Document:

exv10w39

 

Exhibit 10.39

IN MAKING AN INVESTMENT DECISION PURCHASERS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND
THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE,
THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.

XATA CORPORATION

COMMON STOCK WARRANT AND SERIES C PREFERRED STOCK

PURCHASE AGREEMENT

September 7, 2005

 

 

COMMON STOCK WARRANT AND SERIES C PREFERRED STOCK

PURCHASE AGREEMENT

     This Common Stock Warrant and Series C Preferred Stock Purchase Agreement (the
“Agreement”) is made as of the 7th day of September, 2005 (the “Effective Date”), by and among
Xata Corporation, a Minnesota corporation with its principal place of business at 151 E.
Cliff Road, Suite 10, Burnsville, MN 55337 (the “Company”) and each of those persons and entities,
severally and not jointly, listed as a Purchaser on the Schedule of Purchasers attached as Exhibit
A hereto (each, a “Purchaser” and collectively, the “Purchasers”).

AGREEMENT

     In consideration of the mutual covenants contained in this Agreement, and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the Company and each
Purchaser (severally and not jointly) hereby agree as follows:

1. Authorization of Sale of the Securities. Subject to the terms and conditions of
this Agreement, the Company has or before the Closing Date (as defined in Section 3) will have
authorized (a) the sale and issuance of 1,269,036 shares of its Series C Preferred Stock (the
“Shares”) having rights, preferences and privileges as set forth in the Company’s Certificate of
Designation of Preferences of Series C Preferred Stock (the “Certificate of Designation”) attached
hereto as Exhibit 1, (b) the issuance of shares of common stock (the “Common Stock”) to be issued
upon conversion of the Shares (the “Conversion Shares”), (c) the issuance of warrants to purchase
375,000 shares of Common Stock (the “Warrants”) and (d) the issuance of shares of Common Stock to
be issued upon exercise of the Warrants (the “Warrant Shares”). The Shares, the Conversion Shares,
the Warrants and the Warrant Shares shall be referred to herein as the “Securities.”

2. Agreement to Sell and Purchase the Shares and the Warrants. 

     2.1 Sale of Shares. At the Closing (as defined in Section 3), the Company will sell and issue
to each Purchaser, and each Purchaser will purchase from the Company at a purchase price per Share
equal to $3.94, the number of Shares set forth next to such Purchaser’s name on the Schedule of
Purchasers attached hereto as Exhibit 2.1 (the “Schedule of Purchasers”).

     2.2 Issuance of Warrants. At the Closing (as defined in Section 3), the Company will sell and
issue to each Purchaser, and each Purchaser will purchase from the Company a Warrant in the form
attached hereto at Exhibit 2.2 exercisable into the number of Warrant Shares set forth next to such
Purchaser’s name on the Schedule of Purchasers with a purchase price equal to $0.125 per Warrant
Share.

3. Closing and Delivery. 

     3.1 Closing. The closing of the purchase and sale of the Shares and the Warrants to be sold
pursuant to this Agreement shall be held immediately following the satisfaction of the closing
conditions contained herein, at the offices of Moss &
Barnett, 4800 Wells Fargo Center, Minneapolis, Minnesota, or on such other date and place as
may be agreed to by the Company and the Purchasers. The date of the closing of the purchase and
sale of the Shares and the

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Warrants is referred to herein as the “Closing Date”, and such closing
is referred to as the “Closing.”

     3.2 Delivery of the Shares and the Warrants at the Closing. At the Closing, the Company
shall deliver to each Purchaser (i) a stock certificate registered in the name of such Purchaser,
or in such nominee name(s) as designated by such Purchaser, representing the Shares to be purchased
by such Purchaser at the Closing as set forth in the Schedule of Purchasers and (ii) a Warrant
registered in the name of such Purchaser or in such nominee name(s) as designated by such Purchaser
representing the Warrant Shares issuable to such Purchaser as set forth in the Schedule of
Purchasers.

	4.	 	Representations, Warranties and Covenants of the Company. 

     Except as set forth in the Schedule of Exceptions dated as of even date herewith and
provided to the Purchasers separately from this Agreement, the Company hereby represents and
warrants to, and covenants with, the Purchasers as follows:

     4.1 Organization and Qualification. Each of the Company and each Subsidiary (as defined
below) has been duly incorporated and is a validly existing corporation in good standing under the
laws of the jurisdiction of its incorporation, with requisite corporate power and authority to own
its properties and conduct its business as presently conducted. The Company and each Subsidiary are
duly qualified to do business as foreign corporations in good standing in each jurisdiction in
which their ownership or lease of property or the conduct of their businesses require such
qualification, except where the failure to be so qualified would not have a Material Adverse Effect
on the Company. The Company has furnished representatives of the Purchasers with correct and
complete copies of the charter and by-laws of the Company, both as amended and currently in effect.
Except as set forth in the Schedule of Exceptions, the Company does not presently own, directly or
indirectly, any of the stock or other equity interests in any entity. “Subsidiary” shall mean any
corporation or other entity of which 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 the Company. For the
purposes of this Agreement, a “Material Adverse Effect” means with respect to the Company, any
change or effect that is or reasonably could be materially adverse to the business, properties,
results of operations and condition (financial or other) or anticipated future results of
operations or condition (financial or other) of the Company and the Subsidiaries, or that has or
reasonably could have a material adverse effect on the transactions contemplated by this Agreement.

     4.2 Capitalization. The authorized capital stock of the Company consists of 25,000,000
shares of Common Stock, par value $0.01 per share and 5,000,000 shares of preferred stock, with no
stated par value, of which (a) 7,282,357 shares of Common Stock are issued and outstanding, (b)
2,250,000 shares of the preferred stock are
designated as Series B Preferred Stock, 1,710,060 of which are issued and outstanding, (c)
options to purchase 102,084 shares of Common Stock are outstanding under the Company’s 1991 Long
Term Incentive and Stock Option Plan and no additional shares of Common Stock available for
issuance pursuant to such plan, (d) options to purchase 108,500 shares of Common Stock are
outstanding under the Company’s 2001 Interim Incentive and Stock Option Plan and no additional
shares of Common

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Stock available for issuance pursuant to such plan, (e) options to purchase
352,803 shares of Common Stock are outstanding under the Company’s 2002 Long Term Incentive and
Stock Option Plan and 60,187 shares of Common Stock are available for issuance pursuant to such
plan, (f) 1,019,026 shares of Common Stock have been reserved for issuance upon the exercise of
warrants to purchase Common Stock (including the Warrants), and (g) 1,400,000 shares of the
preferred stock are designated as Series C Preferred Stock, none of which are issued or outstanding
prior to the Closing Date. Other than the Series B or Series C Preferred Stock, there are no other
authorized or designated series of preferred stock. The Series C Preferred Stock has the rights,
preferences and privileges set forth in the Certificate of Designation. All outstanding shares of
the Company have been duly authorized, validly issued, fully paid and are non-assessable and free
of any liens or encumbrances created by the Company. Other than as contemplated by this Agreement
or under the stock plans described in this Section 4.2(c), (d) and (e) and except as described in
this Section 4.2, there are no other options, warrants, calls, rights, commitments, preemptive
rights, rights of first refusal or other rights or agreements to which the Company is a party or by
which it is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to
be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company
or obligating the Company to grant, extend or enter into any such option, warrant, call, right,
commitment or agreement.

     (b) All of the issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued and is fully paid and nonassessable and is owned of record by the
Company, free and clear of any lien, charge, security interest, encumbrance or claim.

     4.3 Authorization of Securities. The Securities have been duly authorized and when (i) the
Shares have been delivered and paid for in accordance with this Agreement and (ii) the Warrant
Shares have been delivered and paid for in accordance with the Warrants, such Shares and Warrant
Shares will have been validly issued, fully paid and non-assessable. None of the Securities are or
will be subject to any preemptive right or any right of refusal.

     4.4 Governmental Consents. No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale of the Shares by the
Company, except for the filing of a Form D with the Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”), and such similar filings as
may be required following the Closing under state securities laws.

     4.5 Due Authorization, Execution and Delivery of Agreement and Voting Agreement. This
Agreement and the Amended and Restated Voting Agreement attached hereto as Exhibit 4.5 (the “Voting
Agreement”) have been duly authorized, executed
and delivered by the Company. All corporate action on the part of the Company and its
directors and officers necessary for the authorization, execution and delivery of this Agreement,
the performance of all the Company’s obligations hereunder and thereunder and for the
authorization, issuance or reservation for issuance, sale and delivery of the Securities has been
taken, except only that the Certificate of Designation, the form of which is attached hereto as
Exhibit 1 which has been duly approved by the Board of Directors of the Company, has not yet been
filed with the Secretary of State of the State of Minnesota and will be so filed prior to the
Closing. No approval by the stockholders of the Company is required for the authorization,
execution and

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delivery of this Agreement, the performance of all the Company’s obligations
hereunder and thereunder and for the authorization, issuance or reservation for issuance, sale and
delivery of the Securities. The Agreement constitutes the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of debtors, (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies, and (iii) the
limitations imposed by applicable federal or state securities laws on the indemnification
provisions contained in this Agreement.

     4.6 No Conflicts. The execution, delivery and performance of this Agreement and the Voting
Agreement, and the issuance and sale of the Securities, will not conflict with, or result in a
breach or violation of (i) any of the terms and provisions of the charter or bylaws of the Company
or any Subsidiary, (ii) any statute, rule, regulation or order of any governmental agency or body,
any court, domestic or foreign, or any self-regulatory organization having jurisdiction over the
Company or any Subsidiary or any of their respective properties, or (iii) any of the terms and
provisions of, or constitute a default (with or without notice or lapse of time) under, or give to
any third party a right of termination, amendment, acceleration or cancellation (with or without
notice or lapse of time) of, any agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary is bound or to which any of the properties of the
Company or any Subsidiary is subject. The Company has full power and authority to authorize, issue
and sell the Securities as contemplated by this Agreement.

     4.7 Title to Assets. The Company and each Subsidiary have good and marketable title to
all real properties and all other properties and assets owned by it that are material to the
operation of the business of the Company or each Subsidiary, in each case free from liens and
defects that would materially affect the value thereof or materially interfere with the use made or
to be made thereof by them; and the Company and each Subsidiary hold all leased real and personal
property that are material to the operation of their respective businesses under valid and
enforceable leases with no exceptions that would materially interfere with the use made or to be
made thereof by them.

     4.8 Permits. The Company and each Subsidiary possess all certificates, authorizations and
permits issued by appropriate governmental agencies or bodies necessary to conduct the business now
operated by them and to own, lease, license and use their respective properties in the manner so
owned, leased, licensed and used, except to the extent that the failure to so possess could not
individually or in the aggregate reasonably be expected to have or result in a Material Adverse
Effect. Neither the Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such
certificate, authorization or permit that, if determined adversely to the Company or the
Subsidiary would individually or in the aggregate have a Material Adverse Effect.

     4.9 Legal Actions. There are no pending legal, governmental or administrative actions, suits
or proceedings against or affecting the Company or any Subsidiary or any of their respective
properties or any director, officer or employee (related to any such person’s services as a
director, officer or employee of the Company or any Subsidiary) that, if determined adversely to
the Company or the Subsidiary would individually or in the aggregate have a Material Adverse
Effect, or could materially and adversely affect the ability of the Company to

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perform its
obligations under this Agreement, or which are otherwise material in the context of the sale of the
Shares and the Warrants and, to the knowledge of the Company’s executive officers, no such actions,
suits or proceedings are threatened or contemplated. Neither the Company nor any Subsidiary has
initiated and neither has any plan to initiate any action, suit or proceeding.

     4.10 Labor. No material labor dispute exists or, to the knowledge of the Company’s executive
officers, is imminent with respect to any of the employees of the Company or any Subsidiary.

     4.11 No Violations. Neither the Company nor any Subsidiary is (i) in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time
could reasonably be expected to result in a default by the Company or the Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in default under or that it
is in violation of, any agreement or instrument to which it is a party or by which it or any of its
properties is bound, (ii) in violation of any order of any court, arbitrator, governmental body or
self-regulatory organization, or (iii) in violation of any statute, rule or regulation of any
governmental authority or self-regulatory organization, including, without limitation, any foreign,
federal, state and local laws relating to taxes, environmental protection, occupational health and
safety, product quality and safety and employment and labor matters, except in each case as would
not, individually or in the aggregate, reasonably be expected to have or result in a Material
Adverse Effect.

     4.12 Insurance. The Company maintains insurance and in such coverage amounts as
is customary in the business in which the Company is engaged. The Company believes that such
insurance is sufficient against such losses and risks and in such amounts as are reasonably
necessary for the business in which the Company is engaged.

     4.13 Company Contracts. Except as filed under the SEC Documents (defined below),
neither the Company nor any Subsidiary is a party to any material contract, as such contracts are
defined in Reg. § 601(a)(10) of Regulation S-B under the Securities Act (each such contract, a
“Company Contract”). To the knowledge of the executive officers of the Company, each Company
Contract is valid, binding and in full force and effect and is enforceable by the Company or the
Subsidiary in accordance with its terms subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws affecting creditors’ rights generally and to
general equitable principles. As of the date hereof, no party to any such Company Contract has
notified the Company or any Subsidiary that it intends to terminate such Company Contract. The
Company and each Subsidiary have
performed, in all respects, all obligations required to be performed by it to date under the
Company Contracts, as amended, and neither the Company nor any Subsidiary is (with or without the
lapse of time or the giving of notice, or both) in breach or default in any respect thereunder and,
to the knowledge of the executive officers of the Company, no other party to any of the Company
Contracts, as of the date hereof, is (with or without the lapse of time or the giving of notice, or
both) in breach or default in any respect thereunder, except in each case to the extent that such
breach or default could not reasonably likely result in a Material Adverse Effect.

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     4.14 SEC Documents. The Company has made available to representatives of the Purchasers all
registration statements, proxy statements and other statements, reports, schedules, forms and other
documents filed by the Company or any affiliate of the Company with the SEC since January 1, 2004,
including copies of all the exhibits referenced therein (the “SEC Documents”). All statements,
reports, schedules, forms and other documents required to have been filed by the Company with the
SEC since January 1, 2004 have been so timely filed. As of their respective dates (or, if amended
or superseded by a filing prior to the date of this Agreement, then on the date of such amendment
or superseding filing): (i) each of the SEC Documents complied in all material respects with the
applicable requirements of the Securities Act or the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), as the case may be, and the rules and regulations thereunder; and (ii) none
of the SEC Documents contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

     4.15 Related Party Transactions. Except as set forth in the SEC Documents, none of the
officers or directors of the Company and, to the knowledge of the executive officers of the
Company, none of the employees of the Company is presently a party to any transaction with the
Company (other than customary transactions involving reasonable amounts for services as employees,
officers and directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such employee or, to the knowledge
of the executive officers of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or partner.

     4.16 Financial Statements. The financial statements included in the SEC Documents
present fairly the financial position of the Company as of the dates shown and its results of
operations and cash flows for the periods shown, and such financial statements have been prepared
in conformity with the generally accepted accounting principles in the United States applied on a
consistent basis (except as may be indicated in the audit report or notes to such financial
statements or, in the case of unaudited statements, as permitted by Form 10-QSB of the SEC, and
except that the unaudited financial statements may not have contained footnotes and were subject to
normal and recurring year-end adjustments which were not, or are not reasonably expected to be,
individually or in the aggregate, material in amount), and complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto at the time of
filing. Except as and to the extent disclosed or reserved against in the financial statements of
the Company and the
notes thereto included in the SEC Documents, neither the Company nor any Subsidiary has any
liability, debt or obligation, whether accrued, absolute, contingent or otherwise, and whether due
or to become due which, individually or in the aggregate, are material to the Company and the
Subsidiaries, taken as a whole. Neither the Company nor any Subsidiary has incurred any
liabilities, debts or obligations of any nature whatsoever which are, individually or in the
aggregate, material to the Company and the Subsidiaries, taken as a whole, other than those
incurred in the ordinary course of its business, other than as disclosed in the SEC Documents.

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     4.17 Receivables. The accounts receivable reflected on the balance sheet of the Company
as of June 30, 2005 represent valid obligations of customers of the Company arising from bona fide
transactions entered into in the ordinary course of business and to the knowledge of the Company,
will be collected in full no later than 90 days after the respective date on which each such
receivable is due (without any counterclaim or set off).

     4.18 Intellectual Property. The Company and each Subsidiary own or possess, or can acquire
on reasonable terms that could not individually or in the aggregate reasonably be expected to have
a Material Adverse Effect, sufficient legal rights to all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable
propriety or confidential information, systems or procedures), trademarks, service marks and trade
names (collectively, “Intellectual Property Rights”) necessary to conduct its business as now
operated by it and as currently proposed to be operated by it. To the knowledge of the executive
officers of the Company, the methods, products, services, works, technologies, systems and
processes employed by the Company to conduct its business do not infringe upon or misappropriate
any Intellectual Property Rights of any person or entity anywhere in the world, except for
Intellectual Property Rights which the Company can acquire on reasonable terms that could not
individually or in the aggregate reasonably be expected to have a Material Adverse Effect. No
claims or written notice (i) challenging the validity, effectiveness or ownership by the Company or
the Subsidiary of any of the Intellectual Property Rights of the Company or the Subsidiary, or (ii)
to the effect that the use, distribution, licensing, sublicensing, sale or any other exercise of
rights in any product, service, work, technology or process as now used or offered or proposed for
use, licensing, sublicensing, sale or other manner of commercial exploitation by the Company or the
Subsidiary infringes or will infringe on any Intellectual Property Rights of any person or entity
have been asserted or, to the knowledge of the executive officers of the Company, are threatened by
any person or entity, nor are there, to the knowledge of the executive officers of the Company, any
valid grounds for any bona fide claim of any such kind except as can be cured by the Company by
procurement of Intellectual Property Rights which the Company can acquire on reasonable terms that
could not individually or in the aggregate reasonably be expected to have a Material Adverse
Effect. There has been no material default (nor does any set of circumstances exist that will cause
such a default) with respect to any license granting Intellectual Property Rights to the Company or
any Subsidiary. No employee or third party is or has been infringing or using without authorization
any Intellectual Property Rights of the Company or any Subsidiary. The Company and each Subsidiary
use and have used, best efforts to maintain the confidentiality of its trade secrets.

     4.19 Nasdaq Compliance. As of the Closing (after taking into account the investment by the
Purchasers), the Company will be in compliance with the continued listing and maintenance
requirements of The Nasdaq Small Cap Market System (“Nasdaq”). The Company has no reason to
believe that it will not in the foreseeable future following the Closing continue to be in
compliance with all such listing and maintenance requirements. The issuance and sale of the
securities hereunder does not contravene the rules and regulations of Nasdaq.

     4.20 Taxes. The Company and each Subsidiary have timely made or filed all federal, state and
foreign income and all other tax returns, reports and declarations required by any jurisdiction to
which it is subject and have timely paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such

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returns, reports and
declarations, except those being contested in good faith, and have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods
to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim. The Company has not executed a waiver with respect to
the statute of limitations relating to the assessment or collection of any foreign, federal, state
or local tax. None of the Company’s or any Subsidiary’s tax returns is presently being audited by
any taxing authority.

     4.21 No Integration or General Solicitation. Neither the Company nor any affiliate (as
defined in Rule 501(b) of Regulation D under the Securities Act) (an “Affiliate”) of the Company
has, directly, or through any agent, (a) sold, offered for sale, solicited any offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sales of the Securities in a manner that would require the registration
under the Securities Act of the Securities; or (b) offered, solicited offers to buy or sold the
Securities in any form of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; and the Company will not engage in any of the
actions described in subsections (a) and (b) of this paragraph.

     4.22 No Registration. Subject to the accuracy of each of the Purchaser’s representations
herein, it is not necessary in connection with the offer, sale and delivery of the Securities to
the several Purchasers in the manner contemplated by this Agreement to register the Securities
under the Securities Act or to qualify the Company’s issuance of the Securities under applicable
state securities laws.

     4.23 No Material Changes. Except as disclosed in the SEC Documents, since September 30,
2004, (i) there has been no event, occurrence or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred
in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed
in filings made with the SEC, (iii) the Company has not altered its method of accounting or the
identity of its
auditors, (iv) the Company has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock option and stock
purchase plans. Except as disclosed in the SEC Documents, since September 30, 2004, no material
off-balance sheet liabilities not required to be reflected in the Company’s financial statements
pursuant to GAAP or required to be disclosed in filings made with the SEC which could individually
or in the aggregate reasonably be expected to have a Material Adverse Effect have been incurred. No
material default exists with respect to or under any obligations of the Company or any Subsidiary
to repay money borrowed (including, without limitation, all notes payable and drafts accepted
representing extensions of credit, all obligations under letters of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments and all obligations upon which
interest charges are customarily paid) and all contractual obligations (whether absolute or
contingent) of such entity to repurchase goods sold

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and distributed or any instrument or agreement
relating thereto and no event or circumstance exists with respect thereto that (with notice or the
lapse of time or both) could give rise to such a default.

     4.24 Accounting Controls. The Company maintains 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 generally accepted accounting
principles 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. Since the date of the most recent
evaluation of such internal accounting controls, there has been no change in internal control over
financial reporting that occurred during the most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting, including any corrective actions with regard to significant deficiencies and
material weaknesses.

     4.25 Form S-3 Qualification. The Company satisfies the requirements for use of Form S-3 for
registration of the resale of the Securities as contemplated herein. There exist no facts or
circumstances that would prohibit or delay the preparation or initial filing of the Registration
Statement.

     4.26 No Anti-Dilution Event. The issuance of the Securities does not constitute an
anti-dilution event for any existing security holders of the Company, pursuant to which such
security holders would be entitled to additional securities or a reduction in the applicable
conversion price or exercise price of any securities due to any issuance proposed to be conducted
hereunder.

     4.27 Registration Rights. The Company has not granted or agreed to grant any person or
entity any rights (including “piggy — back” registration rights) to require the Company to file a
registration statement under the Securities Act with respect to any securities, or to include such
securities with the Securities in any registration statement, except for such as have been
satisfied or waived.

     4.28 Investment Company Act. The Company is not, and upon the issuance and sale of the
Shares and the Warrants as herein contemplated and the application of the net proceeds therefrom
will not be an “investment company” as such term is defined in the Investment Company Act of 1940,
as amended (the “1940 Act”). Furthermore, in the event that the SEC shall inform the Company that
the SEC believes that the Company is an “investment company” as such term is defined in the 1940
Act, the Company shall manage its investments and promptly take such other actions as is reasonably
necessary such that the SEC shall no longer consider the Company to be an “investment company” as
such term is defined in the 1940 Act.

     4.29 Sarbanes-Oxley Act. The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the 1934 Act), which (i) are designed to
ensure that material information relating to the Company, including its

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consolidated subsidiaries,
is made known to the Company’s principal executive officer and its principal financial officer by
others within those entities, particularly during the periods in which the periodic reports
required under the 1934 Act are being prepared; (ii) provide for the periodic evaluation of the
effectiveness of such disclosure controls and procedures as of the end of the period covered by the
Company’s most recent annual or quarterly report filed with the SEC; and (iii) are effective in all
material respects to perform the functions for which they were established. Based on the
evaluation of its disclosure controls and procedures, the Company is not aware of (i) any
significant deficiency in the design or operation of internal controls which could adversely affect
the Company’s ability to record, process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s internal controls. The
Chief Executive Officer and the Chief Financial Officer of the Company have signed, and the Company
has furnished to the SEC, all certifications required by Section 906 and Section 302 of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).; such certifications contain no
qualifications or exceptions to the matters certified therein, except as to knowledge, and have not
been modified or withdrawn; and neither the Company nor any of its officers has received notice
from any governmental entity questioning or challenging the accuracy, completeness, content, form
or manner of filing or submission of such certifications.

     4.30 Audit Committee. The Company’s board of directors has validly appointed an audit
committee whose composition satisfies the requirements of Rule 4350(d)(2) of the Rules of the
National Association of Securities Dealers, Inc. (the “NASD Rules”) and the Company’s board of
directors and/or the audit committee has adopted a charter that satisfies the requirements of Rule
4350(d)(1) of the NASD Rules. The audit committee has reviewed the adequacy of its charter within
the past twelve months. Neither the Company’s board of directors nor the audit committee has been
informed, nor is any director of the Company aware, of (1) any significant deficiencies in the
design or operation of the Company’s internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial data or any material weakness in the
Company’s internal controls; or (2) any fraud, whether or not material, that involves management or
other employees of the Company who have a significant role in the Company’s internal controls.

     4.31 Foreign Corrupt Practices Act. Neither the Company nor any of its Subsidiaries has
violated the Foreign Corrupt Practices Act. Without limiting the foregoing, neither the Company
nor any of its Subsidiaries has, to obtain or retain business, directly or indirectly offered, paid
or promised to pay, or authorized the payment of, any money or other thing of value to: (a) any
person or entity who is an official, officer, agent, employee or representative of any
governmental body or of any existing or prospective customer (whether government owned or
non-government owned); (b) any political party or official thereof; (c) any candidate for political
or political party office; or (d) any other person or entity while knowing or having reason to
believe that all or any portion of such money or thing of value would be offered, given or
promised, directly or indirectly, to any such official, officer, agent, employee, representative,
political party, political party official, candidate or person or entity affiliated with such
customer, political party or official or political office.

     4.32 Loans to Officers and Directors. Since July 30, 2002, the Company has not, directly or
indirectly, including through any subsidiary, extended or maintained credit, or

10

 

arranged for the
extension of credit, or renewed an extension of credit, in the form of a personal loan to or for
any of its directors or executive officers in violation of Section 402 of the Sarbanes-Oxley Act of
2002.

     4.33 Employee Benefits. Except as disclosed in the SEC Documents, a Change of Control (as
defined below) will not (either alone or upon the occurrence of any additional or subsequent
events) constitute an event that will or may result (either alone or in connection with any other
circumstance or event) in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee of the Company or any of its Subsidiaries or any Affiliate of
the Company.

     4.34 Nasdaq Listing. Prior to the Closing Date, the Company shall file with Nasdaq an
application or other document required by Nasdaq for the listing of the Conversion Shares with
Nasdaq and shall provide evidence of such filing to the Purchasers. The Company shall use its best
efforts to obtain the listing, subject to official notice of issuance, of the Conversion Shares on
Nasdaq prior to the Closing Date. So long as the Purchasers beneficially owns any Preferred Stock
or Common Stock, the Company shall maintain the listing of the Common Stock on the Nasdaq Stock
Market or a registered national securities exchange.

     4.35 Qualified Small Business. The Company represents and warrants to Purchasers that the
Company is a “qualified small business” within the meaning of Section 1202(d) of the Internal
Revenue Code of 1986, as amended (the “Code”), as of the date hereof and the Shares should qualify
as “qualified small business stock” as defined in Section 1202(c) of the Code as of the date
hereof. The Company further represents and warrants that, as of the date hereof, it meets the
“active business requirement” of Section 1202(e) of the Code, and it has made no “significant
redemptions” within the meaning of Section 1202(c)(3)(B) of the Code.

     4.36 Broker’s Fee. There are no brokers or finders (and similar agents) entitled to
compensation in connection with the sale of the Shares or the Warrants.

     4.37 Complete Disclosure. All information provided to the Purchasers in connection with the
transactions contemplated hereby, or contained in this Agreement and the SEC Documents with respect
to the business, operations, assets, results of operations and financial condition of the Company,
and the transactions contemplated by this Agreement, are true and complete in all material respects
and do not omit to state any material fact or facts necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

	5.	 	Representations, Warranties and Covenants of the Purchasers. 

     Each Purchaser, severally and not jointly, represents and warrants to and covenants with
the Company that:

          (a) Purchaser, taking into account the personnel and resources it can practically bring
to bear on the purchase of the Securities contemplated hereby, either alone or together with the
advice of such Purchaser’s purchaser representative, is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to

11

 

investments in shares
presenting an investment decision like that involved in the purchase of the Securities, including
investments in securities issued by the Company, and has requested, received, reviewed and
considered, either alone or with such Purchaser’s purchaser representative, all information
Purchaser deems relevant in making an informed decision to purchase the Securities.

          (b) Purchaser is acquiring the Securities being acquired by Purchaser pursuant to this
Agreement in the ordinary course of its business and for its own account for investment only and
with no present intention of distributing any of such Securities or any arrangement or
understanding with any other persons regarding the distribution of such Securities, except in
compliance with Section 5(c).

          (c) Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of
the Securities purchased hereunder except in compliance with the Securities Act of 1933, as amended
(the “Securities Act”), applicable blue sky laws, and the rules and regulations promulgated
thereunder.

          (d) Purchaser is an “accredited investor” within the meaning of Rule 501 of Regulation D
promulgated under the Securities Act.

          (e) Purchaser has full right, power, authority and capacity to enter into this Agreement and
to consummate the transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement. Upon the execution and delivery of this
Agreement by Purchaser, this Agreement shall constitute a valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except (i) as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors’ and contracting parties’ rights generally, (ii) as limited by
equitable principles generally, including any specific performance, and (iii) as to those
provisions of Section 9.5 relating to indemnity or contribution.

6. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements, representations and
warranties made by the Company and each Purchaser herein and in the certificates for the Shares and
the Warrants delivered pursuant hereto shall survive the execution of this Agreement, the delivery
to the Purchasers of the Shares and the Warrants being purchased and the payment therefor for a
period of two (2) years following the Closing Date.

7. Conditions to Company’s Obligations at the Closing. The Company’s obligation to
complete the sale and issuance of the Shares and the Warrants and deliver the Shares and the
Warrants to each Purchaser, individually, as set forth in the Schedule of Purchasers, at the
Closing shall be subject to the following conditions to the extent not waived by the Company:

     7.1 Receipt of Payment. The Company shall have received payment, by check or wire transfer
of immediately available funds, in the full amount of the purchase price for the number of Shares
being purchased by such Purchaser at the Closing as set forth in the Schedule of Purchasers.

12

 

     7.2 Representations and Warranties Correct. The representations and warranties made by such
Purchaser in Section 5 hereof shall be true and correct in all material respects when made, and
shall be true and correct in all material respects on the date of the Closing.

     7.3 Covenants Performed. All covenants, agreements and conditions contained herein to be
performed by such Purchaser on or prior to the Closing shall have been performed or complied with
in all material respects.

8. Conditions to Purchasers’ Obligations at the Closing. Each Purchaser’s obligation to
accept delivery of the Shares and the Warrants and to pay for the Shares and the Warrants at the
Closing shall be subject to the following conditions to the extent not waived by such Purchaser:

     8.1 Representations and Warranties Correct. The representations and warranties made by the
Company in Section 4 hereof shall be true and correct when made and shall be true and correct on
the Closing Date and as of the date of this Agreement.

     8.2 Covenants Performed. All covenants, agreements and conditions contained herein to be
performed by the Company shall have been performed or complied with in all material respects.

     8.3 Reservation of Conversion Shares and Warrant Shares. The Conversion Shares and Warrant
Shares shall have been duly authorized and reserved for issuance upon such conversion or exercise.

     8.4 Voting Agreement. The Voting Agreement substantially in the form attached hereto as
Exhibit 4.5 shall have been executed and delivered by the parties thereto.

     8.5 Intentionally Omitted.

     8.6 Legal Opinion. Each Purchaser must have received a customary opinion, dated the Closing
Date, from Moss-Barnett, counsel for the Company, substantially in the form attached hereto as
Exhibit 8.6.

     8.7 Intentionally Omitted

     8.8 Officer’s Certificate. Each Purchaser must have received a certificate, dated the
Closing Date, of an officer of the Company in which such officer shall state that: the
representations and warranties of the Company in Section 4 of this Agreement are correct as of such
date; the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date; and there has been no event
constituting a Material Adverse Effect since the date of this Agreement.

     8.9 Secretary’s Certificate. Each Purchaser must have received a certificate, dated the
Closing Date, of the Secretary of the Company in customary form having attached thereto (i)

13

 

the
bylaws of the Company, (ii) the articles of incorporation of the Company, (iii) the resolutions of
the Board of Directors of the Company and any committee of the Board of Directors approving the
transactions contemplated by this Agreement and (iv) good standing certificates (including tax good
standing) with respect to the Company from the applicable authority(ies) in Minnesota and any other
jurisdiction in which the Company is qualified to do business, dated as of the Closing Date.

     8.10 Transfer Agent Instructions. Prior to the Closing, the Company will (i) execute and
deliver to the Company’s Transfer Agent the Transfer Agent Instruction in substantially the form of
Exhibit 8.10 to this Agreement and pursuant thereto irrevocably instruct the Transfer Agent to
issue certificates for the Common Stock from time to time upon conversion of the Shares or upon
exercise of the Warrants in such amounts as specified from time to time to the Transfer Agent in
the conversion notices surrendered in connection with such conversions, (ii) appoint the Transfer
Agent the conversion agent for the Shares and authorize the Transfer Agent to issue Common Stock
upon exercise of the Warrants.

     8.11 Certificate of Designation. Each Purchaser shall have received satisfactory
confirmation of the filing with the Secretary of State of the State of Minnesota of the Certificate
of Designation.

     8.12 No Material Adverse Effect. No event that would constitute a Material Adverse Effect
to the Company shall have occurred subsequent to the date of the filing of the Company’s last
Quarterly Report on Form 10-QSB.

     8.13 Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to each Purchaser and Cooley Godward LLP.

     9. Registration of the Conversion Shares and the Warrant Shares; Compliance with the
Securities Act. 

     9.1 Registration Procedures. The Company is obligated to do the following:

          (a) As soon as is reasonably practicable after the Closing Date, but in no event later than
sixty (60) calendar days after the Closing Date (the “Filing Deadline”), the Company shall prepare
and file with the SEC one or more registration statements (collectively, the “Registration
Statement”) on Form S-3 (unless the Company is not then eligible to register for resale on Form
S-3, in which case on another appropriate form) to register with the SEC the resale by the
Purchasers, from time to time, of the Conversion Shares and the Warrant Shares
and a reasonable estimate of any Common Stock to be issued as (or issuable upon the conversion
or exercise of any Preferred Stock, warrant, right or other security that is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of, the Conversion
Shares or the Warrant Shares (collectively, the “Registrable Securities”) through Nasdaq or the
facilities of any national securities exchange on which the Company’s Common Stock is then traded,
or in privately negotiated transactions. The Company shall use its best efforts to cause the
Registration Statement to be declared effective as soon thereafter as possible, but in any event
prior to one hundred eighty (180) days after the Closing Date (the “Effectiveness Deadline”).

14

 

          (b) If a Registration Statement covering all of the Registrable Securities has not been
declared effective by the SEC on or prior to the Effectiveness Deadline, then the Company shall
issue an additional Warrant to each Purchaser to purchase shares of Common Stock representing two
and one-half percent (2 1/2%) of the number of Shares purchased by such Purchaser at the Closing for
each aggregated thirty day period (or portion thereof) for which such Registration Statement has
not been declared effective; provided, however, that the aggregate number of Warrant Shares
issuable upon exercise of additional Warrants issued to a Purchaser under this subsection (b) shall
not in the aggregate exceed ten percent (10%) of the number of Shares purchased by such Purchaser
at the Closing.

          (c) Not less than five (5) trading days prior to the filing of a Registration Statement or any
prospectus contained in a Registration Statement (a “Prospectus”) or any amendment or supplement
thereto, the Company shall, (i) furnish to the Purchasers for their review copies of all such
documents proposed to be filed (including documents incorporated or deemed incorporated by
reference), and (ii) notify each Purchaser in writing of the information
the Company requires from each such Purchaser to be included in such Registration Statement.
The Company will cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as the Purchasers shall deem reasonably necessary as soon
as practicable after having received such inquiries.

          (d) The Company shall (i) prepare and file with the SEC (x) such amendments and supplements to
each Registration Statement and the Prospectus used in connection therewith, and (y) such other
filings required by the SEC, and (ii) take such other actions, in each case as may be necessary to
keep the Registration Statement continuously effective and so that such Registration Statement will
not contain an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and so that such
Prospectus will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, until the earlier of (A) the sixth
(6th) anniversary of the date of execution of this Agreement, and (B) such time as legal
counsel to the Company delivers a legal opinion to the Purchasers, the Company and the Company’s
transfer agent stating that all Registrable Securities then held by the Purchasers can be sold
without compliance with the registration requirements of the Securities Act pursuant to Rule 144(k)
under the Securities Act (the “Effectiveness Period”). The Company shall not, during the
Effectiveness Period, voluntarily take any action that would result in the Purchasers not being
able to offer and sell Registrable Securities during that period, unless such action is taken by
the Company in good faith in compliance with Section 9.2(f) below.

          (e) (i) Furnish to the Purchasers with respect to the Registrable Securities registered under
the Registration Statement such number of copies of the Registration Statement (including
pre-effective and post-effective amendments), Prospectuses (including supplemental prospectuses)
and preliminary versions of the Prospectus filed with the SEC (“Preliminary Prospectuses”) in
conformity with the requirements of the Securities Act and such other documents as the Purchasers
may reasonably request, to facilitate the public sale or other disposition of all or any of the
Registrable Securities by the Purchasers; and (ii) upon request, inform each Purchaser who so
requests that the Company has complied with its obligations in Section 9.1(e)(i) (or that, if the
Company has filed a post-effective amendment to the

15

 

Registration Statement which has not yet been
declared effective, the Company will notify the Purchaser to that effect, will use its reasonable
efforts to secure the effectiveness of such post-effective amendment as promptly as reasonably
possible and will promptly notify the Purchaser pursuant to Section 9.1(e)(i) hereof when the
amendment has become effective).

          (f) Notify the Purchasers as promptly as reasonably possible and (if requested by any such
Person) confirm such notice in writing no later than one trading day following the day (i) (A) when
the SEC notifies the Company whether there will be a review of a Registration Statement and
whenever the SEC comments in writing on such Registration Statement (the Company shall provide true
and complete copies thereof and all written responses thereto to each of the Purchasers); and (B)
with respect to a Registration Statement or any posteffective amendment, when the same has become
effective; (ii) of any request by the SEC for amendments or supplements to a Registration Statement
or Prospectus or for additional information; (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any proceedings
for that purpose; (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for
such purpose; and (v) of the occurrence of any event or passage of time that makes the financial
statements included in a Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that requires any revisions to
such Registration Statement, Prospectus or other documents so that, in the case of a Registration
Statement, such Registration Statement will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, and so that such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading.

          (g) File documents required of the Company for normal blue sky clearance in states reasonably
specified in writing by the Purchasers prior to the effectiveness of the Registration Statement;
provided, however, that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or has not so consented.

          (h) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i)
any order suspending the effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption therefrom) of any of the Registrable Securities
for sale in any jurisdiction, at the earliest practicable moment.

          (i) Cooperate with the Purchasers to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to any transferee pursuant to any
Registration Statement free of any restrictive legends and in such denominations and registered in
such names as the Purchasers may reasonably request.

16

 

          (j) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of
such offering. Each Purchaser participating in such underwriting shall also enter into and perform
its obligations under such an agreement.

          (k) In the event of any underwritten public offering, use its best efforts to furnish, on the
date that such Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering addressed to the
underwriters.

          (l) Cause all such Registrable Securities registered pursuant hereto to be listed on Nasdaq,
if the Common Stock is then listed on Nasdaq, and each other securities exchange on which similar
securities issued by the Company are then listed.

          (m) The Company understands that each of the Purchasers disclaims being an underwriter, but
any Purchasers being deemed an underwriter by the SEC shall not relieve the Company of any
obligations it has hereunder.

     9.2 Transfer of Shares After Registration; Suspension; Damages.

          (a) Each Purchaser, severally and not jointly, agrees (i) that it will not sell, offer to
sell, solicit offers to buy, dispose of, loan, pledge or grant any right with respect to the
Registrable Securities or otherwise take an action that would constitute a sale within the meaning
of the Securities Act, other than transactions exempt from the registration requirements of the
Securities Act, except as contemplated in the Registration Statement referred to in Section 9.1 and
as described below, (ii) that it shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the Registrable Securities
of a particular Purchaser that such Purchaser shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method of disposition of
the Registrable Securities held by it as shall be required to effect the registration of such
Registrable Securities and as requested by the Company, (iii) that it shall execute such documents
in connection with such registration, that are customary for resale registration statements, as the
Company may reasonably request, (iv) to cooperate with the Company as
reasonably requested by the Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Purchaser has notified the Company in writing of such
Purchasers election to exclude all of such Purchasers Registrable Securities from such Registration
Statement and (v) that it will promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding the Purchaser or its plan of distribution.

          (b) Subject to paragraph (c) below, in the event: (i) of any request by the SEC or any other
federal or state governmental authority during the period of effectiveness of the

17

 

Registration
Statement for amendments or supplements to a Registration Statement or related Prospectus or for
additional information; (ii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption from qualification of
any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding
for such purpose; or (iv) of any event or circumstance which necessitates the making of any changes
in the Registration Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading, and that in the
case of the Prospectus, it will not contain any untrue statement of a material fact or any omission
to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made,
not misleading; then the Company shall promptly deliver a certificate in writing to each
Purchaser (a “Suspension Notice”) to the effect of the foregoing and, upon receipt of such
Suspension Notice, the Purchaser will refrain from selling any Registrable Securities pursuant to
the Registration Statement (a “Suspension”) until the Purchasers receipt of copies of a
supplemented or amended Prospectus prepared and filed by the Company, or until it is advised in
writing by the Company that the current Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated by reference in any
such Prospectus.

          (c) In the event of any Suspension, the Company shall cause the use of the Prospectus so
suspended to be resumed as soon as practicable but in any event within thirty (30) days after
delivery of the Suspension Notice to Purchasers; provided, however, that Purchasers shall not be
prohibited from selling Registrable Securities under the Registration Statement as a result of
Suspensions on more than three occasions of not more than thirty (30) days each and not more than
ninety (90) days in the aggregate in any twelve month period. Notwithstanding the foregoing, if
the Company ceases to be eligible to register the Registrable Securities on Form S-3 and resolution
of any Suspension requires the Company to file a post-effective amendment on Form S-1, (i) the
Company will use its best efforts to cause the use of the Prospectus so suspended to be resumed as
soon as reasonably practicable but in any event within ninety (90) days after delivery of a
Suspension Notice to Purchasers, and (ii) the Purchasers shall not be prohibited from selling
Registrable Securities under the amended Registration Statement on Form S-1 as a result of
Suspensions on or after the date that the Company ceases to be eligible to register the Registrable
Securities on Form S-3 on more than three occasions of not more than thirty (30) days each and not
more than ninety (90) days in the aggregate in any twelve month
period. In addition to and without limiting any other remedies (including, without
limitation, at law or at equity) available to the Purchaser, the Purchaser shall be entitled to
specific performance in the event that the Company fails to comply with the provisions of this
Section 9.2(c).

          (d) Provided that a Suspension in accordance with paragraphs (b) and (c) of this Section 9.2
is not then in effect, a Purchaser may sell Registrable Securities under the Registration
Statement, provided that it arranges for delivery of a current Prospectus to the transferee of such
Registrable Securities. Upon receipt of a request therefor, the Company will
provide an adequate
number of current Prospectuses to the Purchaser and to any other parties requiring such
Prospectuses.

18

 

          (e) If a Registration Statement ceases to be effective as to, or ceases to be available to the
Purchasers with respect to, all Registrable Securities pursuant to subsections (b) or (c) of
Section 9.2 for any reason prior to the expiration of the Effectiveness Period (any such event, a
“Registration Default”), then the Company shall issue additional Warrants to each Purchaser to
purchase shares of Common Stock representing two and one-half percent (2 1/2%) of the number of
Shares purchased by each such Purchaser at the Closing for each aggregated thirty day period (or
portion thereof) for which a Registration Default had continued; provided however, that the
aggregate number of Warrant Shares issuable upon exercise of Warrants issued to a Purchaser under
this subsection (e) shall not in the aggregate exceed ten percent (10%) of the number of Shares
purchased by such Purchaser at the Closing.

     9.3 Expenses of Registration. Except as specifically provided herein, all expenses incurred
by the Company in complying with Section 9 hereof, including, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, reasonable fees and expenses
of one counsel to the Purchasers (which shall be in addition to any fees pursuant to Section 16.8
but which shall not exceed $40,000), blue sky fees and expenses, fees and the expense of any
special audits incident to or required by any such registration (but excluding the compensation of
regular employees of the Company which shall be paid in any event by the Company) (collectively,
the “Registration Expenses”) shall be borne by the Company. All underwriting discounts and selling
commissions applicable to a sale incurred in connection with any registrations hereunder shall be
borne by the holders of the securities so registered pro rata on the basis of the number of shares
so sold.

     9.4 Delay of Registration; Furnishing Information. The Purchasers shall furnish to the
Company such information regarding themselves, the Registrable Securities held by them and the
intended method of disposition of such securities as shall be required to effect the registration
of their Registrable Securities. Furthermore, each Purchaser, severally and not jointly, agrees to
promptly notify the Company of any changes in the information set forth in a registration statement
regarding such Purchaser or its plan of distribution set forth in such registration statement.

     9.5 Indemnification. In the event any Registrable Securities are included in a registration
statement under this Section 9.

          (a) The Company will indemnify and hold harmless each Purchaser, the partners, officers and
directors of each Purchaser, any underwriter (as defined in the Securities Act) for such Purchaser
and each person, if any, who controls such Purchaser or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations (collectively a
“Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in
a Registration Statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii)

19

 

the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the statements therein
not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law in connection with the offering
covered by such Registration Statement; and the Company will pay as incurred to each such
Purchaser, partner, officer, director, underwriter or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity agreement contained in
this Section 9.5 shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, unless such settlement (x) includes an unconditional
release of the Company from all liability on any claims that are the subject matter of such action,
and (y) does not include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of the Company; provided,
further, that the Company shall not be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon a Violation which
(i) occurs in reliance upon and in conformity with written information furnished expressly for
inclusion in such Registration Statement, prospectus, amendment or supplement by such Purchaser,
partner, officer, director, underwriter or controlling person of such Purchaser or (ii) based upon
a claim that a Preliminary Prospectus contained an untrue statement or alleged untrue statement of
a material fact or omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, if such person was not
sent or given a copy of the Prospectus (or the Prospectus as amended or supplemented) at or prior
to the written confirmation of the sale of such Registrable Securities to such person and the
untrue statement contained in or omission from such Preliminary Prospectus was corrected in the
final Prospectus (or the Prospectus as amended or supplemented) unless such failure is the result
of noncompliance by the Company of Section 9.1(b) or (e) hereof; provided, further, that this
indemnification agreement will be in addition to any liability which the Company may otherwise have
to the Purchasers.

          (b) Each Purchaser will, if Registrable Securities held by such Purchaser are included in the
securities as to which such Registration Statement, prospectus, amendment or supplement is being
filed, severally and not jointly, indemnify and hold harmless the Company, each of its directors,
its officers and each person, if any, who controls the Company within the meaning of the Securities
Act or Exchange Act, any underwriter and any other Purchaser selling securities under such
registration statement or any of such other Purchaser’s partners, directors or officers or any
person who controls such Purchaser, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director, officer, controlling
person, underwriter or other such Purchaser, or partner, director, officer or controlling person of
such other Purchaser may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of
or are based upon any Violation, in each case to the extent (and only to the extent) that such
Violation occurs (i) in reliance upon and in conformity with written information furnished by such
Purchaser specifically for use in connection with such Registration Statement, prospectus,
amendment or supplement or (ii) as a result of such Purchaser’s failure to deliver a Prospectus or
Prospectus supplement as contemplated by the Securities Act prior to the pertinent sale of shares
by such Purchaser; and each such Purchaser will pay as incurred any legal or other

20

 

expenses
reasonably incurred by the Company or any such director, officer, controlling person, underwriter
or other person registering shares under such registration, or partner, officer, director or
controlling person of such other person registering shares under such Registration Statement in
connection with investigating or defending any such loss, claim, damage, liability or action if it
is judicially determined that there was such a Violation; provided, however, that the indemnity
agreement contained in this Section 9.5 shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without the consent of the
Purchaser, which consent shall not be unreasonably withheld, unless such settlement (x) includes an
unconditional release of such Purchaser from all liability on any claims that are the subject
matter of such action, and (y) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of such Purchaser; provided, further, that in no
event shall any indemnity or contribution under this Section 9.5 exceed in the aggregate the dollar
amount of the net proceeds to be received by such Purchaser from the sale of such Purchasers
Registrable Securities pursuant to the Registration Statement.

          (c) Promptly after receipt by an indemnified party under this Section 9.5 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 9.5,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel reasonably satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to the indemnified party
under this Section 9.5, unless and to the extent that such failure is materially prejudicial to the
indemnifying party’s ability to defend such action, but the omission so to deliver written notice
to the indemnifying party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 9.5.

          (d) If the indemnification provided for in this Section 9.5 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages
or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law contribute to
the amount paid or payable by such indemnified party as a result of such loss, claim, damage
or liability (i) in such proportion as is appropriate to reflect the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on the other from the
sale of the Registrable Securities pursuant to the Registration Statement, or (ii) if such
allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the Violation(s) that resulted
in such loss, claim, damage or liability, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall be determined by a
court of law by reference to, among other things, whether the untrue or alleged untrue statement

21

 

of
a material fact or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission; provided, that in
no event shall any indemnification or contribution by a Purchaser under this Section 9.5 exceed in
the aggregate the dollar amount of the net proceeds to be received by such Purchaser from the sale
of such Purchasers Registrable Securities pursuant to the Registration Statement.

          (e) The obligations of the Company and the Purchasers under this Section 9.5 shall survive
completion of any offering of Registrable Securities in a Registration Statement and the
termination of this Agreement.

     9.6 Agreement to Furnish Information.

          (a) In connection with an underwritten registration in which such Purchaser is participating,
each Purchaser agrees to execute and deliver such other agreements as may be reasonably requested
by the Company or the underwriter. In addition, if requested by the Company or the representative
of the underwriters of Common Stock (or other securities) of the Company, each Purchaser shall
provide such information related to such Purchaser as may be required by the Company or such
representative in connection with the completion of any public offering of the Companys securities
pursuant to a registration statement filed under the Securities Act.

     9.7 Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 9 may be assigned (but only with the related
obligations) by a Purchaser, provided (i) each transfer to each transferee or designee involves
either (X) all Registrable Securities held by such Purchaser, (Y) not less than twenty-five
thousand (25,000) shares of Preferred Stock, or (Z) an affiliate or a current or former partner or
member of such Purchaser or any affiliate, (ii) the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such transferee or assignee,
(iii) such transferee or assignee agrees in writing to assume the obligations of this Section 9 and
(iv) such assignment shall be effective only if immediately following such transfer the further
disposition of such shares by the transferee or assignee is restricted under the Securities Act
(for purposes of this statement, if the transferee, together with all affiliated persons is able to
sell all of the Restricted Securities held by such transferee pursuant to Rule 144(k) then further
disposition will not be deemed to be restricted under the Securities Act).

     9.8 Rule 144 Reporting. With a view to making available to the Purchasers the benefits of
certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to
the public without registration, the Company agrees to use its best efforts to:

          (a) Make and keep public information available, as those terms are understood and defined in
SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act;

          (b) Keep the Registration Statement effective at all times;

          (c) File with the SEC, in a timely manner, all reports and other documents required of the
Company under the Exchange Act; and

22

 

          (d) So long as a Purchaser owns any Registrable Securities, furnish to such Purchaser
forthwith upon request: a written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it
has become subject to such reporting requirements); a copy of the most recent annual or quarterly
report of the Company; and such other reports and documents as a Purchaser may reasonably request
in availing itself of any rule or regulation of the SEC allowing it to sell any such securities
without registration.

     9.9 S-3 Eligibility. The Company will use its best efforts to meet the requirements for the
use of Form S-3 for registration of the resale by the Purchasers of the Registrable Securities. The
Company will use its best efforts to file all reports required to be filed by the Company with the
SEC in a timely manner and take all other necessary action so as to maintain such eligibility for
the use of Form S-3.

     9.10 Termination of Registration Rights. Subject to the rights of transferees under Section
9.7 hereof, the Company’s obligations pursuant to this Section 9 shall terminate with respect to
each Purchaser severally upon the earlier of (A) the date that such Purchaser has completed the
distribution related to such Purchaser’s Registrable Securities, (B) the sixth (6th)
anniversary of the date of execution of this Agreement, and (C) such time as legal counsel to the
Company delivers a legal opinion to the Purchasers stating that all Registrable Securities then
held by the Purchasers can be sold without compliance with the registration requirements of the
Securities Act pursuant to Rule 144(k) under the Securities Act (but only for so long as the shares
may be so sold). Following a termination of the Company’s obligations pursuant to the preceding
sentence with respect to a Purchaser, any Securities held by such Purchaser shall not be deemed to
be Registrable Securities thereafter, and the obligations of such Purchaser pursuant to this
Section 9 shall also terminate.

     9.11 Amendment of Registration Rights. Provisions of this Section 9 may be amended and the
observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and Purchasers who
then hold not less than a majority of the Registrable Securities. Any amendment or waiver effected
in
accordance with this Section 9.11 shall be binding upon each Purchaser and the Company. No
such amendment shall be effective to the extent that it applies to less than all of the holders of
the Registrable Securities.

     9.12 Legends. Each certificate representing Shares shall (unless such Shares are then
eligible for transfer pursuant to Rule 144(k) under the Securities Act or as otherwise permitted
under applicable law or the provisions of the Agreement) be stamped or otherwise imprinted with a
legend substantially similar to the following (in addition to any legend required under applicable
state securities laws or as provided elsewhere in this Agreement):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,
IN THE OPINION OF COUNSEL OR BASED ON OTHER WRITTEN EVIDENCE IN THE FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE

23

 

SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

Nothing in this Section 9.12 or elsewhere in this Agreement shall be deemed to restrict the ability
of the holder of any Securities to transfer any such Securities to an affiliate, partner or former
partner of such
holder in compliance with the Securities Act, nor shall any legal opinion be required in connection
therewith.

     10. Right of First Refusal.

     10.1 Subsequent Offerings. Each Purchaser shall have a right of first refusal to purchase its
pro rata share of all Equity Securities, as defined below, that the Company may, from time to time,
propose to sell and issue after the date of this Agreement, other than the Equity Securities
excluded by Section 10.4 hereof. Each Purchaser’s pro rata share is equal to the ratio of (a) the
number of shares of the Company’s Common Stock (including all shares of Common Stock issuable upon
conversion of the Preferred Stock or issuable or upon the exercise of any outstanding warrants or
options) which such Purchaser is deemed to be a holder immediately prior to the issuance of such
Equity Securities to (b) the total number of shares of the Company’s outstanding Common Stock
(including all shares of Common Stock issuable upon conversion of the Preferred Stock or issuable
or upon the exercise of any outstanding warrants or options) immediately prior to the issuance of
the Equity Securities. The term “Equity Securities” shall mean (i) any Common Stock, Preferred
Stock or other security of the Company, (ii) any security convertible into or exercisable or
exchangeable for, with or without consideration, any Common Stock, Preferred Stock or other
security (including any option to purchase such a convertible security), (iii) any security
carrying any warrant or right to subscribe to or purchase any Common Stock, Preferred Stock or
other security or (iv) any such warrant or right.

     10.2 Exercise of Rights. If the Company proposes to issue any Equity Securities in a public
offering or a private placement, the
Company shall give each Purchaser written notice of its intention, describing the Equity
Securities, the price and the terms and conditions upon which the Company proposes to issue the
same. Each Purchaser shall have twenty (20) days from the giving of such notice to agree to
purchase its pro rata share of the Equity Securities for the price and upon the terms and
conditions specified in the notice by giving written notice to the Company and stating therein the
quantity of Equity Securities to be purchased. Such exercise of rights may be made contingent upon
a minimum number of shares being purchased in such transaction.

     10.3 Transfer of Rights of First Refusal. The rights of first refusal of each Purchaser under
this Section 10 may be transferred to the same parties, subject to the same restrictions as any
transfer of registration rights pursuant to Section 9.7.

     10.4 Excluded Securities. The rights of first refusal established by this Section 10 shall
have no application to any of the following Equity Securities:

          (a) shares of Common Stock and/or options, warrants or other Common Stock purchase rights and
the Common Stock issued pursuant to such options, warrants or other rights issued or to be issued
after the date of execution of this Agreement to employees, officers or

24

 

directors of, or
consultants or advisors to the Company or any subsidiary, pursuant to stock
purchase or stock option plans or other arrangements that are approved by the Board of
Directors;

          (b) stock issued or issuable pursuant to any rights or agreements, options, warrants or
convertible securities outstanding as of the date of this Agreement;

          (c) any Equity Securities issued for consideration other than cash pursuant to a merger,
consolidation, acquisition or similar business combination;

          (d) any Equity Securities issued in connection with any stock split, stock dividend or
recapitalization by the Company; and

          (e) Any Equity Securities issued by the Company pursuant to the terms of this Agreement.

     10.5 Termination of Rights of First Refusal. The rights of first refusal of the Purchasers
under this Section 10 shall terminate on the date the Purchasers and their affiliates hold an
aggregate number of number of shares of Series B Preferred Stock, Series C Preferred Stock and/or
Common Stock of the Company that are less than twenty-five percent (25%) of the aggregate number of
shares of Series B Preferred Stock, Series C Preferred Stock and Common Stock held by the
Purchasers as of immediately following the Closing (in each such case calculated on an as-converted
to Common Stock basis).

     11. Special Voting Rights

     11.1 Special Voting Rights. For so long as the Purchasers and their affiliates continue to
hold an aggregate number of shares of Series B Preferred Stock, Series C Preferred Stock and/or
Common Stock of the Company equal to or greater than thirty percent (30%) of the aggregate number
of shares of Series B Preferred Stock, Series C Preferred Stock and/or Common Stock of the Company
held by the Purchasers as of immediately following the Closing (in each such case calculated on an
as-converted to Common Stock basis) (the “Purchaser Shares”), the Company shall not, without first
obtaining the approval of holders of a majority in interest of the Purchaser Shares:

          (a) enter into a transaction with an affiliated or interested party except upon terms not less
favorable to the Company than it could obtain in a comparable arm’s length transaction with a
unaffiliated or disinterested third party;

          (b) create (by new authorization, reclassification, recapitalization, designation or
otherwise) or issue any class or series of stock or any other securities convertible into equity
securities of the Company having any right, preference or privilege senior to or on parity with the
Series B Preferred Stock with respect to voting, dividends, redemption or liquidation preference;

          (c) alter or change the rights, preferences or privileges of the shares of Series C Preferred
Stock (whether by merger, recapitalization or otherwise) so as to affect adversely such shares, or
increase the authorized number of shares of the Series C Preferred Stock;

25

 

          (d) enter into any bankruptcy filing, liquidation, assignment for the benefit of creditors or
similar event of the Company or any significant subsidiary;

          (e) make any redemption, repurchase, payment or declaration of any dividend or distribution on
any shares of capital stock of the Company other than the Series C Preferred Stock; or

          (f) issue or sell, or is deemed to have issued or sold, Common Stock for an Effective Price
(as defined below) less than the then current Fair Market Value (as defined below) of the Company’s
Common Stock.

               (i) For the purposes of this section (f), the “Fair Market Value” of the Company’s Common
Stock shall mean:

                    (1) If the Company’s Common Stock is traded on a securities exchange (which shall include the
Nasdaq Stock Market), the value shall be deemed to be the average of the closing prices of the
Common Stock on such exchange over the thirty (30) day period ending on the date prior to the
closing of the sale and issuance of the shares of Common Stock;

                    (2) If Corporation’s Common Stock is traded over-the-counter, the value shall be deemed to be
the average of the closing bid or sale prices (whichever are applicable) over the thirty (30) day
period ending on the date prior to the closing of the sale and issuance of the Equity Securities;
and

                    (3) If there is no public market for the Company’s Common Stock, the value shall be the fair
market value thereof, as determined in good faith by the Board of Directors of the Company.

               (ii) For the purposes of this section (f), if the Company issues or sells (x) Preferred Stock
or other stock, options, warrants, purchase rights or other securities convertible into shares of
Common Stock (such convertible stock or securities being herein referred to as “Convertible
Securities”) or (y) rights or options for the purchase of Common Stock or Convertible Securities
and if the Effective Price (as defined below) of such shares of Common Stock is less than the
then-current Fair Market Value, in each case the Company shall be deemed to have issued at the time
of the issuance of such rights or options or Convertible Securities the maximum number of shares of
Common Stock issuable upon exercise or conversion thereof and to have received as consideration for
the issuance of such shares an amount equal to the total amount of the consideration, if any,
received by the Company for the issuance of such rights or options or Convertible Securities.

               (iii) For the purposes of this paragraph (f) the “Effective Price” of the Common Stock shall
mean the quotient determined by dividing the total number of shares of Common Stock issued or sold,
or deemed to have been issued or sold by the Company under this
paragraph (f), into the Aggregate Consideration received, or deemed to have been received by
the Company for such issue under this section, for such shares of Common Stock. In the event that
the number of shares of Common Stock or the Effective Price cannot be ascertained at the time of
issuance, such shares of Common Stock shall be deemed to have an Effective Price

26

 

below the
then-current Fair Market Value. The “Aggregate Consideration” received by the Company for any
issue or sale of securities shall be defined as: (A) to the extent it consists of cash, be computed
at the gross amount of cash received by the Company before deduction of any underwriting or similar
commissions, compensation or concessions paid or allowed by the Company in connection with such
issue or sale and without deduction of any expenses payable by the Company, (B) to the extent it
consists of property other than cash, be computed at the fair value of that property as determined
in good faith by the Board, and (C) if shares of Common Stock, Convertible Securities (as defined
below) or rights or options to purchase either shares of Common Stock or Convertible Securities are
issued or sold together with other stock or securities or other assets of the Company for a
consideration which covers both, be computed as the portion of the consideration so received that
may be reasonably determined in good faith by the Board to be allocable to such shares of Common
Stock, Convertible Securities or rights or options.

               (iv) The provisions of section (f) shall not apply to issuances of:

                    v. shares of Common Stock issued upon conversion of the Series B Preferred Stock or Series C
Preferred Stock or exercise of the Warrants issued in connection with the original issuance of
Series B Preferred Stock and Series C Preferred Stock;

                    vi. shares of Common Stock or Convertible Securities issued to employees, officers or
directors of, or consultants or advisors to the Company or any subsidiary pursuant to stock
purchase or stock option plans or other arrangements that are approved by the Board provided that,
(i) such options were granted with an exercise price equal
to or greater than the then-current fair market value (as “fair market value” is defined in
the relevant plan) or (ii) such shares were issued pursuant to a IRC 423 plan with an exercise
price equal to or greater than 85% of the then-current fair market value (as such “fair market
value” is defined in the relevant plan);

                    vii. shares of Common Stock issued pursuant to the exercise of Convertible Securities
outstanding as of the date of filing of this Certificate of Designation (including without
limitation the Series B Convertible Preferred Stock and Series C Preferred Stock); and

                    viii. shares of Common Stock or Convertible Securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition, strategic alliance or similar business
combination approved by the Board.

12. Company Covenants.

     12.1 Reservation of Shares and Common Stock. The Company will at all times reserve and keep
available a
sufficient number of shares of Series C Preferred Stock to issue as dividends pursuant to the
provisions of Section 3 of the Certificate of Designation, and shall reserve and keep available a
sufficient number of shares of Common Stock, solely for issuance and delivery upon the conversion
of the Series B Preferred Stock and upon exercise of the Warrants issuable from time to time upon
such conversion or exercise.

27

 

     12.2 Subsequent Registration Rights. In the event of a Change in Control transaction (as such
term is defined in Section 4(D) of the Certificate of Designation) involving issuance of an
acquiror’s securities (the “Acquisition Securities”) and if such Change in Control transaction
provides for the registration of the Acquisition Securities, the Company shall specifically provide
in such Change of Control transaction agreements that the Acquisition Securities issued or issuable
to the Purchasers shall be included in any such registration of the Acquisition Securities.

     12.3 Termination and Election of President or Chief Executive Officer. Prior to any
termination of the employment of the Company’s President and/or Chief Executive Officer or any
selection of a new President and/or Chief Executive Officer, the Company agrees to consult, in good
faith, with Trident Capital on matters relating to such termination or the selection of the
Company’s next President and/or Chief Executive Officer.

     12.4 Director and Officer Insurance. The Company shall maintain in full force and effect
director and officer liability insurance in the amount of $5,000,000, or such other amount as the
Board of Directors determines to be appropriate in light of relevant facts and circumstances,
provided however, that the amount of such insurance coverage shall not be changed to an amount less
than $3,000,000 unless the holders of a majority of the Series C Preferred then outstanding approve
such change.
The Company shall notify Trident Capital at least thirty (30) days in advance of any
termination of such insurance coverage.

     13. Information Rights.

     13.1 Basic Financial Information and Reporting.

          (a) As soon as practicable after the end of each fiscal year of the Company, and in any event
within ninety (90) days thereafter, the Company will furnish to each current or subsequent holder
of Shares, Conversion Shares or Warrant Shares (a “Qualified Holder”) a copy of its Annual Report
on Form 10-KSB, or if such report is not available, a balance sheet of the Company, as at the end
of such fiscal year, and a statement of income and a statement of cash flows of the Company, for
such year, prepared in accordance with generally accepted accounting principles consistently
applied (except as noted therein) and setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail. Such financial statements shall be
accompanied by a report and opinion thereon by independent public accountants of national standing
selected by the Company’s Board of Directors.

          (b) The Company will furnish to each Qualified Holder, as soon as practicable after the end of
the first, second and third quarterly accounting periods in each fiscal year of the Company, and in
any event within forty-five (45) days thereafter, a copy of its Quarterly Report on Form 10-QSB, or
if such report is not available, a balance sheet of the Company as of the end of each such
quarterly period, and a statement of income and a statement of cash flows of the Company for such
period and for the current fiscal year to date, prepared in accordance with generally accepted
accounting principles consistently applied (except as noted therein), with the exception that no
notes need be attached to such statements and year-end audit adjustments may not have been made.

28

 

          (c) The Company will furnish to each Qualified Holder: (i) at least thirty (30) days prior to
the beginning of each fiscal year an annual budget, business plans for such fiscal year (and as
soon as available, any subsequent updates thereto in the event of any material changes to such
budget, business plan or financial forecast); and (ii) as soon as practicable after the end of each
month, and in any event within thirty (30) days thereafter, a balance sheet of the Company as of
the end of each such month, and a statement of income and a statement of cash flows of the Company
for such month and for the current fiscal year to date, including a comparison to plan figures for
such period, prepared in accordance with generally accepted accounting principles consistently
applied (except as noted thereon), with the exception that no notes need be attached to such
statements and year-end audit adjustments may not have been made.

     13.2 Inspection Rights. Each Qualified Holder shall have the right to visit and inspect any
of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances
and accounts of the Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often as may be
reasonably requested.

     14. Broker’s Fee. The Company and each Purchaser (severally and not jointly)
hereby represent that there are no brokers or finders (and similar agents) entitled to compensation
in connection with the sale of the Shares or the Warrants, and shall indemnify each other for any
such fees for which they are responsible.

     15. Notices. All notices required in connection with this Agreement shall be in
writing and shall be deemed effectively given upon the earlier of actual receipt of: (a) personal
delivery to the party to be notified, (b) one business day after the date of confirmed transmission
by facsimile, (c) five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one (1) business
day after the business day of deposit with a nationally recognized overnight courier,
specifying next day delivery, freight prepaid, with written notification of receipt, and addressed
as follows:

          (a) if to the Company, to:

XATA Corporation

151 E. Cliff Road, Suite 10

Burnsville, MN 55337

Attention: Chief Executive Officer

Facsimile: (952) 894-2463

Email: craigf@xata.com

          with a copy so mailed to:

Moss & Barnett

3800 Wells Fargo Center

Minneapolis, MN 55402

Attention: Janna Severance, Esq.

Facsimile: (612) 339-6686

Email: severancej@moss-barnett.com

          or to such other person at such other place as the Company shall designate to
the Purchasers in writing; and

29

 

          (b) if to the Purchasers, at the address as set forth below each Purchaser’s name on the
Schedule of Purchasers, or at such other address or addresses as may have been furnished to the
Company in writing.

     16. Miscellaneous. 

     16.1 Waivers and Amendments. Neither this Agreement nor any provision hereof may be changed,
waived, discharged, terminated, modified or amended except upon the written consent of the Company
and holders of at least a majority of the Shares then held by the Purchasers (including any shares
of Common Stock issued upon conversion of the Shares and then held by the Purchasers).

     16.2 Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this Agreement.

     16.3 Severability. In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby.

     16.4 Governing Law. This Agreement shall be governed by and construed in accordance with
the corporate laws of the State of Delaware and, with respect to matters of law other than
corporate law, the laws of the State of Delaware as
applied to contracts entered into and performed entirely in Delaware by Delaware residents,
without regard to conflicts of law principles.

     16.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall constitute but one
instrument, and shall become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.

     16.6 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.

     16.7 Entire Agreement. This Agreement and other documents delivered pursuant hereto,
including the exhibits, constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.

     16.8 Payment of Fees and Expenses.

          (a) Each of the Company and the Purchasers shall bear its own expenses and legal fees incurred
on its behalf with respect to this Agreement and the transactions contemplated

30

 

hereby; provided, however, that upon the Closing, the Company shall pay the fees and expenses of Cooley Godward LLP,
special counsel for Purchasers, in an amount equal to $20,000.

          (b) If any action at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs and
necessary disbursements in addition to any other relief to which such party may be entitled.

31

 

     In Witness Whereof, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above written.

COMPANY:

XATA CORPORATION

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Mark E. Ties
	 	 
	 

	 	Chief Financial Officer	 	 

PURCHASERS:

Trident Capital Fund-V, L.P.

Trident Capital Fund-V Affiliates Fund, L.P.

Trident Capital Fund-V Affiliates Fund (Q), L.P.

Trident Capital Fund-V Principals Fund, L.P.

Trident Capital Parallel Fund-V, C.V.

Executed on behalf of the forgoing funds by the undersigned, as an authorized signatory of the
respective general partner of each such fund:

	 	 	 
	 

(signature)

	 	 
	 
	 	 
	 

(print name)

	 	 

32

 

EXHIBIT 1

FORM OF CERTIFICATE OF DESIGNATION OF

PREFERENCES OF SERIES B PREFERRED STOCK

 

 

EXHIBIT 2.1

SCHEDULE OF PURCHASERS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Aggregate	 
	 	 	 	 	 	 	 	 	 	 	No. of	 	 	Warrant	 
	 	 	No. of	 	 	Aggregate	 	 	Warrant	 	 	Purchase	 
	Name	 	Shares	 	 	Purchase Price	 	 	Shares	 	 	Price	 
	Trident Capital Fund-V, L.P.
	 	 	1,136,849	 	 	$	4,479,185.06	 	 	 	335,939	 	 	$	41,992.38	 
	505 Hamilton Avenue
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Suite 200
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Palo Alto, CA 94301
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trident Capital Fund-V Affiliates Fund,
L.P.
	 	 	6,607	 	 	 	26,031.58	 	 	 	1,953	 	 	 	244.12	 
	505 Hamilton Avenue
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Suite 200
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Palo Alto, CA 94301
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trident Capital Fund-V Affiliates Fund
(Q), L.P.
	 	 	6,305	 	 	 	24,841.70	 	 	 	1,863	 	 	 	232.88	 
	505 Hamilton Avenue
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Suite 200
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Palo Alto, CA 94301
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trident Capital Fund-V Principals Fund,
L.P.
	 	 	32,905	 	 	 	129,645.70	 	 	 	9,723	 	 	 	1,215.37	 
	505 Hamilton Avenue
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Suite 200
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Palo Alto, CA 94301
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trident Capital Parallel Fund-V, C.V.
	 	 	86,370	 	 	 	340,297.80	 	 	 	25,522	 	 	 	3,190.25	 
	505 Hamilton Avenue
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Suite 200
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Palo Alto, CA 94301
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	1,269,036	 	 	$	5,000,001.84	 	 	 	375,000	 	 	$	46,875.00	 

 

 

EXHIBIT 2.2

FORM OF COMMON STOCK WARRANT

 

 

EXHIBIT 4.5

AMENDED AND RESTATED VOTING AGREEMENT

 

 

EXHIBIT 8.6

FORM OF COMPANY COUNSEL OPINION

 

 

EXHIBIT 8.10

FORM OF TRANSFER AGENT INSTRUCTIONS

 

 

Table
Of Contents

	 	 	 	 	 
	 	 	Page
	SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES
	 	 	1	 
	SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES
	 	 	1	 
	2.1 Sale of Shares
	 	 	1	 
	2.2 Issuance of Warrants
	 	 	1	 
	SECTION 3. CLOSING AND DELIVERY
	 	 	1	 
	3.1 Closing
	 	 	1	 
	3.2 Delivery of the Shares and the Warrants at the Closing
	 	 	2	 
	SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
	 	 	2	 
	4.1 Organization and Qualification
	 	 	2	 
	4.2 Capitalization
	 	 	2	 
	4.3 Authorization of Securities
	 	 	3	 
	4.4 Governmental Consents
	 	 	3	 
	4.5 Due Authorization, Execution and Delivery of Agreement and Voting
Agreement
	 	 	3	 
	4.6 No Conflicts
	 	 	4	 
	4.7 Title to Assets
	 	 	4	 
	4.8 Permits
	 	 	4	 
	4.9 Legal Actions
	 	 	4	 
	4.10 Labor
	 	 	5	 
	4.11 No Violations
	 	 	5	 
	4.12 Insurance
	 	 	5	 
	4.13 Company Contracts
	 	 	5	 
	4.14 SEC Documents
	 	 	6	 
	4.15 Related Party Transactions
	 	 	6	 
	4.16 Financial Statements
	 	 	6	 
	4.17 Receivables
	 	 	7	 
	4.18 Intellectual Property
	 	 	7	 
	4.19 Nasdaq Compliance
	 	 	7	 
	4.20 Taxes
	 	 	7	 
	4.21 No Integration or General Solicitation
	 	 	8	 

i

 

	 	 	 	 	 
	 	 	Page
	4.22 No Registration
	 	 	8	 
	4.23 No Material Changes
	 	 	8	 
	4.24 Accounting Controls
	 	 	9	 
	4.25 Form S-3 Qualification
	 	 	9	 
	4.26 No Anti-Dilution Event
	 	 	9	 
	4.27 Registration Rights
	 	 	9	 
	4.28 Investment Company Act
	 	 	9	 
	4.29 Sarbanes-Oxley Act
	 	 	9	 
	4.30 Audit Committee
	 	 	10	 
	4.31 Foreign Corrupt Practices Act
	 	 	10	 
	4.32 Loans to Officers and Directors
	 	 	10	 
	4.33 Employee Benefits
	 	 	11	 
	4.34 Nasdaq Listing
	 	 	11	 
	4.35 Qualified Small Business
	 	 	11	 
	4.36 Broker’s Fee
	 	 	11	 
	4.37 Complete Disclosure
	 	 	11	 
	SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
	 	 	11	 
	SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
	 	 	12	 
	SECTION 7. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING
	 	 	12	 
	7.1 Receipt of Payment
	 	 	12	 
	7.2 Representations and Warranties Correct
	 	 	13	 
	7.3 Covenants Performed
	 	 	13	 
	SECTION 8. CONDITIONS TO PURCHASERS’ OBLIGATIONS AT THE CLOSING
	 	 	13	 
	8.1 Representations and Warranties Correct
	 	 	13	 
	8.2 Covenants Performed
	 	 	13	 
	8.3 Covenants Performed
	 	 	13	 
	8.4 Voting Agreement
	 	 	13	 
	8.5 Intentionally Omitted
	 	 	13	 
	8.6 Legal Opinion
	 	 	13	 

ii

 

	 	 	 	 	 
	 	 	Page
	8.7 Intentionally Omitted
	 	 	13	 
	8.8 Officer’s Certificate
	 	 	13	 
	8.9 Secretary’s Certificate
	 	 	13	 
	8.10 Transfer Agent Instructions
	 	 	14	 
	8.11 Certificate of Designation
	 	 	14	 
	8.12 No Material Adverse Effect
	 	 	14	 
	8.13 Proceedings and Documents
	 	 	14	 
	8.2 Covenants Performed
	 	 	14	 
	SECTION 9. REGISTRATION OF THE CONVERSION SHARES AND THE WARRANT; COMPLIANCE WITH THE
SECURITIES ACT
	 	 	14	 
	9.1 Registration Procedures
	 	 	14	 
	9.2 Transfer of Shares After Registration; Suspension; Damages
	 	 	17	 
	9.3 Expenses of Registration
	 	 	19	 
	9.4 Delay of Registration; Furnishing Information
	 	 	19	 
	9.5 Indemnification
	 	 	19	 
	9.6 Agreement to Furnish Information
	 	 	22	 
	9.7 Assignment of Registration Rights
	 	 	22	 
	9.8 Rule 144 Reporting
	 	 	22	 
	9.9 S-3 Eligibility
	 	 	23	 
	9.10 Termination of Registration Rights
	 	 	23	 
	9.11 Amendment of Registration Rights
	 	 	23	 
	9.12 Legends
	 	 	23	 
	SECTION 10. RIGHT OF FIRST REFUSAL
	 	 	24	 
	10.1 Subsequent Offerings
	 	 	24	 
	10.2 Exercise of Rights
	 	 	24	 
	10.3 Transfer of Rights of First Refusal
	 	 	24	 
	10.4 Excluded Securities
	 	 	24	 
	10.5 Termination of Rights of First Refusal
	 	 	25	 
	SECTION 11. SPECIAL VOTING RIGHTS
	 	 	25	 
	11.1 Special Voting Rights
	 	 	25	 
	SECTION 12. COMPANY COVENANTS
	 	 	27	 
	12.1 Reservation of Shares and Common Stock
	 	 	27	 

iii

 

	 	 	 	 	 
	 	 	Page
	12.2 Subsequent Registration Rights
	 	 	28	 
	12.3 Termination and Election of President or Chief Executive Officer
	 	 	28	 
	12.4 Director and Officer Insurance
	 	 	28	 
	SECTION 13. INFORMATION RIGHTS
	 	 	28	 
	13.1 Basic Financial Information and Reporting
	 	 	28	 
	13.2 Inspection Rights
	 	 	29	 
	SECTION 14. BROKER’S FEE
	 	 	29	 
	SECTION 15. NOTICES
	 	 	29	 
	SECTION 16. MISCELLANEOUS
	 	 	30	 
	16.1 Waivers and Amendments
	 	 	30	 
	16.2 Headings
	 	 	30	 
	16.3 Severability
	 	 	30	 
	16.4 Governing Law
	 	 	30	 
	16.5 Counterparts
	 	 	30	 
	16.6 Successors and Assigns
	 	 	30	 
	16.7 Entire Agreement
	 	 	30	 
	16.8 Payment of Fees and Expenses
	 	 	30	 

ATTACHMENTS:

	 	 	 	 	 
	Exhibit 1

	 	—
	 	Certificate of Designation of Preferences of Series C Preferred Stock
	Exhibit 2.1

	 	—
	 	Schedule of Purchasers
	Exhibit 2.2

	 	—
	 	Form of Common Stock Warrant
	Exhibit 4.5

	 	 	 	Amended and Restated Voting Agreement
	Exhibit 8.6

	 	—
	 	Opinion of Company Counsel
	Exhibit 8.10

	 	—
	 	Form of Transfer Agent Instructions

ivexv4w2

 

Exhibit 4.2

 

WEST CORPORATION

ISSUER

TO

[__________________]

TRUSTEE

INDENTURE

Dated as of      , 20__

% CONVERTIBLE SENIOR NOTES DUE      , 20__

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Article I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 	 	1	 
	 
	Section 1.1
	 	Definitions	 	 	1	 
	Section 1.2
	 	Compliance Certificates and Opinions	 	 	11	 
	Section 1.3
	 	Form of Documents Delivered to the Trustee	 	 	12	 
	Section 1.4
	 	Acts of Holders of Notes	 	 	12	 
	Section 1.5
	 	Notices, Etc.  to the Trustee and Company	 	 	14	 
	Section 1.6
	 	Notice to Holders of Notes; Waiver	 	 	14	 
	Section 1.7
	 	Effect of Headings and Table of Contents	 	 	15	 
	Section 1.8
	 	Successors and Assigns	 	 	15	 
	Section 1.9
	 	Separability Clause	 	 	15	 
	Section 1.10
	 	Benefits of Indenture	 	 	15	 
	Section 1.11
	 	Governing Law	 	 	15	 
	Section 1.12
	 	Legal Holidays	 	 	15	 
	Section 1.13
	 	Trust Indenture Act Controls	 	 	16	 
	 
	 	 	 	 	 	 
	Article II SECURITY FORMS	 	 	16	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Form Generally	 	 	16	 
	Section 2.2
	 	Form of Note	 	 	16	 
	Section 2.3
	 	Form of Certificate of Authentication	 	 	22	 
	Section 2.4
	 	Form of Conversion Notice	 	 	23	 
	Section 2.5
	 	Form of Assignment	 	 	24	 
	 
	 	 	 	 	 	 
	Article III THE NOTES	 	 	25	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Title and Terms	 	 	25	 
	Section 3.2
	 	Maturity, Interest and Principal Payments Generally	 	 	25	 
	Section 3.3
	 	Denominations	 	 	26	 
	Section 3.4
	 	Execution, Authentication, Delivery and Dating	 	 	26	 
	Section 3.5
	 	Global Notes; Non-global Notes; Book-entry Provisions.  Global Notes	 	 	27	 
	Section 3.6
	 	Registration; Registration of Transfer and Exchange	 	 	28	 
	Section 3.7
	 	Mutilated, Destroyed, Lost or Stolen Notes	 	 	29	 
	Section 3.8
	 	Interest	 	 	30	 
	Section 3.9
	 	Payment of Interest; Interest Rights Preserved	 	 	30	 
	Section 3.10
	 	Persons Deemed Owners	 	 	31	 
	Section 3.11
	 	Cancellation	 	 	31	 
	Section 3.12
	 	Computation of Interest	 	 	31	 
	Section 3.13
	 	CUSIP Numbers	 	 	31	 
	 
	 	 	 	 	 	 
	Article IV SATISFACTION AND DISCHARGE	 	 	31	 
	 
	 	 	 	 	 	 
	Section 4.1
	 	Satisfaction and Discharge of Indenture	 	 	31	 
	Section 4.2
	 	Application of Trust Money	 	 	32	 

ii

 

	 	 	 	 	 	 	 
	Article V DEFAULT AND REMEDIES	 	 	33	 
	 
	 	 	 	 	 	 
	Section 5.1
	 	Events of Default	 	 	33	 
	Section 5.2
	 	Covenant of Company to Pay to
Trustee Whole Amount  Due on Notes on Default in Payment of Interest or Principal; Suits for Enforcement by Trustee	 	 	35	 
	Section 5.3
	 	Trustee May File Proof of Claim	 	 	35	 
	Section 5.4
	 	Trustee May Enforce Claims Without Possession of Notes	 	 	36	 
	Section 5.5
	 	Application of Money Collected	 	 	36	 
	Section 5.6
	 	Limitation on Suits	 	 	37	 
	Section 5.7
	 	Notice of Defaults	 	 	37	 
	Section 5.8
	 	Unconditional Right of Holders to Receive Principal and Interest	 	 	38	 
	Section 5.9
	 	Restoration of Rights and Remedies	 	 	38	 
	Section 5.10
	 	Rights and Remedies Cumulative	 	 	38	 
	Section 5.11
	 	Delay or Omission not Waiver	 	 	38	 
	Section 5.12
	 	Control by Holders of Notes	 	 	38	 
	Section 5.13
	 	Waiver of Past Defaults	 	 	38	 
	Section 5.14
	 	Undertaking for Costs	 	 	39	 
	Section 5.15
	 	Waiver of Stay, Usury or Extension Laws	 	 	39	 
	 
	 	 	 	 	 	 
	Article VI THE TRUSTEE	 	 	39	 
	 
	 	 	 	 	 	 
	Section 6.1
	 	Certain Duties and Responsibilities	 	 	39	 
	Section 6.2
	 	Notice of Defaults	 	 	40	 
	Section 6.3
	 	Certain Rights of Trustee	 	 	40	 
	Section 6.4
	 	Not Responsible for Recitals or Issuance of Notes	 	 	42	 
	Section 6.5
	 	May Hold Notes, Act as Trustee Under Other Indentures	 	 	42	 
	Section 6.6
	 	Money Held in Trust	 	 	42	 
	Section 6.7
	 	Compensation and Reimbursement	 	 	42	 
	Section 6.8
	 	Corporate Trustee Required; Eligibility	 	 	43	 
	Section 6.9
	 	Resignation and Removal; Appointment of Successor	 	 	43	 
	Section 6.10
	 	Acceptance of Appointment by Successor	 	 	44	 
	Section 6.11
	 	Merger, Conversion, Consolidation or Succession to Business	 	 	45	 
	Section 6.12
	 	Authenticating Agents	 	 	45	 
	Section 6.13
	 	Disqualification; Conflicting Interests	 	 	47	 
	Section 6.14
	 	Preferential Collection of Claims Against Company	 	 	47	 
	 
	 	 	 	 	 	 
	Article VII CONSOLIDATION, MERGER, SALE OR TRANSFER	 	 	47	 
	 
	 	 	 	 	 	 
	Section 7.1
	 	Company May Consolidate, Etc.  Only on Certain Terms	 	 	47	 
	Section 7.2
	 	Successor Substituted	 	 	48	 
	 
	 	 	 	 	 	 
	Article VIII SUPPLEMENTAL INDENTURES	 	 	48	 

iii

 

	 	 	 	 	 	 	 
	Section 8.1
	 	Supplemental Indentures Without Consent of Holders of Notes	 	 	48	 
	Section 8.2
	 	Supplemental Indentures with Consent of Holders of Notes	 	 	49	 
	Section 8.3
	 	Execution of Supplemental Indentures	 	 	50	 
	Section 8.4
	 	Effect of Supplemental Indentures	 	 	50	 
	Section 8.5
	 	Reference in Notes to Supplemental Indentures	 	 	51	 
	Section 8.6
	 	Notice of Supplemental Indentures	 	 	51	 
	 
	 	 	 	 	 	 
	Article IX MEETINGS OF HOLDERS OF NOTES	 	 	51	 
	 
	 	 	 	 	 	 
	Section 9.1
	 	Purposes for Which Meetings May Be Called	 	 	51	 
	Section 9.2
	 	Call, Notice and Place of Meetings	 	 	51	 
	Section 9.3
	 	Persons Entitled to Vote at Meetings	 	 	52	 
	Section 9.4
	 	Quorum; Action	 	 	52	 
	Section 9.5
	 	Determination of Voting Rights; Conduct and Adjournment of Meetings	 	 	52	 
	Section 9.6
	 	Counting Votes and Recording Action of Meetings	 	 	53	 
	 
	 	 	 	 	 	 
	Article X COVENANTS	 	 	54	 
	 
	 	 	 	 	 	 
	Section 10.1
	 	Payment of Principal and Interest	 	 	54	 
	Section 10.2
	 	Maintenance of Offices or Agencies	 	 	54	 
	Section 10.3
	 	Money for Note Payments to Be Held in Trust	 	 	54	 
	Section 10.4
	 	Existence	 	 	56	 
	Section 10.5
	 	Payment of Taxes and Other Claims	 	 	56	 
	Section 10.6
	 	Statement by Officers as to Default	 	 	56	 
	Section 10.7
	 	Waiver of Certain Covenants	 	 	56	 
	 
	 	 	 	 	 	 
	Article XI CONVERSION OF NOTES	 	 	57	 
	 
	 	 	 	 	 	 
	Section 11.1
	 	Right to Convert	 	 	57	 
	Section 11.2
	 	Certain Corporate Transactions	 	 	58	 
	Section 11.3
	 	Determination of Satisfaction of Certain Conversion Triggers	 	 	58	 
	Section 11.4
	 	Notice of Conversion	 	 	59	 
	Section 11.5
	 	Conversion at Option of the Holder Upon a Fundamental Change	 	 	59	 
	Section 11.6
	 	Exercise of Conversion Privilege	 	 	60	 
	Section 11.7
	 	Conversion Consideration	 	 	61	 
	Section 11.8
	 	Fractions of Shares	 	 	62	 
	Section 11.9
	 	Anti-Dilution Adjustments	 	 	62	 
	Section 11.10
	 	Adjustment to Conversion Rate In Connection With a Fundamental Change	 	 	68	 
	Section 11.11
	 	Notice of Adjustments	 	 	69	 
	Section 11.12
	 	Notice of Certain Corporate Action	 	 	69	 
	Section 11.13
	 	Company to Provide Common Stock	 	 	70	 
	Section 11.14
	 	Taxes on Conversions	 	 	70	 

iv

 

	 	 	 	 	 	 	 
	Section 11.15
	 	Covenant as to Common Stock	 	 	71	 
	Section 11.16
	 	Cancellation of Converted Notes	 	 	71	 
	Section 11.17
	 	Rights Issued in Respect of Common Stock	 	 	71	 
	Section 11.18
	 	Responsibility of Trustee for Conversion Provisions	 	 	72	 
	 
	 	 	 	 	 	 
	Article XII REPURCHASE OF NOTES	 	 	72	 
	 
	 	 	 	 	 	 
	Section 12.1
	 	Repurchase at Option of the Holder Upon a Fundamental Change	 	 	72	 
	 
	 	 	 	 	 	 
	Article XIII HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE	 	 	74	 
	 
	 	 	 	 	 	 
	Section 13.1
	 	Company to Furnish Trustee Names and Addresses of Holders	 	 	75	 
	Section 13.2
	 	Preservation of Information	 	 	75	 
	Section 13.3
	 	Reports by Trustee	 	 	75	 
	Section 13.4
	 	Reports by Company	 	 	75	 
	Section 13.5
	 	Calculations in Respect of Notes	 	 	75	 
	 
	 	 	 	 	 	 
	Article XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS	 	 	76	 
	 
	 	 	 	 	 	 
	Section 14.1
	 	Indenture and Notes Solely Corporate Obligations	 	 	76	 

 v 

 

 

     INDENTURE, dated as of      , 20___, between WEST CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware, having its principal office at
11808 Miracle Hills Drive, Omaha, Nebraska 68154 (herein called the “Company”), and
        , as Trustee hereunder (herein called the “Trustee”).

RECITALS OF THE COMPANY

     The Company has duly authorized the creation of an issue of its      % Convertible Senior Notes
due      , 20___ (herein called the “Notes”) of substantially the tenor and
amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution
and delivery of this Indenture.

     All things necessary to make the Notes, when the Notes are executed by the Company and
authenticated and delivered hereunder, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its terms, have been done.

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Notes by the Holders thereof,
it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the
Notes, as follows:

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

          Section 1.1 Definitions. For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:

          (a) the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;

          (b) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States, and, except as
otherwise herein expressly provided, the term “generally accepted accounting principles” with
respect to any computation required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and

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

     “Act,” when used with respect to any Holder of a Note, has the meaning specified in Section
1.4 hereof.

1

 

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

     “Agent Member” means any member of, or participant in, the Depositary.

     “Applicable Conversion Price” at any given time is equal to the principal amount of a Note
divided by the Applicable Conversion Rate.

     “Applicable Conversion Rate” means the Conversion Rate in effect at any given time.

     “Applicable Conversion Reference Period” means the 30 consecutive Trading Days beginning on
the third Trading Day following the Conversion Date or, if the Company elects to pay cash to
Holders of Notes in lieu of all or a portion of the Residual Value Shares, the third Trading Day
after the Conversion Retraction Period ends.

     “Applicable Procedures” means, with respect to any transfer or transaction involving a Global
Note or beneficial interest therein, the rules and procedures of DTC or any successor Depository,
in each case to the extent applicable to such transaction and as in effect from time to time.

     “Applicable Stock Price” shall be equal, with respect to a Trading Day, to the Volume-Weighted
Average Price per share of Common Stock on such Trading Day or, if the Volume-Weighted Average
Price is not available, to the market value per share of the Common Stock on such Trading Day as
determined by a nationally recognized independent investment banking firm retained for this purpose
by the Company.

     “Authenticating Agent” means any Person authorized pursuant to Section 6.12 to act on behalf
of the Trustee to authenticate Notes.

     “beneficial owner” and “beneficial ownership” will be determined in accordance with Rule 13d-3
under the Exchange Act.

     “Board of Directors” means either the board of directors of the Company or any duly authorized
committee of that board.

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

     “Business Day” when used with respect to any Place of Payment, Place of Conversion or any
other place, as the case may be, means any day other than a Saturday or Sunday or a day on which
banking institutions in the City of New York are authorized or required by law or executive order
to close.

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     “capital stock” means:

     (a) in the case of a corporation, corporate stock;

     (b) in the case of an association or business entity, shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;

     (c) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

     (d) any other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of the assets of, the issuing Person.

     “Cash Settlement Notice Period” has the meaning specified in Section 11.7 hereof.

     “Closing Sale Price” means, with respect to the Common Stock, on any date, the last reported
per share sale price (or, if no last sale price is reported, the average of the last bid and
average ask prices or, if more than one in either case, the average of the average bid and the
average ask prices) on such date as reported by NASDAQ or, if the Common Stock is not quoted on
NASDAQ, as reported by the United States national securities exchange on which the Common Stock is
then listed or, if the Common Stock is not then so quoted or listed, as reported by the principal
other market on which the Common Stock is then quoted or traded. In the absence of such
quotations, the Company’s Board of Directors will make a good faith determination of the closing
sale price; provided that the closing sale price will be determined without reference to
after-hours or extended trading.

     “Code” has the meaning specified in Section 2.l hereof.

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

     “Common Stock” means the common stock of the Company, par value $0.01 per share, as it exists
on the date of this Indenture, or to the extent such common stock is reclassified or otherwise
ceases to exist, any class of Capital Stock of the Company that (1) is Voting Stock, (2) has 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 issuer thereof and which is not subject
to redemption by the issuer thereof and (3) is registered pursuant to Section 12 of the Exchange
Act and admitted for trading on a national securities exchange or quoted on the automated quotation
system of a registered securities association, if any.

     “common stock” includes any stock of any class of capital stock which has 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 issuer thereof, which has unrestricted voting rights
and which is not subject to redemption by the issuer thereof.

     “Company” means West Corporation, and any and all successors thereto.

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     “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by (a) its Chairman of the Board, its President, Chief Executive Officer, an Executive
Vice President or a Vice President, and by (b) its principal financial officer, Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

     “Continuing Directors” means, as of any date of determination, any member of the Board of
Directors of the Company who: (a) was a member of such Board of Directors on the date of this
Indenture; or (b) becomes a member of the Board of Directors of the Company subsequent to that date
and was appointed, nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board of Directors at the time
of such appointment, nomination or election.

     “Conversion Agent” means any Person authorized by the Company to convert Notes in accordance
with Article XI. The Company has initially appointed the Trustee as its Conversion Agent pursuant
to Section 10.2 hereof.

     “Conversion Rate” has the meaning specified in Section 11.1 hereof.

     “Conversion Consideration” has the meaning specified in Section 11.7 hereof.

     “Conversion Date” has the meaning specified in Section 11.6 hereof.

     “Conversion Retraction Period” has the meaning specified in Section 11.7 hereof.

     “Conversion Value” shall equal the product of (a) the applicable Conversion Rate and (b) the
average of the Applicable Stock Prices of the Common Stock for each of the 30 consecutive Trading
Days in the Applicable Conversion Reference Period.

     “Corporate Trust Office” means the office of the Trustee at which at any particular time the
trust created by this Indenture shall be principally administered (which at the date of this
Indenture is located at [___]; and for purposes of Section 10.2 shall mean,
[___].

     “corporation” means a corporation, company, association, joint-stock company or business
trust.

     “Current Market Price” has the meanings specified in Section 11.9, as applicable.

     “Daily Adjustment” has the meaning specified in Section 11.9 hereof.

     “Daily Trading Share Amount” for each day in the Applicable Conversion Reference Period shall
equal the greater of:

     (1) zero; or

     (2) a number of shares determined by the following formula:

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 (Applicable Stock Price x Applicable Conversion Rate) – $1,000 

30 x Applicable Stock Price

     “default” means any event which is, or after notice or lapse of time would become, an Event of
Default.

     “Defaulted Interest” has the meaning specified in Section 3.9 hereof.

     “Depositary” means, with respect to any Notes (including any Global Notes), a clearing agency
that is registered as such under the Exchange Act and is designated by the Company to act as
Depositary for such Notes (or any successor securities clearing agency so registered).

     “Documents” has the meaning specified in Section 6.3 hereof.

     “Dollar” or “U.S. $” means a dollar or other equivalent unit in such coin or currency of the
United States as at the time shall be legal tender for the payment of public and private debts.

     “DTC” means The Depository Trust Company, a New York corporation.

     “Effective Date” means the date on which a Fundamental Change transaction becomes effective
(which Fundamental Change results in the Holders of the Notes having the right to cause the Company
to repurchase their Notes).

     “Event of Default” has the meaning specified in Section 5.1 hereof.

     “Exchange Act” means the U.S. Notes Exchange Act of 1934 (or any successor statute), as
amended from time to time.

     “ex-date” or “ex-dividend date” has the meaning set forth in Section 11.2 hereof.

     “Fundamental Change” will be deemed to have occurred at the time after the Notes are
originally issued that any of the following occurs:

     (1) the Company’s Common Stock (or other common stock into which the Notes are
convertible) is neither quoted on NASDAQ or another established automated over-the-counter
trading market in the United States nor listed on the NYSE or another United States national
securities exchange;

     (2) any Person, including any syndicate or group deemed to be a “person” under Section
13(d)(3) of the Exchange Act, but excluding members of the West Family Group, acquires
Beneficial Ownership, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of the Company’s Capital Stock
entitling the Person to exercise 50% or more of the total voting power of all shares of the
Company’s Capital Stock entitled to vote generally in elections of directors, other than an
acquisition by the Company, any of its Subsidiaries or any of the Company’s employee benefit
plans;

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     (3) the Company merges or consolidates with or into any other person (other than a
Subsidiary), another Person merges with or into the Company, or the Company conveys, sells,
transfers or leases all or substantially all of the Company’s assets to another Person,
other than any transaction:

     (i) that does not result in a reclassification, conversion, exchange or
cancellation of the Company’s outstanding Common Stock; or

     (ii) pursuant to which the Holders of the Company’s Common Stock immediately
prior to the transaction have the entitlement to exercise, directly or indirectly,
50% or more of the voting power of all shares of Capital Stock entitled to vote
generally in the election of directors of the continuing or surviving corporation
immediately after the transaction; or

     (iii) which is effected solely to change the Company’s jurisdiction of
incorporation and results in a reclassification, conversion or exchange of
outstanding shares of the Company’s Common Stock solely into shares of common stock
of the surviving entity; or

     (4) at any time the Continuing Directors do not constitute a majority of the
Company’s Board of Directors (or, if applicable, a successor Person to the Company).

     “Fundamental Change Conversion Right Notice” has the meaning specified in Section 11.5 hereof.

     “Fundamental Change Election Date” has the meaning specified in Section 11.5 hereof.

     “Fundamental Change Election Notice” has the meaning specified in Section 11.5 hereof.

     “Fundamental Change Repurchase Date” means a date selected by the Company on which the Company
shall be required to repurchase the Notes and which is no less than 20 and no more than 35 days
after the date of the Company’s mailing of the Fundamental Change Repurchase Right Notice with
respect to the occurrence of the relevant Fundamental Change, subject to extension to comply with
applicable law.

     “Fundamental Change Repurchase Price” has the meaning specified in Section 12.1 hereof.

     “Fundamental Change Repurchase Right Notice” has the meaning specified in Section 12.1 hereof.

     “Global Note” means a Note that is registered in the Note Register in the name of a Depositary
or a nominee thereof.

     “Holder” means the Person in whose name the Note is registered in the Note Register.

     “in connection with,” when followed by “a Fundamental Change,” has the meaning set forth in
Section 11.10(a) hereof.

6

 

     “Indebtedness” means the principal of, premium, if any, and interest on any indebtedness for
borrowed money (excluding trade payables and insurance liabilities) of the Company or one of its
Subsidiaries, whether outstanding on the date of this Indenture or hereafter created, incurred or
assumed, so long as the instrument or agreement pursuant to which indebtedness was created does not
expressly provide that such indebtedness will be subordinate in right of payment to the Notes.

     “Indenture” means this Indenture as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this Indenture and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this Indenture and any such supplemental indenture, respectively.

     “Interest Payment Date” has the meaning specified in Section 2.2 hereof.

     “Issue Date” means      , 20___.

     “Market Capitalization” has the meaning specified in Section 11.8 hereof.

     “Maturity,” when used with respect to any Note, means the date on which the principal amount
of such Note becomes due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, exercise of the repurchase right set forth in Article XII or
otherwise.

     “NASDAQ” means The Nasdaq National Market, Inc.

     “Notes” has the meaning specified in the first paragraph under the caption “Recitals of the
Company.”

     “Note Register” and “Note Registrar” have the respective meanings specified in Section 3.6
hereof.

     “Officers’ Certificate” means a certificate signed by (a) the Chairman of the Board, the
President, Chief Executive Officer, or any Vice President and by (b) the principal financial
officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee. One of the officers signing an Officers’ Certificate given
pursuant to Section 10.6 shall be the principal executive, financial or accounting officer of the
Company.

     “Opinion of Counsel” means a written opinion of counsel, in form and substance reasonably
satisfactory to the Trustee, who may be counsel for the Company and who shall be reasonably
acceptable to the Trustee.

     “Outstanding,” when used with respect to Notes, means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture, except:

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

7

 

          (b) Notes for which money in the necessary amount to pay or redeem such Notes has been
theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Notes;

          (c) Notes which have been paid pursuant to Section 3.7 or in exchange for or in lieu of which
other Notes have been authenticated and delivered pursuant to this Indenture, other than any such
Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it
that such Notes are held by a bona fide purchaser in whose hands such Notes are valid obligations
of the Company;

          (d) Notes converted pursuant to Article XI; and

          (e) Notes that cease to be Outstanding in accordance with Section 12.1;

provided, however, that in determining whether the Holders of the requisite principal amount of
Outstanding Notes are present at a meeting of Holders of Notes for quorum purposes or have given
any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether
the Trustee shall be protected in relying upon any such determination as to the presence of a
quorum or upon any such request, demand, authorization, direction, notice, consent or waiver, only
Notes which a Responsible Officer of the Trustee has been notified in writing to be so owned shall
be so disregarded. Notes so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or such other obligor, and the Trustee shall be protected in relying upon an
Officer’s Certificate to such effect.

     “Paying Agent” means any Person authorized by the Company to pay the principal of or interest
on any Notes on behalf of the Company and, except as otherwise specifically set forth herein, such
term shall include the Company if it shall act as its own Paying Agent. The Company has initially
appointed the Trustee as its Paying Agent pursuant to Section 10.2 hereof.

     “Person” means any individual, corporation, limited liability company, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency or political
subdivision thereof and, for purposes of the definition of “Fundamental Change,” includes any
syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange
Act.

     “Place of Conversion” has the meaning specified in Section 3.1 hereof.

     “Place of Payment” has the meaning specified in Section 3.1 hereof.

     “Predecessor Note” of any particular Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.

8

 

     “Press Release” means any press release issued by the Company and disseminated to Reuters
Business News Services and Bloomberg News Services.

     “Record Date” means any Regular Record Date or Special Record Date.

     “Record Date Period” means the period from the close of business of any Regular Record Date
next preceding any Interest Payment Date to the opening of business on such Interest Payment Date.

     “Regular Record Date” for interest payable in respect of any Note on any Interest Payment Date
means            or            (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date.

     “Representatives” means [ • ].

     “Repurchase Premium” has the meaning set forth in Section 11.9(h) hereof.

     “Residual Cash Value” for each date shall be the product of (1) the percentage of each
Residual Value Share otherwise issuable upon conversion which the Company elects to pay in cash and
(2) the cash value of the Daily Trading Share Amount for such date. The cash value of the Daily
Trading Share Amount shall be determined by multiplying the Daily Trading Share Amount for such
date by the Applicable Stock Price of the Common Stock for such date.

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

     “Securities Act” means the U.S. Securities Act of 1933 (or any successor statute), as amended
from time to time.

     “Significant Subsidiary” means, with respect to any Person, a Subsidiary of such Person that
would constitute a “significant subsidiary” as such term is defined under Rule 1-02 of Regulation
S-X under the Securities Act and the Exchange Act.

     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Company pursuant to Section 3.9 hereof.

     “Spin-Off” has the meaning specified in Section 11.9 hereof.

     “Stated Maturity,” when used with respect to any Note or any installment of interest thereon,
means the date specified in such Note as the fixed date on which the principal of such Note or such
installment of interest is due and payable.

     “Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is
owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition, “voting

9

 

stock” means stock or other similar interests in the corporation which ordinarily has or have
voting power for the election of directors, or persons performing similar functions, whether at all
times or only so long as no senior class of stock or other interests has or have such voting power
by reason of any contingency.

     “Successor Note” of any particular Note means every Note issued after, and evidencing all or a
portion of the same debt as that evidenced by, such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.

     “Termination of Trading” will be deemed to have occurred if the Common Stock (or other common
stock into which the Notes are convertible) is neither traded on The Nasdaq National Market or
another established automated over-the-counter trading market in the United States nor listed on
the New York Stock Exchange or another United States national securities exchange.

     “Then-Prevailing Market Price” has the meaning specified in Section 11.9(h) hereof.

     “Trading Day” means a day during which trading in securities generally occurs on NASDAQ, or if
the Common Stock is not then quoted on NASDAQ, on the United States national securities exchange on
which the Common Stock is then listed or, if the Common Stock is not then so quoted or listed, on
the principal other market on which the Common Stock is then quoted or traded.

     “Trading Price,” means, with respect to the Notes, on any date of determination, the average
of the secondary market bid quotations per Note obtained by the Conversion Agent for $5,000,000
principal amount of the Notes at approximately 3:30 p.m., New York City time, on such determination
date from two independent nationally recognized securities dealers selected by the Company, which
may include the Representatives; provided that if at least two such bids cannot reasonably be
obtained by the Conversion Agent, but one such bid can reasonably be obtained by the Conversion
Agent, this one bid will be used. If, on any date of determination, the Conversion Agent cannot
reasonably obtain at least one bid for $5.0 million principal amount of the Notes from a nationally
recognized securities dealer or, in the Company’s reasonable judgment, the bid quotations are not
indicative of the secondary market value of the Notes, then the trading price of the Notes will be
deemed to be less than 95% of the product of the Applicable Conversion Rate of the Notes and the
Closing Sale Price of the Common Stock on such determination date. Any such determination will be
conclusive and binding absent manifest error.

     “Trigger Event” has the meaning specified in Section 11.17 hereof.

     “Trust Indenture Act” means the Trust Indenture Act of 1939, and the rules and regulations
thereunder, as in force at the date as of which this Indenture was executed, provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act”
means, to the extent required by any such amendment, the Trust Indenture Act of 1939, and the rules
and regulations thereunder, as so amended.

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     “Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean such successor Trustee.

     “United States” means the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its jurisdiction (its
“possessions” including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands).

     “Volume-Weighted Average Price” means, with respect to a Trading Day, such price as displayed
under the heading “Bloomberg VWAP” on Bloomberg (or any successor service) page “WSTC
<equity> AQR” (or any successor page) in respect of the period from 9:30 a.m. to 4:00 p.m.,
New York City time, on such Trading Day.

     “West Family Group” means Gary L. West, Mary E. West, and any charitable foundation or trust
created by Gary L. West or Mary E. West to the extent that the board of trustees of any such
charitable foundation or trust is controlled by Thomas B. Barker and Roland J. Santoni (or any
replacement of Thomas B. Barker or Roland J. Santoni on the board of trustees that is designated by
Gary L. West and Mary E. West or a president, chief executive officer or chief financial officer of
the Company).

          Section 1.2 Compliance Certificates and Opinions. Upon any application or request by
the Company to the Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or opinion need be
furnished.

     Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (including certificates provided for in Section 10.6) shall include:

          (a) a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;

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

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

          (d) a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.

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          Section 1.3 Form of Documents Delivered to the Trustee. In any case where several
matters are required to be certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such matters in one or
several documents.

     Any certificate or opinion of an officer of the Company may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an officer or officers of
the Company or any other Person stating that the information with respect to such factual matters
is in the possession of the Company or such other Person, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.

     Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.

          Section 1.4 Acts of Holders of Notes. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders of Notes may be embodied in and evidenced by (i) one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent or proxy duly
appointed in writing by such Holders or (ii) the record of Holders of Notes voting in favor
thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of
Notes duly called and held in accordance with the provisions of Article IX. Such action shall
become effective when such instrument or instruments or record is delivered to the Trustee and,
where it is hereby expressly required, to the Company. The Trustee shall promptly deliver to the
Company copies of all such instruments and records delivered to the Trustee. Such instrument or
instruments and records (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act” of the Holders of Notes signing such instrument or instruments
and so voting at such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent or proxy, or of the holding by any Person of a Note, shall be sufficient
for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee
and the Company if made in the manner provided in this Section. The record of any meeting of
Holders of Notes shall be proved in the manner provided in Section 9.6.

          (b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof of his authority.

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          (c) The principal amount and serial number of any Note held by any Person, and the date of his
holding the same, shall be proved by the Note Register.

          (d) The fact and date of execution of any such instrument or writing and the authority of the
Person executing the same may also be proved in any other manner which the Trustee deems
sufficient; and the Trustee may in any instance require further proof with respect to any of the
matters referred to in this Section.

          (e) The Company may set any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or
other action, or to vote on any action, authorized or permitted by this Indenture to be given or
taken by Holders. Promptly and in any case not later than ten days after setting a record date,
the Company shall notify the Trustee and the Holders of such record date. If not set by the
Company prior to the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date for any such action
or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required
to be provided pursuant to Section 13.1) prior to such first solicitation or vote, as the case may
be. With regard to any record date, the Holders on such date (or their duly appointed agents or
proxies), and only such Persons, shall be entitled to give or take, or vote on, the relevant
action, whether or not such Holders remain Holders after such record date. Notwithstanding the
foregoing, the Company shall not set a record date for, and the provisions of this paragraph shall
not apply with respect to, any notice, declaration or direction referred to in the next paragraph.

     Upon receipt by the Trustee from any Holder of (i) any notice of default or breach referred to
in Section 5.1(a)(iii), if such default or breach has occurred and is continuing and the Trustee
shall not have given such a notice to the Company, (ii) any declaration of acceleration referred to
in Section 5.1(b), if an Event of Default has occurred and is continuing and the Trustee shall not
have given such a declaration to the Company, or (iii) any direction referred to in Section 5.12,
if the Trustee shall not have taken the action specified in such direction, then, with respect to
clauses (ii) and (iii), a record date shall automatically and without any action by the Company or
the Trustee be set for determining the Holders entitled to join in such declaration or direction,
which record date shall be the close of business on the tenth day (or, if such day is not a
Business Day, the first Business Day thereafter) following the day on which the Trustee receives
such declaration or direction, and, with respect to clause (i), the Trustee may set any day as a
record date for the purpose of determining the Holders entitled to join in such notice of default.
Promptly after such receipt by the Trustee of any such declaration or direction referred to in
clause (ii) or (iii), and promptly after setting any record date with respect to clause (i), and as
soon as practicable thereafter, the Trustee shall notify the Company and the Holders of any such
record date so fixed. The Holders on such record date (or their duly appointed agents or proxies),
and only such Persons, shall be entitled to join in such notice, declaration or direction, whether
or not such Holders remain Holders after such record date; provided that, unless such notice,
declaration or direction shall have become effective by virtue of Holders of the requisite principal amounts of Notes on such record date (or their duly appointed agents or proxies)
having joined therein on or prior to the 90th day after such record date, such notice, declaration
or direction shall automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall be construed to prevent a Holder (or a duly

13

 

appointed agent or proxy thereof) from giving, before or after the expiration of such 90-day period, a
notice, declaration or direction contrary to or different from, or, after the expiration of such
period, identical to, the notice, declaration or direction to which such record date relates, in
which event a new record date in respect thereof shall be set pursuant to this paragraph. In
addition, nothing in this paragraph shall be construed to render ineffective any notice,
declaration or direction of the type referred to in this paragraph given at any time to the Trustee
and the Company by Holders (or their duly appointed agents or proxies) of the requisite principal
amounts of Notes on the date such notice, declaration or direction is so given.

          (f) Except as provided in Sections 5.12 and 5.13, any request, demand, authorization,
direction, notice, consent, election, waiver or other Act of the Holder of any Note shall bind
every future Holder of the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Note.

          (g) The provisions of this Section are subject to the provisions of Section 9.5.

          Section 1.5 Notices, Etc. to the Trustee and Company. Any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of Holders of Notes or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with:

          (a) the Trustee by any Holder of Notes or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with a Responsible Officer of the
Trustee and received at its Corporate Trust Office; and

          (b) the Company by the Trustee or by any Holder of Notes shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing, mailed, first-class postage
prepaid, or telecopied and confirmed by mail, first-class postage prepaid, or delivered by hand or
overnight courier, addressed to the Company at 11808 Miracle Hills Drive, Omaha, Nebraska 68154
Attention: ___, or at any other address previously furnished in writing to the Trustee by
the Company.

          Section 1.6 Notice to Holders of Notes; Waiver. (a) Except as otherwise expressly
provided herein, where this Indenture provides for notice to Holders of Notes of any event, such
notice shall be sufficiently given to Holders if in writing and mailed, first-class postage prepaid
or delivered by an overnight delivery service, or transmitted by telecopy or other electronic
means, with written confirmation of transmission, to each Holder of a Note affected by such event,
at the address of such Holder as it appears in the Note Register, not earlier than the earliest
date and not later than the latest date prescribed for the giving of such notice.

          (b) Neither the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Note shall affect the sufficiency of such notice with respect to other
Holders of Notes. In case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such notification to
Holders of Notes as shall be made with the approval of the Trustee, which

14

 

approval shall not be
unreasonably withheld, shall constitute a sufficient notification to such Holders for every purpose
hereunder.

          (c) Such notice shall be deemed to have been given three days after mailing, if by mail, one
day after mailing if by overnight courier, and on the date the notice is furnished if by telecopy
or other electronic means or by hand.

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

          Section 1.7 Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not affect the
construction hereof.

          Section 1.8 Successors and Assigns. All covenants and agreements in this Indenture by
the Company shall bind its successors and assigns, whether so expressed or not.

          Section 1.9 Separability Clause. In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

          Section 1.10 Benefits of Indenture. Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto and their successors
and assigns hereunder and the Holders of Notes, any benefit or legal or equitable right, remedy or
claim under this Indenture.

          Section 1.11 Governing Law. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          Section 1.12 Legal Holidays. In any case where any Interest Payment Date, Fundamental Change Repurchase Date or Stated
Maturity of any Note or the last day on which a Holder of a Note has a right to convert his Note
shall not be a Business Day at a Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Notes) payment of principal amount
of or interest on, or the payment of the Fundamental Change Repurchase Price (whether the same is
payable in cash or in shares of Common Stock or a combination of cash and stock) with respect to,
or delivery for conversion of, such Note need not be made at such Place of Payment or Place of
Conversion, as the case may be, on or by such day, but may be made on or by the next succeeding
Business Day at such Place of Payment or Place of Conversion, as the case may be, with the same
force and effect as if made on the Interest Payment Date or Fundamental Change Repurchase Date, or
at the Stated Maturity or by such last day for conversion; provided, however, that in the case that
payment is made on such succeeding Business Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date, Fundamental Change Repurchase Date,
Stated Maturity or last day for conversion, as the case may be.

15

 

          Section 1.13 Trust Indenture Act Controls. This Indenture is subject to the
provisions of the TIA which are required to be part of this Indenture, and shall, to the extent
applicable, be governed by such provisions.

ARTICLE II

SECURITY FORMS

          Section 2.1 Form Generally. (a) The Notes shall be in substantially the form set
forth in this Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as may be required to
comply with the rules of any securities exchange, the Internal Revenue Code of 1986, as amended,
and regulations thereunder (the “Code”), or as may, consistent herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. All Notes shall be in
fully registered form.

          (b) The Trustee’s certificates of authentication shall be in substantially the form set forth
in Section 2.3.

          (c) Conversion notices shall be in substantially the form set forth in Section 2.4.

          (d) Repurchase notices shall be substantially in the form set forth in Section 2.2.

          (e) The Notes shall be printed, lithographed, typewritten or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by the rules of any
automated quotation system or securities exchange (including on steel engraved borders if so
required by any securities exchange upon which the Notes may be listed) on which the Notes may be
quoted or listed, as the case may be, all as determined by the officers executing such Notes, as
evidenced by their execution thereof.

          (f) Upon their original issuance, Notes shall be issued in the form of one or more Global
Notes in fully registered form without interest coupons. Such Global Notes shall be registered in
the name of DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian for
DTC, for credit by DTC to the respective accounts of beneficial owners of the Notes represented
thereby (or such other accounts as they may direct). Such Global Notes, together with any
Successor Notes which are Global Notes, are collectively herein called the “Global Note.”

16

 

          Section 2.2 Form of Note.

[FORM OF FACE]

     [THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL NOTE:

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY
THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES.

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

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED REGISTERED FORM IN
THE LIMITED CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

WEST CORPORATION

% CONVERTIBLE SENIOR NOTES DUE      , 20__

 $ 

CUSIP NO.

     West Corporation, a corporation duly organized and existing under the laws of the State of
Delaware (herein called the “Company,” which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay to
___, or registered assigns, the principal sum of
___ United States
Dollars (U.S.$___) [if this Note is a Global Note, then insert — (which principal amount may from
time to time be increased or decreased to such other principal amounts (which, taken together with
the principal amounts of all other Outstanding Notes, shall not exceed “$___”) by adjustments
made on the records of the Trustee hereinafter referred to in accordance with the Indenture)] on
        , 20___ and to pay interest thereon as described below.

17

 

     Interest will accrue on this Note at the rate of      % per annum, from      , 20___, or
from the most recent Interest Payment Date (as defined below) to which interest has been paid or
duly provided for, semi-annually in arrears on            and            in each year
(each, an “Interest Payment Date”), commencing      , 20___. Except as otherwise provided
herein, interest payable on each Interest Payment Date shall be payable to Holders of record as of
the applicable Regular Record Date and shall include interest accrued from and including the
immediately proceeding Interest Payment Date (or the Issue Date if no interest has been paid
hereon) to but excluding such Interest Payment Date.

     Payments on the Notes will be made in U.S. dollars at the office of the Trustee; provided that
the Company may elect to make payments by check mailed to the Holder’s registered address or, with
respect to Global Notes, by wire transfer.

     Except as specifically provided herein and in the Indenture, the Company shall not be required
to make any payment with respect to any tax, assessment or other governmental charge imposed by any
government or any political subdivision or taxing authority thereof or therein.

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

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof or an Authenticating Agent by the manual signature of one of their respective
authorized signatories, this Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

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

	 	 	 	 	 
	 	 	WEST CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

18

 

[FORM OF REVERSE]

     This Note is one of a duly authorized issue of securities of the Company designated as its “
          % Convertible Senior Notes due      , 20___” (herein called the “Notes”), initially
limited in aggregate principal amount to U.S. “$___,” issued and to be issued under an
Indenture, dated as of      ,
20___ (herein called the “Indenture”), between the Company
and      , as Trustee (herein called the “Trustee,” which term includes any
successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms
upon which the Notes are, and are to be, authenticated and delivered. The Company may, from time
to time, issue additional Notes under the Indenture in unlimited principal amount in accordance
with the provisions for the issuance of notes contained in the Indenture, and each such additional
Note shall be of the same class as all other Notes then Outstanding and entitled to the all of the
benefits of the Indenture; provided that, except as otherwise specifically provided in the
Indenture, the aggregate principal amount of Notes issued under the Indenture may not exceed (1)
the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or
more Orders for authentication, minus (2) the aggregate principal amount of Notes duly
authenticated and delivered by the Trustee that have been cancelled.

     As provided in the Indenture and subject to certain limitations therein set forth, Notes are
convertible into Conversion Consideration. In the event any Holder surrenders any Note for
conversion during the period between the close of business on a Record Date but prior to the
corresponding Interest Payment Date, the Company shall pay accrued interest on such Note on that
Interest Payment Date to the Holder of such Note as of such Record Date. However, the Holder
surrendering the Note for conversion shall be required to pay to the Company an amount equal to the
interest that has accrued as of such Interest Payment Date and that amount will be paid to the
Holder of such Note as of the Record Date pursuant to the preceding sentence.

     No sinking fund is provided for the Notes.

     [The following paragraph shall appear in each Global Note:

     In the event of a deposit or withdrawal of an interest in this Note, including an exchange,
transfer, repurchase or conversion of this Note in part only, the Trustee, as custodian of the
Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in
accordance with the Applicable Procedures.]

     [The following paragraph shall appear in each Note that is not a Global Note:

     In the event of repurchase or conversion of this Note in part only, a new Note or Notes for
the unrepurchased or unconverted portion hereof will be issued in the name of the Holder hereof.]

     If an Event of Default shall occur and be continuing, the principal amounts of all the Notes,
together with accrued interest to the date of declaration, may be declared due and payable in the
manner and with the effect provided in the Indenture. Upon payment (a) of the principal

19

 

amounts so declared due and payable, together with accrued interest to the date of
declaration, and (b) of interest on any overdue principal and, to the extent permitted by
applicable law, overdue interest, all of the Company’s obligations in respect of the payment of the
principal of and interest on the Notes shall terminate.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Notes under the Indenture at any time by the Company and the Trustee with either (a) the written
consent of the Holders of not less than a majority in principal amount of the Notes at the time
Outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding
Notes at which a quorum is present, by the Holders of at least a majority in aggregate principal
amount of the Outstanding Notes represented and entitled to vote at such meeting. The Indenture
also contains provisions permitting the Holders of specified percentages in principal amounts of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to waive compliance
by the Company with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note
issued in exchange therefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note or such other Note.

     As provided in and subject to the provisions of the Indenture, the Holder of this Note shall
not have the right to institute any proceeding with respect to the Indenture or for the appointment
of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Notes shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee, the Holder or
Holders shall have offered indemnity satisfactory to the Trustee, the Trustee shall not have
received from the Holders of a majority in principal amount of the Notes Outstanding a direction
inconsistent with such request, and the Trustee shall have failed to institute any such proceeding
for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Note for the enforcement of any payment of
principal amount hereof or interest hereon on or after the respective due dates expressed herein or
for the enforcement of the right to convert this Note as provided in the Indenture.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal amount of and interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Note as provided in the Indenture.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable on the Note Register upon surrender of this Note for
registration of transfer at the Corporate Trust Office of the Trustee or at such other office or
agency of the Company as may be designated by it for such purpose in the Borough of Manhattan, The
City of New York (which shall initially be an office or agency of the Trustee), or at such other
offices or agencies as the Company may designate, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing,

20

 

and thereupon one or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees by the Registrar. No
service charge shall be made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to recover any tax or other governmental charge payable in
connection therewith.

     Prior to due presentation of a Note for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such Note is registered
as the owner thereof for all purposes, whether or not such Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the contrary.

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

     THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

     All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture. In the event of a conflict between this Note and the Indenture,
the terms of the Indenture shall govern.

ABBREVIATIONS

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

     TEN COM: as tenant-in-common

     TEN ENT as tenants by the entireties

     JT TEN as joint tenants with right of survivorship and not as tenants-in-common

     UNIF
GIFT MIN ACT: Custodian under Uniform Gifts to Minors Act ___ (State)

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

21

 

ELECTION OF HOLDER TO REQUIRE REPURCHASE

     (1) Pursuant to Article XII of the Indenture, the undersigned hereby elects to have this Note
repurchased by the Company.

     (2) The
undersigned hereby directs the Trustee or the Company to pay it or ___ the repurchase
price as set forth in the Indenture.

Dated:

	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 

	 	Signature(s)	 	 

Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved
signature guarantee program pursuant to Rule 17Ad-15 under the Notes Exchange Act of 1934.

	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 
	 

	 	Signature Guaranteed	 	 

principal amount to be repurchased (at least U.S. $1,000 or an integral multiple of $1,000 in
excess thereof):

	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 

Remaining principal amount following such repurchase (not less than U.S. $1,000):

	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 

NOTICE: The signature to the foregoing Election must correspond to the Name as written upon the
face of this Note in every particular, without alteration or any change whatsoever.

          Section 2.3 Form of Certificate of Authentication. The Trustee’s certificate of
authentication shall be in substantially the following form:

     This is one of the Notes referred to in the within-mentioned Indenture.

Dated:                                        

	 	 	 	 	 
	 	                     ,

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 

22

 

	 	 	 	 	 

          Section 2.4 Form of Conversion Notice.

CONVERSION NOTICE

     The undersigned Holder of this Note hereby irrevocably exercises the option to convert this
Note, or any portion of the principal amount hereof (which is U.S. $1,000 or an integral multiple
of U.S. $1,000 in excess thereof; provided that, the unconverted portion of such principal amount
is equal to or in excess of U.S. $1,000) below designated, into the Conversion Consideration in
accordance with the terms of the Indenture referred to in this Note, and directs that such
Conversion Consideration, be delivered to and be registered in the name of the undersigned unless a
different name has been indicated below. If shares of Common Stock or Notes are to be registered
in the name of a Person other than the undersigned, (a) the undersigned will pay all transfer taxes
payable with respect thereto and (b) signature(s) must be guaranteed by an Eligible Guarantor
Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934. Any amount required to be paid by the undersigned on
account of interest accompanies this Note.

Dated:

	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 
	 

	 	Signature(s)	 	 

     If shares or Notes are to be registered in the name of a Person other than the Holder, please
print such Person’s name and address:

	 	 	 
	 

	 	 
	 	 	 
	(Name)
	 	 
	 
	 	 
	 	 	 
	(Address)
	 	 
	 
	 	 
	 	 	 
	Social Security or other Identification
Number, if any Signature(s) must be
guaranteed by an Eligible Guarantor
Institution with membership in an
approved signature guarantee program
pursuant to Rule 17Ad -15 under the
Securities Exchange Act of 1934.
	 	 
	 
	 	 
	 	 	 
	[Signature Guaranteed]
	 	 

If only a portion of the Notes is to be converted, please indicate:

23

 

	1.	 	Principal amount to be converted: U.S. $ ___
	 
	2.	 	Principal amount and denomination of Notes representing unconverted principal amount to be
issued:
	 
	 	 	Amount: U.S. $___Denominations: U.S. $___

(U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof; provided that, the
unconverted portion of such principal amount is equal to or in excess of U.S. $1,000)

          Section 2.5
Form of Assignment. For value received ___ hereby sell(s), assign(s) and
transfer(s) unto ___ (Please insert social security or other identifying number of assignee) the
within Note, and hereby irrevocably constitutes and appoints
___ as attorney to transfer the said
Note on the books of the Company, with full power of substitution in the premises.

Dated:

	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 
	 

	 	Signature(s)	 	 

Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an
approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of
1934.

	 	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 
	 

	 	Signature Guaranteed	 	 

24

 

ARTICLE III

THE NOTES

          Section 3.1 Title and Terms. (a) The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is initially limited to U.S. “$___,” except
for Notes authenticated and delivered pursuant to Section 3.5, 3.6, 3.7, 8.5, 11.5 or 11.6 in
exchange for, or in lieu of, other Notes previously authenticated and delivered under this
Indenture. The Company may, from time to time, issue additional Notes under this Indenture in
unlimited principal amount in accordance with the provisions for the issuance of notes contained
herein, and each such additional Note shall be of the same class as all other Notes then
Outstanding and entitled to the all of the benefits of this Indenture; provided that, except as
otherwise specifically provided in this Indenture, the aggregate principal amount of Notes issued
under this Indenture may not exceed (1) the aggregate principal amount of Notes authorized for
issuance by the Company pursuant to one or more Orders for authentication, minus (2) the aggregate
principal amount of Notes duly authenticated and delivered by the Trustee that have been cancelled.

          (b) The Notes shall be known and designated as the “       
   % Convertible Senior Notes due
        ,
20___” of the Company. Their Stated Maturity shall be      , 20___ and they
shall bear interest on their principal amount beginning      , 20___.

          (c) The principal amount of and interest on the Notes shall be payable as provided in Sections
3.2, 3.8 and 3.9 of this Indenture (any city in which any Paying Agent is located being herein
called a “Place of Payment”).

          (d) The Notes shall be convertible as provided in Article XI (any city in which any Conversion
Agent is located being herein called a “Place of Conversion”).

          (e) The Notes shall be subject to repurchase by the Company at the option of the Holders as
provided in Article XII.

          Section 3.2 Maturity, Interest and Principal Payments Generally. (a) The Notes will
mature on      , 20___, and Holders will be entitled to receive the principal
amount of their Notes on that date, unless the Notes were earlier repurchased or converted pursuant
to the terms of this Indenture.

          (b) A Holder of a Note at the close of business on a Record Date shall be entitled to receive
such interest on the corresponding Interest Payment Date; provided, however, that subject to
Section 11.6, the Company will not pay accrued interest on Notes surrendered for conversion and
upon payment by or on behalf of the Company of the Conversion Consideration with respect thereto
the Company shall satisfy its obligations with respect to the Notes, including the payment of the
principal amount and any such accrued but unpaid interest, such
amounts being deemed to have been paid in full rather than cancelled, extinguished or
forfeited by receipt of Conversion Consideration.

25

 

          (c) Except as provided below, the Company will pay interest on:

          (i) any Global Note to the Depositary therefor in immediately available funds; and

          (ii) any certificated Notes by check mailed to the Holders of those Notes, provided that a
Holder of certificated Notes with an aggregate principal amount in excess of $2.0 million will be
paid by wire transfer in immediately available funds upon its election if the Holder has provided
us with wire transfer instructions at least 10 business days prior to the payment date.

          (d) At maturity, interest on any certificated Notes will be payable at the office of the
Trustee.

          (e) Payments on the Notes will be made in U.S. dollars at the office of the Trustee; provided
that, the Company may elect to make payments by check mailed to the Holder’s registered address or,
with respect to Global Notes, by wire transfer in immediately available funds.

          Section 3.3 Denominations. The Notes shall be issuable only in fully registered book
entry form, without coupons, in denominations of U.S. $1,000 principal amount and integral
multiples of U.S. $1,000 in excess thereof.

          Section 3.4 Execution, Authentication, Delivery and Dating. (a) The Notes shall be
executed on behalf of the Company by its Chairman of the Board, its President or Chief Executive
Officer, or one of its Vice Presidents. Any such signature may be manual or facsimile.

          (b) Notes bearing the manual or facsimile signature of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such Notes or
did not hold such offices at the date of such Notes.

          (c) At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Notes executed by the Company to the Trustee or to its order for
authentication, together with a Company Order for the authentication and delivery of such Notes,
and the Trustee in accordance with such Company Order shall authenticate and make available for
delivery such Notes as in this Indenture provided.

          (d) Each Note shall be dated the date of its authentication.

          (e) No Note shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Note a certificate of authentication substantially in
the form provided for herein executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.

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          Section 3.5 Global Notes; Non-global Notes; Book-entry Provisions. (a) (a) Each
Global Note authenticated under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Note or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global Note shall constitute a
single Note for all purposes of this Indenture.

          (b) No Global Note may be exchanged in whole or in part for Notes registered, and no transfer
of a Global Note in whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Note or a nominee thereof unless (i) such Depositary (A) has notified
the Company that it is unwilling to be a Depositary for such Global Note or (B) has ceased to be a
clearing agency registered as such under the Exchange Act and the Company has not appointed a
successor Depositary within 90 days or (ii) there shall have occurred and be continuing an Event of
Default with respect to such Global Note. In the event clause (i)(A) of the immediately preceding
sentence is applicable, if a successor Depositary for such Global Note is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee, upon receipt of a Company Order,
accompanied by an Officers’ Certificate, directing the authentication and delivery of Notes, will
authenticate and deliver, Notes, in any authorized denominations in an aggregate principal amount
equal to the principal amount of such Global Note in exchange for such Global Note. Notes issued
upon the events described in Section 3.5(b) shall be in definitive, fully registered form, without
interest coupons.

          (c) If any Global Note is to be exchanged for other Notes or canceled in whole, it shall be
surrendered by or on behalf of the Depositary or its nominee to the Trustee, as Note Registrar, for
exchange or cancellation, as provided in this Article III. If any Global Note is to be exchanged
for other Notes or canceled in part, or if another Note is to be exchanged in whole or in part for
a beneficial interest in any Global Note, in each case, as provided in Section 3.6, then either (i)
such Global Note shall be so surrendered for exchange or cancellation, as provided in this Article
III, or (ii) the principal amount thereof shall be reduced or increased by an amount equal to the
portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Note
to be so exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Note Registrar, whereupon the
Trustee, in accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Note, the Trustee shall authenticate and deliver any Notes
issuable in exchange for such Global Note (or any portion thereof) to or upon the order of, and
registered in such names as may be directed by, the Depositary or its authorized representative.
Upon the request of the Trustee in connection with the occurrence of
any of the events specified in the preceding paragraph, the Company shall promptly make
available to the Trustee a reasonable supply of Notes that are not in the form of Global Notes.
The Trustee shall be entitled to rely upon any order, direction or request of the Depositary or its
authorized representative which is given or made pursuant to this Article III if such order,
direction or request is given or made in accordance with the Applicable Procedures.

          (d) Every Note authenticated and delivered upon registration of transfer of, or in exchange
for or in lieu of, a Global Note or any portion thereof, whether pursuant to this Article III or
otherwise, shall be authenticated and delivered in the form of, and shall be, a

27

 

registered Global
Note, unless such Note is registered in the name of a Person other than the Depositary for such
Global Note or a nominee thereof, in which case such Note shall be authenticated and delivered in
definitive, fully registered form, without interest coupons.

          (e) The Depositary or its nominee, as registered owner of a Global Note, shall be the Holder
of such Global Note for all purposes under the Indenture and the Notes, and owners of beneficial
interests in a Global Note shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner’s beneficial interest in a Global Note will be shown only on, and the
transfer of such interest shall be effected only through, records maintained by the Depositary or
its nominee or its Agent Members and such owners of beneficial interests in a Global Note will not
be considered the owners or holders thereof.

          Section 3.6 Registration; Registration of Transfer and Exchange. (a) The Company
shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register
maintained in such office referred to as the “Note Register”) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes. The Trustee is hereby appointed “Note Registrar” for the purpose of
registering Notes and transfers and exchanges of Notes as herein provided.

          (b) Upon surrender for registration of transfer of any Note at an office or agency of the
Company designated pursuant to Section 10.2 for such purpose, the Company shall execute, and, upon
receipt of a Company Order, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized denominations and of
a like aggregate principal amount and bearing such restrictive legends as may be required by this
Indenture.

          (c) At the option of the Holder, and subject to the other provisions of this Section, Notes
may be exchanged for other Notes of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at any such office or agency. Whenever any
Notes are so surrendered for exchange, and subject to the other provisions of this Section, the
Company shall execute and, upon receipt of a Company Order, the Trustee shall authenticate and
deliver, the Notes that the Holder making the exchange is entitled to receive. Every Note
presented or surrendered for registration of transfer or for exchange shall (if so required by the
Company or the Note Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee and the Note Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.

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

          (e) No service charge shall be charged to a Holder for any registration of transfer or
exchange of Notes except as provided in Section 3.7, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes, other than exchanges

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pursuant to Section 3.5, 3.6,
3.7, 8.5, 11.5 or 11.6 (other than where the shares of Common Stock are to be issued or delivered
in a name other than that of the Holder of the Note) not involving any transfer and other than any
stamp and other duties, if any, which may be imposed in connection with any such transfer or
exchange by the United States or any political subdivision thereof or therein, which shall be paid
by the Company.

          (f) Neither the Trustee, the Paying Agent nor any of their agents shall (i) have any duty to
monitor compliance with or with respect to any Federal or state or other securities or tax laws or
(ii) have any duty to obtain documentation on any transfers or exchanges other than as specifically
required hereunder.

          Section 3.7 Mutilated, Destroyed, Lost or Stolen Notes. (a) If any mutilated Note is
surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding. If the Holder of such lost, stolen or destroyed Note delivers to
the Company and the Trustee:

          (i) evidence to their satisfaction of the destruction, loss or theft of any Note, and

          (ii) such security or indemnity as may be satisfactory to the Company and the Trustee to save
each of them and any agent of either of them harmless, then, in the absence of actual notice to the
Company or the Trustee that such Note has been acquired by a bona fide purchaser, the Company shall
execute and the Trustee shall authenticate and deliver, in lieu of any such lost, stolen or
destroyed Note, a new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

          (b) In case any such mutilated, destroyed, lost or stolen Note has become or is about to
become due and payable, the Company in its discretion, but subject to any conversion rights, may,
instead of issuing a new Note, pay such Note, upon satisfaction of the conditions set forth in the
preceding paragraph.

          (c) Upon the issuance of any new Note under this Section, 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 (other than any stamp and other duties, if any, which may be imposed in connection
therewith by the United States or any political subdivision thereof or therein, which shall be paid
by the Company) and any other expenses (including the fees and expenses of the Trustee) connected
therewith.

          (d) Every new Note issued pursuant to this Section 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 such new Note shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

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

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          Section 3.8 Interest. Subject to the last paragraph of Section 3.9, interest will
accrue on the Notes at the rate of      % per annum, from      , 20___, or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or duly provided for,
semi-annually in arrears on            and            in each year (each, an
“Interest Payment Date”), commencing      , 20___. Except as otherwise provided herein,
interest payable on each Interest Payment Date shall be payable to Holders of record as of the
applicable Regular Record Date and shall include interest accrued from and including the
immediately proceeding Interest Payment Date (or the Issue Date if no interest has been paid
thereon) to but excluding such Interest Payment Date.

          Section 3.9 Payment of Interest; Interest Rights Preserved. (a) Any interest on any
Note that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder 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 (i) or (ii) below:

          (i) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Notes (or their respective Predecessor Notes) are registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Note, the date of the proposed payment and the Special Record
Date, and at the same time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements reasonably satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. The Special Record Date for the
payment of such Defaulted Interest shall be not more than 15 days and not less than 10 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 Trustee, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at such Holder’s address as it
appears in the Note Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the Notes (or their
respective Predecessor Notes) are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause (ii).

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

          (b) Subject to the foregoing and following provisions of this Section 3.9 and Section 3.6,
each Note delivered under this Indenture upon registration of transfer of or in

30

 

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 Note.

          (c) Interest on any Note that is converted in accordance with Section 11.1 during a Record
Date Period shall be payable in accordance with the provisions of Section 11.1.

          Section 3.10 Persons Deemed Owners. Prior to due presentment of a Note for
registration of transfer, the Company, the Trustee, any Paying Agent and any agent of the Company,
the Trustee or any Paying Agent may treat the Person in whose name such Note is registered as the
owner of such Note for the purpose of receiving payment of the principal amount of and interest on
such Note (subject to Section 3.2 and Section 3.9) and for all other purposes whatsoever, whether
or not such Note be overdue, and neither the Company, the Trustee, any Paying Agent nor any agent
of the Company, the Trustee or any Paying Agent shall be affected by notice to the contrary.

          Section 3.11 Cancellation. All Notes surrendered for payment, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee. All Notes so delivered to the Trustee shall be cancelled
promptly by the Trustee (or its agent). No Notes shall be authenticated in lieu of or in exchange
for any Notes canceled as provided in this Section. The Trustee shall dispose of all cancelled
Notes in accordance with applicable law and its customary practices in effect from time to time.

          Section 3.12 Computation of Interest. Interest on the Notes shall be computed on the
basis of a 360-day year of twelve 30-day months.

          Section 3.13 CUSIP Numbers. The Company in issuing Notes may use “CUSIP” numbers (if
then generally in use); if so, the Trustee shall use such CUSIP numbers in notices of repurchase as
a convenience to Holders; provided that any such notice may state that no representation is made as
to the correctness of such CUSIP numbers either as printed on the Notes or as contained in any
notice of a repurchase and that reliance may be placed only on the serial or other identification
numbers printed on the Notes, and any such repurchase shall not be affected by any defect in or
omission of such CUSIP numbers. The Company will promptly notify the Trustee of any change in the
CUSIP numbers.

ARTICLE IV

SATISFACTION AND DISCHARGE

          Section 4.1 Satisfaction and Discharge of Indenture. This Indenture shall upon
Company Request cease to be of further effect (except as to any surviving rights of conversion, or
registration of transfer or exchange, or replacement of Notes herein expressly provided for and in
the form of Note set forth in Section 2.2 and the Company’s obligations to the Trustee pursuant to
Section 6.7), and the Trustee, at the expense of the Company, shall execute proper instruments in
form and substance reasonably satisfactory to the Trustee acknowledging satisfaction and discharge
of this Indenture, when

          (a) Either:

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          (i) all Notes theretofore authenticated and delivered (other than (A) Notes which have been
destroyed, lost or stolen and that have been replaced or paid as provided in Section 3.7 and (B)
Notes for whose payment money has theretofore been deposited in trust or segregated and held in
trust by the Trustee or the Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or

          (ii) all such Notes not theretofore delivered to the Trustee or its agent for cancellation
(other than Notes referred to in clauses (A) and (B) of clause (a)(i) above): (A) have become due
and payable, or (B) will have become due and payable at their Stated Maturity within one year; and

          (iii) the Company has deposited or caused to be deposited with the Trustee as trust funds
(immediately available to the Holders in the case of clause (ii)(A) above or held in trust for such
purpose, in the case of clause (ii)(B) or (ii)(C) above) an amount in cash sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for the principal amount of and interest to the date of such deposit (in the case of
Notes which have become due and payable) or to the Stated Maturity, as the case may be;

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

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

     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 6.7, the obligations of the Company to any Authenticating
Agent under Section 6.12, the obligations of the Trustee under Section 4.2 and the last paragraph
of Section 10.3 and the obligations of the Company and the Trustee under Section 3.6 and Article XI
shall survive.

          Section 4.2 Application of Trust Money. (a) Subject to the provisions of the last
paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be
held in trust for the sole benefit of the Holders, and such monies shall be applied by the Trustee,
in accordance with the provisions of the Notes and this Indenture, to the payment, either directly
or through any Paying Agent, to the Persons entitled thereto, of the principal amount and interest
for whose payment such money has been deposited with the Trustee.

          (b) All moneys deposited with the Trustee pursuant to Section 4.1 (and held by it or any
Paying Agent) for the payment of Notes subsequently converted shall be returned to the Company.

          (c) The Company shall pay and indemnify the Trustee against any tax, fee or other charge
imposed or assessed against all money deposited with the Trustee pursuant to Section 4.1 (other
than income taxes and franchise taxes incurred or payable by the
Trustee and 

32

 

such other taxes, fees
or charges incurred or payable by the Trustee that are not directly the result of the deposit of
such money with the Trustee).

ARTICLE V

DEFAULT AND REMEDIES

          Section 5.1 Events of Default. (a) “Event of Default,” wherever used herein, means
any one of the following events (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or governmental body):

          (i) the Company fails to pay principal on any Note when due whether at Maturity, upon
repurchase following a Fundamental Change or otherwise;

          (ii) the Company fails to pay interest on any Note when due if such failure continues for 30
days;

          (iii) the Company fails to perform any other agreement required of the Company in this
Indenture if such failure continues for 60 days after notice is given in accordance with this
Indenture;

          (iv) the Company defaults in its conversion obligations upon exercise of a Holder’s conversion
right, unless such default is cured within five days after written notice of default is given to
the Company by the Trustee or the Holder of the Note;

          (v) the Company fails to provide any required notice of a Fundamental Change within the time
period required by this Indenture, if such failure continues for 30 days after notice of the
Company’s failure to do so;

          (vi) any Indebtedness for money borrowed by the Company or one of its subsidiaries (all or
substantially all of the outstanding voting securities of which are owned, directly, or indirectly,
by us) in an aggregate outstanding principal amount in excess of $25.0 million is not paid at final
maturity or upon acceleration and such Indebtedness is not discharged, or such acceleration is not
cured or rescinded, within 30 days after written notice as provided in this Indenture;

          (vii) failure by the Company or any of its subsidiaries to pay final and non-appealable
judgments entered by a court or courts of competent jurisdiction, the aggregate uninsured portion
of which is at least $25.0 million, if the judgments are not paid, discharged or stayed within 30
days; and

          (viii) the entry by a court having jurisdiction in the premises of (A) a decree or order for
relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization, or other similar law
or (B) a decree or order adjudging the Company or any Significant Subsidiary

33

 

a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization, arrangement,
adjustment, or composition of or in respect of the Company or any Significant Subsidiary under any
applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of the Company or any Significant Subsidiary or of
any substantial part of the property of either or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive calendar days;

          (ix) the commencement by the Company or any Significant Subsidiary of a voluntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization, or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by either to the entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization, or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against either, or the filing by either of a petition
or answer or consent seeking reorganization or relief with respect to the Company or any
Significant Subsidiary under any applicable Federal or state bankruptcy, insolvency,
reorganization, or other similar law, or the consent by either to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or other similar official of the Company or any Significant Subsidiary or of any
substantial part of the property of either pursuant to any such law, or the making by either of an
assignment for the benefit of creditors, or the admission by
either in writing of its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company in furtherance of any such action;

          (b) If an Event of Default (other than an Event of Default arising under Section 5.1(a)(viii)
or (ix) with respect to the Company) occurs and is continuing, then in every case the Trustee or
the Holders of at least 25% in aggregate principal amount of the Outstanding Notes may declare the
principal amount of the Notes to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration such principal
amount will become immediately due and payable. If an Event of Default under Section 5.1(a)(viii)
or (ix) occurs with respect to the Company, then the principal amount of and accrued interest on
all the Notes shall automatically become immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.

          (c) At any time after a declaration of acceleration with respect to Notes has been made but
before a judgment or decree for payment of the money due has been obtained in respect of such
acceleration, the Holders of a majority in aggregate principal amount of the Outstanding Notes by
written notice to the Trustee may on behalf of all the Holders rescind and annul an acceleration
and its consequences if the rescission would not conflict with any judgment or decree based on
acceleration and if all existing Events of Default with respect to the Notes (other than the
nonpayment of principal amounts or interest that has become due solely by reason of the declaration
of acceleration) have been cured or waived. No such rescission will affect any subsequent default
or impair any right consequent thereon.

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          Section 5.2
Covenant of Company to Pay to Trustee Whole Amount  Due on Notes on Default in Payment of Interest or Principal; Suits for Enforcement by
Trustee. (a) The Company covenants that if (i) default is made in the payment of any interest
on any Note when such interest becomes due and payable and such default continues for a period of
30 calendar days or (ii) default is made in the payment of the principal amount of any Note when it
becomes due and payable, the Company will, upon demand of the Trustee, pay to it, for the benefit
of the Holders of such Notes and, to the extent that payment of such interest will be legally
enforceable, interest on any overdue principal amount and, to the extent permitted by applicable
law, on any overdue interest, at the rate or rates prescribed therefor in such Notes, and, in
addition thereto, such further amount as will be sufficient to cover the reasonable costs and
expenses of collection, including the reasonable compensation, expenses, disbursements, and
advances of the Trustee and its agents and counsel.

          (b) If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its
own name and as trustee of an express trust, may institute a judicial proceeding for the collection
of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the property of the Company
or any other obligor upon the Notes, wherever situated.

          (c) If an Event of Default with respect to any Note occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of the Holders of Notes
by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper
remedy.

          (d) In case of any judicial proceeding relative to the Company (or any other obligor upon the
Notes), its property or its creditors, the Trustee will be entitled and empowered, by intervention
in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee will be authorized to collect and receive any money or other property
payable or deliverable on any such claims and to distribute the same, and any custodian, 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, in the
event that the Trustee consents to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses, disbursements, and
advances of the Trustee and its agents and counsel, and any other amounts due the Trustee under
Section 6.7.

          Section 5.3 Trustee May File Proof of Claim. (a) In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other obligor upon the
Notes or the property of the Company or of such other obligor or the creditors of either, the
Trustee (irrespective of whether the principal of, and any interest on, the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective of whether the

35

 

Trustee shall have made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or otherwise,

          (i) to file and prove a claim for the whole amount of the principal amount and interest owing
and unpaid in respect of the Notes and take such other actions, including participating as a
member, voting or otherwise, of any official committee of creditors appointed in such matter, and
to file such other papers or documents, in each of the foregoing cases, as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of Notes allowed in such judicial proceeding, and

          (ii) to collect and receive any moneys or other property payable or deliverable on any such
claim and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Holder of Notes to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders of Notes to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under Section 6.7.

          (b) Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent
to or accept or adopt on behalf of any Holder of a Note 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 of a Note in any such proceeding;
provided, however, that the Trustee may, on behalf of such Holders, vote for the election of a
trustee in bankruptcy or similar official.

          Section 5.4 Trustee May Enforce Claims Without Possession of Notes. All rights of
action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee
without the possession of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee will be brought in its own name as
trustee of an express trust, and any recovery of judgment will, after provision for the payment of
the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents
and counsel, be for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.

          Section 5.5 Application of Money Collected. Any money collected by the Trustee
pursuant to this Article will be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of the principal amount or
interest, upon presentation of the Notes and the notation thereon of the payment if only partially
paid and upon surrender thereof if fully paid:

     FIRST: To the payment of all amounts due the Trustee under Section 6.7;

     SECOND: To the payment of the amounts then due and unpaid for principal of and interest on
the Notes in respect of which or for the benefit of which such money has been

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collected, ratably,
without preference or priority of any kind, according to the amounts due and payable on such Notes
for principal amount and interest, respectively; and

     THIRD: To such other Person or Persons, if any, to the extent entitled thereto; and

     FOURTH: To the Company.

          Section 5.6 Limitation on Suits. No Holder of any Note shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

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

          (b) the Holders of at least 25% in aggregate principal amount of the Outstanding Notes shall
have made written request to the Trustee to institute proceedings in respect of such Event of
Default, appoint a receiver or pursue any other remedy hereunder, as applicable, in its own name as
Trustee hereunder;

          (c) such Holder or Holders have offered to the Trustee and, if requested, shall have provided
indemnity satisfactory to the Trustee against the costs, expenses, and liabilities to be incurred
in compliance with such request;

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

          (e) no direction inconsistent with such written request has been given to the Trustee during
the 60 calendar day period referred to in Section 5.6(d) hereof by the Holders of a majority in
aggregate principal amount of the Outstanding Notes, it being understood and intended that no one
or more of such Holders will have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb, or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or
to enforce any right under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.

     The Trustee may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.

     Notwithstanding the foregoing, this Section 5.6 shall not affect the right of a Holder to sue
for enforcement of the payment of the principal of or interest on its Note on or after the
respective due dates in the Note or the Holder’s right to convert its Notes in accordance with the
provisions of this Indenture.

          Section 5.7 Notice of Defaults. If a default occurs hereunder with respect to Notes,
the Trustee will give the Holders notice of such Event of Default of which it has actual notice
within 90 calendar days of occurrence; provided, however, to the extent consistent with the Trust
Indenture Act, the Trustee may withhold notice of any Event of Default (except a

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default of the
character specified in Section 5.1(a)(i) or Section 5.1(a)(ii)) if the Trustee in good faith
determines that the withholding of such notice is in the interests of the Holders.

          Section 5.8 Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Note will have the right,
which is absolute and unconditional, to receive payment of the principal amount of and interest on
such Note on the respective Stated Maturities expressed in such Note (or, in the case of
repurchase, on the Fundamental Change Repurchase Date) and, as contemplated by Article XI, to
convert such Note in accordance with its terms and to institute suit for the enforcement of any
such payment, and any such right to convert and such rights may not be impaired without the consent
of such Holder.

          Section 5.9 Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such 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 Trustee and the Holders will continue as though no such
proceeding had been instituted.

          Section 5.10 Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost, or stolen Notes in the last
paragraph of Section 3.7, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every right and remedy
will, to the extent permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, will not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

          Section 5.11 Delay or Omission not Waiver. No delay or omission of the Trustee or of
any Holder of any Notes 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 5.12 Control by Holders of Notes. The Holders of a majority in principal
amount of the Outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Notes; provided that, the Trustee may refuse to
follow any direction that conflicts with any rule of law or with this Indenture, that is
prejudicial to the rights of other Holders or that would involve the Trustee in personal liability.

          Section 5.13 Waiver of Past Defaults. The Holders, either through the written consent
of not less than a majority in principal amount of the Outstanding Notes or by the adoption of a
resolution, at a meeting of Holders of the Outstanding Notes at which a quorum is

38

 

present, by the
Holders of at least a majority in aggregate principal amount of the Outstanding Notes represented
at such meeting, may, by notice to the Trustee, on behalf of the Holders of all the Notes waive any
past default hereunder and its consequences, except a default (i) in the payment of the principal
amount of or interest on any Note, (ii) in respect of the conversion of any Note in accordance with
the provisions of the Note and this Indenture or (iii) in respect of our compliance with any of the
provisions of this Indenture that would require the consent of the Holder of each Outstanding Note
affected.

     Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon.

          Section 5.14 Undertaking for Costs. All parties to this Indenture agree, and each
Holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy under this
Indenture, or any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but the provisions of
this Section shall not apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Notes, or to any suit instituted by any Holder of
any Note for the enforcement of the payment of the principal amount of or interest on any Note on
or after the respective Stated Maturity or Maturities expressed in such Note (or, in the case of
repurchase, on or after the Fundamental Change Repurchase Date) or for the enforcement of the right
to convert any Note in accordance with Article XI.

          Section 5.15 Waiver of Stay, Usury or Extension Laws. The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, usury or extension law
wherever enacted, now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede by reason of such law 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 VI

THE TRUSTEE

          Section 6.1 Certain Duties and Responsibilities. (a) Except during the continuance of
an Event of Default, (i) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and (ii) in the absence of bad faith on its

39

 

part, the
Trustee may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture, but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture, but not to verify the contents
thereof.

          (b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent 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,
except that (i) this paragraph (c) shall not be construed to limit the effect of paragraph (a) of
this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by
a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; (iii) the Trustee shall not be liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Notes 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; and (iv) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its rights or powers.

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

          (e) The Trustee may refuse to perform any duty or exercise any right or power under this
Indenture unless it receives indemnity satisfactory to it against any loss, liability or expense.

          Section 6.2 Notice of Defaults. Within 90 days after the occurrence of any default
hereunder as to which the Trustee has received written notice, the Trustee shall give to all
Holders of Notes, in the manner provided in Section 1.6, notice of such default, unless such
default shall have been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal amount of or interest on any Note the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders.

          Section 6.3 Certain Rights of Trustee. Subject to the provisions of Section 6.1:

          (a) the Trustee may conclusively rely, and shall be protected in acting or refraining from
acting, upon any resolution, Officers’ Certificate, other certificate, statement,

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instrument, opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document (collectively, the
“Documents”) believed by it to be genuine and to have been signed or presented by the proper party
or parties, and the Trustee need not investigate any fact or matter stated in such Documents;

          (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced
by a Company Request or Company Order and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;

          (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that
a matter be proved or established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be the one specifically prescribed) may, in the absence of bad faith
on its part, request and conclusively rely upon an Officers’ Certificate or Opinion of Counsel;

          (d) the Trustee may consult with counsel of its selection and the advice of such counsel or
any Opinion of Counsel shall 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;

          (e) the Trustee shall 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 of Notes pursuant to this
Indenture, unless such Holders shall have offered, and, if requested by the Trustee, delivered to
the Trustee, reasonable security against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;

          (f) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or
document, but the Trustee in its discretion may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney and shall, absent its bad faith, incur no liability of
any kind by reason of such inquiry or investigation;

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

          (h) the rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder, absent bad faith on the part the of Trustee (in any such
capacity) and of such agent, custodian or other Person.

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          Section 6.4 Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes (except the Trustee’s certificates of
authentication) shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity,
sufficiency or priority of this Indenture, of the Notes or of the Common Stock issuable upon the
conversion of the Notes. The Trustee shall not be accountable for the use or application by the
Company of Notes or the proceeds thereof.

          Section 6.5 May Hold Notes, Act as Trustee Under Other Indentures. The Trustee, any
Authenticating Agent, any Paying Agent, any Conversion Agent or any other agent of the Company or
the Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Conversion Agent or such other agent.

     The Trustee may become and act as trustee under other indentures under which other securities,
or certificates of interest or participation in other securities, of the Company are outstanding in
the same manner as if it were not Trustee hereunder.

          Section 6.6 Money Held in Trust. Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as otherwise agreed in
writing with the Company.

          Section 6.7 Compensation and Reimbursement. (a) The Company agrees:

          (i) to pay to the Trustee from time to time such reasonable compensation as the Company and
the Trustee shall from time to time agree in writing for its acceptance of this Indenture and for
all services rendered by it hereunder (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust);

          (ii) except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the Trustee (including
costs and expenses of enforcing this Indenture and defending itself against any claim (whether
asserted by the Company, any Holder of Notes or any other Person) or liability in connection with
the exercise of any of its powers or duties hereunder) in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and

          (iii) to indemnify the Trustee (and its directors, officers, employees and agents) for, and to
hold it harmless against, any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or administration of this trust,
including the reasonable costs, expenses and reasonable attorneys’
fees of defending itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.

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          (b) The Trustee shall have a lien prior to the Notes on all money or property held or
controlled by the Trustee to secure the Company’s payment obligations in this Section, except that
held in trust to pay principal and interest on the Notes.

          (c) When the Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.1(a)(viii) or (ix) with respect to the Company, the expenses
(including the reasonable charges of its counsel) and the compensation for the services are
intended to constitute expenses of the administration under any applicable Federal or state
bankruptcy, insolvency or other similar law.

          (d) The provisions of this Section 6.7 shall survive the termination of this Indenture or the
earlier resignation or removal of the Trustee.

          Section 6.8 Corporate Trustee Required; Eligibility. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to
act as such, and the Trustee and its parent corporation shall have (or be part of a holding company
group with) a combined capital and surplus of at least U.S. $50 million, subject to supervision or
examination by Federal or state authority, and in good standing. The Trustee or an Affiliate of
the Trustee shall maintain an established place of business in the Borough of Manhattan, The City
of New York. If such corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so published. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified in this Article
and a successor shall be appointed pursuant to Section 6.9.

          Section 6.9 Resignation and Removal; Appointment of Successor. (a) No resignation or
removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 6.10.

          (b) The Trustee may resign at any time by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been
delivered to the Trustee within 30 calendar days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

          (c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal
amount of the Outstanding Notes, delivered to the Trustee and the Company. If the instrument of
acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the
Trustee within 30 calendar days after the giving of such notice of
removal, the removed Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

          (d) The Trustee may be removed at any time by the Company and the Company may appoint a
successor Trustee pursuant to this Article; provided that, (i) there is not

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an Event of Default
that is continuing at the time of removal, (ii) the successor Trustee appointed by the Company
meets the eligibility requirements of Section 6.8, and (iii) such removal and resignation shall not
become effective until the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 6.10.

          (e) If at any time: (i) the Trustee shall cease to be eligible under Section 6.8 and shall
fail to resign after written request therefor by the Company or by any Holder of a Note who has
been a bona fide Holder of a Note for at least six months, or (ii) the Trustee shall become
incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then,
in any such case (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to
Section 5.14, any Holder of a Note who has been a bona fide Holder of a Note for at least six
months may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

          (f) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee and shall comply with the applicable requirements of this
Section 6.9 and Section 6.10. If no successor Trustee shall have been so appointed by the Company
or the Holders of Notes and accepted appointment in the manner required by this Section 6.9 and
Section 6.10, any Holder of a Note who has been a bona fide Holder of a Note for at least six
months may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.

          (g) The Company shall give notice of each resignation and each removal of the Trustee and each
appointment of a successor Trustee to all Holders of Notes in the manner provided in Section 1.6.
Each notice shall include the name of the successor Trustee and the address of its Corporate Trust
Office.

          Section 6.10 Acceptance of Appointment by Successor. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.

     No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be eligible under this Article.

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          Section 6.11 Merger, Conversion, Consolidation or Succession to Business. Any
corporation into which the Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee (including the trust created by this Indenture), by sale or otherwise,
shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise
eligible under this Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated
with the same effect as if such successor Trustee had itself authenticated such Notes.

          Section 6.12 Authenticating Agents. (a) The Trustee may, with the consent of the
Company, appoint an Authenticating Agent or Agents acceptable to the Company with respect to the
Notes, which Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Notes issued upon exchange or substitution pursuant to this Indenture.

          (b) Notes authenticated by an Authenticating Agent shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder, and every reference in this Indenture to the authentication and delivery of Notes by the
Trustee or the Trustee’s certificate of authentication shall be deemed to include authentication
and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be subject to acceptance by the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating Agent and subject to
supervision or examination by government or other fiscal authority. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section
6.12, such Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.12.

          (c) Any corporation into which an Authenticating Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to
the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be
an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section 6.12, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.

          (d) An Authenticating Agent may resign at any time by giving written notice thereof to the
Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section,
the Trustee may appoint a successor Authenticating Agent which shall be subject to acceptance by
the Company. Any successor Authenticating Agent upon

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acceptance of its appointment hereunder shall
become vested with all the rights, powers and duties of its predecessor hereunder, with like effect
as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

          (e) The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section.

          (f) If an Authenticating Agent is appointed with respect to the Notes pursuant to this
Section, the Notes may have endorsed thereon, in addition to or in lieu of the Trustee’s
certification of authentication, an alternative certificate of authentication in the following
form:

     This is one of the Notes referred to in the within-mentioned Indenture.

	 	 	 	 	 
	                                                            , as Trustee	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	As Authenticating Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	As Authenticating Agent	 	 

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          Section 6.13 Disqualification; Conflicting Interests. If the Trustee has or shall acquire
a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.

          Section 6.14 Preferential Collection of Claims Against Company. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon the Notes), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor).

ARTICLE VII

CONSOLIDATION, MERGER, SALE OR TRANSFER

          Section 7.1 Company May Consolidate, Etc. Only on Certain Terms.

          (a) The Company shall not (i) consolidate with or merge into any Person, or convey, transfer
or lease the Company’s properties and assets substantially as an entirety to any successor Person,
unless:

          (i) in the case of a merger or consolidation, either the Company is the surviving Person or,
if the Company is not the surviving Person, the surviving Person formed by such merger or
consolidation or into which the Company is merged or consolidated or in the case of a conveyance,
transfer or lease of the Company’s properties and assets substantially as an entirety, the Person
to which the Company’s properties and assets are so transferred shall be a corporation organized
and existing under the laws of the United States, any state thereof, or the District of Columbia,
and shall execute and deliver to the Trustee a supplemental indenture expressly assuming the
payment when due of the principal amount of and interest, if any, on the Notes and the performance
of each of the Company’s other covenants under the Notes and this Indenture;

          (ii) in either case, immediately after giving effect to such transaction, no default or Event
of Default shall have occurred and be continuing; and

          (iii) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such merger, consolidation, conveyance, transfer or lease and, if a
supplemental indenture is required, such supplemental indenture comply with this Article VII and
that all conditions precedent provided for in this Indenture relating to such transaction have been
complied with.

          (b) In the case of a reclassifications, consolidations, mergers, sales or transfers of assets
or other transactions that cause the Common Stock to be converted into the right to receive other
securities, cash or property, upon conversion of Notes, Holders so
converting shall be entitled to receive the same type and amount of consideration that a
Holder would have been entitled to receive if the Holder had held a number of shares of Common
Stock equal to the Applicable Conversion Rate immediately prior to these events; provided, however,
that upon conversion such Holder will continue to receive cash in satisfaction of all or

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a portion
of the Conversion Consideration as provided in Article XI. In such event, the Company and the
Trustee shall enter into a supplemental indenture providing for adjustments that, for events
subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article VII. The above provisions of
this Section shall similarly apply to successive reclassifications, consolidations, mergers, sales
or transfers of assets or other transactions. Notice of the execution of such a supplemental
indenture shall be given by the Company to the Holder of each Note as provided in Section 1.6
promptly upon such execution. For purposes of this Section 7.1(b), the type and amount of
consideration that a Holder would have been entitled to receive as a holder of the Common Stock in
the case of reclassifications, consolidations, mergers, sales or transfers of assets or other
transactions that cause the Common Stock to be converted into the right to receive more than a
single type of consideration (determined based in part upon any form of stockholder election), will
be deemed to be the weighted average of the types and amounts of consideration received by the
holders of the Common Stock that affirmatively make such an election.

          (c) Neither the Trustee nor any Conversion Agent shall be under any responsibility to
determine the correctness of any provisions contained in any such supplemental indenture relating
either to the kind or amount of shares of Common Stock or other securities or property or cash
receivable by Holders of Notes upon the conversion of their Notes after any such consolidation,
merger, conveyance, transfer, sale or lease or to any such adjustment, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in relying upon, an
Officers’ Certificate with respect thereto, which the Company shall cause to be furnished to the
Trustee.

          Section 7.2 Successor Substituted. Upon any consolidation of the Company with, or
merger of the Company into, any other Person or any sale, transfer or lease, sale or other
disposition of all or substantially all the properties and assets of the Company in accordance with
Section 7.1, the successor Person formed by such consolidation or into which the Company is merged
or to which such sale, transfer, lease or other disposition is made shall succeed to and be
substituted for, and may exercise every right and power of the Company under this Indenture with
the same effect as if such successor or Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Notes.

ARTICLE VIII

SUPPLEMENTAL INDENTURES

          Section 8.1 Supplemental Indentures Without Consent of Holders of Notes.
Without the consent of any Holders of Notes, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto for any of the following purposes:

          (a) to cure any ambiguity, defect or inconsistency or make any other change that does not
adversely affect the interests of the Holders of the Notes in any material respect;

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          (b) to provide for the assumption of our obligations under this Indenture by a successor upon
any merger, consolidation or asset transfer permitted under this Indenture;

          (c) to make any change that would provide any additional rights or benefits to the Holders of
the Notes;

          (d) to comply with the requirements of the Commission to maintain the qualification of this
Indenture under the TIA;

          (e) to conform the text of this Indenture or the Notes to any provision of the “Description of
Notes” section of the Company’s Prospectus Supplement dated      , 20___, to the extent that
such provision in that “Description of Notes” was intended to be a verbatim recitation of a
provision of this Indenture or the Notes; or

          (f) to provide for the issuance of additional Notes in accordance with the limitations set
forth in this Indenture.

     Upon Company Request, accompanied by a Board Resolution authorizing the execution of any such
supplemental indenture, and subject to and upon receipt by the Trustee of the documents described
in Section 8.3 hereof, the Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained.

          Section 8.2 Supplemental Indentures with Consent of Holders of Notes. Except as set
forth in Section 8.1, with either:

          (a) the written consent of the Holders of not less than a majority in principal amount of the
Outstanding Notes, by the Act of said Holders delivered to the Company and the Trustee, or

          (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding Notes at which
a quorum is present, by the Holders of at least a majority in principal amount of the Outstanding
Notes represented at such meeting,

     the Company, when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner
the rights of the Holders of Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent or affirmative vote of the Holder of each
Outstanding Note affected thereby:

               (i) change the Stated Maturity of the principal of, or interest on, any Note;

               (ii) reduce the principal amount or Fundamental Change Repurchase Price of, or interest on,
any Note;

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               (iii) reduce the amount of principal payable upon acceleration of the Maturity of any Note;

               (iv) change the place or currency of payment of principal of, or interest on, any Note;

               (v) impair the right to institute suit for the enforcement of any payment on, or conversion
of, any Note;

               (vi) modify the provisions with respect to the repurchase right of the Holders upon a
Fundamental Change in a manner adverse to Holders;

               (vii) adversely affect the right of Holders to convert Notes other than as provided in this
Indenture;

               (viii) reduce the percentage in principal amount of Outstanding Notes required for
modification or amendment of this Indenture;

               (ix) reduce the percentage in principal amount of Outstanding Notes necessary for waiver of
compliance with certain provisions of this Indenture or for waiver of certain defaults;

               (x) reduce the percentage required for the adoption of a resolution or for a quorum required
at any meeting of Holders of Notes at which a resolution is adopted; or

               (xi) modify provisions with respect to modification and waiver (including waiver of Events of
Default), except to increase the percentage required for modification or waiver or to provide for
consent of each affected Holder of Notes.

     It shall not be necessary for any Act of Holders of Notes under this Section 8.2 to approve
the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.

          Section 8.3 Execution of Supplemental Indentures. In executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is authorized or permitted by
this Indenture, and that such supplemental indenture has been duly authorized, executed and
delivered by the Company, constitutes a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms and
does not conflict with or violate the terms of this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which adversely affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise.

          Section 8.4 Effect of Supplemental Indentures. Upon the execution of any supplemental
indenture under this Article VIII, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all purposes;

50

 

and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder appertaining thereto shall
be bound thereby.

          Section 8.5 Reference in Notes to Supplemental Indentures. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine, new Notes so
modified as to conform, in the opinion of the Company and the Trustee, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Notes.

          Section 8.6 Notice of Supplemental Indentures. Promptly after the execution by the
Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 8.1 or
Section 8.2, the Company shall give notice to all Holders of Notes of such fact, setting forth in
general terms the substance of such supplemental indenture, in the manner provided in Section 1.6.
Any failure of the Company to give such notice, or any defect therein, shall not in any way impair
or affect the validity of any such supplemental indenture.

ARTICLE IX

MEETINGS OF HOLDERS OF NOTES

          Section 9.1 Purposes for Which Meetings May Be Called. A meeting of Holders of Notes
may be called at any time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other action provided by this
Indenture to be made, given or taken by Holders of Notes.

          Section 9.2 Call, Notice and Place of Meetings. (a) The Trustee may at any time call
a meeting of Holders of Notes for any purpose specified in Section 9.1, to be held at such time and
at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of Holders of Notes, setting forth the time and the place of such meeting
and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.6,
not less than 21 nor more than 180 days prior to the date fixed for the meeting.

          (b) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at
least 10% in principal amount of the Outstanding Notes shall have requested the Trustee to call a
meeting of the Holders of Notes for any purpose specified in Section 9.1, by written request
setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee
shall not have mailed the notice of such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company
or the Holders of Notes in the amount specified, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York, for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in paragraph (a) of this Section.

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          Section 9.3 Persons Entitled to Vote at Meetings. To be entitled to vote at any
meeting of Holders of Notes, a Person shall be:

          (a) a Holder of one or more Outstanding Notes, or

          (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of Notes
of one or more Outstanding Notes by such Holder or Holders.

     The only Persons who shall be entitled to be present or to speak at any meeting of Holders of
Notes shall be the Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company and its counsel.

          Section 9.4 Quorum; Action. (a) The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Notes shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders, be dissolved. In any other case, the meeting may be adjourned for a period of
not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting (subject to repeated applications of this
sentence). Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 9.2(a), except that such notice need be given only once not less than five days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the principal amount of the Outstanding
Notes that shall constitute a quorum.

          (b) Subject to the foregoing, at the reconvening of any meeting adjourned for a lack of a
quorum, the Persons entitled to vote 25% in aggregate principal amount of the Outstanding Notes at
the time shall constitute a quorum for the taking of any action set forth in the notice of the
original meeting.

          (c) At a meeting or an adjourned meeting duly reconvened and at which a quorum is present as
aforesaid, any resolution and all matters (except as limited by the proviso to and except to the
extent Section 10.07 requires a different vote) shall be effectively passed and decided if passed
or decided by the lesser of: (i) the Holders of not less than a majority in aggregate principal
amount of Outstanding Notes and (ii) the Persons entitled to vote not less than a majority in
aggregate principal amount of Outstanding Notes represented and entitled to vote at such meeting.

          (d) Any resolution passed or decisions taken at any meeting of Holders of Notes duly held in
accordance with this Section shall be binding on all the Holders of Notes whether or not present or
represented at the meeting. The Trustee shall, in the name and at the expense of the Company,
notify all the Holders of Notes of any such resolutions or decisions pursuant to Section 1.6.

          Section 9.5 Determination of Voting Rights; Conduct and Adjournment of Meetings. (a)
Notwithstanding any other provisions of this Indenture, the Trustee may make

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such reasonable
regulations as it may deem advisable for any meeting of Holders of Notes in regard to proof of the
holding of Notes and of the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations, the holding of
Notes shall be proved in the manner specified in Section 1.4 and the appointment of any proxy shall
be proved in the manner specified in Section 1.4 or by having the signature of the Person executing
the proxy guaranteed by any bank, broker or other eligible institution participating in a
recognized medallion signature guarantee program.

          (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman (which may be
the Trustee) of the meeting, unless the meeting shall have been called by the Company or by Holders
of Notes as provided in Section 9.2(b), in which case the Company or the Holders of Notes calling
the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in principal amount of the Outstanding Notes represented at the meeting.

          (c) At any meeting, each Holder of a Note or proxy shall be entitled to one vote for each U.S.
$1,000 principal amount of Notes held or represented by him; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Note challenged as not Outstanding and ruled by
the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right
to vote, except as a Holder or proxy.

          (d) Any meeting of Holders of Notes duly called pursuant to Section 9.2 at which a quorum is
present may be adjourned from time to time by Persons entitled to vote a majority in principal
amount of the Outstanding Notes represented at the meeting, and the meeting may be held as so
adjourned without further notice.

          Section 9.6 Counting Votes and Recording Action of Meetings. The vote upon any
resolution submitted to any meeting of Holders of Notes shall be by written ballots on which shall
be subscribed the signatures of the Holders of Notes or of their representatives by proxy and the
principal amounts at Stated Maturity and serial numbers of the Outstanding Notes held or
represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes
who shall count all votes cast at the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified written reports in duplicate of all votes
cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of
Holders of Notes shall be prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice
of the meeting and showing that said notice was given as provided in Section 9.2(a) and, if
applicable, Section 9.4(a). Each copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company
and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of
the matters therein stated.

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ARTICLE X

COVENANTS

          Section 10.1 Payment of Principal and Interest. The Company covenants and agrees that
it will duly and punctually pay the principal amount of and interest on the Notes in accordance
with the terms of the Notes and this Indenture. The Company will deposit or cause to be deposited
with the Trustee or its nominee, no later than the opening of business on the date of the Stated
Maturity of any Note or no later than the opening of business on the due date for any installment
of interest, all payments so due, which payments shall be in immediately available funds on the
date of such Stated Maturity or due date, as the case may be.

          Section 10.2 Maintenance of Offices or Agencies. The Company will maintain in the
Borough of Manhattan, The City of New York, an office or agency where the Notes may be surrendered
for registration of transfer or exchange or for presentation for payment or for conversion or
repurchase and where notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not designated or appointed by
the Trustee. If at any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office or the office or agency of
the Trustee in the Borough of Manhattan, The City of New York.

     The Company may at any time and from time to time vary or terminate the appointment of any
such agent or appoint any additional agents for any or all of such purposes; provided, however,
that until all of the Notes have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal amount of and interest on the Notes have been made available for
payment and either paid or returned to the Company pursuant to the provisions of Section 10.3, the
Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be presented or surrendered for payment and conversion, which shall initially be the
Corporate Trust Office of the Trustee, where Notes may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the Trustee, and notice to
the Holders in accordance with Section 1.6, of the appointment or termination of any such agents
and of the location and any change in the location of any such office or agency.

     The Company hereby initially designates the Trustee as Paying Agent, Note Registrar and
Conversion Agent, and the Corporate Trust Office of the Trustee as one such office or agency of the
Company for each of the aforesaid purposes.

          Section 10.3 Money for Note Payments to Be Held in Trust. (a) If the Company shall
act as its own Paying Agent, it will, on or before each due date of the principal amount of or
interest on any of the Notes, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal amount of or interest so becoming due until such

54

 

sums
shall be paid to such Persons or otherwise disposed of as herein provided and the Company will
promptly notify the Trustee, in writing, of its action or failure so to act.

          (b) Whenever the Company shall have one or more Paying Agents, it will, no later than the
opening of business on each due date of the principal amount or interest on any Notes, deposit with
the Trustee a sum in funds immediately payable on the payment date sufficient to pay the principal
amount or interest so becoming due, such sum to be held for the benefit of the Persons entitled to
such principal amount or interest and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee, in writing, of any failure so to act.

          (c) The Company will cause each Paying Agent other than the Trustee to execute and deliver to
the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section that such Paying Agent will:

          (i) hold all sums held by it for the payment of the principal amount of or interest on Notes
for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;

          (ii) give the Trustee written notice of any default by the Company (or any other obligor upon
the Notes) in the making of any payment of principal amount or interest; and

          (iii) at any time during the continuance of any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held by such Paying Agent.

          (d) The Company may at any time, for the purpose of obtaining the satisfaction and discharge
of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to
pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be
held by the Trustee upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.

          (e) Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal amount of or interest on any Note and remaining unclaimed
for two years after such principal amount or interest has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.

          (f) In the absence of a written request from the Company to return unclaimed funds to the
Company, the Trustee shall from time to time deliver all unclaimed funds to or as directed by
applicable escheat authorities, as determined by the Trustee in its sole discretion, in accordance
with the customary practices and procedures of the Trustee. Any unclaimed funds held by the
Trustee pursuant to this Section shall be held uninvested and without any liability of interest.

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          Section 10.4 Existence. Subject to Article VII, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its existence, rights
(charter and statutory) and franchises; provided, however, that the Company shall not be required
to preserve any such right or franchise if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.

          Section 10.5 Payment of Taxes and Other Claims. The Company will pay or discharge, or
cause to be paid or discharged, before the same may become delinquent,

          (a) all taxes, assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any Significant Subsidiary,

          (b) all claims for labor, materials and supplies which, if unpaid, might by law become a lien
or charge upon the property of the Company or any Significant Subsidiary, and

          (c) subject to Section 11.14, all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with the issuance,
transfer, exchange or conversion of any Notes or with respect to this Indenture;

provided, however, that, in the case of clauses (a) and (b), the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim (i)
if the failure to do so will not, in the aggregate, have a material adverse impact on the Company
and its Subsidiaries taken as a whole, or (ii) if the amount, applicability or validity is being
contested in good faith by appropriate proceedings.

          Section 10.6 Statement by Officers as to Default. (a) The Company shall deliver to
the Trustee, within 90 days after the end of each fiscal year of the Company ending after the date
hereof, an Officers’ Certificate, stating whether or not to the best knowledge of the signer
thereof the Company is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all such defaults and the
nature and status thereof of which they may have knowledge.

          (b) The Company will deliver to the Trustee, forthwith upon becoming aware of any default or
any Event of Default under the Indenture, an Officers’ Certificate specifying with particularity
such default or Event of Default and further stating what action the Company has taken, is taking
or proposes to take with respect thereto.

          (c) Any notice required to be given under this Section shall be delivered to the Trustee at
its Corporate Trust Office.

          Section 10.7 Waiver of Certain Covenants. The Company may omit in any particular
instance to comply with any covenant or condition set forth in Sections 10.4 (other than with
respect to the existence of the Company (subject to Article VII)) and 10.5, inclusive (other than a
covenant or condition which under Article VII cannot be modified or amended

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without the consent of
the Holder of each Outstanding Note affected), if before the time for such compliance the Holders
shall, through:

          (a) the written consent of not less than a majority in aggregate principal amount of the
Outstanding Notes or

          (b) the adoption of a resolution at a meeting of Holders of the Outstanding Notes at which a
quorum is present by the Holders of not less than a majority in aggregate principal amount of the
Outstanding Notes represented at such meeting,

either waive such compliance in such instance or generally waive compliance with such covenant
or condition, but no such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee or any Paying or Conversion Agent in respect of any such
covenant or condition shall remain in full force and effect.

ARTICLE XI

CONVERSION OF NOTES

          Section 11.1 Right to Convert. Subject to and upon compliance with the provisions of
this Article XI, at the option of the Holder, any Notes or any portion of the principal amount
thereof that is an integral multiple of $1,000 may be converted into Conversion Consideration (as
set forth in Section 11.7) at the Applicable Conversion Rate (determined as hereinafter provided)
at any time prior to Maturity:

          (a) prior to      , 20___, during any calendar quarter commencing after
___, 20___, if the Closing Sale Price of the Common Stock for at least 20 Trading Days
in the 30 consecutive Trading Day period ending on the last Trading Day of the immediately
preceding calendar quarter is greater than 120% of the Applicable Conversion Price on each such
Trading Day;

          (b) prior to      , 20___, during the five consecutive Business Day period
following any five consecutive Trading Day period in which the Trading Price of a Note for each day
of that five Trading Day period was less than 95% of the product of (i) the Closing Sale Price of
the Common Stock on such corresponding Trading Day and (ii) the Applicable Conversion Rate;

          (c) at any time on or after      , 20___; or

          (d) upon the occurrence of a corporate transaction described in Section 11.2 and upon the
occurrence of certain Fundamental Changes described in Section 11.5.

     The rate (the “Conversion rate”) at which shares of Common Stock shall be delivered upon
conversion shall be initially shares of Common Stock for each U.S. $1,000 principal
amount of Notes. The Conversion Rate shall be adjusted in certain instances as provided in this
Article XI.

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          Section 11.2 Certain Corporate Transactions.

          (a) If the Company elects to:

          (i) distribute to all or substantially all holders of Common Stock certain rights or warrants
entitling them to purchase, for a period expiring within 60 days of the declaration date for such
distribution, shares of Common Stock at less than the average of the Closing Sale Price of the
Common Stock for the five consecutive Trading Days ending on the Trading Day immediately preceding
the declaration date for such distribution; or

          (ii) distribute to all or substantially all holders of Common Stock the Company’s assets, debt
securities certain rights or warrants to purchase the Company’s
securities, which distribution has a per share value exceeding 10% of the Closing Sale Price
of the Company’s Common Stock on the Trading Day immediately preceding the declaration date for
such distribution;

then in the case of the foregoing clauses (i) and (ii), the Company shall notify the Holders at
least 20 days prior to the ex-dividend date for such distribution. Once the Company has given such
notice, even if the Notes are not otherwise convertible at such time, Holders may surrender their
Notes for conversion at any time thereafter until the earlier of the close of business on the
Business Day immediately prior to the ex-dividend date or the Company’s announcement that such
distribution will not take place, subject to the limitations imposed by the last paragraph of
Section 11.1; provided, however, that a Holder may not exercise this right to convert if the Holder
is otherwise entitled to participate in the distribution without conversion. As used herein, the
term “ex-dividend date” or “ex-date” when used with respect to any issuance or distribution, shall
mean the first date upon which a sale of shares of Common Stock does not automatically transfer the
right to receive the relevant dividend or distribution from the seller of such Common Stock to its
buyer.

          Section 11.3
Determination of Satisfaction of Certain Conversion Triggers. (a) Prior
to      , 20___, the Conversion Agent shall upon the Company’s request determine if the
Notes are convertible in accordance with Section 11.1(a) and shall notify the Company and the
Trustee if the Notes become convertible.

          (b) The Conversion Agent shall determine if the Notes are convertible in accordance with
Section 11.1(b) and notify the Company and the Trustee if the Notes become convertible; provided
however, the Conversion Agent shall have no obligation to make such determination unless the
Company has requested such determination and the Company shall have no obligation to make such
request unless requested to do so by a Holder of the Notes that has provided the Company with
reasonable evidence that the Trading Price of the Notes would be less than 95% of the Closing Sale
Price of the Common Stock multiplied by the Applicable Conversion Rate. Upon such request, the
Company shall instruct the Conversion Agent to determine the Trading Price of a Note beginning on
the next Trading Day and on each successive Trading Day until the Trading Price of a Note is
greater than or equal to 95% of the product of (1) the Closing Sale Price of the Common Stock and
(2) the Applicable Conversion Rate.

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          Section 11.4 Notice of Conversion. Upon any determination by the Company, the
Conversion Agent or the Trustee that Holders are or will be entitled to convert the Notes in
accordance with the provisions of Section 11.1, the Company will issue a Press Release containing
information about the right of conversion through a public medium that is customary for such Press
Release and publish the information on the Company’s website.

          Section 11.5 Conversion at Option of the Holder Upon a Fundamental Change.

          (a) If a Fundamental Change under clause (2), (3) or (4) of the definition of such term occurs
at any time prior to Maturity, each Holder will have the right to convert any or all of such
Holder’s Notes into Conversion Consideration pursuant to the procedures set forth in this Section
11.5.

          (b) At least 15 Trading Days prior to the anticipated effective date of a Fundamental Change,
the Company will provide to all Holders, the Trustee and the Paying Agent and the Conversion Agent
a notice of the anticipated occurrence of the Fundamental Change (such notice, a “Fundamental
Change Conversion Right Notice”) and of the resulting rights of Holders. Each Fundamental Change
Conversion Right Notice shall state, among other things:

          (i) If applicable, that the Company will increase the Conversion Rate applicable to Notes
converted in connection with the Fundamental Change as set forth in Section 11.10 hereof;

          (ii) Whether the Company expects that Holders will have the right to require the Company to
repurchase Notes as described in Article XII; and

          (iii) The fact that Holders have the right to convert Notes in accordance with this Section
11.5.

          (c) Simultaneously with providing the Fundamental Change Conversion Right Notice, the Company
will issue a Press Release and publish the information contained therein through a public medium
customary for such Press Releases publish the information on its website.

          (d) To exercise the conversion right contemplated by this Section 11.5, a Holder must
surrender Notes for conversion to the Conversion Agent during the period starting on the 15th day
prior to the anticipated effective date of the Fundamental Change and ending at the close of
business on the 15th day after the actual effective date of such Fundamental Change (or, if later
and to the extent applicable, the close of business on the second Business Day immediately
preceding the Fundamental Change Repurchase Date) (the “Fundamental Change Election Date”). The
Holder must surrender the Notes together with a Fundamental Change Election Notice (the
“Fundamental Change Election Notice”) which must state:

          (i) if certificated, the certificate numbers of the Notes to be delivered for conversion;

59

 

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

          (iii) that the Notes are to be converted by the Company pursuant to the applicable provisions
of the Notes and this Indenture.

     If the Notes are Global Notes, the Fundamental Change Election Notice must comply with the
Applicable Procedures.

          (e) A Holder may withdraw any Fundamental Change Election Notice (in whole or in part) by a
written notice of withdrawal delivered to the Paying Agent prior to the close of business on the
Business Day prior to the Fundamental Change Election Date. The notice of withdrawal must state:
(i) the principal amount of the withdrawn Notes; (ii) if certificated Notes have been issued, the
certificate numbers of the withdrawn Notes; and (iii) the principal amount, if any, that remains
subject to the Fundamental Change Election Notice.

     If the Notes are Global Notes, the withdrawal notice must comply with the Applicable
Procedures.

          (f) A Holder must either effect book-entry transfer or deliver the Notes, together with
necessary endorsements, to the office of the Paying Agent after delivery of the Fundamental Change
Election Notice to receive payment of the Conversion Consideration. Holders will receive payment
of the Conversion Consideration promptly following the later of the Fundamental Change Election
Date or the time of book-entry transfer or the delivery of the Notes to the Paying Agent. If the
Paying Agent holds money or securities sufficient to pay the Conversion Consideration of the Notes
on the Business Day following the Fundamental Change Election Date, then: (i) the Notes will cease
to be Outstanding and interest, if any, will cease to accrue or principal to accrete (whether or
not book-entry transfer of the Notes is made or whether or not the Note is delivered to the Paying
Agent); and (ii) all other rights of the Holder will terminate (other than the right to receive the
Conversion Consideration upon delivery or transfer of the Notes).

          Section 11.6 Exercise of Conversion Privilege. (a) In order to convert a Note other
than in connection with a Fundamental Change (which is governed by Section 11.5 above), the Holder
of any Note to be converted must deliver an irrevocable conversion notice substantially in the form
set forth in Section 2.4 together with the Note (if the Note is in certificated form), duly
endorsed in blank, by the time required by the applicable Section of this Article XI, to the
Conversion Agent at any office or agency of the Company maintained for that purpose pursuant to
Section 10.2 (the date of such delivery of notice and satisfaction of all other requirements for
conversion, the “Conversion Date”). Any Holder may obtain copies of the required form of the
conversion notice from the Conversion Agent. Upon conversion, the Company will satisfy its
conversion obligations with respect to the principal amount of the Notes to be converted into
Conversion Consideration.

          (b) The Conversion Agent will convert the Notes and the Company will remit the Conversion
Consideration as soon as practicable, but in no event later than the third Business Day following
the last day of the Applicable Conversion Reference Period.

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          (c) In the event any Holder surrenders any Note for conversion during the period between the
close of business on a Record Date but prior to the corresponding Interest Payment Date, the
Company shall pay accrued interest on such Note on that Interest Payment Date to the Holder of such
Note as of such Record Date. The Holder surrendering the Note for conversion shall be required to
pay to the Company an amount equal to the interest that has accrued as of such Interest Payment
Date and that will be paid to the Holder of such Note as of the Record Date.

          (d) Notes shall be deemed to have been converted immediately prior to the close of business on
the day of surrender of such Notes for conversion in accordance with the foregoing provisions, and
at such time the rights of the Holders of such Notes as Holders shall cease, and the Person or
Persons entitled to receive any Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Company shall issue and deliver to the Trustee,
for delivery to the Holder (unless a different Person is indicated on the Conversion Notice), a
certificate or certificates for the number of full shares of Common Stock issuable upon conversion
as provided in clause (b) above, together with payment in lieu of any fraction of a share, as
provided in Section 11.8.

          (e) In the case of any Note which is converted in part only, upon such conversion the Company
shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense
of the Company, a new Note or Notes of authorized denominations in an aggregate principal amount
equal to the unconverted portion of the principal amount of such Note. A Note may be converted in
part, but only if the principal amount of such Note to be converted is any integral multiple of
U.S. $1,000 (but for purposes of such denominations based on the principal amount of such Notes)
and the principal amount of such Note to remain Outstanding after such conversion is equal to or in
excess of U.S. $1,000.

          Section 11.7 Conversion Consideration.

     (a) Upon surrendering any Notes for conversion, the Holder of such Notes shall be entitled to
receive, in respect of each $1,000 principal amount of Notes:

     (i) cash in the amount equal to the lesser of:

                    a) the principal amount of each Note, or

                    b) the Conversion Value; and

     (ii) to the extent the Conversion Value exceeds $1,000, a number of shares of Common
Stock (the “Residual Value Shares”) equal to the sum of the Daily Trading Share Amounts for
each of the 30 consecutive Trading Days in the Applicable Conversion Reference Period;
provided, however, that the Company shall pay cash in lieu of fractional shares otherwise
issuable upon conversion of the Notes.

     If a Holder receives Common Stock upon conversion of Notes, such Holder will also receive the
associated rights under any stockholder rights plan that the Company may adopt, unless, prior to
conversion, the rights have expired, terminated, been exchanged or separated

61

 

from the Common Stock.
If the rights have been exchanged or separated from the Common Stock, the Conversion Rate shall be
adjusted at the time of such exchange or separation in accordance with Section 11.09(d) as if the
Company had made a distribution to all holders of its Common Stock.

     (b) The Company may elect to pay cash to Holders of Notes surrendered for conversion in lieu
of all or a portion of the Residual Value Shares issuable upon conversion of such Notes. Upon such
election, the Company shall provide notice to the relevant Holders and the Trustee stating the
dollar amount to be satisfied in cash (expressed as a percentage of each Residual Value Share that
shall be paid in cash in lieu of Common Stock) at any time on or before the date that is three
Business Days following receipt of any Holder’s Conversion Notice (the “Cash Settlement Notice
Period”). If the Company timely elects to pay cash for any portion of the Residual Value Shares
otherwise issuable to such Holder, such Holder may retract the Conversion Notice at any time during
the two Business Day period immediately following the Cash Settlement Notice Period (the
“Conversion Retraction Period”). If the Company does not make such an election, no retraction can
be made (and a Conversion Notice shall be irrevocable). In addition, if the Company elects to
settle all or any portion of the Residual Value Shares in cash in connection with conversions
within 30 days prior to the maturity date of the Notes, the Company shall send, on or prior to such
maturity date, a single notice for all such conversions to the Trustee with respect to the Residual
Value Shares to be satisfied in cash.

     The amount of cash payable in respect of each Residual Value Share otherwise issuable upon
conversion shall equal the sum of the Residual Cash Value for such share calculated for each day of
the Applicable Conversion Reference Period.

     (c) The Company will determine the Conversion Value, the Daily Trading Share Amount, the
calculation of the excess of the Conversion Value over the principal amount and the number of
shares of Common Stock and/or cash deliverable to Holders upon conversion in satisfaction of such
excess. Any such determination will be conclusive and binding absent manifest error.

          Section 11.8 Fractions of Shares. (a) No fractional shares of Common Stock shall be
issued upon conversion of any Note or Notes. Instead of any fractional shares of Common Stock that
would otherwise be issued upon conversion of the Notes, the Company will pay a cash amount
(calculated to the nearest cent) equal to the value of such fractional shares, based on the Closing
Sale Price on the last Trading Day of the Applicable Conversion Reference Period.

          (b) For purposes of paragraphs (a) above, if more than one Note shall be surrendered for
conversion at one time by a Holder, the number of full shares of Common Stock which shall be
issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount
of the Notes (or specified portions thereof) so surrendered.

          Section 11.9 Anti-Dilution Adjustments. The Conversion Rate will be subject to
adjustment, without duplication, as follows upon the occurrence of any of the following events:

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          (a) Stock Dividends in Common Stock. If the Company pays a dividend or makes a distribution
on Common Stock, payable exclusively in shares of Common Stock, the Conversion Rate in effect
immediately before the close of business on the record date fixed for
the determination of stockholders entitled to receive such dividend or other distribution
shall be adjusted by multiplying it by a fraction:

          (i) the numerator of which shall be the sum of (A) the number of shares of Common Stock
outstanding at the close of business on the date fixed for the dividend or distribution, plus (B)
the total number of shares constituting the 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 record date fixed for such dividend or distribution.

          (b) Issuance of Rights or Warrants. If the Company issues to all or substantially all holders
of Common Stock rights or warrants (other than pursuant to any dividend reinvestment or share
purchase or similar plan) entitling such holders to subscribe for or purchase shares of Common
Stock for a period expiring within 60 days from the date of issuance of the rights or warrants at
less than the Current Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or warrants, the Conversion Rate in
effect immediately before the close of business on the record date fixed for such determination
shall be increased by multiplying it by a fraction:

          (i) the numerator of which shall be the sum of (A) the number of shares of Common Stock
outstanding at the close of business on the date fixed for such distribution plus (B) the total
number of shares of Common Stock so offered for subscription or purchase;

          (ii) the denominator of which shall be the sum of (A) the number of shares of Common Stock
outstanding at the close of business on the date fixed for such distribution plus (B) the total
number of shares of Common Stock that the aggregate offering price of the total number of shares of
Common Stock offered for subscription or purchase would purchase at the Current Market Price.

     If, after any such date fixed for determination, any such rights or warrants are not in fact
exercised prior to the expiration thereof (and as a result no additional shares of Common Stock are
delivered or issued pursuant to such rights, options or warrants), the Conversion Rate shall be
immediately readjusted to the Conversion Rate that would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of delivery or issuance of only
the number of shares of Common Stock actually delivered or issued.

     “Current Market Price” of the Common Stock (unless otherwise stated below) means the average
of the Closing Sale Prices of the Common Stock for the five consecutive Trading Days ending on
Trading Day prior to the earlier of the record date or the ex-dividend Trading Day for such
distribution.

          (c) Stock Splits and Combinations. If the Company subdivides, splits or recombines the
outstanding shares of Common Stock (including an effective subdivision of Common Stock through the
reclassification of Common Stock), the Conversion Rate in effect

63

 

immediately before the close of
business on the record date fixed for such subdivision, split or recombination becomes effective
shall be proportionately increased or reduced.

          (d) Distributions of Indebtedness, Securities or Assets. If the Company distributes to all or
substantially all holders of Common Stock evidences of indebtedness, securities or other assets or
any other rights, options or warrants to purchase its securities (provided, however, that if these
rights are only exercisable upon the occurrence of specified triggering events, then the Conversion
Rate will not be adjusted until the triggering events occur), but excluding:

          (i) dividends or distributions described in Section 11.9(a);

          (ii) rights or warrants described in Section 11.9(b);

          (iii) dividends or distributions in connection with a Spin-Off described in Section 11.9(e);
and

          (iv) dividends or distributions paid exclusively in cash described in Section 11.9(f) (the
“distributed assets”);

the Conversion Rate in effect immediately before the close of business on the record date fixed for
determination of stockholders entitled to receive that distribution will be increased by
multiplying it by a fraction:

          (i) the numerator of which is the Current Market Price of the Common Stock; and

          (ii) the denominator of which is the Current Market Price of the Common Stock minus the fair
market value, as determined by the Board of Directors, whose determination in good faith will be
conclusive, of the portion of those distributed assets applicable to one share of Common Stock.

     Notwithstanding the foregoing, in cases where (i) the fair market value per share of Common
Stock of the distributed assets equals or exceeds the Current Market Price of the Common Stock, or
(ii) the Current Market Price of the Common Stock exceeds the fair market value per share of Common
Stock of the distributed assets by less than $1.00, in lieu of making the foregoing adjustment, the
Holder will have the right to receive upon conversion, in addition to cash and shares of Common
Stock, the distributed assets the Holder would have received if the Holder had held a number of
shares of Common Stock equal to the Applicable Conversion Rate in effect immediately prior to the
record date for such distribution of assets.

          (e) Spin-Offs. If the Company distributes to all or substantially all holders of capital
stock of any class or series, or similar equity interests, of or relating to a Subsidiary of the
Company or other business unit (“Spin-Off”), the Conversion Rate in effect immediately before the
close of business on the record date fixed for determination of stockholders entitled to receive
that distribution will be increased by multiplying it by a fraction equal to the sum of the Daily
Adjustments for each of the ten consecutive Trading Days beginning on the effective date of the
Spin-Off. The “Daily Adjustment” for any given Trading Day is equal to a fraction:

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          (i) the numerator of which is the Closing Sale Price of the Common Stock on that Trading Day
plus the Closing Sale Price of the portion of those shares of capital stock or
similar equity interests so distributed applicable to one share of Common Stock on that
Trading Day; and

          (ii) the denominator of which is the product of (a) 10 and (b) the Closing Sale Price of the
Common Stock on that Trading Day.

     The adjustment to the Conversion Rate in the event of a Spin-Off will take effect at the
opening of business on the tenth Trading Day from, and including, the effective date of the
Spin-Off.

          (f) Cash Dividends or Distributions. If the Company makes a distribution consisting
exclusively of cash to all or substantially all holders of the Common Stock, the Conversion Rate in
effect immediately before the close of business on the record date fixed for such dividend or
distribution will be increased by multiplying it by a fraction:

          (i) the numerator of which is the Current Market Price of the Common Stock; and

          (ii) the denominator of which is the Current Market Price of the Common Stock, minus the
amount per share of such distribution.

     Notwithstanding the foregoing, in cases where (i) the amount per share of Common Stock of such
distribution equals or exceeds the Current Market Price of the Common Stock or (ii) the Current
Market Price of the Common Stock exceeds the amount per share of Common Stock of such distribution
by less than $1.00, in lieu of making the foregoing adjustment, the Company will have the right to
adjust a Holder’s conversion right such that such Holder will receive upon conversion, in addition
to cash and shares of Common Stock, if any, the distribution the Holder would have received if the
Holder had held a number of shares equal to the Applicable Conversion Rate then in effect
immediately prior to the record date for such distribution. For purposes of this clause 11.9(f),
the “Current Market Price” of the Common Stock means the average of the Closing Sale Prices of the
Common Stock for the five consecutive Trading Days ending on the Trading Day prior to the
ex-dividend Trading Day for such cash distribution, and the new Conversion Rate will take effect
immediately after the record date fixed for determination of the stockholders entitled to receive
such distribution.

          (g) Tender or Exchange Offers. If the Company (or one of its Subsidiaries) makes a payment in
respect of a tender offer or exchange offer for Common Stock, to the extent the cash and value of
any other consideration included in the payment per share of the Common Stock exceeds the Closing
Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or
exchanges may be made pursuant to such tender offer or exchange offer, as the case may be, the
Conversion Rate in effect immediately before the close of business on the date fixed for the
consummation of such tender or exchange offer will be adjusted by multiplying it by a fraction:

          (i) the numerator of which shall 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

65

 

Common Stock the
Company or any such Subsidiary purchases in the tender or exchange offer and (B) the product of (1)
the number of shares of Common Stock outstanding on the date of
consummation of such tender or exchange offer less any such purchased shares and (2) the
Closing Sale Price of the Common Stock on the Trading Day next succeeding the date of the
expiration of the tender or exchange offer; and

          (ii) the denominator of which shall be the product of (A) the number of shares of Common Stock
outstanding on the date of consummation of such tender or exchange offer, including any such
purchased shares, and (B) the Closing Sale Price of the Common Stock on the Trading Day next
succeeding the date of expiration of the tender or exchange offer;

          (h) Repurchases. If the Company (or one of its Subsidiaries) makes a payment in respect of a
repurchase of Common Stock, the consideration for which exceeds the Then-Prevailing Market Price of
the Common Stock (such amount being the “Repurchase Premium”), and that repurchase, together with
any other repurchases of Common Stock by the Company or a Subsidiary of the Company involving a
Repurchase Premium concluded within the preceding 12 months, results in the payment by the Company
(or its Subsidiary) of an aggregate consideration exceeding an amount equal to 10% of the Market
Capitalization of the Common Stock, the Conversion Rate in effect immediately before the close of
business on the day of such payment in respect of a repurchase will be increased by multiplying it
by a fraction:

          (i) the numerator of which shall be the Current Market Price of the Common Stock; and

          (ii) the denominator of which shall be (A) the Current Market Price of the Common Stock, minus
(B) the quotient of (1) the aggregate amount of all of the Repurchase Premiums paid in connection
with such repurchases and (2) the number of shares of Common Stock outstanding on the day next
succeeding the date of the repurchase triggering the adjustment, as determined by the Board of
Directors;

	provided that no adjustment to the Conversion Rate shall be made to the extent the Conversion Rate
is not increased as a result of the above calculation and; provided further that the repurchases of
Common Stock effected by the Company, any of its Subsidiaries or their respective agents in
conformity with Rule 10b-18 under the Exchange Act will not be included in any adjustment to the
Conversion Rate made under this Section 11.9(h).

     For purposes of this Section 11.9(h):

          (i) “Market Capitalization” will be calculated by multiplying (A) the Current Market Price of
the Common Stock by (B) the number of shares of Common Stock then outstanding on the date of the
repurchase triggering the adjustment;

          (ii) “Current Market Price” will be the average of the Closing Sale Prices of the Common Stock
for the five consecutive Trading Days beginning on the Trading Day next succeeding the date of the
repurchase triggering the adjustment; and

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          (iii) in determining the Repurchase Premium, the “Then-Prevailing Market Price” of the Common
Stock will be the average of the Closing Sale Prices of the Common Stock for the five consecutive
Trading Days ending on the relevant repurchase date.

          (i) In addition to the adjustments set forth above, the Company may increase the Conversion
Rate as the Board of Directors considers 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
capital stock (or rights to acquire capital stock) or from any event treated as such for income tax
purposes. The Company may also, from time to time, to the extent permitted by applicable law,
increase the Conversion Rate by any amount for any period of at least 20 days if the Board of
Directors has determined that such increase would be in the Company’s best interests. If the Board
of Directors makes such a determination, it will be conclusive. The Company will give Holders at
least 15 days’ notice of such an increase in the Conversion Rate. Any increase, however, will not
be taken into account for purposes of determining whether the Closing Sale Price of the Common
Stock equals or exceeds 105% of the conversion price in connection with an event that otherwise
would be a Fundamental Change.

     No adjustment to the Conversion Rate or a Holder’s ability to convert its Notes will be made
if the Holder otherwise participated in the distribution without conversion.

     Notwithstanding the foregoing provisions of this Section 11.9, the Conversion Rate will not be
adjusted:

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

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

          (iii) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right
or exercisable, exchangeable or convertible security not described in the preceding clause and
outstanding as of the date the Notes were first issued;

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

          (v) for accrued and unpaid interest, if any.

     Holders will receive, upon conversion of their Notes, in addition to cash and Common Stock, as
the case may be, the associated rights under any stockholder rights plan the Company may adopt,
unless prior to such conversion a Trigger Event (as defined in Section 11.17) shall have occurred,
in which case the Conversion Rate will be adjusted at the time of the Trigger Event as described in
Section 11.9(f).

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     Simultaneously with an adjustment to the Conversion Rate, the Company will disseminate a Press
Release detailing the new Conversion Rate and other relevant information.

          Section 11.10 Adjustment to Conversion Rate In Connection With a Fundamental Change.
(a) If and only to the extent that a Holder converts Notes in connection with a Fundamental
Change of a nature described in clause (2), (3) or (4) of the definition thereof, the Company will
increase the Conversion Rate for Notes surrendered for conversion by a number of additional shares
(the “Additional Shares”) as described in clause (b) below; provided, however, that no increase
will be made in the case of a Fundamental Change that if at least 90% of the consideration paid for
Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to
dissenters’ appraisal rights) in such Fundamental Change transaction consists of shares of capital
stock (or American Depositary Shares representing such capital stock) traded on The Nasdaq National
Market or another established automated over-the-counter trading market in the United States or
listed on The New York Stock Exchange or another United States national securities exchange (or
that will be so quoted or traded immediately following the transaction) and as a result of such
transaction or transactions the notes become convertible solely into such capital stock (or
American Depositary Shares representing such capital stock). A conversion of a Note will only be
considered “in connection with” a Fundamental Change if the Note is surrendered for conversion to
the Conversion Agent on or after the effective date of the Fundamental Change and prior to the
15th day after the actual effective date of such Fundamental Change (or, if later and to
the extent applicable, the close of business on the second Business Day immediately preceding the
Fundamental Change Repurchase Date). In connection with such a Fundamental Change, the Company
must send Holders a Fundamental Change Conversion Right Notice at least 15 Trading Days prior to
the anticipated effective date of the Fundamental Change in which the Company will notify Holders
that, among other things, Holders will have the right to convert the Notes.

          (b) The following table sets forth the increase in the conversion rate, expressed as a number
of Additional Shares issuable per $1,000 initial principal amount of Notes, as a result of a
Fundamental Change that occurs for each hypothetical Stock Price and Effective Date set forth below
(the Stock Prices and Additional Share amounts set forth above are based upon a closing sale price
of
$        on      , 20___ and an initial conversion price of $        ):

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Price ($)
	Effective Date of	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fundamental Change	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

          (c) In the event that the exact Stock Price and Effective Date are not set forth in
Section 11.10(b), then:

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

          (ii) more
than $          per share, no adjustment will be made; and

          (iii) less
than $         per share, no adjustment will be made.

          (d) Notwithstanding the provisions of this Section 11.9, in no event will the Conversion Rate
exceed ___ per $1,000 principal amount of the Notes, after giving effect to the adjustments
set forth in this Section 11.10 and any other anti-dilution adjustments set forth in Section 11.9.

          (e) The adjustment to the Conversion Rate pursuant to this Section 11.10 will occur
on the Effective Date and will remain in effect only for purposes of determining the number of
shares a Holder is entitled to receive if such Holder submits a Fundamental Change Election Notice
and converts such Holder’s Notes in connection with the qualifying Fundamental Change.

          Section 11.11 Notice of Adjustments. Whenever the Conversion Rate is adjusted as
herein provided:

          (a) the Company shall compute the adjusted Conversion Rate in accordance with Section 11.9 and
11.10 and shall prepare a certificate signed by its principal financial officer, Comptroller or
Treasurer of the Company setting forth the adjusted Conversion Rate and showing in reasonable
detail the facts upon which such adjustment is based, and such certificate shall promptly be filed
with the Trustee and with each Conversion Agent; and

          (b) upon each such adjustment, a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall be required, and as soon as practicable after it
is required, such notice shall be provided by the Company to all Holders in accordance with Section
1.6.

     Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with
respect to any such certificate or the information and calculations contained therein, except to
exhibit the same to any Holder of Notes desiring inspection thereof at its office during normal
business hours, and shall not be deemed to have knowledge of any adjustment in the Conversion Rate
unless and until a Responsible Officer of the Trustee shall have received such a certificate.
Until a Responsible Officer of the Trustee receives such a certificate, the Trustee and each
Conversion Agent may assume without inquiry that the last Conversion Rate of which the Trustee has
knowledge remains in effect.

          Section 11.12 Notice of Certain Corporate Action. In case:

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          (a) the Company shall declare a dividend (or any other distribution) on its Common Stock
payable (i) otherwise than exclusively in cash or (ii) exclusively in cash in an amount that would
require any adjustment pursuant to Section 11.9; or

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

          (c) of any reclassification of the Common Stock, or of any consolidation, merger or share
exchange to which the Company is a party and for which approval of any stockholders of the Company
is required, or of the conveyance, sale, transfer or lease (other than a mere grant of security
interest) of all or substantially all of the assets of the Company; or

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

then the Company shall cause to be filed at each office or agency maintained for the purpose of
conversion of Notes pursuant to Section 10.2, and shall cause to be provided to all Holders in
accordance with Section 1.6, at least 20 days (or 10 days in any case specified in clause (a) or
(b) above and 30 days for clause (c) above) prior to the applicable record or effective date
hereinafter specified, a notice stating (i) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights, options or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights, options or warrants are to be determined or (ii) the date on which such
reclassification, consolidation, merger, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up is expected to become effective, and the date as of which it is expected
that holders of Common Stock of record will be entitled to exchange their shares of Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding up. Neither the
failure to give such notice or the notice referred to in the following paragraph nor any defect
therein shall affect the legality or validity of the proceedings described in clauses (a) through
(d) of this Section. If at the time the Trustee shall not be the Conversion Agent, a copy of such
notice shall also forthwith be filed by the Company with the Trustee.

     The Company shall cause to be filed at the Corporate Trust Office and each office or agency
maintained for the purpose of conversion of Notes pursuant to Section 10.2, and shall cause to be
provided to all Holders in accordance with Section 1.6, notice of any tender offer by the Company
or any Subsidiary for all or any portion of the Common Stock at or about the time that such notice
of tender offer is provided to the public generally.

          Section 11.13 Company to Provide Common Stock. As soon as practicable, the Company
shall reserve for issuance upon conversion of Notes an amount of shares of Common Stock sufficient
for the purpose of effecting the conversion of all of the Outstanding Notes.

          Section 11.14 Taxes on Conversions. Except as provided in the next sentence, the
Company will pay all stamp taxes and other duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Notes pursuant to Article XI. The

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Company
shall not, however, be required to pay any tax or duty (i) in respect of income of the Holder or
(ii) caused by a Holder’s request
that the shares of Common Stock deliverable upon conversion be issued in a name other than its
own. Certificates representing shares of Common Stock will be issued or delivered only after all
applicable taxes and duties payable by the Holder, if any, are paid.

          If the Conversion Consideration paid by the Company to a Holder upon conversion of the Notes
pursuant to this Article XI is not sufficient to allow the Company to comply with the U.S. federal
withholding tax obligations imposed by the Code with respect to accrued and unpaid interest on the
Notes payable to the beneficial owner of such Notes, the Company may, to the extent required by
applicable law, recoup or set-off such liability against any amounts owed to such Holder,
including, but not limited to, the shares of Common Stock to be issued upon conversion to such
beneficial owner or any actual cash dividends or distributions subsequently made with respect to
such shares of Common Stock to such beneficial owner.

          Section 11.15 Covenant as to Common Stock. The Company agrees that all shares of
Common Stock that may be delivered upon conversion of Notes, upon such delivery, will be newly
issued shares and will have been duly authorized and validly issued and will be fully paid and
nonassessable and, except as provided in Section 11.14, the Company will pay all taxes, liens and
charges with respect to the issue thereof.

          Section 11.16 Cancellation of Converted Notes. All Notes delivered for conversion
shall be delivered to the Trustee or its agent to be canceled by or at the direction of the
Trustee, which shall dispose of the same as provided in Section 3.11.

          Section 11.17 Rights Issued in Respect of Common Stock. 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 or warrants, until the occurrence of a specified event or events
identified in the instruments governing such rights or warrants (“Trigger Event”):

          (a) are deemed to be transferred with such shares of Common Stock,

          (b) are not exercisable, and

          (c) are also issued in respect of future issuances of Common Stock,

shall not be deemed distributed for purposes of Section 11.9(f) until the occurrence of the
earliest Trigger Event. In addition, in the event of any distribution of rights or warrants, or
any Trigger Event with respect thereto, that shall have resulted in an adjustment to the Conversion
Rate under Section 11.9(f), (1) in the case of any such rights or warrants that shall all have been
redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be
readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to the per share redemption
or repurchase price received by a holder of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders of Common Stock as
of the date of such redemption or repurchase, and (2) in the case of any such rights or

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warrants
all of which shall have expired without exercise by any holder thereof, the Conversion Rate shall
be readjusted as if such issuance had not occurred.

          Section 11.18 Responsibility of Trustee for Conversion Provisions. The Trustee,
subject to the provisions of Section 6.1, and any Conversion Agent shall not at any time be under
any duty or responsibility to any Holder of Notes to determine whether any facts exist that may
require any adjustment of the Conversion Rate, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, herein or in any supplemental
indenture provided to be employed, in making the same, or whether a supplemental indenture need be
entered into. Neither the Trustee, subject to the provisions of Section 6.1, nor any Conversion
Agent shall be accountable with respect to the validity or value (or the kind or amount) of any
Common Stock, or of any other securities or property or cash, which may at any time be issued or
delivered upon the conversion of any Note; and it or they do not make any representation with
respect thereto. Neither the Trustee, subject to the provisions of Section 6.1, nor any Conversion
Agent shall be responsible for any failure of the Company to make or calculate any cash payment or
to issue, transfer or deliver any shares of Common Stock or share certificates or other securities
or property or cash upon the surrender of any Note for the purpose of conversion; and the Trustee,
subject to the provisions of Section 6.1, and any Conversion Agent shall not be responsible for any
failure of the Company to comply with any of the covenants of the Company contained in this
Article.

ARTICLE XII

REPURCHASE OF NOTES

          Section 12.1 Repurchase at Option of the Holder Upon a Fundamental Change. (a) If a
Fundamental Change occurs at any time prior to Maturity, each Holder will have the right to require
the Company to repurchase any or all of such Holder’s Notes for cash, or any portion of the
principal amount thereof that is equal to $1,000 or an integral multiple of $1,000. The cash price
the Company is required to pay is equal to 100% of the principal amount of the Notes to be
purchased plus accrued and unpaid interest to (but not including) the Fundamental Change Repurchase
Date (the “Fundamental Change Repurchase Price”), unless such Fundamental Change Repurchase Date
falls after a Record Date and on or prior to the corresponding Interest Payment Date, in which case
the Company will pay the full amount of accrued and unpaid interest payable on such Interest
Payment Date to the Holder of record at the close of business on the corresponding Record Date.

          (b) Notwithstanding the foregoing, Holders will not have the right to require the Company to
repurchase any Notes if a Fundamental Change described in clause (2), (3) or (4) in the definition
of Fundamental Change occurs (and the Company will not be required to deliver the notice incidental
thereto), if either:

          (i) the Closing Sale Price of the Common Stock for any five Trading Days within the period of
10 consecutive Trading Days ending immediately after the later of the date of the Fundamental
Change or the date of the public announcement of the Fundamental Change, in the case of a
Fundamental Change relating to an acquisition of capital stock under clause (2)

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of the definition
of Fundamental Change, or within the period of ten consecutive Trading Days ending immediately
before the date of the Fundamental Change, in the case of a Fundamental Change relating to a
merger, consolidation, asset sale or otherwise under clause (3) of the definition of Fundamental
Change, or a change in the Board of Directors under clause (4) of the definition of Fundamental
Change, equals or exceeds 105% of the Applicable Conversion Price of the Notes in effect on each of
those five Trading Days; or

          (ii) at least 90% of the consideration paid for the Common Stock (excluding cash payments for
fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in a merger or
consolidation or a conveyance, sale, transfer or lease otherwise constituting a Fundamental Change
under clause (2) and/or (3) of the definition of Fundamental Change consists of shares of capital
stock (or American Depositary Shares representing capital stock) quoted on The Nasdaq National
Market or another established automated over-the-counter trading market in the United States or
traded on the New York Stock Exchange or another United States national securities exchange (or
will be so traded or quoted immediately following the merger or consolidation) and as a result of
the merger or consolidation the Notes become convertible into shares of such capital stock (or
American Depositary Shares representing capital stock).

          (c) On or before the 15th day after the Effective Date, the Company will provide to all
Holders, the Trustee, the Paying Agent and the Conversion Agent a notice of the occurrence of the
Fundamental Change and of the resulting repurchase right (the “Fundamental Change Repurchase Right
Notice”). The Fundamental Change Repurchase Right Notice shall state, among other things:

          (i) the events causing the Fundamental Change;

          (ii) the Effective Date of the Fundamental Change;

         (iii) the last date on which a Holder may exercise its repurchase right;

          (iv) the Fundamental Change Repurchase Price;

          (v) the Fundamental Change Repurchase Date;

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

          (vii) that the Notes with respect to which a Fundamental Change repurchase notice has been
given by the Holder may be converted only if the Holder withdraws the Fundamental Change repurchase
notice as described in clause (e) below; and

          (viii) the procedures that Holders must follow to require the Company to repurchase their
Notes.

          (d) Simultaneously with providing such Fundamental Change Repurchase Right Notice, the Company
will issue a Press Release and publish the information through a public medium customary for such
Press Releases.

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          (e) To exercise the repurchase right in connection with a Fundamental Change, a Holder must
deliver, before the close of business on the second Business Day immediately preceding the
Fundamental Change Repurchase Date, the Notes to be purchased, duly endorsed for transfer, together
with the Fundamental Change repurchase notice duly completed, to the Paying Agent. The Fundamental
Change repurchase notice must state:

          (i) if certificated, the certificate numbers of the Notes to be delivered for repurchase;

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

          (iii) that the Notes are to be repurchased by the Company pursuant to the applicable
provisions of the Notes and this Indenture.

     If the Notes are Global Notes, the Fundamental Change repurchase notice must comply with the
Applicable Procedures.

     A Holder may withdraw any Fundamental Change repurchase notice (in whole or in part) by a
written notice of withdrawal delivered to the Paying Agent prior to the close of business on the
Business Day prior to the Fundamental Change Repurchase Date. The notice of withdrawal must state:
(i) the principal amount of the withdrawn Notes; (ii) if certificated Notes have been issued, the
certificate numbers of the withdrawn Notes; and (iii) the principal amount, if any, that remains
subject to the Fundamental Change repurchase notice.

     If the Notes are Global Notes, the withdrawal notice must comply with the Applicable
Procedures.

          (f) The Company will be required to repurchase the Notes no less than 20 and no more than 35
days after the date of the Company’s notice of the occurrence of the relevant Fundamental Change,
subject to extension to comply with applicable law. A Holder must either effect book-entry
transfer or deliver the Notes, together with necessary endorsements, to the office of the Paying
Agent after delivery of the Fundamental Change repurchase notice to receive payment of the
Fundamental Change Repurchase Price. Holders will receive payment of the Fundamental Change
Repurchase Price promptly following the later of the Fundamental Change Repurchase Date or the time
of book-entry transfer or the delivery of the Notes. If the Paying Agent holds money or securities
sufficient to pay the Fundamental Change Repurchase Price of the Notes on the Business Day
following the Fundamental Change Repurchase Date, then: (i) the Notes will cease to be Outstanding
and interest, if any, will cease to accrue or principal to accrete (whether or not book-entry
transfer of the Notes is made or whether or not the Note is delivered to the Paying Agent); and
(ii) all other rights of the Holder will terminate (other than the right to receive the Fundamental
Change Repurchase Price upon delivery or transfer of the Notes).

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ARTICLE XIII

HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE

          Section 13.1 Company to Furnish Trustee Names and Addresses of Holders. The Company
will furnish or cause to be furnished to the Trustee:

          (a) semi-annually, not more than 15 days after the Regular Record Date, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the Holders of Notes as of
such Regular Record Date, and

          (b) at such other times as the Trustee may reasonably request in writing, within 30 days after
the receipt by the Company of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished; provided, however, that no such list
need be furnished so long as the Trustee is acting as Note Registrar.

          Section 13.2 Preservation of Information. (a) The Trustee shall preserve, in as
current a form as is reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 13.1 and the names and addresses
of Holders received by the Trustee in its capacity as Note Registrar. The Trustee may destroy any
list, if any, furnished to it as provided in Section 13.1 upon receipt of a new list so furnished.

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

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

          Section 13.3 Reports by Trustee. (a) The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant thereto.

          (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by
the Trustee with each stock exchange upon which the Notes are listed, with the Commission and with
the Company. The Company will notify the Trustee when the Notes are listed on any stock exchange.

          Section 13.4 Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to Holders, such
information, documents and other reports, and such summaries thereof, as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided
that any such information, documents or reports required to be filed with the Commission pursuant
to Section 13 or 15(d) of the Notes Exchange Act of 1934 shall be filed with the Trustee within 15
days after the same is filed with the Commission.

          Section 13.5 Calculations in Respect of Notes. The Company will be responsible for
making any calculations called for under the Notes. These calculations include, but are not
limited to, determinations of the Trading Price of the Notes and the Closing Sale Price of the
Common Stock, any accrued interest payable on the Notes, the Conversion Rate and

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the projected
payment schedule with respect to the Notes. The Company will make these calculations in good faith
and, absent manifest error, its calculations will be final and binding on the Holders of Notes.
The Company will provide a schedule of its calculations to the Trustee, and the Trustee is entitled
to rely upon the accuracy of the Company’s calculations without independent verification. The
Trustee will forward the Company’s calculations to any Holder of Notes upon a written request by
such Holder.

ARTICLE XIV

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

          Section 14.1 Indenture and Notes Solely Corporate Obligations. No recourse for the
payment of the principal amount of or interest on any Note and no recourse under or upon any
obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture
or in any Note, or because of the creation of any indebtedness represented thereby, shall be had
against any past, present or future incorporator, stockholder, employee, agent, officer, or
director or subsidiary, as such, of the Company or of any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby waived and released as a
condition of, and as a consideration for, the execution of this Indenture and the issue of the
Notes.

     This Indenture may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.

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

	 	 	 	 	 	 	 
	 	 	WEST CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	, as Trustee
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

77

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