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Exhibit 4.1  

MICRON TECHNOLOGY, INC.

as Issuer  

 and  

 WELLS FARGO BANK, NATIONAL ASSOCIATION

as Trustee  

Indenture  

 Dated as of May [    •    ], 2007  

$1,100,000,000

[    •    ]% Convertible Senior Notes due June 1, 2014  

  

 
 

Micron Technology, Inc.    
    

        Reconciliation and Tie between the Trust Indenture Act of 1939 and Indenture, dated as of May     , 2007, between Micron Technology, Inc.
and Wells Fargo Bank, National Association, as Trustee. 

	Trust Indenture Act Section
 
	 	Indenture Section

	§ 310	 	(a)(1)	 	7.10
	 	 	(a)(2)	 	7.10
	 	 	(a)(3)	 	Not Applicable
	 	 	(a)(4)	 	Not Applicable
	 	 	(a)(5)	 	7.10
	 	 	(b)	 	7.08(a)(iii), 7.08(e)
	 	 	(c)	 	Not Applicable
	§ 311	 	(a)	 	7.03
	 	 	(b)	 	7.03
	 	 	(c)	 	Not Applicable
	§ 312	 	(a)	 	2.04
	 	 	(b)	 	13.02(a), 13.04
	 	 	(c)	 	13.02(a), 13.04
	§ 313	 	(a)	 	7.06
	 	 	(b)	 	Not Applicable
	 	 	(c)	 	7.05, 7.06
	 	 	(d)	 	7.06
	§ 314	 	(a)	 	4.04, 4.05
	 	 	(b)	 	Not Applicable
	 	 	(c)(1)	 	13.05(1)
	 	 	(c)(2)	 	13.05(2)
	 	 	(c)(3)	 	Not Applicable
	 	 	(d)	 	Not Applicable
	 	 	(e)	 	13.06
	§ 315	 	(a)	 	7.01(b), 7.02(a)
	 	 	(b)	 	7.05
	 	 	(c)	 	7.01(b)
	 	 	(d)	 	7.01(c)
	 	 	(d)(1)	 	7.01(b), 7.02(a)
	 	 	(d)(2)	 	7.02(c)
	 	 	(d)(3)	 	7.02(e)
	 	 	(e)	 	6.12
	§ 316	 	(a)(1)(A)	 	6.05
	 	 	(a)(1)(B)	 	6.04
	 	 	(a)(2)	 	Not Applicable
	 	 	(b)	 	9.02(b)
	 	 	(c)	 	13.02(d)
	§ 317	 	(a)(1)	 	6.03
	 	 	(a)(2)	 	6.09
	 	 	(b)	 	8.02
	§ 318	 	(a)	 	7.01

Note:
This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. 

i

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	ARTICLE 1    Definitions and Incorporation by Reference	 	1
	 	Section 1.01.	 	Definitions	 	1
	 	Section 1.02.	 	Other Definitions	 	6
	 	Section 1.03.	 	Incorporation by Reference of Trust Indenture Act	 	6
	 	Section 1.04.	 	Rules of Construction	 	7
	 	Section 1.05.	 	Acts of Holders	 	7
	

ARTICLE 2    The Notes	
 	

8
	 	
 Section 2.01.	
 	

Form, Dating and Denominations; Legends	
 	

8
	 	Section 2.02.	 	Execution And Authentication	 	8
	 	Section 2.03.	 	Registrar, Paying Agent and Conversion Agent	 	9
	 	Section 2.04.	 	Paying Agent to Hold Money in Trust	 	9
	 	Section 2.05.	 	Noteholder Lists	 	10
	 	Section 2.06.	 	Transfer and Exchange	 	10
	 	Section 2.07.	 	Replacement Notes	 	10
	 	Section 2.08.	 	Outstanding Notes	 	11
	 	Section 2.09.	 	Treasury Notes	 	11
	 	Section 2.10.	 	Temporary Notes	 	11
	 	Section 2.11.	 	Cancellation	 	11
	 	Section 2.12.	 	CUSIP Numbers	 	12
	 	Section 2.13.	 	Book-Entry Provisions for Global Notes	 	12
	

ARTICLE 3    Repurchases	
 	

12
	 	
 Section 3.01.	
 	

Repurchase at the Option of the Holders Upon Change in Control or Termination of Trading	
 	

12
	 	Section 3.02.	 	Effect of Repurchase Notice	 	15
	 	Section 3.03.	 	Deposit of Repurchase Price	 	15
	 	Section 3.04.	 	Notes Repurchased in Part	 	15
	 	Section 3.05.	 	Covenant to Comply with Securities Laws upon Repurchase of Notes	 	16
	

ARTICLE 4    Covenants	
 	

16
	 	
 Section 4.01.	
 	

Payment of Notes	
 	

16
	 	Section 4.02.	 	Maintenance of Office or Agency	 	16
	 	Section 4.03.	 	Existence	 	17
	 	Section 4.04.	 	Annual Reports	 	17
	 	Section 4.05.	 	Reports to Trustee	 	17
	 	Section 4.06.	 	Stay, Extension and Usury Laws	 	17
	

ARTICLE 5    Consolidation, Merger, Sale or Lease of Assets	
 	

17
	 	
 Section 5.01.	
 	

Consolidation, Merger, Sale or Lease of Assets by the Company	
 	

17
	

ARTICLE 6    Default and Remedies	
 	

18
	 	
 Section 6.01.	
 	

Events of Default	
 	

18
	 	Section 6.02.	 	Acceleration	 	19
	 	Section 6.03.	 	Other Remedies	 	19
	 	Section 6.04.	 	Waiver of Past Defaults	 	19
	 	Section 6.05.	 	Control by Majority	 	20
	 	Section 6.06.	 	Limitation on Suits	 	20
	 	 	 	 	 

ii

 

	 	Section 6.07.	 	Rights of Holders to Receive Payment	 	20
	 	Section 6.08.	 	Collection Suit by Trustee	 	20
	 	Section 6.09.	 	Trustee May File Proofs of Claim	 	20
	 	Section 6.10.	 	Priorities	 	21
	 	Section 6.11.	 	Restoration of Rights and Remedies	 	21
	 	Section 6.12.	 	Undertaking for Costs	 	21
	 	Section 6.13.	 	Rights and Remedies Cumulative	 	21
	 	Section 6.14.	 	Delay or Omission Not Waiver	 	22
	 	Section 6.15.	 	Failure to File	 	22
	

ARTICLE 7    The Trustee	
 	

22
	 	
 Section 7.01.	
 	

General	
 	

22
	 	Section 7.02.	 	Certain Rights of Trustee	 	22
	 	Section 7.03.	 	Individual Rights of Trustee	 	23
	 	Section 7.04.	 	Trustee's Disclaimer	 	23
	 	Section 7.05.	 	Notice of Default	 	23
	 	Section 7.06.	 	Reports by Trustee to Holders	 	24
	 	Section 7.07.	 	Compensation and Indemnity	 	24
	 	Section 7.08.	 	Replacement of Trustee	 	24
	 	Section 7.09.	 	Successor Trustee by Merger	 	25
	 	Section 7.10.	 	Eligibility	 	25
	 	Section 7.11.	 	Money Held in Trust	 	25
	

ARTICLE 8    Discharge	
 	

25
	 	
 Section 8.01.	
 	

Satisfaction and Discharge of this Indenture	
 	

25
	 	Section 8.02.	 	Application of Trust Money	 	26
	 	Section 8.03.	 	Repayment to Company	 	26
	 	Section 8.04.	 	Reinstatement	 	27
	

ARTICLE 9    Amendments, Supplements and Waivers	
 	

27
	 	
 Section 9.01.	
 	

Amendments Without Consent of Holders	
 	

27
	 	Section 9.02.	 	Amendments With Consent of Holders	 	27
	 	Section 9.03.	 	Effect of Consent	 	28
	 	Section 9.04.	 	Trustee's Rights and Obligations	 	28
	 	Section 9.05.	 	Conformity With Trust Indenture Act	 	28
	 	Section 9.06.	 	Payments for Consents	 	29
	

ARTICLE 10    Conversion	
 	

29
	 	
 Section 10.01.	
 	

Conversion Privilege	
 	

29
	 	Section 10.02.	 	Conversion Procedures; Conversion Settlement	 	31
	 	Section 10.03.	 	Fractional Shares	 	34
	 	Section 10.04.	 	Taxes on Conversion	 	34
	 	Section 10.05.	 	Company to Provide Common Stock	 	34
	 	Section 10.06.	 	Adjustment for Change in Capital Stock	 	34
	 	Section 10.07.	 	Adjustment for Rights, Options or Warrants Issue	 	35
	 	Section 10.08.	 	Adjustment for Other Distributions	 	36
	 	Section 10.09.	 	Adjustment for Cash Dividends	 	37
	 	Section 10.10.	 	Adjustment for Tender Offer	 	37
	 	Section 10.11.	 	Provisions Governing Adjustment to Conversion Rate	 	38
	 	Section 10.12.	 	Disposition Events	 	39
	 	 	 	 	 

iii

 

	 	Section 10.13.	 	Adjustment to Conversion Rate Upon a Make-Whole Change in Control; Discretionary Adjustment	 	40
	 	Section 10.14.	 	When Adjustment May Be Deferred	 	42
	 	Section 10.15.	 	When No Adjustment Required	 	42
	 	Section 10.16.	 	Notice of Adjustment	 	42
	 	Section 10.17.	 	Notice of Certain Transactions	 	42
	 	Section 10.18.	 	Right of Holders to Convert	 	43
	 	Section 10.19.	 	Company Determination Final	 	43
	 	Section 10.20.	 	Trustee's Adjustment Disclaimer	 	43
	 	Section 10.21.	 	Simultaneous Adjustments	 	43
	 	Section 10.22.	 	Successive Adjustments	 	43
	 	Section 10.23.	 	Rights Issued in Respect of Common Stock Issued Upon Conversion	 	43
	 	Section 10.24.	 	Withholding Taxes for Adjustments in Conversion Rate	 	44
	

ARTICLE 11    Redemption	
 	

44
	 	
 Section 11.01.	
 	

Right to Redeem; Notices to Trustee.	
 	

44
	 	Section 11.02.	 	Selection of Notes to be Redeemed	 	44
	 	Section 11.03.	 	Notice of Redemption	 	45
	 	Section 11.04.	 	Effect of Notice of Redemption	 	45
	 	Section 11.05.	 	Deposit of Redemption Price	 	45
	 	Section 11.06.	 	Notes Redeemed in Part	 	45
	

ARTICLE 12    Payment of Interest	
 	

46
	 	
 Section 12.01.	
 	

Interest Payments	
 	

46
	 	Section 12.02.	 	Defaulted Interest	 	46
	 	Section 12.03.	 	Interest Rights Preserved	 	47
	

ARTICLE 13    Miscellaneous	
 	

47
	 	
 Section 13.01.	
 	

Trust Indenture Act of 1939	
 	

47
	 	Section 13.02.	 	Noteholder Communications; Noteholder Actions	 	47
	 	Section 13.03.	 	Notices	 	47
	 	Section 13.04.	 	Communication by Holders with Other Holders	 	48
	 	Section 13.05.	 	Certificate and Opinion as to Conditions Precedent	 	49
	 	Section 13.06.	 	Statements Required in Certificate or Opinion	 	49
	 	Section 13.07.	 	Legal Holiday	 	49
	 	Section 13.08.	 	Rules by Trustee, Paying Agent, Conversion Agent and Registrar	 	49
	 	Section 13.09.	 	Governing Law	 	49
	 	Section 13.10.	 	No Adverse Interpretation of Other Agreements	 	49
	 	Section 13.11.	 	Successors	 	49
	 	Section 13.12.	 	Counterparts	 	49
	 	Section 13.13.	 	Severability	 	49
	 	Section 13.14.	 	Table of Contents and Headings	 	50
	 	Section 13.15.	 	No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders	 	50

EXHIBITS  

	EXHIBIT A	 	Form of Note
	EXHIBIT B	 	DTC Legend

iv

        INDENTURE dated as of May [    •    ], 2007 between Micron Technology, Inc., a Delaware corporation (the
"Company") and Wells Fargo Bank, National Association, a national banking association, as Trustee. 

 
 

RECITALS    
    

        The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of $1,100,000,000 (or up to $1,265,000,000 to the extent
the Underwriters exercise their over-allotment option under the Underwriting Agreement in full) aggregate principal amount of the Company's
[    •    ]% Convertible Senior Notes due June 1, 2014 (the "Notes"). All things
necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes, when executed by the
Company and authenticated and delivered by the Trustee and duly issued by the Company, the valid obligations of the Company as hereinafter provided. 

        This
Indenture is subject to, and will be governed by, the provisions of the Trust Indenture Act that are required to be a part of and govern indentures qualified under the Trust
Indenture Act. 

 
 

THIS INDENTURE WITNESSETH    
    

        For and in consideration of the premises and the purchase of the Notes by the Holders thereof, the parties hereto covenant and agree, for the equal and
proportionate benefit of all Holders, as follows: 

 
 

ARTICLE 1
  
    Definitions and Incorporation by Reference    
    

 
 
        Section 1.01.    Definitions.     

        "Additional Notes" means the $165,000,000 aggregate principal amount of Notes issued under this Indenture as a result of the Underwriters
exercise of their over-allotment option under the Underwriting Agreement. The Additional Notes shall have the same terms as the Initial Notes. 

        "Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with")
with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of
Voting Securities, by contract or otherwise. 

        "Agent" means any Registrar, Paying Agent or Conversion Agent. 

        "Agent Member" means a member of, or a participant in, the Depositary. 

        "Applicable Conversion Rate" means the Conversion Rate on any day. 

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

        "Bankruptcy Law" means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law for the relief of
debtors. 

        "Board of Directors" means the board of directors or comparable governing body of the Company, or any committee thereof duly authorized to
act on its behalf. 

        "Board Resolution" means a resolution duly adopted by the Board of Directors which is certified by the Secretary or an Assistant Secretary
of the Company and remains in full force and effect as of the date of its certification. 

 

        "Business Day" means any weekday that is not a day on which banking institutions in The City of Boise, The City of New York or the place
of payment are authorized or obligated to close. 

        "Capital Stock" means, with respect to any Person, any and all shares of stock of a corporation, partnership interests or other equivalent
interests (however designated, whether voting or non-voting) in such Person's equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets, after
liabilities, of such Person. 

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

        "Cash Settlement Averaging Period" means (a) with respect to any Conversion Date occurring on or after the 24th Scheduled Trading
Day immediately preceding the Maturity Date, the twenty (20) consecutive Trading Day period ending on, and including, the third Scheduled Trading Day immediately preceding the Maturity Date and
(b) in all other cases, the twenty (20) consecutive Trading Day period beginning on, and including, the third Trading Day immediately following the relevant Conversion Date. 

        "Certificated Note" means a Note in registered individual form without interest coupons. 

        "Change in Control" shall have the meaning set forth in Section 3.01(a) of this Indenture. 

        "Close of Business" means 5:00 p.m. (New York City time). 

        "Closing Price" of Common Stock or any other security on any date means the closing sale price per share (or, if no closing sale price is
reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite
transactions for the principal U.S. securities exchange on which Common Stock or such other security is traded. If Common Stock or such other security is not listed for trading on a U.S. national or
regional securities exchange on the relevant date, the Closing Price will be the last quoted bid price for Common Stock or such other security in the over-the-counter market on
the relevant date as reported by the National Quotation Bureau or similar organization. If Common Stock or such other security is not so quoted, the Closing Price will be the average of the
mid-point of the last bid and ask prices for Common Stock or such other security on the relevant date from each of at least three nationally recognized independent investment banking firms
selected by the Company for this purpose. The Closing Price will be determined without reference to extended or after hours trading. 

        "Common Stock" means Common Stock of the Company, $0.10 par value, as it exists on the date of this Indenture and any shares of any class
or classes of Capital Stock of the Company resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company;  provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion of Notes
shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from
all such reclassifications. 

        "Company" means the party named as such in the first paragraph of this Indenture or any successor obligor under this Indenture and the
Notes pursuant to Section 5.01. 

        "Conversion Price" per share of Common Stock as of any day means $1,000 divided by the
Conversion Rate on such day. 

        "Conversion Value" means the product of (a) the Conversion Rate on the first Trading Day of the Cash Settlement Averaging Period  multiplied by (b) the average
of the Volume Weighted Average 

2

 

Prices
per share of Common Stock on each of the Trading Days during the applicable Cash Settlement Averaging Period. The "Conversion Rate on the first Trading Day of the Cash Settlement Averaging
Period," as such term is used in the immediately preceding sentence, shall be appropriately adjusted to take into account the occurrence on or before the relevant Trading Day in the applicable Cash
Settlement Averaging Period of any event that would require an adjustment to the applicable Conversion Rate pursuant to Sections 10.06 to 10.10 of this Indenture. 

        "Corporate Trust Office" means the office of the Trustee at which the corporate trust business of the Trustee is principally administered,
which at the date of this Indenture is located at Sixth and Marquette, MAC N9303-120, Minneapolis, Minnesota 55479. 

        "Current Market Price" of Common Stock on any day means the average of the Closing Prices of Common Stock for each of the five consecutive
Trading Days ending on the earlier of the day in question and the day before the Ex-Date with respect to the issuance or distribution requiring such computation. 

        "Daily Share Amount" means, for each Trading Day of the Cash Settlement Averaging Period and each $1,000 principal amount of Notes
surrendered for conversion, a number of shares of Common Stock (but in no event less than zero) determined pursuant to the following formula: 

	

 	 	Volume Weighted Average

Price per share of common

stock on such Trading Day	 	×	 	Conversion Rate

in effect on the

Conversion Date	 	

 	 	-	 	Specified

Cash

Amount
	

	 	 	Volume Weighted Average Price per share

of Common Stock on such Trading Day	 	×	 	20	 	 

The
"Conversion Rate in effect on the Conversion Date," as such term is used in the formula set forth above, shall be appropriately adjusted to take into account the occurrence on or before the
relevant Trading Day of any event that would require an adjustment to the applicable Conversion Rate pursuant to Sections 10.06 to 10.10 of this Indenture. 

        "Debt" means, with respect to any Person, without duplication, (a) all indebtedness of such Person for borrowed money (other than
non-recourse obligations); and (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments. 

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

        "Depositary" means DTC or the nominee thereof, or any successor thereto. 

        "DTC" means The Depository Trust Company, a New York corporation, and its successors. 

        "DTC Legend" means the legend set forth in Exhibit B. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. 

        "Ex-Date" means, with respect to any distribution on Common Stock, the first date on which the shares of Common Stock trade on
the applicable exchange or in the applicable market, regular way, without the right to receive such distribution. 

        "GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time. 

        "Global Note" means a Note in registered global form without interest coupons. 

        "Holder" or "Noteholder" means the registered holder of any Note. 

3

 

        "Indenture" means this indenture, as amended or supplemented from time to time. 

        "Initial Notes" means the Notes, other than any Additional Notes, issued on the date hereof and any Notes issued in replacement thereof. 

        "Interest Payment Date" means each June 1 and December 1 of each year, commencing December 1, 2007. 

        "Market Disruption Event" means, with respect to Common Stock or any other security, the occurrence or existence for more than
one-half hour period in the aggregate on any scheduled Trading Day for Common Stock or such other security of any suspension or limitation imposed on trading (by reason of movements in
price exceeding limits permitted by the stock exchange or otherwise) in Common Stock or such other security or in any options, contracts or future contracts relating to Common Stock or such other
security, and such suspension or limitation occurs or exists at any time before 1:00 p.m. (New York City time) on such day. 

        "Maturity Date" means June 1, 2014. 

        "Notes" has the meaning assigned to such term in the Recitals. 

        "Officer" means the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial
officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the Company. 

        "Officers' Certificate" means a certificate signed in the name of the Company (a) by the chairman of the Board of Directors, the
president or chief executive officer or a vice president and (b) by the chief financial officer, the treasurer or any assistant treasurer or the secretary or any assistant secretary. 

        "Opinion of Counsel" means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, satisfactory to
the Trustee. 

        "Paying Agent" refers to a Person engaged to perform the obligations of the Trustee in respect of payments made or funds held hereunder in
respect of the Notes. 

        "Person" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity,
including a government or political subdivision or an agency or instrumentality thereof. 

        "principal" of any Debt (including the Notes) means the principal amount of such Debt (or if such Debt was issued with original issue
discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt), together with, unless the context otherwise indicates, any premium then
payable on such Debt. 

        "Prospectus" means the final prospectus dated May [    •    ], 2007 relating to
the offering and sale of the Notes. 

        "Redemption Date" means the date specified for redemption of the Notes in accordance with the terms of the Notes and Article 11. 

        "Regular Record Date" for the interest payable on any Interest Payment Date means the May 15 or November 15 next preceding
such Interest Payment Date. 

        "Responsible Officer" means, when used with respect to the Trustee, any officer of the trustee within the Corporate Trust Office of the
Trustee who has direct responsibility for the administration of this indenture and shall also mean any other officer of the Trustee to whom any corporate trust matter is referred because of such
person's knowledge and familiarity with the particular subject matter. 

        "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. 

4

 

        "Scheduled Trading Day" means a day that is scheduled to be a Trading Day. 

        "Subsidiary" means with respect to any Person, any corporation, association or other business entity of which more than 50% of the
outstanding Voting Securities is owned, directly or indirectly, by, or, in the case of a partnership, the sole general partner or the managing partner or the only general partners of which are, such
Person and one or more Subsidiaries of such Person (or a combination thereof). 

        "Termination of Trading" means the Company's Common Stock, or other Capital Stock into which the Notes are then convertible, is not listed
for trading on a United States national securities exchange or approved for quotation on a U.S. system of automated dissemination of quotations of securities prices similar to the Nasdaq National
Market prior to its designation as a national securities exchange. 

        "Trading Day" means, with respect to Common Stock or any other security, a day during which (a) trading in Common Stock or such
other security generally occurs, (b) there is no Market Disruption Event and (c) a Closing Price for Common Stock or such other security (other than a Closing Price referred to in the
next to last sentence of such definition) is available for such day; provided that if Common Stock or such other security is not admitted for trading or
quotation on or by any exchange, bureau or other organization, Trading Day will mean any Business Day. 

        "Trading Price" means, on any date of determination, the average of the secondary market bid quotations obtained by the Trustee for
$5.0 million principal amount of the Notes, at approximately 3:30 p.m., New York City time, on such determination date from three independent U.S. nationally recognized securities
dealers selected by the Company; provided that if three such bids cannot reasonably be obtained by the Trustee, but two such bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Trustee, that one bid shall be used. If the Trustee cannot reasonably obtain at least one bid for
$5.0 million principal amount of the Notes from a U.S. nationally recognized securities dealer, then the Trading Price per $1,000 principal amount of the Notes will be deemed to be less than
98% of the product of the Closing Price of Common Stock on such date of determination and the then Applicable Conversion Rate for the Notes. 

        "Trustee" means the party named as such in the first paragraph of this Indenture or any successor trustee under this Indenture pursuant to
Article 7. 

        "Trust Indenture Act" means the Trust Indenture Act of 1939. 

        "Underwriters" means Morgan Stanley & Co. Incorporated and [                        ].

        "Underwriting Agreement" means the Underwriting Agreement dated as of May
[    •    ], 2007 among the Company and the Underwriters relating to the purchase of the Notes by the Underwriters. 

        "Volume Weighted Average Price" per share of Common Stock on any Trading Day means such price as displayed on Bloomberg (or any successor
service) page MU.N <equity> VAP in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such Trading Day. If such price is not available, the Volume
Weighted Average Price means the market value per share of Common Stock on such day as determined by a nationally recognized independent investment banking firm retained for this purpose by the
Company. 

        "Voting Securities" means, with respect to any Person, securities of any class or kind ordinarily having the power to vote for the
election of directors, managers or other voting members of the governing body of such Person. 

5

 

 
 

           Section 1.02.    Other Definitions.     

	Term
 
	 	Defined in Section
	 
	"act"	 	13.02	(b)
	"Act"	 	1.05	 
	"Bankruptcy Default"	 	6.01	(k)
	"beneficial owner"	 	3.01	(a)
	"Company Order"	 	2.02	 
	"Conversion Agent"	 	2.03	 
	"Conversion Date"	 	10.02	(a)
	"Conversion Obligation"	 	10.01	(a)
	"Conversion Rate"	 	10.01	(a)
	"Conversion Trigger Price"	 	10.01	(c)
	"Defaulted Interest"	 	12.02	 
	"Disposition Event"	 	10.12	 
	"Distributed Assets"	 	10.08	(a)
	"Effective Date"	 	10.13	(b)
	"Event of Default"	 	6.01	 
	"Expiration Date"	 	10.10	 
	"Extension Fee"	 	6.15	 
	"group"	 	3.01	(a)
	"Legal Holiday"	 	13.07	 
	"Make-Whole Change in Control"	 	10.13	(a)
	"Make-Whole Shares"	 	10.13	(a)
	"Net Share Settlement"	 	10.02	(c)
	"Paying Agent"	 	2.03	 
	"Primary Registrar"	 	2.03	 
	"Purchased Shares"	 	10.10	 
	"Redemption Price"	 	11.01	(b)
	"Reference Period"	 	10.08	(a)
	"Reference Property"	 	10.12	 
	"Register"	 	2.03	 
	"Registrar"	 	2.03	 
	"Repurchase Date"	 	3.01	(a)
	"Repurchase Notice"	 	3.01	(c)
	"Repurchase Price"	 	3.01	(a)
	"Rights"	 	10.23	 
	"Shareholders Rights Plan"	 	10.23	 
	"Special Record Date"	 	12.02	(a)
	"Specified Cash Amount"	 	10.02	(b)
	"Spin-Off"	 	10.08	(b)
	"Stock Price"	 	10.13	(b)
	"Trading Price Condition"	 	10.01	(b)(ii)
	"Trigger Event"	 	10.11	 
	"Underwriters"	 	1.01	 

 
 

           Section 1.03.    Incorporation by Reference of Trust Indenture Act.     Whenever this Indenture refers to a
provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture. The
following Trust Indenture Act terms used in this Indenture have the following meanings: 

        "Commission" means the Securities and Exchange Commission. 

6

  

        "indenture securities" means the Notes. 

        "indenture security holder" means a Noteholder. 

        "indenture to be qualified" means this Indenture. 

        "indenture trustee" or "institutional trustee" means the Trustee. 

        "obligor" on this Indenture securities means the Company. 

        All
other Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by
Securities Exchange Commission rule have the meanings assigned to them by such definitions. 

 
 

           Section 1.04.    Rules of Construction.     Unless the context otherwise requires or except as otherwise
expressly provided, 

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

        (d)   all
references to Sections or Articles or Exhibits refer to Sections or Articles or Exhibits of or to this Indenture unless otherwise indicated; 

        (e)   references
to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time
(or to successor statutes and regulations); 

        (f)    in
the event that a transaction meets the criteria of more than one category of permitted transactions or listed exceptions the Company may classify such transaction as
it, in its sole discretion, determines; 

        (g)   "or"
is not exclusive; 

        (h)   "including"
means including, without limitation; and 

        (i)    words
in the singular include the plural, and words in the plural include the singular. 

 
 

           Section 1.05.    Acts of Holders.     Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may be embodied
in and evidenced by one or more instruments (which may take the form of an electronic writing or messaging or otherwise be in accordance with the Applicable Procedures or customary procedures of the
Trustee) of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing (which may be in electronic form); and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent (either of which may be in electronic form) shall be sufficient for any purpose of this Indenture and conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section. 

7

 
 
 

ARTICLE 2
  
    The Notes    
    

 
 

           Section 2.01.    Form, Dating and Denominations; Legends.     

        (a)   The
Notes and the Trustee's certificate of authentication will be substantially in the form attached as Exhibit A. The terms and provisions contained in the form
of the Note annexed as Exhibit A constitute and are hereby expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, rules of or agreements
with national securities exchanges to which the Company is subject, or usage. Each Note will be dated the date of its authentication. The Notes will be issuable only in denominations of $1,000 in
principal amount and any integral multiple thereof. 

        (b)   Global Notes in General. Each Global Note shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges, purchases, conversions or issuances of such Notes. Any adjustment of the aggregate principal amount of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.06 and shall be made on the records of the Trustee and the Depositary. 

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

        (c)   Book-Entry Provisions. The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(c), authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary, (ii) shall be delivered by the Trustee to
the Depositary or pursuant to the Depositary's instructions and (iii) shall bear a legend substantially to the effect set forth in Exhibit B. 

 
 

           Section 2.02.    Execution And Authentication.     An Officer shall sign the Notes for the Company by manual
or facsimile signature. Typographic errors or defects in any such facsimile signature shall not affect
the validity or enforceability of any Note which has been authenticated and delivered by the Trustee. 

        If
an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless. 

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

        The
Trustee shall authenticate and make available for delivery Notes for original issue in the aggregate principal amount of $1,100,000,000 (or up to $1,265,000,000 to the extent the
Underwriters exercise their over-allotment option under the Underwriting Agreement in full) upon receipt of a 

8

 

written
order or orders of the Company signed by an Officer of the Company (a "Company Order"). The Company Order shall specify the amount of Notes to
be authenticated, shall provide that all such Notes will be represented by a Global Note and the date on which each original issue of Notes is to be authenticated. The initial aggregate principal
amount of Notes outstanding at any time may not exceed $1,100,000,000 (or $1,265,000,000 to the extent the Underwriters exercise their over-allotment option under the Underwriting
Agreement in full) except as provided in Section 2.07. 

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

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

 
 

           Section 2.03.    Registrar, Paying Agent and Conversion Agent.     The Company shall maintain one or more
offices or agencies where Notes may be presented for registration of transfer or for exchange (each, a
"Registrar"), one or more offices or agencies where Notes may be presented for payment (each, a "Paying
Agent"), one or more offices or agencies where Notes may be presented for conversion (each, a "Conversion Agent") and one or
more offices or agencies where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will at all times maintain a Paying Agent, Conversion
Agent, Registrar and an office or agency where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served in the United States. One of the Registrars (the
"Primary Registrar") shall keep a register of the Notes and of their transfer and exchange (the
"Register"). 

        The
Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to
such Agent. The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture. If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or
agent for service of notices and demands in any place required by this Indenture, or fails to give the foregoing notice, the Trustee shall act as such. The Company or any Affiliate of the Company may
act as Paying Agent (except for the purposes of Article 8). 

        The
Company hereby initially designates the Trustee as Paying Agent, Registrar, and Conversion Agent, and each of the Corporate Trust Office of the Trustee and the office or agency of
the Trustee in the United States (located at Sixth and Marquette, MAC N9303-120, Minneapolis, Minnesota 55479, Tel. (612) 667-2344, Attention: Corporate Trust Services,
one such office or agency of the Company for each of the aforesaid purposes. 

 
 

           Section 2.04.    Paying Agent to Hold Money in Trust.     Prior to 12:00 p.m., New York City time, on
each date on which the principal amount of or interest, if any, on any Notes is due and payable, the Company
shall deposit with a Paying Agent a sum sufficient to pay such principal amount or interest, if any, so becoming due. A Paying Agent shall hold in trust for the benefit of Noteholders or the Trustee
all money held by the Paying Agent for the payment of principal amount of or interest, if any, on the Notes, and shall notify the Trustee of any default by the Company (or any other obligor on the
Notes) in making any such payment. If the Company or an Affiliate of the Company acts as Paying Agent, it shall, before 12:00 p.m., New York City time, on each date on which a payment of the
principal amount of or interest on any Notes is due and payable, segregate the money and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by
it to the Trustee, and the Trustee may at any time during the continuance of any default, upon written request to a Paying Agent, require such Paying Agent to pay forthwith to the Trustee all sums so
held in trust by 

9

 

such
Paying Agent. Upon doing so, the Paying Agent (other than the Company) shall have no further liability for the money. 

 
 

           Section 2.05.    Noteholder 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 Noteholders. If
the Trustee is not the Primary Registrar, the Company shall furnish to the Trustee on or before ten Business Days prior to the 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 Noteholders. 

 
 

           Section 2.06.    Transfer and Exchange.     Subject to compliance with any applicable additional
requirements contained in Section 2.13, when a Note is presented to a Registrar with a request to
register a transfer thereof or to exchange such Note for an equal principal amount of Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided that every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by an assignment form in the form included in Exhibit A, and in form satisfactory to the Registrar duly executed by the Holder thereof or its attorney duly
authorized in writing. To permit registration of transfers and exchanges, upon surrender of any Note for registration of transfer or exchange at an office or agency maintained pursuant to
Section 2.03, the Company shall execute and the Trustee shall authenticate Notes of a like aggregate principal amount at the Registrar's request. Any exchange or transfer shall be without
service charge, except that the Company or the Registrar may require payment of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in relation thereto;  provided that this sentence shall not apply to any exchange pursuant to Section 2.10, Section 3.04, Section 9.03(b) or
Section 10.02(h) not involving any transfer. 

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

        Any
Registrar appointed pursuant to Section 2.03 shall provide to the Trustee such information as the Trustee may reasonably require in connection with the delivery by such
Registrar of Notes upon transfer or exchange of Notes. 

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

 
 

           Section 2.07.    Replacement Notes.     If any mutilated Note is surrendered to the Company, a Registrar or
the Trustee, or the Company, a Registrar and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Note, and there is delivered to the Company, the applicable Registrar and the Trustee such security or indemnity as will be required by them to
save each of them harmless, then, in the absence of notice to the Company, such Registrar or the Trustee that such Note has been acquired by a protected purchaser, the Company shall execute, and upon
its written request the Trustee shall authenticate and deliver, in exchange for any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal
amount, bearing a number not contemporaneously outstanding. 

10

 

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

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

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

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

 
 

          Section 2.08.    Outstanding Notes.     Notes outstanding at any time are all Notes authenticated by the
Trustee, except for those canceled by it, those converted pursuant to Article 10, those
delivered to it for cancellation or surrendered for transfer or exchange and those described in this Section 2.08 as not outstanding. 

        If
a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Company receives proof satisfactory to it that the replaced Note is held by a protected
purchaser. 

        If
a Paying Agent holds at 12:00 p.m., New York City time, on the Maturity Date Cash sufficient to pay the principal amount of the Notes payable on that date, then on and after
the Maturity Date, such Notes shall cease to be outstanding and the principal amount thereof shall cease to bear interest. 

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

 
 

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

 
 

           Section 2.10.    Temporary Notes.     Until definitive Notes are ready for delivery, the Company may prepare
and execute, and, upon receipt of a Company Order, the Trustee shall authenticate and
deliver, temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company with the consent of the Trustee considers appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate and deliver definitive Notes in exchange for temporary Notes. 

 
 

           Section 2.11.    Cancellation.     The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee
or its agent any Notes surrendered to them for transfer, exchange, payment or conversion. The Trustee and no one else shall cancel, in accordance with its standard procedures, all Notes surrendered
for 

11

 

transfer,
exchange, payment, conversion or cancellation and upon written request of the Company shall deliver evidence of the canceled Notes to the Company. 

 
 

           Section 2.12.    CUSIP Numbers.     The Company in issuing the Notes may use one or more "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
purchase as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a purchase and that reliance may be placed only on the other identification numbers printed on the Notes, and any such purchase shall
not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. 

 
 

           Section 2.13.    Book-Entry Provisions for Global Notes.     (a) Transfers of Global Notes shall be limited
to transfers in whole, but not in part, to the Depositary, its successors or their respective nominees. In
addition, Certificated Notes shall be transferred to all beneficial owners, as identified by the Depositary, in exchange for their beneficial interests in Global Notes only if (i) the
Depositary notifies the Company that the Depositary is unwilling or unable to continue as depositary for any Global Note (or the Depositary ceases to be a "clearing agency" registered under
Section 17A of the Exchange Act) and a successor Depositary is not appointed by the Company within 90 days of such notice or cessation or (ii) an Event of Default has occurred and
is continuing and the Registrar has received a written request from the Depositary to issue Certificated Notes. 

        (b)   In
connection with the transfer of a Global Note in its entirety to beneficial owners pursuant to Section 2.13(a), such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall upon written instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Certificated Notes of authorized denominations. 

        (c)   The
Holder of any Global Note may grant proxies and otherwise authorize any Person to take any action that a Holder is entitled to take under this Indenture or the
Notes. 

 
 

ARTICLE 3
  
    Repurchases    
    

 
 

           Section 3.01.    Repurchase at the Option of the Holders Upon Change in Control or Termination of Trading.     (a) Upon the occurrence of a Change in Control or a Termination of Trading, each Holder shall have the right, at such Holder's option, subject to the terms
and conditions of Article 3 of this Indenture, to require the Company to repurchase for Cash all or any portion of such Holder's Notes in integral multiples of $1,000 principal amount at a
price (the "Repurchase Price") equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding,
the Repurchase Date; provided that if the Repurchase Date is after a Regular Record Date and on or prior to the Interest Payment Date to which it
relates, the interest accrued to the Interest Payment Date will be paid to Holders of the Notes as of the preceding Regular Record Date, and the Repurchase Price shall be equal to the principal amount
of Notes subject to repurchase. Upon a valid exercise of such an option, the Company will be required to repurchase the Notes on a date selected by the Company (the "Repurchase
Date"), which shall be no earlier than 20 days or later than 35 days after the date on which the Company mails the notice contemplated by
Section 3.01(b)(i), subject to satisfaction by or on behalf of the Holder of the requirements set forth in Section 3.01(c). 

12

 

        A
"Change in Control" shall be deemed to have occurred at such time as any of the following events shall occur: 

          (i)  any
person or group, other than the Company, its Subsidiaries or any employee benefit plan of the Company or its Subsidiaries, files a Schedule 13D or Schedule
TO (or any successor schedule, form or report) pursuant to the Exchange Act disclosing that such person has become the beneficial owner of shares with a majority of the total voting power of all of
the Company's outstanding Voting Securities, unless such beneficial ownership (a) arises solely as a result of a revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to the applicable rules and regulations under the Exchange Act, and (b) is not also then reportable on Schedule 13D (or any successor schedule) under the Exchange Act; 

         (ii)  the
Company consolidates with or merges with or into another person (other than a Subsidiary of the Company) and the outstanding Voting Securities of the Company are
reclassified into, converted for or converted into the right to receive any other property or security, or the Company sells, conveys, transfers or leases all or substantially all of its properties
and assets to any Person (other than a Subsidiary of the Company); provided that none of these circumstances will be a Change in Control if persons that beneficially own the Voting Securities of the
Company immediately prior to the transaction own, directly or indirectly, a majority of the Voting Securities of the surviving or transferee person immediately after the transaction; or 

        (iii)  the
holders of Common Stock approve any plan or proposal for the liquidation or dissolution of the Company. 

        For
purposes of defining a Change in Control: 

        (A)  the
term "person" and the term "group" have the meanings given by
Section 13(d) and 14(d) of the Exchange Act or any successor provisions; 

        (B)  the
term "group" includes any group acting for the purpose of acquiring, holding or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision; and 

        (C)  the
term "beneficial owner" is determined in accordance with Rules 13d-3 and 13d-5 under
the Exchange Act or any successor provisions, except that a person will be deemed to have beneficial ownership of all shares that person has the right to acquire irrespective of whether that right is
exercisable immediately or only after the passage of time. 

        Notwithstanding
the foregoing, it will not constitute a Change in Control if at least 90% of the consideration for Common Stock (excluding cash payments for fractional shares and cash
payments made in respect of dissenter's appraisal rights) in the transaction or transactions constituting the Change in Control consists of common stock traded on a United States national securities
exchange, or which will be so traded when issued or exchanged in connection with the Change in Control, and as a
result of such transaction or transactions the Notes become convertible solely into the consideration that holders of Common Stock receive in such transaction, other than any Cash in lieu of
fractional shares, subject to the provisions set forth in Section 10.02. 

        (b)   On
or before the 15th day after the occurrence of a Change in Control or Termination of Trading, the Company will mail a written notice of Change in Control or
Termination of Trading by first-class mail to the Trustee and to each Holder at their addresses shown in the register of the Registrar (and to beneficial owners as required by applicable law). The
notice shall include a form of Repurchase Notice to be completed by the Noteholder and shall state: 

          (i)  the
events causing a Change in Control or Termination of Trading, as applicable; 

         (ii)  the
date of such Change in Control or Termination of Trading, as applicable; 

13

 

        (iii)  the
last date on which the repurchase right may be exercised; 

        (iv)  the
Repurchase Price; 

         (v)  the
Repurchase Date; 

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

       (vii)  the
then current Applicable Conversion Rate and any adjustments thereto; 

      (viii)  that
Notes with respect to which a Repurchase Notice is given by the Holder may be converted pursuant to Article 10 hereof only if the Repurchase Notice has
been withdrawn in accordance with the terms of this Indenture; and 

        (ix)  the
procedures a Holder must follow to exercise rights under this Section 3.01. 

        (c)   A
Holder may exercise its rights specified in Section 3.01 by delivery of a written notice (a "Repurchase Notice")
to the Paying Agent at any time prior to the Close of Business on the Business Day immediately preceding the Repurchase Date. The Repurchase Notice shall state: 

          (i)  if
Certificated Notes have been issued, the certificate number of the Notes (or if the Holder's Notes are Global Notes, such Holder's notice must comply with the
Applicable Procedures); 

         (ii)  the
portion of the principal amount of Notes to be repurchased, which portion must be $1,000 or an integral multiple of $1,000; and 

        (iii)  that
such Notes shall be repurchased by the Company pursuant to the terms and conditions specified in this Article 3. 

        The
delivery of such Note to the Paying Agent prior to, on or after the Repurchase Date (together with all necessary endorsements and compliance by the Holder with the Applicable
Procedures) at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Repurchase Price therefor; provided,  however, that
such Repurchase Price shall be so paid pursuant to this Section 3.01 only if the Note so delivered to the Paying Agent shall
conform in all respects to the description thereof set forth in the related Repurchase Notice. 

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

        Any
repurchase by the Company contemplated pursuant to the provisions of this Section 3.01 shall be consummated by the delivery of the consideration to be received by the Holder
(together with accrued and unpaid interest to but not including the Repurchase Date) on or prior to the later of the Repurchase Date and the time of delivery of the Note to the Paying Agent in
accordance with this Section 3.01. 

        Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the Repurchase Notice contemplated by this Section 3.01(c) shall have the right to
withdraw such Repurchase Notice at any time prior to the Close of Business on the Business Day immediately preceding the Repurchase Date by delivery of a written notice of withdrawal to the Paying
Agent in accordance with Section 3.02. 

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

        No
Notes may be repurchased by the Company at the option of Holders upon a Change in Control or a Termination of Trading if the principal amount of the Notes has been accelerated (other 

14

 

than
as a result of a default in the payment of the Repurchase Price with respect to the Notes), and such acceleration has not been rescinded, on or prior to the date on which such repurchase is to be
consummated. The Paying Agent will promptly return to the respective Holders thereof any Notes (x) with respect to which a Repurchase Notice has been withdrawn in compliance with this
Indenture, or (y) held by it during the continuance of acceleration described in the immediately preceding sentence in which case, upon such return, the Repurchase Notice with respect thereto
shall be deemed to have been withdrawn. 

 
 

           Section 3.02.    Effect of Repurchase Notice.     (a) Upon receipt by the Paying Agent of the Repurchase
Notice specified in Section 3.01(c), the Holder of the Note in respect of which such Repurchase
Notice was given shall (unless such Repurchase Notice is withdrawn as specified in this Section 3.02) thereafter be entitled to receive solely the Repurchase Price and any accrued and unpaid
interest to but not including the Repurchase Date, with respect to such Note. Such Repurchase Price shall be paid to such Holder, subject to receipt of funds by the Paying Agent, on or prior to the
later of (x) the Repurchase Date, with respect to such Note (provided the conditions in Section 3.01(c) have been satisfied) and (y) the time of delivery of such Note to the
Paying Agent by the Holder thereof in the manner required by Section 3.01(c). Notes in respect of which a Repurchase Notice has been given by the Holder thereof may not be converted pursuant to
Article 10 hereof on or after the date of the delivery of such Repurchase Notice unless such Repurchase Notice has first been validly withdrawn as specified in this Section 3.02. 

        (b)   A
Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent at any time prior to the Close of Business on
the Business Day immediately preceding the Repurchase Date. Such notice of withdrawal shall state: 

          (i)  the
principal amount being withdrawn; 

         (ii)  if
Certificated Notes are to be withdrawn, the certificate numbers of the Notes being withdrawn (or, if Global Notes or a portion thereof are to be withdrawn, such
Holder's notice must comply with the Applicable Procedures); 

        (iii)  the
principal amount, if any, of the Notes that remain subject to a Repurchase Notice. 

 
 

           Section 3.03.    Deposit of Repurchase Price.     Prior to 12:00 p.m. (New York City time) on or prior
to the Repurchase Date, the Company shall deposit with the Trustee or with the Paying Agent (or, if
the Company or a Subsidiary of the Company or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an amount of money (in
immediately available funds if deposited on such Trading Day) sufficient to pay the aggregate Repurchase Price of all the Notes or portions thereof which are to be repurchased as of the Repurchase
Date. 

        If
the Paying Agent holds money sufficient to pay the Repurchase Price with respect to the Notes to be repurchased on the Repurchase Date in accordance with the terms of this Indenture,
then, immediately on and after the Repurchase Date, interest on such Notes shall cease to accrue, whether or not the Notes are delivered to the Paying Agent, and all other rights of the Holders of
such Notes shall terminate, other than the right to receive the Repurchase Price upon delivery of such Notes. 

 
 

          Section 3.04.    Notes Repurchased in Part.     Any Note which is to be repurchased 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 shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Note, 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 Note so surrendered that is not repurchased. 

15

  

 
 

           Section 3.05.    Covenant to Comply with Securities Laws upon Repurchase of Notes.     In connection with
any repurchase upon the occurrence of a Change in Control, to the extent required by applicable law, the Company shall:
 

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

        (b)   otherwise
comply with all federal and state securities laws as necessary to effect a repurchase of Notes by the Company at the option of Holder. 

 
 

ARTICLE 4
  
    Covenants    
    

 
 
        Section 4.01.    Payment of Notes.     (a) The Company agrees to pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes and this Indenture. Not later than
12:00 p.m. New York City time, on the due date of any principal of or interest on any Notes, or any Repurchase Date or Redemption Date, as the case may be, the Company will deposit with the
Trustee (or Paying Agent) money in immediately available funds sufficient to pay the amounts then due; provided that if the Company or any Affiliate of
the Company is acting as Paying Agent, it will, on or before each due date, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such amounts
until paid to such Holders or otherwise disposed of as provided in this Indenture. In each case the Company will promptly notify the Trustee of its compliance with this paragraph. 

        (b)   An
installment of principal or interest will be considered paid on the date due if the Trustee (or Paying Agent, other than the Company or any Affiliate of the Company)
holds on that date money designated for and sufficient to pay the installment. If the Company or any Affiliate of the Company acts as Paying Agent, an installment of principal or interest will be
considered paid on the due date only if paid to the Holders. 

        (c)   The
Company agrees to pay interest on overdue principal, and, to the extent lawful, overdue installments of interest at the rate per annum specified in the Notes. 

        (d)   Payments
in respect of the Notes represented by the Global Notes are to be made by wire transfer of same-day funds to the Depositary for the purpose of
permitting such party to credit the payments received by it in respect of such Global Note to the accounts of the beneficial owners thereof. With respect to Certificated Notes, the Company will make
all payments in same-day funds by transfer to an account maintained by the payee located inside the United States, if the Trustee shall have received proper wire transfer instructions from
such payee not later than the related Regular Record Date or, if no such instructions have been received by check drawn on a bank in the United States mailed to the payee at its address set forth on
the Registrar's books. 

 
 

           Section 4.02.    Maintenance of Office or Agency.     The Company will maintain in the United States, an
office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation
for payment and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company hereby initially designates the Corporate Trust Office of the
Trustee as such office of the Company. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served to the Trustee. 

        The
Company may also from time to time designate one or more other offices or agencies where the Notes may be surrendered or presented for any of such purposes and may from time to time 

16

 

rescind
such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 

 
 

           Section 4.03.    Existence.     The Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence, rights and franchises
of the Company; provided that the Company is not required to preserve any such right or franchise if the preservation thereof is no longer desirable in
the conduct of the business of the Company; provided further that this Section does not prohibit any transaction otherwise permitted by
Section 5.01. 

 
 

           Section 4.04.    Annual Reports.     The Company shall deliver to the Trustee, within fifteen days after the
Company is required to file the same with the Commission, copies of the Company's annual
reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) that the Company is required
to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; provided that any such information, documents or reports filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval (or EDGAR) system shall be deemed to be filed with the Trustee. 

        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 4.05.    Reports to Trustee.     The Company will deliver to the Trustee: 

        (a)   within
120 days after the end of each fiscal year a certificate from the principal executive, financial or accounting officer of the Company stating that the
officer has conducted or supervised a review of the activities of the Company and its performance under this Indenture and that, based upon such review, no Default exists hereunder or, if there has
been a Default, specifying the Default and its nature and status. 

        (b)   promptly
and in any event within 30 days after the Company becomes aware or should reasonably become aware of the occurrence of a Default, an Officers'
Certificate setting forth the details of the Default, and the action which the Company proposes to take with respect thereto. 

 
 

           Section 4.06.    Stay, Extension and Usury Laws.     The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture, and the Company
(in each case, to the extent that it may lawfully do so) hereby covenants that it will not, by resort to any such law to the extent it would hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 

 
 

ARTICLE 5
  
    Consolidation, Merger, Sale or Lease of Assets    
    

 
 
        Section 5.01.    Consolidation, Merger, Sale or Lease of Assets by the Company.     (a) The Company may consolidate
with or merge into any Person or convey, transfer or lease its properties and assets substantially as an entirety to another
Person (other than a Subsidiary of the Company) only if: 

          (i)  the
resulting, surviving or transferee Person (if other than the Company) is a corporation organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia; 

17

 

         (ii)  such
corporation (if other than the Company) assumes all of the obligations of the Company under the Notes and this Indenture; 

        (iii)  immediately
after giving effect to the transaction, no Event of Default and no Default has occurred and is continuing; and 

        (iv)  the
Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and
the supplemental indenture (if any) comply with this Indenture. 

        (b)   Upon
the consummation of any transaction effected in accordance with these provisions, if the Company is not the resulting, surviving or transferee Person, the
resulting, surviving or transferee Person shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if
such successor Person had been named as the Company in this Indenture. Upon such substitution, except in the case of a lease, unless the successor is one or more of the Company's Subsidiaries, the
Company will be released from its obligations under the Notes and this Indenture. 

 
 

ARTICLE 6
  
    Default and Remedies    
    

 
 
        Section 6.01.    Events of Default.     An "Event of Default" occurs
with respect to the Notes if: 

        (a)   the
Company defaults in payment of the principal or any Repurchase Price or Redemption Price with respect to any Note, when such becomes due and payable; 

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

        (c)   the
Company fails to issue any notice of a Termination of Trading, a Change in Control as required under Section 3.01(b) of this Indenture or a
Make-Whole Change in Control that does not constitute a Change in Control as required under Section 10.13(a) of this Indenture, and such default continues for a period of three
Business Days; 

        (d)   the
Company fails to issue any notice of a distribution as required under Section 10.01(e) of this Indenture, and such default continues for a period of three
Business Days; 

        (e)   the
Company fails to comply with its obligation to convert the Notes into Common Stock, Cash or a combination of Cash and Common Stock, as applicable, upon exercise of a
Holder's right to convert its Notes pursuant to Article 10; 

        (f)    the
Company fails to comply with any of its other covenants or agreements in the Notes or this Indenture and fails to cure (or obtain a waiver of) such default, within
60 days after the Company receives a notice of such default by the Trustee or by Holders of not less than 25% in aggregate principal amount of the Notes then outstanding; 

        (g)   (1)
the Company fails to make any payment at maturity (after giving effect to any applicable grace period) of any Debt in a principal amount in excess of $100,000,000
and continuance of such failure, or (2) the acceleration of Debt of the Company in an amount in excess of $100,000,000 because of a default with respect to such Debt without such Debt having
been discharged or such acceleration having been cured, waived, rescinded or annulled within a period of 30 days after written notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of not less than 25% in aggregate principal amount of the Notes then outstanding; provided that if any such failure or
acceleration referred to in (1) or (2) above shall cease or be cured, waived, rescinded or annulled, then the resulting Event of Default shall be deemed not to have occurred; 

18

 

        (h)   the
Company, pursuant to or under or within the meaning of any Bankruptcy Law, (i) commences a voluntary case or proceeding; (ii) consents to the entry of
an order for relief against it in an involuntary case or proceeding or the commencement of any case against it; (iii) consents to the appointment of any receiver, trustee, assignee, liquidator,
custodian or similar official of it or for any substantial part of its property; (iv) makes a general assignment for the benefit of its creditors; (v) files a petition in bankruptcy or
answer or consent seeking reorganization or relief; or (vi) consents to the filing of such petition or the appointment of or taking possession by any receiver, trustee, assignee, liquidator,
custodian or similar official; or 

        (i)    a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case or
proceeding, or adjudicates the Company insolvent or bankrupt; (ii) appoints any receiver, trustee, assignee, liquidator, custodian or similar official of the Company or for any substantial part
of its property; or (iii) orders the winding up or liquidation of the Company, and the order or decree remains unstayed and in effect for 30 days (an event of default specified in
clause (h) or (i) a "Bankruptcy Default"). 

 
 

           Section 6.02.    Acceleration.     If an Event of Default, other than a Bankruptcy Default, occurs and is
continuing under this Indenture, the Trustee or the Holders of at least 25% in aggregate of
the outstanding principal amount of the Notes, by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders may,
declare the principal of and accrued and unpaid interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal and interest will become immediately due and
payable. If a Bankruptcy Default occurs, the principal of and accrued interest on the Notes then outstanding will become immediately due and payable automatically without any declaration or other act
on the part of the Trustee or any Holder. 

 
 

           Section 6.03.    Other Remedies.     If an Event of Default occurs and is continuing, the Trustee may pursue,
 in its own name or as trustee of an express trust, any available remedy by proceeding at
law or in equity to collect the payment of principal of and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding
even if it does not possess any of the Notes or does not produce any of them in the proceeding. 

 
 

           Section 6.04.    Waiver of Past Defaults.     Except as otherwise provided in Section 6.07 and
Section 9.02(b), Holders of a majority in principal amount of the outstanding Notes by written
notice to the Company and to the Trustee may waive any existing or future Default or Event of Default and its consequences and rescind and annul a declaration of acceleration with respect to such
Default or Event of Default and its consequences (other than an uncured default (a) in the payment of the principal amount with respect to any Note, accrued and unpaid interest with respect to
any Note or the Repurchase Price or Redemption Price with respect to any Note, (b) in the payment or delivery of the consideration due upon conversion of the Notes or (c) in respect of
any provision that under this Indenture cannot be modified or amended without the consent of the Holder of each outstanding Note affected) if: 

          (i)  all
existing Events of Default, other than the nonpayment of the principal of and interest on the Notes that have become due solely by the declaration of acceleration,
have been cured or waived, and 

         (ii)  the
rescission would not conflict with any judgment or decree of a court of competent jurisdiction. 

        Upon
such waiver, the Default will cease to exist, and any Event of Default arising therefrom will be deemed to have been cured, but no such waiver will extend to any subsequent or other
Default or impair any right consequent thereon. 

19

 

 
 

          Section 6.05.    Control by Majority.     The Holders of a majority in aggregate principal amount of the
outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that may involve
the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction, and may take
any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes. 

 
 

           Section 6.06.    Limitation on Suits.     A Holder may not institute any proceeding, judicial or otherwise,
with respect to this Indenture or the Notes, or for the appointment of a receiver or trustee, or
for any other remedy under this Indenture or the Notes, unless: 

          (i)  the
Holder has previously given to the Trustee written notice of a continuing Event of Default; 

         (ii)  Holders
of at least 25% in aggregate principal amount of outstanding Notes have made written request to the Trustee to institute proceedings in respect of the Event of
Default in its own name as Trustee under this Indenture; 

        (iii)  Holders
have offered to the Trustee indemnity satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request; 

        (iv)  the
Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and 

         (v)  during
such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a direction that is
inconsistent with such written request. 

 
 

           Section 6.07.    Rights of Holders to Receive Payment.     Notwithstanding anything to the contrary, the
right of a Holder of a Note to receive (w) payment of principal of or interest on its Note on the Maturity
Date or the relevant Interest Payment Date, as the case may be, (x) payment of the Repurchase Price on the Repurchase Date, (y) payment of the Redemption Price on the Redemption Date and
(z) payment or delivery, as the case may be, of Cash, Common Stock or a combination thereof upon conversion of such Note on the date specified in the third paragraph of Section 10.02(a),
or to bring suit for the enforcement of any such payment or delivery, as the case may be, on or after such respective dates, may not be impaired or affected without the consent of that Holder. 

 
 

           Section 6.08.    Collection Suit by Trustee.     If an Event of Default in payment of principal or interest
specified in clause (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 for the whole amount of principal and accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent lawful, overdue installments of interest, in each case at the rate specified in the Notes, and such further amount as is sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee hereunder. 

 
 

           Section 6.09.    Trustee May File Proofs of Claim.     The Trustee may file 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 compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee hereunder) and the Holders allowed in any judicial
proceedings relating to the Company or its creditors or property, and is entitled and empowered to collect, receive and distribute any money, securities or other property payable or deliverable upon
conversion or exchange of the Notes or upon any such claims. Any custodian, 

20

 

receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, if the
Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee hereunder. Nothing in this Indenture will be deemed to empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding. 

 
 

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

        First:
to the Trustee for all amounts due under Section 7.07 hereof; 

        Second:
to Holders for amounts then due and unpaid for principal of and interest on the Notes, ratably, without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal and interest; 

        Third:
to Holders for other amounts then due and unpaid in respect of the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable in respect
of the Notes; and 

        Fourth:
to the Company or as a court of competent jurisdiction may direct. 

        The
Trustee, upon written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Noteholder and the Company a notice that states the record date, the payment date and the 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 Trustee and the Holders will be restored
severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, the Trustee and the Holders will continue as though no such proceeding had been
instituted. 

 
 

           Section 6.12.    Undertaking for Costs.     In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a
court may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable
attorneys fees, against any party litigant (other than the Trustee) in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by a Holder to enforce payment of (a) principal of or interest on any Note on the respective due dates, (b) the Change of Control Purchase Price on the Change of
Control Repurchase Date, (c) the Redemption Price on the Redemption Date, (d) the Cash, Common Stock, or a combination thereof due upon conversion of a Note or (e) a suit by
Holders of more than 10% in principal amount of the outstanding Notes. 

 
 

           Section 6.13.    Rights and Remedies Cumulative.     No right or remedy conferred or reserved to the Trustee
or to the Holders under this Indenture is intended to be exclusive of any other right or remedy, and all
such rights and remedies are, to the extent permitted by law, cumulative and in addition to every other right and remedy hereunder or now or hereafter existing at law or in equity or otherwise. 

21

 

The
assertion or exercise of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or exercise of any other right or remedy. 

 
 

           Section 6.14.    Delay or Omission Not Waiver.     No delay or omission of the Trustee or of any Holder to
exercise any right or remedy accruing upon any Event of Default will impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. 

 
 

           Section 6.15.    Failure to File.     The Company may, at its option, elect that the sole remedy for an
Event of Default relating to its failure to comply with its obligations described under
Section 4.04 or its failure to comply with the requirements of Section 314(a)(1) of the Trust Indenture Act will for the first 180 days after the occurrence of such an Event of
Default consist exclusively of the right to receive an extension fee on the notes in an amount equal to 0.5% of the principal amount of the Notes (the "Extension
Fee"). The Company shall pay the Extension Fee on all outstanding Notes on the date on which such Event of Default first occurs. On the 181st day after such Event of Default
(if the Event of Default relating to the reporting obligations is not cured or waived prior to such 181st day), the Notes shall be subject to acceleration as provided in Section 6.02. This
Section 6.15 shall not affect the rights of Holders of Notes if any other Event of Default occurs under the Indenture. If the Company does not pay the Extension Fee on a timely basis in
accordance with this Section 6.15, the Notes shall be subject to acceleration as provided in Section 6.02. 

 
 

ARTICLE 7
  
    The Trustee    
    

 
 
        Section 7.01.    General.     (a) The duties and responsibilities of the Trustee are as provided by the Trust
Indenture Act and as set forth herein. Whether or not expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to this Article. 

        (b)   Except
during the continuance of an Event of Default, the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations will be read into this Indenture against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise those rights and powers
vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. 

        (c)   No
provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct. 

 
 

           Section 7.02.    Certain Rights of Trustee.     Subject to Trust Indenture Act Sections 315(a) through (d):

        (a)   In
the absence of bad faith on its part, the Trustee may rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document 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, but, in the case of any document which is specifically required to be furnished to
the Trustee pursuant to any provision hereof, the Trustee shall examine the document to determine whether it conforms to the form requirements of this Indenture (but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated therein). The Trustee, in its discretion, may make further inquiry or investigation into such facts or matters as it sees fit. 

22

 

        (b)   Before
the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel conforming to Section 13.06 and the Trustee will
not be liable for any action it takes or omits to take in good faith in reliance on the certificate or opinion. 

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

        (d)   The
Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders, unless
such Holders have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. 

        (e)   The
Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action
it takes or omits to take in accordance with the direction of the Holders in accordance with Section 6.05 relating to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. 

        (f)    The
Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 

        (g)   No
provision of this Indenture will require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties
hereunder, or in the exercise of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense. 

        (h)   Except
with respect to Section 4.01, the Trustee shall have no duty to inquire as to performance of the Company with respect to the covenants contained in
Article 4. In addition, the Trustee shall not be deemed to have knowledge of an Default or Event of Default except (i) a Default or Event of Default occurring pursuant to
Section 6.01(a) and 6.01(b), or (ii) any Default or Event of Default of which the Trustee shall have received written notification from the Company or the Holders of at least 25% in
aggregate principal amount of Notes or obtained actual knowledge. 

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

        (j)    The
permissive rights of the Trustee to take certain actions under this Indenture shall not be construed as a duty unless so specified herein. 

 
 

           Section 7.03.    Individual Rights of Trustee.     The Trustee, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311. 

 
 

          Section 7.04.    Trustee's Disclaimer.     The Trustee (a) makes no representation as to the validity or
adequacy of this Indenture or the Notes, (b) is not accountable for the Company's use
or application of the proceeds from the Notes and (c) is not responsible for any statement in the Notes other than its certificate of authentication. 

 
 

           Section 7.05.    Notice of Default.     If any Default or Event of Default occurs and is continuing and is
known to the Trustee, the Trustee will send notice of the Default or Event of Default to each
Holder within 90 days after it occurs, unless the Default or Event of Default has been cured; provided that, 

23

 

except
in the case of a default (w) in the payment of the principal of or interest on any Note (x) in the payment of the Repurchase Price on the Repurchase Date, (y) in the
payment of the Redemption Price on the Redemption Date or (z) in the payment or delivery, as the case may be, of Cash, Common Stock or a combination thereof upon conversion of such Note on the
date specified in the third paragraph of Section 10.02(b), the Trustee may withhold the notice if and so long as the Responsible Officer or a committee of Responsible Officers of the Trustee in
good faith determines that withholding the notice is in the interest of the Holders. Notice to Holders under this Section will be given in the manner and to the extent provided in Trust Indenture Act
Section 313(c). 

 
 

           Section 7.06.    Reports by Trustee to Holders.     Within 60 days after each June 1, beginning
with December 1, 2007, the Trustee will mail to each Holder, as provided in Trust Indenture Act
Section 313(c), a brief report dated as of such December 1, if required by Trust Indenture Act Section 313(a), and file such reports with each stock exchange upon which its Notes
are listed and with the Commission as required by Trust Indenture Act Section 313(d). 

 
 

           Section 7.07.    Compensation and Indemnity.     (a) The Company will pay the Trustee compensation as agreed
upon in writing for its services. The compensation of the Trustee is not limited by any law on
compensation of a Trustee of an express trust. The Company will reimburse the Trustee upon request for all out-of-pocket expenses, disbursements and advances incurred or made
by the Trustee, including the compensation and expenses of the Trustee's agents and counsel. 

        (b)   The
Company will indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without negligence or bad faith on its part
arising out of or in connection with the acceptance or administration of this Indenture and its duties under this Indenture and the Notes, including the costs and expenses of defending itself against
any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under this Indenture and
the Notes. 

        (c)   To
secure the Company's payment obligations in this Section, the Trustee will have a lien prior to the Notes on all money or property held or collected by the Trustee,
in its capacity as Trustee, except money or property held in trust to pay principal of, and interest on particular Notes. 

 
 

           Section 7.08.    Replacement of Trustee.     (a) (i) The Trustee may resign at any time by written
notice to the Company. 

         (ii)  The
Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by written notice to the Trustee. 

        (iii)  If
the Trustee is no longer eligible under Section 7.10 or in the circumstances described in Trust Indenture Act Section 310(b), any Holder that
satisfies the requirements of Trust Indenture Act Section 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 

        (iv)  The
Company may remove the Trustee if (A) the Trustee is no longer eligible under Section 7.10; (B) the Trustee is adjudged a bankrupt or an
insolvent; (C) a receiver or other public officer takes charge of the Trustee or its property; or (D) the Trustee becomes incapable of acting. 

24

  

        A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee's acceptance of appointment as provided in this
Section. 

        (b)   If
the Trustee has been removed by the Holders, Holders of a majority in principal amount of the Notes may appoint a successor Trustee with the consent of the Company.
Otherwise, if the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. If the successor Trustee does
not deliver its written acceptance within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the
outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. 

        (c)   Upon
delivery by the successor Trustee of a written acceptance of its appointment to the retiring Trustee and to the Company, (i) the retiring Trustee will
transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07(c), (ii) the resignation or removal of the retiring Trustee will
become effective, and (iii) the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. Upon request of any successor Trustee, the Company will
execute any and all reasonable instruments for fully and vesting in and confirming to the successor Trustee all such rights, powers and trusts. The Company will give notice of any resignation and any
removal of the Trustee and each appointment of a successor Trustee to all Holders, and include in the notice the name of the successor Trustee and the address of its Corporate Trust Office. 

        (d)   Notwithstanding
replacement of the Trustee pursuant to this Section, the Company's obligations under Section 7.07 will continue for the benefit of the retiring
Trustee. 

        (e)   The
Trustee agrees to give the notices provided for in, and otherwise comply with, Trust Indenture Act Section 310(b). 

 
 

           Section 7.09.    Successor Trustee by Merger.     If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust business to, another corporation or
national banking association, the resulting, surviving or transferee corporation or national banking association without any further act will be the successor Trustee with the same effect as if the
successor Trustee had been named as the Trustee in this Indenture. 

 
 

           Section 7.10.    Eligibility.     This Indenture must always have a Trustee that satisfies the requirements
of Trust Indenture Act Section 310(a) and has a combined capital and surplus of
at least $25,000,000 as set forth in its most recent published annual report of condition. 

 
 

          Section 7.11.    Money Held in Trust.     The Trustee will not be liable for interest on any money received
by it except as it may agree in writing with the Company. Money held in trust by the Trustee
need not be segregated from other funds except to the extent required by law and except for money held in trust under Article 8. 

 
 

ARTICLE 8
  
    Discharge    
    

 
 
        Section 8.01.    Satisfaction and Discharge of this Indenture.     (a) This Indenture shall cease to be of further
effect if either: (i) all outstanding Notes (other than Notes replaced pursuant to Section 2.07)
have been delivered to the Trustee for cancellation, (ii) all outstanding Notes have become due and payable on the Maturity Date or on any Repurchase Date in connection with any repurchase upon
the occurrence of a Change in Control or on any Redemption Date in connection with any redemption of all outstanding Notes or (iii) all outstanding Notes have been delivered for conversion
pursuant to Article 10, and the Company irrevocably deposits or delivers, as the case may be, prior to the applicable date on which such payment is due and payable, or such conversion is to be
settled, with the 

25

 

Trustee,
the Paying Agent (if the Paying Agent is not the Company or any of its Affiliates) or the Conversion Agent Cash in respect of such payment or Cash and Common Stock, if any, in respect of any
such conversion on the Maturity Date, the Repurchase Date, the Redemption Date or the date such conversion is to be settled, as the case may be;  providedthat, in all cases, the Company shall pay to the
Trustee all other sums payable hereunder by the Company. 

        (b)   The
Company may exercise its satisfaction and discharge option with respect to the Notes only if: 

          (i)  no
Default or Event of Default with respect to the Notes shall exist on the date of such deposit; 

         (ii)  such
deposit or delivery, as the case may be, shall not result in a breach or violation of, or constitute a Default or Event of Default under, this Indenture or any
other agreement or instrument to which the Company is a party or by which it is bound; and 

        (iii)  the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel (which may rely upon such Officers' Certificate as to the absence of
Defaults and Events of Default and as to any factual matters), each stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been
complied with. 

        Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07 shall survive and, if money shall have been
deposited with the Trustee pursuant to clause (a) of this Section, the provisions of Section 2.03, Section 2.04, Section 2.05, Section 2.06, Section 2.07,
Section 2.12, Section 3.01, Article 5, Article 10 and this Article 8, shall survive and the Company shall be required to make all payments and deliveries required by
such Sections or Articles, as the case may be, irrespective of any prior satisfaction and discharge until the Notes have been paid in full. 

 
 

          Section 8.02.    Application of Trust Money.     Subject to the provisions of Section 8.03, the Trustee
or a Paying Agent shall hold in trust, for the benefit of the Holders, all money, Common Stock or
other consideration paid or delivered to it, as the case may be, pursuant to Section 8.01 and shall apply such money, Common Stock or other consideration in accordance with this Indenture and
the Notes to the payment of the principal amount of (including the relevant Repurchase Price or Redemption Price) and interest on the Notes or delivery of the Cash and Common Stock, if applicable,
payable or issuable, as the case may be, upon conversion of the Notes. 

 
 

           Section 8.03.    Repayment to Company.     The Trustee and each Paying Agent shall promptly pay or deliver,
as the case may be, to the Company upon request any excess money, Common Stock or other
consideration (x) paid or delivered to them pursuant to Section 8.01 and (y) held by them at any time. 

        Subject
to applicable abandoned property law, the Trustee and each Paying Agent shall also pay or deliver, as the case may be, to the Company upon request any money, Common Stock or
other consideration held by them for the payment of the principal amount of (including the relevant Repurchase Price or Redemption Price) and interest on, or the amount due in connection with any
conversion of, the Notes that remains unclaimed for two years after a right to such money, Common Stock or other consideration has matured (which maturity shall occur, for the avoidance of doubt, on
the Maturity Date, the Repurchase Date, the Redemption Date or the date specified in the third paragraph of Section 10.02(b), as the case may be);  provided that the Trustee or such Paying Agent,
before being required to make any such payment or delivery, may at the expense of the Company cause to
be mailed to each Holder entitled to such money, Common Stock or other consideration or publish in a newspaper of general circulation in the City of New York notice that such money, Common Stock or
other consideration remains unclaimed and that after a date specified therein, which shall be at least 30 days from the date of such mailing or publication, any unclaimed balance or portion of
such money, Common Stock or other consideration then remaining will be repaid or re-delivered to the Company. 

26

 

After
payment or delivery, as the case may be, to the Company, Holders entitled to such money, Common Stock or other consideration must look to the Company for payment or delivery as general creditors
unless an applicable abandoned property law designates another Person. 

 
 

          Section 8.04.    Reinstatement.     If the Trustee or any Paying Agent is unable to apply any money, Common
Stock or other consideration in accordance with Section 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no payment or delivery, as the case may be, had occurred pursuant to Section 8.01 until such time as the Trustee or such Paying
Agent is permitted to apply all such money in accordance with Section 8.02; provided that if the Company has made any payment of the principal
amount of (including the relevant Repurchase Price or Redemption Price) or interest on, or the amount due in connection with any conversion of, the Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive any such payment or delivery from the money, Common Stock or other consideration held by the Trustee
or such Paying Agent. 

 
 

ARTICLE 9
  
    Amendments, Supplements and Waivers    
    

 
 
        Section 9.01.    Amendments Without Consent of Holders.     The Company and the Trustee may amend or supplement
this Indenture or the Notes without notice to or the consent of any Noteholder: 

        (a)   to
cure any ambiguity, omission, defect or inconsistency in this Indenture or the Notes or to conform this Indenture or the Notes to the "Description of Notes" contained
in the Prospectus; 

        (b)   to
evidence a successor to the Company and the assumption by that successor of the obligations of the Company under this Indenture in accordance with Article 5 or
Section 10.12 of this Indenture; 

        (c)   to
secure the obligations of the Company in respect of the Notes and this Indenture; 

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

        (e)   to
make any change to comply with the Trust Indenture Act, or any amendment thereto; and 

        (f)    to
make any change that does not adversely affect the rights of any Holder of the Notes. 

 
 

          Section 9.02.    Amendments With Consent of Holders.     (a) Except as otherwise provided in
Section 6.07 or paragraph (b), the Company and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of at least a majority in principal amount of the outstanding Notes, and the Holders of a majority in principal amount of the outstanding Notes by written notice to the
Trustee may, on behalf of the Holders of such Notes waive any existing or past default under this Indenture and its consequences, except an uncured default (i) in the payment of the principal
amount, or accrued and unpaid interest, with respect to any Note, (ii) the Repurchase Price with respect to any Note (iii) the Redemption Price with respect to any Note, (iv) in
the payment or delivery of the consideration due upon conversion of the Notes or (v) in respect of any provision that under this Indenture cannot be modified or amended without the consent of
the Holder of each outstanding Note affected. 

27

 

        (b)   Notwithstanding
the provisions of paragraph (a), without the consent of each Holder affected, an amendment or waiver may not: 

          (i)  reduce
the principal amount of, or interest payment on any Note, or reduce the Repurchase Price or Redemption Price on any Note; 

         (ii)  make
any Note payable in any currency or securities other than that stated in the Note; 

        (iii)  change
the Maturity Date of any Note; 

        (iv)  change
the ranking of the Notes; 

         (v)  make
any change that adversely affects the right of a Holder to convert any Note; 

        (vi)  make
any change that adversely affects the right of a Holder to require the Company to repurchase a Note upon the occurrence of a Change in Control; 

       (vii)  impair
the right to convert or receive payment with respect to the Notes or the right to institute suit for the enforcement of any payment with respect to, or
conversion of, the Notes; or 

      (viii)  change
the provisions in this Indenture that relate to modifying or amending the provisions of this Indenture. 

        (c)   It
is not necessary for Noteholders to approve the particular form of any proposed amendment, supplement or waiver, but is sufficient if their consent approves the
substance thereof. 

        (d)   An
amendment, supplement or waiver under this Section will become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in
principal amount of the outstanding Notes. After an amendment, supplement or waiver under this Section becomes effective, the Company will send to the Holders affected thereby a notice briefly
describing the amendment, supplement or waiver. The Company will send supplemental indentures to Holders upon request. Any failure of the Company to send such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such supplemental indenture or waiver. 

 
 

           Section 9.03.    Effect of Consent.     (a) After an amendment, supplement or waiver becomes effective, it
will bind every Holder unless it is of the type requiring the consent of each Holder affected.
If the amendment, supplement or waiver is of the type requiring the consent of each Holder affected, the amendment, supplement or waiver shall bind each Holder that has consented to it and every
subsequent Holder of a Note that evidences the same debt as the Note of the consenting Holder. 

        (b)   If
an amendment, supplement or waiver changes the terms of a Note, the Trustee may require the Holder to deliver it to the Trustee so that the Trustee may place an
appropriate notation of the changed terms on the Note and return it to the Holder, or exchange it for a new Note that reflects the changed terms. The Trustee may also place an appropriate notation on
any Note thereafter authenticated. However, the effectiveness of the amendment, supplement or waiver is not affected by any failure to annotate or exchange Notes in this fashion. 

 
 

           Section 9.04.    Trustee's Rights and Obligations.     The Trustee is entitled to receive, and will be fully
protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article is authorized or permitted by this Indenture. If the Trustee has received such an Opinion of Counsel, it shall sign the amendment, supplement or waiver so
long as the same does not adversely affect the rights of the Trustee. The Trustee may, but is not obligated to, execute any amendment, supplement or waiver that affects the Trustee's own rights,
duties or immunities under this Indenture. 

 
 

           Section 9.05.    Conformity With Trust Indenture Act.     Every supplemental indenture executed pursuant to
this Article shall conform to the requirements of the Trust Indenture Act. 

28

 

 
 

           Section 9.06.    Payments for Consents.     The Company shall not, and shall not permit or suffer any of its
Subsidiaries or Affiliates to, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent, waive or agree to amend such term or provision within the time period set forth in the solicitation
documents relating to the consent, waiver or amendment. 

 
 

ARTICLE 10
  
    Conversion    
    

 
 
        Section 10.01.    Conversion Privilege.     (a) Subject to and upon compliance with the provisions of this
Article 10, a Noteholder shall have the right, at such Noteholder's option, to convert all
or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such Noteholder's Notes (1) at any time prior to the Close of Business on
March 1, 2014, upon the occurrence of any of the events set forth in clauses (i) through (vi) of Section 10.01(b) and (2) at any time on or after March 1,
2014, until the Close of Business on the Business Day immediately preceding the Maturity Date without regard to the occurrence of any of the events set forth in clauses (i) through
(vi) of Section 10.01(b), in each case, at a conversion rate (the "Conversion Rate") equivalent to
[    •    ] shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as set forth in this Article 10. Upon
conversion of any Notes, the Company shall pay or deliver to the converting Noteholder Cash, shares of Common Stock, or a combination thereof, as described in Section 10.02 (the Company's
obligation to pay or deliver such consideration being herein called the "Conversion Obligation"). 

        (b)   A
Noteholder may convert its Note into Cash, shares of Common Stock, or a combination thereof, as described in Section 10.02, prior to the Close of Business on
March 1, 2014, upon the occurrence of any of the events set forth below: 

          (i)  during
any calendar quarter commencing at any time after August 30, 2007, and only during such calendar quarter, if the Closing Price of Common Stock for at
least 20 Trading Days in the period of 30 consecutive Trading Days ending on the last Trading Day of the preceding calendar quarter exceeds the Conversion Trigger Price as defined in
Section 10.01(c); 

         (ii)  during
the five Business Day period after any five consecutive Trading Day period in which the Trading Price per $1,000 principal amount of Notes for each Trading Day
during that five-day period was less than 98% of the product of the Closing Price of Common Stock and the then Applicable Conversion Rate, subject to compliance with the procedures and
conditions described in Section 10.01(d) concerning the Trustee's obligation to make a Trading Price determination (the "Trading Price
Condition"); 

        (iii)  if
the Company elects to distribute to all holders of Common Stock rights, options or warrants entitling all holders of Common Stock to subscribe for or purchase
Common Stock, for a period expiring within 60 days after the record date for such distribution, at less than the average of the
Closing Prices of Common Stock for the five consecutive Trading Days ending on the date immediately preceding the first public announcement of such distribution, during the period beginning on, and
including, the date the Company provides notice to Noteholders of such distribution as set forth in Section 10.01(e) and ending on, and including, the earlier of (x) the Close of
Business on the Business Day prior to the Ex-Date for such distribution and (y) the Company's announcement that such distribution will not take place; 

        (iv)  if
the Company elects to distribute to all holders of Common Stock Cash, debt securities (or other evidence of Debt) or other assets (excluding dividends or
distributions described in 

29

 

Section 10.06),
which distribution, together with all other such distributions within the preceding twelve months, has a per share value exceeding 15% of the average of the Closing Prices of
Common Stock for the five consecutive Trading Days ending on the date immediately preceding the first public announcement of such distribution, during the period beginning on, and including, the date
the Company provides notice to Noteholders of such distribution as set forth in Section 10.01(e) and ending on, and including, the earlier of (x) the Close of Business on the Business
Day prior to the Ex-Date for such distribution and (y) the Company's announcement that such distribution will not take place; 

         (v)  if
a Termination of Trading, a Change in Control or a Make-Whole Change in Control that does not constitute a Change in Control occurs, during the period
from, and including, the date that is 35 Business Days prior to the anticipated effective date of the transaction, or, in the case of a Termination of Trading, the earlier of the date the applicable
securities exchange announces that a termination of trading will occur or the effective date of the Termination of Trading, to, and including, the date that is 35 Trading Days after the actual
effective date of such transaction (or, in the case of a Change in Control or a Termination of Trading, until the related Repurchase Date); 

        (vi)  if
the Company is party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of the Company's assets, pursuant to which
Common Stock would be converted into Cash, securities or other assets, during the period from, and including, the date that is 35 Business Days prior to the anticipated effective date of the
transaction, or, in the case of a Termination of Trading, the earlier of the date the applicable securities exchange announces that a termination of trading will occur or the effective date of the
Termination of Trading, to, and including, the date that is 35 Trading Days after the actual effective date of such transaction (or, if such transaction also constitutes a Change in Control or in the
case of a Termination of Trading, until the related Repurchase Date); or 

       (vii)  for
Notes that have been called for redemption, at any time prior to the close of business on the Business Day immediately preceding the Redemption Date, even if the
Notes are not otherwise convertible at such time. 

        (c)   The
"Conversion Trigger Price" shall equal 130% of the Conversion Price. The Conversion Trigger Price will initially
equal $[    •    ] and shall be automatically adjusted whenever the Conversion Price is adjusted as a result of an adjustment in the Conversion
Rate pursuant to this Article 10. The Company will determine at the beginning of each calendar quarter commencing at any time after August 30, 2007 (through the calendar quarter ending
February 28, 2014), whether the Notes are convertible as a result of the price of Common Stock exceeding the Conversion Trigger Price in accordance with Section 10.01(b)(i) and
will notify the Company, the Conversion Agent and the Trustee. 

        (d)   In
connection with any conversion upon satisfaction of the Trading Price Condition as set forth in Section 10.01(b)(ii) above, the Trustee shall have no
obligation to determine the Trading Price of the Notes unless the Company has requested such determination, and the Company shall have no obligation to make such request unless a Noteholder provides
the Company with reasonable evidence that the Trading Price per $1,000 principal amount of the Notes would be less than 98% of the product of the Closing Price of Common Stock and the then Applicable
Conversion Rate. At such time, the Company shall instruct the Trustee to determine the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading
Price per $1,000 principal amount of the Notes is greater than or equal to 98% of the product of the Closing Price of Common Stock and the then Applicable Conversion Rate. If the Company does not,
when it is obligated to, make a request to the Trustee to determine the Trading Price per $1,000 principal amount of Notes, or if the Company makes such request to the Trustee, but the Trustee does
not make such determination, then the Trading 

30

 

Price
per $1,000 principal amount of Notes will be deemed to be less than 98% of the product of the Closing Price of Common Stock and the then applicable Conversion Rate. If the Trading Price
Condition has been met, the Company shall so notify the Noteholders. If, at any point after the Trading Price Condition has been met, the Trading Price per $1,000 principal amount of Notes is greater
than 98% of the product of the Closing Price of Common Stock and the then Applicable Conversion Rate, the Company shall so notify Noteholders. 

        (e)   Upon
the first public announcement of any distribution described in Section 10.01(b)(iii) or Section 10.01(b)(iv), the Company shall notify the
Noteholders at least 35 Business Days prior to the Ex-Date for such distribution by (i) issuing a press release and using its reasonable efforts to post such information on its
website or otherwise publicly disclose this information or (ii) providing written notice to Noteholders by mailing such notice to Noteholders at their address in the Register (in the case of a
Certificated Note), or through the facilities of the Depositary (in the case of a Global Note). 

        Following
the announcement of any public announcement of a transaction described in Section 10.01(b)(v) or Section 10.01(b)(vi), the Company shall notify the
Noteholders and the Trustee as promptly as practicable, but at least 35 Business Days prior to the anticipated effective date of such transaction in the case of a Change in Control or a
Make-Whole Change in Control, and the earlier of the day immediately following the date the applicable securities exchange announces
that a termination of trading will occur or on the effective date of a Termination of Trading in the case of a Termination of Trading by (i) issuing a press release and using its reasonable
efforts to post such information on its website or otherwise publicly disclose this information or (ii) providing written notice to Noteholders by mailing such notice to Noteholders at their
address in the Register (in the case of a Certificated Note), or through the facilities of the Depositary (in the case of a Global Note). 

        (f)    Upon
determining that Noteholders are entitled to convert their Notes in accordance with the provisions set forth in Section 10.01(b), the Company shall promptly
(i) issuing a press release and use its reasonable efforts to post such information on its website or otherwise publicly disclose this information or (ii) provide written notice to
Noteholders by mailing such notice to Noteholders at their address in the Register (in the case of a Certificated Note), or through the facilities of the Depositary (in the case of a Global Note). 

        (g)   Noteholders
shall not have the right to convert their Notes pursuant to Section 10.01(b)(iii) or Section 10.01(b)(iv) if in connection with
the distribution described in Section 10.01(b)(iii) or Section 10.01(b)(iv) that gives rise to a right to convert their Notes, such Noteholders are entitled to participate
(as a result of holding their Notes, and at the same time as holders of Common Stock participate) in the distribution described in such Section as if such Noteholders held a number of shares of Common
Stock equal to the applicable Conversion Rate on the Ex-Date for such distribution, multiplied by the principal amount (expressed in
thousands) of Notes held by such Noteholder, without having to convert their Notes. 

 
 

           Section 10.02.    Conversion Procedures; Conversion Settlement.     (a) To convert a Note that is
represented by a Certificated Note, a Noteholder must (1) complete and manually sign a Conversion Notice, a form of which is
on the back of the Note, and deliver such Conversion Notice to the Conversion Agent, (2) surrender the Note to the Conversion Agent, (3) if required, furnish appropriate endorsement and
transfer documents, (4) if required, pay all transfer or similar taxes and (5) if required, pay Cash equal to amount of interest due on the next Interest Payment Date for such Note. If a
Noteholder holds a beneficial interest in a Global Note, to convert such beneficial interest, such Noteholder must comply with the requirements (4) and (5) as set forth in the
immediately preceding sentence and comply with the applicable procedures of the Depositary for converting a beneficial interest in a Global Note. The first date on which all of the requirements set
forth in the first sentence of this Section 10.02(a) (in the case of a Certificated Note) or the second sentence of this Section 10.02(a) (in the case of a Global Note or a beneficial
interest therein) have been satisfied is 

31

 

referred
to in this Indenture as the "Conversion Date." The Conversion Agent shall, within one (1) Business Day of any Conversion Date, provide
notice to the Company, as set forth in Section 12.03, of the occurrence of such Conversion Date. 

        (b)   The
Company may satisfy the Conversion Obligation by delivering shares of Common Stock, Cash, or a combination thereof as set forth in this Section 10.02(b). The
Company shall inform Noteholders through the Trustee of the method the Company chooses to satisfy the Conversion Obligation (and the Specified Cash Amount, if applicable, as described in the
immediately succeeding paragraph) no later than the 25th Scheduled Trading Day prior to the Maturity Date (in respect of Notes converted during the period on or after the 24th Scheduled Trading Day
immediately preceding the Maturity Date) and no later than two Trading Days following the applicable Conversion Date (in all other cases), as the case may be. Except to the extent the Company has
irrevocably elected Net Share Settlement as described in Section 10.02(c), if the Company does not give notice within the time periods described in the immediately preceding sentence as to how
it intends to settle any Conversion Obligation, the Company shall satisfy the Conversion Obligation by delivering solely shares of Common Stock (except for any Cash in lieu of fractional shares). 

        If
the Company chooses to satisfy any portion of the Conversion Obligation in Cash (except for any Cash in lieu of fractional shares), or if the Company has irrevocably elected Net Share
Settlement as described in Section 10.02(c), the Company shall notify holders during the periods set forth in the immediately preceding paragraph of the amount to be satisfied in Cash as a
fixed dollar amount per $1,000 principal amount of Notes (the "Specified Cash Amount"); provided that if
the Company has previously irrevocably elected Net Share Settlement as described in Section 10.02(c), the Specified Cash Amount must be at least equal to $1,000. If, subsequent to the Company
electing Net Share Settlement, the Company fails to timely notify converting Noteholders of the Specified Cash Amount, the Specified Cash Amount shall be deemed to be $1,000. 

        The
Company shall treat all Holders with the same Cash Settlement Averaging Period in the same manner. The Company shall not, however, have any obligation to settle any Conversion
Obligations arising with respect to different Cash Settlement Averaging Periods in the same manner. 

        If
the Company elects to settle any conversion of Notes by delivering solely shares of Common Stock, such settlement shall occur as soon as practicable after the Company notifies Holders
that is has chosen such method of settlement, but in any event within three Business Days of the relevant Conversion Date. Any settlement of a Conversion Obligation made entirely or partially in Cash
(other than Cash in lieu of fractional shares) shall occur on the third Business Day immediately following the final Trading Day of the Cash Settlement Averaging Period. 

        The
amount of Cash and/or number of shares of Common Stock, as the case may be, due upon conversion of Notes shall be determined as follows: 

        (1)   If
the Company elects to satisfy the entire Conversion Obligation by delivering Common Stock, the Company shall deliver to the converting Holder a number of shares of
Common Stock equal to (i) (A) the aggregate principal amount of Notes to be converted divided by (B) 1,000  multiplied by (ii) the Applicable
Conversion Rate in effect on the relevant Conversion Date
(provided that the Company shall deliver Cash in lieu of fractional shares as described in Section 10.03). 

        (2)   If
the Company elects to satisfy the entire Conversion Obligation by paying Cash, the Company shall pay to the converting Holder, for each $1,000 principal amount of
Notes so converted, Cash in an amount equal to the Conversion Value. 

32

  

        (3)   If
the Company elects to satisfy the Conversion Obligation by delivering or paying, as the case may be, a combination of Cash and Common Stock, or if the Company has
irrevocably elected Net Share Settlement pursuant to Section 10.02(c), the Company shall deliver to the converting holder, for each $1,000 principal amount of Notes so converted (x) Cash
in an amount equal to the lesser of (A) the Specified Cash Amount (which shall be at least $1,000 if the Company has made an irrevocable Net Share Settlement Election) and (B) the
Conversion Value; and (y) if the Conversion Value is greater than the Specified Cash Amount, a number of shares of Common Stock equal to the sum of the Daily Share Amounts for each of the
twenty Trading Days in the Cash Settlement Averaging Period (provided that the Company shall deliver Cash in lieu of fractional shares as described in
Section 10.03). 

        (c)   At
any time on or prior to the 30th Scheduled Trading Day prior to the Maturity Date, the Company may irrevocably elect to satisfy the Conversion Obligation with respect
to any Notes converted after the date of such election by delivering Cash up to the aggregate principal amount of Notes to be converted, and shares of Common Stock, Cash or a combination thereof in
respect of the remainder, if any, of the Conversion Obligation. Such election (a "Net Share Settlement" election) shall be in the Company's sole
discretion and shall not require the consent of Noteholders. Upon making a Net Share Settlement election, the Company shall promptly (i) issue a press release and use its reasonable efforts to
post such information on its website or otherwise publicly disclose this information or (ii) provide written notice to Noteholders by mailing such notice to Noteholders at their address in the
Register (in the case of a Certificated Note), or through the facilities of the Depositary (in the case of a Global Note). 

        (d)   A
Holder receiving Common Stock upon conversion shall not be entitled to any rights as a holder of Common Stock, including, among other things, the right to vote and
receive dividends and notices of stockholder meetings, until the Close of Business on the Conversion Date (if the Company delivers solely Common Stock in respect of the Conversion Obligation pursuant
to clause (1) of Section 10.02(b), other than Cash in lieu of fractional shares delivered pursuant to Section 10.03) or the Close of Business on the last Trading Day of the Cash
Settlement Averaging Period (if the Company delivers cash in respect of any portion of the Conversion Obligation pursuant to clause (2) or clause (3) of Section 10.02(b), other
than Cash in lieu of any fractional shares delivered pursuant to Section 10.03, or if the Company has irrevocably elected Net Share Settlement). 

        (e)   No
payment or adjustment will be made for dividends on, or other distributions with respect to, any Common Stock except as provided in this Article 10. Upon
conversion of a Note, a Noteholder will not receive, except as described below, any Cash payment representing accrued interest. Instead, accrued interest will be deemed paid by the Cash and/or shares
of Common Stock, if any, received by the Noteholder upon conversion. Delivery to the Noteholder of such Cash and/or shares of Common Stock shall thus be deemed to satisfy (1) the Company's
obligation to pay the principal amount of a Note, and (2) the Company's obligation to pay any accrued and unpaid interest on the Note. As a result, upon conversion of a Note, accrued and unpaid
interest on such Note is deemed paid in full rather than cancelled, extinguished or forfeited. 

        (f)    Notwithstanding
Section 10.02(e), if Notes are converted after a Record Date but prior to the next succeeding Interest Payment Date, Holders of such notes at the
Close of Business on such Record Date will receive the interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Such Notes, upon surrender for
conversion, must be accompanied by Cash equal to the amount of interest payable on such Interest Payment Date on the Notes so converted; provided that
no such payment need be made (1) if the Company has specified a Redemption Date that is after a Record Date but on or prior to the next succeeding Interest Payment Date, (2) if the
Company has specified a Repurchase Date that is after a Record Date but on or prior to the next succeeding Interest Payment Date, (3) with respect to any notes converted after the Record 

33

 

Date
immediately preceding the Maturity Date or (4) to the extent of any Defaulted Interest that exists at the time of conversion with respect to such Note. 

        (g)   If
a Noteholder converts more than one Note at the same time, the number of shares of Common Stock and the amount of Cash, if any, including Cash in lieu of fractional
shares, due upon conversion shall be determined based on the total principal amount of the Notes converted. 

        (h)   Upon
surrender of a Note that is converted in part, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder, a new Note in an authorized
denomination equal in principal amount to the unconverted portion of the Note surrendered. 

 
 

           Section 10.03.    Fractional Shares.     The Company will not issue a fractional share of Common Stock upon
conversion of a Note. Instead, the Company shall pay Cash in lieu of fractional shares based on
the Closing Price of Common Stock on the Trading Day prior to the applicable Conversion Date (if the Company delivers solely shares of Common Stock to satisfy the Conversion Obligation, other than
such Cash in lieu of fractional shares) or the Closing Price of Common Stock on the last Trading Day of the relevant Cash Settlement Averaging Period (if the Company delivers Cash to satisfy a
portion, but less than all, of the Conversion Obligation, other than solely such Cash in lieu of any fractional shares, or if the Company has irrevocably elected Net Share Settlement upon conversion). 

 
 

           Section 10.04.    Taxes on Conversion.     If a Holder converts a Note, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of any 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 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 will be due because
Common Stock is to be delivered in a name other than the Holder's name. 

 
 

           Section 10.05.    Company to Provide Common Stock.     The Company shall, from time to time as may be
necessary, reserve out of its authorized but unissued shares of Common Stock a sufficient number of shares of
Common Stock to permit the delivery in respect of all outstanding Notes of the number of shares of Common Stock due upon conversion (assuming, for purposes of this sentence, that the Company elects to
deliver solely shares of Common Stock in respect of the Conversion Obligation). 

        Any
shares of Common Stock delivered upon conversion of the Notes shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and
shall be free from preemptive rights and free of any lien or adverse claim. 

        The
Company will comply with all federal and state securities laws regulating the offer and delivery of shares of Common Stock upon conversion of Notes, if any, and shall list or cause
to have quoted such shares of Common Stock on each national securities exchange or in the over-the-counter market or such other market on which Common Stock is then listed or
quoted. 

        In
addition, if any shares of Common Stock that would be issuable upon conversion of Notes hereunder require registration with or approval of any governmental authority before such
shares of Common Stock may be issued upon such conversion, the Company will cause such shares of Common Stock to be duly registered or approved, as the case may be. 

 
 

           Section 10.06.    Adjustment for Change in Capital Stock.     (a) If the Company shall, at any time and from
time to time while any of the Notes are outstanding, issue dividends or make distributions on Common Stock payable
in shares of Common Stock, then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect at the opening of business on the
Ex-Date for such dividend or distribution by a fraction: 

          (i)  the
numerator of which shall be the sum of the number of shares of Common Stock outstanding at the Close of Business on the Business Day immediately preceding the
Ex-Date for 

34

 

such
dividend or distribution, plus the total number of shares of Common Stock constituting such dividend or distribution; and 

         (ii)  the
denominator of which shall be the number of shares of Common Stock outstanding at the Close of Business on the Business Day immediately preceding such
Ex-Date. 

        If
any dividend or distribution of the type described in this Section 10.06 is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such dividend or distribution had not been declared. In no event shall the Conversion Rate be decreased pursuant to this Section 10.06. 

        (b)   If
the Company shall, at any time or from time to time while any of the Notes are outstanding, subdivide or reclassify outstanding shares of Common Stock into a greater
number of shares of Common Stock, then the Conversion Rate in effect at the opening of business on the day upon which such subdivision or reclassification becomes effective shall be proportionately
increased, and conversely, if the Company shall, at any time or from time to time while any of the Notes are outstanding, combine or reclassify outstanding shares of Common Stock into a smaller number
of shares of Common Stock, then the Conversion Rate in effect at the opening of business on the day upon which such combination or reclassification becomes effective shall be proportionately
decreased. In each such case, the Conversion Rate shall be adjusted by multiplying such Conversion Rate by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such subdivision, combination or reclassification and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such
subdivision, combination or reclassification. Such increase or reduction (solely in the case of any combination or reclassification of outstanding shares of Common Stock into a smaller number of
shares of Common Stock), as the case may be, shall become effective immediately after the opening of business on the day upon which such subdivision, combination or reclassification becomes effective. 

 
 

           Section 10.07.    Adjustment for Rights, Options or Warrants Issue.     If the Company shall, at any time or
from time to time while the Notes are outstanding, distribute to all holders of Common Stock rights, options or warrants to
purchase shares of Common Stock for a period expiring within 60 days after the record date for such distribution at less than the average of the Closing Prices of Common Stock for the five
consecutive Trading Days immediately preceding the first public announcement of such distribution, then the Conversion Rate shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect at the opening of business on the Ex-Date for such distribution by a fraction: 

        (x)   the
numerator of which shall be the number of shares of Common Stock outstanding at the Close of Business on the Business Day immediately preceding the
Ex-Date for such distribution, plus the total number of additional shares of Common Stock so offered for purchase; and 

        (y)   the
denominator of which shall be the number of shares of Common Stock outstanding on the Close of Business on the Business Day immediately preceding the
Ex-Date for such distribution, plus the number of shares of Common Stock that the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at the Current Market Price of Common Stock on the first public announcement date for such distribution (determined by multiplying such total number of shares of
Common Stock so offered by the exercise price of such rights, options or warrants and dividing the product so obtained by such Current Market Price). 

        Such
adjustment shall become effective immediately after the opening of business on the Ex-Date for such distribution. 

        To
the extent that shares of Common Stock are not delivered pursuant to such rights or upon the expiration or termination of such rights, options or warrants, the Conversion Rate shall
be readjusted 

35

 

to
the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights, options or warrants been made on the basis of the delivery of only the number of shares
of Common Stock actually delivered. In the event that such rights, options or warrants are not so distributed, the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be
in effect if the Ex-Date for such distribution had not occurred. In determining whether any rights, options or warrants entitle the holders to purchase shares of Common Stock at less than
the average of the Closing Prices for the five consecutive Trading Days immediately preceding the first public announcement of the relevant distribution, and in determining the aggregate offering
price of such shares of Common Stock, there shall be taken into account any consideration received for such rights, options or warrants and the value of such consideration if other than Cash, to be
determined in good faith by the Board of Directors. In no event shall the Conversion Rate be decreased pursuant to this Section 10.07. 

        If
the Company elects to make a distribution described in this Section 10.07 that has a per share of Common Stock value equal to more than 15% of the Closing Price of Common Stock
on the day preceding the declaration date for such distribution, the Company will be required to give notice to Holders at least 35 Business Days prior to the Ex-Date for such
distribution. 

 
 

           Section 10.08.    Adjustment for Other Distributions.
    

        (a)   If
the Company shall, at any time or from time to time while the Notes are outstanding, distribute to all holders of Common Stock any of its Capital Stock, assets
(including shares of any Subsidiary of the Company or business unit of the Company), or debt securities or rights to purchase securities of the Company (excluding (x) any dividends or
distributions described in Section 10.06, (y) any rights, options or warrants described in Section 10.07 and (z) any dividends or other distributions described in
Section 10.09 (such Capital Stock, assets, debt securities or rights to purchase securities of the Company hereinafter in this Section 10.08 called the
"Distributed Assets")), then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate
in effect at the opening of business on the Ex-Date for such distribution by a fraction: 

          (i)  the
numerator of which will be the Current Market Price of Common Stock, and 

         (ii)  the
denominator of which will be the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution,  minus the fair market value, as determined by the Board
of Directors, of the portion of Distributed Assets so distributed applicable to one share of
Common Stock; 

        Such
increase shall become effective immediately after the opening of business on the Ex-Date for such distribution; provided
that if "the fair market value, as determined by the Board of Directors, of the portion of Distributed Assets so distributed applicable to one share of Common Stock" as set forth above is equal to or
greater than "the Current Market Price of Common Stock on the Business Day immediately preceding the Ex-Date for such distribution" as set forth above, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall receive on the date on which the Distributed Assets are distributed to holders of Common Stock, for each $1,000 principal amount of
Notes, the amount of Distributed Assets such Noteholder would have received had such Noteholder owned a number of shares of Common Stock equal to the Conversion Rate on the record date for such
distribution. In the event that such distribution is not so made, the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if such distribution had not been
declared. In no event shall the Conversion Rate be decreased pursuant to this Section 10.08(a). 

        If
the Board of Directors determines the fair market value of any distribution for purposes of this Section 10.08(a) by reference to the actual or when issued trading market for
any Distributed Assets comprising all or part of such distribution, it must in doing so consider the prices in such market over the same period (the "Reference
Period") used in computing the Current Market Price for purposes of 

36

 

clause (i)
above, unless the Board of Directors determines in good faith that determining the fair market value during the Reference Period would not be in the best interest of the Holders. 

        (b)   Notwithstanding
anything to the contrary in this Section 10.08, if the Company distributes Capital Stock of, or similar equity interests in, a Subsidiary of the
Company or other business unit of the Company (a "Spin-Off"), then the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect at the opening of business on the fifteenth Trading Day immediately following the Ex-Date for such Spin-Off by a
fraction: 

        (x)   the
numerator of which will be the sum of (A) the average of the Closing Prices of the Capital Stock or similar equity interest distributed to holders of Common
Stock applicable to one share of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the Ex-Date for the
Spin-Off and (B) the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth Trading Day after the
Ex-Date for the Spin-Off; and 

        (y)   the
denominator of which is the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period immediately following, and including, the fifth
Trading Day after the Ex-Date for the Spin-Off. 

        In
no event shall the Conversion Rate be decreased pursuant to this Section 10.08(b). 

        (c)   If
the Company elects to make a distribution described in Section 10.08(a) or Section 10.08(b) that has a per share of Common Stock value equal to more
than 15% of the Closing Price of Common Stock on the day preceding the declaration date for such distribution, the Company will be required to give notice to Holders at least 35 Business Days prior to
the Ex-Date for such distribution. 

 
 

           Section 10.09.    Adjustment for Cash Dividends.     If the Company shall, at any time or from time to time
while any of the Notes are outstanding, distribute dividends or make other distributions paid entirely in
Cash to all or substantially all holders of Common Stock (other than (x) distributions described in Section 10.10 below or (y) any dividend or distribution in connection with the
Company's liquidation, dissolution or winding up), then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect at the
opening of business on the Ex-Date for such dividend or distribution by a fraction: 

        (x)   the
numerator of which will be the Current Market Price of Common Stock; and 

        (y)   the
denominator of which will be the Current Market Price per share of Common Stock on the Business Day immediately preceding the Ex-Date for such dividend
or distribution, minus the amount per share of such dividend or distribution. 

        Such
adjustment shall become effective immediately after the opening of business on the Ex-Date for such distribution or dividend;  provided that if "the amount per share of such dividend or distribution" as
set forth above is equal to or greater than "the Current Market Price per
share of Common Stock on the Business Day immediately preceding the Ex-Date for such dividend or distribution" as set forth above, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Noteholder shall have the right to receive on the date on which the relevant Cash dividend or distribution is distributed to holders of Common Stock, for each $1,000
principal amount of Notes upon conversion, the amount of Cash such Noteholder would have received had such Noteholder owned a number of shares equal to the Conversion Rate on the Record Date for such
dividend or distribution. In the event that such distribution or dividend is not so made, the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared. 

        In
no event shall the Conversion Rate be decreased pursuant to this Section 10.09. 

37

 

        If
the Company elects to make a distribution described in this Section 10.09 that has a per share of Common Stock value equal to more than 15% of the Closing Price of Common Stock
on the day preceding the declaration date for such distribution, the Company will be required to give notice to Holders at least 35 Business Days prior to the Ex-Date for such
distribution. 

 
 

          Section 10.10.    Adjustment for Tender Offer.     If the Company or any of its Subsidiaries shall, at any
time or from time to time, while any of the Notes are outstanding, distribute Cash or other consideration
in respect of a tender offer or exchange offer for Common Stock, where such Cash and the value of any such other consideration per share of Common Stock validly tendered or exchanged exceeds the
Closing Price of Common Stock on Trading Day immediately following the last date (such last date, the "Expiration Date") on which tenders or exchanges
may be made pursuant to the tender or exchange offer, then the Conversion Rate shall be increased so that the same shall equal the rate determined by multiplying the Conversion Rate in effect at the
opening of business on the Business Day immediately following the Trading Day immediately following the Expiration Date by a fraction: 

        (x)   the
numerator of which will be the sum of (A) the fair market value, as determined by the Board of Directors, of the aggregate consideration payable for all
shares of Common Stock that the Company purchases in such tender or exchange offer and (B) the product of the number of shares of Common Stock outstanding, less the number of shares of Common
Stock purchased in the relevant tender offer or exchange offer (the "Purchased Shares"), and the Closing Price of Common Stock on the Trading Day immediately following the Expiration Date; and 

        (y)   the
denominator of which will be the product of the number of shares of Common Stock outstanding, including the Purchased Shares, and the Closing Price of Common Stock
on the Trading Day immediately following the Expiration Date. 

        An
adjustment, if any, to the Conversion Rate pursuant to this Section 10.10 shall become effective immediately prior to the opening of business on the second Trading Day
immediately following the Expiration Date. In the event that the Company or a Subsidiary of the Company is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange
offer, but the Company or such Subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect if such tender offer or exchange offer had not been made. If the application of this Section 10.10 to any tender offer or
exchange offer would result in a decrease in the Conversion Rate, no adjustment shall be made for such tender offer or exchange offer under this Section 10.10. 

 
 

          Section 10.11.    Provisions Governing Adjustment to Conversion Rate.     Rights or warrants distributed by
the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's
Capital Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events ("Trigger
Event"): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for purposes of Section 10.06, Section 10.07, Section 10.08, Section 10.09 or Section 10.10
(and no adjustment to the Conversion Rate under Section 10.06, Section 10.07, Section 10.08, Section 10.09 or Section 10.10 will be required) until the occurrence of
the earliest Trigger Event, whereupon such rights, options and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made
under Section 10.08, and, if applicable, Section 10.23. If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Date with respect to new rights, 

38

 

options
or warrants with such rights (and a termination or expiration of the existing rights, options or warrants without exercise by any of the holders thereof), except as set forth in
Section 10.23. In addition, except as set forth in Section 10.23, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other
event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under
Section 10.06, Section 10.07, Section 10.08, Section 10.09 or Section 10.10 was made (including any adjustment contemplated in Section 10.23), (1) in
the case of any such rights, options or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a Cash distribution, equal to the per share redemption or repurchase price received
by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the
Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued. 

 
 

           Section 10.12.    Disposition Events.     If any of the following events (a "Disposition Event") occurs: 

        (a)   any
reclassification of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a
subdivision or combination); 

        (b)   consolidation,
merger, or other combination involving the Company; or 

        (c)   sale
or conveyance to another Person of all or substantially all of the assets of the Company; 

in
each case, in which holders of outstanding Common Stock would be entitled to receive Cash, securities or other property for their shares of Common Stock, if a Holder converts its Notes on or after
the effective date of any such event, subject to the right of the Company to settle all or a portion of the Conversion Obligation with respect to such Notes in Cash (other than solely Cash in lieu of
any fractional shares), and the right of the Company to irrevocably elect Net Share Settlement, Notes will be convertible into, in lieu of the shares of Common Stock otherwise deliverable, the same
type (in the same proportions) of consideration received by holders of Common Stock in the relevant event (collectively, "Reference Property"). 

        If
the Company elects to settle all or any portion of the Conversion Obligation in Cash (other than solely Cash in lieu of any fractional shares) or if the Company irrevocably elects Net
Share Settlement, Holders shall receive in connection with any conversion (1) Cash in an amount equal to the portion of the Conversion Obligation that Company has elected to settle with Cash
(which shall be at least equal to the lesser of (x) the aggregate principal amount of Notes to be converted and (y) the relevant Conversion Value, if the Company has irrevocably elected
Net Share Settlement); and (2) in lieu of the shares of Common Stock otherwise deliverable, if any, Reference Property. If the Company elects to settle any conversion in whole or in part by
delivering Cash in respect the Conversion Obligation (other than solely Cash in lieu of any fractional shares) or if the Company irrevocably elects Net Share Settlement, the amount of Cash and any
Reference Property that the Holders will receive will be based on the Daily Share Amounts of Reference Property and the Applicable Conversion Rate as set forth in Section 10.02. 

        If
the Disposition Event provides the holders of Common Stock with the right to receive more than a single type of consideration determined based in part upon any form of stockholder
election, the Reference Property shall be comprised of the weighted average of the types and amounts of consideration received by the holders of Common Stock upon the occurrence of such event. 

39

 

        Upon
the occurrence of a Disposition Event, 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 if such supplemental indenture is then required to so comply) permitted under
Section 9.02(b) providing for the conversion and settlement of the Notes as set forth in this Indenture. Such supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article 10. If, in the case of any Disposition Event, the Reference Property includes shares of stock or other
securities and assets of a Person other than the successor or purchasing Person,
as the case may be, in such reclassification, consolidation, merger, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other Person and shall contain
such additional provisions to protect the interests of the holders of the Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to the extent
required by the Board of Directors and practicable the provisions providing for the repurchase rights set forth in Article 3 herein. 

        In
the event the Company shall execute a supplemental indenture pursuant to this Section 10.12, the Company shall promptly file with the Trustee an Officers' Certificate briefly
stating the reasons therefore, the kind or amount of cash, securities or property or asset that will comprise the Reference Property after any such Disposition Event, any adjustment to be made with
respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Noteholders. The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Noteholder, at its address appearing on the Register provided for in this Indenture, within twenty days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture. 

 
 

           Section 10.13.    Adjustment to Conversion Rate Upon a Make-Whole Change in Control; Discretionary Adjustment.     (a) If, after the date hereof, a Change in Control (determined after giving effect to any exceptions or exclusions to such definition, but without regard
to the proviso in clause (ii) of the definition thereof, a "Make-Whole Change in
Control") occurs and a Holder elects to convert its Notes in connection with such Make-Whole Change in Control, the Company will, under certain circumstances,
increase the Applicable Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the "Make-Whole
Shares"), as described in this Section 10.13. A conversion of Notes will be deemed for these purposes to be "in connection with" a Make-Whole Change in
Control if the notice of conversion of the Notes is received by the Conversion Agent from, and including, the Effective Date of the Make-Whole Change in Control up to, and including, the
Business Day immediately prior to the related Repurchase Date (or, in the case of an event that would have been a Change in Control but for the proviso
in clause (ii) of the definition thereof, the 35th Trading Day immediately following the Effective Date of such Make-Whole Change in Control). Upon surrender of Notes for conversion
in connection with a Make-Whole Change in Control, the Company will have the right to deliver, in lieu of shares of Common Stock, including the Make-Whole Shares, Cash or a
combination of Cash and shares of Common Stock as described in Section 10.02. 

        On
or before the 15th day after the occurrence of a Make-Whole Change in Control that does not also constitute a Change in Control, the Company will mail to the Trustee and
to all Holders at their addresses shown in the Register of the Registrar, and to beneficial owners as required by applicable law, notice indicating that a Make-Whole Change in Control has
occurred. 

40

  

        (b)   The number of Make-Whole Shares will be determined by reference to the table below and is based on the date which such Make-Whole Change in
Control transaction becomes effective (the "Effective Date") and the price paid per share of Common Stock in the Make-Whole Change in
Control (in the case of a Make-Whole Change in Control described in clause (ii) of the definition of Change in Control in which holders of Common Stock receive only Cash), or in the
case of any other Make-Whole Change in Control, the average of the Closing Prices per share of Common Stock over the five Trading-Day period ending on the Trading Day
immediately preceding the Effective Date of such Make-Whole Change in Control (the "Stock Price"). 

        (c)   The
Stock Prices set forth in the first column of the table below will be adjusted as of any date on which the Applicable Conversion Rate is adjusted. The adjusted Stock
Prices will equal the Stock Prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Applicable Conversion Rate immediately prior to the adjustment giving
rise to the Stock Price adjustment, and the denominator of which is the Applicable Conversion Rate as so adjusted. In addition, the number of Make-Whole Shares will be subject to
adjustment in the same manner as the Applicable Conversion Rate as set forth in Section 10.06 through Section 10.10. 

	 
	 	Effective Date

	Stock

Price
 
	 	May [•],

2007
	 	June 1,

2008
	 	June 1,

2009
	 	June 1,

2010
	 	June 1,

2011
	 	June 1,

2012
	 	June 1,

2013
	 	June 1,

2014

	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 	
 	

 

        (d)   If
the exact Stock Price and Effective Date is not set forth in the table, then (i) if the Stock Price is between two Stock Prices in the table or the Effective
Date is between two Effective Dates in the table, the Make-Whole Shares issued upon conversion of the Notes will be determined by a straight-line interpolation between the
number of Make-Whole Shares set forth for the higher and lower Stock Prices and/or the earlier and later Effective Dates in the table, as applicable, based on a 365-day year,
(ii) if the Stock Price is in excess of $[    •    ] per share of Common Stock (subject to adjustment as set forth in
Section 10.13(c)), no Make-Whole Shares will be issued upon conversion of the Notes; and (iii) if the Stock Price is less than
$[    •    ] per share of Common Stock (subject to adjustment as set forth in Section 10.13(c)), no Make-Whole Shares will be
issued upon conversion of the Notes. 

        (e)   The
Company may make such increases in the Conversion Rate, in addition to those required by Section 10.06, 10.07, 10.08, 10.09 and 10.10 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 resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes. 

        (f)    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 time if the period is at least
twenty (20) days, the increase is irrevocable during the period and 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. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the 

41

 

Company
shall mail to holders of record of the Notes a notice of the increase at least fifteen (15) days prior to the date the increased Conversion Rate takes effect, and such notice shall
state the increased Conversion Rate and the period during which it will be in effect. 

 
 

           Section 10.14.    When Adjustment May Be Deferred.     No adjustment in the Conversion Rate need be made
unless the adjustment would require an increase or decrease of at least 1% of the Conversion Rate. Any
adjustments that are less than 1% of the Conversion Rate will be carried forward and taken into account in determining any subsequent adjustment. In addition, the Company shall make any carry forward
adjustments not otherwise effected on each anniversary of the date hereof, upon conversion of any Note, upon required repurchases of the Notes pursuant to Section 3.01, and on each day from and
after the 24th Scheduled Trading Day prior to the Maturity Date. 

 
 

           Section 10.15.    When No Adjustment Required.     (a) No adjustment need be made for a transaction referred
to in Section 10.06, 10.07, 10.08, 10.09 or 10.10 if Noteholders participate, without conversion,
in the transaction or event that would otherwise give rise to an adjustment pursuant to such Section at the same time as holders of Common Stock participate with respect to such transaction or event
and on the same terms as holders of Common Stock participate with respect to such transaction or event as if Noteholders, at such time, held a number of shares of Common Stock equal to the Applicable
Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Noteholder, without having to convert their Notes. 

        (b)   No
adjustment need be made for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock or carrying the right to purchase Common
Stock or any such security. 

        (c)   No
adjustment need be made for rights to purchase Common Stock pursuant to a Company plan for reinvestment of dividends or interest. 

        (d)   No
adjustment need be made for a change in the par value or no par value of Common Stock. 

        (e)   To
the extent the Notes become convertible pursuant to this Article 10 into Cash, no adjustment need be made thereafter as to the Cash. Interest will not accrue
on the Cash. 

        (f)    Notwithstanding
anything in this Article 10 to the contrary, the Applicable Conversion Rate shall not exceed
[    •    ] per $1,000 principal amount of Notes, other than on account of adjustments to the Conversion Rate in the manner set forth in
Sections 10.06, 10.07, 10.08, 10.09 and 10.10. 

 
 

           Section 10.16.    Notice of Adjustment.     Whenever the Conversion Rate is adjusted, the Company shall
promptly mail to Noteholders a notice of the adjustment. The Company shall file with the Trustee and
the Conversion Agent such notice and a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate
shall be conclusive evidence that the adjustment is correct. Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof. 

 
 

           Section 10.17.    Notice of Certain Transactions.     If (a) the Company takes any action that would
require an adjustment in the Conversion Rate pursuant to Section 10.06, 10.07, 10.08, 10.09 or 10.10
(unless no adjustment is to occur pursuant to Section 10.14 or Section 10.15), (b) the Company takes any action that would require a supplemental indenture pursuant to
Section 10.12, or (c) there is a liquidation or dissolution of the Company, then the Company shall mail to Noteholders and file with the Trustee and the Conversion Agent a notice stating
the proposed Ex-Date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, combination, sale or conveyance.
The Company shall file and mail the notice at least 15 days before such date; provided that if the Company elects to make a distribution
described in Section 10.07, 

42

 

Section 10.08,
or Section 10.09, and in the case of Section 10.08 or Section 10.09, that has a per share value equal to more than 15% of the Closing Price per share of
Common Stock on the day preceding the declaration date for such distribution, the Company shall give notice to Holders at least 35 Business Days prior to the Ex-Date for such distribution.
Failure to file or mail the notice or any defect in it shall not affect the validity of the transaction. 

 
 

           Section 10.18.    Right of Holders to Convert.     Notwithstanding any other provision in this Indenture,
the Holder of any Note shall have the right to convert its Note in accordance with this Article 10
and to bring an action for the enforcement of any such right to convert, and such rights shall not be impaired or affected without the consent of such Holder. 

 
 

           Section 10.19.    Company Determination Final.     The Company shall be responsible for making all
calculations called for hereunder and under the Notes. These calculations include, but are not limited to,
Conversion Value, the Conversion Date, the Volume Weighted Average Price, the Cash Settlement Averaging Period, the Closing Price, the Conversion Price, the Applicable Conversion Rate and the number
of shares of Common Stock, if any, to be issued upon conversion of the Notes. The Company shall make all these calculations using commercially reasonable means and, absent manifest error, the
Company's calculations will be final and binding on Noteholders. The Company shall provide a schedule of the Company's calculations to the Trustee, and the Trustee is entitled to rely upon the
accuracy of the Company's calculations without independent verification. 

 
 

           Section 10.20.    Trustee's Adjustment Disclaimer.     The Trustee has no duty to determine when an
adjustment under this Article 10 should be made, how it should be made or what it should be. The Trustee has
no duty to determine whether a supplemental indenture under Section 10.12 need be entered into or whether any provisions of any supplemental indenture are correct. The Trustee shall not be
accountable for and makes no representation as to the validity or value of any securities or assets issued upon conversion of Notes. The Trustee shall not be responsible for the Company's failure to
comply with this Article 10. Each Conversion Agent shall have the same protection under this Section 10.20 as the Trustee. 

 
 

           Section 10.21.    Simultaneous Adjustments.     For purposes of Section 10.08, Section 10.06 and
Section 10.07, any dividend or distribution to which Section 10.08 is applicable that
also includes shares of Common Stock, or rights, options or warrants to subscribe for or purchase shares of Common Stock (or both), shall be deemed instead to be (1) a dividend or distribution
of the debt securities, assets or shares of Capital Stock other than such shares of Common Stock or rights (and any Conversion Rate adjustment required by Section 10.08 with respect to such
dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights (and any further Conversion Rate adjustment
required by Section 10.06 and Section 10.07 with respect to such dividend or distribution shall then be made), except any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the Close of Business on the Business Day immediately preceding such Ex-Date" within the meaning of Section 10.06. 

 
 

           Section 10.22.    Successive Adjustments.     After an adjustment to the Conversion Rate under this
Article 10, any subsequent event requiring an adjustment under this Article 10 shall cause an
adjustment to the Conversion Rate as so adjusted. 

 
 

           Section 10.23.    Rights Issued in Respect of Common Stock Issued Upon Conversion.     Each share of Common
Stock issued upon conversion of Notes pursuant to this Article 10 shall be entitled to receive the appropriate number of rights
("Rights"), if any, and the certificates representing Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be
provided by the terms of any rights plan (i.e., a poison pill) adopted by the Company, as the same may be amended form time to time, is in effect, (in each case, a
"Shareholders Rights Plan"). Upon conversion of the Notes a Holder will receive, in addition to any Common Stock received in connection with such
conversion, the Rights under the Shareholders Rights Plan, unless prior to any conversion, the Rights 

43

 

have
separated from Common Stock, in which case the Applicable Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of Common Stock, shares of
Company Capital Stock, assets, debt securities or certain rights to purchase securities of the Company as described in Section 10.08, subject to readjustment in the event of the expiration,
termination or redemption of such rights. Any distribution of Rights pursuant to the Shareholders Rights Plan that would allow a Holder to receive upon conversion, in addition to shares of Common
Stock, the Rights described therein (unless such Rights have separated from Common Stock) shall not constitute a distribution of Rights that would entitle the Holder to an adjustment to the Conversion
Rate. 

 
 

          Section 10.24.    Withholding Taxes for Adjustments in Conversion Rate.     The Company may, at its option,
set-off withholding taxes due with respect to Notes against payments of Cash and Common Stock on the Notes. In the
case of any such set-off against Common Stock delivered upon conversion of the Notes, such Common Stock shall be valued based on the arithmetic average of the Volume Weighted Average
Prices for each Trading Day in the relevant Cash Settlement Averaging Period. 

 
 

ARTICLE 11
  
    Redemption    
    

 
 
        Section 11.01.    Right to Redeem; Notices to Trustee.     

        (a)   The
Notes are not redeemable by the Company prior to June 6, 2011. On or after June 6, 2011, the Notes may be redeemed in whole or in part at the option of
the Company if the Closing Price of the Company's Common Stock has been greater than or equal to 130% of Conversion Price then in effect for at least 20 Trading Days during any 30 consecutive Trading
Day period ending within five Trading Days prior to the date on which the Company provides notice of redemption. 

        (b)   The
redemption price at which the Notes are redeemable (the "Redemption Price") shall be payable in Cash and shall be
equal to 100% of the principal of Notes to be redeemed, together with accrued and unpaid interest to, but excluding, the Redemption Date; provided,
however, that if Notes are redeemed on any Interest Payment Date, the interest payable in respect of such Interest Payment Date shall be payable to the Holders of record as of the corresponding
Regular Record Date. 

        (c)   The
Company may not redeem any Notes unless all accrued and unpaid Interest thereon has been or is simultaneously paid for all semi-annual periods or
portions thereof terminating prior to the Redemption Date. In addition, the Company may not redeem any Notes or deliver to any Holder of Notes a notice of redemption pursuant to Section 11.03
at any time when there exists any accrued and unpaid Defaulted Interest. 

 
 

          Section 11.02.    Selection of Notes to be Redeemed.     If less than all the Notes are to be redeemed, the
Trustee shall select the Notes to be redeemed pro rata or by lot or by any other method the Trustee considers
fair and appropriate (so long as such method is not prohibited by the rules of The New York Stock Exchange or any other stock exchange on which the Notes are then listed, as applicable). The Trustee
shall make the selection within 7 days from its receipt of the notice from the Company delivered pursuant to Section 11.03 from outstanding Notes not previously called for redemption. 

        Notes
and portions of them the Trustee selects shall be in principal amounts of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Notes called for
redemption in whole also apply to Notes called for redemption in part. The Trustee shall notify the Company promptly of the Notes or portions of Notes to be redeemed. 

        If
any Note selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Note so selected, the converted portion of
such Note shall be deemed (so far as may be) to be the portion selected for redemption. Notes which have been 

44

 

converted
during a selection of Notes to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection. 

 
 

           Section 11.03.    Notice of Redemption.     At least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to the Trustee, the Paying Agent and each Holder of Notes to be redeemed; provided, however, that the Company may not deliver any such notice
to any Holder of Notes at any time when there exists any accrued and unpaid Defaulted Interest. 

        The
notice shall specify the Notes to be redeemed and shall state: 

          (i)  the
Redemption Date; 

         (ii)  the
Redemption Price; 

        (iii)  the
Applicable Conversion Rate and any adjustments thereto; 

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

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

        (vi)  the
procedures a Holder must follow to exercise rights under Section 3.01. 

        At
the Company's written request delivered at least 30 days prior to the date such notice is to be given to the Holders (unless a shorter time period shall be acceptable to the
Trustee), the Trustee shall give the notice of redemption to each Holder of Notes to be redeemed in the Company's name and at the Company's expense. 

 
 

           Section 11.04.    Effect of Notice of Redemption.     Once notice of redemption is given, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption Price stated in the notice
except for Notes that are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Notes shall be paid at the Redemption Price stated in the notice. 

 
 

           Section 11.05.    Deposit of Redemption Price.     Prior to 12:00 p.m. (New York City time) on or prior
to the Redemption Date, the Company shall deposit with the Trustee or with the Paying Agent (or, if
the Company or a Subsidiary of the Company or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an amount of money (in
immediately available funds if deposited on such Trading Day) sufficient to pay the aggregate Redemption Price of all the Notes or portions thereof which are to be redeemed as of the Redemption Date. 

        If
the Paying Agent holds money sufficient to pay the Redemption Price with respect to the Notes to be redeemed on the Redemption Date in accordance with the terms of this Indenture,
then, immediately on and after the Redemption Date, interest on such Notes shall cease to accrue, whether or not the Notes are delivered to the Paying Agent, and all other rights of the Holders of
such Notes shall terminate, other than the right to receive the Redemption Price upon delivery of such Notes. 

 
 

          Section 11.06.    Notes Redeemed in Part.     Any Note which is to be redeemed 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 shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Note, 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 Note so surrendered that is not redeemed. 

45

 
 
 

ARTICLE 12
  
    Payment of Interest    
    

 
 
        Section 12.01.    Interest Payments.     Interest on any Note that is payable, and is punctually paid or duly
provided for, on any applicable Interest Payment Date shall be paid to the Person in whose
name that Note is registered at the Close of Business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose. Each installment of interest
payable in Cash on any Note shall be paid in same-day funds by transfer to an account maintained by the payee located inside the United States, if the Trustee shall have received proper
wire transfer instructions from such payee not later than the related Regular Record Date or, if no such instructions have been received by check drawn on a bank in the United States mailed to the
payee at its address set forth on the Registrar's books. In the case of a Global Note, interest payable on any applicable payment date will be paid by wire transfer of same-day funds to
the Depositary for the purpose of permitting such party to credit the interest received by it in respect of such Global Note to the accounts of the beneficial owners thereof. 

 
 

           Section 12.02.    Defaulted Interest.     Any interest on any Note that is payable, but is not punctually
paid or duly provided for, within 30 days following any applicable payment date (herein
called "Defaulted Interest", which term shall include any accrued and unpaid interest that has accrued on such defaulted amount in accordance with
paragraph 1 of the Notes), shall forthwith cease to be payable to the registered Holder thereof on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may 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 Notes are registered at the Close of Business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Note and the date of the proposed payment (which shall not be less than 20 days after such notice is received by the Trustee), 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 on or prior
to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest which shall be not more than 20 days and not less than 15 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of the proposed payment (the "Special Record Date"). The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder of Notes at his address as it appears on the list of Noteholders maintained pursuant to Section 2.05 not less than
25 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the persons in whose names the Notes are registered at the Close of Business on such Special Record Date and shall no longer be payable pursuant to the following
clause (b). 

        (b)   The
Company may make payment of any Defaulted Interest on the Notes in any other lawful manner not inconsistent with the requirements of any securities exchange on which
such Notes 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. 

46

 

 
 

           Section 12.03.    Interest Rights Preserved.     Subject to the foregoing provisions of this Article 12
and Section 2.06, each Note delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Notes. 

 
 

ARTICLE 13
  
    Miscellaneous    
    

 
 
        Section 13.01.    Trust Indenture Act of 1939.     This Indenture shall incorporate and be governed by the
provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified
under the Trust Indenture Act. 

 
 

           Section 13.01.    Noteholder Communications; Noteholder Actions.     (a) The rights of Holders to
communicate with other Holders with respect to this Indenture or the Notes are as provided by the Trust Indenture Act, and the
Company and the Trustee shall comply with the requirements of Trust Indenture Act Sections 312(a) and 312(b). Neither the Company nor the Trustee will be held accountable by reason of any disclosure
of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. 

        (b)   (i)
Any request, demand, authorization, direction, notice, consent to amendment, supplement or waiver or other action provided by this Indenture to be given or taken by
a Holder (an "act") may be evidenced by an instrument signed by the Holder delivered to the Trustee. The fact and date of the execution of the
instrument, or the authority of the person executing it, may be proved in any manner that the Trustee deems sufficient. 

         (ii)  The
Trustee may make reasonable rules for action by or at a meeting of Holders, which will be binding on all the Holders. 

        (c)   Any
act by the Holder of any Note binds that Holder and every subsequent Holder of a Note that evidences the same debt as the Note of the acting Holder, even if no
notation thereof appears on the Note. Subject to paragraph (d), a Holder may revoke an act as to its Notes, but only if the Trustee receives the notice of revocation before the date the
amendment or waiver or other consequence of the act becomes effective. 

        (d)   The
Company may, but is not obligated to, fix a record date (which need not be within the time limits otherwise prescribed by Trust Indenture Act Section 316(c))
for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard, except that during the continuance of an Event of Default, only the Trustee
may set a record date as to notices of Default, any declaration or acceleration or any other remedies or other consequences of the Event of Default. If a record date is fixed, those Persons that were
Holders at such record date and only those Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date. No act will be
valid or effective for more than 90 days after the record date. 

 
 

           Section 13.03.    Notices.     (a) Any notice or communication to the Company will be deemed given if in
writing (i) when delivered in person or (ii) five days after mailing when
mailed by first class mail, or (iii) when sent by facsimile transmission, with transmission confirmed. Any notice to the Trustee will 

47

 

be
effective only upon receipt. In each case the notice or communication should be addressed as follows: 

        if to the Company:

Micron
Technology, Inc.

8000 South Federal Way

Boise, Idaho 83716

Attention: General Counsel

Tel: (208) 368-4000

Fax: (208) 368-4540 

        with a copy to:

Wilson
Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, California 94304

Attention: John A. Fore

Tel: (650) 493-9300

Fax: (650) 493-6811

        if to the Trustee:  

Wells
Fargo Bank, National Association

Sixth and Marquette

MAC N9303-120

Minneapolis, MN 55479

Attention: Corporate Trust Services

Tel: (612) 667-2344

Fax: (612) 667-9825 

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

        (b)   Except
as otherwise expressly provided with respect to published notices, any notice or communication to a Holder will be deemed given when mailed to the Holder at its
address as it appears on the Register by first class mail or, as to any Global Note registered in the name of the Depository or its nominee, as agreed by the Company, the Trustee and the Depository.
Copies of any notice or communication to a Holder, if given by the Company, will be mailed to the Trustee at the same time. Any defect in mailing a notice or communication to any particular Holder
will not affect its sufficiency with respect to other Holders. 

        (c)   Where
this Indenture provides for notice, the notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and the
waiver will be the equivalent of the notice. Waivers of notice by Holders must be filed with the Trustee, but such filing is not a condition precedent to the validity of any action taken in reliance
upon such waivers. 

 
 

           Section 13.04.    Communication by Holders with Other Holders.     Noteholders may communicate pursuant to
Section 312(b) of the Trust Indenture Act with other Noteholders with respect to their rights under this Indenture
or the Notes. The Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent and anyone else shall have the protection of Section 312(c) of the Trust Indenture Act. 

48

 

 
 

           Section 13.05.    Certificate and Opinion as to Conditions Precedent.     Upon any request or application by
the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: 

        (1)   an
Officers' Certificate 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 

        (2)   an
Opinion of Counsel stating that all such conditions precedent have been complied with. 

Notwithstanding
the foregoing, no such Opinion of Counsel shall be required with respect to the authentication and delivery of any Initial Notes or Additional Notes. 

 
 

          Section 13.06.    Statements Required in Certificate or Opinion.     Each certificate or opinion with respect
to compliance with a condition or covenant provided for in this Indenture must include: 

        (1)   a
statement that each person signing the certificate or opinion has read the covenant or condition and the related definitions; 

        (2)   a
brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in the certificate or opinion is based; 

        (3)   a
statement that, in the opinion of each such person, that person has made such examination or investigation as is necessary to enable the person 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 each such person, such condition or covenant has been complied with,  provided that an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials with respect to matters of fact. 

 
 

           Section 13.07.    Legal Holiday.     A "Legal Holiday" is any
day other than a Business Day. If any specified date (including a date for giving notice)
is a Legal Holiday, the action shall be taken on the next succeeding day that is not a Legal Holiday, and, if the action to be taken on such date is a payment in respect of the Notes, interest shall
accrue for the intervening period. 

 
 

           Section 13.08.    Rules by Trustee, Paying Agent, Conversion Agent and Registrar.     The Trustee may make
reasonable rules for action by or a meeting of Noteholders. The Registrar, Conversion Agent and the Paying Agent may make reasonable rules
for their functions. 

 
 

          Section 13.09.    Governing Law.     THIS INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF). 

 
 

           Section 13.10.    No Adverse Interpretation of Other Agreements.     This Indenture may not be used to
interpret another indenture or loan or debt agreement of the Company or any Subsidiary of the Company, and no such indenture or
loan or debt agreement may be used to interpret this Indenture. 

 
 

           Section 13.11.    Successors.     All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its successor. 

 
 

           Section 13.12.    Counterparts.     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. 

 
 

           Section 13.13.    Severability.     In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby. 

49

 

 
 

          Section 13.14.    Table of Contents and Headings.     The Table of Contents, Cross-Reference Table and
headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are
not to be considered a part of this Indenture and in no way modify or restrict any of the terms and provisions of this Indenture. 

 
 

           Section 13.15.    No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders.     No director, officer, employee, incorporator, member or stockholder of the Company, as such, will have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of, or by reason of, such obligations. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. 

50

 

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

	 	 	MICRON TECHNOLOGY, INC., as Issuer
	

 	
 	

By:	
 	

    
 Name:

Title:
	

 	
 	

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
	

 	
 	

By:	
 	

    
 Name:

Title:

51

  

EXHIBIT A  

[FACE
OF NOTE] 

Micron
Technology, Inc. 

[    •    ]%
Convertible Senior Note due June 1, 2014 

        No.
[        ] 

CUSIP
[    •    ] 

ISIN
[    •    ] 

        Micron
Technology, Inc., a Delaware corporation (the "Company," which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to Cede & Co. or its registered assigns, the principal sum [of            ] [set forth on
Schedule I hereto]* on June 1, 2014. 

        Initial
Interest Rate: [    •    ]% per annum. 

        Interest
Payment Dates: June 1 and December 1, commencing December 1, 2007. 

        Regular
Record Dates: May 15 and November 15. 

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

	*
	This
schedule should be included only if the Note is a Global Note. 

A-1

 

        IN
WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer. 

	Date: May [•], 2007	 	MICRON TECHNOLOGY, INC.
	

 	
 	

By:	

    
 Name:

Title:

(Form
of Trustee's Certificate of Authentication) 

        This
is one of the [    •    ]% Convertible Senior Notes due June 1, 2014 described in the Indenture referred to in this
Note. 

	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
	

 	
 	

By:	

    
 Authorized Signatory

A-2

 
[REVERSE
SIDE OF NOTE] 

Micron
Technology, Inc. 

[    •    ]%
Convertible Senior Note due June 1, 2014 

 
 

          1.    Principal and Interest.     

        The
Company promises to pay the principal of this Note on June 1, 2014. 

        The
Company promises to pay interest on the principal amount of this Note on each Interest Payment Date, as set forth on the face of this Note, at the rate of
[    •    ]% per annum. 

        Interest
will be payable semiannually (to the holders of record of the Notes at the Close of Business on the June 1 or December 1 immediately preceding the interest payment
date) on each interest payment date, commencing December 1, 2007. 

        Interest
on this Note will accrue from the most recent date to which interest has been paid or provided for on this Note or the Note surrendered in exchange for this Note or, if no
interest has been paid, from May [    •    ], 2007, through the day before each Interest Payment Date. Interest will be computed in the basis of
a 360-day year of twelve 30-day months. 

        The
Company will pay interest on overdue principal, premium, if any, and, to the extent lawful, interest at a rate per annum that is 1% in excess of
[    •    ]%. Defaulted Interest shall be paid to the Persons that are Holders on a Special Record Date, which will established as set forth in
the Indenture referred to below. 

 
 

           2.    Method of Payment.     

        Subject
to the terms and conditions of the Indenture, the Company shall pay interest on this Note to the person who is the Holder of this Note at the Close of Business on the Regular
Record Date next preceding the related Interest Payment Date. The Company will pay any Cash amounts in money of the United States that at the time of payment is legal tender for payment of public and
private debts. 

 
 

           3.    Paying Agent, Conversion Agent and Registrar.     

        Initially,
the Trustee will act as Paying Agent, Conversion Agent and Registrar. The Company may appoint and change any Paying Agent, Conversion Agent, Registrar or
co-registrar without notice, other than notice to the Trustee. The Company or any of its Subsidiaries or any of their
Affiliates may act as Paying Agent, Conversion Agent, Registrar or co-registrar. The Company may maintain deposit accounts and conduct other banking transactions with the Trustee in the
normal course of business. 

 
 

           4.    Indenture.     

        This
is one of the Notes issued under an Indenture dated as of May [    •    ], 2007 (as amended from time to time, the
"Indenture"), between the Company and Wells Fargo Bank, National Association, as Trustee. Capitalized terms used herein are used as defined in the
Indenture unless otherwise indicated. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject
to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency
between the terms of this Note and the terms of the Indenture, the terms of the Indenture will control. The Notes are general unsecured obligations of the Company. 

 
 

           5.    Repurchase at the Option of the Holders upon Change in Control.     

        Upon
the occurrence of a Change in Control, a Holder has the right, at such Holder's option, to require the Company to repurchase all of such Holder's Notes or any portion thereof (in
principal 

A-3

 

amounts
of $1,000 or integral multiples thereof) on the Repurchase Date at a price equal to the Repurchase Price. 

 
 

           6.    Redemption at the Option of the Company.     

        No
sinking fund is provided for the Notes. The Notes are redeemable as a whole, or from time to time in part, at any time commencing on June 6, 2011 at the option of the Company
if the Closing Price of the Company's Common Stock has been greater than or equal to 130% of Conversion Price then in effect for at least 20 Trading Days during any 30 consecutive Trading Day period
ending within five Trading Days prior to the date on which the Company provides notice of redemption. The redemption
price (the "Redemption Price") for any such redemption is equal to 100%, expressed as a percentage of the Principal Amount of Notes to be redeemed,
together with accrued and unpaid interest to, but excluding, the Redemption Date. 

 
 

           7.    Conversion.     

        Subject
to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the
Indenture, prior to the close of business on the Business Day immediately preceding the Maturity Date, to convert this Note or portion thereof that is $1,000 or an integral multiple thereof, into
Common Stock, Cash or a combination thereof, at the Company's election, at a Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture. 

 
 

           8.    Defaults and Remedies.     

        Subject
to certain exceptions, if an Event of Default, other than a Bankruptcy Default, occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate of the outstanding principal amount of the Notes, by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such
Holders may, declare the principal of and accrued interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal and interest will become immediately due
and payable. If a Bankruptcy Default occurs, the principal of and accrued interest on the Notes then outstanding will become immediately due and payable automatically without any declaration or other
act on the part of the Trustee or any Holder. 

 
 

          9.    Amendment and Waiver.     

        Subject
to certain exceptions set forth in the Indenture, the Indenture and the Notes may be amended, or default may be waived, with the consent of the Holders of a majority in principal
amount of the outstanding Notes. Without notice to or the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or this Note to, among other things, cure any
ambiguity, omission, defect or inconsistency in the Indenture or this Note that does not adversely affect the rights of any Holder of the Notes. 

 
 

           10.    Registered Form; Denominations; Transfer; Exchange.     

        The
Notes are in registered form without coupons in denominations of $1,000 principal amount and integral multiples of $1,000. A Holder may register the transfer or exchange of Notes in
accordance with the Indenture. The Trustee may require a Holder to furnish appropriate endorsements and transfer documents and to pay any taxes and fees as set forth in the Indenture. Pursuant to the
Indenture, there are certain periods during which the Trustee will not be required to issue, register the transfer of or exchange any Note or certain portions of a Note. 

 
 

           11.    Persons Deemed Owners.     

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

A-4

 

 
 

           12.    Unclaimed Money or Notes.     

        Subject
to applicable abandoned property law, the Trustee and each Paying Agent shall pay or deliver, as the case may be, to the Company upon request any money, Common Stock or other
consideration held by them for the payment of the principal amount of (including the relevant Repurchase Price or Redemption Price) and interest on, or the amount due in connection with any conversion
of, this Note that remains unclaimed for two years after a right to such money, Common Stock or other consideration has matured. 

 
 

           13.    Trustee Dealings with the Company.     

        The
Trustee, in its individual or any other capacity, may become the owner or pledgee of this Note and may otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not
the Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311. 

 
 

          14.    No Recourse Against Others.     

        No
director, officer, employee, incorporator, member or stockholder of the Company, as such, will have any liability for any obligations of the Company under this Note or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations. Each Holder of this Note by accepting this Note waives and releases all such liability. The waiver and release are part of
the consideration for issuance of this Note. 

 
 

          15.    Authentication.     

        This
Note shall not be valid until an authorized officer of the Trustee signs manually the Trustee's Certificate of Authentication on the other side of this Note. 

 
 

           16.    Governing Law.     

        THE
INDENTURE AND THE NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK (WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF). 

 
 

           17.    Abbreviations.     

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

        The
Company will furnish a copy of the Indenture to any Holder upon written request and without charge. 

A-5

 
[FORM
OF TRANSFER NOTICE] 

        FOR
VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto 

Insert
Taxpayer Identification No. 

  

   

Please print or typewrite name and address including zip code of assignee 

   

the within Note and all rights thereunder, hereby irrevocably constituting and appointing 

  

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

	 	 	Your Signature:
	

Date:	
 	

 
	

 	
 	

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

*Signature guaranteed by:	
 	

 
	By:	 	 

	*
	The
signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion
Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the
Trustee. 

A-6

 

Micron
Technology, Inc.

8000 South Federal Way

Boise, Idaho 83716

Attention: General Counsel

Fax: [                        ] 

Wells
Fargo Bank, National Association

Sixth and Marquette

MAC N9303-120

Minneapolis, MN 55479

Attention: Corporate Trust Services

Fax: (612) 667-9825 

 
 

CONVERSION NOTICE    
    

        To
convert this Note, check the box: / / 

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

        If
you want the Cash paid to another person or the stock certificate, if any, made out in another person's name, fill in the form below: 

   

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

   

   

   

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

and
irrevocably appoint 

  

agent to transfer this Note on the books of the Company. The agent may substitute another to act for him or her. 

	 	 	Your Signature:
	

Date:	
 	

 
	

 	
 	

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

*Signature guaranteed by:	
 	

 
	By:	 	 

	*
	The
signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion
Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the
Trustee. 

A-7

 
Schedule I*  

No.
[    ] 

        The
initial principal amount of this Global Note is $1,100,000,000. 

	Date
 
	 	Principal Amount of

this Global Note
	 	Notation Explaining Change

in Principal Amount
	 	Authorized Signature

of Trustee

	 	 	 	 	 	 	 

	*
	This
schedule should be included only if the Note is a Global Note. 

A-8

  

EXHIBIT B  

 
 

DTC LEGEND    
    

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

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

B-1

QuickLinks

Micron Technology, Inc.

TABLE OF CONTENTS

RECITALS

THIS INDENTURE WITNESSETH

ARTICLE 1 Definitions and Incorporation by Reference

Section 1.01. Definitions.

Section 1.02. Other Definitions.

Section 1.03. Incorporation by Reference of Trust Indenture Act.

Section 1.04. Rules of Construction.

Section 1.05. Acts of Holders.

ARTICLE 2 The Notes

Section 2.01. Form, Dating and Denominations; Legends.

Section 2.02. Execution And Authentication.

Section 2.03. Registrar, Paying Agent and Conversion Agent.

Section 2.04. Paying Agent to Hold Money in Trust.

Section 2.05. Noteholder Lists.

Section 2.06. Transfer and Exchange.

Section 2.07. Replacement Notes.

Section 2.08. Outstanding Notes.

Section 2.09. Treasury Notes.

Section 2.10. Temporary Notes.

Section 2.11. Cancellation.

Section 2.12. CUSIP Numbers.

Section 2.13. Book-Entry Provisions for Global Notes.

ARTICLE 3 Repurchases

Section 3.01. Repurchase at the Option of the Holders Upon Change in Control or Termination of Trading.

Section 3.02. Effect of Repurchase Notice.

Section 3.03. Deposit of Repurchase Price.

Section 3.04. Notes Repurchased in Part.

Section 3.05. Covenant to Comply with Securities Laws upon Repurchase of Notes.

ARTICLE 4 Covenants

Section 4.01. Payment of Notes.

Section 4.02. Maintenance of Office or Agency.

Section 4.03. Existence.

Section 4.04. Annual Reports.

Section 4.05. Reports to Trustee.

Section 4.06. Stay, Extension and Usury Laws.

ARTICLE 5 Consolidation, Merger, Sale or Lease of Assets

Section 5.01. Consolidation, Merger, Sale or Lease of Assets by the Company.

ARTICLE 6 Default and Remedies

Section 6.01. Events of Default.

Section 6.02. Acceleration.

Section 6.03. Other Remedies.

Section 6.04. Waiver of Past Defaults.

Section 6.05. Control by Majority.

Section 6.06. Limitation on Suits.

Section 6.07. Rights of Holders to Receive Payment.

Section 6.08. Collection Suit by Trustee.

Section 6.09. Trustee May File Proofs of Claim.

Section 6.10. Priorities.

Section 6.11. Restoration of Rights and Remedies.

Section 6.12. Undertaking for Costs.

Section 6.13. Rights and Remedies Cumulative.

Section 6.14. Delay or Omission Not Waiver.

Section 6.15. Failure to File.

ARTICLE 7 The Trustee

Section 7.01. General.

Section 7.02. Certain Rights of Trustee.

Section 7.03. Individual Rights of Trustee.

Section 7.04. Trustee's Disclaimer.

Section 7.05. Notice of Default.

Section 7.06. Reports by Trustee to Holders.

Section 7.07. Compensation and Indemnity.

Section 7.08. Replacement of Trustee.

Section 7.09. Successor Trustee by Merger.

Section 7.10. Eligibility.

Section 7.11. Money Held in Trust.

ARTICLE 8 Discharge

Section 8.01. Satisfaction and Discharge of this Indenture.

Section 8.02. Application of Trust Money.

Section 8.03. Repayment to Company.

Section 8.04. Reinstatement.

ARTICLE 9 Amendments, Supplements and Waivers

Section 9.01. Amendments Without Consent of Holders.

Section 9.02. Amendments With Consent of Holders.

Section 9.03. Effect of Consent.

Section 9.04. Trustee's Rights and Obligations.

Section 9.05. Conformity With Trust Indenture Act.

Section 9.06. Payments for Consents.

ARTICLE 10 Conversion

Section 10.01. Conversion Privilege.

Section 10.02. Conversion Procedures; Conversion Settlement.

Section 10.03. Fractional Shares.

Section 10.04. Taxes on Conversion.

Section 10.05. Company to Provide Common Stock.

Section 10.06. Adjustment for Change in Capital Stock.

Section 10.07. Adjustment for Rights, Options or Warrants Issue.

Section 10.08. Adjustment for Other Distributions .

Section 10.09. Adjustment for Cash Dividends.

Section 10.10. Adjustment for Tender Offer.

Section 10.11. Provisions Governing Adjustment to Conversion Rate.

Section 10.12. Disposition Events.

Section 10.13. Adjustment to Conversion Rate Upon a Make-Whole Change in Control; Discretionary Adjustment.

Section 10.14. When Adjustment May Be Deferred.

Section 10.15. When No Adjustment Required.

Section 10.16. Notice of Adjustment.

Section 10.17. Notice of Certain Transactions.

Section 10.18. Right of Holders to Convert.

Section 10.19. Company Determination Final.

Section 10.20. Trustee's Adjustment Disclaimer.

Section 10.21. Simultaneous Adjustments.

Section 10.22. Successive Adjustments.

Section 10.23. Rights Issued in Respect of Common Stock Issued Upon Conversion.

Section 10.24. Withholding Taxes for Adjustments in Conversion Rate.

ARTICLE 11 Redemption

Section 11.01. Right to Redeem; Notices to Trustee.

Section 11.02. Selection of Notes to be Redeemed.

Section 11.03. Notice of Redemption.

Section 11.04. Effect of Notice of Redemption.

Section 11.05. Deposit of Redemption Price.

Section 11.06. Notes Redeemed in Part.

ARTICLE 12 Payment of Interest

Section 12.01. Interest Payments.

Section 12.02. Defaulted Interest.

Section 12.03. Interest Rights Preserved.

ARTICLE 13 Miscellaneous

Section 13.01. Trust Indenture Act of 1939.

Section 13.01. Noteholder Communications; Noteholder Actions.

Section 13.03. Notices.

Section 13.04. Communication by Holders with Other Holders.

Section 13.05. Certificate and Opinion as to Conditions Precedent.

Section 13.06. Statements Required in Certificate or Opinion.

Section 13.07. Legal Holiday.

Section 13.08. Rules by Trustee, Paying Agent, Conversion Agent and Registrar.

Section 13.09. Governing Law.

Section 13.10. No Adverse Interpretation of Other Agreements.

Section 13.11. Successors.

Section 13.12. Counterparts.

Section 13.13. Severability.

Section 13.14. Table of Contents and Headings.

Section 13.15. No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders.

1. Principal and Interest.

2. Method of Payment.

3. Paying Agent, Conversion Agent and Registrar.

4. Indenture.

5. Repurchase at the Option of the Holders upon Change in Control.

6. Redemption at the Option of the Company.

7. Conversion.

8. Defaults and Remedies.

9. Amendment and Waiver.

10. Registered Form; Denominations; Transfer; Exchange.

11. Persons Deemed Owners.

12. Unclaimed Money or Notes.

13. Trustee Dealings with the Company.

14. No Recourse Against Others.

15. Authentication.

16. Governing Law.

17. Abbreviations.

CONVERSION NOTICE

DTC LEGENDConverted by EDGARwiz

EXHIBIT 10.1

SECURITIES PURCHASE AGREEMENT

AGREEMENT dated as of May 11, 2007, between HepaLife Technologies, Inc. (the “Company”) and GCA Strategic Investment Fund Limited (“Purchaser”).

R E C I T A L S:

WHEREAS, the Company desires to sell and issue to Purchaser, and Purchaser desires to purchase from the Company, $2,500,000 aggregate principal amount of the Company’s Convertible Note due two years from the date of issuance (the “Convertible Note”), with terms and conditions as set forth in the form of Convertible Note attached hereto as Exhibit A;

WHEREAS, the Convertible Note will be convertible into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”);

WHEREAS, in order to induce the Purchaser to enter into the transactions described in this Agreement, the Company desires to issue to the Purchaser warrants to purchase 670,000 shares of Common Stock on the terms and conditions described in the form of the common stock purchase warrant attached hereto as Exhibit F (the “Warrants”), and

WHEREAS, Purchaser will have certain registration rights with respect to such shares of Common Stock issuable as interest under, and upon conversion of, the Convertible Note (the “Note Shares”) and upon exercise of the Warrants (the “Warrant Shares,” the Note Shares and the Warrant Shares being collectively referred to herein as the “Conversion Shares”) as set forth in the Registration Rights Agreement in the form attached hereto as Exhibit B;

NOW, THEREFORE, in consideration of the foregoing premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1.

  DEFINITIONS

ARTICLE 1.1

  Definitions.  The following terms, as used herein, have the following meanings:

“Additional Shares of Common Stock” has the meaning set forth in Section 11.6.

“Affiliate” means, with respect to any Person (the “Subject Person”), (i) any other Person (a “Controlling Person”) that directly, or indirectly through one or more intermediaries, Controls the Subject Person or (ii) any other Person (other than the Subject Person or a Consolidated Subsidiary of the Subject Person) which is Controlled by or is under common Control with a Controlling Person.

“Agreement” means this Securities Purchase Agreement, as amended, supplemented or otherwise modified from time to time in accordance with its terms.

“Asset Sale” has the meaning set forth in Section 8.4.

“Balance Sheet Date” has the meaning set forth in Section 4.7.

“Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by the Company.

“Benefit Plans” has the meaning set forth in Section 4.9(b).

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law to close.

“Capital Reorganization” has the meaning set forth in Section 11.5.

“Change in Control” means (i) after the date of this Agreement, any person or group of persons (within the meaning of Sections 13 and 14 of the Exchange Act and the rules and regulations of the Commission relating to such sections) other than Purchaser shall have acquired beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 promulgated by the Commission pursuant to the Exchange Act) of 33a% or more of the outstanding shares of Common Stock of the Company without the prior written consent of Purchaser; (ii) except as provided in Section 8.8 below, any sale or other disposition (other than by reason of death or disability) to any Person of more than 75,000 shares of Common Stock of the Company by any executive officers and/or employee directors of the Company without the prior written consent of Purchaser; (iii) individuals constituting the Board of Directors of the Company on the date hereof (together with any new Directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of at least 50.1% of the Directors still in office who are either Directors as of the date hereof or whose election or nomination for election was previously so approved), cease for any reason to constitute at least two-thirds of the Board of Directors of the Company then in office.

“Closing Bid Price” shall mean for any security as of any date, the lowest closing bid price as reported by Bloomberg, L.P. (“Bloomberg”) on the principal securities exchange or trading market where such security is listed or traded or, if the foregoing does not apply, the lowest closing bid price of such security in the over-the-counter market on the OTC Bulletin Board for such security as reported by Bloomberg, or, if no lowest trading price is reported for such security by Bloomberg, then the average of the bid prices of any market makers for such securities as reported in the “Pink Sheets” by the National Quotation Bureau, Inc.  If the lowest closing bid price cannot be calculated for such security on such date on any of the foregoing bases, the lowest closing bid price of such security on such date shall be the fair market value as mutually determined by Purchaser and the Company for which the calculation of the closing bid price requires, and in the absence of such mutual determination, as determined by the Board of Directors of the Company in good faith.

“Closing Date” means the date on which all of the conditions set forth in Sections 6.1 and 6.2 shall have been satisfied and Convertible Note in the aggregate principal amount of $2,500,000 are issued by the Company to Purchaser. 

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

“Commission” means the Securities and Exchange Commission or any entity succeeding to all of its material functions.

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

“Company” means HepaLife Technologies, Inc., a Florida corporation, and its successors.

“Company Corporate Documents” means the certificate of incorporation and bylaws of the Company.

“Consolidated Net Worth” means at any date the total shareholder’s equity which would appear on a consolidated balance sheet of the Company prepared as of such date.

“Consolidated Subsidiary” means at any date with respect to any Person or Subsidiary or other entity, the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date.

“Control” (including, with correlative meanings, the terms “Controlling,” “Controlled by” and under “common Control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by contract or otherwise.

“Conversion Date” shall mean the date of delivery (including delivery via telecopy) of a Notice of Conversion for all or a portion of a Convertible Note by the holder thereof to the Company as specified in each Convertible Note.

“Conversion Price” has the meaning set forth in the Convertible Note.

“Conversion Shares” has the meaning set forth in the Recitals.

“Convertible Note” means the Company’s Convertible Note substantially in the form set forth as Exhibit A hereto.

“Deadline” has the meaning set forth in Section 10.1.

“Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, Notes, notes, or other similar instruments issued by such Person, (iii) all obligations of such Person as lessee 

which (y) are capitalized in accordance with GAAP or (z) arise pursuant to sale-leaseback transactions, (iv) all reimbursement obligations of such Person in respect of letters of credit or other similar instruments, (v) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person and (vi) all Debt of others Guaranteed by such Person.

“Default” means any event or condition which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“Default Fee” has the meaning set forth in Section 10.4.

“Derivative Securities” has the meaning set forth in Section 8.6.

“Discounted Equity Offerings” has the meaning set forth in Section 8.6.

“Directors” means the individuals then serving on the Board of Directors or similar such management council of the Company.

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment, including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the cleanup or other remediation thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

“ERISA Group” means the Company and each Subsidiary and all members of a controlled group of corporation and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any Subsidiary, are treated as a single employer under the Code.

“Event of Default” has the meaning set forth in Section 12.1 hereof.

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

“Financing” means a public or private financing consummated (meaning closing and funding) through the issuance of debt or equity securities (or securities convertible into or exchangeable for debt or equity securities) of the Company, other than Permitted Financings.

“Fixed Price(s)” has the meaning set forth in Section 11.1.

“GAAP” has the meaning set forth in Section 1.2.

“Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing (whether by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain a minimum net worth, financial ratio or similar requirements, or otherwise) any Debt of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or (ii) entered into for the purpose of assuring in any other manner the holder of such Debt of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part); provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.  The term Guarantee used as a verb has a corresponding meaning.

“Hazardous Materials” means any hazardous materials, hazardous wastes, hazardous constituents, hazardous or toxic substances or petroleum products (including crude oil or any derivative or fraction thereof), defined or regulated as such in or under any Environmental Laws.

‘Intellectual Property” has the meaning set forth in Section 4.20.

“Investment” means any investment in any Person, whether by means of share purchase, partnership interest, capital contribution, loan, time deposit or otherwise.

“Lien” means any lien, mechanic’s lien, materialmen’s lien, lease, easement, charge, encumbrance, mortgage, conditional sale agreement, title retention agreement, agreement to sell or convey, option, claim, title imperfection, encroachment or other survey defect, pledge, restriction, security interest or other adverse claim, whether arising by contract or under law or otherwise (including, without limitation, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction in respect of any of the foregoing).

“Listing Applications” has the meaning set forth in Section 4.4.

“Majority Holders” means (i) as of the Closing Date, Purchaser and (ii) at any time thereafter, the holders of more than 50% in aggregate principal amount of the Convertible Note outstanding at such time.

“Market Price” shall mean the Closing Bid Price of the Common Stock preceding the date of determination.

“Material Plan” means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $100,000.

“Maturity Date” shall mean the date of maturity of the Convertible Note.

“Maximum Number of Shares” shall mean that percentage that the Company may issue without shareholder approval under the applicable rules of the National Market or the OTC Bulletin Board or equivalent entity, of the then issued and outstanding shares of Common Stock of the Company as of the applicable date of determination, or such greater number of shares as the stockholders of the Company may have previously approved.

"NASD" has the meaning set forth in Section 7.10.

“Nasdaq Market” means the Nasdaq Stock Market’s National Market System.

“National Market” means the Nasdaq Market, the Nasdaq Small Cap Market, the New York Stock Exchange, Inc. or the American Stock Exchange, Inc..

“Net Cash Proceeds” means, with respect to any transaction, the total amount of cash proceeds received by the Company or any Subsidiary less (i) reasonable underwriters’ fees, brokerage commissions, reasonable professional fees and other customary out-of-pocket expenses payable in connection with such transaction, and (ii) in the case of dispositions of assets, (A) actual transfer taxes (but not income taxes) payable with respect to such dispositions, and (B) the amount of Debt, if any, secured by a Lien on the asset or assets disposed of and required to be, and actually repaid by the Company or any Subsidiary in connection therewith, and any trade payables specifically relating to such asset or assets sold by the Company or any Subsidiary that are not assumed by the purchaser of such asset or assets.

“Notice of Conversion” means the form to be delivered by a holder of a Convertible Note upon conversion of all or a portion thereof to the Company substantially in the form of Exhibit A to the form of Convertible Note.

“Officer’s Certificate” shall mean a certificate executed by the president, chief executive officer or chief financial officer of the Company in the form of Exhibit C attached hereto.

"OTC Bulletin Board" means the over-the-counter bulletin board operated by the NASD.

“Other Taxes” has the meaning set forth in Section 3.6(b).

“Out of Pocket Fee” has the meaning set forth in Section 13.4.

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Permits” means all domestic and foreign licenses, franchises, grants, authorizations, permits, easements, variances, exemptions, consents, certificates, orders and approvals necessary to own, lease and operate the properties of, and to carry on the business of the Company and the Subsidiaries.

“Permitted Financings” has the meaning set forth in Section 8.6(a).

“Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock Company, government (or any agency or political subdivision thereof) or other entity of any kind.

“Plan” means at any time an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under the Code and either (i) is maintained, or contributed to, by any member of the ERISA group for employees of any member of the ERISA group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA group for employees of the Person which was at such time a member of the ERISA Group.

“Purchase Price” means the purchase price for the Securities set forth in Section 2.2 hereof.

“Purchaser” means  the entity listed on the signature page hereto and its successors and assigns, including holders from time to time of the Convertible Note.

“Recourse Financing” means Debt of the Company or any Subsidiary which, by its terms, does not bar the lender thereof from action against the Company or any Subsidiary, as borrower or guarantor, if the security value of the project or asset pledged in respect thereof falls below the amount required to repay such Debt.

“Redemption Event” has the meaning set forth in Section 3.4.

“Registrable Securities” has the meaning set forth in Section 10.4(a).

“Registration Statement” has the meaning set forth in Section 10.4(b).

“Registration Rights Agreement” means the agreement between the Company and Purchaser dated the date hereof substantially in the form set forth in Exhibit B attached hereto.

“Reserved Amount” has the meaning set forth in Section 7.10(a).

“Rights Offering” has the meaning set forth in Section 11.3.

“Sale Event” has the meaning set forth in Section 3.4.

“SEC Reports” has the meaning set forth in Section 7.1(a).

“Securities” means the Convertible Note, the Warrants and, as applicable, the Conversion Shares.

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

“Share Reorganization” has the meaning set forth in Section 11.2.

“Special Distribution” has the meaning set forth in Section 11.4.

“Subsidiary” means, with respect to any Person, any corporation or other entity of which (x) a majority of the capital stock or other ownership interests having ordinary voting power to elect a majority of the Board of Directors or other persons performing similar functions are at the time directly or indirectly owned by such Person or (y) the results of operations, the assets and the liabilities of which are consolidated with such Person under GAAP.

“Subsidiary Corporate Documents” means the certificates of incorporation and bylaws of each Subsidiary.

“Taxes” has the meaning set forth in Section 3.6.

“Trading Day” shall mean any Business Day in which the OTC Bulletin Board, National Market or other automated  quotation system or exchange on which the Common Stock is then traded is open for trading for at least four (4) hours.

“Transaction Agreements” means this Agreement, the Convertible Note, the Registration Rights Agreement, and the other agreements contemplated by this Agreement.

“Transfer” means any disposition of Securities that would constitute a sale thereof under the Securities Act.

“Unfunded Liabilities” means, with respect to any Plan at any time, the amount (if any) by which (i) the present value of all benefits under Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.

“VWAP” shall mean for any security as of any date, the volume weighted average price as reported by Bloomberg, L.P. (“Bloomberg”) on the principal securities exchange or trading market where such security is listed or traded or, if the foregoing does not apply, the volume weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no volume weighted average price is reported for such security by Bloomberg, then the average of the bid prices of any market makers for such securities as reported in the “Pink Sheets” by the National Quotation Bureau, Inc.  If the volume weighted average price cannot be calculated for such security on such date on any of the foregoing bases, the volume weighted average price of such security on such date shall be the fair market value as mutually determined by Purchaser and the Company for which the calculation of the volume weighted average price requires, and in the absence of such mutual determination, as determined by the Board of Directors of the Company in good faith.

“Warrant” means the Common Stock Purchase Warrants substantially in the form set forth in Exhibit F attached hereto.

ARTICLE 1.2

  Accounting Terms and Determinations.  Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with generally accepted accounting principles as in effect from time to time, applied on a consistent basis (except for changes concurred in by the Company’s independent public accountants) (“GAAP”).  All references to “dollars,” “Dollars” or “$” are to United States dollars unless otherwise indicated.

ARTICLE 2.

  PURCHASE AND SALE OF SECURITIES

ARTICLE 2.1

  Purchase and Sale of Convertible Note.

(a)

Subject to the terms and conditions set forth herein, the Company agrees to issue and sell to Purchaser, and Purchaser agrees to purchase from the Company, the Convertible Note.

(b)

Purchaser shall acquire Convertible Note on the Closing Date in an aggregate principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00).

ARTICLE 2.2

  Purchase Price.  The purchase price for the Convertible Note on the Closing Date shall be 85% of the principal amount thereof.  Therefore, the aggregate consideration payable by Purchaser to the Company for the Convertible Note on the Closing Date shall be Two Million One Hundred Twenty Five Thousand Dollars ($2,125,000.00) (the “Purchase Price”).

ARTICLE 2.3

  Closing and Mechanics of Payment.

(a)

The Purchase Price shall be paid on the Closing Date by wire transfer of immediately available funds on or before 5:00 p.m. (EST).

(b)

The Convertible Note issued on the Closing Date shall be dated the date hereof.

ARTICLE 3.

  PAYMENT TERMS OF CONVERTIBLE NOTE

ARTICLE 3.1

  Payment of Principal and Interest; Payment Mechanics.  The Company will pay all amounts 

due on each Convertible Note by the method and at the address specified for such purpose by Purchaser in writing, without the presentation or surrender of any Convertible Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of this Convertible Note, the holder shall surrender the Convertible Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office.  Prior to any sale or other disposition of any Convertible Note, the holder thereof will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender the Convertible Note to the Company in exchange for a new Convertible Note or Convertible Notes.  The Company will afford the benefits of this Section 3.1 to any direct or indirect transferee of the Convertible Note purchased under this Agreement that has made the same agreement relating to this Convertible Note as Purchaser has in this Section 3.1; provided that such transferee is an “accredited investor” under Rule 501 of the Securities Act.

ARTICLE 3.2

. Intentionally Omitted.

ARTICLE 3.3

  Voluntary Prepayment.   For so long as no Event of Default shall have occurred and is continuing, the Company may, at its option, repay, in whole or in part, the Convertible Note, per the formula set forth in Section 5.1 of Exhibit A hereto, following at least five (5) Business Days prior written notice to Purchaser (the expiration of such five (5) Business Day period being referred to as the “prepayment date”); provided, however, that if such date is not a Business Day, the prepayment date shall be the next Business Day thereafter.  

ARTICLE 3.4

  Mandatory Prepayments.

(a)

Upon (i) the occurrence of a Change in Control of the Company, (ii) a transfer of all or substantially all of the assets of the Company to any Person in a single transaction or series of related transactions, (iii) a consolidation or merger of the Company with or into another Person in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a “Sale Event”), or (iv) the occurrence of a Registration Default which continues uncured for a period of twenty (20) days, then, in each case, the Company shall, upon request of the Majority Holders, redeem the Convertible Note.  The redemption price payable upon any such redemption shall be the redemption price in Section 5 of the Convertible Note (referred to herein as the "Formula Price").

(b)

At the option of Purchaser, upon the consummation of one or more Financings, the Company shall use 25% of the Net Cash Proceeds therefrom (unless such Net Cash Proceeds from each such Financing is less than $250,000) to redeem the Convertible Note.

(c)

Upon the issuance of the Maximum Number of Shares, the receipt by the Company of Notice of Conversion requiring the issuance of shares of Common Stock in excess of the Maximum Number of Shares, and the failure within 70 days of such issuance to obtain shareholder approval to issue additional shares of Common Stock required to be issued in connection with such Notices of Conversion (the “Redemption Event”), the Company shall redeem the outstanding balance of each Convertible Note for the Formula Price.

(d)

In the event that there is an insufficient number of authorized, issuable, shares of Common Stock registered under the Registration Statement filed by the Company to allow Purchaser to fully convert the Convertible Note and exercise all Warrants held by Purchaser and sell such shares issued thereon, then the Company shall immediately file an amendment to the then current Registration Statement to register a sufficient number of such shares to convert said Convertible Note and Warrants.  Upon the failure within twenty (20) Trading Days measured from the date of filing the Registration Statement to register a sufficient number of such shares, the Company shall redeem the outstanding balance of each Convertible Note for the Formula Price.  In addition, failure of the Company to register a sufficient number of such shares to fully convert said Convertible Note and exercise such Warrants shall be a Registration Default under Section 10.4(e) from the date of the Notice of Conversion to the date of the earlier of (i) the redemption of the outstanding balance of the Convertible Note or (ii) full conversion of the Convertible Note and exercise of all such Warrants.

ARTICLE 3.5

  Prepayment Procedures.

(a)

Any permitted prepayment or redemption of the Convertible Note pursuant to Sections 3.3 or 3.4 above shall be deemed to be effective and consummated (for purposes of determining the Formula Price and the time at which Purchaser shall thereafter not be entitled to deliver a Notice of Conversion for the Convertible Note) as follows:

(i)

A prepayment pursuant to Section 3.3, the “prepayment date” specified therein;

(ii)

A redemption pursuant to Section 3.4(a), the date of consummation of the applicable Sale Event;

(iii)

A redemption pursuant to Section 3.4(b), three (3) Business Days following the date of consummation of the applicable Financing (meaning closing and funding); and

(iv)

A redemption pursuant to Section 3.4(c), the date specified in each Convertible Note.

(b)

On the Maturity Date and on the effective date of a repayment or redemption of the Convertible Note as specified in Section 3.5(a) above, the Company shall deliver by wire transfer of funds the repayment/redemption price to Purchaser of the Convertible Note subject to redemption in accordance with written directions to be provided by Purchaser.  Should Purchaser not receive payment of any amounts due on redemption of its Convertible Note by reason of the Company’s failure to make payment at the times prescribed above for any reason, the Company shall pay to the applicable holder on demand (x) interest on the sums not paid when due at an annual rate equal to the maximum lawful rate compounded at the end of each thirty (30) days, until the applicable holder is paid in full and (y) all costs of collection, including, but not limited to, reasonable attorneys’ fees and costs, whether or not suit or other formal proceedings are instituted.

(c)

The Company shall select the Convertible Note  to be redeemed in any redemption in which not all of the Convertible Note  are to be redeemed so that the ratio of the Convertible Note  of each holder selected for redemption to the total Convertible Note  owned by that holder shall be the same as the ratio of all such Convertible Note  selected for redemption bears to the total of all then outstanding Convertible Note .  Should any Convertible Note  required to be redeemed under the terms hereof not be redeemed solely by reason of limitations imposed by law, the applicable Convertible Note  shall be redeemed on the earliest possible dates thereafter to the maximum extent permitted by law.

(d)

Any Notice of Conversion delivered by Purchaser (including delivery via telecopy) to the Company prior to the (x) Maturity Date or (y) effective date of a voluntary repayment pursuant to Section 3.3 or a mandatory prepayment pursuant to Section 3.4 as specified in Section 3.5(a) above), shall be honored by the Company and the conversion of the Convertible Note shall be deemed effected on the Conversion Date.  In addition, between the effective date of a voluntary prepayment pursuant to Section 3.3 or a mandatory prepayment pursuant to Section 3.4 as specified in Section 3.5(a) above and the date the Company is required to deliver the redemption proceeds in full to Purchaser, Purchaser may deliver a Notice of Conversion to the Company.  Such notice will be (x) of no force or effect if the Company timely pays the redemption proceeds to Purchaser when due or (y) honored on or as of the date of the Notice of Conversion if the Company fails to timely pay the redemption proceeds to Purchaser when due.

ARTICLE 3.6

  Payment of Additional Amounts.

(a)

Any and all payments by the Company hereunder or under the Convertible Note to Purchaser and each “qualified assignee” thereof shall be made free and clear of and without deduction or withholding for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto (all such taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”) unless such Taxes are required by law or the administration thereof to be deducted or withheld.  If the Company shall be 

required by law or the administration thereof to deduct or withhold any Taxes from or in respect of any sum payable under the Convertible Note (i) the holders of the Convertible Note subject to such Taxes shall have the right, but not the obligation, for a period of thirty (30) days commencing upon the day it shall have received written notice from the Company that it is required to withhold Taxes to transfer all or any portion of the Convertible Note to a qualified assignee to the extent such transfer can be effected in accordance with the other provisions of this Agreement and applicable law; (ii) the Company shall make such deductions or withholdings; (iii) the sum payable shall be increased as may be necessary so that after making all required deductions or withholdings (including deductions or withholdings applicable to additional amounts paid under this Section 3.6) Purchaser receives an amount equal to the sum it would have received if no such deduction or withholding had been made; and (iv) the Company shall forthwith pay the full amount deducted or withheld to the relevant taxation or other authority in accordance with applicable.  A “qualified assignee” of a Purchaser is a Person that is organized under the laws of (i) the United States or (II) any jurisdiction other than the United States or any political subdivision thereof and that (y) represents and warrants to the Company that payments of the Company to such assignee under the laws in existence on the date of this Agreement would not be subject to any Taxes and (z) from time to time, as and when requested by the Company, executes and delivers to the Company and the Internal Revenue Service forms, and provides the Company with any information necessary to establish such assignee’s continued exemption from Taxes under applicable law.

(b)

The Company shall forthwith pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (all such taxes, charges and levies hereinafter referred to as “Other Taxes”) which arise from any payment made under any of the Transaction Agreements or from the execution, delivery or registration of, or otherwise with respect to, this Agreement other than Taxes payable solely as a result of the transfer from Purchaser to a Person of any Security.  Anything herein to the contrary notwithstanding, Taxes or Other Taxes shall not include income taxes, if any, payable by Purchaser as a result of this Agreement, the Transaction Agreements or the transaction contemplated hereunder or thereunder.

(c)

The Company shall indemnify Purchaser, or qualified assignee, for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 3.6) paid by Purchaser, or qualified assignee, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  Payment under this indemnification shall be made within 30 days from the date Purchaser or assignee makes written demand therefor.  A certificate as to the amount of such Taxes or Other Taxes submitted to the Company by Purchaser or assignee shall be conclusive evidence of the amount due from the Company to such party.

(d)

Within 30 days after the date of any payment of Taxes, the Company will furnish to Purchaser the original or a certified copy of a receipt evidencing payment thereof.

(e)

Purchaser shall provide to the Company a form W-8, stating that it is a non-U.S. person, together with any additional tax forms which may be required under the Code, as amended after the date hereof, to allow interest payments to be made to it without  deduction.

ARTICLE 4.

  REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to Purchaser, as of the Closing Date, the following:

ARTICLE 4.1

  Organization and Qualification.  The Company and each Subsidiary is a corporation (or other legal entity) duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, with full power and authority to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.  The Company is qualified to conduct business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where such failure would not have a Material Adverse Effect.  A “Material Adverse Effect” means any material adverse effect on the operations, results of operations, properties, assets or condition  (financial or otherwise) of the Company or the Company and its Subsidiaries, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith.

ARTICLE 4.2

  Authorization and Execution.

(a)

The Company has all requisite corporate power and authority to enter into and perform each Transaction Agreement and to consummate the transactions contemplated hereby and thereby and to issue the Securities in accordance with the terms hereof and thereof.

(b)

The execution, delivery and performance by the Company of each Transaction Agreement and the issuance by the Company of the Securities have been duly and validly authorized and no further consent or authorization of the Company, its Board of Directors or its shareholders is required.

(c)

This Agreement has been duly executed and delivered by the Company.

(d)

This Agreement constitutes, and upon execution and delivery thereof by the Company, each of the Transaction Agreements will constitute, a valid and binding agreement of the Company, in each case enforceable against the Company in accordance with its respective terms except as such enforceability may be limited by general principals of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to or affecting generally, the enforceability of creditor’s rights and remedies.

ARTICLE 4.3

  Capitalization .  As of the date hereof, the authorized, issued and outstanding capital stock of the Company is as set forth on Schedule 4.3 hereto and except as set forth on Schedule 4.3 no other shares of capital stock of the Company will be outstanding as of the Closing Date.  All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable.  No shares of capital stock of the Company are subject to preemptive rights or similar rights of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company.  Other than as set forth on Schedule 4.3 hereto, as of the date hereof, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, and (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries are obligated to register the sale of any of its or their securities under the Securities Act (except pursuant to the Registration Rights Agreement) and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Convertible Note or Conversion Shares.  The Company has furnished to Purchaser true and correct copies of the Company’s Corporate Documents, and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.

ARTICLE 4.4

  Governmental Authorization.  The execution and delivery by the Company of the Transaction Agreements does not and will not, the issuance and sale by the Company of the Securities does not and will not, and the consummation of the transactions contemplated hereby and by the other Transaction Agreements will not, require any action by or in respect of, or filing with, any governmental body, agency or governmental official except (a) such actions or filings that have been undertaken or made prior to the date hereof and that will be in full force and effect (or as to  which all applicable waiting periods have expired) on and as of the date hereof or which are not required to be filed on or prior to the Closing Date, (b) such actions or filings that, if not obtained, would not result in a Material Adverse Effect, (c) the filing of a “Form D” as described in Section 7.13 below and (d) the Registration Rights Agreement.

ARTICLE 4.5

  Issuance of Shares.  Upon conversion in accordance with the terms of the Convertible Note, the Conversion Shares shall be duly and 

validly issued and outstanding, fully paid and nonassessable, free and clear of any Taxes, Liens and charges with respect to issuance and shall not be subject to preemptive rights or similar rights of any other stockholders of the Company.  Assuming the representations and warranties of Purchaser herein are true and correct in all material respects, each of the Securities will have been issued in material compliance with all applicable U.S. federal and state securities laws.  The Company understands and acknowledges that, in certain circumstances, the issuance of Conversion Shares could dilute the ownership interests of other stockholders of the Company.  The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Convertible Note is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.

ARTICLE 4.6

  No Conflicts.  Except as set forth on Schedule 4.6 hereto, the execution and delivery by the Company of the Transaction Agreements to which it is a party did not and will not, the issuance and sale by the Company of the Securities did not and will not and the consummation of the transactions contemplated hereby and by the other Transaction Agreements will not, contravene or constitute a default under or violation of (i) any provision of applicable law or regulation, (ii) the Company Corporate Documents, (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Company or any Subsidiary or any of their respective assets, or result in the creation or imposition of any Lien on any asset of the Company or any Subsidiary.  The Company and each Subsidiary is in compliance with and conforms to all statutes, laws, ordinances, rules, regulations, orders, restrictions and all other legal requirements of any domestic or foreign government or any instrumentality thereof having jurisdiction over the conduct of its businesses or the ownership of its properties, except where such failure would not have a Material Adverse Effect.

ARTICLE 4.7

  Financial Information. Since December 31, 2006 (the “Balance Sheet Date”), except as disclosed in Schedule 4.7, there has been (x) no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects, of the Company and its Subsidiaries, whether as a result of any legislative or regulatory change, revocation of any license or rights to do business, fire, explosion, accident, casualty, labor  trouble, flood, drought, riot, storm, condemnation, act of God, public force or otherwise and (y) no material adverse change in the assets or liabilities, or in the business or condition, financial or otherwise, or in the results of operations or prospects, of the Company and its subsidiaries except in the ordinary course of business; and to the best of the Company’s knowledge, no fact or condition exists or is contemplated or threatened which might cause such a change in the future.  The audited consolidated balance sheets of the Company and its Subsidiaries for the periods ending December 31, 2004, December 31, 2005 and December 31, 2006, respectively, and the related consolidated statements of income, changes in stockholders’ equity and changes in cash flows for the periods then ended, including the footnotes thereto, except as indicated therein, (i) complied in all material respects with applicable accounting requirements and (ii) have been prepared in accordance with GAAP consistently applied throughout the periods indicated, except that the unaudited financial statements do not contain notes and may be subject to normal audit adjustments and normal annual adjustments.  Such financial statements fairly present the financial condition of the Company and its Consolidated Subsidiaries at the dates indicated and the consolidated results of their operations and cash flows for the periods then ended and, except 

as indicated therein, reflect all claims against and all Debts and liabilities of the Company and its Subsidiaries, fixed or contingent. 

ARTICLE 4.8

  Litigation.  Except as set forth on Schedule 4.8, there is no action, suit or proceeding pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary, before any court or arbitrator or any governmental body, agency or official in which there is a reasonable possibility of an adverse decision which could materially adversely affect the business, condition (financial or otherwise), operations, performance, properties or prospects of the Company or which challenges the validity of any Transaction Agreements.

ARTICLE 4.9

  Compliance with ERISA and other Benefit Plans.

(a)

Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Plan.  No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Code in respect of any Plan, (ii) failed to make any required contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which as resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.

(b)

The benefit plans not covered under clause (a) above (including profit sharing, deferred compensation, stock option, employee stock purchase, bonus, retirement, health or insurance plans, collectively the “Benefit Plans”) relating to the employees of the Company are duly registered where required by, and are in good standing in all material respects under, all applicable laws.  All required employer and employee contributions and premiums under the Benefit Plans to the date hereof have been made, the respective fund or funds established under the Benefit Plans are funded in accordance with applicable laws, and no past service funding liabilities exist thereunder.

(c)

No Benefit Plans have any unfunded liabilities, either on a “going concern” or “winding up” basis and determined in accordance with all applicable laws and actuarial practices and using actuarial assumptions and methods that are reasonable in the circumstances.  No event has occurred and no condition exists with respect to any Benefit Plans that has resulted or could reasonably be expected to result in any pension plan having its registration revoked or wound up (in whole or in part) or refused for the purposes of any applicable laws or being placed under the administration of any relevant pension benefits regulatory authority or being required to pay any taxes or penalties (in any material amounts) under any applicable laws.

ARTICLE 4.10

  Environmental Matters.  Except as set forth on Schedule 4.10, the costs and liabilities associated with Environmental Laws (including the cost of compliance therewith) are unlikely to have a material adverse effect on the 

business, condition (financial or otherwise), operations, performance, properties or prospects of the Company or any Subsidiary.  Each of the Company and the Subsidiaries conducts its businesses in compliance in all material respects with all applicable Environmental Laws.

ARTICLE 4.11

  Taxes.  All United States federal, state, county, municipality, local or foreign  income tax returns and all other material tax returns (including foreign tax returns) which are required to be filed by or on behalf of the Company and each Subsidiary have been filed and all material taxes due pursuant to such returns or pursuant to any assessment received by the Company and each Subsidiary through the date hereof have been paid except those being disputed in good faith and for which adequate reserves have been established.  The charges, accruals and reserves on the books of the Company and each Subsidiary in respect of taxes and other governmental charges have been established in accordance with GAAP.

ARTICLE 4.12

  Investments, Joint Ventures.  Other than as set forth in Schedule 4.12, the Company has no Subsidiaries or other direct or indirect Investment in any Person, and the Company is not a party to any partnership, management, shareholders’ or joint venture or similar agreement.

ARTICLE 4.13

  Not an Investment Company.  Neither the Company nor any Subsidiary is an “Investment Company” within the meaning of Investment Company Act of 1940, as amended.

ARTICLE 4.14

  Full Disclosure.  Except as set forth on Schedule 4.14, the information heretofore furnished by the Company to Purchaser for purposes of or in connection with this Agreement or any transaction contemplated hereby does not, and all such information hereafter furnished by the Company or any Subsidiary to Purchaser will not (in each case taken together and on the date as of which such information is furnished), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they are made, not misleading.

ARTICLE 4.15

  No Solicitation; No Integration with Other Offerings.  Except as set forth on Schedule 4.15, no form of general solicitation or general advertising was used by the Company or, to the best of its actual knowledge, any other Person acting on behalf of the Company, in connection with the offer and sale of the Securities.  Neither the Company, nor, to its knowledge, any Person acting on behalf of the Company, has, either directly or indirectly, sold or offered for sale to any Person (other than Purchaser) any of the Securities or, within the six months prior to the date hereof, any other similar security of the Company except as contemplated by this Agreement, and the Company represents that neither itself nor any Person authorized to act on its behalf (except that the Company makes no representation as to Purchaser and their Affiliates) will sell or offer for sale any such security to, or solicit any offers to buy any such security from, or otherwise approach or negotiate in respect thereof with, any Person or Persons so as thereby to cause the issuance or sale of any of the Securities to be in violation of any of the provisions of Section 5 of the Securities Act. 

ARTICLE 4.16

  Permits.  (a) Each of the Company and its Subsidiaries has all material Permits; (b) all such Permits are in full force and effect, and each of the Company and its Subsidiaries has fulfilled and performed all material obligations with respect to such Permits; (c) no event has occurred which allows, or after notice of lapse of time would allow, revocation or termination by the issuer thereof or which results in any other material impairment of the rights of the holder of any such Permit; and (d) the Company has no reason to believe that any governmental body or agency is considering limiting, suspending or revoking any such Permit.

ARTICLE 4.17

  Leases.  Neither the Company nor any Subsidiary is a party to any capital lease obligation with a value greater than $100,000 or to any operating lease with an aggregate annual rental greater than $100,000 during the life of such lease.

ARTICLE 4.18

  Absence of Any Undisclosed Liabilities.  There are no liabilities of the Company or any Subsidiary of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which would reasonably be expected to result in such a liability, other than (i) those liabilities provided for in the financial statements delivered pursuant to Section 4.7 and (ii) other undisclosed liabilities which, individually or in the aggregate, would not have a Material Adverse Effect.

ARTICLE 4.19

  Public Utility Holding Company.  Neither the Company nor any Subsidiary is, or will be upon issuance and sale of the Securities and the use of the proceeds described herein, subject to regulation under the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, the Interstate Commerce Act or to any federal or state statute or regulation limiting its ability to issue and perform its obligations under any Transaction Agreement.

ARTICLE 4.20

  Intellectual Property Rights.  Except as set forth on Schedule 4.20 hereto, each of the Company and its Subsidiaries owns, or is licensed under, and has the rights to use, all material patents, trademarks, trade names, copyrights, technology, know-how and processes (collectively, “Intellectual Property”) used in, or necessary for the conduct of its business; no claims have been asserted by any Person to the use of any such Intellectual Property or challenging or questioning the validity or effectiveness of any license or agreement related thereto.  To the best of Company’s and its Subsidiaries’ knowledge, there is no valid basis for any such claim and the use of such Intellectual Property by the Company and its Subsidiaries will not infringe upon the rights of any Person.

ARTICLE 4.21

  Insurance.  The Company and its Subsidiaries maintain, with financially sound and reputable insurance companies, insurance in at least such amounts and against such risks such that any uninsured loss would not have a Material Adverse Effect.  All insurance coverages of the Company and its Subsidiaries are in full force and effect and there are no past due premiums in respect of any such insurance.

ARTICLE 4.22

  Title to Properties.  The Company and its Subsidiaries have good and marketable title to all their respective properties free and clear of all Liens.

ARTICLE 4.23

 Subsidiaries.  Except for the directly and indirectly owned subsidiaries of the Company as set forth on .  Neither the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any Subsidiary has made any payments of funds of the Company or Subsidiary, or received or retained any funds, in each case  in violation of any law, rule or regulation.

ARTICLE 4.26

  SEC Reports.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, as applicable, and none of the SEC Reports, when filed, contained any untrue 

statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

ARTICLE 4.27

  Sarbanes-Oxley: Internal Accounting Controls.  The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date.  The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ARTICLE 5.

  REPRESENTATIONS AND WARRANTIES OF PURCHASER

ARTICLE 5.1

  Purchaser.  Purchaser hereby represents and warrants to the Company that:

(a)

Purchaser is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act and the Securities to be acquired by it pursuant to this 

Agreement are being acquired for its own account and, as of the date hereof, not with a view toward, or for sale in connection with, any distribution thereof except in compliance with applicable United States federal and state securities law; provided that the disposition of Purchaser’s property shall at all times be and remain within its control;

(b)

the execution, delivery and performance of this Agreement and the purchase of the Securities pursuant thereto are within Purchaser’s corporate or partnership powers, as applicable, and have been duly and validly authorized by all requisite corporate or partnership action;

(c)

this Agreement has been duly executed and delivered by Purchaser;

(d)

the execution and delivery by Purchaser of the Transaction Agreements to which it is a party does not, and the consummation of the transactions contemplated hereby and thereby will not, contravene or constitute a default under or violation of (i) any provision of applicable law or regulation, or (ii) any agreement, judgment, injunction, order, decree or other instrument binding upon Purchaser;

(e)

Purchaser understands that the Securities have not been registered under the Securities Act and may not be transferred or sold except as specified in this Agreement or the remaining Transaction Agreements;

(f)

this Agreement constitutes a valid and binding agreement of Purchaser enforceable in accordance with its terms, subject to (i) applicable bankruptcy, insolvency or similar laws affecting the enforceability of creditors rights generally and (ii) equitable principles of general applicability;

(g)

Purchaser has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Securities and Purchaser is capable of bearing the economic risks of such investment;

(h)

Purchaser is knowledgeable, sophisticated and experienced in business and financial matters; Purchaser has previously invested in securities similar to the Securities and fully understands the limitations on transfer described herein; Purchaser has been afforded access to information about the Company and the financial condition, results of operations, property, management and prospects of the Company sufficient to enable it to evaluate its investment in the Securities; Purchaser has been afforded the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and the risks of investing in the Securities; and Purchaser has been afforded the opportunity to obtain such additional information which the Company possesses or can acquire that is necessary to verify the accuracy and completeness of the information given to Purchaser concerning the Company.  The foregoing does not in any way relieve the Company of its representations and other undertakings hereunder, and shall not limit Purchaser’s ability to rely thereon;

(i)

no part of the source of funds used by Purchaser to acquire the Securities constitutes assets allocated to any separate account maintained by Purchaser in which any employee benefit plan (or its related trust) has any interest;

(j)

Purchaser agrees that for as long as this Securities Purchase Agreement is in effect or two years, whichever is longer, that Purchaser or any Affiliate of Purchaser will not short sell (either in a naked or covered short transaction) any common stock of Company. Any violation of this requirement would be considered a condition of default by Purchaser and would automatically void all restrictive covenants of Company imposed by Purchaser and Company; and

(k)

Purchaser is a corporation organized and duly existing under the laws of Bermuda.

ARTICLE 6.

  CONDITIONS PRECEDENT TO PURCHASE OF SECURITIES

ARTICLE 6.1

  Conditions Precedent to Purchaser’s Obligations to Purchase.  The obligation of Purchaser hereunder to purchase the Convertible Note at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Purchaser’s sole benefit and may be waived by Purchaser at any time in its sole discretion:

(a)

The Company shall have duly executed this Agreement, the Warrant and the Registration Rights Agreement and delivered the same to Purchaser;

(b)

The Company shall have delivered to Purchaser duly executed Convertible Note in accordance with Section 2.3 hereof;

(c)

The representations and warranties of the Company contained in each Transaction Agreement shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specified date) and the Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by such Transaction Agreements to be performed, satisfied or complied with by it at or prior to the Closing Date.  Purchaser shall have received an executed Officer’s Certificate, dated as of the Closing Date to the foregoing effect and as to such other matters as may be reasonably requested by Purchaser, including but not limited to certificates with respect to the Company Corporate Documents, resolutions relating to the transactions contemplated hereby and the incumbencies of certain officers and Directors of the Company.  The form of such certificate is attached hereto as Exhibit C;

(d)

The Company shall have received all governmental, Board of Directors, shareholders and third party consents and approvals necessary or desirable in connection 

with the issuance and sale of the Securities and the consummation of the transactions contemplated by the Transaction Agreements other than the Registration Rights Agreement;

(e)

All applicable waiting periods in respect to the issuance and sale of the Securities shall have expired without any action having been taken by any competent authority that could restrain, prevent or impose any materially adverse conditions thereon or that could seek or threaten any of the foregoing;

(f)

No law or regulation shall have been imposed or enacted that, in the judgment of Purchaser, could adversely affect the transactions set forth herein or in the other Transaction Agreements, and no law or regulation shall have been proposed that in the reasonable judgment of Purchaser could reasonably have any such effect;

(g)

Purchaser shall have received an opinion, dated the Closing Date, of counsel to the Company, in form and substance satisfactory to Purchaser;

(h)

All fees and expenses due and payable by the Company on or prior to the Closing Date shall have been paid;

(i)

The Company Corporate Documents and the Subsidiary Corporate Documents, if any, shall be in full force and effect and no term or condition thereof shall have been amended, waived or otherwise modified without the prior written consent of Purchaser;

(j)

There shall have occurred no material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Company or any Subsidiary since May 1, 2007;

(k)

There shall exist no action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality that challenges the validity of or purports to affect this Agreement or any other Transaction Agreement, or other transaction contemplated hereby or thereby or that could reasonably be expected to have a Material Adverse Effect, or any material adverse effect on the enforceability of the Transaction Agreements or the Securities or the rights of the holders of the Securities or Purchaser hereunder;

(l)

Purchaser shall have confirmed the receipt of the Convertible Note  to be issued, duly executed by the Company in the denominations requested by Purchaser and registered in the name of Purchaser;

(m)

Immediately before and after the Closing Date, no Default or Event of Default shall have occurred and be continuing;

(n)

Purchaser shall have received all other opinions, resolutions, certificates, instruments, agreements or other documents as they shall reasonably request;

(o)

 

Company shall have delivered to Purchaser the Use of Proceeds Schedule 7.8.

ARTICLE 6.2

  Conditions to the Company’s Obligations.  The obligations of the Company to issue and sell the Securities to Purchaser pursuant to this Agreement are subject to the satisfaction, at or prior to the Closing Date, of the following conditions:

(a)

The representations and warranties of Purchaser contained herein shall be true and correct in all material respects on the Closing Date and Purchaser shall have performed and complied in all material respects with all agreements required by this Agreement to be performed or complied with by Purchaser at or prior to the Closing Date;

(b)

The issue and sale of the Securities by the Company shall not be prohibited by any applicable law, court order or governmental regulation;

(c)

Receipt by the Company of duly executed counterparts of this Agreement and the Registration Rights Agreement signed by Purchaser;

(d)

The Company shall have received payment of Purchase Price, less the Expense Reimbursement Fee.

ARTICLE 7.

  AFFIRMATIVE COVENANTS

The Company hereby agrees that, from and after the date hereof for so long as any Convertible Note remain outstanding and for the benefit of Purchaser:

ARTICLE 7.1

 Information.  The Company will deliver to each holder of the Convertible Note:

(a)

within two (2) days after the CEO or CFO of the Company obtains knowledge of a Default or Event of Default, or that any Person has given any notice or taken any action with respect to a claimed Default hereunder, a certificate of the chief financial officer of the Company setting forth the details thereof and the action which the Company is taking or proposed to take with respect thereto;

(b)

promptly upon the mailing thereof to the shareholders of the Company generally, copies of all financial statements, reports and proxy statements so mailed and any other document generally distributed to shareholders;

(c)

at least two (2) Business Days prior to the consummation of any Financing or other event requiring a repayment of the Convertible Note under Section 3.4, notice 

thereof together with a summary of all material terms thereof and copies of all documents and instruments associated therewith;

(d)

notice promptly upon the occurrence of any event by which the Reserved Amount becomes less than the sum of (i) 1.5 times the maximum number of Conversion Shares issuable pursuant to the Transaction Agreements; and

(e)

promptly following the commencement thereof, notice and a description in reasonable detail of any litigation or proceeding to which the Company or any Subsidiary is a party in which the amount involved is $250,000 or more and not covered by insurance or in which injunctive or similar relief is sought.

ARTICLE 7.2

  Payment of Obligations.  The Company will, and will cause each Subsidiary to, pay and discharge, at or before maturity, all their respective material obligations, including, without limitation, tax liabilities, except where the same may be contested in good faith by appropriate proceedings and will maintain, in accordance with GAAP, appropriate reserves for the accrual of any of the same.

ARTICLE 7.3

 Maintenance of Property; Insurance.  The Company will, and will cause each Subsidiary to, keep all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.  In addition, the Company and each Subsidiary will maintain insurance in at least such amounts and against such risks as it has insured against as of the Closing Date.

ARTICLE 7.4

 Maintenance of Existence.  The Company will, and will cause each Subsidiary to, continue to engage in business of the same general type as now conducted by the Company and such Subsidiaries, and will preserve, renew and keep in full force and effect its respective corporate existence and their respective material rights, privileges and franchises necessary or desirable in the normal conduct of business.

ARTICLE 7.5

 Compliance with Laws.  The Company will, and will cause each Subsidiary to, comply, in all material respects, with all federal, state, municipal, local or foreign applicable laws, ordinances, rules, regulations, municipal by-laws, codes and requirements of governmental authorities (including, without limitation, Environmental Laws and ERISA and the rules and regulations thereunder) except (i) where compliance therewith is contested in good faith by appropriate proceedings or (ii) where non-compliance therewith could not reasonably be expected, in the aggregate, to have a material adverse effect on the business, condition (financial or otherwise), operations, performance, properties or prospects of the Company or such Subsidiary.

ARTICLE 7.6

  Inspection of Property, Books and Records.  The Company will, and will cause each Subsidiary to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to their respective businesses and activities; and will permit, during normal business hours, Purchaser’ Representative or an affiliate thereof, as representatives of Purchaser, to visit and inspect any of their respective properties, upon 

reasonable prior notice, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective executive officers and independent public accountants (and by this provision the Company authorizes its independent public accountants to disclose and discuss with Purchaser the affairs, finances and accounts of the Company and its Subsidiaries in the presence of a representative of the Company; provided, however, that such discussions will not result in any unreasonable expense to the Company, without Company consent), all at such reasonable times.

ARTICLE 7.7

  Investment Company Act.  The Company will not be or become an open-end investment trust, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act of 1940, as amended.

ARTICLE 7.8

 Use of Proceeds.  The proceeds from the issuance and sale of the Convertible Note by the Company shall be used in accordance with Schedule 7.8 attached hereto.  None of the proceeds from the issuance and sale of the Convertible Note by the Company pursuant to this Agreement will be used directly or indirectly for, (i) payment of any existing indebtedness of the Company to any officer, director or shareholder of the Company; or (ii) the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any “margin stock” within the meaning of Regulation G of the Board of Governors of the Federal Reserve System.

ARTICLE 7.9

  Compliance with Terms and Conditions of Material Contracts.  The Company will, and will cause each Subsidiary to, comply, in all respects, with all terms and conditions of all material contracts to which it is subject.

ARTICLE 7.10

  Reserved Shares.

(a)

The Company shall at all times have authorized, and reserved for the purpose of issuance, a sufficient number of shares of Common Stock to provide for the full conversion of the outstanding Convertible Note and issuance of the Conversion Shares (based on the conversion price of the Convertible Note in effect from time to time) (the “Reserved Amount”).  The Company shall not reduce the Reserved Amount without the prior written consent of Purchaser.  With respect to all Securities which contain an indeterminate number of shares of Common Stock issuable in connection therewith (such as the Convertible Note), the Company shall include in the Reserve Amount, no less than two (2) times the number of shares that is then actually issuable upon conversion or exercise of such Securities.  If at any time the number of shares of Common Stock authorized and reserved for issuance is below the number of Conversion Shares issued or issuable upon conversion of the Convertible Note, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, either (x) calling a special meeting of shareholders to authorize additional shares, in the case of an insufficient number of authorized shares or (y) in lieu thereof, consummating the immediate repurchase of the Convertible Note contemplated in Sections 3.4(c) hereof.

ARTICLE 7.11

  Transfer Agent Instructions.  Upon receipt of a Notice of Conversion or Notice of Exercise, as applicable, the Company shall immediately direct the Company's transfer agent to issue certificates, registered in the name of Purchaser or its nominee, for the Conversion Shares, in such amounts as specified from time to time by Purchaser to the Company upon proper conversion of the Convertible Note.  Upon conversion of any Convertible Note in accordance with their terms, the Company will, and will use its best lawful efforts to cause its transfer agent to, issue one or more certificates representing shares of Common Stock in such name or names and in such denominations specified by a Purchaser in a Notice of Conversion.  As long as the Registration Statement contemplated by the Registration Rights Agreement shall remain effective, the shares of Common Stock issuable upon conversion of any Convertible Note shall be issued to any transferee of such shares from Purchaser without any restrictive legend upon appropriate evidence of transfer in compliance with the Securities Act and the rules and regulations of the Commission; provided that for so long as the Registration Statement is effective, no opinion of counsel will be required to effect any such transfer.  The Company further warrants and agrees that no instructions other than these instructions have been or will be given to its transfer agent.  Nothing in this Section 7.11 shall affect in any way the Purchaser’s obligation to comply with all securities laws applicable to Purchaser upon resale of such shares of Common Stock, including any prospectus delivery requirements.

ARTICLE 7.12

  Maintenance of Reporting Status; Supplemental Information.  So long as any of the Securities are outstanding, the Company shall timely file all reports required to be filed with the Commission pursuant to the Exchange Act.  The Company shall not terminate its status as an issuer required to file reports under the Exchange Act, even if the Exchange Act or the rules and regulations thereunder would permit such termination.  If at anytime the Company is not subject to the requirements of Section 13 or 15(d) of the Exchange Act, the Company will promptly furnish at its expense, upon request, for the benefit of the holders from time to time of Securities, and prospective purchasers of Securities, information satisfying the information requirements of Rule 144 under the Securities Act.

ARTICLE 7.13

  Form D; Blue Sky Laws.  The Company agrees to file a “Form D” with respect to the Securities as required under Regulation D of the Securities Act and to provide a copy thereof to Purchaser promptly after such filing.  The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to Purchaser at the Closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to Purchaser on or prior to the Closing Date.

ARTICLE 8.

  NEGATIVE COVENANTS

The Company hereby agrees that after the date hereof for so long as any Convertible Note remain outstanding and for the benefit of Purchaser:

ARTICLE 8.1

  Limitations on Debt or Other Liabilities.  Neither the Company nor any Subsidiary will create, incur, assume or suffer to exist (at any time after the Closing Date, after giving effect to the application of the proceeds of the issuance of the Securities) (i) any Debt except without the prior written consent of the Purchaser (x) Debt incurred in a Permitted Financing, (y) Debt incurred in connection with equipment leases to which the Company or its Subsidiaries are a party incurred in the ordinary course of business; and (z) Debt incurred in connection with trade accounts payable, imbalances and refunds arising in the ordinary course of business and (ii) any equity securities (including Derivative Securities) (other than those securities that are issuable (x) under or pursuant to stock option plans, warrants or other rights  programs that exist as of the date hereof, or (y) securities incurred in a Permitted Financing or (z) in connection with the acquisition (including by merger) of a business or of assets otherwise permitted under this Agreement), unless the Company complies with the mandatory prepayment terms of Section 3.4(b) hereof.

ARTICLE 8.2

  Transactions with Affiliates.  Except as set forth on Schedule 8.2 hereto, the Company and each Subsidiary will not, directly or indirectly, pay any funds to or for the account of, make any investment (whether by acquisition or stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, and Debt, or otherwise) in, lease, sell, transfer or otherwise dispose of any assets, tangible or intangible, to, or participate in, or effect any transaction in connection with any joint enterprise or other joint arrangement with, any Affiliate, except, (1) pursuant to those agreements specifically identified on Schedule 8.2 attached hereto (with a copy of such agreements annexed to such Schedule 8.2) and (2) on terms to the Company or such Subsidiary no less favorable than terms that could be obtained by the Company or such Subsidiary from a Person that is not an Affiliate of the Company upon negotiation at arms’ length, as determined in good faith by the Board of Directors of the Company; provided that no determination of the Board of Directors shall be required with respect to any such transactions entered into in the ordinary course of business.

ARTICLE 8.3

  Merger or Consolidation.  The Company will not, in a single transaction or a series of related transactions (i) consolidate with or merge with or into any other Person, or (ii) permit any other Person to consolidate with or merge into it, unless the Company shall be the survivor of such merger or consolidation and (x) immediately before and immediately after given effect to such transaction (including any indebtedness incurred or anticipated to be incurred in connection with the transaction), no Default or Event of Default shall have occurred and be continuing; and (y) the Company has delivered to Purchaser an Officer’s Certificate stating that such consolidation, merger or transfer complies with this Agreement, and that all conditions precedent in this Agreement relating to such transaction have been satisfied.

ARTICLE 8.4

  Limitation on Asset Sales.  Neither the Company nor any Subsidiary will consummate an Asset Sale of material assets of the Company or any Subsidiary without the prior written consent of Purchaser, which consent shall not be unreasonably withheld.  As used herein, “Asset Sale” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) or sales of capital stock of a Subsidiary (other than directors’ qualifying shares), property or other assets (each 

referred to for the purpose of this definition as a “disposition”), including any disposition by means of a merger, consolidation or similar transaction other than a disposition of property or assets at fair market value in the ordinary course of business.

ARTICLE 8.5

  Restrictions on Certain Amendments.  Neither the Company nor any Subsidiary will waive any provision of, amend, or suffer to be amended, any provision of such entity’s existing Debt, any material contract or agreement, any Company Corporate Document or Subsidiary Corporate Document if such amendment, in the Company’s reasonable judgment, would materially adversely affect Purchaser or the holders of the Securities without the prior written consent of Purchaser.

ARTICLE 8.6

  Restrictions on Issuances of Securities.

(a)

In addition to and not in lieu of the covenant specified in Section 8.1 above:

(1)

From the Closing Date and continuing until 180 days following the date on which the Registration Statement becomes effective, the Company agrees that it will not issue any of its equity securities (or securities convertible into or exchangeable or exercisable for equity securities (the “Derivative Securities”)) on terms that allow a holder thereof to acquire such equity securities (or Derivative Securities) at a discount to the Market Price of the Common Stock at the time of issuance or, in the case of Derivative Securities, at a conversion price based on any formula (other than standard anti-dilution provisions) based on the Market Price on a date later than the date of issuance which is below the Market Price on the date of issuance (each such event, a “Discounted Equity Offering”) other than (i) borrowings under conventional credit facilities existing as of the date hereof, (ii) stock issued or credit facilities to be established in connection with acquisitions, (iii) equity securities or Derivative Securities in connection with employee and director stock option and stock purchase plans, (iv) employee and director stock option and stock purchase plans, and (v) securities issued under the Convertible Note or Warrants.  In addition, the Company shall not issue any equity securities in connection with a strategic alliance entered into by the Company unless such securities are the subject of a one year statutory or contractual hold period or, if not subject to such a hold period, unless the Purchaser has fully converted all outstanding Convertible Note and exercised all Warrants.  As used herein, “discount” shall include, but not be limited to, (i) any warrant, right or other security granted or offered in connection with such issuance which, on the applicable date of grant, is offered with an exercise or conversion price, as the case may be, at less than the then current Market Price of the Common Stock or, if such security has an exercise or conversion price based on any formula (other than standard anti-dilution provisions) based on the Market Price on a date later than the date of issuance, then at a price below the Market Price on such date of exercise or conversion, as the case may be, or (ii) any commissions, fees or other allowances paid in 

connection with such issuances (other than customary underwriter or placement agent commissions, fees or allowances).  For the purposes of determining the Market Price at which Common Stock is acquired under this Section, normal underwriting commissions and placement fees (including underwriters’ warrants) shall be excluded.  Notwithstanding the foregoing, the Company may enter into the following types of transactions (collectively referred to as "Permitted Financings"):  (1) "permanent financing" transactions, which would include any form of debt or equity financing (other than an underwritten offering), which is followed by a reduction of the said financing commitment to zero and payment of all related fees and expenses; (2) "project financing" which provide for the issuance of recourse debt instruments in connection with the operation of the Company's business as presently conducted or as proposed to be conducted; (3) an underwritten offering of Common Stock, provided that such offering provides for the registration of the Conversion Shares if the Registration Statement has not been declared effective; and (4) other financing transactions specifically consented to in writing by the Purchaser.

(2)

The 180-day restrictive period set forth in paragraph (1) of this Section 8.6(a) shall be increased by one day for each day a Registration Default has occurred and not been cured by the Company. 

(b)

Until such time as all of the Convertible Note have been either redeemed or converted into Conversion Shares in full, the Company agrees it will not issue any of its equity securities (or Derivative Securities), unless any shares of Common Stock issued or issuable in connection therewith are “restricted securities.”  As used herein “restricted securities” shall mean securities which may not be sold prior to twelve (12) months following the date of issuance of such securities by virtue of contractual restrictions imposed by the Company or otherwise.

ARTICLE 8.7

  Limitation on Stock Repurchases.  Except as otherwise set forth in the Convertible Note and the Warrants, the Company shall not, without the written consent of the Majority Holders, redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) any shares of capital stock of the Company or any warrants, rights or options to purchase or acquire any such shares.

ARTICLE 8.8

  Limitation on Sales By Officers and Employee Directors.  For a period of 180 days following the date the Registration Statement is declared effective by the Commission, no executive officer or a employee director of the Company shall, individually, sell or otherwise dispose of (other than by reason of death or disability) to any Person an amount of Common Stock greater than that allowed by Rule 144, promulgated under the Securities Act: provided however, that the foregoing restriction, nor the limitation set forth in section (ii) of the definition of Change in Control, shall apply (i) once the outstanding principal balance of the Convertible Note is less than fifteen percent (15%) of the original face amount of the Convertible Note; or 

(ii) the VWAP of the Company’s Common Stock equals or exceeds $2.50 and average volume traded equals or exceeds 250,000 shares for 10 consecutive Trading Days.

ARTICLE 9.

  RESTRICTIVE LEGENDS

ARTICLE 9.1

  Restrictions on Transfer.  From and after their respective dates of issuance, none of the Securities shall be transferable except upon the conditions specified in this Article IX, which conditions are intended to ensure compliance with the provisions of the Securities Act in respect of the Transfer of any of such Securities or any interest therein.  Purchaser will use its best efforts to cause any proposed transferee of any Securities held by it to agree to take and hold such Securities subject to the provisions and upon the conditions specified in this Article IX.

ARTICLE 9.2

 Legends.  The Conversion Shares, upon resale by the Purchaser pursuant to the Registration Statement, shall be freely tradeable and unrestricted.

ARTICLE 9.3

  Notice of Proposed Transfers.  Prior to any proposed Transfer of the Securities (other than a Transfer (i) registered or exempt from registration under the Securities Act, (ii) to an  affiliate of a Purchaser which is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act, provided that any such transferee shall agree to be bound by the terms of this Agreement and the Registration Rights Agreement, or (iii) to be made in reliance on Rule 144 under the Securities Act), the holder thereof shall give written notice to the Company of such holder’s intention to effect such Transfer, setting forth the manner and circumstances of the proposed Transfer, which shall be accompanied by (a) an opinion of counsel reasonably acceptable to the Company, confirming that such transfer does not give rise to a violation of the Securities Act, (B) representation letters in form and substance reasonably satisfactory to the Company to ensure compliance with the provisions of the Securities Act and (c) letters in form and substance reasonably satisfactory to the Company from each such transferee stating such transferee’s agreement to be bound by the terms of this Agreement and the Registration Rights Agreement.  Such proposed Transfer may be effected only if the Company shall have received such notice of transfer, opinion of counsel, representation letters and other letters referred to in the immediately preceding sentence, whereupon the holder of such Securities shall be entitled to Transfer such Securities in accordance with the terms of the notice delivered by the holder to the Company.

ARTICLE 10.

  ADDITIONAL AGREEMENTS AMONG THE PARTIES

ARTICLE 10.1

  Liquidated Damages.

(a)

The Company shall cause its transfer agent to, issue and deliver shares of Common Stock consistent with Section 7.11 hereof within three (3) Trading Days of delivery of a Notice of Conversion, as applicable (the “Deadline”) to Purchaser (or any party receiving Securities by transfer from Purchaser) at the address of Purchaser set forth in the Notice of Conversion.  The Company understands that a delay in the issuance of such certificates after the Deadline could result in economic loss to Purchaser.

(b)

Without in any way limiting Purchaser’s right to pursue other remedies, including actual damages and/or equitable relief, the Company agrees that if delivery of the Conversion Shares is more than one (1) Business Day after the Deadline (other than a failure due to the circumstances described in Section 4.3 of the Convertible Note, which failure shall be governed by such Section) the Company shall pay to Purchaser, as liquidated damages and not as a penalty, $500 for each $100,000 of Convertible Note then outstanding per day in cash, for each of the first ten (10) days beyond the Deadline, and $1,000 for each $100,000 of Convertible Note then outstanding per day in cash for each day thereafter that the Company fails to deliver such Common Stock.  Such cash amount shall be paid to Purchaser by the last day of the calendar week following the week in which it has accrued or, at the option of Purchaser (by written notice to the Company by the first day of the week following the week in which it has accrued), shall be added to the principal amount of the Convertible Note (if then outstanding) payable to Purchaser, in which event interest shall accrue thereon in accordance with the terms of the Convertible Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of the Convertible Note.

ARTICLE 10.2

  Conversion Notice.  The Company agrees that, in addition to any other remedies which may be available to Purchaser, including, but not limited to, the remedies available under Section 10.1, in the event the Company fails for any reason (other than as a result of actions taken by a Purchaser in breach of this Agreement) to effect delivery to a Purchaser of certificates with or without restrictive legends as contemplated by Article IX representing the shares of Common Stock on or prior to the Deadline after conversion of any Convertible Note, Purchaser will be entitled, if prior to the delivery of such certificates, to revoke the Notice of Conversion by delivering a notice to such effect to the Company whereupon the Company and Purchaser shall each be restored to their respective positions immediately prior to delivery of such Notice of Conversion.

ARTICLE 10.3

  Conversion Limit.  Notwithstanding the conversion rights under the Convertible Note, unless Purchaser delivers a waiver in accordance with the last sentence in this Section 10.3, in no event shall Purchaser be entitled to convert any portion of the Convertible Note, in excess of that portion of the Convertible Note, as applicable, of which the sum of (i) the number of shares of Common Stock beneficially owned by Purchaser and its Affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Convertible Note or other Derivative Securities convertible into or exchangeable for shares of Common Stock which contain a limitation similar to that set forth in this Section 10.3), and (ii) the number of shares of Common Stock issuable upon the conversion of the portion of the Convertible Note with respect to which this determination is being made, would result in beneficial ownership by Purchaser and its 

Affiliates of more than 4.99% of the outstanding shares of Common Stock.  For purposes of Section 10.3(i) beneficial ownership shall be determined in accordance with Rule 13d-3 of the Exchange Act and Regulations 13 D-G thereunder, except as otherwise provided in this Section 10.3.  Upon notification by written waiver, the foregoing limitation shall not apply and shall be of no further force or effect (i) immediately preceding and upon the occurrence of any voluntary or mandatory redemption or repayment transaction described herein or in the Convertible Note, (ii) immediately preceding and upon any Sale Event, (iii) on the Maturity Date or (iv) following the occurrence of any Event of Default which is not cured for a period of ten (10) calendar days.

ARTICLE 10.4

  Registration Rights.  

(a)

The Company shall grant Purchaser registration rights covering the Conversion Shares (the “Registrable Securities”) on the terms set forth in the Registration Rights Agreement and herein.

(b)

The Company shall prepare and file on or before the 45th day following the Closing Date (“Filing Date”), a registration statement or amendment thereto (the “Registration Statement”) covering the resale of the Registrable Securities with the Commission.  In the event the Company fails to file the Registration Statement by the Filing Date for any reason other than Purchaser’s failure to provide information requested by the Company for the completion and filing of the Registration Statement, the Company shall pay to Purchaser as liquidated damages (and not as a penalty) one percent (1%) of the then outstanding principal amount of Convertible Note, prorated, for each 30 day period until the Registration Statement is filed with the Commission.  The Company shall use its best efforts to cause the Registration Statement to be declared effective by the Commission or the earlier of (i) 120 days following the Closing Date, (ii) ten days following the receipt of a “No Review” Letter from the Commission or (iii) the first Business Day following the day the Commission determines the Registration Statement eligible to be declared effective (the “Required Effectiveness Date”).  The Company shall pay all expenses of registration (other than underwriting fees and discounts, if any, in respect of Registrable Securities offered and sold under the registration statement by Purchaser).  The Company agrees to file an initial written response to the Commission within twenty (20) calender days of receipt of any comments by  the Commission relating to the Registration Statement.

(c)

If the Registration Statement  is not declared effective by the Commission by the Required Effectiveness Date, the Company shall pay to Purchaser, as liquidated damages (and not as a penalty), an amount equal to 2% of the outstanding principal amount of the Convertible Note, prorated, for each 30 day period the Registration Statement is not declared effective by the Commission; provided however, that in the event the Commission issues written comments pertaining directly to the structure of the investment in relation to Rule 415, then and only in such event, the liquidated damages set forth herein shall be suspended for 10 days from the date of the Commission’s comments and the Company and Purchaser shall negotiate in good faith toward a resolution of the Commission’s comments so as to achieve effectiveness of the Registration Statement.  In the event the Company fails to obtain a valid registration 

statement by the 180th day following the Closing Date, the Company will redeem the Convertible Note and the Warrants as set forth in Section 5 of the Convertible Note and Section 13 of the Warrants, respectively.  Additionally, the Company will grant to Purchaser certain piggyback registration rights in the event the Company proposes to effect a registered offering of Common Stock or warrants or both prior to the filing of the Registration Statement referenced above.

(d)

Any such liquidated damages shall be paid in cash by the Company to Purchaser by wire transfer in immediately available funds on the last day of each calendar week following the event requiring its payment.

(e)

If, following the declaration of effectiveness of the Registration Statement, such registration statement (or any prospectus or supplemental prospectus contained therein) shall cease to be effective for any reason (including but not limited to the occurrence of any event that results in any prospectus or supplemental prospectus containing an untrue statement of a material fact or omitting a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading), the Company fails to file required amendments to the Registration Statement in order to allow the Purchaser to resell the Conversion Shares pursuant to the Registration Statement as unrestricted, unlegended, freely tradeable shares of Common Stock, or if for any reason there are insufficient shares of such shares of Common Stock registered under the then current Registration Statement to effect full conversion of the Convertible Note or exercise of the Warrants (a "Registration Default"), the Company shall immediately take all necessary steps to cause the Registration Statement to be amended or supplemented so as to cure such Registration Default.  Failure to cure a Registration Default within ten (10) Business Days shall result in the Company paying to Purchaser liquidated damages at the rate of one percent (1%) of the outstanding principal amount of Convertible Note for each 30 day period (prorated) (“Default Fee”), the Registration Default remains uncured.

ARTICLE 11.

  ADJUSTMENT OF FIXED PRICE

ARTICLE 11.1

  Reorganization.  The Conversion Price (the “Fixed Price”) shall be adjusted, as applicable, as hereafter provided.

ARTICLE 11.2

  Share Reorganization.  If and whenever the Company shall:

(i)

subdivide the outstanding shares of Common Stock into a greater number of shares;

(ii)

consolidate the outstanding shares of Common Stock into a smaller number of shares;

(iii)

issue Common Stock or securities convertible into or exchangeable for shares of Common Stock as a stock dividend to all or substantially all the holders of Common Stock; or

(iv)

make a distribution on the outstanding Common Stock to all or substantially all the holders of Common Stock payable in Common Stock or securities convertible into or exchangeable for Common Stock;

any of such events being herein called a “Share Reorganization,” then in each such case the applicable Fixed Price shall be adjusted, effective immediately after the record date at which the holders of Common Stock are determined for the purposes of the Share Reorganization or, if no record date is fixed, the effective date of the Share Reorganization, by multiplying the applicable Fixed Price in effect on such record or effective date, as the case may be, by a fraction of which:

(i)

the numerator shall be the number of shares of Common Stock outstanding on such record or effective date (without giving effect to the transaction); and

(ii)

the denominator shall be the number of shares of Common Stock outstanding after giving effect to such Share Reorganization, including, in the case of a distribution of securities convertible into or exchangeable for shares of Common Stock, the number of shares of Common Stock that would have been outstanding if such securities had been converted into or exchanged for Common Stock on such record or effective date.

ARTICLE 11.3

  Rights Offering.  If and whenever the Company shall issue to all or substantially all the holders of Common Stock, rights, options or warrants under which such holders are entitled, during a period expiring not more than 45 days after the record date of such issue, to subscribe for or purchase Common Stock (or Derivative Securities), at a price per share (or, in the case of securities convertible into or exchangeable for Common Stock, at an exchange or conversion price per share at the date of issue of such securities) of less than 95% of the Market Price of the Common Stock on such record date (any such event being herein called a “Rights Offering”), then in each such case the applicable Fixed Price shall be adjusted, effective immediately after the record date at which holders of Common Stock are determined for the purposes of the Rights Offering, by multiplying the applicable Fixed Price in effect on such record date by a fraction of which:

(i)

the numerator shall be the sum of:

(i)

the number of shares of Common Stock outstanding on such record date; and

(ii)

a number obtained by dividing:

(A)

either,

(x)

the product of the total number of shares of Common Stock so offered for subscription or purchase and the price at which such shares are so offered, or

(y)

the product of the maximum number of shares of Common Stock into or for which the convertible or exchangeable securities so offered for subscription or purchase may be converted or exchanged and the conversion or exchange price of such securities, or, as the case may be, by

(B)

the Market Price of the Common Stock on such record date; and

(ii)

the denominator shall be the sum of:

(i)

the number of shares of Common Stock outstanding on such record date; and

(ii)

the number of shares of Common Stock so offered for subscription or purchase (or, in the case of Derivative Securities, the maximum number of shares of Common Stock for or into which the securities so offered for subscription or purchase may be converted or exchanged).

To the extent that such rights, options or warrants are not exercised prior to the expiry time thereof, the applicable Fixed Price shall be readjusted effective immediately after such expiry time to the applicable Fixed Price which would then have been in effect upon the number of shares of Common Stock (or Derivative Securities) actually delivered upon the exercise of such rights, options or warrants.

ARTICLE 11.4

  Special Distribution.  If and whenever the Company shall issue or distribute to all or substantially all the holders of Common Stock:

(i)

shares of the Company of any class, other than Common Stock;

(ii)

rights, options or warrants; or

(iii)

any other assets (excluding cash dividends and equivalent dividends in shares paid in lieu of cash dividends in the ordinary course);

and if such issuance or distribution does not constitute a Share Reorganization or a Rights Offering (any such event being herein called a “Special Distribution”), then in each such case the applicable Fixed Price shall be adjusted, effective immediately after the record date at which the holders of Common Stock are determined for purposes of the Special Distribution, by multiplying the applicable Fixed Price in effect on such record date by a fraction of which:

(i)

the numerator shall be the difference between:

(A)

the product of the number of shares of Common Stock outstanding on such record date and the Market Price of the Common Stock on such date; and

(B)

the fair market value, as determined by the Directors (whose determination shall be conclusive), to the holders of Common Stock of the shares, rights, options, warrants, evidences of indebtedness or other assets issued or distributed in the Special Distribution (net of any consideration paid therefor by the holders of Common Stock), and

(ii)

the denominator shall be the product of the number of shares of Common Stock outstanding on such record date and the Market Price of the Common Stock on such date.

ARTICLE 12.5

 Capital Reorganization.  If and whenever there shall occur:

(i)

a reclassification or redesignation of the shares of Common Stock or any change of the shares of Common Stock into other shares, other than in a Share Reorganization;

(ii)

a consolidation, merger or amalgamation of the Company with, or into another body corporate; or

(iii)

the transfer of all or substantially all of the assets of the Company to another body corporate;

(any such event being herein called a “Capital Reorganization”), then in each such case the holder who exercises the right to convert Convertible Note after the effective date of such Capital Reorganization shall be entitled to receive and shall accept, upon the exercise of such right, in lieu of the number of shares of Common Stock to which such holder was theretofore entitled upon the exercise of the conversion privilege, the aggregate number of shares or other securities or property of the Company or of the body corporate resulting from such Capital Reorganization that such holder would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, such holders had been the holder of the number of shares of Common Stock to which such holder was theretofore entitled upon conversion; provided, however, that no such Capital Reorganization shall be consummated in effect unless all necessary steps shall have been taken so that such holders shall thereafter be entitled to receive such number of shares or other securities of the Company or of the body corporate resulting from such Capital Reorganization, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained above.

ARTICLE 12.6

  Purchase Price Adjustments.  In case at any time and from time to time the Company shall issue any shares of Common Stock or Derivative Securities convertible or exercisable for shares of Common Stock (the number of shares so issued, or issuable upon conversion or exercise of such Derivative Securities, as applicable, being referred to as “Additional Shares of Common Stock”) for consideration less than the then Market Price at the date of issuance of such shares of Common Stock or such Derivative Securities, in each such case the Conversion Price shall, concurrently with such issuance, be adjusted by multiplying the Conversion Price immediately prior to such event by a 

fraction: (i) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common Stock plus the number of shares of Common Stock that the aggregate consideration received by the Company for the total number of such Additional Shares of Common Stock so issued would purchase at the Market Price and (ii) the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of Additional Shares of Common Stock plus the number of such Additional Shares of Common Stock so issued or sold.

ARTICLE 12.7

  Adjustment Rules. The following rules and procedures shall be applicable to adjustments made in this Article XI:

(a)

no adjustment in the applicable Fixed Price shall be required unless such adjustment would result in a change of at least 1% in the applicable Fixed Price then in effect, provided, however, that any adjustments which, but for the provisions of this clause would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;

(b)

if any event occurs of the type contemplated by the adjustment provisions of this Article XI but not expressly provided for by such provisions, the Company will give notice of such event as provided herein, and the Company’s board of directors will make an appropriate adjustment in the Fixed Price so that the rights of the holders of the applicable Security shall not be diminished by such event; and

(c)

if a dispute shall at any time arise with respect to any adjustment of the applicable Fixed Price, such dispute shall be conclusively determined by the auditors of the Company or, if they are unable or unwilling to act, by a firm of independent chartered accountants selected by the Directors and any such determination shall be binding upon the Company and Purchaser.

ARTICLE 12.8

  Certificate as to Adjustment.  The Company shall from time to time promptly after the occurrence of any event which requires an adjustment in the applicable Fixed Price deliver to Purchaser a certificate specifying the nature of the event requiring the adjustment, the amount of the adjustment necessitated thereby, the applicable Fixed Price after giving effect to such adjustment and setting forth, in reasonable detail, the method of calculation and the facts upon which such calculation is based.

ARTICLE 12.9

  Notice to Holders.  If the Company shall fix a record date for:

(a)

any Share Reorganization (other than the subdivision of outstanding Common Stock into a greater number of shares or the consolidation of outstanding Common Stock into a smaller number of shares),

(b)

any Rights Offering,

(c)

any Special Distribution,

(d)

any Capital Reorganization (other than a reclassification or redesignation of the Common Stock into other shares),

(e)

Sale Event; or

(f)

any cash dividend,

the Company shall, not less than 10 days prior to such record date or, if no record date is fixed, prior to the effective date of such event, give to Purchaser notice of the particulars of the proposed event or the extent that such particulars have been determined at the time of giving the notice.

ARTICLE 13.

  EVENTS OF DEFAULT

ARTICLE 13.5

  Events of Default.  If one or more of the following events (each an “Event of Default”) shall have occurred and be continuing:

(a)

failure by the Company to pay or repay when due, all or any part of the principal on any of the Convertible Note (whether by virtue of the agreements specified in this Agreement or the Convertible Note);

(b)

failure by the Company to pay (i) within five (5) Business Days of the due date thereof any interest on any Convertible Note or (ii) within five (5) Business Days following the delivery of notice to the Company of any fees or any other amount payable (not otherwise referred to in (a) above or this clause (b)) by the Company under this Agreement or any other Transaction Agreement;

(c)

failure by the Company to timely comply with the requirements of Section 7.11 or 10.1 hereof, which failure is not cured within five (5) Business Days of such failure;

(d)

failure on the part of the Company to observe or perform any covenant contained in Section 7.10 or Article VIII of this Agreement;

(e)

failure on the part of the Company to observe or perform any covenant or agreement contained in any Transaction Agreement (other than those covered by clauses (a), (b), (c) or (d) above) for 30 days from the date of such occurrence;

(f)

the trading in the Common Stock shall have been suspended by the Commission or any National Market (except for any suspension of trading of limited duration solely to permit dissemination of material information regarding the Company and except if, at the time there is any suspension on any National Market, the Common Stock is then listed and approved for trading on another  National Market within ten (10) Trading Days thereof);

(g)

if listed on a National Market, the Company shall have its Common Stock delisted from a National Market for at least ten (10) consecutive Trading Days and is unable to obtain a listing on a National Market within such ten (10) Trading Days;

(h)

the Registration Statement shall not have been declared effective by the Commission by the Required Effectiveness Date which results in the Company incurring liquidated damages or a default fee for a period in excess of 10 days;

(i)

the Company or any Subsidiary has commenced a voluntary case or other proceeding seeking liquidation, winding-up, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency, moratorium or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or has consented to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or has made a general assignment for the benefit of creditors, or has failed generally to pay its debts as they become due, or has taken any corporate action to authorize any of the foregoing;

(j)

an involuntary case or other proceeding has been commenced against the Company or any Subsidiary seeking liquidation, winding-up, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency, moratorium or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days, or an order for relief has been entered against the Company or any Subsidiary under the federal bankruptcy laws as now or hereafter in effect;

(k)

default in any provision (including payment) or any agreement governing the terms of any Debt of the Company or any Subsidiary in excess of $100,000, which has not been cured within any applicable period of grace associated therewith;

(l)

judgments or orders for the payment of money which in the aggregate at any one time exceed $100,000 and are not covered by insurance have been rendered against the Company or any Subsidiary by a court of competent jurisdiction and such judgments or orders shall continue unsatisfied and unstayed for a period of 60 days; or

(m)

any representation, warranty, certification or statement made by the Company in any Transaction Agreement or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with any Transaction Agreement shall prove to have been untrue in any material respect when made.

then, and in every such occurrence, Purchaser may, with respect to an Event of Default specified in paragraphs (a) or (b), and the Majority Holders may, with respect to any other Event of 

Default, by notice to the Company, declare the Convertible Note to be, and the Convertible Note shall thereon become immediately due and payable; provided that in the case of any of the Events of Default specified in paragraph (i) or (j) above with respect to the Company or any Subsidiary, then, without any notice to the Company or any other act by Purchaser, the entire amount of the Convertible Note shall become immediately due and payable, provided, further, if any Event of Default has occurred and is continuing, and irrespective of whether any Convertible Note has been declared immediately due and payable hereunder, any Purchaser of Convertible Note may proceed to protect and enforce the rights of Purchaser by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Convertible Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise, and provided further, in the case of any Event of Default, the amount declared due and payable on the Convertible Note shall be the Formula Price thereof.

ARTICLE 13.6

  Powers and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to Purchaser is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.  Every power and remedy given by the Convertible Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by Purchaser.

ARTICLE 14.

  MISCELLANEOUS

ARTICLE 14.5

  Notices.  All notices, demands and other communications to any party hereunder shall be in writing (including telecopier or similar writing) and shall be given to such party at its address set forth on the signature pages hereof, or such other address as such party may hereafter specify for the purpose to the other parties.  Each such notice, demand or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified on the signature page hereof, (ii) if given by mail, four days after such  communication is deposited in the mail with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when delivered at the address specified in or pursuant to this Section.

ARTICLE 14.6

  No Waivers; Amendments.

(a)

No failure or delay on the part of any party in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

(b)

Any provision of this Agreement may be amended, supplemented or waived if, but only if, such amendment, supplement or waiver is in writing and is signed 

by the Company and the Majority Holders; provided, that without the consent of each holder of any Convertible Note affected thereby, an amendment or waiver may not (a) reduce the aggregate principal amount of Convertible Note whose holders must consent to an amendment or waiver, (b) reduce the rate or extend the time for payment of interest on any Convertible Note, (c) reduce the principal amount of or extend the stated maturity of any Convertible Note or (d) make any Convertible Note payable in money or property other than as stated in such Convertible Note.  In determining whether the holders of the requisite principal amount of Convertible Note have concurred in any direction, consent, or waiver as provided in any Transaction Agreement, Convertible Note which are owned by the Company or any other obligor on or guarantor of the convertible Note, or by any Person Controlling, Controlled by, or under common Control with any of the foregoing, shall be disregarded and deemed not to be outstanding for the purpose of any such determination; and provided further that no such amendment, supplement or waiver which affects the rights of Purchaser and their affiliates otherwise than solely in their capacities as holders of Convertible Note shall be effective with respect to them without their prior written consent.

ARTICLE 14.7

  Indemnification by Company.

(a)

The Company agrees to indemnify and hold harmless Purchaser, its Affiliates, and each Person, if any, who controls Purchaser, or any of its Affiliates, within the meaning of the Securities Act or the Exchange Act (each, a “Controlling Person”), and the respective partners, agents, employees, officers and Directors of Purchaser, their Affiliates and any such Controlling Person (each an “Indemnified Party”) and collectively, the “Indemnified Parties”), from and against any and all losses, claims, damages, liabilities and expenses (including, without limitation and as incurred, reasonable costs of investigating, preparing or defending any such claim or action, whether or not such Indemnified Party is a party thereto, provided that the Company shall not be obligated to advance such costs to any Indemnified Party other than Purchaser unless it has received from such Indemnified Party an undertaking to repay to the Company the costs so advanced if it should be determined by final judgment of a court of competent jurisdiction that such Indemnified Party was not entitled to indemnification hereunder with respect to such costs) which may be incurred by such Indemnified Party in connection with any investigative, administrative or judicial proceeding brought or threatened that relates to or arises out of, or is in connection with any activities contemplated by any Transaction Agreement or any other services rendered in connection herewith; provided that the Company will not be responsible for any claims, liabilities, losses, damages or expenses that are determined by final judgment of a court of competent jurisdiction to result from such Indemnified Party’s gross negligence, willful misconduct or bad faith.

(b)

If any action shall be brought against an Indemnified Party with respect to which indemnity may be sought against the Company under this Agreement, such Indemnified Party shall promptly notify the Company in writing and the Company, at its option, may, assume the defense thereof, including the employment of counsel 

reasonably satisfactory to such Indemnified Party and payment of all reasonable fees and expenses.  The failure to so notify the Company shall not affect any obligations the Company may have to such Indemnified Party under this Agreement or otherwise unless the Company is materially adversely affected by such failure.  Such Indemnified Party shall have the right to employ separate counsel in such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party, unless (i) the Company has failed to assume the defense and employ counsel or (ii) the named parties to any such action (including any impleaded parties) include such Indemnified Party and the Company, and such Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Company, in which case, if such Indemnified Party notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Party, provided, however, that the Company shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be responsible hereunder for the reasonable fees and expenses of more than one such firm of separate counsel, in addition to any local counsel, which counsel shall be designated by Purchaser.  The Company shall not be liable for any settlement of any such action effected without the written consent of the Company (which shall not be unreasonably withheld) and the Company agrees to indemnify and hold harmless each Indemnified Party from and against any loss or liability by reason of settlement of any action effected with the consent of the Company.  In addition, the Company will not, without the prior written consent of Purchaser, settle or compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action, claim, suit or proceeding in respect to which indemnification or contribution may be sought hereunder (whether or not any Indemnified Party is a party thereto) unless such settlement, compromise, consent or termination includes an express unconditional release of Purchaser and the other Indemnified Parties, satisfactory in form and substance to Purchaser, from all liability arising out of such action, claim, suit or proceeding.

(c)

If for any reason the foregoing indemnity is unavailable (otherwise than pursuant to the express terms of such indemnity) to an Indemnified Party or insufficient to hold an Indemnified Party harmless, then in lieu of indemnifying such Indemnified Party, the Company shall contribute to the amount paid or payable by such Indemnified Party as a result of such claims, liabilities, losses, damages, or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by Purchaser on the other from the transactions contemplated by this Agreement or (ii) if the allocation provided by clause (i) is not permitted under applicable law, in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and Purchaser on the other, but also the relative fault of the Company and Purchaser as well as any other relevant equitable considerations.  Notwithstanding the provisions of this Section 13.3, the aggregate contribution of all Indemnified Parties shall not exceed the amount of interest and fees actually received by Purchaser pursuant to this Agreement.  It is hereby further agreed that the relative 

benefits to the Company on the one hand and Purchaser on the other with respect to the transactions contemplated hereby shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of material fact or the omission or alleged omission to state a material fact related to information supplied by the Company or by Purchaser and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(d)

The indemnification, contribution and expense reimbursement obligations set forth in this Section 13.3 (i) shall be in addition to any liability the Company may have to any Indemnified Party at common law or otherwise; (ii) shall survive the termination of this Agreement and the other Transaction Agreements and the payment in full of the Convertible Note and (iii) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of Purchaser or any other Indemnified Party.

ARTICLE 14.8

  Indemnification by Purchaser.  The Purchaser agrees to indemnify and hold the Company and its directors, officers, employees and agents (each a “Company Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Company Party may suffer or incur as a direct result of any breach by Purchaser of any of the representations, warranties or agreements made by the Purchaser in this Agreement or in the other Transaction Agreements.

ARTICLE 14.9

  Expenses:  Documentary Taxes.  The Company agrees to pay to Global Capital Advisors, LLC (“GCA”), on the Closing Date, a fee equal to $15,000.00 (the “Out of Pocket Fee”) in full satisfaction of all obligations of the Company to Purchaser and its agents in connection with the negotiation and preparation of the Transaction Agreements, relevant due diligence, and fees and disbursements of legal counsel.  The Company has paid earnest money of $7,500 which shall be applied toward the Out of Pocket Fee on the Closing Date.  In addition, the Company agrees to pay any and all stamp, transfer and other similar taxes, assessments or charges payable in connection with the execution and delivery of any Transaction Agreement or the issuance of the Securities to Purchaser, excluding their assigns.

ARTICLE 14.10

  Payment.  The Company agrees that, so long as Purchaser shall own any Convertible Note purchased by it from the Company hereunder, the Company will make payments to Purchaser of all amounts due thereon by wire transfer by 4:00 P.M. (E.S.T.).

ARTICLE 14.11

  Successors and Assigns.  This Agreement shall be binding upon the Company and upon Purchaser and its respective successors 

and assigns; provided that the Company shall not assign or otherwise transfer its rights or obligations under this Agreement to any other Person without the prior written consent of the Majority Holders.  All provisions hereunder purporting to give rights to Purchaser and its affiliates or to holders of Securities are for the express benefit of such Persons and their successors and assigns.

ARTICLE 14.12

  Brokers.  Except for Equinox Securities, Inc. and Michael Draper (the “Brokers”), the Company represents and warrants that it has not employed any broker, finder, financial advisor or investment banker who would be entitled to any brokerage, finder’s or other fee or commission payable by the Company or Purchaser in connection with the sale of the Securities.  The Company represents and warrants that it is solely responsible for any fees due Brokers.

ARTICLE 14.13

 Florida Law; Submission to Jurisdiction; Waiver of Jury Trial; Appointment of Agent.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA.  EACH PARTY HERETO HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE STATE OF FLORIDA AND OF ANY FEDERAL DISTRICT COURT SITTING IN TALLAHASSEE, FLORIDA FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH HEREIN.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY.

ARTICLE 14.14

Entire Agreement.  This Agreement, the Exhibits or Schedules hereto, which include, but are not limited to the Convertible Note and the Registration Rights Agreement, set forth the entire agreement and understanding of the parties relating to the subject matter hereof and supersedes all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written relating to the subject matter hereof. The terms and conditions of all Exhibits and Schedules to this Agreement are incorporated herein by this reference and shall constitute part of this Agreement as is fully set forth herein.

ARTICLE 14.15

Survival; Severability. The representations, warranties, covenants and agreements of the parties hereto shall survive the closing hereunder. In the event that any provision of this Agreement becomes or is declared by a 

court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

ARTICLE 14.16

Title and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 

ARTICLE 14.17

Reporting Entity for the Common Stock.  The reporting entity relied upon for the determination of the trading price or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement and all Exhibits shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of Purchaser and the Company shall be required to employ any other reporting entity. 

ARTICLE 14.18

Publicity.  The Company and the Purchaser shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions 

contemplated hereby and no party shall issue any such press release or otherwise make any such public statement without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other parties with prior notice of such public statement.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of Purchaser without the prior written consent of Purchaser, except to the extent required by law, in which case the Company shall provide Purchaser with prior written notice of such public disclosure.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers, as of the date first above written.

HepaLife Technologies, Inc.

By:

/s/ Frank Menzler

Name:

Frank Menzler

Title:

CEO and President

        

Address:

HepaLife Technologies, Inc.

60 State Street

Suite 700

Boston, MA 02109

Fax:

617-371-2950

      Tel.:     617-878-2051

GCA STRATEGIC INVESTMENT FUND LIMITED

By:

/s/ Lewis N. Lester

  Name:  Lewis N. Lester

Title:  Director

Address:

c/o Prime Management Limited

Mechanics Building

12 Church Street

Hamilton HM II, Bermuda

Fax:

441-295-3926

Tel.:

441-295-0329

TABLE OF CONTENTS

ARTICLE I.  DEFINITIONS

1

Section 1.1  Definitions

1

Section 1.2  Accounting Terms and Determinations

9

ARTICLE II.  PURCHASE AND SALE OF SECURITIES

10

Section 2.1  Purchase and Sale of Convertible Note

10

Section 2.2  Purchase Price

10

Section 2.3  Closing and Mechanics of Payment

10

ARTICLE III.  PAYMENT TERMS OF CONVERTIBLE Note

10

Section 3.1  Payment of Principal and Interest; Payment Mechanics

10

Section 3.2

11

Section 3.3  Voluntary Prepayment

11

Section 3.4  Mandatory Prepayments

11

Section 3.5  Prepayment Procedures

12

Section 3.6  Payment of Additional Amounts

13

ARTICLE IV.  REPRESENTATIONS AND WARRANTIES

15

Section 4.1  Organization and Qualification

15

Section 4.2  Authorization and Execution

15

Section 4.3  Capitalization 

15

Section 4.4  Governmental Authorization

16

Section 4.5  Issuance of Shares

16

Section 4.6  No Conflicts

16

Section 4.7  Financial Information

17

Section 4.8  Litigation

17

Section 4.9  Compliance with ERISA and other Benefit Plans

17

Section 4.10  Environmental Matters

18

Section 4.11  Taxes

18

Section 4.12  Investments, Joint Ventures

19

Section 4.13  Not an Investment Company

19

Section 4.14  Full Disclosure

19

Section 4.15  No Solicitation; No Integration with Other Offerings

19

Section 4.16  Permits

19

Section 4.17  Leases

19

Section 4.18  Absence of Any Undisclosed Liabilities or Capital Calls

20

Section 4.19  Public Utility Holding Company

20

Section 4.20  Intellectual Property Rights

20

Section 4.21  Insurance

20

Section 4.22  Title to Properties

20

Section 4.23  Internal Accounting Controls

20

Section 4.24 Subsidiaries

21

Section 4.25  Foreign Practices

21

Section 4.26  SEC Reports

21

Section 4.27  Sarbanes-Oxley: Internal Accounting Controls

22

ARTICLE V.  REPRESENTATIONS AND WARRANTIES OF PURCHASER

22

Section 5.1  Purchaser

22

ARTICLE VI.  CONDITIONS PRECEDENT TO PURCHASE OF SECURITIES

24

Section 6.1  Conditions Precedent to Purchaser’s Obligations to Purchase

24

Section 6.2  Conditions to the Company’s Obligations

26

ARTICLE VII.  AFFIRMATIVE COVENANTS

26

Section 7.1 Information

26

Section 7.2  Payment of Obligations

27

Section 7.3 Maintenance of Property; Insurance

27

Section 7.4 Maintenance of Existence

27

Section 7.5 Compliance with Laws

27

Section 7.6  Inspection of Property, Books and Records

27

Section 7.7  Investment Company Act

28

Section 7.8 Use of Proceeds

28

Section 7.9  Compliance with Terms and Conditions of Material Contracts

28

Section 7.10  Reserved Shares

28

Section 7.11  Transfer Agent Instructions

29

Section 7.12  Maintenance of Reporting Status; Supplemental Information

29

Section 7.13  Form D; Blue Sky Laws

29

ARTICLE VIII.  NEGATIVE COVENANTS

29

Section 8.1  Limitations on Debt or Other Liabilities

30

Section 8.2  Transactions with Affiliates

30

Section 8.3  Merger or Consolidation

30

Section 8.4  Limitation on Asset Sales

30

Section 8.5  Restrictions on Certain Amendments

31

Section 8.6  Restrictions on Issuances of Securities

31

Section 8.7  Limitation on Stock Repurchases

32

Section 8.8  Limitation on Sales By Officers and Employee Directors

32

ARTICLE IX.  RESTRICTIVE LEGENDS

33

Section 9.1  Restrictions on Transfer

33

Section 9.2 Legends.

33

Section 9.3  Notice of Proposed Transfers

33

ARTICLE X.  ADDITIONAL AGREEMENTS AMONG THE PARTIES

34

Section 10.1  Liquidated Damages

34

Section 10.2  Conversion Notice

34

Section 10.3  Conversion Limit

34

Section 10.4  Registration Rights

35

ARTICLE XI.  ADJUSTMENT OF FIXED PRICE

36

Section 11.1  Reorganization

36

Section 11.2  Share Reorganization

37

Section 11.3  Rights Offering

37

Section 11.4  Special Distribution

38

Section 11.5 Capital Reorganization

39

Section 11.6  Purchase Price Adjustments

40

Section 11.7  Adjustment Rules

40

Section 11.8  Certificate as to Adjustment

41

Section 11.9  Notice to Holders

41

ARTICLE XII.  EVENTS OF DEFAULT

41

Section 12.1  Events of Default.

41

Section 12.2  Powers and Remedies Cumulative

43

ARTICLE XIII.  MISCELLANEOUS

44

Section 13.1  Notices

44

Section 13.2  No Waivers; Amendments

44

Section 13.3  Indemnification by Company

45

Section 13.4  Indemnification by Purchaser

47

Section 13.5  Expenses:  Documentary Taxes

47

Section 13.6  Payment

47

Section 13.7  Successors and Assigns

47

Section 13.8  Brokers

47

Section 13.9 Florida Law; Submission to Jurisdiction; Waiver of Jury Trial; Appointment of Agent  47

Section 13.10  Entire Agreement

48

Section 13.11  Survival; Severability.

48

Section 13.12  Title and Subtitles

48

Section 13.13  Reporting Entity for the Common Stock.  

48

Section 13.14  Publicity.

49

LIST OF SCHEDULES

Schedule 4.3

Capitalization

Schedule 4.6

No Conflicts

Schedule 4.7

Financial Information 

Schedule 4.8

Litigation

Schedule 4.10

Environmental Matters

Schedule 4.12

Investments, Joint Ventures

Schedule 4.14

Full Disclosure

Schedule 4.15

No Solicitation; No Integration with Other Offerings

Schedule 4.20

Intellectual Property Rights

Schedule 7.8

Use of Proceeds

Schedule 8.2

Transactions with Affiliates

LIST OF EXHIBITS

Exhibit A

Form of Convertible Note

Exhibit B

Form of Registration Rights Agreement

Exhibit C

Form of Officer’s Certificate

SECURITIES PURCHASE AGREEMENT

dated as of

May 11, 2007

by and between

HepaLife Technologies, Inc.

as the Issuer,

and

GCA Strategic Investment Fund Limited

as Purchaser

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