Date
      and Special Interest Payment Date therefor having been so given, such
      Defaulted Interest shall be paid on the Special Interest Payment Date to
      the Persons in whose names the Securities (or their respective
      predecessor Securities) are registered at the close of business on such
      Special Record Date and shall no longer be payable pursuant to the
      following clause (b).
    

    
      
        

        

      

      
        
          20
        

        
          

        

      

      
        

        

      

    

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

    
      Subject to the foregoing provisions of this Section 2.15, each Security
      delivered under this Indenture upon registration of, transfer of or in
      exchange for or in lieu of any other Security shall carry the rights to
      interest accrued and unpaid, and to accrue, which were carried by such
      other Security.
    

    
      Section 2.16.  Computation of Interest and Make-Whole
      Payment.  Interest and Make-Whole Payment, if any,
      on the Securities shall be computed on the basis of a 360-day year of
      twelve 30-day months.
    

    
      Section 2.17.  Cusip and ISIN Numbers.  The
      Company in issuing the Securities may use “CUSIP” and “ISIN” numbers (if
      then generally in use) and, if so, the Trustee shall use “CUSIP” and
      “ISIN” numbers in notices of redemption as a convenience to Holders;
      provided, however, that any such notice may state that no representation
      is made as to the correctness of such numbers either as printed on the
      Securities or as contained in any notice of a redemption and that
      reliance may be placed only on the other identification numbers printed
      on the Securities, and any such redemption shall not be affected by any
      defect in or omission of such CUSIP or ISIN numbers.  The Company shall
      promptly notify the Trustee in writing of any change in the CUSIP and
      ISIN numbers.
    

    
      ARTICLE 3
COVENANTS
    

    
      Section 3.01.  Payment of Securities.  The
      Company shall promptly make all payments in respect of the Securities on
      the dates and in the manner provided in the Securities and in this
      Indenture.  All payments made or due pursuant to the Securities and this
      Indenture shall be considered paid on the date due if on such date the
      Trustee or the Paying Agent holds in accordance with this Indenture
      immediately available funds sufficient to pay all such amounts then due
      and the Trustee or the Paying Agent, as the case may be, is not
      prohibited from paying such money to the Securityholders on that date
      pursuant to the terms of this Indenture.
    

    
      
        

        

      

      
        
          21
        

        
          

        

      

      
        

        

      

    

    
      The Company shall pay interest on overdue principal at the rate
      specified therefor in the Securities, and it shall pay interest on
      overdue installments of interest at the same rate to the extent lawful.
    

    
      Notwithstanding anything to the contrary contained in this Indenture,
      the Company may, to the extent it is required to do so by law, deduct or
      withhold income or other similar taxes imposed by the United States of
      America from all payments hereunder.
    

    
      Section 3.02.  Financial Statements.  In
      the event and for so long as the Company is not subject to Section 13 or
      15(d) of the Exchange Act, it shall file with the Trustee and cause to
      be mailed to each Holder at such Holder’s registered address, upon the
      request of any Holder or beneficial holder of the Securities or the
      Common Stock issued upon conversion thereof, and make available to such
      Holder or beneficial holder of such Securities or Common Stock in
      connection with any sale thereof and any prospective purchaser of
      Securities or Common Stock designated by such Holder or beneficial
      holder, the information required pursuant to Rule 144(c)(2) under the
      Securities Act and it will take such further action as any Holder or
      beneficial holder of such Securities or Common Stock may reasonably
      request, all to the extent required from time to time to enable such
      Holder or beneficial holder to sell its Securities or Common Stock
      without registration under the Securities Act within the limitation of
      the exemption provided by Rule 144 of the Securities Act, as such Rule
      may be amended from time to time.
    

    
      Delivery of such reports, information and documents to the Trustee is
      for informational purposes only and the Trustee’s receipt of such shall
      not constitute constructive notice of any information contained therein
      or determinable from information contained therein, including the
      Company’s compliance with any of its covenants hereunder (as to which
      the Trustee is entitled to rely exclusively on Officers’ Certificates).
    

    
      Section 3.03.  Maintenance of Office or Agency.  The
      Company will maintain in the Borough of Manhattan, The City of New York,
      an office or agency where the Securities may be presented or surrendered
      for payment, where, if applicable, the Securities may be surrendered for
      registration of transfer or exchange and where notices and demands to or
      upon the Company in respect of the Securities and this Indenture may be
      served.  The agency of the Trustee (the “Agent”)
      currently located in The City of New York shall be such office or agency
      of the Company, unless the Company shall designate and maintain some
      other office or agency for one or more of such purposes.  The Company
      will give prompt written notice to the Trustee of any change in the
      location of any such office or agency.  If at any time the Company shall
      fail to maintain any such required office or agency or shall fail to
      furnish the Trustee with the address thereof, such presentations,
      surrenders, notices and demands may be made or served at the Agent of
      the Trustee, and the Company hereby appoints the Trustee as its agent to
      receive all such presentations, surrenders, notices and demands.
    

    
      
        

        

      

      
        
          22
        

        
          

        

      

      
        

        

      

    

    
      The Company may also from time to time designate one or more other
      offices or agencies (in or outside of The City of New York) where the
      Securities may be presented or surrendered for any or all such purposes
      and may from time to time rescind any such designation; provided,
      however, that no such designation or rescission shall in any manner
      relieve the Company of its obligation to maintain an office or agency in
      The City of New York for such purposes.  The Company will give prompt
      written notice to the Trustee of any such designation or rescission and
      any change in the location of any such other office or agency.
    

    
      Section 3.04.  Corporate Existence.  Except
      as otherwise provided in Article 4 and Section 10.02(b), the Company
      will do or cause to be done all things necessary to preserve and keep in
      full force and effect its corporate existence and the corporate,
      partnership, limited liability company or other existence of each
      Subsidiary Guarantor and the rights (charter and statutory), licenses
      and franchises of the Company and each Subsidiary Guarantor; provided,
      however, that the Company shall not be required to preserve any such
      right, license or franchise or the corporate, partnership, limited
      liability company or other existence of any Subsidiary Guarantor if the
      Board of Directors of the Company shall determine that the preservation
      thereof is no longer desirable in the conduct of the business of the
      Company and each of its Subsidiaries, taken as a whole, and that the
      loss thereof is not, and will not be, disadvantageous in any material
      respect to the Holders.
    

    
      Section 3.05.  Payment of Taxes and Other Claims.  The
      Company will pay or discharge or cause to be paid or discharged, before
      the same shall become delinquent, (i) all material taxes, assessments
      and governmental charges levied or imposed upon the Company or any
      Subsidiary or upon the income, profits or property of the Company or any
      Subsidiary and (ii) all lawful claims for labor, materials and supplies,
      which, if unpaid, might by law become a material liability or lien upon
      the property of the Company or any Subsidiary; provided, however, that
      the Company shall not be required to pay or discharge or cause to be
      paid or discharged any such tax, assessment, charge or claim whose
      amount, applicability or validity is being contested in good faith by
      appropriate proceedings and for which appropriate reserves, if necessary
      (in the good faith judgment of management of the Company), are being
      maintained in accordance with GAAP or where the failure to effect such
      payment will not be disadvantageous to the Holders.
    

    
      Section 3.06.  Compliance Certificate.  The
      Company shall deliver to the Trustee within 120 days after the end of
      each fiscal year of the Company an Officers’ Certificate, one of the
      signers of which shall be the principal executive officer, principal
      financial officer or principal accounting officer of the Company,
      stating that in the course of the performance by the signers of their
      duties as Officers of the Company they would normally have knowledge of
      any Default or Event of Default and whether or not the signers know of
      any Default or Event of Default that occurred during such period.  If
      they do, the certificate shall describe the Default or Event of Default,
      its status and the action the Company is taking or proposes to take with
      respect thereto.  The Company also shall comply with TIA Section
      314(a)(4).
    

    
      Section 3.07.  Further Instruments and Acts.  Upon
      request of the Trustee, the Company will execute and deliver such
      further instruments and do such further acts as may be reasonably
      necessary or proper to carry out more effectively the purpose of this
      Indenture.
    

    
      
        

        

      

      
        
          23
        

        
          

        

      

      
        

        

      

    

    
      Section 3.08.  Statement by Officers as to Default.  The
      Company shall deliver to the Trustee, as soon as possible and in any
      event within 30 days after the Company becomes aware of the occurrence
      of any Default or Event of Default, an Officers’ Certificate setting
      forth the details of such Default or Event of Default, its status and
      the action which the Company proposes to take with respect thereto.
    

    
      ARTICLE 4
SUCCESSOR COMPANY
    

    
      Section 4.01.  Consolidation, Merger and Sale of Assets.  The
      Company shall not consolidate with or merge with or into, or convey,
      transfer or lease all or substantially all its assets to, another
      Person, unless:
    

    
      (a)       the resulting, surviving or transferee Person (the “Successor
      Company”) if not the Company shall be a corporation, partnership,
      trust or limited liability company organized and existing under the laws
      of the United States of America, any State thereof or the District of
      Columbia and the Successor Company (if not the Company) shall expressly
      assume, by supplemental indenture, executed and delivered to the
      Trustee, in form satisfactory to the Trustee, all the obligations of the
      Company under the Securities and this Indenture;
    

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

    
      (c)       each Subsidiary Guarantor (unless it is the other party to the
      transactions described above, in which case clause (a) and Section 10.02
      shall apply) shall have by supplemental indenture confirmed that its
      Subsidiary Guarantee shall apply for such Person’s obligations in
      respect of this Indenture and the Securities shall continue to be in
      effect; and
    

    
      (d)       the Company shall have delivered to the Trustee an Officers’
      Certificate and an Opinion of Counsel, each stating that such
      consolidation, merger or transfer and such supplemental indenture, if
      any, comply with this Indenture.
    

    
      For purposes of this Section 4.01, the sale, lease, conveyance,
      assignment, transfer, or other disposition of all or substantially all
      of the properties and assets of one or more Subsidiaries of the Company,
      which properties and assets, if held by the Company instead of such
      Subsidiaries, would constitute all or substantially all of the
      properties and assets of the Company on a consolidated basis, shall be
      deemed to be the transfer of all or substantially all of the properties
      and assets of the Company.
    

    
      The Successor Company will succeed to, and be substituted for, and may
      exercise every right and power of, the Company under this Indenture,
      but, in the case of a lease of all or substantially all its assets, the
      Company will not be released from the obligation to pay the principal of
      and interest on the Securities.
    

    
      
        

        

      

      
        
          24
        

        
          

        

      

      
        

        

      

    

    
      ARTICLE 5
REDEMPTION OF SECURITIES
    

    
      Section 5.01.  Optional Redemption.  Prior
      to February 15, 2012, the Securities shall not be redeemable.  On and
      after February 15, 2012, the Securities may be redeemed, as a whole or
      from time to time in part, subject to the conditions set forth herein,
      at a price (the “Redemption Price”) equal to 100% of the
      principal amount of Securities to be redeemed, plus accrued and unpaid
      interest to the Redemption Date; provided that if the Redemption Date
      occurs after a Regular Record Date for the payment of interest and on or
      prior to the related interest payment date, the Redemption Price for any
      such Securities to be redeemed shall be 100% of the principal amount of
      such Securities and accrued and unpaid interest shall be paid to the
      Holder on such Regular Record Date.
    

    
      Section 5.02.  Election to Redeem; Notice to Trustee.  The
      election of the Company to redeem any Securities pursuant to Section
      5.01 shall be evidenced by a Board Resolution.  In case of any
      redemption at the election of the Company, the Company shall, on or
      prior to the date that is 15 days prior to the date on which notice is
      given to the Holders (unless a shorter notice shall be satisfactory to
      the Trustee), notify the Trustee of such Redemption Date and of the
      principal amount of Securities to be redeemed and shall deliver to the
      Trustee such documentation and records as shall enable the Trustee to
      select the Securities to be redeemed pursuant to Section 5.03.  Any such
      notice may be cancelled at any time prior to notice of such redemption
      being mailed to any Holder and shall thereby be void and of no effect.
    

    
      Section 5.03.  Selection by Trustee of Securities to be
      Redeemed.  If less than all the Securities are to be
      redeemed at any time pursuant to an optional redemption, the particular
      Securities to be redeemed shall be selected, not more than 60 days prior
      to the Redemption Date by the Trustee, from the outstanding Securities
      not previously called for redemption, by lot, or on a pro rata basis
      among the classes of Securities or by such other method as the Trustee
      shall deem fair and appropriate (and in such manner as is not prohibited
      by applicable legal requirements) and which may provide for the
      selection for redemption of portions of the principal of the Securities;
      provided, however, that no such partial redemption shall reduce the
      portion of the principal amount of a Security not redeemed to less than
      $1,000.
    

    
      The Trustee shall promptly notify the Company in writing of the
      Securities selected for redemption and, in the case of any Securities
      selected for partial redemption, the principal amount thereof to be
      redeemed.
    

    
      For all purposes of this Indenture, unless the context otherwise
      requires, all provisions relating to redemption of Securities shall
      relate, in the case of any Security redeemed or to be redeemed only in
      part, to the portion of the principal amount of such Security which has
      been or is to be redeemed.
    

    
      If any Securities selected for partial redemption are thereafter
      surrendered for conversion in part before termination of the conversion
      right with respect to the portion of the Securities so selected, the
      converted portion of such Securities shall be deemed (so far as may be),
      solely for purposes of determining the aggregate principal amount of
      Securities to be redeemed by the Company, to be the portion selected for
      redemption. Securities which have been converted during a selection of
      Securities to be redeemed may be treated by the Trustee as outstanding
      for the purpose of such selection. Nothing in this Section 5.03 shall
      affect the right of any Holder to convert any Securities pursuant to
      Article 12 before the termination of the conversion right with respect
      thereto.
    

    
      
        

        

      

      
        
          25
        

        
          

        

      

      
        

        

      

    

    
      Section 5.04.  Notice of Redemption.  Notice
      of redemption shall be given in the manner provided for in Section 13.02
      not less than 45 nor more than 60 days prior to the Redemption Date, to
      each Holder of Securities to be redeemed.  The Trustee shall give notice
      of redemption in the Company’s name and at the Company’s expense;
      provided, however, that the Company shall deliver to the Trustee, at
      least 60 days prior to the Redemption Date, an Officers’ Certificate
      requesting that the Trustee give such notice at the Company’s expense
      and setting forth the information to be stated in such notice as
      provided in the following items.
    

    
      All notices of redemption shall state:
    

    
      (a)       the Redemption Date,
    

    
      (b)       the Redemption Price payable as provided in Section 5.06, if
      any,
    

    
      (c)       the then current Conversion Rate, and provide a statement that
      the Securities called for redemption may be converted prior to the
      Redemption Date pursuant to the terms of the Indenture,
    

    
      (d)       if less than all outstanding Securities are to be redeemed,
      the identification of the particular Securities (or portion thereof) to
      be redeemed, as well as the aggregate principal amount of Securities to
      be redeemed and the aggregate principal amount of Securities to be
      outstanding after such partial redemption,
    

    
      (e)       in case any Security is to be redeemed in part only, the
      notice which relates to such Security shall state that on and after the
      Redemption Date, upon surrender of such Security, the Holder will
      receive, without charge, a new Security or Securities of authorized
      denominations for the principal amount thereof remaining unredeemed,
    

    
      (f)       that on the Redemption Date the Redemption Price will become
      due and payable upon each such Security, or the portion thereof, to be
      redeemed, and, unless the Company defaults in making the redemption
      payment, that interest on Securities called for redemption (or the
      portion thereof) will cease to accrue on and after said date,
    

    
      (g)       the place or places where such Securities are to be
      surrendered for payment of the Redemption Price,
    

    
      (h)       the name and address of the Paying Agent and the Conversion
      Agent,
    

    
      (i)       that Securities called for redemption must be surrendered to
      the Paying Agent to collect the Redemption Price,
    

    
      
        

        

      

      
        
          26
        

        
          

        

      

      
        

        

      

    

    
      (j)       the CUSIP or ISIN number, and that no representation is made
      as to the accuracy or correctness of the CUSIP or ISIN number, if any,
      listed in such notice or printed on the Securities, and
    

    
      (k)       the paragraph of the Securities pursuant to which the
      Securities are to be redeemed.
    

    
      Section 5.05.  Deposit of Redemption Price.  Prior
      to any Redemption Date, the Company shall deposit with the Trustee or
      with a Paying Agent (or, if the Company is acting as its own Paying
      Agent, segregate and hold in trust as provided in Section 2.06) an
      amount of money sufficient to pay the Redemption Price of all the
      Securities which are to be redeemed on that date other than Securities
      or portions of Securities called for redemption that are beneficially
      owned by the Company and have been delivered by the Company to the
      Trustee for cancellation.
    

    
      Section 5.06.  Securities Payable on Redemption Date.  Notice
      of redemption having been given as aforesaid, the Securities so to be
      redeemed shall, on the Redemption Date, become due and payable at the
      Redemption Price, and from and after such date (unless the Company shall
      default in the payment of the Redemption Price or accrued and unpaid
      interest) such Securities shall cease to bear interest.  Upon surrender
      of any such Security for redemption in accordance with said notice, such
      Security shall be paid by the Company at the Redemption Price.
    

    
      If any Security called for redemption shall not be so paid upon
      surrender thereof for redemption, the principal shall, until paid, bear
      interest from the Redemption Date at the rate borne by the Securities.
    

    
      Section 5.07.  Securities Redeemed in Part.  Any
      Security which is to be redeemed only in part (pursuant to the
      provisions of this Article 5) shall be surrendered at the office or
      agency of the Company maintained for such purpose pursuant to Section
      3.03 (with, if the Company or the Trustee so requires, due endorsement
      by, or a written instrument of transfer in form satisfactory to the
      Company and the Trustee duly executed by, the Holder thereof or such
      Holder’s attorney duly authorized in writing), and the Company shall
      execute, and the Trustee shall authenticate and make available for
      delivery to the Holder of such Security at the expense of the Company, a
      new Security or Securities, of any authorized denomination as requested
      by such Holder, in an aggregate principal amount equal to and in
      exchange for the unredeemed portion of the principal of the Security so
      surrendered, provided that each such new Security will be in a principal
      amount of $1,000 or integral multiple thereof.
    

    
      ARTICLE 6
DEFAULTS AND REMEDIES 
    

    
      Section 6.01.  Events of Default.  Each of
      the following is an “Event of Default”:
    

    
      (a)       default in any payment of interest on any Security when the
      same becomes due and payable, and such default continues for a period of
      30 days;
    

    
      
        

        

      

      
        
          27
        

        
          

        

      

      
        

        

      

    

    
      (b)       default in the payment of the principal of any Security when
      the same becomes due and payable at its Stated Maturity, upon optional
      redemption, upon required repurchase, upon declaration or otherwise;
    

    
      (c)       failure by the Company to comply with its obligation to
      convert the Securities into Common Stock (or, pursuant to Section 12.13,
      cash or a combination of cash and Common Stock) and to make the
      Make-Whole Payment, if any, upon exercise of a Holder’s conversion right
      and such failure continues for a period of five days;
    

    
      (d)       failure by the Company to give a Fundamental Change notice to
      Holders when due;
    

    
      (e)       failure by the Company or any Subsidiary Guarantor to comply
      with any of its obligations under Article 4 or Section 10.02;
    

    
      (f)       default in the performance of or a breach by the Company of
      any other covenant or agreement in this Indenture or under the
      Securities (other than those referred to in Section 6.01(a) through
      Section 6.01(e) above or Section 6.01(g) through Section 6.01(i) below)
      and such default continues for 60 days after the notice specified below;
    

    
      (g)       default by the Company or any Subsidiary in the payment of the
      principal or interest on any mortgage, agreement or other instrument
      under which there may be outstanding, or by which there may be secured
      or evidenced any indebtedness for money borrowed in excess of $10
      million in the aggregate of the Company and/or any such Subsidiary,
      whether such indebtedness now exists or shall hereafter be created,
      resulting in such indebtedness becoming or being declared due and
      payable, and such acceleration shall not have been rescinded or annulled
      within 10 days after written notice of such acceleration has been
      received by the Company or such Subsidiary;
    

    
      (h)       the Company or any Significant Subsidiary pursuant to or
      within the meaning of any Bankruptcy Law:
    

    
      (i)       commences a voluntary case or proceeding;
    

    
      (ii)      consents to the entry of judgment, decree or order for relief
      against it in an involuntary case or proceeding;
    

    
      (iii)     consents to the appointment of a Custodian of it or for any
      substantial part of its property;
    

    
      (iv)      makes a general assignment for the benefit of its creditors;
    

    
      (v)       consents to or acquiesces in the institution of a bankruptcy
      or an insolvency proceeding against it;
    

    
      (vi)      takes any corporate action to authorize or effect any of the
      foregoing; or
    

    
      (vii)     takes any comparable action under any foreign laws relating to
      insolvency;
    

    
      
        

        

      

      
        
          28
        

        
          

        

      

      
        

        

      

    

    
      (i)       a court of competent jurisdiction enters an order or decree
      under any Bankruptcy Law that:
    

    
      (i)       is for relief against the Company or any Significant
      Subsidiary in an involuntary case;
    

    
      (ii)      appoints a Custodian of the Company for all or substantially
      all of the Company’s or any Significant Subsidiary’s property; or
    

    
      (iii)     orders the winding up or liquidation of the Company or
      Significant Subsidiary;
    

    
      and, in each case, the order or decree or relief remains unstayed and in
      effect for 90 days;
    

    
      (j)       there has been entered in a court of competent jurisdiction a
      final judgment for the payment of $10.0 million or more (excluding any
      amounts covered by insurance) rendered against the Company or any
      Significant Subsidiary, which judgment is not discharged or stayed
      within 90 days after i) the date on which the right to appeal thereof
      has expired if no such appeal has commenced, or ii) the date on which
      all rights to appeal have been extinguished (“judgment default
      provision”); or
    

    
      (k)       except as permitted by this Indenture, any Subsidiary
      Guarantee shall be held in any judicial proceeding to be unenforceable
      or invalid or shall cease for any reason to be in full force and effect,
      or any Subsidiary Guarantor, or any Person acting on its behalf, shall
      deny or disaffirm its obligation under the Subsidiary Guarantee.
    

    
      The foregoing will constitute Events of Default whatever the reason for
      any such Event of Default and whether it is voluntary or involuntary or
      is effected by operation of law or pursuant to any judgment, decree or
      order of any court or any order, rule or regulation of any
      administrative or governmental body.
    

    
      Notwithstanding the foregoing, a Default under clause (f) of this
      Section 6.01 will not constitute an Event of Default until the Trustee
      or the Holders of 25% or more in principal amount of the outstanding
      Securities notify the Company of the Default in writing and the Company
      does not cure such Default within the time specified in clause (f) of
      this Section 6.01 after receipt of such notice.
    

    
      The Company shall deliver to the Trustee, within 30 days after the
      occurrence thereof, written notice in the form of an Officers’
      Certificate of any Default or Event of Default under clauses (d), (e),
      (f), (g), (j) or (k) of this Section 6.01, which notice shall contain
      the status thereof and a description of the action being taken or
      proposed to be taken by the Company in respect thereof.
    

    
      Section 6.02.  Acceleration.  If an
      Event of Default (other than an Event of Default specified in Section
      6.01(h) or 6.01(i) above) occurs and is continuing, the Trustee by
      notice to the Company, or the Holders of at least 25% in outstanding
      principal amount of the outstanding Securities by notice to the Company
      and the Trustee, may, and the Trustee at the request of such Holders
      shall, declare the principal of and accrued and unpaid interest, if any,
      on (and any portion of the Make-Whole Payment and Settlement Amount
      payable in cash, if any, with respect to) all the Securities to be due
      and payable.  Upon such a declaration, such principal, premium, if any,
      and accrued and unpaid interest, if any (and any portion of the
      Make-Whole Payment and Settlement Amount payable in cash, if any), shall
      be due and payable immediately.  If an Event of Default specified in
      Section 6.01(h) or 6.01(i) above occurs and is continuing, the principal
      of and accrued and unpaid interest, if any, on all the Securities
      outstanding shall be immediately due and payable with no further action
      by the Trustee or the Holders.
    

    
      
        

        

      

      
        
          29
        

        
          

        

      

      
        

        

      

    

    
      Section 6.03.  Other Remedies.  If an Event
      of Default occurs and is continuing, the Trustee may pursue any
      available remedy to collect the payment of principal of or interest on
      (and any portion of the Make-Whole Payment and Settlement Amount payable
      in cash, if any, with respect to) the Securities or to enforce the
      performance of any provision of the Securities or this Indenture.
    

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

    
      Section 6.04.  Waiver of Past Defaults.  The
      Holders of a majority in principal amount of the outstanding Securities
      by notice to the Trustee may (a) waive, by their consent (including,
      without limitation, consents obtained in connection with a purchase of,
      or tender offer or exchange offer for, Securities), an existing Default
      or Event of Default and its consequences except (1) a Default or Event
      of Default in the payment of the principal of or interest on a Security
      or in the payment of any portion of the Make-Whole Payment and
      Settlement Amount payable in cash, if any, or (2) a Default or Event of
      Default in respect of a provision that under Section 9.02 cannot be
      amended without the consent of each Securityholder affected and (b)
      rescind any such acceleration with respect to the Securities and its
      consequences if (1) rescission would not conflict with any judgment or
      decree of a court of competent jurisdiction and (2) all existing Events
      of Default, other than the nonpayment of the principal of and interest
      on the Securities that have become due solely by such declaration of
      acceleration, have been cured or waived.  When a Default or Event of
      Default is waived, it is deemed cured, but no such waiver shall extend
      to any subsequent or other Default or Event of Default or impair any
      consequent right.
    

    
      Section 6.05.  Control by Majority.  The
      Holders of a majority in principal amount of the outstanding Securities
      may direct the time, method and place of conducting any proceeding for
      any remedy available to the Trustee or of exercising any trust or power
      conferred on the Trustee.  However, the Trustee may refuse to follow any
      direction that conflicts with law or this Indenture or, subject to
      Sections 7.01 and 7.02, that the Trustee determines is unduly
      prejudicial to the rights of other Securityholders or would involve the
      Trustee in personal liability; provided, however, that the Trustee may
      take any other action deemed proper by the Trustee that is not
      inconsistent with such direction.
    

    
      Section 6.06.  Limitation on Suits.  Subject
      to Section 6.07, a Securityholder may not pursue any remedy with respect
      to this Indenture or the Securities unless:
    

    
      
        

        

      

      
        
          30
        

        
          

        

      

      
        

        

      

    

    
      (a)       such Holder has previously given to the Trustee written notice
      stating that an Event of Default is continuing;
    

    
      (b)       Holders of at least 25% in principal amount of the outstanding
      Securities have requested that the Trustee pursue the remedy;
    

    
      (c)       such Holders have offered to the Trustee security or indemnity
      reasonably satisfactory to it against any loss, liability or expense to
      be incurred in compliance with such request;
    

    
      (d)       the Trustee has not complied with such request within 60 days
      after receipt of the request and the offer of security or indemnity; and
    

    
      (e)       the Holders of a majority in principal amount of the
      outstanding Securities have not given the Trustee a direction that, in
      the opinion of the Trustee, is inconsistent with such request within
      such 60-day period.
    

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

    
      Section 6.07.  Rights of Holders to Receive Payment.  Notwithstanding
      any other provision of this Indenture (including, without limitation,
      Section 6.06), the right of any Holder to receive payment of principal
      of or interest on (or any portion of the Make-Whole Payment and
      Settlement Amount payable in cash, if any, with respect to) the
      Securities held by such Holder, on or after the respective due dates
      expressed in the Securities, or to bring suit for the enforcement of any
      such payment on or after such respective dates, shall not be impaired or
      affected without the consent of such Holder.
    

    
      Section 6.08.  Collection Suit by Trustee.  If
      an Event of Default specified in clauses (a) or (b) of Section 6.01
      occurs and is continuing, the Trustee may recover judgment in its own
      name and as trustee of an express trust against the Company for the
      whole amount then due and owing (together with interest on any unpaid
      interest to the extent lawful) and the amounts provided for in Section
      7.07.
    

    
      Section 6.09.  Trustee May File Proofs of Claim.  The
      Trustee may file such proofs of claim and other papers or documents as
      may be necessary or advisable in order to have the claims of the Trustee
      (including any claim for the reasonable compensation, expenses,
      disbursements and advances of the Trustee, its agents and counsel) and
      the Securityholders allowed in any judicial proceedings relative to the
      Company, its Subsidiaries or its or their respective creditors or
      properties and, unless prohibited by law or applicable regulations, may
      be entitled and empowered to participate as a member of any official
      committee of creditors appointed in such matter, and may vote on behalf
      of the Holders in any election of a trustee in bankruptcy or other
      Person performing similar functions, and any Custodian in any such
      judicial proceeding is hereby authorized by each Holder to make payments
      to the Trustee and, in the event that the Trustee shall consent to the
      making of such payments directly to the Holders, to pay to the Trustee
      any amount due for the reasonable compensation, expenses, disbursements
      and advances of the Trustee, its agents and its counsel, and any other
      amounts due to the Trustee under Section 7.07.
    

    
      
        

        

      

      
        
          31
        

        
          

        

      

      
        

        

      

    

    
      Section 6.10.  Priorities.  If the Trustee
      collects any money or property pursuant to this Article 6, it shall pay
      out the money or property in the following order:
    

    
      FIRST:  to the Trustee for amounts due under Section 7.07;
    

    
      SECOND:  to Securityholders for amounts due and unpaid on the Securities
      for principal and interest, ratably, without preference or priority of
      any kind, according to the amounts due and payable on the Securities for
      principal and interest (and any portion of the Make-Whole Payment and
      Settlement Amount payable in cash, if any), respectively; and
    

    
      THIRD:  to the Company.
    

    
      The Trustee may fix a record date and payment date for any payment to
      Securityholders pursuant to this Section 6.10.  At least 15 days before
      such record date, the Company shall mail to each Securityholder and the
      Trustee a notice that states the record date, the payment date and
      amount to be paid.
    

    
      Section 6.11.  Restoration of Rights and Remedies.  If
      the Trustee or any Holder has instituted a proceeding to enforce any
      right or remedy under this Indenture and the proceeding has been
      discontinued or abandoned for any reason, or has been determined
      adversely to the Trustee or to the Holder, then, subject to any
      determination in the proceeding, the Company, the Subsidiary Guarantors,
      the Trustee, any Subsidiaries and the Holders will be restored severally
      and respectively to their former positions hereunder and thereafter all
      rights and remedies of the Company, any Subsidiary Guarantors, the
      Trustee, any Subsidiaries and the Holders will continue as though no
      such proceeding had been instituted.
    

    
      Section 6.12.  Undertaking of Costs.  In any
      suit for the enforcement of any right or remedy under this Indenture or
      in any suit against the Trustee for any action taken or omitted by it as
      Trustee, a court in its discretion may require the filing by any party
      litigant in the suit of an undertaking to pay the costs of the suit, and
      the court in its discretion may assess reasonable costs, including
      reasonable attorneys’ fees and expenses, against any party litigant in
      the suit, having due regard to the merits and good faith of the claims
      or defenses made by the party litigant.  This Section 6.12 does not
      apply to a suit by the Trustee, a suit by the Company, a suit by a
      Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
      outstanding principal amount of the Securities.
    

    
      ARTICLE 7
TRUSTEE
    

    
      Section 7.01.  Duties of Trustee.  (a)
      If an Event of Default has occurred and is continuing, the Trustee shall
      exercise the rights and powers vested in it by this Indenture and use
      the same degree of care and skill in its exercise as a prudent Person
      would exercise or use under the circumstances in the conduct of such
      Person’s own affairs; provided that if an Event of Default occurs and is
      continuing, the Trustee will be under no obligation to exercise any of
      the rights or powers under this Indenture at the request or direction of
      any of the Holders unless such Holders have offered to the Trustee
      reasonable indemnity or security against loss, liability or expense that
      might be incurred in compliance with such request or direction.
    

    
      
        

        

      

      
        
          32
        

        
          

        

      

      
        

        

      

    

    
      (b)       Except during the continuance of an Event of Default:
    

    
      (i)       the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture and no implied
      covenants or obligations shall be read into this Indenture against the
      Trustee; and
    

    
      (ii)      in the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates, opinions or orders
      furnished to the Trustee and conforming to the requirements of this
      Indenture.  However, in the case of any such certificates, opinions or
      orders which by any provisions hereof are specifically required to be
      furnished to the Trustee, the Trustee shall examine such certificates
      and opinions to determine whether or not they conform to the
      requirements of this Indenture (but need not confirm or investigate the
      accuracy of mathematical calculations or other facts stated therein).
    

    
      (c)       The Trustee may not be relieved from liability for its own
      negligent action, its own negligent failure to act or its own willful
      misconduct, except that:
    

    
      (i)       this paragraph does not limit the effect of paragraph (b) of
      this Section 7.01;
    

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

    
      (iii)     the Trustee shall not be liable with respect to any action it
      takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 6.05.
    

    
      (d)       Every provision of this Indenture that in any way relates to
      the Trustee is subject to paragraphs (a), (b) and (c) of this Section
      7.01.
    

    
      (e)       The Trustee shall not be liable for interest on any money
      received by it except as the Trustee may agree in writing with the
      Company.
    

    
      (f)       Money held in trust by the Trustee need not be segregated from
      other funds except to the extent required by law.
    

    
      (g)       No provision of this Indenture shall require the Trustee to
      expend or risk its own funds or otherwise incur financial liability in
      the performance of any of its duties hereunder or in the exercise of any
      of its rights or powers, if it shall have reasonable grounds to believe
      that repayment of such funds or adequate indemnity against such risk or
      liability is not reasonably assured to it.
    

    
      (h)       Every provision of this Indenture relating to the conduct or
      affecting the liability of or affording protection to the Trustee shall
      be subject to the provisions of this Section 7.01 and to the provisions
      of the TIA.
    

    
      
        

        

      

      
        
          33
        

        
          

        

      

      
        

        

      

    

    
      (i)       Unless otherwise specifically provided in this Indenture, any
      demand, request, direction or notice from the Company shall be
      sufficient if signed by an Officer of the Company.
    

    
      Section 7.02.  Rights of Trustee.  Subject to Section
      7.01:
    

    
      (a)       The Trustee may conclusively rely on any document (whether in
      its original or facsimile form) reasonably believed by it to be genuine
      and to have been signed or presented by the proper person.  The Trustee
      need not investigate any fact or matter stated in the document.  The
      Trustee shall receive and retain financial reports and statements of the
      Company as provided herein, but shall have no duty to review or analyze
      such reports or statements to determine compliance under covenants or
      other obligations of the Company.
    

    
      (b)       Before the Trustee acts or refrains from acting, it may
      require an Officers’ Certificate and/or an Opinion of Counsel.  The
      Trustee shall not be liable for any action it takes or omits to take in
      good faith in reliance on an Officers’ Certificate or Opinion of Counsel.
    

    
      (c)       The Trustee may act through its attorneys and agents and shall
      not be responsible for the misconduct or negligence of any agent
      appointed with due care.
    

    
      (d)       The Trustee shall not be liable for any action it takes or
      omits to take in good faith which it believes to be authorized or within
      its rights or powers, unless the Trustee’s conduct constitutes willful
      misconduct or negligence.
    

    
      (e)       The Trustee may consult with counsel of its selection, and the
      advice or opinion of counsel with respect to legal matters relating to
      this Indenture and the Securities shall be full and complete
      authorization and protection from liability in respect to any action
      taken, omitted or suffered by it hereunder in good faith and in
      accordance with the advice or opinion of such counsel.
    

    
      (f)       The Trustee shall not be responsible or liable for special,
      indirect, or consequential loss or damage of any kind whatsoever
      (including, but not limited to, loss of profit) resulting from actions
      taken in good faith and which the Trustee believes to be authorized or
      within its rights or powers, unless the Trustee’s conduct constitutes
      willful misconduct or negligence.
    

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

    
      (h)       The Trustee may request that the Company deliver a certificate
      setting forth the names of individuals and/or titles of officers
      authorized at such time to take specified actions pursuant to this
      Indenture.
    

    
      Section 7.03.  Individual Rights of Trustee.  The
      Trustee in its individual or any other capacity may become the owner or
      pledgee of Securities and may otherwise deal with the Company or its
      Affiliates with the same rights it would have if it were not
      Trustee.  Any Paying Agent, Registrar, co-registrar or co-paying agent
      may do the same with like rights.  However, the Trustee must comply with
      Sections 7.10 and 7.11.  In addition, the Trustee shall be permitted to
      engage in transactions with the Company; provided, however, that if the
      Trustee acquires any conflicting interest the Trustee must (i) eliminate
      such conflict within 90 days of acquiring such conflicting interest,
      (ii) apply to the SEC for permission to continue acting as Trustee or
      (iii) resign.
    

    
      
        

        

      

      
        
          34
        

        
          

        

      

      
        

        

      

    

    
      Section 7.04.  Trustee’s Disclaimer.  The
      Trustee shall not be responsible for and makes no representation as to
      the validity or adequacy of this Indenture or the Securities, shall not
      be accountable for the Company’s use of the proceeds from the
      Securities, shall not be responsible for the use or application of any
      money received by any Paying Agent other than the Trustee and shall not
      be responsible for any statement of the Company in this Indenture or in
      any document issued in connection with the sale of the Securities or in
      the Securities other than the Trustee’s certificate of authentication.
    

    
      Section 7.05.  Notice of Defaults.  If a
      Default or Event of Default occurs and is continuing and if a Trust
      Officer of the Trustee has actual knowledge thereof, the Trustee shall
      mail by first class mail to each Securityholder at the address set forth
      in the Securities Register notice of the Default or Event of Default
      within 90 days after it occurs.  Except in the case of a Default or
      Event of Default in payment of principal of or interest on any Security
      (including payments of any portion of the Make-Whole Payment and
      Settlement Amount payable in cash, if any, and payments pursuant to the
      optional redemption or required repurchase provisions of such Security,
      if any), the Trustee may withhold the notice if and so long as its board
      of directors, a committee of its board of directors or a committee of
      its Trust Officers in good faith determines that withholding the notice
      is in the interests of Securityholders.
    

    
      Section 7.06.  Reports by Trustee to Holders.  As
      promptly as practicable after each May 15 beginning with the May 15
      following the date of this Indenture, and in any event prior to July 1
      in each year, the Trustee shall mail to each Securityholder a brief
      report dated as of such May 15 that complies with TIA Section 313(a), if
      required by such TIA Section 313(a).  The Trustee also shall comply with
      TIA Section 313(b).  The Trustee shall also transmit by mail all reports
      required by TIA Section 313(c).
    

    
      Section 7.07.  Compensation and Indemnity.  The
      Company shall pay to the Trustee from time to time such compensation for
      its acceptance of this Indenture and services hereunder as the Company
      and the Trustee shall from time to time agree in writing.  The Trustee’s
      compensation shall not be limited by any law on compensation of a
      trustee of an express trust.  In addition to the compensation the
      Company shall reimburse the Trustee upon request for all reasonable
      out-of-pocket expenses incurred or made by it.  Such expenses shall
      include the reasonable compensation and out-of-pocket expenses,
      disbursements and advances of the Trustee’s agents, counsel, accountants
      and experts.  The Company shall indemnify the Trustee against any and
      all loss, liability, damages, claims or expense (including reasonable
      attorneys’ fees and expenses) incurred by it without negligence or bad
      faith on its part in connection with the administration of this trust
      and the performance of its duties hereunder, including the costs and
      expenses of enforcing this Indenture (including this Section 7.07) and
      of defending itself against any claims (whether asserted by any
      Securityholder, the Company or otherwise).  The Trustee shall notify the
      Company promptly of any claim for which it may seek indemnity.  Failure
      by the Trustee to so notify the Company shall not relieve the Company of
      its obligations hereunder.  The Company shall defend the claim and the
      Trustee shall provide reasonable cooperation at the Company’s expense in
      the defense.  The Trustee may have separate counsel and the Company
      shall pay the fees and expenses of such counsel, provided that the
      Company shall not be required to pay such fees and expenses if it
      assumes the Trustee’s defense, and, in the reasonable judgment of
      outside counsel to the Trustee, there is no conflict of interest between
      the Company and the Trustee in connection with such defense.  The
      Company need not reimburse any expense or indemnify against any loss,
      liability or expense incurred by the Trustee through the Trustee’s own
      willful misconduct, negligence or bad faith.
    

    
      
        

        

      

      
        
          35
        

        
          

        

      

      
        

        

      

    

    
      To secure the Company’s payment obligations in this Section 7.07, the
      Trustee shall have a lien prior to the Securities on all money or
      property held or collected by the Trustee other than money or property
      held in trust to pay principal of and interest on (and any portion of
      the Make-Whole Payment and Settlement Amount payable in cash, if any,
      with respect to) particular Securities.  Such lien shall survive the
      satisfaction and discharge of this Indenture.  The Trustee’s right to
      receive payment of any amounts due under this Section 7.07 shall not be
      subordinate to any other unsecured liability or debt of the Company.
    

    
      The Company’s payment obligations pursuant to this Section 7.07 shall
      survive the discharge of this Indenture.  When the Trustee incurs
      expenses after the occurrence of a Default specified in clauses (h) and
      (i) of Section 6.01 with respect to the Company, the expenses are
      intended to constitute expenses of administration under any Bankruptcy
      Law.
    

    
      Section 7.08.  Replacement of Trustee.  The
      Trustee may resign at any time by so notifying the Company.  The Holders
      of a majority in principal amount of the Securities may remove the
      Trustee by so notifying the Trustee and may appoint a successor
      Trustee.  The Company shall remove the Trustee if:
    

    
      (a)       the Trustee fails to comply with Section 7.10;
    

    
      (b)       the Trustee is adjudged bankrupt or insolvent;
    

    
      (c)       a receiver or other public officer takes charge of the Trustee
      or its property; or
    

    
      (d)       the Trustee otherwise becomes incapable of acting.
    

    
      If the Trustee resigns or is removed by the Company or by the Holders of
      a majority in principal amount of the Securities and such Holders do not
      reasonably promptly appoint a successor Trustee, or if a vacancy exists
      in the office of the Trustee for any reason (the Trustee in such event
      being referred to herein as the retiring Trustee), the Company shall
      promptly appoint a successor Trustee.
    

    
      A successor Trustee shall deliver a written acceptance of its
      appointment to the retiring Trustee and to the Company.  Thereupon the
      resignation or removal of the retiring Trustee shall become effective,
      and the successor Trustee shall have all the rights, powers and duties
      of the Trustee under this Indenture.  The successor Trustee shall mail a
      notice of its succession to Securityholders.  The retiring Trustee shall
      promptly transfer all property held by it as Trustee to the successor
      Trustee, subject to the lien provided for in Section 7.07.
    

    
      
        

        

      

      
        
          36
        

        
          

        

      

      
        

        

      

    

    
      If a successor Trustee does not take office within 60 days after the
      retiring Trustee resigns or is removed, the retiring Trustee or the
      Holders of at least 10% in principal amount of the Securities may
      petition, at the Company’s expense, any court of competent jurisdiction
      for the appointment of a successor Trustee.
    

    
      If the Trustee fails to comply with Section 7.10, unless the Trustee’s
      duty to resign is stayed as provided in TIA Section 310(b), any
      Securityholder may petition any court of competent jurisdiction for the
      removal of the Trustee and the appointment of a successor Trustee.
    

    
      Notwithstanding the replacement of the Trustee pursuant to this Section
      7.08, the Company’s obligations under Section 7.07 shall continue for
      the benefit of the retiring Trustee.
    

    
      Section 7.09.  Successor Trustee by Merger.  If
      the Trustee consolidates with, merges or converts into, or transfers all
      or substantially all its corporate trust business or assets to, another
      corporation or banking association, the resulting, surviving or
      transferee corporation without any further act shall be the successor
      Trustee.
    

    
      In case at the time such successor or successors by merger, conversion
      or consolidation to the Trustee shall succeed to the trusts created by
      this Indenture, any of the Securities shall have been authenticated but
      not delivered, any such successor to the Trustee may adopt the
      certificate of authentication of any predecessor trustee, and deliver
      such Securities so authenticated; and in case at that time any of the
      Securities shall not have been authenticated, any successor to the
      Trustee may authenticate such Securities either in the name of any
      predecessor hereunder or in the name of the successor to the Trustee;
      provided that the right to adopt the certificate of authentication of
      any predecessor Trustee or authenticate Securities in the name of any
      predecessor Trustee shall only apply to its successor or successors by
      merger, consolidation or conversion.
    

    
      Section 7.10.  Eligibility; Disqualification.  The
      Trustee shall at all times satisfy the requirements of TIA Section
      310(a).  The Trustee shall have a combined capital and surplus of at
      least $100 million as set forth in its most recent published annual
      report of condition.  The Trustee shall comply with TIA Section 310(b);
      provided, however, that there shall be excluded from the operation of
      TIA Section 310(b)(1) any indenture or indentures under which other
      securities or certificates of interest or participation in other
      securities of the Company are outstanding if the requirements for such
      exclusion set forth in TIA Section 310(b)(1) are met.
    

    
      Section 7.11.  Preferential Collection of Claims Against
      Company.  The Trustee shall comply with TIA Section
      311(a), excluding any creditor relationship listed in TIA Section
      311(b).  A Trustee who has resigned or been removed shall be subject to
      TIA Section 311(a) to the extent indicated.
    

    
      Section 7.12.  Trustee’s Application for Instruction
      from the Company.  Any application by the Trustee for
      written instructions from the Company may, at the option of the Trustee,
      set forth in writing any action proposed to be taken or omitted by the
      Trustee under this Indenture and the date on and/or after which such
      action shall be taken or such omission shall be effective.  The Trustee
      shall not be liable for any action taken by, or omission of, the Trustee
      in accordance with a proposal included in such application on or after
      the date specified in such application (which date shall not be less
      than three Business Days after the date any officer of the Company
      actually receives such application, unless any such officer shall have
      consented in writing to any earlier date) unless prior to taking any
      such action (or the effective date in the case of an omission), the
      Trustee shall have received written instructions in response to such
      application specifying the action to be taken or omitted.
    

    
      
        

        

      

      
        
          37
        

        
          

        

      

      
        

        

      

    

    
      ARTICLE 8
DISCHARGE OF INDENTURE 
    

    
      Section 8.01.  Discharge of Liability on Securities.  When
      (1) the Company shall deliver to the Registrar for cancellation all
      Securities theretofore authenticated (other than any Securities which
      have been destroyed, lost or stolen and in lieu of or in substitution
      for which other Securities shall have been authenticated and delivered)
      and not theretofore canceled, or (2) all the Securities not theretofore
      canceled or delivered to the Registrar for cancellation shall have (a)
      been deposited for conversion and the Company shall deliver to the
      Holders cash and shares of Common Stock, as applicable, sufficient to
      pay all amounts owing in respect of all Securities (other than any
      Securities which shall have been mutilated, destroyed, lost or stolen
      and in lieu of or in substitution for which other Securities shall have
      been authenticated and delivered) not theretofore canceled or delivered
      to the Registrar for cancellation or (b) become due and payable on the
      Stated Maturity, Purchase Date, Fundamental Change Purchase Date or
      Redemption Date, as applicable, and the Company shall deposit with the
      Trustee cash or shares of Common Stock, as applicable, sufficient to pay
      all amounts owing in respect of all Securities (other than any
      Securities which shall have been mutilated, destroyed, lost or stolen
      and in lieu of or in substitution for which other Securities shall have
      been authenticated and delivered) not theretofore canceled or delivered
      to the Registrar for cancellation, including the principal amount and
      interest accrued and unpaid to such Stated Maturity, Purchase Date,
      Fundamental Change Purchase Date or Redemption Date, as the case may be,
      and if in either case (1) or (2) the Company shall also pay or cause to
      be paid all other sums payable hereunder by the Company, then this
      Indenture with respect to the Securities shall cease to be of further
      effect (except as to (i) remaining rights of registration of transfer,
      substitution and exchange and conversion of Securities; (ii) rights
      hereunder of Holders to receive payments of the amounts then due,
      including interest with respect to the Securities and the other rights,
      duties and obligations of Holders, as beneficiaries hereof with respect
      to the amounts, if any, so deposited with the Trustee; and (iii) the
      rights, obligations and immunities of the Trustee, Authenticating Agent,
      Paying Agent, Conversion Agent and Registrar under this Indenture with
      respect to the Securities), and the Trustee, on demand of the Company
      accompanied by an Officers’ Certificate and an Opinion of Counsel as
      required by Section 8.03 and at the cost and expense of the Company,
      shall execute proper instruments acknowledging satisfaction of and
      discharging this Indenture with respect to the Securities; the Company,
      however, hereby agrees to reimburse the Trustee, Authenticating Agent,
      Paying Agent, Conversion Agent and Registrar for any costs or expenses
      thereafter reasonably and properly incurred by the Trustee,
      Authenticating Agent, Paying Agent, Conversion Agent and Registrar and
      to compensate the Trustee, Authenticating Agent, Paying Agent,
      Conversion Agent and Registrar for any services thereafter reasonably
      and properly rendered by the Trustee, Authenticating Agent, Paying
      Agent, Conversion Agent and Registrar in connection with this Indenture
      with respect to the Securities.
    

    
      
        

        

      

      
        
          38
        

        
          

        

      

      
        

        

      

    

    
      Section 8.02.  Reinstatement.  If the
      Trustee or the Paying Agent is unable to apply any money to the Holders
      entitled thereto by reason of any order or judgment of any court of
      governmental authority enjoining, restraining or otherwise prohibiting
      such application, the Company’s obligations under this Indenture with
      respect to the Securities and the Securities shall be revived and
      reinstated as though no deposit had occurred pursuant to Section 8.01
      until such time as the Trustee or the Paying Agent is permitted to apply
      all such money in accordance with this Indenture and the Securities to
      the Holders entitled thereto; provided, however, that if the Company
      makes any payment of principal amount of or interest on (or any portion
      of the Make-Whole Payment and Settlement Amount payable in cash, if any,
      with respect to) any Securities following the reinstatement of its
      obligations, the Company shall be subrogated to the rights of the
      Holders of such Securities to receive such payment from the money held
      by the Trustee or Paying Agent.
    

    
      Section 8.03.  Officers’ Certificate; Opinion of Counsel.  Upon
      any application or demand by the Company to the Trustee to take any
      action under Section 8.01, the Company shall furnish to the Trustee an
      Officers’ Certificate stating that all conditions precedent, if any,
      provided for in this Indenture relating to the proposed action have been
      complied with, and an Opinion of Counsel stating that, in the opinion of
      such counsel, all such conditions precedent have been complied with.
    

    
      Each certificate or Opinion of Counsel provided for in this Indenture
      and delivered to the Trustee with respect to compliance with a condition
      or covenant pursuant to the previous paragraph shall include: (1) a
      statement that the Person making such certificate or opinion has read
      such covenant or condition; (2) a brief statement as to the nature and
      scope of the examination or investigation upon which the statement or
      opinion contained in such certificate or opinion is based; (3) a
      statement that, in the opinion of such Person, such Person has made such
      examination or investigation as is necessary to enable him to express an
      informed opinion as to whether or not such covenant or condition has
      been complied with; and (4) a statement as to whether or not, in the
      opinion of such Person, such condition or covenant has been complied
      with.
    

    
      ARTICLE 9
AMENDMENTS
    

    
      Section 9.01.  Without Consent of Holders.  The
      Company, the Subsidiary Guarantors and the Trustee may amend this
      Indenture or the Securities without notice to or consent of any
      Securityholder:
    

    
      (a)       to cure any ambiguity, omission, defect or inconsistency;
    

    
      (b)       to comply with Article 4 in respect of the assumption by a
      Successor Company of an obligation of the Company or a Subsidiary
      Guarantor under this Indenture;
    

    
      (c)       to provide for uncertificated Securities in addition to or in
      place of certificated Securities; provided, however, that the
      uncertificated Securities are issued in registered form for purposes of
      Section 163(f) of the Code or in a manner such that the uncertificated
      Securities are described in Section 163(f)(2)(B) of the Code;
    

    
      
        

        

      

      
        
          39
        

        
          

        

      

      
        

        

      

    

    
      (d)       to add guarantees with respect to the Securities;
    

    
      (e)       to secure the Securities;
    

    
      (f)       to add to the covenants of the Company for the benefit of the
      Holders or to surrender any right or power herein conferred upon the
      Company;
    

    
      (g)       to comply with any requirement of the SEC in connection with
      the qualification of this Indenture under the TIA;
    

    
      (h)       to make any change that does not materially adversely affect
      the rights of any Securityholder;
    

    
      (i)       to terminate the conversion rights of the Holders pursuant to
      Section 12.10; or
    

    
      (j)       to waive the provisions limiting the ability of the Holders to
      convert Securities pursuant to Section 12.12.
    

    
      After an amendment under this Section 9.01 becomes effective, the
      Company shall mail to Securityholders a notice briefly describing such
      amendment.  The failure to give such notice to all Securityholders, or
      any defect therein, shall not impair or affect the validity of an
      amendment under this Section 9.01.
    

    
      Section 9.02.  With Consent of Holders.  The
      Company, the Subsidiary Guarantors and the Trustee may amend this
      Indenture or the Securities without notice to any Securityholder but
      with the written consent of the Holders of at least a majority in
      principal amount of the Securities then outstanding (including, without
      limitation, consents obtained in connection with a purchase of, or
      tender offer or exchange offer for, Securities) and compliance with the
      provisions of this Indenture may be waived with the written consent of
      the Holders of at least a majority in principal amount of the Securities
      then outstanding (including, without limitation, consents obtained in
      connection with a purchase of, or tender offer or exchange offer for,
      Securities).  However, without the consent of each Securityholder
      affected, an amendment or waiver may not:
    

    
      (a)       reduce the amount of Securities whose Holders must consent to
      an amendment;
    

    
      (b)       reduce the rate of or extend the stated time for payment of
      interest on any Security;
    

    
      (c)       reduce the principal of or extend the Stated Maturity of any
      Security;
    

    
      (d)       make any change that adversely affects the conversion rights
      of any Securities;
    

    
      (e)       reduce the Redemption Price, the Fundamental Change Purchase
      Price, the Purchase Price payable upon the redemption or repurchase or
      conversion of any Security or amend or modify in any manner adverse to
      holders of the Securities the Company’s obligation to make such
      payments, whether through an amendment to or waiver of a provision in
      the covenants, definitions or otherwise;
    

    
      
        

        

      

      
        
          40
        

        
          

        

      

      
        

        

      

    

    
      (f)       make any Security payable in money other than that stated in
      the Security (it being understood that all references to cash in this
      Indenture and the Securities are to U.S. legal tender) or, other than in
      accordance with the provisions of this Indenture in effect on the Issue
      Date, eliminate any existing Subsidiary Guarantee of the Securities;
    

    
      (g)       impair the right of any Holder to receive payment of principal
      of and interest on (and any portion of the Make-Whole Payment and
      Settlement Amount payable in cash, if any, with respect to) such
      Holder’s Securities on or after the due dates therefor or to institute
      suit for the enforcement of any payment on or with respect to such
      Holder’s Securities; or
    

    
      (h)       make any change to the amendment provisions which require each
      Holder’s consent or to the waiver provisions.
    

    
      It shall not be necessary for the consent of the Holders under this
      Section 9.02 to approve the particular form of any proposed amendment or
      waiver, but it shall be sufficient if such consent approves the
      substance thereof. A consent to any amendment or waiver under this
      Indenture by any Holder of the Securities given in connection with a
      tender or exchange of such Holder’s Securities will not be rendered
      invalid by such tender or exchange.
    

    
      After an amendment under this Section 9.02 becomes effective, the
      Company shall mail to Securityholders a notice briefly describing such
      amendment.  The failure to give such notice to all Securityholders, or
      any defect therein, shall not impair or affect the validity of an
      amendment under this Section 9.02.
    

    
      Section 9.03.  Compliance with Trust Indenture Act.  Every
      amendment to this Indenture or the Securities shall comply with the TIA
      as then in effect.
    

    
      Section 9.04.  Revocation and Effect of Consents and
      Waivers.  A consent to an amendment or a waiver by a
      Holder of a Security shall bind the Holder and every subsequent Holder
      of that Security or portion of the Security that evidences the same debt
      as the consenting Holder’s Security, even if notation of the consent or
      waiver is not made on the Security.  However, any such Holder or
      subsequent Holder may revoke the consent or waiver as to such Holder’s
      Security or portion of the Security if the Trustee receives the notice
      of revocation before the date the amendment or waiver becomes effective
      or otherwise in accordance with any related solicitation
      documents.  After an amendment or waiver becomes effective, it shall
      bind every Securityholder.  An amendment or waiver shall become
      effective upon receipt by the Trustee of the requisite number of written
      consents under Section 9.01 or 9.02, as applicable.
    

    
      The Company may, but shall not be obligated to, fix a record date for
      the purpose of determining the Securityholders entitled to give their
      consent or take any other action described above or required or
      permitted to be taken pursuant to this Indenture.  If a record date is
      fixed, then notwithstanding the immediately preceding paragraph, those
      Persons who were Securityholders at such record date (or their duly
      designated proxies), and only those Persons, shall be entitled to give
      such consent or to revoke any consent previously given or to take any
      such action, whether or not such Persons continue to be Holders after
      such record date.  No such consent shall become valid or effective more
      than 120 days after such record date.
    

    
      
        

        

      

      
        
          41
        

        
          

        

      

      
        

        

      

    

    
      Section 9.05.  Notation on or Exchange of Securities.  If
      an amendment changes the terms of a Security, the Trustee may require
      the Holder of the Security to deliver it to the Trustee.  The Trustee
      may place an appropriate notation on the Security regarding the changed
      terms and return it to the Holder.  Alternatively, if the Company or the
      Trustee so determines, the Company in exchange for the Security shall
      issue and the Trustee shall authenticate a new Security that reflects
      the changed terms.  Failure to make the appropriate notation or to issue
      a new Security shall not affect the validity of such amendment.
    

    
      Section 9.06.  Trustee to Sign Amendments.  The
      Trustee shall sign any amendment authorized pursuant to this Article 9
      if the amendment does not adversely affect the rights, duties,
      liabilities or immunities of the Trustee.  If it does, the Trustee may
      but need not sign it.  In signing such amendment the Trustee shall be
      entitled to receive indemnity reasonably satisfactory to it and to
      receive, and (subject to Sections 7.01 and 7.02) shall be fully
      protected in relying upon, an Officers’ Certificate and an Opinion of
      Counsel stating that such amendment is authorized or permitted by this
      Indenture and that such amendment is the legal, valid and binding
      obligation of the Company and any Subsidiary Guarantors, enforceable
      against them in accordance with its terms, subject to customary
      exceptions, and complies with the provisions hereof (including Section
      9.03).
    

    
      ARTICLE 10
SUBSIDIARY GUARANTEE 
    

    
      Section 10.01.  Subsidiary Guarantee.  Each
      Subsidiary Guarantor hereby fully, unconditionally and irrevocably
      guarantees, as primary obligor and not merely as surety, jointly and
      severally with each other Subsidiary Guarantor, to each Holder of the
      Securities and the Trustee the full and punctual payment when due,
      whether at maturity, by acceleration, by redemption or otherwise, of the
      principal of and interest on (and any portion of the Make-Whole Payment
      and Settlement Amount payable in cash, if any, with respect to) the
      Securities and all other obligations and liabilities of the Company
      under this Indenture (including without limitation interest accruing
      after the filing of any petition in bankruptcy, or the commencement of
      any insolvency, reorganization or like proceeding, relating to the
      Company or any Subsidiary Guarantor whether or not a claim for
      post-filing or post-petition interest is allowed in such proceeding)
      (all the foregoing being hereinafter collectively called the “Obligations”).  Each
      Subsidiary Guarantor further agrees (to the extent permitted by law)
      that the Obligations may be extended or renewed, in whole or in part,
      without notice or further assent from it, and that it will remain bound
      under this Article 10 notwithstanding any extension or renewal of any
      Obligation.
    

    
      Each Subsidiary Guarantor waives presentation to, demand of payment from
      and protest to the Company of any of the Obligations and also waives
      notice of protest for nonpayment.  Each Subsidiary Guarantor waives
      notice of any default under the Securities or the Obligations.  The
      obligations of each Subsidiary Guarantor hereunder shall not be affected
      by (a) the failure of any Holder to assert any claim or demand or to
      enforce any right or remedy against the Company or any other person
      under this Indenture, the Securities or any other agreement or
      otherwise; (b) any extension or renewal of any thereof; (c) any
      rescission, waiver, amendment or modification of any of the terms or
      provisions of this Indenture, the Securities or any other agreement; (d)
      the release of any security held by any Holder or the Trustee for the
      Obligations or any of them; (e) the failure of any Holder to exercise
      any right or remedy against any other Subsidiary Guarantor; or (f) any
      change in the ownership of the Company.
    

    
      
        

        

      

      
        
          42
        

        
          

        

      

      
        

        

      

    

    
      Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
      herein constitutes a guarantee of payment when due (and not a guarantee
      of collection) and waives any right to require that any resort be had by
      any Holder to any security held for payment of the Obligations.
    

    
      The obligations of each Subsidiary Guarantor hereunder shall not be
      subject to any reduction, limitation, impairment or termination for any
      reason (other than payment of the Obligations in full), including any
      claim of waiver, release, surrender, alteration or compromise, and shall
      not be subject to any defense of setoff, counterclaim, recoupment or
      termination whatsoever or by reason of the invalidity, illegality or
      unenforceability of the Obligations or otherwise.  Without limiting the
      generality of the foregoing, the obligations of each Subsidiary
      Guarantor herein shall not be (to the extent permitted by law)
      discharged or impaired or otherwise affected by the failure of any
      Holder to assert any claim or demand or to enforce any remedy under this
      Indenture, the Securities or any other agreement, by any waiver or
      modification of any thereof, by any default, failure or delay, willful
      or otherwise, in the performance of the Obligations, or by any other act
      or thing or omission or delay to do any other act or thing which may or
      might in any manner or to any extent vary the risk of any Subsidiary
      Guarantor or would otherwise operate as a discharge of such Subsidiary
      Guarantor as a matter of law or equity.
    

    
      Each Subsidiary Guarantor agrees that its Subsidiary Guarantee herein
      shall remain in full force and effect until payment in full of all the
      Obligations or until such Subsidiary Guarantor is released from its
      Subsidiary Guarantee upon the merger or the sale of all the Capital
      Stock or assets of the Subsidiary Guarantor in compliance with Section
      10.02.  Each Subsidiary Guarantor further agrees that its Subsidiary
      Guarantee herein shall continue to be effective or be reinstated, as the
      case may be, if at any time payment, or any part thereof, of principal
      of or interest (or any portion of the Make-Whole Payment and Settlement
      Amount payable in cash, if any), on any of the Obligations is rescinded
      or must otherwise be restored by any Holder upon the bankruptcy or
      reorganization of the Company or otherwise.
    

    
      In furtherance of the foregoing and not in limitation of any other right
      which any Holder has at law or in equity against any Subsidiary
      Guarantor by virtue hereof, upon the failure of the Company to pay any
      of the Obligations when and as the same shall become due, whether at
      maturity, by acceleration, by redemption or otherwise, each Subsidiary
      Guarantor hereby promises to and will, upon receipt of written demand by
      the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders
      an amount equal to the sum of (i) the unpaid amount of such Obligations
      then due and owing and (ii) accrued and unpaid interest  on such
      Obligations then due and owing (but only to the extent not prohibited by
      law).
    

    
      Each Subsidiary Guarantor further agrees that, as between such
      Subsidiary Guarantor, on the one hand, and the Holders, on the other
      hand, (x) the maturity of the Obligations guaranteed hereby may be
      accelerated as provided in this Indenture for the purposes of its
      Subsidiary Guarantee herein, notwithstanding any stay, injunction or
      other prohibition preventing such acceleration in respect of the
      Obligations guaranteed hereby and (y) in the event of any such
      declaration of acceleration of such Obligations, such Obligations
      (whether or not due and payable) shall forthwith become due and payable
      by the Subsidiary Guarantor for the purposes of this Subsidiary
      Guarantee.
    

    
      
        

        

      

      
        
          43
        

        
          

        

      

      
        

        

      

    

    
      Each Subsidiary Guarantor also agrees to pay any and all reasonable
      costs and expenses (including reasonable attorneys’ fees and expenses)
      incurred by the Trustee in enforcing any rights under this Section 10.01.
    

    
      Section 10.02.  Limitation on Liability; Termination,
      Release and Discharge Upon Merger or Consolidation; Termination on
      Conversion. (a) The obligations of each Subsidiary Guarantor
      hereunder will be limited to the maximum amount as will, after giving
      effect to all other contingent and fixed liabilities of such Subsidiary
      Guarantor (including, without limitation, any guarantees under the
      Senior Credit Facility) and after giving effect to any collections from
      or payments made by or on behalf of any other Subsidiary Guarantor in
      respect of the obligations of such other Subsidiary Guarantor under its
      Subsidiary Guarantee or pursuant to its contribution obligations under
      this Indenture, result in the obligations of such Subsidiary Guarantor
      under its Subsidiary Guarantee not constituting a fraudulent conveyance
      or fraudulent transfer under federal or state law and not otherwise
      being void or voidable under any similar laws affecting the rights of
      creditors generally.
    

    
      (b)       Each Subsidiary Guarantor may consolidate with or merge into
      or sell its assets to the Company or another Subsidiary Guarantor
      without limitation. Subject to Section 3.04 and Article 4, (i) the
      Company may sell or otherwise dispose (including by way of merger or
      consolidation), in one or more series of related transactions, of a
      majority of the total voting power of the Capital Stock or other
      interests of any Subsidiary Guarantor, or (ii) a Subsidiary Guarantor
      may sell or otherwise dispose all or substantially all of such
      Subsidiary Guarantor’s assets (including by way of merger or
      consolidation); provided that if the surviving Person of any such merger
      or consolidation is not the Company or an Affiliate of the Company, or
      any such sale is not to the Company or an Affiliate of the Company, such
      merger, consolidation or sale shall not be permitted unless:
    

    
      (A)       the Person formed by or surviving any such consolidation or
      merger or to whom such sale is made is a corporation, partnership, trust
      or limited liability company organized existing under the laws of the
      United States of America, any State thereof or the District of Columbia
      and assumes all the obligations of such Subsidiary under the Subsidiary
      Guarantee pursuant to a supplemental indenture in form and substance
      reasonably satisfactory to the Trustee in respect of the Securities,
      this Indenture and the Subsidiary Guarantee,
    

    
      (B)       immediately after giving effect to such transaction, no
      Default or Event of Default exists; and
    

    
      (C)       the Company delivers to the Trustee an Officers’ Certificate
      and an Opinion of Counsel addressed to the Trustee with respect to the
      foregoing matters.
    

    
      Upon the sale or disposition of a Subsidiary Guarantor (by merger,
      consolidation, the sale of its Capital Stock or the sale of all or
      substantially all of its assets (other than by lease)), which sale or
      disposition is otherwise in compliance with this Indenture, such
      Subsidiary Guarantor will be released from all its obligations under
      this Indenture and its Subsidiary Guarantee will terminate.  Each
      Subsidiary Guarantee with respect to a Security will automatically
      terminate immediately prior to such Security’s conversion.
    

    
      
        

        

      

      
        
          44
        

        
          

        

      

      
        

        

      

    

    
      (c)       Each Subsidiary Guarantor will be deemed released from all its
      obligations under this Indenture and its Subsidiary Guarantee and such
      Subsidiary Guarantee will terminate upon the discharge of the Securities
      pursuant to the provisions of Article 8 hereof.
    

    
      Section 10.03.  Right of Contribution.  Each
      Subsidiary Guarantor hereby agrees that to the extent that any
      Subsidiary Guarantor shall have paid more than its proportionate share
      of any payment made on the obligations under the Subsidiary Guarantees,
      such Subsidiary Guarantor shall be entitled to seek and receive
      contribution from and against the Company or any other Subsidiary
      Guarantor who has not paid its proportionate share of such payment.  The
      provisions of this Section 10.03 shall in no respect limit the
      obligations and liabilities of each Subsidiary Guarantor to the Trustee
      and the Holders and each Subsidiary Guarantor shall remain liable to the
      Trustee and the Holders for the full amount guaranteed by such
      Subsidiary Guarantor hereunder.
    

    
      Section 10.04.  No Subrogation.  Notwithstanding
      any payment or payments made by each Subsidiary Guarantor hereunder, no
      Subsidiary Guarantor shall be entitled to be subrogated to any of the
      rights of the Trustee or any Holder against the Company or any other
      Subsidiary Guarantor or any collateral security or guarantee or right of
      offset held by the Trustee or any Holder for the payment of the
      Obligations, nor shall any Subsidiary Guarantor seek or be entitled to
      seek any contribution or reimbursement from the Company or any other
      Subsidiary Guarantor in respect of payments made by such Subsidiary
      Guarantor hereunder, until all amounts owing to the Trustee and the
      Holders by the Company on account of the Obligations are paid in
      full.  If any amount shall be paid to any Subsidiary Guarantor on
      account of such subrogation rights at any time when all of the
      Obligations shall not have been paid in full, such amount shall be held
      by such Subsidiary Guarantor in trust for the Trustee and the Holders,
      segregated from other funds of such Subsidiary Guarantor, and shall,
      forthwith upon receipt by such Subsidiary Guarantor, be turned over to
      the Trustee in the exact form received by such Subsidiary Guarantor
      (duly indorsed by such Subsidiary Guarantor to the Trustee, if
      required), to be applied against the Obligations.
    

    
      ARTICLE 11
PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE;
      PURCHASE AT THE OPTION OF HOLDERS 
    

    
      Section 11.01.  Purchase at the Option of the Holder
      Upon a Fundamental Change.  If a Fundamental Change shall
      occur at any time, each Holder shall have the right, at such Holder’s
      option, to require the Company to purchase any or all of such Holder’s
      Securities on a date specified by the Company that is no later than 35
      calendar days after the date of the Company Notice of the occurrence of
      such Fundamental Change (subject to extension to comply with applicable
      law, as provided in Section 11.03(d)) (the “Fundamental Change
      Purchase Date”). The Securities shall be repurchased in integral
      multiples of $1,000 of the principal amount. The Company shall purchase
      such Securities at a price (the “Fundamental Change Purchase
      Price”), which shall be paid in cash, equal to 100% of the principal
      amount of the Securities to be purchased plus accrued and unpaid
      interest to but excluding the Fundamental Change Purchase Date, unless
      the Fundamental Change Purchase Date is between a Regular Record Date
      and the interest payment date to which it relates, in which case the
      Fundamental Change Purchase Price shall equal 100% of the principal
      amount of Securities to be purchased and accrued and unpaid interest
      shall be paid to the Holder of record on the Regular Record Date.
    

    
      
        

        

      

      
        
          45
        

        
          

        

      

      
        

        

      

    

    
      (a)       Notice of Fundamental
      Change.  The Company, or at its request (which must be received by
      the Paying Agent at least three Business Days (or such lesser period as
      agreed to by the Paying Agent) prior to the date the Paying Agent is
      requested to give such notice as described below) the Paying Agent, in
      the name of and at the expense of the Company, shall mail to all Holders
      and the Trustee a Company Notice of the occurrence of a Fundamental
      Change and of the purchase right arising as a result thereof, including
      the information required by Section 11.03(a) hereof, on or before the
      20th calendar day after the occurrence of such Fundamental Change. The
      Company shall promptly furnish to the Paying Agent a copy of such
      Company Notice.
    

    
      (b)       Exercise of Option.  For
      a Security to be so purchased at the option of the Holder, the Paying
      Agent must receive such Security duly endorsed for transfer, together
      with a written notice of purchase (a “Fundamental Change
      Purchase Notice”) in the form entitled “Form of Fundamental Change
      Purchase Notice” attached to the Security duly completed, on or before
      the Business Day immediately preceding the Fundamental Change Purchase
      Date, subject to extension to comply with applicable law. The
      Fundamental Change Purchase Notice shall state:
    

    
      (i)       if certificated, the certificate numbers of the Securities
      which the Holder shall deliver to be purchased;
    

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

    
      (iii)     that such Securities shall be purchased as of the Fundamental
      Change Purchase Date pursuant to the terms and conditions specified in
      paragraph 4 of the Securities and in this Indenture.
    

    
      (c)       Procedures. The
      Company shall purchase from a Holder, pursuant to this Section 11.01,
      Securities if the principal amount of such Securities is $1,000 or a
      multiple of $1,000 if so requested by such Holder.
    

    
      Any purchase by the Company contemplated pursuant to the provisions of
      this Section 11.01 shall be consummated by the delivery of the
      Fundamental Change Purchase Price to be received by the Holder promptly
      following the later of the Fundamental Change Purchase Date or the time
      of book-entry transfer or delivery of the Securities.
    

    
      Notwithstanding anything herein to the contrary, any Holder delivering
      to the Paying Agent the Fundamental Change Purchase Notice contemplated
      by this Section 11.01 shall have the right at any time prior to the
      close of business on the Business Day prior to the Fundamental Change
      Purchase Date to withdraw such Fundamental Change Purchase Notice (in
      whole or in part) by delivery of a written notice of withdrawal to the
      Paying Agent in accordance with Section 11.03(b).
    

    
      
        

        

      

      
        
          46
        

        
          

        

      

      
        

        

      

    

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

    
      On or before 11:00 a.m. (New York City time) on the Fundamental Change
      Purchase Date, the Company shall deposit with the Paying Agent (or if
      the Company or an Affiliate of the Company is acting as the Paying
      Agent, shall segregate and hold in trust) cash sufficient to pay the
      aggregate Fundamental Change Purchase Price of the Securities to be
      purchased pursuant to this Section 11.01. Payment by the Paying Agent of
      the Fundamental Change Purchase Price for such Securities shall be made
      promptly following the later of the Fundamental Change Purchase Date or
      the time of book-entry transfer or delivery of such Securities. Subject
      to Section 12.02 herein, no payment or adjustment shall be made for
      dividends on the Common Stock the record date for which occurred on or
      prior to the Fundamental Change Purchase Date. If the Paying Agent
      holds, in accordance with the terms of this Indenture, cash sufficient
      to pay the Fundamental Change Purchase Price of such Securities on the
      Fundamental Change Purchase Date, then, on and after such date, such
      Securities shall cease to be outstanding and interest, on such
      Securities shall cease to accrue, whether or not book-entry transfer of
      such Securities is made or such Securities are delivered to the Paying
      Agent, and all other rights of the Holder shall terminate (other than
      the right to receive the Fundamental Change Purchase Price and
      previously accrued and unpaid interest, upon delivery or transfer of the
      Securities).  Nothing herein shall preclude any withholding tax required
      by law.
    

    
      The Company shall require each Paying Agent (other than the Trustee) to
      agree in writing that the Paying Agent shall hold in trust for the
      benefit of Holders or the Trustee all cash held by the Paying Agent for
      the payment of the Fundamental Change Purchase Price and shall notify
      the Trustee of any default by the Company in making any such payment. If
      the Company or an Affiliate of the Company acts as Paying Agent, it
      shall segregate the cash held by it as Paying Agent and hold it as a
      separate trust fund. The Company at any time may require a Paying Agent
      to deliver all cash held by it to the Trustee and to account for any
      funds disbursed by the Paying Agent. Upon doing so, the Paying Agent
      shall have no further liability for the cash delivered to the Trustee.
    

    
      Section 11.02.  Purchase of Securities at the Option of
      the Holder.
    

    
      (a)       On each of February 15, 2013, February 15, 2016, February 15,
      2021, February 15, 2026 and February 15, 2031 (each a “Purchase
      Date”), at a price (the “Purchase Price”), which
      shall be paid in cash, equal to 100% of the principal amount of the
      Securities to be repurchased plus any accrued and unpaid interest to but
      excluding the Purchase Date, a Holder shall have the option to require
      the Company to purchase any outstanding Securities, upon:
    

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

    
      
        

        

      

      
        
          47
        

        
          

        

      

      
        

        

      

    

    
      (A)       if certificated, the certificate numbers of the Securities
      which the Holder will deliver to be purchased, or, if not certificated,
      the Purchase Notice must comply with appropriate DTC procedures;
    

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

    
      (C)       that such Securities shall be purchased as of the Purchase
      Date pursuant to the terms and conditions specified in paragraph 6 of
      the Securities and in this Indenture; and
    

    
      (ii)      delivery or book-entry transfer of such Securities to the
      Paying Agent (together with all necessary endorsements) at the offices
      of the Paying Agent, such delivery or transfer being a condition to
      receipt by the Holder of the Purchase Price therefor; provided, however,
      that such Purchase Price shall be so paid pursuant to this Section 11.02
      only if the Securities so delivered or transferred to the Paying Agent
      shall conform in all respects to the description thereof in the related
      Purchase Notice.
    

    
      (b)       The Company shall purchase from a Holder, pursuant to this
      Section 11.02, Securities if the principal amount of such Securities is
      $1,000 or a multiple of $1,000 if so requested by such Holder.
    

    
      (c)       Any purchase by the Company contemplated pursuant to the
      provisions of this Section 11.02 shall be consummated by the delivery of
      the Purchase Price to be received by the Holder promptly following the
      later of the Purchase Date or the time of book-entry transfer or
      delivery of the Securities.
    

    
      (d)       Notwithstanding anything herein to the contrary, any Holder
      delivering to the Paying Agent the Purchase Notice contemplated by this
      Section 11.02 shall have the right at any time prior to the close of
      business on the Business Day prior to the Purchase Date to withdraw such
      Purchase Notice (in whole or in part) by delivery of a written notice of
      withdrawal to the Paying Agent in accordance with Section 11.03(b).
    

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

    
      (f)       On or before 11:00 a.m. (New York City time) on the 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) cash sufficient to pay the aggregate
      Purchase Price of the Securities to be purchased pursuant to this
      Section 11.02.  Payment by the Paying Agent of the Purchase Price for
      such Securities shall be made promptly following the later of the
      Purchase Date or the time of book-entry transfer or delivery of such
      Securities.  Subject to Section 12.02 herein and paragraph 6 of the
      Securities, no payment or adjustment shall be made for dividends on the
      Common Stock the record date for which occurred on or prior to the
      Purchase Date. If the Paying Agent holds, in accordance with the terms
      of this Indenture, cash sufficient to pay the Purchase Price of such
      Securities on the Purchase Date, then, on and after such date, such
      Securities shall cease to be outstanding and interest on such Securities
      shall cease to accrue, whether or not book-entry transfer of such
      Securities is made or such Securities are delivered to the Paying Agent,
      and all other rights of the Holder shall terminate (other than the right
      to receive the Purchase Price and previously accrued interest upon
      delivery or transfer of the Securities). Nothing herein shall preclude
      any withholding tax required by law.
    

    
      
        

        

      

      
        
          48
        

        
          

        

      

      
        

        

      

    

    
      (g)       The Company shall require each Paying Agent (other than the
      Trustee) to agree in writing that the Paying Agent shall hold in trust
      for the benefit of Holders or the Trustee all cash held by the Paying
      Agent for the payment of the Purchase Price and shall notify the Trustee
      of any default by the Company in making any such payment. If the Company
      or an Affiliate of the Company acts as Paying Agent, it shall segregate
      the cash held by it as Paying Agent and hold it as a separate trust
      fund. The Company at any time may require a Paying Agent to deliver all
      cash held by it to the Trustee and to account for any funds disbursed by
      the Paying Agent. Upon doing so, the Paying Agent shall have no further
      liability for the cash delivered to the Trustee.
    

    
      Section 11.03.  Further Conditions and Procedures for
      Purchase at the Option of the Holder Upon a Fundamental Change and
      Purchase of Securities at the Option of the Holder.  
    

    
      (a)       Notice of Purchase Date
      or Fundamental Change. The Company shall send notices (each, a “Company
      Notice”) to the Holders (and to beneficial owners as required by
      applicable law) at their addresses shown in the Securities Register
      maintained by the Registrar, and delivered to the Trustee and Paying
      Agent, not less than 20 Business Days prior to each Purchase Date, or on
      or before the 20th calendar day after the occurrence of a Fundamental
      Change, as the case may be (each such date of delivery, a “Company
      Notice Date”). Each Company Notice shall include a form of Purchase
      Notice or Fundamental Change Purchase Notice to be completed by a Holder
      and shall state:
    

    
      (i)       the applicable Purchase Price or Fundamental Change Purchase
      Price;
    

    
      (ii)      Conversion Rate at the time of such notice and any expected
      adjustments to the Conversion Rate;
    

    
      (iii)     the applicable Purchase Date or Fundamental Change Purchase
      Date and the last date on which a Holder may exercise its repurchase
      rights under Section 11.01 or Section 11.02 as applicable;
    

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

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

    
      (vi)      that Securities as to which a Purchase Notice or Fundamental
      Change Purchase Notice has been given may be converted only if the
      applicable Purchase Notice or Fundamental Change Purchase Notice has
      been withdrawn in accordance with the terms of this Indenture;
    

    
      (vii)     that the Purchase Price or Fundamental Change Purchase Price
      for any Securities as to which a Purchase Notice or a Fundamental Change
      Purchase Notice, as applicable, has been given and not withdrawn shall
      be paid by the Paying Agent promptly following the later of the Purchase
      Date or Fundamental Change Purchase Date, as applicable, or the time of
      book-entry transfer or delivery of such Securities;
    

    
      
        

        

      

      
        
          49
        

        
          

        

      

      
        

        

      

    

    
      (viii)    the procedures the Holder must follow under Sections 11.01 or
      11.02, as applicable, and Section 11.03;
    

    
      (ix)      briefly, the conversion rights of the Securities;
    

    
      (x)       that, unless the Company defaults in making payment of such
      Purchase Price or Fundamental Change Purchase Price on Securities
      covered by any Purchase Notice or Fundamental Change Purchase Notice, as
      applicable, interest will cease to accrue on and after the Purchase Date
      or Fundamental Change Purchase Date, as applicable;
    

    
      (xi)      the CUSIP or ISIN number of the Securities;
    

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

    
      (xiii)    in the case of a Company Notice pursuant to Section 11.01, the
      events causing a Fundamental Change and the date of the Fundamental
      Change.
    

    
      Simultaneously with providing such Company Notice, the Company will
      publish a notice containing the information in such Company Notice in a
      newspaper of general circulation in The City of New York or publish such
      information on its then existing website or through such other public
      medium as it may use at the time.
    

    
      At the Company’s request, made at least five Business Days prior to the
      date upon which such notice is to be mailed, and at the Company’s
      expense, the Paying Agent shall give the Company Notice in the Company’s
      name; provided, however, that, in all cases, the text of the Company
      Notice shall be prepared by the Company.
    

    
      (b)       Effect of Purchase
      Notice or Fundamental Change Purchase Notice; Withdrawal; Effect of
      Event of Default.  Upon receipt by the Company of the Purchase
      Notice or Fundamental Change Purchase Notice specified in Section
      11.02(a) or Section 11.01(b), as applicable, the Holder of the
      Securities in respect of which such Purchase Notice or Fundamental
      Change Purchase Notice, as the case may be, was given shall (unless such
      Purchase Notice or Fundamental Change Purchase Notice is withdrawn as
      specified in the following two paragraphs) thereafter be entitled to
      receive solely the Purchase Price or Fundamental Change Purchase Price
      with respect to such Securities. Such Purchase Price or Fundamental
      Change Purchase Price shall be paid by the Paying Agent to such Holder
      promptly following the later of (x) the Purchase Date or the Fundamental
      Change Purchase Date, as the case may be, with respect to such
      Securities (provided the conditions in this Article 11 have been
      satisfied) and (y) the time of delivery or book-entry transfer of such
      Securities to the Paying Agent by the Holder thereof in the manner
      required by Section 11.02 or Section 11.01, as applicable. Securities in
      respect of which a Purchase Notice or Fundamental Change Purchase
      Notice, as the case may be, has been given by the Holder thereof may not
      be converted on or after the date of the delivery of such Purchase
      Notice or Fundamental Change Purchase Notice, as the case may be, unless
      such Purchase Notice or Fundamental Change Purchase Notice, as the case
      may be, has first been validly withdrawn as specified in the following
      two paragraphs.
    

    
      
        

        

      

      
        
          50
        

        
          

        

      

      
        

        

      

    

    
      A Purchase Notice or Fundamental Change Purchase Notice, as the case may
      be, may be withdrawn by means of a written notice of withdrawal
      delivered to the office of the Paying Agent at any time prior to 5:00
      p.m., New York City time, on the Business Day prior to the Purchase Date
      or the Fundamental Change Purchase Date, as the case may be, to which it
      relates specifying:
    

    
      (i)       the principal amount of the Securities with respect to which
      such notice of withdrawal is being submitted;
    

    
      (ii)      if certificated, the certificate number of the Securities in
      respect of which such notice of withdrawal is being submitted, or, if
      not certificated, the written notice of withdrawal must comply with
      appropriate DTC procedures; and
    

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

    
      There shall be no purchase of any Securities pursuant to Section 11.02
      or Section 11.01, if an Event of Default has occurred and is continuing
      (other than a default that is cured by the payment of the Purchase Price
      or Fundamental Change Purchase Price, as the case may be). The Paying
      Agent shall promptly return to the respective Holders thereof any
      Securities (x) with respect to which a Purchase Notice or Fundamental
      Change Purchase Notice, as the case may be, has been withdrawn in
      compliance with this Indenture, or (y) held by it during the continuance
      of an Event of Default (other than a default that is cured by the
      payment of the Purchase Price or Fundamental Change Purchase Price, as
      the case may be) in which case, upon such return, the Purchase Notice or
      Fundamental Change Purchase Notice with respect thereto shall be deemed
      to have been withdrawn.
    

    
      (c)       Securities Purchased in
      Part. Any Securities that are to be purchased only in part shall be
      surrendered at the office of the Paying Agent (with, if the Company or
      the Trustee so requires, due endorsement by, or a written instrument of
      transfer in form satisfactory to the Company and the Trustee duly
      executed by, the Holder thereof or such Holder’s attorney duly
      authorized in writing) and the Company shall execute and the Trustee or
      the Authenticating Agent shall authenticate and deliver to the Holder of
      such Securities, without service charge, a new Security or Securities,
      of any authorized denomination as requested by such Holder in aggregate
      principal amount equal to, and in exchange for, the portion of the
      principal amount of the Securities so surrendered which is not purchased
      or redeemed.
    

    
      (d)       Covenant to Comply with
      Securities Laws Upon Purchase of Securities.  In connection with any
      offer to purchase Securities under Section 11.02 or Section 11.01, the
      Company shall, to the extent applicable, (a) comply with Rules 13e-4 and
      14e-1 (and any successor provisions thereto) under the Exchange Act, if
      applicable; (b) file the related Schedule TO (or any successor schedule,
      form or report) under the Exchange Act, if applicable; and (c) otherwise
      comply with all applicable federal and state securities laws so as to
      permit the rights and obligations under Section 11.02 or Section 11.01
      to be exercised in the time and in the manner specified in Section 11.02
      or Section 11.01.
    

    
      
        

        

      

      
        
          51
        

        
          

        

      

      
        

        

      

    

    
      (e)       Repayment to the Company.  The
      Trustee and the Paying Agent shall return to the Company any cash or
      property that remains unclaimed, as provided in paragraph 14 of the
      Securities, together with interest that the Trustee or Paying Agent, as
      the case may be, has expressly agreed in writing to pay, if any, that is
      held by them for the payment of a Purchase Price or Fundamental Change
      Purchase Price, as the case may be; provided, however, that to the
      extent that the aggregate amount of cash or property deposited by the
      Company pursuant to Section 11.01(c) or Section 11.02(f), as applicable,
      exceeds the aggregate Purchase Price or Fundamental Change Purchase
      Price, as the case may be, of the Securities or portions thereof which
      the Company is obligated to purchase as of the Purchase Date or
      Fundamental Change Purchase Date, as the case may be, then promptly on
      and after the Business Day following the Purchase Date or Fundamental
      Change Purchase Date, as the case may be, the Trustee and the Paying
      Agent shall return any such excess to the Company together with interest
      that the Trustee or Paying Agent, as the case may be, has expressly
      agreed in writing to pay, if any.
    

    
      (f)       Officers’ Certificate.  At
      least five Business Days before the Company Notice Date, the Company
      shall deliver an Officers’ Certificate to the Trustee specifying whether
      the Company desires the Trustee to give the Company Notice required by
      Section 11.03(a) herein.
    

    
      ARTICLE 12
CONVERSION
    

    
      Section 12.01.  Conversion of Securities.  
    

    
      (a)       Right to Convert.  Subject
      to the procedures for conversion set forth in this Article 12, a Holder
      may convert its Securities into Common Stock in the following
      circumstances:  
    

    
      (i)       Conversion. Subject
      to Section 12.09(c), a Holder may elect to convert all or a portion of
      its Securities by delivering upon each such conversion a Conversion
      Notice to the Conversion Agent at any time prior to the date on which
      the earlier of the following occurs (i) Stated Maturity and (ii) the
      date the Company (or the Trustee, on behalf of the Company) first mails
      to each of the Holders a Conversion Termination Notice; provided that
      such Conversion Notice either provides the Specified Percentage
      Certifications or provides the Excess of Specified Percentage
      Certifications but identifies therein Securities the conversion of which
      would not result in such Holder or a Related Person becoming a 5%
      Shareholder with respect to the Company.  A Holder that certifies that
      it or a Related Person is or was a 5% Shareholder with respect to the
      Company during the Section 382 Testing Period ending on the Conversion
      Date may not convert any of its Securities pursuant to this Section
      12.01(a)(i).
    

    
      (ii)      Conversion After Termination
      Notice.  After the mailing of the first Conversion Termination
      Notice, a Holder may elect to convert all or a portion of its Securities
      by delivering upon each conversion a Conversion Notice to the Conversion
      Agent at any time prior to a Conversion Rights Termination Date;
      provided that such Conversion Notice either provides the Specified
      Percentage Certifications or provides the Excess of Specified Percentage
      Certifications but identifies therein Securities the conversion of which
      would not result in such Holder or a Related Person becoming a 5%
      Shareholder with respect to the Company; and, provided further, that any
      such Holder may preserve its conversion rights under this Section
      12.01(a)(ii) after such Conversion Rights Termination Date pursuant to
      Section 12.10(h) of the Indenture.  A Holder that certifies that it or a
      Related Person is or was a 5% Shareholder with respect to the Company
      during the Section 382 Testing Period ending on the Conversion Date may
      not convert any of its Securities pursuant to this Section 12.01(a)(ii).
    

    
      
        

        

      

      
        
          52
        

        
          

        

      

      
        

        

      

    

    
      A Holder may convert a portion of the principal amount of Securities if
      the portion is $1,000 or a multiple of $1,000. The number of shares of
      Common Stock issuable (and cash in lieu of fractions thereof as provided
      in Section 12.01(d)), if any, upon conversion of a Security shall be
      determined as set forth in Section 12.01(c).
    

    
      The Company, at its option, may permit a Holder to convert all or a
      portion of the Securities of such Holder notwithstanding that such
      Holder or any of its Related Persons (i) is or was a 5% Shareholder with
      respect to the Company at any time during the Section 382 Testing Period
      ending on the applicable Conversion Date or (ii) would as a result of
      the conversion become a 5% Shareholder with respect to the Company.
    

    
      (b)       Conversion Procedures.  The
      following procedures shall apply to convert Securities:
    

    
      (i)       In respect of a Definitive Security, a Holder must (1)
      complete and manually sign the Conversion Notice attached to the
      Security, or facsimile of such Conversion Notice; (2) deliver the
      Conversion Notice, which is irrevocable, and the Security to the
      Conversion Agent at the office maintained by the Conversion Agent for
      such purpose; (3) to the extent any shares of Common Stock issuable upon
      conversion are to be issued in a name other than the Holder’s, furnish
      endorsements and transfer documents as may be required by the Conversion
      Agent and, if required pursuant to Section 12.01(e) below, pay all
      transfer or similar taxes; and (4) if required pursuant to Section
      2.01(c) above, pay funds equal to interest payable on the next interest
      payment date to which such Holder is not entitled.
    

    
      (ii)      In respect of a beneficial interest in a Global Security, a
      beneficial owner must comply with DTC’s procedures for converting a
      beneficial interest in a Global Security and, if required pursuant to
      Section 2.01(c) above, pay funds equal to interest payable on the next
      interest payment date to which such beneficial owner is not entitled.
    

    
      The date a Holder satisfies the foregoing requirements is the “Conversion
      Date” hereunder.
    

    
      A Security shall be deemed to have been converted on the Conversion
      Date, and at such time the rights of the Holder of such Security as
      Holder shall cease, except the right to receive the shares of Common
      Stock and cash, if any, to which they are entitled pursuant to this
      Article 12, and the Person or Persons entitled to receive the Common
      Stock issuable upon conversion shall be treated for all purposes as the
      record holder or holders of such Common Stock as of the Conversion Date.
    

    
      
        

        

      

      
        
          53
        

        
          

        

      

      
        

        

      

    

    
      Upon conversion, interest on the Securities or portion thereof so
      converted shall cease to accrue and to be entitled to any benefit or
      security under this Indenture.
    

    
      If a Holder converts more than one Security at the same time, the number
      of shares of Common Stock issuable upon the conversion (and cash in lieu
      of fractions thereof as provided in Section 12.01(d)), if any, shall be
      based on the total principal amount of the Securities converted.
    

    
      (c)       Payment Upon Conversion.  Subject
      to Section 12.01(d) and 12.13, upon any conversion of any Security, the
      Company will deliver to converting Holders, in respect of each $1,000
      principal amount of Securities being converted, the number of shares of
      Common Stock equal to the Conversion Rate (such amount of shares, the “Settlement
      Amount”).
    

    
      The Settlement Amount in respect of any Security converted will be
      delivered to converting Holders on the third Business Day immediately
      following the Conversion Date for such Security.
    

    
      (d)       Cash Payments in Lieu of
      Fractional Shares. The Company shall not issue a fractional share of
      Common Stock upon conversion of Securities.  Instead the Company shall
      deliver cash for the current market value of the fractional share.  The
      current market value of a fractional share shall be the Last Reported
      Sales Price on the Trading Day immediately preceding the Conversion Date.
    

    
      (e)       Taxes on Conversion.  If
      a Holder converts Securities, the Company shall pay any documentary,
      stamp or similar issue or transfer tax due on the issue of shares of
      Common Stock upon the conversion. However, the Holder shall pay any such
      tax which is due because the Holder requests the shares to be issued in
      a name other than the Holder’s name. The Conversion Agent may refuse to
      deliver the certificates representing the Common Stock being issued in a
      name other than the Holder’s name until the Conversion Agent receives a
      sum sufficient to pay any tax which shall be due because the shares are
      to be issued in a name other than the Holder’s name, but the Conversion
      Agent shall have no duty to determine if any such tax is due.  Nothing
      herein shall preclude any withholding of tax required by law.
    

    
      (f)       Certain Covenants of the
      Company.  
    

    
      (i)       The Company shall, prior to issuance of any Securities
      hereunder, and from time to time as may be necessary, reserve out of its
      authorized but unissued Common Stock or shares of Common Stock held in
      treasury, sufficient number of shares of Common Stock, free of
      preemptive rights, to permit the conversion of the Securities.
    

    
      (ii)      All shares of Common Stock delivered upon conversion of the
      Securities 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.
    

    
      
        

        

      

      
        
          54
        

        
          

        

      

      
        

        

      

    

    
      (iii)     The Company shall endeavor promptly to comply with all federal
      and state securities laws regulating the issuance and delivery of shares
      of Common Stock upon the conversion of Securities, if any, and shall
      cause to have listed or quoted all such shares of 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.
    

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

    
      Section 12.02.  Adjustments to Conversion Rate.  The
      Conversion Rate shall be adjusted from time to time by the Company as
      follows:
    

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

    
      

    

    
      where,              
    

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

    
      CR′                =          the Conversion Rate in effect immediately
      after such event
    

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

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

    
      Such adjustment shall become effective immediately after 9:00 a.m., New
      York City time, on the Business Day following the Record Date for such
      dividend or distribution, or the date fixed for determination for such
      share split or share combination.  The Company will not pay any dividend
      or make any distribution on shares of Common Stock held in treasury by
      the Company.  If any dividend or distribution of the type described in
      this Section 12.02(a) is declared but not so paid or made, the
      Conversion Rate shall again be adjusted to the Conversion Rate that
      would then be in effect if such dividend or distribution had not been
      declared.
    

    
      (b)       If the Company issues to all or substantially all holders of
      its Common Stock any rights or warrants entitling them for a period of
      not more than 60 calendar days to subscribe for or purchase shares of
      Common Stock at a price per share less than the Last Reported Sale Price
      of the Common Stock on the Business Day immediately preceding the date
      of announcement of such issuance, the Conversion Rate will be adjusted
      based on the following formula (provided that the Conversion Rate will
      be readjusted to the extent that such rights or warrants are not
      exercised prior to their expiration):
    

    
      
        

        

      

      
        
          55
        

        
          

        

      

      
        

        

      

    

    
      

    

    
      where,              
    

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

    
      CR′                =          the Conversion Rate in effect immediately
      after such event
    

    
      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
    

    
      Y                  =          the number of shares of Common Stock equal
      to the aggregate price payable to exercise such rights divided by the
      average of the Last Reported Sale Prices of the Common Stock over the 10
      consecutive Trading-Day period ending on the Business Day immediately
      preceding the Record Date for the issuance of such rights.
    

    
      Such adjustment shall be successively made whenever any such rights or
      warrants are issued and shall become effective immediately after 9:00
      a.m., New York City time, on the Business Day following the date fixed
      for such determination.  The Company shall not issue any such rights,
      options or warrants in respect of shares of Common Stock held in
      treasury by the Company.  To the extent that shares of Common Stock are
      not delivered after the expiration of such rights or warrants, the
      Conversion Rate shall be readjusted to the Conversion Rate that would
      then be in effect had the adjustments made upon the issuance of such
      rights or warrants been made on the basis of delivery of only the number
      of shares of Common Stock actually delivered.  If such rights or
      warrants are not so issued, the Conversion Rate shall again be adjusted
      to be the Conversion Rate that would then be in effect if such date
      fixed for the determination of stockholders entitled to receive such
      rights or warrants had not been fixed.
    

    
      In determining whether any rights or warrants entitle the holders to
      subscribe for or purchase shares of Common Stock at less than such Last
      Reported Sale Price, and in determining the aggregate offering price of
      such shares of Common Stock, there shall be taken into account any
      consideration received by the Company for such rights or warrants and
      any amount payable on exercise or conversion thereof, the value of such
      consideration, if other than cash, to be determined by the Board of
      Directors.
    

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

    
      
        

        

      

      
        
          56
        

        
          

        

      

      
        

        

      

    

    

    

    
      (i)       dividends or distributions and rights or warrants referred to
      in clause (a) or (b) above; and
    

    
      (ii)      dividends or distributions paid exclusively in cash;
    

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

    
      

    

    
      where,              
    

    
      CR0                =          the Conversion Rate in effect
      immediately prior to such distribution
    

    
      CR′                =          the Conversion Rate in effect immediately
      after such distribution
    

    
      SP0                =          the average of the Last
      Reported Sale Prices of the Common Stock over the 10 consecutive
      Trading-Day period ending on the Business Day immediately preceding the
      Record Date for such distribution
    

    
      FMV                =          the fair market value (as determined by
      the Board of Directors) of the shares of Capital Stock, evidences of
      indebtedness, assets or property distributed with respect to each
      outstanding share of Common Stock on the Record Date for such
      distribution.
    

    
      Such adjustment shall become effective immediately prior to 9:00 a.m.,
      New York City time, on the Business Day following the date fixed for the
      determination of stockholders entitled to receive such distribution.
    

    
      With respect to an adjustment pursuant to this clause (c) where there
      has been a payment of a dividend or other distribution on the Common
      Stock or shares of Capital Stock of any class or series, or similar
      equity interest, of or relating to a Subsidiary or other business unit
      (a “Spin-Off”), the Conversion Rate in effect immediately
      before 5:00 p.m., New York City time, on the effective date for such
      Spin-off will be increased based on the following formula:
    

    

    

    
      

    

    
      where,              
    

    
      CR0                 =         the Conversion Rate in effect
      immediately prior to such distribution
    

    
      CR′                 =          the Conversion Rate in effect immediately
      after such distribution
    

    
      FMV0              =          the average of the Last Reported
      Sale Prices of the Capital Stock or similar equity interest distributed
      to holders of Common Stock applicable to one share of Common Stock over
      the first 10 consecutive Trading-Day period after the effective date of
      the Spin-Off
    

    
      MP0                =          the average of the Last
      Reported Sale Prices of Common Stock over the first 10 consecutive
      Trading-Day period after the effective date of the Spin-Off.
    

    
      
        

        

      

      
        
          57
        

        
          

        

      

      
        

        

      

    

    
      Such adjustment shall occur on the tenth Trading Day from, and
      including, the effective date of the Spin-Off.
    

    
      (d)       If any cash dividend or distribution is made to all or
      substantially all holders of Common Stock, other than regular quarterly
      cash dividends that do not exceed $0.10 per share (the “Initial
      Dividend Threshold”), the Conversion Rate will be adjusted based on
      the following formula:
    

    
      

    

    
      where,              
    

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

    
      CR′                =          the Conversion Rate in effect immediately
      after the Record Date for such distribution
    

    
      SP0                =          the Last Reported Sale Prices
      of the Common Stock on the Trading Day immediately preceding the
      Ex-Dividend Date for such distribution
    

    
      C                  =          the amount in cash per share the Company
      distributes to holders of Common Stock in excess of the Initial Dividend
      Threshold, in the case of a regular quarterly dividend, or, in the case
      of any other dividend or distribution, the full amount of such dividend
      or distribution.
    

    
      Such adjustment shall become effective immediately after 5:00 p.m., New
      York City time, on the Record Date for such dividend or distribution;
      provided that if such dividend or distribution is not so paid or made,
      the Conversion Rate shall again be adjusted to be the Conversion rate
      that would then be in effect if such dividend or distribution had not
      been declared.
    

    
      The Initial Dividend Threshold is subject to adjustment in a manner
      inversely proportional to adjustments to the Conversion Rate; provided
      that no adjustment will be made to the dividend threshold amount for any
      adjustment made to the conversion rate under this clause (d).
    

    
      
        

        

      

      
        
          58
        

        
          

        

      

      
        

        

      

    

    
      (e)       If the Company or any of its Subsidiaries makes a payment in
      respect of a tender or exchange offer for 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 Last Reported Sale Price
      of the 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 (such last date, the “Expiration Time”), the
      Conversion Rate will be increased based on the following formula:
    

    
      

    

    
      where,              
    

    
      CR0                =          the Conversion Rate in effect
      on the date such tender or exchange offer expires
    

    
      CR′                =          the Conversion Rate in effect on the day
      next succeeding the date such tender or exchange offer expires
    

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

    
      OS0                =          the number of shares of Common
      Stock outstanding immediately prior to the date such tender or exchange
      offer expires
    

    
      OS′                =          the number of shares of Common Stock
      outstanding immediately after the date such tender or exchange offer
      expires
    

    
      SP′                =          the average of the Last Reported Sale
      Prices of Common Stock over the 10 consecutive Trading-Day period
      commencing on the Trading Day next succeeding the date such tender or
      exchange offer expires.
    

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

    
      If the application of the foregoing formula set forth in this clause (e)
      would result in a decrease to the Conversion Rate, no adjustment to the
      Conversion Rate will be made.
    

    
      (f)       Notwithstanding the foregoing provisions of this Section
      12.02, no adjustment shall be made thereunder, nor shall an adjustment
      be made to the ability of a Holder of a Security to convert, for any
      distribution described therein if the Holder will otherwise participate
      in the distribution without conversion of such Holder’s Securities.
    

    
      (g)       The Company may (but is not required to) make such increases
      in the Conversion Rate, in addition to those required by clauses (a)
      through (e) of this Section 12.02, as the Board of Directors considers
      to be advisable to avoid or diminish any income tax to holders of Common
      Stock or rights to purchase Common Stock in connection with a dividend
      or distribution of shares (or rights to acquire shares) or any similar
      event treated as such for income tax purposes.
    

    
      
        

        

      

      
        
          59
        

        
          

        

      

      
        

        

      

    

    
      (h)       To the extent permitted by applicable law, the Company from
      time to time may increase the Conversion Rate by any amount for any
      period of at least 20 days if the Board of Directors shall have made a
      determination that such increase would be in the best interests of the
      Company, which determination shall be conclusive.
    

    
      (i)       No adjustment to the Conversion Rate need be made:
    

    
      (i)       upon 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 shares of Common Stock under any plan;
    

    
      (ii)      upon the issuance of any shares of Common Stock or options or
      rights to purchase shares of Common Stock pursuant to any present or
      future employee, director or consultant benefit plan, program or
      contract, equity compensation arrangement or stock purchase plan of or
      assumed by the Company or any of its Subsidiaries;
    

    
      (iii)     upon the issuance of any shares of Common Stock pursuant to
      any option, warrant, right, or exercisable, exchangeable or convertible
      security not described in clause (ii) above and outstanding as of the
      Issue Date;
    

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

    
      (v)       for accrued and unpaid Interest.
    

    
      To the extent the Securities become convertible into cash, assets or
      property (other than Capital Stock of the Company), no adjustment shall
      be made thereafter as to the cash, assets or property.  Interest shall
      not accrue on such cash, assets or property.
    

    
      (j)       All calculations under this Section 12.02 shall be made by the
      Company and shall be made to the nearest cent or to the nearest one-ten
      thousandth (1/10,000) of a share, as the case may be.  
    

    
      (k)       Whenever the Conversion Rate is adjusted as herein provided,
      the Company shall promptly file with the Trustee and any Conversion
      Agent other than the Trustee an Officers’ Certificate setting forth the
      Conversion Rate after such adjustment and setting forth a brief
      statement of the facts requiring such adjustment.  Unless and until a
      Trust Officer of the Trustee shall have received such Officers’
      Certificate, the Trustee shall not be deemed to have knowledge of any
      adjustment of the Conversion Rate and may assume that the last
      Conversion Rate of which it has knowledge is still in effect.  Promptly
      after delivery of such certificate, the Company shall prepare a notice
      of such adjustment of the Conversion Rate setting forth the adjusted
      Conversion Rate and the date on which each adjustment becomes effective
      and shall mail such notice of such adjustment of the Conversion Rate to
      the Holder of each Security at such Holder’s last address appearing on
      the Securities Register provided for in Section 2.05 of this Indenture
      within 20 days after execution thereof.  Failure to deliver such notice
      shall not affect the legality or validity of any such adjustment.
    

    
      
        

        

      

      
        
          60
        

        
          

        

      

      
        

        

      

    

    
      (l)       Any case in which this Section 12.02 provides that an
      adjustment shall become effective immediately after (i) a Record Date
      for an event, (ii) the date fixed for the determination of stockholders
      entitled to receive a dividend or distribution pursuant to Section
      12.02(a), (iii) a date fixed for the determination of stockholders
      entitled to receive rights or warrants pursuant to Section 12.02(b), or
      (iv) the Expiration Time for any tender or exchange offer pursuant to
      Section 12.02(e), (each a “Determination Date”), the
      Company may elect to defer until the occurrence of the applicable
      Adjustment Event (as hereinafter defined) (x) issuing to the holder of
      any Security converted after such Determination Date and before the
      occurrence of such Adjustment Event, the additional shares of Common
      Stock or other securities issuable upon such conversion by reason of the
      adjustment required by such Adjustment Event over and above the Common
      Stock issuable upon such conversion before giving effect to such
      adjustment and (y) paying to such holder any amount in cash in lieu of
      any fraction pursuant to Section 12.01.  For purposes of this Section
      12.02(l), the term “Adjustment Event” shall mean:
    

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

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

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

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

    
      (m)       For purposes of this Section 12.02, 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.  The Company will not pay any dividend or make any distribution
      on shares of Common Stock held in the treasury of the Company.
    

    
      (n)       Whenever any provision of this Article 12 requires a
      calculation of an average of Last Reported Sale Prices or Five-Day VWAP
      over a span of multiple days, the Company will make appropriate
      adjustments (determined in good faith by the Board of Directors) 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, at any time during the
      period from which the average is to be calculated.
    

    
      Section 12.03.  [Reserved].
    

    
      Section 12.04.  [Reserved].
    

    
      
        

        

      

      
        
          61
        

        
          

        

      

      
        

        

      

    

    
      Section 12.05.  Effect of Reclassification,
      Consolidation, Merger or Sale.  
    

    
      (a)       If any of the following events occur: (i) any
      recapitalization, reclassification or change of the outstanding shares
      of Common Stock (other than a subdivision or combination to which
      Section 12.02(c) applies), (ii) any consolidation, merger, binding share
      exchange or combination of the Company with another Person as a result
      of which holders of Common Stock shall be entitled to receive cash,
      securities or other property (or any combination thereof) with respect
      to or in exchange for such Common Stock, or (iii) any sale or conveyance
      of all or substantially all of the properties and assets of the Company
      to any other Person as a result of which holders of Common Stock shall
      be entitled to receive cash, securities or other property (or any
      combination thereof) with respect to or in exchange for such Common
      Stock (any such event or transaction, a “Reorganization Event”),
      then the Company or the successor or purchasing Person, as the case may
      be, shall execute with the Trustee a supplemental indenture (which shall
      comply with the Trust Indenture Act as in force at the date of execution
      of such supplemental indenture to the same extent that this Indenture so
      complies) providing that each Security shall be convertible into the
      kind and amount of cash, securities or other property (and in the same
      proportion) receivable (the “Reference Property”) upon such
      Reorganization Event by a holder of a number of shares of Common Stock
      equal to the Conversion Rate immediately prior to such Reorganization
      Event.  For purposes of the foregoing, the type and amount of
      consideration that a holder of Common Stock would have been entitled to
      receive in the case of any such Reorganization Event that causes the
      Common Stock to be converted into the right to receive more than a
      single type of consideration (determined based in part upon any form of
      stockholder election) 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. Such supplemental
      indenture shall provide for provisions and adjustments which shall be as
      nearly equivalent as may be practicable to the provisions and
      adjustments provided for in this Article 12, Article 11 and Article 9
      and the definition of Fundamental Change, as appropriate, as determined
      in good faith by the Company (which determination shall be conclusive
      and binding), to make such provisions apply to such other Person if
      different from the original issuer of the Securities.
    

    
      (b)       Following the effective time of any such Reorganization Event,
      settlement of Securities converted shall be in units of Reference
      Property based on the Five-Day VWAP of such Reference Property.  For the
      purposes of determining such Five-Day VWAP, (i) if the Reference
      Property includes securities for which the price can be determined in a
      manner contemplated by the definition of Five-Day VWAP, then the value
      of such securities shall be determined in accordance with the principles
      set forth in such definition; (ii) if the Reference Property includes
      other property (other than securities as to which clause (iii) applies
      or cash), then the value of such property shall be the Fair Market Value
      of such property as determined by the Company’s Board of Directors in
      good faith; and (iv) if the Reference Property includes cash, then the
      value of such cash shall be the amount thereof.
    

    
      (c)       The Company shall cause notice of the execution of any
      supplemental indenture required by this Section 12.05 to be mailed to
      each holder of Securities, at its address appearing on the Securities
      Register provided for in Section 2.05 of this Indenture, within 20
      calendar days after execution thereof.  Failure to deliver such notice
      shall not affect the legality or validity of such supplemental indenture.
    

    
      (d)       The above provisions of this Section 12.05 shall similarly
      apply to successive Reorganization Events.  
    

    
      
        

        

      

      
        
          62
        

        
          

        

      

      
        

        

      

    

    
      (e)       If this Section 12.05 applies to any event or occurrence,
      Section 12.02 shall not apply in respect of such event or occurrence.
    

    
      (f)       The Company shall not become a party to any Reorganization
      Event unless its terms are consistent with the foregoing.  None of the
      foregoing provisions shall affect the right of a Holder of Securities to
      convert the Securities into shares of Common Stock as set forth in
      Section 12.01 prior to the effective time of such Reorganization Event.  
    

    
      Section 12.06.  Responsibility of Trustee.  The Trustee
      and any other Conversion Agent shall not at any time be under any duty
      or responsibility to the Company or any Holder of Securities to
      determine the Conversion Rate, or whether any facts exist which may
      require any adjustment of the Conversion Rate, or with respect to the
      nature or extent or calculation of any such adjustment when made, or
      with respect to the method employed in making the same.  The Trustee and
      any other Conversion Agent shall not be accountable with respect to the
      validity or value (or the kind or amount) of any shares of Common Stock,
      or of any securities or property, which may at any time be issued or
      delivered upon the conversion of any Security; and the Trustee and any
      other Conversion Agent make no representations with respect
      thereto.  Neither the Trustee nor any Conversion Agent shall be
      responsible for any failure of the Company to issue, transfer or deliver
      any cash or shares of Common Stock or stock certificates or other
      securities or property upon the surrender of any Security for the
      purpose of conversion or to comply with any of the duties,
      responsibilities or covenants of the Company contained in this Article
      12.  Without limiting the generality of the foregoing, neither the
      Trustee nor any Conversion Agent shall be under any responsibility to
      determine the correctness of any provisions contained in any
      supplemental indenture entered into pursuant to Section 12.05 relating
      either to the kind or amount of shares of stock or securities or
      property (including cash) receivable by Holders upon the conversion of
      their Securities after any Reorganization Event or to any adjustment to
      be made with respect thereto, but, subject to the provisions of Section
      7.01, may accept as conclusive evidence of the correctness of any such
      provisions, and shall be protected in relying upon, the Officers’
      Certificate (which the Company shall be obligated to file with the
      Trustee prior to the execution of any such supplemental indenture) with
      respect thereto.
    

    
      Section 12.07.  Notice to Holders Prior to Certain Actions.  In
      case:
    

    
      (a)       the Company shall declare a dividend (or any other
      distribution) on its Common Stock that would require an adjustment in
      the Conversion Rate pursuant to Section 12.02; or
    

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

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

    
      
        

        

      

      
        
          63
        

        
          

        

      

      
        

        

      

    

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

    
      the Company shall cause to be filed with the Trustee and to be mailed to
      each Holder of Securities at his address appearing on the Securities
      Register provided for in Section 2.05 of this Indenture, as promptly as
      possible but in any event at least three (3) calendar days prior to the
      applicable date hereinafter specified, a notice stating (x) the date on
      which a record is to be taken for the purpose of such dividend,
      distribution or rights or warrants, or, if a record is not to be taken,
      the date as of which the holders of Common Stock of record to be
      entitled to such dividend, distribution or rights are to be determined,
      or (y) the date on which such reclassification, consolidation, merger,
      sale, transfer, dissolution, liquidation or winding up is expected to
      become effective or occur, and the date as of which it is expected that
      holders of Common Stock of record shall be entitled to exchange their
      Common Stock for securities or other property deliverable upon such
      reclassification, consolidation, merger, sale, transfer, dissolution,
      liquidation or winding up.  Failure to give such notice, or any defect
      therein, shall not affect the legality or validity of such dividend,
      distribution, reclassification, consolidation, merger, sale, transfer,
      dissolution, liquidation or winding up.
    

    
      Section 12.08.  Stockholder Rights Plan.  To the extent
      that the Company has a rights plan in effect upon conversion of the
      Securities into Common Stock, the Holder will receive, in addition to
      the Common Stock, the rights under the rights plan, unless prior to any
      conversion, the rights have separated from the Common Stock, in which
      case the Conversion Rate will be adjusted at the time of separation as
      if the Company distributed to all holders of Common Stock shares of the
      Company’s capital stock, evidences of indebtedness or assets as
      described in Section 12.02(c) above, subject to readjustment in the
      event of the expiration, termination or redemption of such rights.  In
      lieu of any such adjustment, the Company may amend such applicable
      stockholder rights agreement to provide that upon conversion of the
      Securities the Holders will receive, in addition to the Common Stock
      issuable upon such conversion, the rights which would have attached to
      such Common Stock if the rights had not become separated from the Common
      Stock under such applicable stockholder rights agreement.
    

    
      Section 12.09.  Additional Conversion Provisions.  
    

    
      (a)       Concurrently with the delivery of the Settlement Amount in
      respect of a conversion pursuant to Section 12.01(a)(i), the Company
      shall make an Additional Voluntary Conversion Interest Payment, if any,
      to the converting Holder.  Within two Business Days after delivery by
      such Holder of such Conversion Notice, the Company shall send such
      Holder a written calculation of the amount of the Additional Voluntary
      Conversion Interest Payment and notice whether such Additional Voluntary
      Conversion Interest Payment shall be paid by the Company in Common
      Stock, cash or a combination thereof.
    

    
      (b)       The Company shall (i) (x) within three Business Days after the
      Conversion Date specified in the applicable Conversion Notice issue and
      deliver to the converting Holder a certificate or certificates for
      Common Stock equal to the Settlement Amount and (y) within eight
      Business Days after the Conversion Date specified in the applicable
      Conversion Notice issue and deliver to the converting Holder a
      certificate or certificates for Common Stock equal to any portion of the
      applicable Additional Voluntary Conversion Interest Payment elected by
      the Company to be made in shares of Common Stock, in each case as
      permitted by Section 12.13, and (ii) within three Business Days after
      the Conversion Date specified in the applicable Conversion Notice pay to
      the converting Holder cash (x) for any portion of the applicable
      Additional Voluntary Conversion Interest Payment made and elected by the
      Company to be made in cash, (y) in lieu of any fractional shares of
      Common Stock into which such Holder’s Securities are being converted
      pursuant to Section 12.01(d), and (z) in lieu of any shares of Common
      Stock not able to be issued upon conversion pursuant to Section 12.13.
    

    
      
        

        

      

      
        
          64
        

        
          

        

      

      
        

        

      

    

    
      (c)       In the event that a Holder that is eligible to convert
      Securities pursuant to Section 12.01(a)(i) sends to the Conversion Agent
      a Conversion Notice to convert all or a portion of its Securities under
      such Section but provides the Excess of Specified Percentage
      Certification in Item 3 of the Conversion Notice, such Holder may
      convert only such portion of its Securities as would not result in such
      Holder or any of its Related Persons becoming a 5% Shareholder with
      respect to the Company.  Any portion of a Holder’s Securities that may
      not be converted as set forth in the previous sentence shall be returned
      to such Holder and the Company shall execute and the Trustee or the
      Authenticating Agent shall authenticate and deliver to the Holder, new
      Securities in authorized denominations equal in principal amount to the
      unconverted portion of the Securities surrendered for conversion
      (subject to the applicable procedures of the Depositary in the case of
      Global Securities).
    

    
      Section 12.10.  Termination of Conversion and Additional
      Post-Termination Conversion Provisions.  
    

    
      (a)       If the Last Reported Sale Price of the Common Stock has
      exceeded the Termination Conversion Price then in effect for at least 20
      Trading Days in any 30 Trading Day period, the Company may terminate the
      right of Holders to convert Securities pursuant to Section 12.01(a)(i)
      or Section 12.01(a)(ii) upon the mailing of, or otherwise on the terms
      set forth in, a notice mailed to the Holders pursuant to Section
      12.10(b) (each such notice, a “Conversion Termination Notice”),
      in each case as applicable.  Any such Conversion Termination Notice
      shall be mailed to the Holders within five (5) days of the last Trading
      Day of any such 30 Trading Day period satisfying the requirement set
      forth in the immediately preceding sentence.  The Company may mail no
      more than one Conversion Termination Notice per fiscal quarter of the
      Company.
    

    
      (b)       Each Conversion Termination Notice shall be mailed to each
      Holder by the Company or, at the written request and expense of the
      Company, the Trustee.  If the Company mails such Conversion Termination
      Notice, it shall also deliver a copy of such Conversion Termination
      Notice to the Trustee. If such Conversion Termination Notice is to be
      mailed by the Trustee, the Company shall prepare and provide the form
      and content of such Conversion Termination Notice to the Trustee. Such
      mailing shall be by first class mail or overnight courier. A Conversion
      Termination Notice, if mailed in the manner herein provided, shall be
      conclusively presumed to have been duly mailed, whether or not any
      Holder receives such notice.  
    

    
      
        

        

      

      
        
          65
        

        
          

        

      

      
        

        

      

    

    
      (c)       Each Conversion Termination Notice shall state:
    

    
      (1)       the date of the mailing of such Conversion Termination Notice,
    

    
      (2)       in the case of the first Conversion Termination Notice mailed
      by the Company that as of the mailing of such Conversion Termination
      Notice the ability of the Holders to convert their Securities pursuant
      to Section 12.01(a)(i) has been terminated,
    

    
      (3)       that such Holders retain the ability to convert their
      Securities pursuant to Section 12.01(a)(ii) until the Conversion Rights
      Termination Date (as defined below),
    

    
      (4)       that on and after any Conversion Date interest on the
      Securities to be converted will cease to accrue,
    

    
      (5)       that, in connection with a conversion of Securities pursuant
      to Section 12.01(a)(ii), the Company shall, concurrently with the
      delivery of the applicable Conversion Shares, make an Additional
      Post-Termination Interest Payment,
    

    
      (6)       the place or places where such Securities are to be
      surrendered for conversion,
    

    
      (7)       the Conversion Price then in effect,
    

    
      (8)       the Termination Conversion Price then in effect, and
    

    
      (9)       that the Company shall irrevocably terminate the rights of the
      Holders to convert their Securities to Common Stock pursuant to Section
      12.01(a)(ii) (subject to a Holder preserving such conversion rights
      pursuant to Section 12.10(h)), effective on a date at least 30 days
      after the date of mailing of such Conversion Termination Notice (each
      such effective date, a “Conversion Rights Termination Date”).
    

    
      (d)       Concurrently with the delivery of the Settlement Amount in
      respect of the Securities converted pursuant to Section 12.01(a)(ii),
      the Company shall make an Additional Post-Termination Interest Payment,
      if any, to the converting Holder.  Within two Business Days after
      delivery by such Holder of such Conversion Notice, the Company shall
      send such Holder a written calculation of the amount of the Additional
      Post-Termination Interest Payment and notice whether such Additional
      Post-Termination Interest Payment shall be paid by the Company in Common
      Stock, cash or a combination thereof.
    

    
      (e)       Within three Business Days after the Conversion Date specified
      in the applicable Conversion Notice, the Company shall (i) issue and
      deliver to the converting Holder a certificate or certificates for
      Common Stock equal to the Settlement Amount and any portion of the
      applicable Additional Post-Termination Interest Payment elected by the
      Company to be made in shares of Common Stock, in each case as permitted
      by Section 12.13, and (ii) pay to the converting Holder cash (x) for any
      portion of the applicable Additional Post-Termination Interest Payment
      made or elected by the Company to be made in cash, (y) in lieu of any
      fractional shares of Common Stock into which such Holder’s Securities
      are being converted pursuant to Section 12.01(d), and (z) in lieu of any
      shares of Common Stock not able to be issued upon conversion pursuant to
      Section 12.13.
    

    
      
        

        

      

      
        
          66
        

        
          

        

      

      
        

        

      

    

    
      (f)       In the event that a Holder that is eligible to convert
      Securities pursuant to Section 12.01(a)(ii) sends to the Conversion
      Agent a Conversion Notice to convert all or a portion of its Securities
      under such Section but provides the Excess of Specified Percentage
      Certification in Item 3 of such Conversion Notice, such Holder may
      convert only such portion of its Securities as would not result in such
      Holder or a Related Person becoming a 5% Shareholder with respect to the
      Company.  Any portion of a Holder’s Securities that may not be converted
      as set forth in the previous sentence shall be returned to such Holder
      and the Company shall execute and the Trustee or the Authenticating
      Agent shall authenticate and deliver to the Holder, new Securities in
      authorized denominations equal in principal amount to the unconverted
      portion of the Securities surrendered for conversion (subject to the
      applicable procedures of the Depositary in the case of Global
      Securities).
    

    
      The rights of a Holder under Section 12.01(a)(ii) to convert Securities
      in respect of which it has provided the Excess of Specified Percentage
      Certifications but which it may not convert under the terms of this
      Section 12.10(f) shall be preserved after a Conversion Rights
      Termination Date in accordance with Section 12.10(h) below.
    

    
      (g)       If a Holder fails to preserve its conversion rights under
      Section 12.10(h), the conversion rights of a Holder under Section
      12.01(a)(ii) shall terminate on the applicable  Conversion Rights
      Termination Date, and thereafter such Holder shall have no rights to
      convert its Securities into Common Stock under such Securities or this
      Indenture.
    

    
      (h)       The foregoing notwithstanding, in the event that prior to any
      Conversion Rights Termination Date a Holder whose conversion rights
      under Section 12.01(a)(ii) have not previously been terminated submits a
      Conversion Notice to the Conversion Agent in respect of its Securities
      but is unable to convert all or a portion of such Securities because
      such Holder or any of its Related Persons (i) is or was a 5% Shareholder
      with respect to the Company at any time during the Section 382 Testing
      Period ending on the applicable Conversion Date or (ii) would as a
      result of the conversion of such Securities become a 5% Shareholder with
      respect to the Company, such Holder shall retain the conversion rights
      set forth in Section 12.01(a)(ii) with respect to such Securities.  If
      the Company (or the Trustee, on behalf of the Company) thereafter mails
      a subsequent Conversion Termination Notice, the conversion rights with
      respect to such Securities will terminate on the Conversion Rights
      Termination Date set forth in such subsequent Conversion Termination
      Notice unless prior to such Conversion Rights Termination Date the
      Holder submits a new Conversion Notice to the Conversion Agent in
      respect of its Securities but is unable to convert all or a portion of
      such Securities because such Holder or any of its Related Persons (i) is
      or was a 5% Shareholder with respect to the Company at any time during
      the Section 382 Testing Period ending on the applicable Conversion Date
      or (ii) would as a result of the conversion of such Securities become a
      5% Shareholder with respect to the Company.  Such Holder shall continue
      to retain the conversion rights with respect to those of its Securities
      which it cannot convert after submission of such new Conversion Notice.
    

    
      (i)       Unless such Securities have been previously executed,
      authenticated and delivered, after any Conversion Rights Termination
      Date, any Securities in respect of which conversion rights are preserved
      pursuant to Section 12.10(h) above shall be represented by new
      Securities bearing the Post-Termination Preservation of Conversion
      Rights Legend, and the Company shall execute and the Trustee shall
      authenticate and make available for delivery to the Holders thereof new
      Securities in authorized denominations in like principal amount (subject
      to the applicable procedures of the Depositary in the case of Global
      Securities).
    

    
      
        

        

      

      
        
          67
        

        
          

        

      

      
        

        

      

    

    
      The Company, at its own expense, shall as promptly as practicable obtain
      new CUSIP and ISIN numbers for any such new Securities that bear the
      Post-Termination Preservation of Conversion Rights Legend, and shall
      promptly notify the Trustee and the applicable Holders in writing of
      such new CUSIP and ISIN numbers.
    

    
      In the event that on or after the Conversion Rights Termination Date all
      Securities bearing the Post-Termination Preservation of Conversion
      Rights Legend are converted, redeemed or otherwise retired, the Company
      may at its option prepare, and the Trustee shall execute, a supplemental
      indenture to this Indenture that eliminates any provisions of the
      Indenture dealing with conversion of the Securities.
    

    
      (j)       Whenever in the Securities or in this Indenture there is a
      reference, in any context, to any conversion obligation of the Company,
      such reference shall be qualified by the conversion termination
      provisions of this Section 12.10, and the Company, other than as
      provided for in Section 12.10(h) above, shall not be required to comply
      with any of the conversion provisions of the Securities and this
      Indenture (including, without limitation, Article 12 (other than this
      Section 12.10)) on or after the Conversion Rights Termination Date, and
      any express mention of the conversion termination provisions of this
      Section 12.10 in any provision of this Indenture shall not be construed
      as excluding the conversion termination provisions of this Section 12.10
      in those provisions of this Indenture when such express mention is not
      made.
    

    
      (k)       During the period beginning five (5) days prior to the date of
      mailing of any Conversion Termination Notice and ending on the date
      thirty (30) days after the Conversion Rights Termination Date specified
      therein, the Company shall not publicly offer to sell any shares of
      Common Stock or securities convertible into or exchangeable for Common
      Stock (other than the Common Stock and shares offered pursuant to
      present or future employee, director or consultant stock purchase plans,
      dividend reinvestment and stock purchase plans, employee or director
      benefit plans, stock option plans or other employee or director equity
      compensation arrangements or contracts or pursuant to then outstanding
      options, warrants or rights), or publicly offer to sell or grant
      options, rights or warrants with respect to any shares of Common Stock
      or securities convertible into or exchangeable for Common Stock (other
      than the grant of options pursuant to employee or director benefit
      plans, stock option plans or other employee or director equity
      compensation arrangements or contracts).
    

    
      Section 12.11.  5% Shareholder Limitations.
      Notwithstanding anything to the contrary in this Article 12, no Holder
      shall be entitled to acquire shares of Common Stock delivered upon
      conversion to the extent (but only to the extent) that such Holder or a
      Related Person (i) is or was a 5% Shareholder with respect to the
      Company at any time during the Section 382 Testing Period ending on the
      applicable Conversion Date or (ii) would as a result of the conversion
      become a 5% Shareholder with respect to the Company.  Any purported
      delivery of shares of Common Stock upon conversion by a Holder of
      Securities shall be void and have no effect to the extent (but only to
      the extent) that such Holder or a Related Person (i) is or was a 5%
      Shareholder with respect to the Company at any time during the Section
      382 Testing Period ending on the applicable Conversion Date or (ii)
      would as a result of the conversion become a 5% Shareholder with respect
      to the Company.  If any delivery of shares of Common Stock owed to any
      Holder upon conversion is not made, in whole or in part, as a result of
      these limitations, such Holder may either (i) certify to the Company
      that such Holder or any Related Person (x) is not or was not a 5%
      Shareholder with respect to the Company at any time during the Section
      382 Testing Period ending on the applicable Conversion Date and (y)
      would not as a result of the conversion become a 5% Shareholder with
      respect to the Company, after which the Company shall deliver such
      shares of Common Stock to such Holder within two Trading Days after
      receipt of such certification or (ii) request the return of the
      Securities surrendered by it for conversion, after which the Company
      shall deliver such Securities to such Holder within two Trading Days
      after receipt of such request.
    

    
      
        

        

      

      
        
          68
        

        
          

        

      

      
        

        

      

    

    
      Section 12.12.  Waiver of 5% Shareholder Provisions.
    

    
      The Company may, at its option, waive (as to a particular Holder or as
      to all Holders) any restrictions that limit a Holder from converting its
      Securities in the event that such Holder or a Related Person (i) is or
      was a 5% Shareholder with respect to the Company at any time during the
      Section 382 Testing Period ending on the applicable Conversion Date or
      (ii) would as a result of the conversion of such Securities become a 5%
      Shareholder with respect to the Company.  In the event that the Company
      exercises its rights pursuant to this Section 12.12 to waive any such
      restrictions as to all Holders, the Company or, at the written request
      and expense of the Company, the Trustee, shall mail or cause to be
      mailed to each Holder 30 days prior to the effective waiver date an
      irrevocable notice stating that as of an effective date specified
      therein, the Company waives any restrictions that limit a Holder from
      converting its Securities in the event that such Holder or a Related
      Person (i) is or was a 5% Shareholder with respect to the Company at any
      time during the Section 382 Testing Period ending on the applicable
      Conversion Date or (ii) would as a result of the conversion of such
      Securities become a 5% Shareholder with respect to the Company (such
      notice, the “5% Shareholder Provision Waiver Notice”).
    

    
      After the date of the mailing of such 5% Shareholder Provision Waiver
      Notice, whenever in the Securities or in this Indenture there is a
      reference, in any context, to any limitation on the ability of a Holder
      to convert its Securities to the extent that such Holder or a Related
      Person (i) is or was a 5% Shareholder with respect to the Company at any
      time during the Section 382 Testing Period ending on the applicable
      Conversion Date or (ii) would as a result of the conversion of such
      Securities become a 5% Shareholder with respect to the Company, such
      limitation shall be deemed waived, and such reference shall be qualified
      by the optional waiver provisions of this Section 12.12.  Any express
      mention of such limitation on the ability of a Holder to convert its
      Securities shall not be construed as excluding the optional waiver
      provisions of this Section 12.12 in those provisions of this Indenture
      when such express mention is not made.
    

    
      After the date of the mailing of the 5% Shareholder Provision Waiver
      Notice, the Company may at its option prepare, and the Trustee shall
      execute, a supplemental indenture to this Indenture that eliminates any
      provisions of the Indenture in respect of any limitation on the ability
      of a Holder to convert its Securities to the extent that such Holder or
      a Related Person (i) is or was a 5% Shareholder with respect to the
      Company at any time during the Section 382 Testing Period ending on the
      applicable Conversion Date or (ii) would as a result of the conversion
      of such Securities become a 5% Shareholder with respect to the Company.
    

    
      
        

        

      

      
        
          69
        

        
          

        

      

      
        

        

      

    

    
      Section 12.13.  Limitation on Issuances of Common Stock.
    

    
      (a)       Notwithstanding anything to the contrary in this Indenture,
      unless the Company shall have received the shareholder approval
      described in Section 12.13(c) (which the Company shall have no
      obligation to seek), the Company shall not issue any shares of Common
      Stock pursuant to this Indenture (including, without limitation,
      Conversion Shares and shares issuable as part of Additional Voluntary
      Conversion Interest Payments and Additional Post-Termination Interest
      Payments) (such shares, “Indenture Shares”) if, after
      giving effect to such issuance, the aggregate number of Indenture Shares
      issued pursuant to this Indenture (after adjusting any previous
      issuances for any subsequent events that would give rise to an
      adjustment to the Conversion Rate pursuant to this Article 12) would
      exceed the “Maximum Shares” as calculated at the time of
      the proposed issuance by the following formula:
    

    
      MS = (0.1999 x OS) + (PON x ONCR)
    

    
      where,
    

    
      MS                    =       the Maximum Shares
    

    
      OS                    =       The number of shares of Common Stock
      outstanding at July 13, 2009 (90,487,123), as appropriately adjusted for
      any subsequent event that would give rise to a change in the Conversion
      Rate pursuant to this Article 12
    

    
      PON                   =       the principal amount of the Company’s
      6.375% Convertible Senior Notes due February 15, 2036 (the “Old
      Notes”) that has been tendered to the Company through the date of
      calculation for cancellation as consideration for issuances of Securities
    

    
      ONCR                  =       92.1659 shares of Common Stock per $1,000
      principal amount of Old Notes, which amount represents the maximum
      conversion rate per $1,000 principal amount of Old Notes, as such amount
      may be adjusted pursuant to the terms of the Indenture dated as of
      February 14, 2006, among the Company, the subsidiary guarantors party
      thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee
    

    
      (b)       If the number of Indenture Shares otherwise issuable under
      this Indenture upon a conversion of Securities would, when aggregated
      with all prior issuances of Indenture Shares, exceed the Maximum Shares,
      the Company shall, in lieu of the shares of Common Stock that it cannot
      issue pursuant to Section 12.13(a), satisfy its obligation by a cash
      payment in an amount equal to the product of (i) the number of shares of
      Common Stock that the Company is unable to issue pursuant to Section
      12.13(a) multiplied by (ii) the Five Day VWAP multiplied by (iii) 1.025.
    

    
      (c)       The restrictions of Section 12.13(a) shall automatically
      terminate if and when the stockholders of the Company duly approve the
      issuance of shares of Common Stock under this Indenture in excess of the
      Maximum Shares and without any limitation under Rule 312.03 of the New
      York Stock Exchange Listed Company Manual or any rule of any other
      principal exchange on which the Common Stock is then traded.
    

    
      
        

        

      

      
        
          70
        

        
          

        

      

      
        

        

      

    

    
      ARTICLE 13
MISCELLANEOUS
    

    
      Section 13.01.  Trust Indenture Act Controls.  If any
      provision of this Indenture limits, qualifies or conflicts with another
      provision which is required to be included in this Indenture by the TIA,
      the provision required by the TIA shall control.  Each Subsidiary
      Guarantor in addition to performing its obligations under its Subsidiary
      Guarantee shall perform such other obligations as may be imposed upon it
      with respect to this Indenture under the TIA.
    

    
      Section 13.02.  Notices.  Any notice or communication
      shall be in writing (including telecopy promptly confirmed in writing)
      and delivered in person or mailed by first-class mail addressed as
      follows:
    

    
      if to the Company:
    

    
      Pier 1 Imports, Inc.
100 Pier 1 Place
Fort Worth, Texas 76102
Attention:  Charles
      H. Turner
Telecopy: (817) 334-0191
    

    
      With a copy to:
    

    
      Bracewell & Giuliani LLP
1445 Ross Avenue
Suite 3800
Dallas,
      Texas 75202
Attention: Bruce A. Cheatham, Esq.
Telecopy: (214)
      758-8317
    

    
      if to the Trustee:
    

    
      The Bank of New York Mellon Trust Company, N.A.
601 Travis Street
16th
      Floor
Houston, Texas 77002
Attention: Corporate Trust
      Administration
Telecopy: (713) 483-6954
    

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

    
      Any notice or communication mailed to a registered Securityholder shall
      be mailed to the Securityholder at the Securityholder’s address as it
      appears on the registration books of the Registrar and shall be
      sufficiently given if so mailed within the time prescribed.
    

    
      
        

        

      

      
        
          71
        

        
          

        

      

      
        

        

      

    

    
      Failure to mail a notice or communication to a Securityholder or any
      defect in it shall not affect its sufficiency with respect to other
      Securityholders.  If a notice or communication is mailed in the manner
      provided above, it is duly given, whether or not the addressee receives
      it, except that notices to the Trustee shall be effective only upon
      receipt.
    

    
      Section 13.03.  Communication by Holders with other Holders.  Securityholders
      may communicate pursuant to TIA Section 312(b) with other
      Securityholders with respect to their rights under this Indenture or the
      Securities.  The Company, the Trustee, the Registrar and anyone else
      shall have the protection of TIA Section 312(c).
    

    
      Section 13.04.  Certificate and Opinion as to Conditions
      Precedent.  Upon any request or application by the Company to the
      Trustee to take or refrain from taking any action under this Indenture,
      the Company shall furnish to the Trustee:
    

    
      (a)       an Officers’ Certificate in form and substance reasonably
      satisfactory to the Trustee stating that, in the opinion of the signers,
      all conditions precedent, if any, provided for in this Indenture
      relating to the proposed action have been complied with; and
    

    
      (b)       an Opinion of Counsel in form and substance reasonably
      satisfactory to the Trustee stating that, in the opinion of such
      counsel, all such conditions precedent have been complied with.
    

    
      Section 13.05.  Statements Required in Certificate or
      Opinion.  Each certificate or opinion with respect to compliance
      with a covenant or condition provided for in this Indenture shall
      include:
    

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

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

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

    
      (d)       a statement as to whether or not, in the opinion of such
      individual, such covenant or condition has been complied with.
    

    
      In giving such Opinion of Counsel, counsel may rely as to factual
      matters on an Officers’ Certificate or on certificates of public
      officials.
    

    
      Section 13.06.  When Securities Disregarded.  In
      determining whether the Holders of the required principal amount of
      Securities have concurred in any direction, waiver or consent,
      Securities owned by the Company or by any Person directly or indirectly
      controlling or controlled by or under direct or indirect common control
      with the Company shall be disregarded and deemed not to be outstanding,
      except that, for the purpose of determining whether the Trustee shall be
      protected in relying on any such direction, waiver or consent, only
      Securities which a Trust Officer of the Trustee actually knows are so
      owned shall be so disregarded.  Also, subject to the foregoing, only
      Securities outstanding at the time shall be considered in any such
      determination.
    

    
      
        

        

      

      
        
          72
        

        
          

        

      

      
        

        

      

    

    
      Section 13.07.  Rules by Trustee, Paying Agent and Registrar.  The
      Trustee may make reasonable rules for action by, or a meeting of,
      Securityholders.  The Registrar and the Paying Agent may make reasonable
      rules for their functions.
    

    
      Section 13.08.  Legal Holidays.  A “Legal
      Holiday” is a Saturday, a Sunday or other day on which commercial
      banking institutions are authorized or required to be closed in New York
      City, Houston, Texas or Dallas, Texas.  If a payment date is a Legal
      Holiday, payment shall be made on the next succeeding day that is not a
      Legal Holiday, and no interest, if any, shall accrue for the intervening
      period.  If a Regular Record Date is a Legal Holiday, the record date
      shall not be affected.
    

    
      Section 13.09.  Governing Law; Waiver of Jury Trial.  THIS
      INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
    

    
      EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
      FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL
      BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
      INDENTURE, THE SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY;
      PROVIDED, HOWEVER, THAT SUCH WAIVER OF TRIAL BY JURY BY THE COMPANY AND
      THE TRUSTEE SHALL IN NO WAY LIMIT ANY AND ALL RIGHT TO TRIAL BY JURY OF
      ANY HOLDER OF THE SECURITIES IN ANY LEGAL PROCEEDING ARISING OUT OF OR
      RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTIONS
      CONTEMPLATED HEREBY.
    

    
      Section 13.10.  No Recourse Against Others.  An
      incorporator, director, officer, employee, Affiliate or stockholder of
      the Company or any Subsidiary Guarantor, solely by reason of this
      status, shall not have any liability for any obligations of the Company
      or any Subsidiary Guarantor under the Securities, this Indenture or the
      Subsidiary Guarantees or for any claim based on, in respect of or by
      reason of such obligations or their creation.  By accepting a Security,
      each Securityholder shall waive and release all such liability.  The
      waiver and release shall be part of the consideration for the issue of
      the Securities.
    

    
      Section 13.11.  Successors.  All agreements of the
      Company in this Indenture and the Securities shall bind their respective
      successors.  All agreements of the Trustee in this Indenture shall bind
      its successors.
    

    
      Section 13.12.  Multiple Originals.  The parties may
      sign any number of copies of this Indenture.  Each signed copy shall be
      an original, but all of them together represent the same agreement.  One
      signed copy is enough to prove this Indenture.
    

    
      Section 13.13.  Table of Contents; Headings.  The table
      of contents, cross-reference sheet and headings of the Articles and
      Sections of this Indenture have been inserted for convenience of
      reference only, are not intended to be considered a part hereof and
      shall not modify or restrict any of the terms or provisions hereof.
    

    
      
        

        

      

      
        
          73
        

        
          

        

      

      
        

        

      

    

    
      Section 13.14.  Severability Clause.  In case any
      provision in this Indenture shall be invalid, illegal or unenforceable,
      the validity, legality and enforceability of the remaining provisions
      shall not in any way be affected or impaired thereby and such provision
      shall be ineffective only to the extent of such invalidity, illegality
      or unenforceability.
    

    
      Section 13.15.  Force Majeure.  In no event shall the
      Trustee be responsible or liable for any failure or delay in the
      performance of its obligations hereunder arising out of or caused by,
      directly or indirectly, forces beyond its control, including, without
      limitation, strikes, work stoppages, accidents, acts of war or
      terrorism, civil or military disturbances, nuclear or natural
      catastrophes or acts of God, and interruptions, loss or malfunctions of
      utilities, communications or computer (software and hardware) services;
      it being understood that the Trustee shall use reasonable efforts that
      are consistent with accepted practices in the banking industry to resume
      performance as soon as practicable under the circumstances.
    

    
      [Remainder of the page intentionally left blank]
    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        

        

      

      
        
          74
        

        
          

        

      

      
        

        

      

    

    
      IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
      executed as of the date first written above.
    

    
    	
           
        	
          THE COMPANY
        	

        
	

        	
           
        	
          
            PIER 1 IMPORTS, INC.
          

        
	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Name:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Title:
          

        	
          
             
          

        
	

        	

        	

        	

        	
           
        
	

        	
          THE SUBSIDIARY GUARANTORS
        
	

        	
           
        
	

        	

        	
          
            PIER 1 ASSETS, INC.
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Name:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Title:
          

        	
          
             
          

        
	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 LICENSING, INC.
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Name:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Title:
          

        	
          
             
          

        
	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 IMPORTS (U.S.), INC.
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Name:
          

        	
          
             
          

        
	

        	

        	

        	
          
            Title:
          

        	
          
             
          

        
	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 VALUE SERVICES, LLC
          

        
	

        	

        	

        	

        	
           
        
	

        	

        	

        	
          By:
        	
          
            Pier 1 Imports (U.S.), Inc.,
          

        
	

        	

        	

        	

        	
          
            its sole member and manager
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          
            By:
          

        	
          
             
          

        
	

        	

        	

        	

        	

        	
          Name:
        
	

        	

        	

        	

        	

        	
          Title:
        

    

    
      
        

        

      

      
        
          75
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
           
        	
           
        	

        	

        	

        	

        	

        
	

        	

        	
          
            PIER 1 HOLDINGS, INC.
          

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 SERVICES COMPANY,
          

        
	

        	

        	
          
            a Delaware statutory trust
          

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	
          
            By:
          

        	
          
            Pier 1 Holdings, Inc.,
          

        
	

        	

        	

        	

        	
          
            its managing trustee
          

        
	

        	

        	

        	

        	
          
             
          

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	

        	

        	
          
            Name:
          

        	

        
	

        	

        	

        	

        	

        	
          
            Title:
          

        	

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	
          
            THE TRUSTEE
          

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee
          

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        

    

    
      
        

        

      

      
        
          76
        

        
          

        

      

      
        

        

      

    

    
      SCHEDULE A
    

    
      SUBSIDIARY GUARANTORS
    

    
      Pier 1 Imports (U.S.), Inc., a Delaware corporation
    

    
      Pier 1 Assets, Inc., a Delaware corporation
    

    
      Pier 1 Licensing, Inc., a Delaware corporation
    

    
      Pier 1 Holdings, Inc., a Delaware corporation
    

    
      Pier 1 Services Company, a Delaware statutory trust
    

    
      Pier 1 Value Services, LLC, a Virginia limited liability company
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      EXHIBIT A
    

    
      [FORM OF FACE OF SECURITY]
    

    
      [Global Security Legend, if applicable]
    

    
      [Definitive Security Legend, if applicable]
    

    
      [Post-Termination Preservation of Conversion Rights Legend, if
      applicable]
    

    
      No. [___]
                                                                  Principal
      Amount $[__________], as revised by the Schedule of Increases and
      Decreases in Global Security attached hereto.
    

    
      CUSIP NO.: [_________]
    

    
      ISIN: [___________]
    

    
      9.0% Convertible Senior Notes due 2036
    

    
      Pier 1 Imports, Inc., a Delaware corporation, promises to pay to
      [__________], or registered assigns, the principal sum of
      [_______________] Dollars, as revised by the Schedule of Increases and
      Decreases in Global Security attached hereto, on February 15, 2036.
    

    
      Interest Payment Dates:  February 15 and August 15
Regular
      Record Dates:  February 1 and August 1
    

    
      Additional provisions of this Security are set forth on the attached “Terms
      of Securities.”
    

    
      Dated: [__________]
    

    
    	
           
        	
          PIER 1 IMPORTS, INC.
        
	

        	
           
        
	

        	
          By:
        	
           
        
	

        	

        	
          Name:
        
	

        	

        	
          Title:
        

    

    
      
        

        

      

      
        
          A-1
        

        
          

        

      

      
        

        

      

    

    
      TRUSTEE’S CERTIFICATE OF
  AUTHENTICATION
    

    
      THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
as Trustee,
      certifies that this is one of the
Securities referred to in the
      Indenture.
    

    
      By:                                                                           
          Authorized
      Signatory
    

    
      TERMS OF SECURITIES
    

    
      9.0% Convertible Senior Notes due 2036
    

    
      The Company issued these Securities under an Indenture dated as of
      August [  ], 2009 (as it may be amended or supplemented from time to
      time in accordance with the terms thereof, the “Indenture”), among the
      Company, the Subsidiary Guarantors and the Trustee, to which reference
      is hereby made for a description of the rights, limitations of rights,
      obligations, duties and immunities thereunder of the Trustee, the
      Company, the Subsidiary Guarantors and the Holders.  Additional
      Securities may be issued under the Indenture in an unlimited aggregate
      principal amount subject to certain conditions specified in the
      Indenture.  
    

    
      1)        Interest
    

    
      Pier 1 Imports, Inc., a Delaware corporation (such corporation, and its
      successors and assigns under the Indenture hereinafter referred to,
      being herein called the “Company”), promises to pay interest on the
      principal amount of this Security at the rate of 9.0% per annum.
    

    
      The Company will pay interest semiannually on February 15 and August 15
      of each year commencing [            ], 20[   ].  Interest on the
      Securities will accrue from the most recent date to which interest has
      been paid on the Securities or, if no interest has been paid, from
      August [  ], 2009.  Interest will be computed on the basis of a 360-day
      year of twelve 30-day months.
    

    
      The Holder of this Security after 5:00 p.m., New York City time, on a
      Regular Record Date shall be entitled to receive interest, on this
      Security on the corresponding interest payment date.  The Holder of this
      Security after 5:00 p.m., New York City time, on a Regular Record Date
      will receive payment of interest payable on the corresponding interest
      payment date notwithstanding the conversion of this Security at any time
      after the close of business on such Regular Record Date.  If this
      Security is surrendered for conversion during the period after 5:00
      p.m., New York City time, on any Regular Record Date to 9:00 a.m., New
      York City time, on the corresponding interest payment date, it must be
      accompanied by payment of an amount equal to the interest that the
      Holder is to receive on the Securities.  Notwithstanding the foregoing,
      no such payment of interest need be made by any converting Holder (i) if
      the Company has specified a Redemption Date that is after a Regular
      Record Date and on or prior to the third Trading Day after the
      corresponding interest payment date, (ii) if the Company has specified a
      Fundamental Change Purchase Date during such period, or (iii) to the
      extent of any overdue interest existing at the time of conversion of
      such Security.  Except where this Security is surrendered for conversion
      and must be accompanied by payment as described above, no interest
      thereon will be payable by the Company on any interest payment date
      subsequent to the date of conversion, and delivery of the cash and
      shares of Common Stock, if applicable, pursuant to Article 12 of the
      Indenture, together with any cash payment for any fractional share, upon
      conversion will be deemed to satisfy the Company’s obligation to pay the
      principal amount of the Securities and accrued and unpaid interest to,
      but not including, the related Conversion Date.
    

    
      
        

        

      

      
        
          A-2
        

        
          

        

      

      
        

        

      

    

    
      2)        Method of Payment
    

    
      By no later than 11:00 a.m. (New York City time) on the date on which
      any principal of or interest (and any portion of the Make-Whole Payment
      and Settlement Amount payable in cash, if any), on any Security is due
      and payable, the Company shall deposit with the Paying Agent money
      sufficient to pay such amount.  The Company will pay principal and
      interest in money of the United States that at the time of payment is
      legal tender for payment of public and private debts.  Payments in
      respect of Securities represented by a Global Security (including
      principal and interest) will be made by wire transfer of immediately
      available funds to the accounts specified by The Depository Trust
      Company.  The Company will pay principal of Definitive Securities at the
      office or agency designated by the Company in the Borough of Manhattan,
      The City of New York.  Interest on Definitive Securities (and any
      portion of the Make-Whole Payment and Settlement Amount payable in cash,
      if any) will be payable (i) to Holders having an aggregate principal
      amount of $5,000,000 or less, by check mailed to the Holders of these
      Securities and (ii) to Holders having an aggregate principal amount of
      more than $5,000,000, either by check mailed to each Holder or, upon
      application by a Holder to the Registrar not later than the relevant
      Regular Record Date, by wire transfer in immediately available funds to
      that Holder’s account within the United States, which application shall
      remain in effect until the Holder notifies, in writing, the Registrar to
      the contrary.
    

    
      3)        Redemption
    

    
      No sinking fund is provided for the Securities.  Subject to certain
      conditions specified in the Indenture, the Securities will be
      redeemable, at the option of the Company, in whole at any time or in
      part from time to time, at any time on or after February 15, 2012 at a
      Redemption Price specified in the Indenture.
    

    
      4)        Purchase By the
      Company at the Option of the Holder; Purchase at the Option of the
      Holder Upon a Fundamental Change
    

    
      a)        Subject to the terms and conditions of the Indenture, a Holder
      shall have the option to require the Company to purchase all or a
      portion of its Securities held by such Holder on February 15, 2013,
      February 15, 2016, February 15, 2021, February 15, 2026, and February
      15, 2031 at a Purchase Price specified in the Indenture.
    

    
      b)        If a Fundamental Change shall occur at any time, each 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 purchase all
      or a portion of its Securities at a Fundamental Change Purchase Price
      specified in the Indenture.
    

    
      
        

        

      

      
        
          A-3
        

        
          

        

      

      
        

        

      

    

    
      5)        Conversion
    

    
      Subject to Section 12.09(c) of the Indenture, a Holder may elect to
      convert all or a portion of its Securities pursuant to Section
      12.01(a)(i) of the Indenture by delivering upon each conversion a
      Conversion Notice to the Conversion Agent at any time prior to the date
      on which the earlier of the following occurs (i) Stated Maturity and
      (ii) the date the Company (or the Trustee, on behalf of the Company)
      first mails to each of the Holders a Conversion Termination Notice;
      provided that such Conversion Notice either provides the Specified
      Percentage Certifications or provides the Excess of Specified Percentage
      Certifications but identifies therein Securities the conversion of which
      would not result in such Holder or a Related Person becoming a 5%
      Shareholder with respect to the Company.  A Holder that certifies that
      it or a Related Person is or was a 5% Shareholder with respect to the
      Company during the Section 382 Testing Period ending on the Conversion
      Date may not convert any of its Securities pursuant to Section
      12.01(a)(i) of the Indenture.
    

    
      After the mailing of the first Conversion Termination Notice, a Holder
      may elect to convert all or a portion of its Securities pursuant to
      Section 12.01(a)(ii) of the Indenture by delivering upon each conversion
      a Conversion Notice to the Conversion Agent at any time prior to a
      Conversion Rights Termination Date; provided that such Conversion Notice
      either provides the Specified Percentage Certifications or provides the
      Excess of Specified Percentage Certifications but identifies therein
      Securities the conversion of which would not result in such Holder or a
      Related Person becoming a 5% Shareholder with respect to the Company;
      and, provided further, that any such Holder may preserve its conversion
      rights under Section 12.01(a)(ii) of the Indenture after such Conversion
      Rights Termination Date pursuant to Section 12.10(h) of the
      Indenture.  A Holder that certifies that it or a Related Person is or
      was a 5% Shareholder with respect to the Company during the Section 382
      Testing Period ending on the Conversion Date may not convert any of its
      Securities pursuant to Section 12.01(a)(ii) of the Indenture.
    

    
      The Company, at its option, may permit a Holder to convert all or a
      portion of the Securities of such Holder notwithstanding that such
      Holder or any of its Related Persons (i) is or was a 5% Shareholder with
      respect to the Company at any time during the Section 382 Testing Period
      ending on the applicable Conversion Date or (ii) would as a result of
      the conversion become a 5% Shareholder with respect to the Company.
    

    
      The initial Conversion Rate is 399.2016 shares of Common Stock per
      $1,000 principal amount of Securities, subject to adjustment in certain
      events described in the Indenture.  Subject to Section 12.01(d) and
      Section 12.13 of the Indenture, upon conversion, the Company will
      deliver to converting Holders a Settlement Amount consisting of the
      number of shares of Common Stock equal to the Conversion Rate.  The
      Company shall deliver cash in lieu of any fractional share of Common
      Stock.
    

    
      
        

        

      

      
        
          A-4
        

        
          

        

      

      
        

        

      

    

    
      A Holder may convert a portion of the Securities only if the principal
      amount of such portion is $1,000 or a multiple of $1,000. No payment or
      adjustment shall be made for dividends on the Common Stock except as
      provided in the Indenture.
    

    
      6)        Additional
      Conversion Provisions
    

    
      The Company shall make an Additional Voluntary Conversion Interest
      Payment, if any, to a Holder converting its Securities pursuant to
      Section 12.01(a)(i) of the Indenture.  As promptly as practicable after
      delivery by such Holder of such Conversion Notice, the Company shall
      send such Holder a written calculation of the amount of the Additional
      Voluntary Conversion Interest Payment and notice whether such Additional
      Voluntary Conversion Interest Payment shall be paid by the Company in
      Common Stock, cash or a combination thereof.
    

    
      In the event that a Holder that is eligible to convert Securities
      pursuant to Section 12.01(a)(i) of the Indenture sends to the Conversion
      Agent a Conversion Notice to convert all or a portion of its Securities
      under such Section but provides the Excess of Specified Percentage
      Certification in Item 3 of the Conversion Notice, such Holder may
      convert only such portion of its Securities as would not result in such
      Holder or a Related Person becoming a 5% Shareholder with respect to the
      Company.
    

    
      7)        Termination of
      Conversion and Additional Post-Termination Conversion Provisions
    

    
      If the Last Reported Sale Price of the Common Stock has exceeded the
      Termination Conversion Price then in effect for at least 20 Trading Days
      in any 30 Trading Day period, the Company may terminate the right of
      Holders to convert Securities pursuant to Section 12.01(a)(i) or Section
      12.01(a)(ii) upon the mailing of, or otherwise on the terms set forth
      in, a Conversion Termination Notice mailed to the Holders pursuant to
      Section 12.10(b) of the Indenture, in each case as applicable.  Any such
      Conversion Termination Notice shall be mailed to the Holders within five
      days of the last Trading Day of any such 30 Trading Day period
      satisfying the requirement set forth in the immediately preceding
      sentence.  The Company may mail no more than one Conversion Termination
      Notice per fiscal quarter of the Company.
    

    
      The Company shall make an Additional Post-Termination Interest Payment,
      if any,  to a Holder converting its Securities pursuant to Section
      12.01(a)(ii) of the Indenture.  Within two Business Days after delivery
      by such Holder of such Conversion Notice, the Company shall send such
      Holder a written calculation of the amount of the Additional
      Post-Termination Interest Payment and notice whether such Additional
      Post-Termination Interest Payment shall be paid by the Company in Common
      Stock, cash or a combination thereof.
    

    
      In the event that a Holder eligible to convert Securities pursuant to
      Section 12.01(a)(ii) of the Indenture sends to the Conversion Agent a
      Conversion Notice to convert all or a portion of its Securities under
      such Section but provides the Excess of Specified Percentage
      Certification in Item 3 of the Conversion Notice, such Holder may
      convert only such portion of its Securities as would not result in such
      Holder or a Related Person becoming a 5% Shareholder with respect to the
      Company.
    

    
      
        

        

      

      
        
          A-5
        

        
          

        

      

      
        

        

      

    

    
      The rights of a Holder under Section 12.01(a)(ii) of the Indenture to
      convert Securities in respect of which it has provided the Excess of
      Specified Percentage Certifications but which it may not convert under
      the terms of Section 12.10(f) of the Indenture shall be preserved after
      the Conversion Rights Termination Date in accordance with Section
      12.10(h) of the Indenture.
    

    
      8)        Preservation of
      Conversion Rights by a Holder
    

    
      In the event that prior to any Conversion Rights Termination Date a
      Holder whose conversion rights have not previously been terminated under
      Section 12.01(a)(ii) of the Indenture submits a Conversion Notice to the
      Conversion Agent in respect of its Securities but is unable to convert
      all or a portion of such Securities because such Holder or any of its
      Related Persons (i) is or was a 5% Shareholder with respect to the
      Company at any time during the Section 382 Testing Period ending on the
      applicable Conversion Date or (ii) would as a result of the conversion
      of such Securities become a 5% Shareholder with respect to the Company,
      such Holder shall retain the conversion rights set forth in Section
      12.01(a)(ii) of the Indenture with respect to such Securities.
    

    
      If the Company (or the Trustee, on behalf of the Company) thereafter
      mails a subsequent Conversion Termination Notice, the conversion rights
      with respect to such Securities will terminate on the Conversion Rights
      Termination Date set forth in such subsequent Conversion Termination
      Notice unless prior to such Conversion Rights Termination Date the
      Holder submits a new Conversion Notice to the Conversion Agent in
      respect of its Securities but is unable to convert all or a portion of
      such Securities because such Holder or any of its Related Persons (i) is
      or was a 5% Shareholder with respect to the Company at any time during
      the Section 382 Testing Period ending on the applicable Conversion Date
      or (ii) would as a result of the conversion of such Securities become a
      5% Shareholder with respect to the Company.  Such Holder shall continue
      to retain the conversion rights with respect to those of its Securities
      which it cannot convert after submission of such new Conversion Notice.
    

    
      9)        5% Shareholder
      Limitations
    

    
      Notwithstanding anything to the contrary in Article 12 of the Indenture,
      no Holder shall be entitled to acquire shares of Common Stock delivered
      upon conversion to the extent (but only to the extent) that such Holder
      or a Related Person (i) is or was a 5% Shareholder with respect to the
      Company at any time during the Section 382 Testing Period ending on the
      applicable Conversion Date or (ii) would as a result of the conversion
      become a 5% Shareholder with respect to the Company.  Any purported
      delivery of shares of Common Stock upon conversion of Securities a
      Holder shall be void and have no effect to the extent (but only to the
      extent) that such Holder or a Related Person (i) is or was a 5%
      Shareholder with respect to the Company at any time during the Section
      382 Testing Period ending on the applicable Conversion Date or (ii)
      would as a result of the conversion become a 5% Shareholder with respect
      to the Company.
    

    
      10)       Waiver of 5% Shareholder
      Provisions
    

    
      The Company may, at its option, waive (as to a particular Holder or as
      to all Holders) any restrictions that limit a Holder from converting its
      Securities in the event that such Holder or a Related Person (i) is or
      was a 5% Shareholder with respect to the Company at any time during the
      Section 382 Testing Period ending on the applicable Conversion Date or
      (ii) would as a result of the conversion of such Securities become a 5%
      Shareholder with respect to the Company.
    

    
      
        

        

      

      
        
          A-6
        

        
          

        

      

      
        

        

      

    

    
      11)       Limitation on Issuances
      of Common Stock
    

    
      Unless the Company shall have received the shareholder approval
      described in Section 12.13(c) of the Indenture (which the Company shall
      have no obligation to seek), the Company shall not issue any Indenture
      Shares if, after giving effect to such issuance, the aggregate number of
      Indenture Shares issued pursuant to the Indenture (after adjusting any
      previous issuances for any subsequent events that would give rise to an
      adjustment to the Conversion Rate pursuant to Article 12 of the
      Indenture) would exceed the Maximum Shares calculated pursuant to
      Section 12.13.
    

    
      If the number of Indenture Shares otherwise issuable under the Indenture
      upon a conversion of Securities would, when aggregated with all prior
      issuances of Indenture Shares, exceed the Maximum Shares, the Company
      shall, in lieu of the shares of Common Stock that it cannot issue
      pursuant to Section 12.13(a) of the Indenture, satisfy its obligation by
      a cash payment in an amount equal to the product of (i) the number of
      shares of Common Stock that the Company is unable to issue pursuant to
      Section 12.13(a) of the Indenture multiplied by (ii) the Five Day VWAP.
    

    
      12)       Denominations; Transfer;
      Exchange
    

    
      The Securities are in registered form without coupons in denominations
      of principal amount of $1,000 and whole multiples of $1,000.  A Holder
      may transfer or exchange Securities in accordance with the
      Indenture.  The Registrar may require a Holder, among other things, to
      furnish appropriate endorsements or transfer documents and to pay any
      taxes and fees required by law or permitted by the Indenture.  The
      Registrar need not register the transfer of or exchange of Securities
      (i) for a period of 15 days prior to the mailing of a notice of
      redemption of Securities selected for redemption under Article 5 of the
      Indenture; (ii) so selected for redemption or, if a portion of any
      Security is selected for redemption, the portion thereof selected for
      redemption; or (iii) surrendered for conversion or, if a portion of any
      Security is surrendered for conversion, the portion thereof surrendered
      for conversion.
    

    
      13)       Persons Deemed Owners
    

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

    
      14)       Unclaimed Money
    

    
      If money for the payment of principal or interest (and any portion of
      the Make-Whole Payment and Settlement Amount payable in cash, if any)
      remains unclaimed for two years, the Trustee or Paying Agent shall pay
      the money back to the Company.  After any such payment, Holders entitled
      to the money must look only to the Company and not to the Trustee for
      payment.
    

    
      
        

        

      

      
        
          A-7
        

        
          

        

      

      
        

        

      

    

    
      15)       Amendment, Waiver
    

    
      The Indenture contains provisions permitting an amendment of the
      Indenture or the Securities with the written consent of the Holders of
      at least a majority in principal amount of the then outstanding
      Securities and the waiver of any Event of Default (other than with
      respect to nonpayment or in respect of a provision that cannot be
      amended without the written consent of each Securityholder affected) or
      noncompliance with any provision with the written consent of the Holders
      of a majority in principal amount of the then outstanding Securities.  
    

    
      In addition, the Indenture permits an amendment of the Indenture or the
      Security without the consent of any Securityholder under circumstances
      specified in the Indenture.
    

    
      16)       Defaults and Remedies
    

    
      If an Event of Default specified in the Indenture occurs and is
      continuing, the Trustee or the Holders of at least 25% in principal
      amount of the Securities may declare all the Securities by notice to the
      Company to be due and payable immediately.  In addition, certain
      specified Events of Default will cause the Securities to become
      immediately due and payable without further action by the Holders.
    

    
      Securityholders may not enforce the Indenture or the Securities except
      as provided in the Indenture.  The Trustee may refuse to enforce the
      Indenture or the Securities unless it receives reasonable indemnity or
      security.  Subject to certain limitations, Holders of a majority in
      principal amount of the Securities may direct the Trustee in its
      exercise of any trust or power.  The Trustee may withhold from
      Securityholders notice of any continuing Default or Event of Default
      (except a Default or Event of Default in payment of principal or
      interest or of any portion of the Make-Whole Payment and Settlement
      Amount payable in cash, if any) if it determines that withholding notice
      is in their interest.
    

    
      17)       Trustee Dealings with
      the Company
    

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

    
      18)       No Recourse Against
      Others
    

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

    
      19)       Authentication
    

    
      This Security shall not be valid until an authorized signatory of the
      Trustee manually authenticates this Security.
    

    
      
        

        

      

      
        
          A-8
        

        
          

        

      

      
        

        

      

    

    
      20)       Abbreviations
    

    
      Customary abbreviations may be used in the name of a Securityholder or
      an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
      the entirety), JT TEN (=joint tenants with rights of survivorship and
      not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift
      to Minors Act).
    

    
      21)       CUSIP Numbers
    

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

    
      22)       Governing Law
    

    
      This Security shall be governed by, and construed in accordance with,
      the laws of the State of New York.
    

    
      The Company will furnish to any Securityholder upon written request and
      without charge to the Securityholder a copy of the Indenture which has
      in it the text of this Security.  Requests may be made to:
    

    
      Pier 1 Imports, Inc.
100 Pier 1 Place
Fort Worth, Texas 76102
Attention:  Charles
      H. Turner
    

    
      
        

        

      

      
        
          A-9
        

        
          

        

      

      
        

        

      

    

    
      [TO BE ATTACHED TO GLOBAL SECURITIES]
    

    
      ASSIGNMENT FORM
    

    
      To assign this Security, fill in the form below:
I or we assign and
      transfer this Security to
    

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

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

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

    
      

      

      
    

    
    	
          Date:_____________________________
        	
           
        	
          Your Signature:______________________
        

    

    

    

    
    	
          Signature Guarantee:
        
	
          (Signature must be guaranteed)
        

    

    

    

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

    

    
      The signature(s) should 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 S.E.C. Rule 17Ad-15.
    

    
      SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
    

    
      The following increases or decreases in this Global Security have been
      made:
    

    
    	
          
            Date
          

        	
           
        	
          
            Amount of decrease
in Principal Amount
of this Global
Security
          

        	
           
        	
          
            Amount of increase
in Principal Amount
of this Global
Security
          

        	
           
        	
          
            Principal Amount of
this Global Security
following such
decrease
            or increase
          

        	
           
        	
          
            Signature of
authorized signatory
of Trustee or
Securities
            Custodian
          

        

    

    
      
        

        

      

      
        
          A-10
        

        
          

        

      

      
        

        

      

    

    

    

    
      FORM OF CONVERSION NOTICE
    

    
      To:       Pier 1 Imports, Inc.
    

    
      The undersigned registered holder of this Security hereby exercises the
      option to convert this Security, or portion hereof (which is $1,000
      principal amount or an integral multiple thereof) designated below
      pursuant to Section _______ of the Indenture, for shares of Common Stock
      of Pier 1 Imports, Inc. in accordance with the terms of the Indenture
      referred to in this Security, and directs that the shares issuable and
      deliverable upon such conversion, and any Securities representing any
      unconverted principal amount hereof, be issued and delivered to the
      registered holder hereof unless a different name has been indicated
      below. If shares or any portion of this Security not converted are to be
      issued in the name of a Person other than the undersigned, the
      undersigned shall pay all transfer taxes payable with respect thereto.
    

    
      This notice shall be deemed to be an irrevocable exercise of the option
      to convert this Security or the portions thereof that may be converted
      pursuant to the terms of the Indenture.  The Conversion Date shall be
      ___________.
    

    
      In connection with any conversion of Securities pursuant to Section
      12.01(a)(i) and 12.01(a)(ii) of the Indenture, the undersigned confirms
      and certifies as to the statements checked below:
    

    
      CHECK ONLY ONE BOX BELOW (AND, IF NECESSARY, INSERT RELEVANT
      INFORMATION):
    

    
    	
          ⃞
        	
           
        	
          1
        	
           
        	
          For purposes of applying Section 382 to the Company, the Holder and
          each of its Related Persons (i) is not and was not a 5% Shareholder
          with respect to the Company at any time during the Section 382
          Testing Period ending on the Conversion Date and (ii) would not as a
          result of the conversion of the Securities that are the subject of
          this Conversion Notice become a 5% Shareholder with respect to the
          Company.
        
	
          ⃞
        	

        	
          2
        	

        	
          For purposes of applying Section 382 to the Company, the Holder or
          any of its Related Persons is or was a 5% Shareholder with respect
          to the Company during the Section 382 Testing Period ending on the
          Conversion Date.
        
	

        	

        	

        	

        	
          
            The principal amount of the Securities held by the Holder is
          

        	
          
            $             
          

        

    

    
    	
           
        	
          The Holder requests a waiver from the Company pursuant to Section
          12.12 of the Indenture to convert the following principal amount of
          Securities:
        	
          
            $
          

        
	

        	

        	
           
        
	

        	
          If this Conversion Notice is being sent after the mailing of a
          Conversion Termination Notice, the Holder requests the preservation
          of conversion rights under Section 12.01(a)(ii) of the Indenture for
          any of the Holder’s Securities that are the subject of this
          Conversion Notice that are not converted.
        	

        

    

    

    

    
      
        

        

      

      
        
          A-11
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
          ⃞
        	
           
        	
          3
        	
           
        	
          For purposes of applying Section 382 to the Company, the Holder and
          each of its Related Persons (i) is not and was not a 5% Shareholder
          with respect to the Company at any time during the Section 382
          Testing Period ending on the Conversion Date and (ii) the conversion
          of the Securities subject to this Conversion Notice will result in
          the Holder or any of its Related Persons becoming a 5% Shareholder
          with respect to the Company.
        	

        	

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          
            The principal amount of the Securities held by the Holder is
          

        	
          
            $
          

        	

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          The conversion of the following principal amount of the Holder’s
          Securities will not result in the Holder or any of its Related
          Persons becoming a 5% Shareholder with respect to the Company:
        	
          
            $
          

        	
          
            1
          

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          The Holder requests a waiver from the Company pursuant to Section
          12.12 of the Indenture to convert the following principal amount of
          Securities:
        	
          
            $
          

        	

        
	

        	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          If this Conversion Notice is being sent after the mailing of a
          Conversion Termination Notice, the Holder requests the preservation
          of conversion rights under Section 12.01(a)(ii) of the Indenture for
          any of the Holder’s Securities that are the subject of this
          Conversion Notice that are not converted
        	

        	

        

    

    
    	
          
            Dated:
          

        	
          
             
          

        
	

        	
           
        
	

        	
          Signature(s)
        
	

        	
          The signature(s) should 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 S.E.C. Rule 17Ad-15.
        
	

        	
           
        
	

        	
           
        
	

        	
          
            Signature Guarantee
          

        

    

    

    
      1 Pursuant to the terms of the Indenture, absent a waiver
      from the Company, no Securities may be converted pursuant to Section
      12.01(a)(i) or Section 12.01(a)(ii) of the Indenture to the extent that
      the converting Holder or any of its Related Persons (i) is or was a 5%
      Shareholder with respect to the Company at any time during the Section
      382 Testing Period ending on the Conversion Date or (ii) would as a
      result of the conversion of the Securities the subject of a Conversion
      Notice become a 5% Shareholder with respect to the Company.
    

    
      
        

        

      

      
        
          A-12
        

        
          

        

      

      
        

        

      

    

    
    	
          Fill in for registration of shares if to be delivered,
        	
           
        	

        
	
          and Securities if to be issued other than to and in the
        	

        	

        
	
          name of registered holder:
        	

        	

        
	

        	

        	
           
        
	
           
        	

        	

        
	
          (Name)
        	

        	
          Principal amount requested for conversion (if less than all):
          $__________,000
        
	

        	

        	
           
        
	
           
        	

        	

        
	
          (Street Address)
        	

        	
          CUSIP number of Securities to be converted:
        
	

        	

        	
          __________
        
	

        	

        	
           
        
	
           
        	

        	
           
        
	
          (City state and zip code)
        	

        	
          Social Security or Other Taxpayer Number
        
	
          Please print name and address
        	

        	

        

    

    
      
        

        

      

      
        
          A-13
        

        
          

        

      

      
        

        

      

    

    

    

    
      FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
    

    
      To:       Pier 1 Imports, Inc.
    

    
      The undersigned registered holder of this Security hereby acknowledges
      receipt of a notice from Pier 1 Imports, Inc. (the “Company”)
      as to the occurrence of a Fundamental Change with respect to the Company
      and requests and instructs the Company to repurchase this Security, or
      the portion hereof (which is $1,000 principal amount or an integral
      multiple thereof) designated below, in accordance with the terms of the
      Indenture referred to in this Security and directs that the check or
      Common Stock of the Company, as applicable, in payment for this Security
      or the portion thereof and any Securities representing any unrepurchased
      principal amount hereof, be issued and delivered to the registered
      holder hereof unless a different name has been indicated below. If any
      portion of this Security not repurchased is to be issued in the name of
      a Person other than the undersigned, the undersigned shall pay all
      transfer taxes payable with respect thereto.
    

    
    	
          Dated:
        	
           
        	
           
        
	

        	

        	
           
        
	

        	

        	
          
            Signature(s)
          

        
	

        	

        	
           
        
	

        	

        	
          The signature(s) should 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 S.E.C. Rule 17Ad-15.
        
	

        	

        	
          
             
          

        
	

        	

        	
           
        
	

        	

        	
          Signature Guarantee
        
	

        	

        	
           
        
	
          
            Fill in if a check is to be issued, or Securities are to be
            issued, other than to and in the name of registered holder:
          

        
	

        	

        	
           
        
	
           
        	

        	

        
	
          (Name)
        	

        	
          Principal amount to be purchased
        
	

        	

        	
          (if less than all): $__________,000
        
	

        	

        	
           
        
	
          
             
          

        	

        	

        
	
          (Street Address)
        	

        	

        
	

        	

        	
           
        
	
           
        	

        	
           
        
	
          (City state and zip code)
        	

        	
          Social Security or Other Taxpayer Number
        
	
          Please print name and address
        	

        	

        

    

    
      
        

        

      

      
        
          A-14
        

        
          

        

      

      
        

        

      

    

    
      FORM OF PURCHASE NOTICE
    

    
      To:       Pier 1 Imports, Inc.
    

    
      The undersigned registered holder of this Security hereby acknowledges
      receipt of a notice from Pier 1 Imports, Inc. (the “Company”)
      as to the holder’s option to require the Company to repurchase this
      Security and requests and instructs the Company to repurchase this
      Security, or the portion hereof (which is $1,000 principal amount or a
      integral multiple thereof) designated below, in accordance with the
      terms of the Indenture referred to in this Security and directs that the
      check or Common Stock of the Company, as applicable, in payment for this
      Security or the portion thereof and any Securities representing any
      unrepurchased principal amount hereof, be issued and delivered to the
      registered holder hereof unless a different name has been indicated
      below. If any portion of this Security not repurchased is to be issued
      in the name of a Person other than the undersigned, the undersigned
      shall pay all transfer taxes payable with respect thereto.
    

    
    	
          Dated:
        	
           
        	
           
        
	

        	

        	
           
        
	

        	

        	
          Signature(s)
        
	

        	

        	
           
        
	

        	

        	
          The signature(s) should 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 S.E.C. Rule 17Ad-15.
        
	

        	

        	
           
        
	

        	

        	
           
        
	

        	

        	
          Signature Guarantee
        
	

        	

        	
           
        
	
          
            Fill in if a check is to be issued, or Securities are to be
            issued, other than to and in the name of registered holder:
          

        
	

        	

        	
           
        
	
           
        	

        	

        
	
          (Name)
        	

        	
          Principal amount to be purchased
        
	

        	

        	
          (if less than all): $__________,000
        
	

        	

        	
           
        
	
           
        	

        	

        
	
          (Street Address)
        	

        	

        
	

        	

        	
           
        
	
           
        	

        	
           
        
	
          (City state and zip code)
        	

        	
          Social Security or Other Taxpayer Number
        
	
          Please print name and address
        	

        	

        

    

    
      
        

        

      

      
        
          A-15
        

        
          

        

      

      
        

        

      

    

    
      EXHIBIT B
    

    
      FORM OF INDENTURE SUPPLEMENT TO ADD
SUBSIDIARY GUARANTORS
    

    
      This Supplemental Indenture, dated as of [__________] (this “Supplemental
      Indenture” or “Guarantee”), among [name of future
      Subsidiary Guarantor] (the “Guarantor”), Pier 1 Imports,
      Inc. (together with its successors and assigns, the “Company”),
      each other then existing Subsidiary Guarantor under the Indenture
      referred to below, and The Bank of New York Mellon Trust Company, N.A.,
      as Trustee under the Indenture referred to below.
    

    
      W I T N E S S E T H:
    

    
      WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have
      heretofore executed and delivered an Indenture, dated as of August [  ],
      2009 (as amended, supplemented, waived or otherwise modified, the “Indenture”),
      providing for the issuance of 9.0% Convertible Senior Notes due 2036 of
      the Company (the “Securities”);
    

    
      WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee and the
      Company are authorized to execute and deliver this Supplemental
      Indenture to amend the Indenture, without the consent of any
      Securityholder;
    

    
      NOW, THEREFORE, in consideration of the foregoing and for other good and
      valuable consideration, the receipt of which is hereby acknowledged, the
      Guarantor, the Company, the other Subsidiary Guarantors and the Trustee
      mutually covenant and agree for the equal and ratable benefit of the
      Holders of the Securities as follows:
    

    
      ARTICLE I
DEFINITIONS
    

    
      Section 1.01.  Defined Terms.  As used in this
      Supplemental Indenture, terms defined in the Indenture or in the
      preamble or recital hereto are used herein as therein defined, except
      that the term “Holders” in this Guarantee shall refer to
      the term “Holders” as defined in the Indenture and the
      Trustee acting on behalf or for the benefit of such Holders.  The words “herein,”
      “hereof” and “hereby” and other words of
      similar import used in this Supplemental Indenture refer to this
      Supplemental Indenture as a whole and not to any particular section
      hereof.
    

    
      ARTICLE II
AGREEMENT TO BE BOUND; GUARANTEE
    

    
      Section 2.01.  Agreement to be Bound.  The Guarantor
      hereby becomes a party to the Indenture as a Subsidiary Guarantor and as
      such will have all of the rights and be subject to all of the
      obligations and agreements of a Subsidiary Guarantor under the
      Indenture.  The Guarantor agrees to be bound by all of the provisions of
      the Indenture applicable to a Subsidiary Guarantor and to perform all of
      the obligations and agreements of a Subsidiary Guarantor under the
      Indenture.  
    

    
      
        

        

      

      
        
          B-1
        

        
          

        

      

      
        

        

      

    

    
      Section 2.02.  Guarantee.  The Guarantor fully,
      unconditionally and irrevocably Guarantees to each Holder of the
      Securities and the Trustee the Obligations pursuant to Article 10 of the
      Indenture on a senior basis.
    

    
      ARTICLE III
MISCELLANEOUS
    

    
      Section 3.01.  Notices.  All notices and other
      communications to the Guarantor shall be given as provided in the
      Indenture to the Guarantor, at its address set forth below, with a copy
      to the Company as provided in the Indenture for notices to the Company.
    

    
      Section 3.02.  Parties.  Nothing expressed or mentioned
      herein is intended or shall be construed to give any Person, firm or
      corporation, other than the Holders and the Trustee, any legal or
      equitable right, remedy or claim under or in respect of this
      Supplemental Indenture or the Indenture or any provision herein or
      therein contained.
    

    
      Section 3.03.  Governing Law.  This Supplemental
      Indenture shall be governed by, and construed in accordance with, the
      laws of the State of New York.
    

    
      Section 3.04.  Severability Clause.  In case any
      provision in this Supplemental Indenture shall be invalid, illegal or
      unenforceable, the validity, legality and enforceability of the
      remaining provisions shall not in any way be affected or impaired
      thereby and such provision shall be ineffective only to the extent of
      such invalidity, illegality or unenforceability.
    

    
      Section 3.05.  Ratification of Indenture; Supplemental
      Indentures Part of Indenture.  Except as expressly amended hereby,
      the Indenture is in all respects ratified and confirmed and all the
      terms, conditions and provisions thereof shall remain in full force and
      effect.  This Supplemental Indenture shall form a part of the Indenture
      for all purposes, and every Holder of Securities heretofore or hereafter
      authenticated and delivered shall be bound hereby.  The Trustee makes no
      representation or warranty as to the validity or sufficiency of this
      Supplemental Indenture.
    

    
      Section 3.06.  Counterparts.  The parties hereto may
      sign one or more copies of this Supplemental Indenture in counterparts,
      all of which together shall constitute one and the same agreement.
    

    
      Section 3.07.  Headings.  The headings of the Articles
      and the sections in this Guarantee are for convenience of reference only
      and shall not be deemed to alter or affect the meaning or interpretation
      of any provisions hereof.
    

    
      
        

        

      

      
        
          B-2
        

        
          

        

      

      
        

        

      

    

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

        
	
           
        	

        
	

        	
          
            THE COMPANY
          

        
	

        	
           
        	

        	

        	

        	

        
	

        	

        	
          
            PIER 1 IMPORTS, INC.
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	
          
            THE SUBSIDIARY GUARANTORS
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 ASSETS, INC.
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 LICENSING, INC.
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 IMPORTS (U.S.), INC.
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 VALUE SERVICES, LLC
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	
          
            By:
          

        	
          
            Pier 1 Imports (U.S.), Inc.,
          

        
	

        	

        	

        	

        	
          
            its sole member and manager
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	

        	

        	
          
            Title:
          

        

    

    
      
        

        

      

      
        
          B-3
        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
           
        	
          
            PIER 1 HOLDINGS, INC.
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            PIER 1 SERVICES COMPANY,
          

        
	

        	

        	
          
            a Delaware statutory trust
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	
          
            By:
          

        	
          
            Pier 1 Holdings, Inc.,
          

        
	

        	

        	

        	

        	
          
            its managing trustee
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            [INSERT OTHER SUBSIDIARY
          

        
	

        	

        	
          
            GUARANTORS]
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	

        	
           
        
	

        	
          
            THE TRUSTEE
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            THE BANK OF NEW YORK MELLON
          

        
	

        	

        	
          
            TRUST COMPANY, N.A., as Trustee
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
           
        
	

        	

        	

        	
          
            Name:
          

        
	

        	

        	

        	
          
            Title:
          

        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	

        	
           
        
	

        	

        	

        	

        	

        	
           
        

    

    
      
        

        

      

      
        
          B-4Exhibit 10.1
    

    

    

    
      THIRD AMENDMENT TO CREDIT AGREEMENT
    

    
      This Third Amendment to Credit Agreement (this “Third Amendment”)
      is made as of July 30, 2009 by and among
    

    
      PIER 1 IMPORTS (U.S.), INC. (in such capacity, the “Borrower”),
      a Delaware corporation with its principal executive offices at 100 Pier
      1 Place, Fort Worth, Texas 76102;
    

    
      BANK OF AMERICA, N.A., a national banking association with
      offices at 100 Federal Street, Boston, Massachusetts 02110, as
      administrative agent (in such capacity, the “Administrative
      Agent”) for its own benefit and the benefit of the other Credit
      Parties;
    

    
      BANK OF AMERICA, N.A., a national banking association with
      offices at 100 Federal Street, Boston, Massachusetts 02110, as
      collateral agent (in such capacity, the “Collateral Agent”)
      for its own benefit and the benefit of the other Credit Parties;
    

    
      The LENDERS party hereto;
    

    
      WELLS FARGO RETAIL FINANCE, LLC, a Delaware limited liability
      company with offices at One Boston Place - 19th Floor, Boston,
      Massachusetts 02109, as syndication agent; and
    

    
      JPMORGAN CHASE BANK, N.A., a national banking association with
      offices at 2200 Ross Avenue, 9th Floor, Dallas, Texas 75201,
      as documentation agent;
    

    
      in consideration of the mutual covenants herein contained and benefits
      to be derived herefrom.  
    

    

    

    
      WITNESSETH
    

    
      WHEREAS, the Borrower, the Lenders, the Administrative Agent, and the
      Collateral Agent, among others, entered into a Credit Agreement dated as
      of November 22, 2005, as amended by that certain First Amendment to
      Credit Agreement dated as of July 28, 2006 and by that certain Second
      Amendment to Credit Agreement dated as of May 31, 2007 (collectively,
      the “Credit Agreement”);
    

    
      WHEREAS, the parties desire to further amend the terms and conditions of
      the Credit Amendment as set forth herein.
    

    
      NOW THEREFORE, it is hereby agreed as follows:
    

    
      1.       Definitions. All
      capitalized terms used herein and not otherwise defined shall have the
      same meaning herein as in the Credit Agreement.
    

    
      
        

        

      

      
        
          1
        

        
          

        

      

      
        

        

      

    

    
      2.       Amendment to Article I.  The
      provisions of Article I of the Credit Agreement are hereby amended as
      follows:
    

    
      (a)                The definition of “Applicable Margin” is hereby
      deleted in its entirety and the following substituted in its stead:
    

    
                “ “Applicable
      Margin” means:  
    

    
      (a)       From and after the Third Amendment Effective Date until the
      first Adjustment Date after the Third Amendment Effective Date, the
      percentages set forth in Level II of the Pricing Grid below; and
    

    
      (b)       On the first day of each January, April, July and October of
      each year (each, an “Adjustment Date”), commencing October
      1, 2009, the Applicable Margin shall be determined from such Pricing
      Grid based upon Average Daily Availability for the most recently ended
      three month period immediately preceding such Adjustment Date; provided
      that notwithstanding anything to the contrary set forth herein, upon the
      occurrence of an Event of Default, the Administrative Agent may, and at
      the direction of the Required Lenders shall, immediately increase the
      Applicable Margin to that set forth in Level I (even if the Average
      Daily Availability requirements for a different Level have been met,
      without limiting the right of the Administrative Agent or the Required
      Lenders to charge interest at the Default Rate as provided in Section
      2.12); provided further if the Borrowing Base Certificates
      are at any time restated or otherwise revised (including as a result of
      an audit) or if the information set forth in any Borrowing Base
      Certificates otherwise proves to be false or incorrect such that the
      Applicable Margin would have been higher than was otherwise in effect
      during any period, without constituting a waiver of any Default or Event
      of Default arising as a result thereof, interest due under this
      Agreement shall be immediately recalculated at such higher rate for any
      applicable periods and shall be due and payable on demand.
    

    
    	
           
        	
          Level
        	
           
        	
          Average Daily Availability
        	
           
        	
          LIBO Applicable Margin
        	
           
        	
          Prime Rate Applicable Margin
        
	

        	
          I
        	
           
        	
          Less than or equal to 33% of the Borrowing Base
        	
           
        	
          3.50%
        	
           
        	
          2.50%
        
	

        	
          II
        	
           
        	
          Greater than 33% of the Borrowing Base but less than or equal to 66%
          of the Borrowing Base
        	
           
        	
          3.25%
        	
           
        	
          2.25%
        
	

        	
          III
        	
           
        	
          Greater than 66% of the Borrowing Base
        	
           
        	
          3.00%
        	
           
        	
          2.00%”
        

    

    
      (b)                The definition of “Borrowing Base” is hereby amended
      by deleting clauses (iv) and (v) thereof and substituting the following
      in its stead:
    

    
      “(iv)     Intentionally Omitted.
    

    
      (v)       the then amount of all Availability Reserves.”
    

    
      
        

        

      

      
        
          2
        

        
          

        

      

      
        

        

      

    

    
      (c)           The definition of “Capital Stock” is hereby deleted in its
      entirety and the following substituted in its stead:
    

    
      “ “Capital Stock” means, as to any Person that is a
      corporation, the authorized shares of such Person’s capital stock,
      including all classes of common, preferred, voting and nonvoting capital
      stock, and, as to any Person that is not a corporation or an individual,
      the membership or other ownership interests in such Person, including,
      without limitation, the right to share in profits and losses, the right
      to receive distributions of cash and other property, and the right to
      receive allocations of items of income, gain, loss, deduction and credit
      and similar items from such Person, whether or not such interests
      include voting or similar rights entitling the holder thereof to
      exercise control over such Person, collectively with, in any such case,
      all warrants, options and other rights to purchase or otherwise acquire,
      and all other instruments convertible into or exchangeable for, any of
      the foregoing; provided that in no event shall any Indebtedness
      (or instrument representing any Indebtedness) that is convertible into
      or exchangeable for any of the foregoing constitute “Capital Stock”
      (unless and until so converted or exchanged) or otherwise be considered
      a right to acquire “Capital Stock” for any purpose of this Agreement.”
    

    
      (d)          The definition of “Consolidated EBITDA” is hereby deleted
      in its entirety and the following substituted in its stead:
    

    
      “ “Consolidated EBITDA” means, with respect to any
      Person for a twelve (12) Fiscal Month period, the sum (without
      duplication) of (a) Consolidated Net Income for such period, plus
      (b) depreciation and amortization for such period, plus (c)
      provisions for Taxes based on income that were deducted in determining
      Consolidated Net Income for such period, plus (d) Consolidated
      Interest Expense that was deducted in determining Consolidated Net
      Income for such period, plus (e) any other non-cash charges,
      including any write offs or write downs, reducing Consolidated Net
      Income for such period (provided that any such non-cash charges
      shall be treated as cash charges in any future period in which the cash
      disbursement attributable thereto are made and such cash disbursement in
      such future period shall be subtracted from Consolidated EBITDA in such
      future period, and excluding amortization of a prepaid cash item that
      was paid in a prior period to the extent such cash item was deducted in
      calculating Consolidated EBITDA in period when paid) minus (f)
      extraordinary gains for such period.”
    

    
      (e)          The definition of “Debt Service Charges” is hereby amended
      by adding the following sentence at the end of such definition:
    

    
      “Notwithstanding anything to the contrary herein contained, prepayments
      of principal of the Convertible Notes or any Refinancing Indebtedness,
      in each case to the extent such prepayments are permitted hereunder,
      shall be excluded in the determination of Debt Service Charges.”
    

    
      
        

        

      

      
        
          3
        

        
          

        

      

      
        

        

      

    

    
      (f)           The definition of “Line Fee” is hereby deleted in its
      entirety and the following substituted in its stead:
    

    
      “ “Line Fee” means  a fee equal to 0.50% per annum
      (on the basis of actual days elapsed in a year of 360 days) of the
      average daily balance of the difference between (x) each Lender’s
      Commitment and (y) the sum of (i) such Lender’s Commitment Percentage of
      the principal amount of Loans then outstanding, net of any Swingline
      Loans, and (ii) such Lender’s Commitment Percentage of the then Letter
      of Credit Outstandings for each day commencing on the date hereof and
      ending on but excluding the Termination Date.”
    

    
      (g)          The definition of “Permitted Acquisition” is hereby amended
      by deleting clause (g) thereof in its entirety and substituting the
      following in its stead:
    

    
      “(g)      If any Loans are then outstanding or, on a pro forma and
      projected basis (which projections shall be reasonably satisfactory to
      the Administrative Agent), for the subsequent twelve month period are
      anticipated to be outstanding, the Payment Conditions shall have been
      satisfied.”
    

    
      (h)          The definition of “Permitted Dividends” is hereby amended
      by deleting clauses (d), (e) and (f) in their entirety and substituting
      the following new clauses (d) and (e) in their stead:
    

    
      “(d)      Restricted Payments for the purpose of repurchasing or
      redeeming Capital Stock in an amount not to exceed $40,000,000 in the
      aggregate from and after the Third Amendment Effective Date and prior to
      the Maturity Date, so long as (i) no Event of Default has occurred or
      shall occur after giving effect to such Restricted Payment, and (ii) if
      the Restricted Payment is to be funded in whole or in part with proceeds
      of Loans: (A) Availability (on a projected and pro forma basis for the
      twelve months following such Restricted Payment) will be equal to or
      greater than thirty-five percent (35%) of the lesser of the Revolving
      Credit Ceiling or the Borrowing Base after giving effect to such
      Restricted Payment and to all Debt Service Charges coming due for the
      twelve months following such Restricted Payment, (B) the Consolidated
      Fixed Charge Coverage Ratio will be equal to or greater than 1.10:1.00,
      in each case after giving effect to such Restricted Payments and as
      projected on a pro forma basis for the twelve months following such
      Restricted Payments, and (C) the Borrower shall have provided
      projections to the Administrative Agent, in form and substance
      satisfactory to the Administrative Agent, evidencing the satisfaction of
      the conditions described in clauses (ii)(A) and (ii)(B) above; and
    

    
      “(e)      Restricted Payments other than those described in clause (d)
      above, so long as (i) no Event of Default has occurred or shall occur
      after giving effect to such Restricted Payment, and (ii) if the
      Restricted Payment is to be funded in whole or in part with proceeds of
      Loans: (A) Availability (on a projected and pro forma basis for the
      twelve months following such Restricted Payment) will be equal to or
      greater than thirty-five percent (35%) of the lesser of the Revolving
      Credit Ceiling or the Borrowing Base after giving effect to such
      Restricted Payment and to all Debt Service Charges coming due for the
      twelve months following such Restricted Payment, (B) the Consolidated
      Fixed Charge Coverage Ratio will be equal to or greater than 1.10:1.00,
      in each case after giving effect to such Restricted Payments and as
      projected on a pro forma basis for the twelve months following such
      Restricted Payments, and (C) the Borrower shall have provided
      projections to the Administrative Agent, in form and substance
      satisfactory to the Administrative Agent, evidencing the satisfaction of
      the conditions described in clauses (ii)(A) and (ii)(B) above.”
    

    
      
        

        

      

      
        
          4
        

        
          

        

      

      
        

        

      

    

    
      (i)           The definition of “Permitted Encumbrances” is hereby
      amended by deleting the phrase “; and” at the end of clause (aa)
      thereof, re-lettering clause (bb) thereof as clause (dd), and inserting
      the following new clauses (bb) and (cc) therein:
    

    
      “(bb)     Liens to secure any Refinancing Indebtedness, provided
      that such Liens shall be subject at all times to the terms of an
      intercreditor agreement in form and substance acceptable to the
      Administrative Agent in its sole reasonable discretion;
    

    
      (cc)      Liens consisting of deposits in the ordinary course of
      business in an aggregate amount not to exceed $1,000,000 at any time
      outstanding; and”
    

    
      (j)           The definition of “Permitted Indebtedness” is hereby
      amended by deleting the phrase “; and” at the end of clause (s) thereof,
      re-lettering clause (t) thereof as clause (u), and inserting the
      following new clause (t) therein:
    

    
      “(t)      Any Refinancing Indebtedness; and”
    

    
      (k)           The definition of “Prime Rate” is hereby deleted in its
      entirety and the following substituted in its stead:
    

    
      “ “Prime Rate” means, for any day, the highest of:
      (a) the variable annual rate of interest then most recently announced by
      Bank of America at its head office in Charlotte, North Carolina as its
      “Prime Rate”; (b) the Federal Funds Effective Rate in effect on such day
      plus 1⁄2 of 1% (0.50%) per annum; and (c) the Adjusted LIBO Rate for an
      Interest Period of one month, plus 1% per annum.  The Prime Rate is a
      reference rate and does not necessarily represent the lowest or best
      rate being charged to any customer.  If for any reason the
      Administrative Agent shall have determined (which determination shall be
      conclusive absent manifest error) that it is unable to ascertain the
      Federal Funds Effective Rate for any reason, including the inability or
      failure of the Administrative Agent to obtain sufficient quotations
      thereof in accordance with the terms hereof, the Prime Rate shall be
      determined without regard to clause (b) of the first sentence of this
      definition, until the circumstances giving rise to such inability no
      longer exist.  If for any reason the Administrative Agent, in accordance
      with Section 2.10 hereof, shall have determined (which determination
      shall be conclusive absent manifest error) that adequate and reasonable
      means do not exist for ascertaining the Adjusted LIBO Rate for an
      Interest Period of one month, the Prime Rate shall be determined without
      regard to clause (c) of the first sentence of this definition, until the
      circumstances giving rise to such inability no longer exist.  Any change
      in the Prime Rate due to a change in Bank of America’s Prime Rate, the
      Adjusted LIBO Rate (after the expiration of the Interest Period
      previously used in determining the Prime Rate) or the Federal Funds
      Effective Rate shall be effective on the effective date of such change
      in Bank of America’s Prime Rate, the Adjusted LIBO Rate (after the
      expiration of the Interest Period previously used in determining the
      Prime Rate) or the Federal Funds Effective Rate, respectively.”  
    

    
      
        

        

      

      
        
          5
        

        
          

        

      

      
        

        

      

    

    
      (l)           The definition of “Revolving Credit Ceiling” is hereby
      deleted in its entirety and the following substituted in its stead:
    

    
      “ “Revolving Credit Ceiling” means $300,000,000, as
      such amount may be increased or reduced in accordance with the terms of
      this Agreement.”
    

    
      (m)          The definitions of “FMV”, “Deed of Trust”, “Eligible Real
      Estate”, “FIRREA”, “Real Estate Advance Rate”, “Realty Reserves”, “Title
      Insurance Company”, and “Title Insurance Policy” are hereby deleted in
      their entirety wherever the same shall appear.
    

    
      (n)           The following new definitions are added to Article I in
      appropriate alphabetical order:
    

    
      (i)       “ “Payment
      Conditions” means, with respect to any transaction, (i) no Event of
      Default has occurred or shall occur after giving effect to such
      transaction, (ii) Availability will be equal to or greater than thirty
      percent (30%) of the lesser of the Revolving Credit Ceiling or the
      Borrowing Base after giving effect to such transaction and as projected
      on a pro forma basis for the nine months following such transaction, and
      (iii) the Borrower shall have provided projections to the Administrative
      Agent, in form and substance satisfactory to the Administrative Agent,
      evidencing the satisfaction of the conditions described in clauses (i)
      and (ii) above.”
    

    
      (ii)      “ “Refinancing
      Indebtedness” means any Indebtedness or any guaranty by a Loan Party
      thereof, in each case issued in exchange for, or the Net Proceeds of
      which are used to extend, refinance, renew, replace, defease or refund
      (collectively, to “refinance”), the Convertible Notes; provided,
      that (a) the face amount of such Refinancing Indebtedness does not
      exceed the face amount of the Convertible Notes so refinanced (plus
      unpaid accrued interest and premium (including tender premiums) thereon
      and underwriting discounts, defeasance costs, fees, commissions and
      expenses), (b) the maturity date of such Refinancing Indebtedness shall
      not be earlier than four months after the maturity date of the
      Obligations, (c) except as provided in Section 7 of the Third Amendment,
      the Refinancing Indebtedness shall not require cash payments of
      principal other than at maturity, and (d) the Refinancing Indebtedness
      shall not have different obligors, or greater guarantees than the
      Convertible Notes.”
    

    
      (iii)     “ “Third Amendment”
      means that certain Third Amendment to Credit Agreement dated as of July
      30, 2009 by and among the Borrower, the Agents, the Lenders, Wells Fargo
      Retail Finance, LLC, as Syndication Agent, and JPMorgan Chase Bank,
      N.A., as Documentation Agent.”
    

    
      (iv)      “ “Third
      Amendment Effective Date” means July 30, 2009.”
    

    
      
        

        

      

      
        
          6
        

        
          

        

      

      
        

        

      

    

    
      3.       Amendments to Article II.  The
      provisions of Article II of the Credit Agreement are hereby amended as
      follows:
    

    
      (a)                The number “$325,000,000” appearing in Section
      2.01(a) is hereby deleted and the number “$300,000,000” substituted in
      its stead.
    

    
      (b)                The provisions of Section 2.19 are hereby amended as
      follows:
    

    
      (i)                          By amending Section 2.19(b) by deleting the
      phrase “0.25% per annum” in the third line thereof in its entirety and
      substituting the phrase “0.50% per annum” in its stead.
    

    
      (ii)                         By amending Section 2.19(c) by deleting
      clause (ii) thereof in its entirety and substituting the following
      clause (ii) in its stead:
    

    
      “(ii)     Commercial Letters of Credit: At a per annum rate equal to
      fifty percent (50%) of the then Applicable Margin for LIBO Loans;”
    

    
      4.       Amendments to Article V.  The
      provisions of Article V of the Credit Agreement are hereby amended as
      follows:
    

    
      (a)                The provisions of Section 5.01(d) are hereby deleted
      in their entirety and the following substituted in their stead:
    

    
      “(d)      On the tenth (10th)
      Business Day of each Fiscal Month, a certificate in the form of Exhibit
      J (a “Borrowing Base Certificate”) showing the
      Borrowing Base as of the close of business on the immediately preceding
      Fiscal Month, provided that if (i) an Event of Default has
      occurred and is continuing, or (ii) if Availability (as calculated under
      clause (b) of the definition thereof) is at any time less than
      twenty-five percent (25%) of the Borrowing Base, then in either case
      such Borrowing Base Certificate shall be furnished on Wednesday of each
      week (or, if Wednesday is not a Business Day, on the next succeeding
      Business Day), and provided further that if any request
      for a Loan will result in Credit Extensions exceeding $150,000,000, a
      Borrowing Base Certificate shall accompany such request; each Borrowing
      Base Certificate to be certified as complete and correct in all material
      respects on behalf of the Borrower by a Financial Officer of the
      Borrower;”
    

    
      (b)                The provisions of Section 5.01(j) are hereby amended
      by deleting clause (ii) thereof in its entirety and substituting the
      following in its stead:
    

    
      “(ii)     the forecasted consolidated statements of income or operations
      and consolidated cash forecasts prepared on a monthly basis, in form
      reasonably acceptable to the Administrative Agent, and”
    

    
      (c)                The provisions of Section 5.08(b) are hereby deleted
      in their entirety and the following substituted in their stead:
    

    
      “(b)      Each Loan Party will, and will cause its Material Subsidiaries
      to, from time to time upon the request of any Agent, permit any Agent or
      professionals (including consultants, accountants, lawyers and
      appraisers) retained by the Agents, subject to reasonable prior notice
      and during normal business hours prior to the occurrence of an Event of
      Default, to conduct appraisals, commercial finance examinations and
      other evaluations, including, without limitation, of (i) the Borrower’s
      practices in the computation of the Borrowing Base, and (ii) the assets
      included in the Borrowing Base and related financial information such
      as, but not limited to, sales, gross margins, payables, accruals and
      reserves.  Any Lender, at its own expense, may accompany the Agent or
      professionals retained by the Agents on such examination.  The Loan
      Parties shall pay the reasonable out-of-pocket fees and expenses of the
      Agents or such professionals with respect to such evaluations and
      appraisals, provided that (x) the Administrative Agent may, in
      its reasonable discretion, conduct no more than two (2) commercial
      finance examinations and two (2) appraisals of the Borrower’s Inventory
      in any twelve (12) month period (provided that (i) if at any time during
      such twelve (12) month period either (A) any Loans in excess of
      $10,000,000 are outstanding for more than ten (10) consecutive Business
      Days, or (B) Availability is less than thirty percent (30%) of the
      lesser of the Revolving Credit Ceiling or the Borrowing Base for more
      than five (5) consecutive Business Days, the Administrative Agent may,
      in its reasonable discretion, conduct one (1) additional commercial
      finance examination and one (1) additional Inventory appraisal during
      such twelve (12) month period, and (ii) if any Event of Default exists,
      the Agents, in their reasonable discretion, may cause such additional
      commercial finance examinations and Inventory appraisals to be taken as
      the Agents reasonably determine, in each case at the expense of the Loan
      Parties).”  
    

    
      
        

        

      

      
        
          7
        

        
          

        

      

      
        

        

      

    

    
      (d)                The provisions of Section 5.11 are hereby deleted in
      their entirety and the following substituted in their stead:
    

    
      “SECTION 5.11       Use of
      Proceeds and Letters of Credit.  The proceeds of Loans made
      hereunder and of Letters of Credit issued hereunder will be used only
      (a) to finance the acquisition of working capital assets of the Borrower
      and its Subsidiaries, including the purchase of inventory and equipment,
      in each case in the ordinary course of business, (b) to finance Capital
      Expenditures of the Borrower and its Subsidiaries, (c) to finance
      Permitted Acquisitions, and (d) for general corporate purposes
      (including but not limited to the repayment or refinancing of
      Indebtedness and the making of Investments and Restricted Payments), in
      each case to the extent permitted in this Agreement.  No part of the
      proceeds of any Loan or any Letter of Credit will be used, whether
      directly or indirectly, for any purpose that entails a violation of any
      of the regulations of the Board, including Regulations U and X.”
    

    
      5.       Amendment to Article VI.  The
      provisions of Article VI of the Credit Agreement are hereby amended as
      follows:
    

    
      (a)                The provisions of Section 6.06(b) of the Credit
      Agreement are hereby deleted in their entirety and the following
      substituted in their stead:
    

    
      “(b)      No Loan Party will make or agree to pay or make, directly or
      indirectly, any payment or other distribution (whether in cash,
      securities or other property) of or in respect of principal of or
      interest on any Indebtedness (other than the Obligations), or any
      payment or other distribution (whether in cash, securities or other
      property), including any sinking fund or similar deposit, on account of
      the purchase, redemption, retirement, acquisition, cancellation or
      termination of any Indebtedness, except:
    

    
      
        

        

      

      
        
          8
        

        
          

        

      

      
        

        

      

    

    
      (i)       as long as no Event of Default then exists or would arise
      therefrom, mandatory payments and mandatory prepayments of interest and
      principal as and when due in respect of any Permitted Indebtedness;
    

    
      (ii)      prepayments, exchanges, purchases, redemptions, retirements,
      acquisitions, cancellations or terminations (collectively, “Prepayments”)
      of (A) prior to March 1, 2010, all or any portion of the Convertible
      Notes, provided that (1) no Event of Default exists or would
      arise therefrom, (2) the aggregate amount of the cash consideration for
      such Prepayment does not exceed $50,000,000, and (3) the only Loans then
      outstanding have been made to pay for any transactions costs, in an
      amount not to exceed $5,000,000 in the aggregate, incurred by the Loan
      Parties in connection with such Prepayment; and (B) thereafter, so long
      as no Loans are then outstanding or, on a pro forma and projected basis
      (which projections shall be reasonably satisfactory to the
      Administrative Agent), for the subsequent twelve month period are
      anticipated to be outstanding, in each case, in excess of $30,000,000,
      the balance of the Convertible Notes or any Refinancing Indebtedness at
      any time after the Third Amendment Effective Date, provided that
      the Payment Conditions shall have been satisfied.  Any Prepayment of the
      Convertible Notes or the Refinancing Indebtedness solely through the
      issuance of shares of Capital Stock of a Loan Party shall be deemed a
      permitted prepayment of such Indebtedness; and
    

    
      (iii)     refinancings of Indebtedness to the extent the Indebtedness
      incurred in connection with such refinancing would otherwise be
      permitted under this Agreement.”
    

    
      (b)                The provisions of Section 6.10 of the Credit
      Agreement are hereby amended by deleting the words “Fixed Charge
      Coverage Ratio” wherever the same shall appear and substituting the
      words “Consolidated Fixed Charge Coverage Ratio” in their stead.
    

    
      6.       Amendment to Schedules.  The
      Commitments of the Lenders are hereby reduced on a pro rata basis as of
      the Third Amendment Effective Date to $300,000,000.  Accordingly,
      Schedule 1.1 to the Credit Agreement is hereby deleted in its entirety
      and the new Schedule 1.1 in the form annexed hereto is substituted in
      its stead.
    

    
      7.       Waivers; Acknowledgments.  The
      Agents and the Lenders hereby acknowledge and agree as follows:
    

    
      (a)                The Administrative Agent and the Lenders hereby waive
      any Default or Event of Default that may arise under any Loan Document
      in connection with any Refinancing Indebtedness as a result of the
      payment of cash and/or the issuance of Capital Stock by the Parent, in
      each case, upon conversion and retirement of the Refinancing
      Indebtedness (including any payment of make-whole amounts in cash in
      settlement of any conversion of all or part of such Indebtedness to
      Capital Stock).
    

    
      (b)                The Administrative Agent and the Lenders hereby
      acknowledge and agree that the cancellation, retirement or termination
      of any Convertible Notes held by Pier International Limited (whether
      directly, as a result of dividends of such Convertible Notes ultimately
      to the Parent, or otherwise) will not constitute a Default or Event of
      Default.
    

    
      
        

        

      

      
        
          9
        

        
          

        

      

      
        

        

      

    

    
      (c)                The Administrative Agent and the Lenders waive prior
      notice of reduction of the Commitments as provided in this Third
      Amendment and as required under Section 2.15 of the Credit Agreement and
      waive any requirement that the Commitment reduction provided for in this
      Third Amendment be in the sum of $20,000,000 or an integral multiple
      thereof.
    

    
      8.       Conditions to
      Effectiveness. This Third Amendment shall not be effective until
      each of the following conditions precedent has been fulfilled to the
      satisfaction of the Administrative Agent:
    

    
      (a)                This Third Amendment shall have been duly executed
      and delivered by the Borrower, the Facility Guarantors, the
      Administrative Agent, the Collateral Agent and the Required
      Lenders.  The Administrative Agent shall have received a fully executed
      copy hereof and of each other document required hereunder.
    

    
      (b)                All necessary consents and approvals to this Third
      Amendment shall have been obtained.
    

    
      (c)                All action on the part of the Loan Parties necessary
      for the valid execution, delivery and performance by the Loan Parties of
      this Third Amendment shall have been duly and effectively taken.  The
      Administrative Agent shall have received from the Loan Parties true
      copies of their respective certificate of the resolutions authorizing
      the transactions described herein, each certified by their secretary or
      other appropriate officer to be true and complete, together with
      certificates of legal existence and good standing for each Loan Party as
      certified by the secretary of state (or similar Governmental Authority)
      of such Loan Party’s jurisdiction of organization as of a recent date.
    

    
      (d)                No Default or Event of Default shall have occurred
      and be continuing, both before and immediately after giving effect to
      the execution of this Third Amendment.
    

    
      (e)                The Borrower shall have paid to the Administrative
      Agent, (i) for the ratable benefit of the Lenders (including Bank of
      America, N.A.) consenting to this Third Amendment on or prior to July
      17, 2009, an amendment fee (to the extent this Third Amendment becomes
      effective in accordance with its terms) in an amount equal to 0.375% of
      each such Lender’s Commitment, and (ii) all fees then due to, and
      reasonable out-of-pocket costs and expenses incurred by, the
      Administrative Agent in connection with this Third Amendment, including,
      without limitation, all attorneys’ fees.
    

    
      If each of the conditions precedent set forth in this Section 8 has not
      been fulfilled to the satisfaction of the Administrative Agent on or
      before July 31, 2009, the agreement of the Lenders to enter into this
      Third Amendment shall be void and of no effect.
    

    
      9.       Miscellaneous.
    

    
      (a)                Notwithstanding the definition of “Cash Management
      Documentation Event” set forth in the Credit Agreement, the Borrower
      shall use its commercially reasonable efforts to deliver to the
      Administrative Agent the documents, agreements and other materials
      required by Section 2.18(a) of the Credit Agreement, each in form and
      substance reasonably satisfactory to the Administrative Agent, within
      ninety (90) days following the Third Amendment Effective Date.
    

    
      
        

        

      

      
        
          10
        

        
          

        

      

      
        

        

      

    

    
      (b)                Except as provided herein or in any waivers
      previously delivered by the Administrative Agent or the Required
      Lenders, all terms and conditions of the Credit Agreement and the other
      Loan Documents remain in full force and effect.  The Loan Parties hereby
      ratify, confirm, and reaffirm all of the representations, warranties and
      covenants therein contained, other than representations and warranties
      that relate solely to an earlier date.
    

    
      (c)                The Loan Parties hereby acknowledge and agree that
      they have no offsets, defenses, claims, or counterclaims against the
      Agents or any Lender or the Issuing Bank, or any of their respective
      officers, directors, employees, attorneys, representatives,
      predecessors, successors, or assigns with respect to the Loan Documents,
      the Obligations, or otherwise, and that if the Loan Parties now have, or
      ever did have, in each case, prior to the date hereof, any offsets,
      defenses, claims, or counterclaims against the Agents or any Lender or
      the Issuing Bank, or any of their respective officers, directors,
      employees, attorneys, representatives, predecessors, successors, or
      assigns, whether known or unknown, at law or in equity, all of them are
      hereby expressly WAIVED, and the Loan Parties hereby RELEASE
      the Agents and each Lender and the Issuing Bank, and each of their
      respective officers, directors, employees, attorneys, representatives,
      predecessors, successors, and assigns from any liability therefor.
    

    
      (d)                This Third Amendment may be executed in several
      counterparts and by each party on a separate counterpart, each of which
      when so executed and delivered, shall be an original, and all of which
      together shall constitute one instrument.  Delivery of an executed
      counterpart of a signature page of this Third Amendment by telecopy or
      e-mail shall be effective delivery of a manually executed counterpart
      thereof.
    

    
      (e)                NOTICE
      OF INDEMNIFICATION:     THE BORROWER AND FACILITY GUARANTORS
      HEREBY ACKNOWLEDGE AND AGREE THAT THE CREDIT AGREEMENT AND THE SECURITY
      DOCUMENTS CONTAIN CERTAIN INDEMNIFICATION PROVISIONS (INCLUDING, WITHOUT
      LIMITATION, THOSE CONTAINED IN SECTION 9.03 OF THE CREDIT AGREEMENT),
      WHICH IN CERTAIN CIRCUMSTANCES, COULD INCLUDE AN INDEMNIFICATION OF THE
      AGENTS AND THE CREDIT PARTIES FROM CLAIMS OR LOSSES ARISING AS A RESULT
      OF THE AGENTS’ AND THE CREDIT PARTIES’ OWN NEGLIGENCE OR ON ACCOUNT OF
      CLAIMS OF STRICT LIABILITY.
    

    
      (f)                The Credit Agreement, as amended by this Third
      Amendment, expresses the entire understanding of the parties with
      respect to the matters set forth herein and therein and supersedes all
      prior discussions or negotiations hereon.  
    

    
      (g)                By executing this Third Amendment, the undersigned
      Facility Guarantors hereby consent to the Third Amendment to Credit
      Agreement and acknowledge that their Guarantee remains in full force and
      effect.
    

    
      (h)                This Third Amendment shall be governed by, and
      construed in accordance with, the laws of the State of New York, without
      giving effect to conflicts of laws principles thereof.
    

    
      
        

        

      

      
        
          11
        

        
          

        

      

      
        

        

      

    

    

    

    
      [SIGNATURE PAGES FOLLOW]
    

    

    

    

    

    
      
        

        

      

      
        
          12
        

        
          

        

      

      
        

        

      

    

    
      IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
      to be executed and their seals to be hereto affixed as the date first
      above written.  
    

    
    	
           
        	
          
            PIER 1 IMPORTS (U.S.), INC., as Borrower
          

        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        
	

        	
           
        
	

        	
           
        
	

        	
          
            PIER 1 IMPORTS, INC., as a Facility Guarantor
          

        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        
	

        	
           
        
	

        	
           
        
	

        	
          
            PIER 1 ASSETS, INC., as a Facility Guarantor
          

        
	

        	
           
        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        
	

        	
           
        
	

        	
           
        
	

        	
          
            PIER 1 LICENSING, INC., as a Facility Guarantor
          

        
	

        	
           
        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        
	

        	
           
        
	

        	
           
        
	

        	
          
            PIER 1 HOLDINGS, INC., as a Facility Guarantor
          

        
	

        	
           
        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        

    

    

    

    
      Signature Page to Third Amendment to Credit Agreement
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          
            PIER 1 SERVICES COMPANY, a Delaware statutory
          

        
	

        	
          trust, as a Facility Guarantor
        
	

        	
           
        
	

        	
          By: Pier 1 Holdings, Inc., Managing Trustee
        
	

        	
           
        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        
	

        	
           
        
	

        	
           
        
	

        	
          
            PIER 1 VALUE SERVICES, LLC, as a Facility Guarantor
          

        
	

        	
           
        
	

        	
          By: Pier 1 Imports (U.S.), Inc., its sole member and manager
        
	

        	
           
        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          
            BANK OF AMERICA, N.A., as Administrative Agent, as
            Collateral Agent, as Swingline Lender, and as a Lender
          

        
	

        	
           
        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          
            WELLS FARGO RETAIL FINANCE, LLC,
          

        
	

        	
          as Syndication Agent and as a Lender
        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        

    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          
            JPMORGAN CHASE BANK, N.A., as Documentation Agent and as a
            Lender
          

        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        

    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          
            GENERAL ELECTRIC CAPITAL CORPORATION, as a Lender
          

        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        

    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          
            SUNTRUST BANK, as a Lender
          

        
	

        	
          By: ___________________________________
        
	

        	
          Name: ___________________________________
        
	

        	
          Title: ___________________________________
        

    

    

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      Schedule 1.1
    

    
      Lenders and Commitments
    

    
    	
          Lender
        	
          Commitment
        	
          Commitment Percentage
        
	
          Bank of America, N.A.
        	
          $120,000,000.00
        	
          40.00%
        
	
          Wells Fargo Retail Finance, LLC
        	
          $69,230,769.23
        	
          23.08%
        
	
          JPMorgan Chase Bank, N.A.
        	
          $41,538,461.54
        	
          13.85%
        
	
          General Electric Capital Corporation
        	
          $46,153,846.15
        	
          15.38%
        
	
          SunTrust Bank
        	
          $23,076,923.08
        	
          7.69%
        
	
          TOTAL
        	
          $300,000,000.00
        	
          100.00%
        

    

    
      Schedule 1.1 to Credit Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]