Document:

Exhibit 10.1

 

BALLY TECHNOLOGIES, INC.

2010 LONG TERM INCENTIVE PLAN

 

The Bally Technologies, Inc. 2010 Long Term Incentive Plan (the “Plan”)
is an amendment and restatement of the Bally Technologies, Inc. 2001 Long
Term Incentive Plan and was established by the Board of Directors (the “Board”)
of Bally Technologies, Inc. (the “Company”) on October 1, 2009,
subject to approval by the Company’s stockholders at a meeting of the Company’s
stockholders or by written consent in accordance with the laws of the State of
Nevada, which approval must be obtained within twelve (12) months of the
adoption of this Plan by the Board.  The
Plan will continue in effect until terminated by the Board in accordance with
the terms of the Plan.

 

1.                                      PURPOSE
OF THE PLAN

 

The Plan is intended to encourage stock ownership by directors,
employees and designated paid consultants of the Company and its subsidiaries
(collectively, the “Subsidiaries” and individually, a “Subsidiary”), in order
to increase their proprietary interest in the success of the Company and to
encourage them to remain in the employ of the Company or a Subsidiary.

 

Options granted under the Plan may be either Incentive Stock Options or
Nonstatutory Stock Options; the term “Option” when used hereinafter refers to
either Incentive Stock Options or Nonstatutory Stock Options, or both.  Restricted Stock and Restricted Stock Units
awarded under the Plan are subject to restrictions as determined in each
specific case by the Board or by a duly appointed committee of the Board (the “Committee”).  Stock Appreciation Rights and Incentive
Bonuses may also be granted under the Plan. 
The term “Award” when used hereinafter collectively refers to Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units awarded under
the Plan.

 

2.                                      ADMINISTRATION

 

Administration of the Plan.  The Plan is administered by the Board or, if
the Board so determines, by the Committee, provided that except as otherwise
provided below, in the case of Awards to directors or officers subject to Section 16
of the Securities Exchange Act of 1934 (the “Exchange Act”), the Committee has
exclusive responsibility for and authority to administer the Plan unless the
Board expressly determines otherwise. 
The membership of the Committee consists of not less than two members of
the Board and will be constituted, if possible, to permit the Plan to comply
with Rule 16b-3 promulgated under the Exchange Act or any successor rule (“Rule 16b-3”)
and with the requirements of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”). 
Duly authorized actions of the Committee constitute actions of the Board
for the purposes of the Plan and its administration.  The Board or the Committee, as applicable,
has authority in its sole discretion:

 

·                  to determine
which directors, employees and consultants, to which of such directors,
employees and consultants, if any, Awards shall be granted hereunder and the
timing of any such Awards;

 

 

·                  to grant Awards
to directors, employees and consultants and determine the terms and conditions
thereof, including the number of shares of Stock or amount of cash subject to
Awards and the exercise or purchase price of such shares and the circumstances
under which Awards become exercisable, vested or payable or are forfeited or
expire, which terms may but need not be conditioned upon the passage of time,
continued employment, the satisfaction of performance criteria, the occurrence
of certain events, or other factors;

 

·                  to determine
the base price of any Stock Appreciation Right, the Incentive Stock Option
Price or the Nonstatutory Stock Option Price (both as defined below) of, and
the number of shares of Stock (as defined below) to be covered by, Stock
Appreciation Rights and Options granted under the Plan;

 

·                  to establish
and verify the extent of satisfaction of any performance goals or other
conditions applicable to the grant, issuance, exercisability, vesting, payment
and/or ability to retain any Award;

 

·                  to prescribe
and amend the terms of the agreements or other documents evidencing Awards made
under this Plan (which need not be identical) and the terms of or form of any
document or notice required to be delivered to the Company by holders of Awards
under this Plan;

 

·                  to approve
corrections in the documentation or administration of any Award;

 

·                  to require or
permit elections and/or consents under this Plan to be made by means of such
electronic media as the Committee may prescribe;

 

·                  to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating
to it, and to define terms not otherwise defined herein; and

 

·                  to make all
other determinations which the Board or Committee, as applicable, deem
necessary or advisable for the administration of the Plan.

 

Reserved Authority of the Board.  The Committee has all the powers and duties
set forth above, as well as any additional powers and duties that the Board may
delegate to it; provided, however, that the Board expressly retains the right (i) to
determine whether the shares of Stock reserved for issuance upon the exercise
and/or payment in respect of Awards granted under the Plan shall be issued
shares or unissued shares, (ii) to appoint the members of the Committee,
and (iii) to terminate or amend the Plan. 
The Board may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed, may fill
vacancies in the Committee, and may discharge the Committee.

 

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3.                                      COMMON
STOCK SUBJECT TO THE PLAN

 

Limitation on Number of Shares.  The number of shares which may be issued
pursuant to all Awards granted under the Plan is limited to an aggregate of
12,050,000 shares of the common stock, $.10 par value, of the Company (the “Stock”).  The shares reserved for issuance pursuant to
the Plan may consist either of authorized but previously unissued shares of
Stock, or of issued shares of Stock which have been reacquired by the Company,
as determined from time to time by the Board. 
If any Option or Stock Appreciation Right granted under the Plan
expires, terminates or is canceled for any reason without having been exercised
in full, or any other Award is forfeited for any reason, the shares of Stock
allocable to the unexercised portion of the Option or Stock Appreciation Right
or to the forfeited portion of the Award may again be made subject to an Option
or Award under the Plan.  Notwithstanding
the foregoing, Stock subject to an Award may not again be made available for
issuance under the Plan if such Stock is: (i) Stock that was subject to a
stock-settled Stock Appreciation Right and was not issued upon the net
settlement or net exercise of such Stock Appreciation Right; (ii) Stock
used to pay the exercise price of an Option; (iii) Stock delivered to or
withheld to pay the withholding taxes related to an Award; or (iv) Stock
repurchased on the open market with the proceeds of an Option exercise.

 

Adjustments of Number of Shares.  In the event of a change in the common stock
of the Company that is limited to a change in the designation thereof to “Capital
Stock” or other similar designation, or to a change in the par value thereof,
or from par value to no par value, without increase or decrease in the number
of issued shares, the shares resulting from any such change are deemed to be
the common stock for purposes of the Plan.

 

4.                                      ELIGIBILITY

 

Awards may be granted under the Plan to paid consultants, directors and
employees of the Company or a Subsidiary designated by the Board or the
Committee, provided that Incentive Stock Options may be awarded only to regular
full-time employees of the Company or a Subsidiary (including employees who
serve as officers or directors).  As used
in the Plan, “paid consultant” means a natural person who is an independent
contractor retained to perform continuing and substantial services for the
Company or any subsidiary, and designated as a paid consultant by the Board or
the Committee, except that no individual shall be designated a “paid consultant”
for purposes of this Plan if such individual is engaged in promoting or
maintaining a market in the securities of the Company, or in any other capacity
that would result in the Form S-8 registration statement being ineffective
as to any Awards made to such individual. 
Any person granted an Award under the Plan (a “Grantee”) remains
eligible to receive one or more additional grants thereafter, notwithstanding
that Options or Stock Appreciation Rights previously granted to such person
remain unexercised in whole or in part, or that the applicable restrictions on
any Restricted Stock or Restricted Stock Units issued to such person have not
lapsed.

 

5.                                      STOCK
OPTIONS

 

In General.  The Plan authorizes the Board or the
Committee to grant Options that qualify as incentive stock Options pursuant to Section 422
of the Code (“Incentive Stock Options”), or Options that do not so qualify (“Nonstatutory
Stock Options”).  Each Option granted
under the Plan is evidenced by a written and executed Option agreement which
will specify whether the Option granted therein is an Incentive Stock Option or
a Nonstatutory Stock Option.

 

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Incentive Stock Options.  Each stock Option agreement covering an
Incentive Stock Option granted under the Plan and any amendment thereof, other
than an amendment to convert an Incentive Stock Option into a Nonstatutory
Stock Option, will conform to the following provisions and may contain other
terms and provisions consistent with the requirements of the Plan as the Board
or the Committee deem appropriate:

 

Option Price.  The purchase price of each of the shares of
Stock subject to an Incentive Stock Option (the “Incentive Stock Option Price”)
will be a stated price which is not less than the fair market value of such
share of Stock, determined in accordance with Section 11 below, or the par
value of such share if greater, as of the date such Incentive Stock Option is
granted; provided, however, that if an employee, at the time an Incentive Stock
Option is granted to him or her, owns stock representing more than 10 percent
of the total combined voting power of all classes of stock of the Company or of
the parent corporation (as defined in Section 424(e) of the Code), if
any, of the Company or of any of the Subsidiaries (or, under Section 424(d) of
the Code, is deemed to own stock representing more than 10 percent of the total
combined voting power of all such classes of stock, by reason of the ownership
of such classes of stock, directly or indirectly, by or for any brother,
sister, spouse, ancestor, or lineal descendent of such employee, or by or for
any corporation, partnership, estate or trust of which such employee is a
stockholder, partner or beneficiary), then the Incentive Stock Option Price of
each share of Stock subject to such Incentive Stock Option will be at least 110
percent of the fair market value of such share of Stock, as determined in
accordance with Section 11 below.

 

Term.  Incentive Stock Options granted under the
Plan will be exercisable for the periods determined by the Board or the
Committee at the time of grant of each Incentive Stock Option, but in no event
is an Incentive Stock Option exercisable after the expiration of ten years from
the date of grant; provided, however, that an Incentive Stock Option granted to
any employee as to whom the Incentive Stock Option Price of each share of Stock
subject thereto is required to be 110 percent of the fair market value of the
share of Stock pursuant to the preceding paragraph will not be exercisable
after the expiration of five years from the date of grant.  Each Incentive Stock Option granted under the
Plan is also subject to earlier termination as provided in the Plan.

 

Exercise.  Generally under the Plan, Incentive Stock
Options may be exercised in whole or in installments, to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each Option.

 

Incentive Stock Options granted under the Plan are exercisable only by
delivery to the Company of written notice of exercise, which states the number
of shares with respect to which such Incentive Stock Option is exercised, the
date of grant of the Incentive Stock Option, the aggregate purchase price for
the shares with respect to which the Incentive Stock Option is exercised and
the effective date of such exercise, which date may not be earlier than the
date the notice is received by the Company nor later than the date upon which
the Incentive Stock Option expires.  The
written notice of exercise must be sent together with the full Incentive Stock
Option Price of the shares purchased, which may be paid in cash or in shares of
any class of issued and outstanding stock of the Company held by the Option
holder, whether preferred or 

 

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common, or partly in cash and partly in such shares of stock.  If any portion of the Incentive Stock Option
Price is paid in shares of stock of the Company, the shares will be valued at
their fair market value, as determined in accordance with Section 11
below, as of the effective date of exercise of the Incentive Stock Option.  The delivery of shares of stock upon exercise
of an Incentive Stock Option shall be subject to such restrictions as the Board
or the Committee may determine to be appropriate, including, without
limitation, a requirement that such shares be held by an agent designated by
the Company until sold or otherwise disposed of by the Option holder, to assure
that the Company is advised of any disposition of such shares by the Option
holder within two years of the date of grant of the Incentive Stock Option or
within one year after the date of exercise of the Incentive Stock Option.

 

In general, an Incentive Stock Option granted under the Plan remains
outstanding and is exercisable only so long as the person to whom the Incentive
Stock Option was granted remains an officer or employee of the Company, the
parent corporation, if any, of the Company, or any of the Subsidiaries.  All Incentive Stock Options granted under the
Plan are nontransferable, except by will or the laws of descent and
distribution, and are exercisable during the lifetime of the person to whom
granted only by such person (or his duly appointed, qualified, and acting
personal representative).

 

No Incentive Stock Option may be exercised as to fewer than 100 shares
of Stock at any one time without the consent of the Board or the Committee,
unless the number of shares to be purchased upon the exercise is the total
number of shares at the time available for purchase under the Incentive Stock
Option.

 

The Board or the Committee may also permit Grantees (either on a
selective or group basis) pay the Incentive Stock Option Price through
withholding of shares of Stock otherwise issuable upon exercise of the Option
and/or to simultaneously exercise Options and sell the shares of the Stock
thereby acquired pursuant to a “cashless exercise” arrangement or program
selected by and approved of in all respects in advance by the Board or the
Committee.  Payment instruments shall be
received by the Company subject to collection. 
The proceeds received by the Company upon exercise of any Option may be
used by the Company for general corporate purposes.  Any portion of an Option that is exercised
may not be exercised again.

 

Nonstatutory Stock Options.  Each stock Option agreement covering a
Nonstatutory Stock Option granted under the Plan and any amendment thereof will
conform to the following provisions and may contain other terms and provisions
consistent with the requirements of the Plan as the Board or the Committee deem
appropriate:

 

Option Price.  The purchase price of each of the shares of
Stock subject to a Nonstatutory Stock Option (the “Nonstatutory Stock Option
Price”) will be a fixed price determined by the Board or the Committee at the
time of grant, which will not be less than the greater of the par value of such
share, or 100 percent of the fair market value of such share, determined in
accordance with Section 11 below, on the date of the grant of the
Nonstatutory Stock Option.

 

Term.  Nonstatutory Stock Options granted under the
Plan will be exercisable for the periods determined by the Board or the
Committee at the time of grant of each Nonstatutory Stock Option, but in no event
is a Nonstatutory Stock Option exercisable after the expiration of ten years
from the time of grant. Each Nonstatutory Stock Option granted under the Plan
will also be subject to earlier termination as provided in the Plan.

 

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Exercise.  Generally, under the Plan, Nonstatutory Stock
Options may be exercised in whole or in installments to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each Option.

 

Nonstatutory Stock Options granted under the Plan are exercisable only
by delivery to the Company of written notice of exercise, which states the
number of shares with respect to which such Nonstatutory Stock Option is
exercised, the date of grant of the Nonstatutory Stock Option, the aggregate
purchase price for the shares with respect to which the Nonstatutory Stock
Option is exercised and the effective date of such exercise, which date may not
be earlier than the date the notice is received by the Company nor later than
the date upon which the Nonstatutory Stock Option expires.  The written notice of exercise must be sent
together with the full Nonstatutory Stock Option Price of the shares purchased,
which may be paid in cash or in shares of any class of issued and outstanding
stock of the Company held by the Option holder, whether preferred or common, or
partly in cash and partly in such shares of stock.  If any portion of the Nonstatutory Stock
Option Price is paid in shares of stock of the Company, the shares will be
valued at their fair market value, as determined in accordance with Section 11
below, as of the effective date of exercise of the Nonstatutory Stock Option.

 

In general, a Nonstatutory Stock Option granted under the Plan remains
outstanding and is exercisable only so long as the person to whom the
Nonstatutory Stock Option was granted remains either a director, employee or
paid consultant of the Company, the parent corporation, if any, of the Company,
or any of the Subsidiaries.  A person is
deemed to be a paid consultant only so long as he or she continues to perform
and be compensated for substantial services for the Company, the parent
corporation, if any, of the Company, or a Subsidiary, as to which the determination
of the Board or the Committee, as applicable, will be binding and
conclusive.  Unless the Board or
Committee determines otherwise, all Nonstatutory Stock Options granted under
the Plan will be nontransferable, except by will or the laws of descent and
distribution.

 

No Nonstatutory Stock Option may be exercised as to fewer than 100
shares at any one time without the consent of the Board or the Committee,
unless the number of shares to be purchased upon the exercise is the total
number of shares at the time available for purchase under the Nonstatutory
Stock Option.

 

The Board or the Committee may also permit Grantees (either on a
selective or group basis) to pay the Nonstatutory Stock Option Price through
withholding of shares of Stock otherwise issuable upon exercise of the Option
and/or to simultaneously exercise Options and sell the shares of the Stock
thereby acquired pursuant to a “cashless exercise” arrangement or program
selected by and approved of in all respects in advance by the Board or the Committee.  Payment instruments shall be received by the
Company subject to collection.  The
proceeds received by the Company upon exercise of any Option may be used by the
Company for general corporate purposes. 
Any portion of an Option that is exercised may not be exercised again.

 

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6.                                      RESTRICTIONS
APPLICABLE TO RESTRICTED STOCK

 

The Board or the Committee may place any restrictions it deems
appropriate on any shares of Stock awarded under this Section 6 (“Restricted
Stock”) to an employee, director or paid consultant; provided, however, that
shares of Restricted Stock awarded under this Section 6 are subject to
certain restrictions including the following:

 

Vesting.  In general, other than with respect to Awards
to directors who are not also employees of the Company, the grant, issuance,
retention, vesting and/or settlement of shares of Restricted Stock that is
based on performance criteria and level of achievement versus such criteria
will be subject to a performance period of not less than twelve months, and the
grant, issuance, retention, vesting and/or settlement of shares of Restricted
Stock that is based solely upon continued employment or service and/or the
passage of time may not vest or be settled in full prior to three years
following its date of grant, but may be subject to pro-rata vesting over such
period, except that the Committee may provide for the satisfaction and/or lapse
of all conditions under any such Award as set forth in Sections 12 and 13
below, and the Committee may provide that any such restriction or limitation
will not apply in the case of an Award that is issued in payment or settlement
of compensation that has been earned by the Grantee.  Any shares of Restricted Stock remaining subject
to forfeiture in accordance with the related vesting schedule are
hereinafter referred to as “Unvested Shares.” 
Notwithstanding anything in this Plan to the contrary, the performance
criteria for any Restricted Stock that is intended to satisfy the requirements
for “performance-based compensation” under Section 162(m) of the Code
will be a measure based on one or more Qualifying Performance Criteria selected
by the Committee and specified when the Award is granted.

 

Delivery to Escrow.  Unless the Board or the Committee determines
otherwise, upon issuance of a certificate evidencing such shares the recipient
will be required to deliver the certificate, endorsed in blank or with a duly
executed stock power attached, to the Secretary of the Company, or such other
person or entity as the Board or the Committee may designate, to be held until
any vesting restrictions applicable thereto have lapsed or any Unvested Shares
have been forfeited.

 

Legend.  Unless the Board or the Committee determines
otherwise, each certificate evidencing Unvested Shares issued under the Plan
will bear a legend to the effect that such shares are subject to potential
forfeiture and may not be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of except in accordance with the terms of an agreement
between the issuer and the registered owner.

 

7.                                      RESTRICTED
STOCK UNITS

 

The Committee may at any time and from time to time grant Restricted
Stock Units under the Plan in such amounts as it determines.  Each Restricted Stock Unit shall entitle the
Grantee to receive from the Company at the end of the vesting period applicable
to such unit one share of Stock, unless the Grantee elects in a timely fashion
prior to the end of the vesting period to defer the receipt of the shares of
Stock subject to the Award of Restricted Stock Units.  Each grant of Restricted Stock Units shall be
evidenced by an Award Agreement which shall specify the applicable restrictions
on such units including the following:

 

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Vesting.  In general, other than with respect to Awards
to directors who are not also employees of the Company, the grant, issuance,
retention, vesting and/or settlement of shares of Stock underlying an Award of
Restricted Stock Units that is based on performance criteria and level of
achievement versus such criteria will be subject to a performance period of not
less than twelve months, and the grant, issuance, retention, vesting and/or
settlement of shares of Stock underlying an Award of Restricted Stock Units
that is based solely upon continued employment or service and/or the passage of
time may not vest or be settled in full prior to three years following its date
of grant, but may be subject to pro-rata vesting over such period, except that
the Committee may provide for the satisfaction and/or lapse of all conditions
under any such Award as set forth in Sections 12 and 13 below, and the
Committee may provide that any such restriction or limitation will not apply in
the case of an Award that is issued in payment or settlement of compensation
that has been earned by the Grantee.  Any
Restricted Stock Units that have not yet vested in accordance with the related
vesting schedule are hereinafter referred to as “Unvested Units.”  Notwithstanding anything in this Plan to the
contrary, the performance criteria for any Restricted Stock Units that is
intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code will be a measure based on one or more
Qualifying Performance Criteria selected by the Committee and specified when
the Award is granted.

 

8.                                      STOCK
APPRECIATION RIGHTS

 

The grant of Stock Appreciation Rights under the Plan is subject to the
following terms and conditions and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the Board or
the Committee sets forth in the relevant Award agreement:

 

Stock Appreciation Rights.  A Stock Appreciation Right is an Award
granted with respect to a specified number of shares of Stock entitling the
Grantee to receive an amount equal to the excess of (a) the fair market
value of a share of Stock on the date of exercise over (b) the fair market
value of a share of Stock on the date of grant of the Stock Appreciation Right
(the “Base Price”) multiplied by the number of shares of Stock with respect to
which the Stock Appreciation Right has been exercised.  Fair market value is determined in accordance
with Section 11 below.

 

Grant.  A Stock Appreciation Right may be granted in
addition to any other Award under the Plan or in tandem with or independent of
any Nonstatutory Stock Option or Incentive Stock Option.

 

Date of Exercisability.  Unless otherwise provided in the Grantee’s
Award agreement in respect of any Stock Appreciation Right, a Stock
Appreciation Right may be exercised by the Grantee, in accordance with and
subject to all of the procedures established by the Board or the Committee, in
whole or in part at any time and from time to time during its specified
term.  Notwithstanding the preceding
sentence, in no event is a Stock Appreciation Right exercisable prior to the
exercisability of any Non-Qualified Stock Option or Incentive Stock Option with
which it is granted in tandem.  The Board
or the Committee may also provide, as set forth in the relevant Award
agreement, that some Stock Appreciation Rights will be automatically exercised
on one or more dates specified by the Board or the Committee.

 

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Form of Payment.  Upon exercise of a Stock Appreciation Right,
payment may be made in cash, in Restricted Stock or in shares of unrestricted
Stock, or in any combination thereof, as the Board or the Committee, in its
sole discretion, determines and provides in the relevant Award agreement.

 

Tandem Grant.  The right of the Grantee to exercise a tandem
Stock Appreciation Right terminates to the extent the Grantee exercises the
Non-Qualified Stock Option or the Incentive Stock Option to which the Stock
Appreciation Right is related.

 

9.                                      INCENTIVE
BONUSES

 

The grant of Incentive Bonuses under the Plan is subject to the
following terms and conditions and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the Board or
the Committee sets forth in the relevant Award documentation:

 

Incentive Bonuses.  Each Incentive Bonus Award will confer upon
the Grantee the opportunity to earn a future payment tied to the level of
achievement with respect to one or more performance criteria established for a
performance period specified by the Committee.

 

Performance Criteria.  The Committee shall establish the performance
criteria and level of achievement versus these criteria that shall determine
the target, threshold and maximum amount payable under an Incentive Bonus,
which criteria may be based on financial performance and/or personal
performance evaluations.  The Committee
may specify the percentage of the target Incentive Bonus that is intended to
satisfy the requirements for “performance-based compensation” under Section 162(m) of
the Code.  Notwithstanding anything to
the contrary herein, the performance criteria for any portion of an Incentive
Bonus that is intended by the Committee to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code shall be a measure
based on one or more Qualifying Performance Criteria selected by the Committee
and specified at the time the Incentive Bonus is granted.  The Committee shall certify the extent to
which any Qualifying Performance Criteria has been satisfied, and the amount
payable as a result thereof, prior to payment of any Incentive Bonus that is
intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code.

 

Timing and Form of Payment.  The Committee shall determine the timing of
payment of any Incentive Bonus.  Payment
of the amount due under an Incentive Bonus may be made in cash, in Restricted
Stock or in shares of unrestricted Stock, or in any combination thereof, as the
Board or the Committee, in its sole discretion, determines.

 

Discretionary Adjustments.  Notwithstanding satisfaction of any
performance goals, the amount paid under an Incentive Bonus on account of
either financial performance or personal performance evaluations may, to the
extent specified in the Award documentation, be reduced, but not increased, by
the Committee on the basis of such further considerations as the Committee
shall determine.

 

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10.                               RIGHTS
OF GRANTEES

 

Options; Stock Appreciation Rights.  No holder of an Option or Stock Appreciation
Right will be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to such Option or Stock
Appreciation Right unless and until his or her Option or Stock Appreciation
Right has been exercised pursuant to the terms thereof, the Company has issued
and delivered to the holder of the Option or Stock Appreciation Right the shares
of Stock as to which the holder has exercised his or her Option or Stock
Appreciation Right, and the holder’s name has been entered as a stockholder of
record on the books of the Company. 
Thereupon, such person shall have full voting and other ownership rights
with respect to such shares of Stock.

 

Restricted Stock.  Each recipient of a Restricted Stock Award is
deemed to be the registered owner of any Unvested Shares subject to such award,
notwithstanding that such shares may be subject to restrictions and possible
forfeiture under the terms of the agreement pursuant to which they were
received.  Unless and until all or a
portion of the Unvested Shares are forfeited in accordance with the terms of
such agreement, the recipient thereof will have full voting rights with respect
to such shares as well as the right to receive any and all distributions
thereon.

 

Restricted Stock Units.  No holder of a Restricted Stock Unit will be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to such Restricted Stock Unit unless
and until the Company has issued and delivered to the holder of the Restricted
Stock Unit the shares of Stock as to which the Award of Restricted Stock Units
has vested, and the holder’s name has been entered as a stockholder of record
on the books of the Company.  Thereupon,
such person shall have full voting and other ownership rights with respect to
such shares of Stock.

 

11.                               DETERMINATION
OF FAIR MARKET VALUE

 

For the purposes of the Plan, “fair market value” means the fair market
value of Stock, Awards or other property as determined in good faith by the Committee
or under procedures established by the Committee.  Unless otherwise determined by the Committee,
the fair market value of Stock as of any given date shall be the closing sale
price per share of Stock reported on a consolidated basis for securities listed
on the principal stock exchange or market on which Stock is traded on the date
as of which such value is being determined or, if there is no sale on the
principal stock exchange or market that day, then on the last previous day on
which a sale on the principal stock exchange or market was reported.
Notwithstanding anything herein to the contrary, the Board or the Committee may
determine the fair market value of a share of Stock on the basis of such
factors as it deems appropriate, consistent with Section 409A of the Code,
if it determines in good faith that the approach specified above does not
properly reflect the fair market value of such Stock.

 

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12.                               RETIREMENT,
TERMINATION OF EMPLOYMENT OR DEATH OF HOLDERS OF AWARDS

 

Retirement or Disability.  If a Grantee retires from employment with the
Company or any of its Subsidiaries as a result of normal retirement (that is,
termination of employment by the Grantee after he or she attains age sixty-five
(65)), or terminates employment or service with the Company after becoming “permanently
disabled” (as defined in the Bally Technologies, Inc. 401(k) Plan as
in effect on the date of adoption of the Plan by the Board), any restrictions
then applicable to his or her Award will lapse and it will thereafter be
exercisable (in the case of Options and Stock Appreciation Rights) or vested
and transferable (in the case of Restricted Stock and Restricted Stock Units) in
whole or in part, by the person to whom granted (or his or her duly appointed,
qualified, and acting personal representative) in the manner set forth in
Sections 5, 6, 7 and 8 above, at any time within the remaining term of the
Award, unless otherwise determined by the Board or the Committee at the time of
grant.

 

Other Termination of Service or Employment.  Except as determined by the Board or the
Committee at the time of grant, or as otherwise provided herein or in a Grantee’s
employment agreement, (a) if a person to whom Restricted Stock has been
awarded under the Plan ceases to be either a director, employee or paid
consultant of the Company or a Subsidiary, any Unvested Shares of Restricted
Stock held by the person are forfeited as of the last date he or she was either
a director, employee or paid consultant of the Company or a Subsidiary, (b) if
a person to whom Restricted Stock Units and/or an Incentive Bonuses have been
awarded under the Plan ceases to be either a director, employee or paid consultant
of the Company or a Subsidiary, the unvested portion, if any, of such Awards
held by the person are forfeited as of the last date he or she was either a
director, employee or paid consultant of the Company or a Subsidiary, and (c) if
a person to whom an Option or Stock Appreciation Right has been granted under
the Plan ceases to be either a director, employee or paid consultant of the
Company or a Subsidiary, such Option or Stock Appreciation Right will continue
to be exercisable or transferable to the same extent that it was exercisable on
the last day on which he or she was either a director, employee or paid
consultant for a period of 60 days thereafter, whereupon such Option or Stock
Appreciation Right will terminate and not be exercisable thereafter; provided,
however, that in the event of termination of employment, termination of service
as a paid consultant, or removal from office as a director for Cause (as
defined below), any such Option or Stock Appreciation Right will terminate ten
days after such termination of employment, service or removal from office
rather than 60 days thereafter. 
Notwithstanding the immediately preceding sentence, the term during
which an Option or Stock Appreciation Right may be exercised shall not in any
event extend beyond the remaining term of such Award as specified in connection
with the grant thereof.  No Award made
under the Plan will be affected by any change of duties or position of the
person to whom the Award was made or by any temporary leave of absence granted
to the person by the Company or any of its Subsidiaries.  For purposes of the Plan, “Cause” means (i) the
Grantee being convicted of a felony, (ii) the Grantee willfully committing
an act of embezzlement or malfeasance which is intended to materially enrich
himself or herself at the expense of the Company or any of its Subsidiaries or
is otherwise intended to materially harm the Company, or (iii) the Grantee
being rejected for an applicable license or approval by a gaming regulatory
authority having jurisdiction over the Company as a result of an explicit
finding of lack of suitability solely as a result of the Grantee’s commission
of a crime or an act of embezzlement or malfeasance.

 

11

 

Death.  Unless otherwise determined by the Board or
the Committee at the time of grant, (a) if a person to whom an Option or
Stock Appreciation Right has been granted under the Plan dies prior to the
expiration of the term of the Option or Stock Appreciation Right, the Option or
Stock Appreciation Right is exercisable by the estate of the Grantee, or by a
person who acquired the right to exercise such Option or Stock Appreciation
Right by bequest or inheritance from the Grantee, at any time within two years
after the death of the person and prior to the date upon which such Option or
Stock Appreciation Right expires as specified in connection with the grant
thereof, to the extent and in the manner exercisable by the Grantee at the date
of his or her death; (b) if a person to whom Restricted Stock has been
awarded under the Plan dies prior to the lapse of all restrictions applicable
to such Restricted Stock, any Unvested Shares held by such person on the date
of his or her death will be forfeited; and (c) if a person to whom Restricted
Stock Units and/or Incentive Bonuses have been awarded under the Plan dies, the
unvested portion, if any, of such Awards held by the person on the date of his
or her death will be forfeited.

 

Termination with Board Approval.  If a Grantee ceases to be either a director,
employee or paid consultant of the Company or a Subsidiary for any reason other
than removal for Cause, and the Board or the Committee expressly determines
that such termination of service or employment is in the best interests of the
Company, then an Option or Stock Appreciation Right awarded to the Grantee
under the Plan will be exercisable by the Grantee or by the estate of the
Grantee, by a person who acquired the right to exercise such Option or Stock
Appreciation Right by bequest or inheritance from the Grantee or otherwise, for
an additional period following termination of service or employment as
determined by the Board or the Committee but in no event later than the date
upon which such Option or Stock Appreciation Right would have expired absent
such termination of service or employment. 
Any such extended Option or Stock Appreciation Right will be exercisable
only to the extent and in the manner exercisable by the Grantee at the time of
such termination of service or employment.

 

Incentive Stock Options.  Notwithstanding anything herein to the
contrary or the provisions of any employment agreement, no Incentive Stock
Option shall be exercisable after the date that is (a) in the case of the
Grantee’s termination of employment for any reason other than death or
disability, three months following such termination of employment, or (b) in
the case of the Grantee’s termination of employment due to death or Total and
Permanent Disability (as defined in Code section 22(e)(3)), twelve months
following such termination of employment.

 

13.                               ADJUSTMENTS

 

Changes in Capitalization.  In the event of any change in the number of
shares of the outstanding Stock of the Company by reason of a stock split,
stock dividend, combination or reclassification of shares, recapitalization, or
similar event, the Board or the Committee will adjust proportionally (a) the
number and kind of shares subject to the Plan, (b) the number and kind of
shares then subject to unexercised Options and Stock Appreciation Rights and
outstanding Awards of Restricted Stock and Restricted Stock Units and (c) the
per share Incentive Stock Option Price, Nonstatutory Stock Option Price or Base
Price (as the case may be) of unexercised Options and Stock Appreciation
Rights.  Any such adjustment will be made
without a change in the aggregate purchase price or aggregate Base Price of the
shares of the Stock subject to the unexercised portion of any Option or Stock
Appreciation Right.

 

12

 

Merger Event.  In the event of any merger, spin-off,
split-off or other similar consolidation, reorganization or change affecting
any class of stock of the Company (a “Merger Event”) subject to Awards made
under the Plan, or any distribution (other than normal cash dividends) to
holders of the stock, fair and equitable adjustment will be made in good faith
by the Board or the Committee, including (without limitation) adjustments to
avoid fractional shares, in respect of (a) all unexercised Options or Stock
Appreciation Rights and (b) all then outstanding Awards of Restricted
Stock, Restricted Stock Units or Incentive Bonuses to give proper effect to
such event and preserve the value, rights and benefits of such Awards;
provided, however, that the Board or the Committee may, in the case of any
Merger Event pursuant to which the Company is not the surviving corporation and
pursuant to which the former holders of the Stock do not hold, directly or
indirectly, more than a majority of the voting securities of the resulting
entity immediately after the Merger Event or in connection with any acquisition
by any person of more than 50 percent of the outstanding shares of the Stock,
provide that each Option or Stock Appreciation Right holder will receive a cash
payment (in exchange for and in cancellation of such Option or Stock
Appreciation Right) equal to the difference (if greater than zero) between the
value of the per share consideration received by the holders of the Stock in
the Merger Event or the acquisition and the purchase price or Base Price of
such Option or Stock Appreciation Right, multiplied by the number of shares of
the Stock underlying such Option or Stock Appreciation Right (and if the
difference is equal to or less than zero, the Committee may provide that each
such holder will receive no payment, nor any other compensation, in exchange
for and in cancellation of any such Option or Stock Appreciation Right).
 In addition, in the event that (i) there occurs any Merger Event
pursuant to which all of the outstanding Stock held by the stockholders of the
Company is exchanged for any lawful consideration and (ii) within twelve
months following the date of such Merger Event, a Grantee’s employment or
service with the Company is terminated either by the Company without Cause or
by the Grantee for Good Reason (as defined below), then, effective immediately
prior to such termination of employment or service, all vested and
unexercisable Options or Stock Appreciation Rights held by the Grantee on the
date on which his or her employment or service terminated will become 100
percent vested and exercisable, and all restrictions then applicable to Awards
of Restricted Stock and Restricted Stock Units held by the Grantee on the date
on which his or her employment or service terminated will lapse and such Awards
will thereafter be fully vested and transferable.  For purposes of the Plan, “Good Reason”
means, unless otherwise provided in a Grantee’s employment agreement, (x) a
material reduction in the Grantee’s base salary or (y) a material
reduction in the Grantee’s duties or responsibilities.

 

14.                               MAXIMUM
AWARDS

 

The following maximum annual and other amounts are subject to
adjustment under Section 13 above and are subject to the Plan maximum
under Section 3 above.  Each
individual Grantee may not receive in any fiscal year Awards of Options, Stock
Appreciation Rights, Restricted Stock and/or Restricted Stock Units exceeding
1,500,000 underlying shares of Stock. 
The maximum amount payable pursuant to that portion of an Incentive
Bonus granted in any fiscal year to any Grantee under this Plan that is
intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code shall not exceed ten million dollars
($10,000,000).  No more than 1,400,000
shares of Stock may be granted as Awards of Restricted Stock or Restricted
Stock Units.  Notwithstanding the
foregoing, to the extent that the aggregate fair market value of stock
(determined at the time of grant of the Option) for which Incentive Stock
Options first become exercisable by a Grantee during a calendar year (under all
Option plans of the Company) exceeds $100,000, such Options shall be treated as
Options that are not Incentive Stock Options.

 

13

 

15.                               QUALIFYING
PERFORMANCE CRITERIA

 

General.  The Committee may establish performance
criteria and level of achievement versus such criteria that shall determine the
number of shares of Stock to be granted, retained, vested, issued or issuable
under or in settlement of or the amount payable pursuant to an Award, which
criteria may be based on Qualifying Performance Criteria or other standards of
financial performance and/or personal performance evaluations.  In addition, the Committee may specify that
an Award or a portion of an Award is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code, provided that the
performance criteria for such Award or portion of an Award that is intended by
the Committee to satisfy the requirements for “performance-based compensation”
under Section 162(m) of the Code shall be a measure based on one or
more Qualifying Performance Criteria selected by the Committee and specified at
the time the Award is granted.  The
Committee shall certify the extent to which any Qualifying Performance Criteria
has been satisfied, and the amount payable as a result thereof, prior to
payment, settlement or vesting of any Award that is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of
the Code.

 

Qualifying Performance Criteria.  For purposes of this Plan, the term “Qualifying
Performance Criteria” shall mean any one or more of the following performance
criteria, or derivations of such performance criteria, either individually,
alternatively or in any combination, applied to either the Company as a whole
or to a business unit or Subsidiary, either individually, alternatively or in
any combination, and measured either annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established target, to
previous years’ results or to a designated comparison group, in each case as
specified by the Committee: (a) revenues; (b) earnings per share
(basic or diluted), earnings from operations, earnings before or after taxes,
earnings before or after interest, depreciation, amortization, incentives,
service fees or extraordinary or special items; (c) net income or net
income per common share (basic or diluted); (d) return on assets, return
on net assets, return on investment, return on capital, or return on equity; (e) cash
flow, free cash flow, cash flow return on investment, or net cash provided by
operations; (f) economic value created or added; (g) operating margin
or profit margin; (h) stock price, dividends or total stockholder return;
and (i) strategic business criteria, consisting of one or more objectives
based on meeting specified market penetration or value added, market share,
product development or introduction, geographic business expansion goals, cost
targets, debt reduction, customer satisfaction, employee satisfaction,
information technology, and goals relating to acquisitions or divestitures of
subsidiaries, affiliates or joint ventures. 
To the extent consistent with Section 162(m) of the Code, the
Committee (i) may appropriately adjust any evaluation of performance under
a Qualifying Performance Criteria to eliminate the effects of charges for
restructurings, discontinued operations, extraordinary items and all items of
gain, loss or expense determined to be extraordinary or unusual in nature or
related to the disposal of a segment of a business or related to a change in
accounting principle all as determined in accordance with accounting principles
generally accepted in the United States of America, as well as the cumulative
effect of accounting changes, in each case as determined in accordance with
generally accepted accounting principles or identified in the Company’s
financial statements 

 

14

 

or notes to the financial statements, and (ii) may appropriately
adjust any evaluation of performance under a Qualifying Performance Criteria to
exclude any of the following events that occurs during a performance period: (1) asset
write-downs, (2) litigation, claims, judgments or settlements, (3) the
effect of changes in tax law or other such laws or provisions affecting
reported results, (4) accruals for reorganization and restructuring
programs and (5) accruals of any amounts for payment under this Plan or
any other compensation arrangement maintained by the Company.

 

16.                               MANNER
OF GRANT

 

Nothing contained in the Plan or in any resolution adopted by the Board
or any committee thereof or by the stockholders of the Company with respect to
the Plan, except as provided in the Plan, will constitute the granting of an
Award under the Plan.  The granting of an
Award under the Plan is deemed to occur only upon the date on which the Board or
the Committee approves the grant of the Award. 
Each Award granted under the Plan shall be evidenced by a written
agreement, in the form determined by the Board or the Committee, signed by a
representative of the Board or the Committee and the recipient thereof.

 

17.                               COMPLIANCE
WITH LAWS AND REGULATIONS

 

The obligation of the Company to sell and deliver any shares of Stock
under the Plan is subject to all applicable laws, rules and regulations,
and the obtaining of all approvals by governmental agencies deemed necessary or
appropriate by the Board or the Committee. 
In general, the Board or the Committee may make such changes in the Plan
and include such terms in any Award agreement as may be necessary or
appropriate, in the opinion of counsel to the Company, to comply with the rules and
regulations of any governmental authority, or to obtain for employees granted
Incentive Stock Options the tax benefits under the applicable provisions of the
Code and the regulations thereunder.

 

18.                               TAX
WITHHOLDING

 

The Company or Subsidiary for which services are performed by a
director, employee or paid consultant granted an Award under the Plan has the
right to deduct or otherwise effect a withholding of any tax (including,
without limitation, any FICA (employment) tax required to be withheld under
Chapter 21 of the Code, any income tax required to be withheld under
Chapter 24 of the Code, and any similar tax imposed under state, local, or
foreign law) required by federal, state, local or foreign laws to be withheld
or otherwise deducted and paid with respect to the grant, vesting or exercise
of any Award; or, in lieu of such withholding, to require that the Grantee or
person holding such Award pay to the Company or such Subsidiary in cash (or, at
the sole discretion of the Board or the Committee, in the form of shares of
Stock) the amount of any taxes required to be withheld or otherwise deducted
and paid by the Company or its Subsidiary in connection with the grant, vesting
or exercise of any Award.  The Company
may condition any delivery of stock certificates or other evidence of ownership
of shares of Stock on payment of the tax amounts referred to in this Section 18.

 

15

 

19.                               CERTAIN
LIMITATIONS ON AWARDS TO ENSURE COMPLIANCE WITH CODE SECTION 409A.

 

For purposes of this Plan, references to an award term or event
(including any authority or right of the Company or a Participant) being
consistent with Code Section 409A shall mean that the term or event will
not cause the Participant to be liable for payment of interest or a tax penalty
under Code Section 409A. Other provisions of the Plan notwithstanding, the
terms of any award including any authority of the Company and rights of the
Participant with respect to the award, shall be limited to those terms
permitted under Code Section 409A, and any terms not permitted under Code Section 409A
shall be automatically modified and limited to the extent necessary to conform
with Code Section 409A. For this purpose, other provisions of the Plan
notwithstanding, the Company shall have no authority to accelerate
distributions relating to 409A Awards in excess of the authority permitted
under Code Section 409A, and any distribution subject to Code Section 409A(a)(2)(A)(i) (separation
from service) to a “key employee” as defined under Code Section 409A(a)(2)(B)(i),
shall not occur earlier than the earliest time permitted under Code Section 409A(a)(2)(B)(i).
Notwithstanding any other provisions of the Plan, the Company does not
guarantee to any Participant or any other person that any Award intended to be
exempt from Section 409A of the Code shall be so exempt, nor that any
Award intended to comply with Section 409A of the Code shall so comply,
nor will the Company indemnify, defend or hold harmless any individual with
respect to the tax consequences of any such failure.

 

20.                               NO
REPRICING WITHOUT STOCKHOLDER APPROVAL

 

Other than in connection with a change in the Company’s capitalization
(as described in Section 13 above) the Option Price or Base Price of an
Option or Stock Appreciation Right may not be reduced without stockholder
approval (including canceling previously awarded Options in exchange for cash,
other Awards, or Options or Stock Appreciation Rights with an exercise price
that is less than the exercise price of the original Award).

 

21.                               NONEXCLUSIVITY
OF THE PLAN

 

Neither the adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company for approval has any impact on existing
qualified or nonqualified retirement, bonus or Option plans of the Company or
creates any limitations on the power of the Board to adopt any other incentive
arrangements that it may deem desirable, including, without limitation, the
granting of stock Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units or Incentive Bonuses otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.

 

22.                               AMENDMENT

 

The Board at any time, and from time to time, may amend the Plan,
subject to any required regulatory approval and subject to the limitation that,
except as provided above in Section 13, no amendment is effective unless
approved within 12 months after the date of the adoption of such amendment by
the affirmative vote of the holders of a majority of the shares of the Company’s
Voting Stock present in person or represented by proxy at a duly held meeting
at 

 

16

 

which a quorum is present (or by such greater vote as may be required
by applicable law, regulation or provision of the certificate of incorporation
or bylaws of the Company) if the amendment would, but for such approval,
prevent the issuance of Incentive Stock Options under the Plan or cause the
Plan to no longer comply with the requirements of Section 162(m) of
the Code.

 

Except as provided in Section 13 above, rights and obligations
under any Awards granted before amendment of the Plan may not be altered or
impaired by amendment of the Plan in any manner having a significant adverse
effect on a Grantee, except with the consent of the Grantee thereof.

 

23.                               TERMINATION
OR SUSPENSION

 

The Board at any time may suspend or terminate the Plan.  The Plan, unless sooner terminated, will
terminate on the 10th anniversary of its adoption by the Board or its approval
by the stockholders of the Company, whichever is earlier, but such termination
will not affect any Award theretofore granted. 
No Award may be granted under the Plan while the Plan is suspended or
after it is terminated.  In general, no
rights or obligations under any Award granted while the Plan is in effect will
be altered or impaired by suspension or termination of the Plan, except with
the consent of the person to whom the Award was granted.  Any Award granted under the Plan may be
terminated by agreement between the holder thereof and the Company and, in lieu
of the terminated Award, a new Award may be granted.

 

24.                               MISCELLANEOUS

 

Nothing contained in the Plan (or in any written Award agreement)
obligates the Company or any Subsidiary to continue for any period to elect any
individual as a director or to employ an employee or consultant to whom an
Award has been granted, or interfere with the right of the Company or any
Subsidiary to vary the terms of the person’s service or employment or reduce
the person’s compensation.

 

25.                               EXCULPATION
AND INDEMNIFICATION

 

To the fullest extent permitted by applicable law and regulation, the
Company will indemnify and hold harmless the members of the Board and the
members of the Committee from and against any and all liabilities, costs, and
expenses incurred by them as a result of any act, or omission to act, in
connection with the performance of their duties, responsibilities, and
obligations under the Plan, other than such liabilities, costs and expenses as
may result from the gross negligence, bad faith, willful misconduct, or
criminal acts of such persons.

 

26.                               GOVERNING
LAW

 

The Plan and all actions taken thereunder are governed by and construed
in accordance with the laws of the State of Nevada, without reference to the
principles of conflict of laws thereof.

 

17

 

27.                               UNFUNDED
PLAN

 

The Plan is unfunded and the Company is not required to segregate any
assets in connection with any Awards under the Plan.  Any liability of the Company to any person
with respect to any Award under the Plan or any Award agreement is based solely
upon the contractual obligations that may be created as a result of the Plan or
any such Award or agreement.  No such
obligation of the Company will be deemed to be secured by any pledge of,
encumbrance on, or other interest in, any property or asset of the Company or
any Subsidiary.  Nothing contained in the
Plan or any Award agreement will be construed as creating in respect of any Grantee
(or beneficiary thereof or any other person) any equity or other interest of
any kind in any assets of the Company or any Subsidiary or creating a trust of
any kind or a fiduciary relationship of any kind between the Company, any
Subsidiary and/or any such Grantee, any beneficiary thereof or any other
person.

 

18Exhibit 4.1

 

Execution
Copy

 

 

 

 

TOREADOR RESOURCES
CORPORATION

 

and

 

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

 

as Trustee

 

 

INDENTURE

 

Dated as of February 1,
2010

 

 

$31,631,000 Principal
Amount

 

8.00%/7.00%
CONVERTIBLE SENIOR NOTES DUE 2025

 

 

 

 

 

CROSS-REFERENCE TABLE

 

	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.08; 7.10; 11.02

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  11.03

  
	
  (c)

  	
   

  	
  11.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(1)

  	
   

  	
  7.06

  
	
  (b)(2)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  7.06; 11.02

  
	
  (d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.04

  
	
  (c)(2)

  	
   

  	
  11.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  11.05

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01(b)

  
	
  (b)

  	
   

  	
  7.05; 11.02

  
	
  (c)

  	
   

  	
  7.01(a)

  
	
  (d)

  	
   

  	
  7.01(c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a) (last sentence)

  	
   

  	
  2.09

  
	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.07

  
	
  (c)

  	
   

  	
  9.04

  
	
  317(a)(1)

  	
   

  	
  6.08

  
	
  (a)(2)

  	
   

  	
  6.09

  
	
  (b)

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
  11.01

  

 

I

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  
	
  I. DEFINITIONS AND INCORPORATION
  BY REFERENCE

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.01

  	
  Definitions

  	
  1

  
	
  1.02

  	
  Other Definitions

  	
  9

  
	
  1.03

  	
  Incorporation by Reference of Trust Indenture Act

  	
  10

  
	
  1.04

  	
  Rules of Construction

  	
  10

  
	
   

  	
   

  	
   

  
	
  II. THE SECURITIES

  	
  11

  
	
   

  	
   

  	
   

  
	
  2.01

  	
  Form and Dating

  	
  11

  
	
  2.02

  	
  Execution and Authentication

  	
  12

  
	
  2.03

  	
  Registrar, Paying Agent and Conversion Agent

  	
  13

  
	
  2.04

  	
  Paying Agent to Hold Money in Trust

  	
  13

  
	
  2.05

  	
  Securityholder Lists

  	
  13

  
	
  2.06

  	
  Transfer and Exchange

  	
  14

  
	
  2.07

  	
  Replacement Securities

  	
  14

  
	
  2.08

  	
  Outstanding Securities

  	
  15

  
	
  2.09

  	
  Securities Held by the Company or an Affiliate

  	
  15

  
	
  2.10

  	
  Temporary Securities

  	
  16

  
	
  2.11

  	
  Cancellation

  	
  16

  
	
  2.12

  	
  Defaulted Interest

  	
  16

  
	
  2.13

  	
  CUSIP Numbers

  	
  17

  
	
  2.14

  	
  Deposit of Moneys and Property

  	
  17

  
	
  2.15

  	
  Book-Entry Provisions for Global Securities

  	
  17

  
	
  2.16

  	
  Special Transfer Provisions

  	
  18

  
	
  2.17

  	
  Ranking

  	
  20

  
	
   

  	
   

  	
   

  
	
  III. REDEMPTION AND REPURCHASE

  	
  20

  
	
   

  	
   

  	
   

  
	
  3.01

  	
  Right of Redemption

  	
  20

  
	
  3.02

  	
  Notices to Trustee

  	
  21

  
	
  3.03

  	
  Selection of Securities to be Redeemed

  	
  21

  
	
  3.04

  	
  Notice of Redemption

  	
  21

  
	
  3.05

  	
  Effect of Notice of Redemption

  	
  23

  
	
  3.06

  	
  Deposit of Redemption Price

  	
  23

  
	
  3.07

  	
  Securities Redeemed In Part

  	
  23

  
	
  3.08

  	
  Purchase Of Securities At Option Of The Holder

  	
  24

  
	
  3.09

  	
  Repurchase at Option Of Holder Upon a Fundamental Change

  	
  28

  
	
  3.10

  	
  Conversion Arrangement on Call for Redemption

  	
  32

  
	
   

  	
   

  	
   

  
	
  IV. COVENANTS

  	
  33

  

 

i

 

	
  4.01

  	
  Payment of Securities

  	
  33

  
	
  4.02

  	
  Maintenance of Office or Agency

  	
  33

  
	
  4.03

  	
  Rule 144A Information and Annual Reports

  	
  34

  
	
  4.04

  	
  Compliance Certificate

  	
  34

  
	
  4.05

  	
  Stay, Extension and Usury Laws

  	
  35

  
	
  4.06

  	
  Corporate Existence

  	
  35

  
	
  4.07

  	
  Limitations on Indebtedness

  	
  35

  
	
  4.08

  	
  Notice of Default

  	
  37

  
	
  4.09

  	
  Further Instruments and Acts

  	
  37

  
	
   

  	
   

  	
   

  
	
  V. SUCCESSORS

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.01

  	
  When Company May Merge, etc.

  	
  37

  
	
  5.02

  	
  Successor Substituted

  	
  38

  
	
   

  	
   

  	
   

  
	
  VI. DEFAULTS AND REMEDIES

  	
  38

  
	
   

  	
   

  	
   

  
	
  6.01

  	
  Events of Default

  	
  38

  
	
  6.02

  	
  Acceleration

  	
  40

  
	
  6.03

  	
  Other Remedies

  	
  40

  
	
  6.04

  	
  Waiver of Past Defaults

  	
  41

  
	
  6.05

  	
  Control by Majority

  	
  41

  
	
  6.06

  	
  Limitation on Suits

  	
  41

  
	
  6.07

  	
  Rights of Holders to Receive Payment

  	
  42

  
	
  6.08

  	
  Collection Suit by Trustee

  	
  42

  
	
  6.09

  	
  Trustee May File Proofs of Claim

  	
  42

  
	
  6.10

  	
  Priorities

  	
  43

  
	
  6.11

  	
  Undertaking for Costs

  	
  43

  
	
   

  	
   

  	
   

  
	
  VII. TRUSTEE

  	
  43

  
	
   

  	
   

  	
   

  
	
  7.01

  	
  Duties of Trustee

  	
  43

  
	
  7.02

  	
  Rights of Trustee

  	
  44

  
	
  7.03

  	
  Individual Rights of Trustee

  	
  46

  
	
  7.04

  	
  Trustee’s Disclaimer

  	
  46

  
	
  7.05

  	
  Notice of Defaults

  	
  46

  
	
  7.06

  	
  Reports by Trustee to Holders

  	
  46

  
	
  7.07

  	
  Compensation and Indemnity

  	
  47

  
	
  7.08

  	
  Replacement of Trustee

  	
  47

  
	
  7.09

  	
  Successor Trustee by Merger, etc.

  	
  48

  
	
  7.10

  	
  Eligibility; Disqualification

  	
  48

  
	
  7.11

  	
  Preferential Collection of Claims against Company

  	
  49

  
	
   

  	
   

  	
   

  
	
  VIII. DISCHARGE OF INDENTURE

  	
  49

  
	
   

  	
   

  	
   

  
	
  8.01

  	
  TERMINATION OF THE OBLIGATIONS OF THE COMPANY

  	
  49

  
	
  8.02

  	
  APPLICATION OF TRUST MONEY

  	
  49

  
	
  8.03

  	
  REPAYMENT TO COMPANY

  	
  49

  

 

ii

 

	
  8.04

  	
  REINSTATEMENT

  	
  50

  
	
   

  	
   

  	
   

  
	
  IX. AMENDMENTS

  	
  50

  
	
   

  	
   

  	
   

  
	
  9.01

  	
  WITHOUT CONSENT OF HOLDERS

  	
  50

  
	
  9.02

  	
  WITH CONSENT OF HOLDERS

  	
  51

  
	
  9.03

  	
  COMPLIANCE WITH TRUST INDENTURE ACT

  	
  52

  
	
  9.04

  	
  REVOCATION AND EFFECT OF CONSENTS

  	
  52

  
	
  9.05

  	
  NOTATION ON OR EXCHANGE OF SECURITIES

  	
  53

  
	
  9.06

  	
  TRUSTEE PROTECTED

  	
  53

  
	
  9.07

  	
  EFFECT OF SUPPLEMENTAL INDENTURES

  	
  54

  
	
   

  	
   

  	
   

  
	
  X. CONVERSION

  	
  54

  
	
   

  	
   

  	
   

  
	
  10.01

  	
  CONVERSION PRIVILEGE

  	
  54

  
	
  10.02

  	
  CONVERSION PROCEDURE

  	
  54

  
	
  10.03

  	
  FRACTIONAL SHARES

  	
  55

  
	
  10.04

  	
  TAXES ON CONVERSION

  	
  55

  
	
  10.05

  	
  COMPANY TO PROVIDE STOCK

  	
  56

  
	
  10.06

  	
  ADJUSTMENT OF CONVERSION RATE

  	
  56

  
	
  10.07

  	
  NO ADJUSTMENT

  	
  61

  
	
  10.08

  	
  OTHER ADJUSTMENTS

  	
  63

  
	
  10.09

  	
  ADJUSTMENTS FOR TAX PURPOSES

  	
  63

  
	
  10.10

  	
  NOTICE OF ADJUSTMENT

  	
  63

  
	
  10.11

  	
  NOTICE OF CERTAIN TRANSACTIONS

  	
  63

  
	
  10.12

  	
  EFFECT OF RECLASSIFICATIONS,
  CONSOLIDATIONS, MERGERS, BINDING SHARE EXCHANGES OR SALES ON CONVERSION
  PRIVILEGE

  	
  64

  
	
  10.13

  	
  TRUSTEE’S DISCLAIMER

  	
  65

  
	
  10.14

  	
  RIGHTS DISTRIBUTIONS PURSUANT TO STOCKHOLDERS’ RIGHTS PLANS

  	
  66

  
	
  10.15

  	
  INCREASED CONVERSION RATE
  APPLICABLE TO CERTAIN NOTES SURRENDERED IN CONNECTION WITH MAKE-WHOLE
  FUNDAMENTAL CHANGES

  	
  66

  
	
   

  	
   

  	
   

  
	
  XI. MISCELLANEOUS

  	
  71

  
	
   

  	
   

  	
   

  
	
  11.01

  	
  TRUST INDENTURE ACT CONTROLS

  	
  71

  
	
  11.02

  	
  NOTICES

  	
  71

  
	
  11.03

  	
  COMMUNICATION BY HOLDERS WITH OTHER HOLDERS

  	
  72

  
	
  11.04

  	
  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT

  	
  72

  
	
  11.05

  	
  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION

  	
  72

  
	
  11.06

  	
  RULES BY TRUSTEE AND AGENTS

  	
  73

  
	
  11.07

  	
  LEGAL HOLIDAYS

  	
  73

  
	
  11.08

  	
  DUPLICATE ORIGINALS

  	
  73

  
	
  11.09

  	
  GOVERNING LAW

  	
  73

  
	
  11.10

  	
  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS

  	
  73

  

 

iii

 

	
  11.11

  	
  SUCCESSORS

  	
  73

  
	
  11.12

  	
  SEPARABILITY

  	
  74

  
	
  11.13

  	
  TABLE OF CONTENTS, HEADINGS, ETC.

  	
  74

  
	
  11.14

  	
  CALCULATIONS IN RESPECT OF THE SECURITIES

  	
  74

  
	
  11.15

  	
  FORCE MAJEURE

  	
  74

  
	
  11.16

  	
  NO PERSONAL LIABILITY OF
  DIRECTORS, EMPLOYEES OR STOCKHOLDERS

  	
  74

  

 

Exhibit A   —  Form of
Global Security

 

Exhibit B-1
-  Form of Restricted Securities &
Common Stock Legend

Exhibit B-2
-  Form of Legend for Global
Security

 

Exhibit C   —  Form of
Notice of Transfer Pursuant to Registration Statement

 

iv

 

INDENTURE, dated as of February 1,
2010, between Toreador Resources Corporation, a Delaware corporation (the “Company”), and The Bank of New York Mellon Trust Company,
N.A., as trustee (the “Trustee”).

 

Each
party agrees as follows for the benefit of the other party and for the equal
and ratable benefit of the Holders of the Company’s 8.00%/7.00% Convertible
Senior Notes due 2025 (the “Securities”).

 

I.  DEFINITIONS AND INCORPORATION BY REFERENCE

 

1.01                           Definitions.

 

“Affiliate” means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company.  For this purpose, “control”
shall mean the power to direct the management and policies of a person through
the ownership of securities, by contract or otherwise.

 

“Applicable Premium” means 7.00% of the principal amount of
the redeemed Securities and any Securities called for redemption in accordance
with Section 3.01(c)(i) but converted prior to the Redemption
Date, provided that if the Redemption Date occurs after October 1, 2012,
the Applicable Premium shall be reduced by an amount equal to the product of (x) a
fraction, the numerator of which is the number of days after October 1,
2012 (calculated on a basis of twelve 30-day months) to but not including the
Redemption Date and the denominator of which is 360 times (y) the
Applicable Premium otherwise payable but for this proviso.

 

“Board of Directors” means the Board of Directors of the
Company or any committee thereof authorized to act for it hereunder.

 

“Board Resolution” means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company, or an equivalent duly
authorized corporate officer 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, and delivered to the Trustee.

 

“Business Day” means any day except a Saturday, Sunday or
legal holiday on which banking institutions in The City of New York are
authorized or obligated by law, regulation or executive order to close.

 

“Capital Stock” of any Person means any and all shares,
interests, participations or other equivalents (however designated) of capital
stock of such Person and all warrants or options to acquire such capital stock.

 

“Cash Equivalents” means

 

(a)           United States dollars or Euro;

 

(b)           securities issued or directly and
fully guaranteed or insured by the government or any agency or instrumentality
of the United States, any member state of the European Union, Switzerland or
Japan, which at the time acquired had a rating of AA (or higher) with Standard &

 

 

Poor’s
Corporation Service (“S&P”) or Aa2 (or higher) with Moody’s
Investors Services, Inc. (“Moody’s”) (or the equivalent by
comparable rating agencies in the European Union, Switzerland or Japan) having
a remaining maturity of not more than one year at the date of acquisition;

 

(c)           certificates of deposit and time
deposits with a remaining maturity of 365 days or less at the date of
acquisition, bankers’ acceptances with a remaining maturity not exceeding 365
days and overnight bank deposits, in each case, with any lender party to any
bank credit facility or with any commercial bank organized in the United
States, any member state of the European Union or Switzerland having capital
and surplus in excess of Euro 500 million (or the equivalent) and a rating of
A-1 (or higher) with S&P or P-1 (or higher) with Moody’s (or the equivalent
by comparable rating agencies in the European Union or Switzerland);

 

(d)           repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in
clause (c) above entered into with any financial institution meeting the
qualifications specified in clause (c) above;

 

(e)           commercial paper having a rating of
at least A-1 (or higher) from S&P or P-1 (or higher) from Moody’s and in
each case maturing within 365 days after the date of acquisition; and

 

(f)           money market funds
at least 95% of the assets of which constitute Cash Equivalents of the kinds
described in any of the clauses (a) through (e) above.

 

“Change in Control” will be deemed to occur at such time as:

 

(a)           any “person” or “group” (as these
terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act), other than the Company, any Subsidiaries of the Company or any
employee benefit plan of the Company, is or becomes the “beneficial owner” (as
that term is used in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than fifty percent (50%) of the total voting power of all
classes of the Company’s Voting Stock; or

 

(b)           there occurs a sale, transfer, lease,
conveyance or other disposition of all or substantially all of the property or
assets of the Company to any “person” or “group” (as those terms are used in
Sections 13(d) and 14(d) of the Exchange Act), including any group
acting for the purpose of acquiring, holding, voting or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act, other
than a sale, transfer, lease, conveyance or other disposition of all or
substantially all of the property or assets of the Company that falls within
the description in clause (c) of this definition; or

 

(c)           there occurs any transaction or event
or any series of transactions or events (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization, asset sale, lease of assets or otherwise)
in connection with which all or substantially all of the Common Stock is
exchanged for, converted into, acquired for or constitutes solely the right to
receive stock, other securities, other property, assets or cash; or

 

2

 

(d)           the following persons cease for any
reason to constitute a majority of the Board of Directors: (i) individuals
who on the Issue Date constituted the Board of Directors, and (ii) any new
directors whose election to the Board of Directors or whose nomination for
election by the Company’s stockholders was approved by at least a majority of
the directors then still in office either who were directors on the Issue Date
or whose election or nomination for election was previously so approved; or

 

(e)           the Company is liquidated or
dissolved or holders of the Company’s Capital Stock approve any plan or proposal
for the liquidation or dissolution of the Company.

 

Notwithstanding
the foregoing, any transaction or event or any series of transactions or events
described in clause (c) of this definition in which:

 

(i)            the persons
that “beneficially owned,” directly or indirectly, the shares  of the Company’s Voting Stock immediately
prior to such transaction,  “beneficially
own,” directly or indirectly, immediately after such  transaction, shares of the surviving or
continuing corporation’s Voting  Stock
representing at least a majority of the total voting power of all  outstanding classes of Voting Stock of the
surviving or continuing  corporation, or

 

(ii)           (A) at
least 95% of the consideration (other than cash payments for  fractional shares or pursuant to statutory
appraisal rights) in such transaction consists of common stock, ordinary shares
or American Depository Shares, and any associated rights, traded or quoted on a
U.S. national securities exchange (or that will 
be so traded or quoted when issued or exchanged in connection with such
transaction), and (B) as a result of such transaction, the consideration
due upon conversion of the Securities shall be payable solely in shares of such
common stock, ordinary shares or American Depository Shares, and any associated
rights and cash for fractional shares

 

shall
not constitute a Change in Control.

 

For
the avoidance of doubt, the transfer by the Company of up to a 50% working
interest in its oil and gas licenses to one or more strategic partners will not
constitute a Change in Control.

 

“Closing Sale Price” on any date means the price of a share
of Common Stock on the relevant date, determined (a) on the basis of the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date on the U.S.
principal national or regional securities exchange on which the Common Stock is
listed; or (b) if the Common Stock is not listed on a U.S. national or
regional securities exchange, as reported by Pink Sheets LLC or a similar
organization.  In the absence of a
quotation, the Closing Sale Price shall be such price as the Company shall reasonably
determine on the basis of such quotations as most accurately reflecting the
price that a fully informed buyer, acting on his own accord, would pay to a
fully informed seller, acting on his own accord in an arms-length transaction,
for a share of Common Stock.

 

3

 

“Common Stock” means the common stock, $0.15625 par value per
share, of the Company, or such other Capital Stock of the Company into which
the Company’s common stock is reclassified or changed.

 

“Company” means the party named as such above until a
successor replaces it pursuant to the applicable provision hereof and
thereafter means the successor.  The
foregoing sentence shall likewise apply to any such successor or subsequent
successor.

 

Each
of “Company Order” and “Company
Request” means a written request or order signed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, its Chief Operating Officer, its Chief Financial Officer, any
Executive Vice President or any Senior Vice President and by its Treasurer or
an Assistant Treasurer or its Secretary or an Assistant Secretary, and
delivered to the Trustee.

 

“Conversion Rate” means the number of shares of Common Stock
issuable upon conversion of a Security per $1,000 principal amount, which
Conversion Rate shall initially be 72.9927 shares of Common Stock per $1,000
principal amount of Securities, subject to adjustment as provided in Article X.

 

“Conversion Price” means, as of any date of determination,
the dollar amount derived by dividing one thousand dollars ($1,000) by the
Conversion Rate in effect on such date.

 

“Corporate Trust Office of the Trustee” shall be at the
address of the Trustee specified in Section 11.02 or such other
address as the Trustee may give notice of to the Company and the Holders.

 

“Current Market Price” shall mean the average of the Closing
Sale Prices per share of Common Stock for the ten consecutive Trading Days
ending on the earlier of the date of determination and the day before the Ex
Date with respect to the distribution requiring such computation.

 

“Currently Producing Assets” shall mean the Neocomian complex
and Charmottes fields.

 

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

 

“Depositary” means The Depository Trust Company, its nominees
and successors.

 

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

 

“Exchange Agreement” means the Exchange Agreement dated as of
January 29, 2010 by and between the Company and Zazove Associates LLC, as
investment advisor to the entities specified therein.

 

“Excluded Reserves” means the proved plus probable reserves
underlying any project or acquisition, joint venture or partnership for which
Indebtedness has been incurred to the extent excluded from Indebtedness as
Permitted Indebtedness pursuant to Section 4.07(b)(iv).

 

4

 

“Ex Date,” means (i) when used with respect to any
issuance or distribution, means the first date on which the Common Stock trades
the regular way on the relevant exchange or in the relevant market from which
the Closing Sale Price was obtained without the right to receive such issuance
or distribution, (ii) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the Common
Stock trades the regular way on such exchange or in such market after the time
at which such subdivision or combination becomes effective, and (iii) when
used with respect to any tender offer or exchange offer means the first date on
which the Common Stock trades the regular way on such exchange or in such
market after the expiration time of such tender offer or exchange offer (as it
may be amended or extended).

 

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

 

“Fundamental Change” shall be deemed to occur upon the
occurrence, on or after the Issue Date, of either a “Change in Control” or a “Termination
of Trading.”

 

“Hedging Obligations” means, with respect to any Person, the
obligations (including guarantee obligations) of such Person (whether existing
on the Issue Date or thereafter arising) under: 
(1) currency exchange, interest rate or commodity swap agreements,
currency exchange, interest rate or commodity cap agreements and currency
exchange, interest rate or commodity collar agreements; and (2) other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange, interest rates or commodity prices.

 

“Holder” or “Securityholder”
means a person in whose name a Security is registered on the Registrar’s books.

 

“Indebtedness” of a person means the principal of, premium,
if any, and interest on, and all other obligations in respect of (a) all
indebtedness of such person for borrowed money (including all indebtedness
evidenced by notes, bonds, debentures or other securities), (b) all
obligations (other than trade payables) incurred by such person in the
acquisition (whether by way of purchase, merger, consolidation or otherwise and
whether by such person or another person) of any business, real property or
other assets, (c) all reimbursement obligations of such person with
respect to letters of credit, bankers’ acceptances or similar facilities issued
for the account of such person, (d) all capital lease obligations of such
person, (e) all net obligations of such person under interest rate swap,
currency exchange or similar agreements of such person, (f) all
obligations and other liabilities, contingent or otherwise, under any lease or
related document, including a purchase agreement, conditional sale or other
title retention agreement, in connection with the lease of real property or
improvements thereon (or any personal property included as part of any such
lease) that provide that such person is contractually obligated to purchase or
cause a third party to purchase the leased property or pay an agreed-upon
residual value of the leased property, including such person’s obligations
under such lease or related document to purchase or cause a third party to
purchase such leased property or pay an agreed-upon residual value of the
leased property to the lessor, (g) guarantees by such person of indebtedness
described in clauses (a) through (f) of another person, and (h) all
renewals, extensions, refundings, deferrals, restructurings, amendments and
modifications of any indebtedness, obligation, guarantee or liability of the
kind described in clauses (a) through (g).

 

5

 

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

 

“Issue Date” means February 1, 2010.

 

“Liquidated Damages Amount” has the meaning ascribed to such
term in the Exchange Agreement.

 

“Make-Whole Fundamental Change” means:

 

(a)           a sale, transfer, lease, conveyance
or other disposition of all or substantially all of the property or assets of
the Company to any “person” or “group” (as those terms are used in Sections 13(d) and
14(d) of the Exchange Act), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than a sale, transfer, lease, conveyance or other
disposition of all or substantially all of the property or assets of the
Company that falls within the description contained in clause (b) of this
definition; or

 

(b)           any transaction or event or any
series of transactions or events (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization, asset sale, lease of assets or otherwise)
in connection with which all or substantially all of the Company’s Common Stock
is exchanged for, converted into, acquired for or constitutes solely the right
to receive stock, other securities, other property, assets or cash.

 

Notwithstanding
the foregoing, any transaction or event or any series of transactions or events
described in clause (b) of this definition in which:

 

(i)            at least 95% of
the consideration (other than cash payments for fractional shares or pursuant
to statutory appraisal rights) in such transaction consists of common stock,
ordinary shares or American Depository Shares, and any associated rights,
traded or quoted on a U.S. national securities exchange (or that will be so
traded or quoted when issued or exchanged in connection with such transaction),
and

 

(ii)           as a result of
such transaction, the consideration due upon conversion of the Securities shall
be payable solely in shares of such common stock, ordinary shares or American
Depository Shares, and any associated rights and cash for fractional shares,

 

shall
not constitute a Make-Whole Fundamental Change.

 

For
the avoidance of doubt, the transfer by the Company of up to a 50% working
interest in its oil and gas licenses to one or more strategic partners will not
constitute a Make-Whole Fundamental Change.

 

“Maturity Date” means October 1, 2025.

 

“Officer” means the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, any Executive Vice President or any Senior Vice President of
the Company.

 

6

 

“Officer’s Certificate” means a certificate signed by an
Officer of the Company.

 

“Opinion of Counsel” means a written opinion from legal
counsel selected by the Company who may be an employee of or counsel for the
Company, or other counsel reasonably acceptable to the Trustee.

 

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

 

“Proved Plus Probable Reserves” means the estimated
quantities of crude oil, natural gas and natural gas liquids classified as
proved plus probable reserves (2P) in the Company’s most recent SEC Reserve
Report plus the proved plus probable reserves underlying any assets acquired or
otherwise transferred and minus the proved plus probable reserves underlying
any assets sold or otherwise transferred by the Company since the date of the
SEC Reserve Report minus Excluded Reserves.

 

“Public Acquirer Common Stock” means common stock that is
traded or quoted on a national securities exchange or that will be so traded or
quoted when issued or exchanged in connection with an event described in clause
(b) of the definition of “Make-Whole Fundamental Change” (as such clause (b) is
modified by the last paragraph of such definition).

 

“Public Acquirer Fundamental Change” shall mean an
acquisition of the Company pursuant to an event described in clause (b) of
the definition of “Make-Whole Fundamental Change” (as such clause (b) is
modified by the last paragraph of such definition), where the acquirer (or any
entity that is a direct or indirect wholly owned Subsidiary of the acquirer or
of which the acquirer is a direct or indirect wholly owned Subsidiary) has a
class of Public Acquirer Common Stock.

 

“Purchase Notice” means a Purchase Notice in the form set
forth in the Securities.

 

“QIB” means a “qualified institutional buyer” within the
meaning of Rule 144A promulgated under the Securities Act.

 

“Redemption Date” means the date specified for Redemption of
the Securities in accordance with the terms of the Securities and this
Indenture.

 

“Redemption Price” means, with respect to a Security to be
redeemed by the Company in accordance with Article III, one hundred
percent (100%) of the outstanding principal amount of such Security to be
redeemed, plus accrued and unpaid interest, if any, to, but excluding, the
Redemption Date.

 

“Responsible Officer” shall mean, when used with respect to
the Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of 

 

7

 

such
person’s knowledge of and familiarity with the particular subject and who shall
have direct responsibility for the administration of this Indenture.

 

“Rule 144A” means Rule 144A promulgated under the
Securities Act, as such rule may be amended and in effect from time to
time.

 

“SEC” means the Securities and Exchange Commission.

 

“SEC Reserve Report” means the most recent report summarizing
the Company’s estimated quantities of reserves and future revenue prepared by
the Company’s independent petroleum engineers and filed by the Company with the
SEC.

 

“Securities” means the 8.00%/7.00% Convertible Senior Notes
due 2025 issued by the Company pursuant to this Indenture.

 

“Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC thereunder.

 

“Significant Subsidiary” with respect to any person means any
Subsidiary of such person that constitutes a “significant subsidiary” within
the meaning of Rule 1-02(w) of Regulation S-X promulgated under the
Securities Act, as such regulation is in effect on the date of this Indenture.

 

“Subsidiary” means (i) a corporation a majority of whose
Capital Stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by the Company, by one
or more subsidiaries of the Company or by the Company and one or more of its
subsidiaries or (ii) any other person (other than a corporation),
including, without limitation, a partnership or joint venture, in which the
Company, one or more of its subsidiaries, or the Company and one or more of its
subsidiaries, directly or indirectly, at the date of determination thereof, own
at least a majority ownership interest entitled to vote in the election of
directors, managers or trustees (or members of any other equivalent governing
body) thereof.

 

“Termination of Trading” shall be deemed to occur if the
Common Stock (or other common stock or American Depository Shares into which
the Securities are then convertible) is not listed for trading nor quoted on a
U.S. national securities exchange.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as amended and in effect from time to time.

 

“Total Consolidated Net Debt” means as of any date (x) long-term
Indebtedness plus the current portion of the long-term Indebtedness minus Cash
Equivalents (to the extent that any of the foregoing would appear as such on a
consolidated balance sheet of the Company as of such date prepared in
accordance with U.S. generally accepted accounting principles in effect from
time to time) plus (y) the proportionate share of (i) long-term
Indebtedness plus (ii) the current portion of the long-term Indebtedness
minus (iii) Cash Equivalents, as reflected in the balance sheets of the
Company’s unconsolidated Subsidiaries as of such date prepared in accordance
with U.S. generally accepted accounting principles in effect from time to time (z) minus
the Permitted Indebtedness described in Section 4.07(b)(iv).

 

8

 

“Trading Day” for any security means (x) if the
applicable security is listed or admitted for trading on the New York Stock
Exchange or Nasdaq Global Market or another national or regional securities
exchange, a day on which the New York Stock Exchange or Nasdaq Global Market or
such other national or regional securities exchange is open for business, or (y) if
the applicable security is not so listed, a day on which trades may be made on
the principal other market on which the Common Stock is then traded, or (z) if
the applicable security is not so listed, admitted for trading or quoted, any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to
close.

 

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

 

“Voting Stock” of any Person means the total voting power of
all classes of the Capital Stock of such Person entitled to vote generally in
the election of directors of such Person.

 

1.02                           Other Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Acquirer Stock Conversion Right Adjustment”

  	
   

  	
  10.15

  	
   

  
	
  “Acquisition of Voting Control”

  	
   

  	
  3.09

  	
   

  
	
  “Additional Securities”

  	
   

  	
  1.01

  	
   

  
	
  “Aggregate Amount”

  	
   

  	
  10.06

  	
   

  
	
  “Applicable Increase”

  	
   

  	
  10.15

  	
   

  
	
  “Applicable Price”

  	
   

  	
  10.15

  	
   

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  	
   

  
	
  “Conversion Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Conversion Date”

  	
   

  	
  10.02

  	
   

  
	
  “Custodian”

  	
   

  	
  6.01

  	
   

  
	
  “Effective Date”

  	
   

  	
  10.15

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Ex Date”

  	
   

  	
  10.06

  	
   

  
	
  “Expiration Date”

  	
   

  	
  10.06

  	
   

  
	
  “Expiration Time”

  	
   

  	
  10.06

  	
   

  
	
  “Fundamental Change Notice”

  	
   

  	
  3.09

  	
   

  
	
  “Fundamental Change Repurchase Date”

  	
   

  	
  3.09

  	
   

  
	
  “Fundamental Change Repurchase Price”

  	
   

  	
  3.09

  	
   

  
	
  “Fundamental Change Repurchase Right”

  	
   

  	
  3.09

  	
   

  
	
  “Global Security”

  	
   

  	
  2.01

  	
   

  
	
  “Legal Holiday”

  	
   

  	
  11.07

  	
   

  
	
  “Make-Whole Consideration”

  	
   

  	
  10.15

  	
   

  
	
  “Make-Whole Conversion Rate Adjustment”

  	
   

  	
  10.15

  	
   

  
	
  “Notice of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Option Purchase Date”

  	
   

  	
  3.08

  	
   

  
	
  “Option Purchase Notice”

  	
   

  	
  3.08

  	
   

  
	
  “Option Purchase Price”

  	
   

  	
  3.08

  	
   

  

 

9

 

	
  “Participants”

  	
   

  	
  2.15

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Permitted Indebtedness

  	
   

  	
  4.07

  	
   

  
	
  “Permitted Strategic Transaction”

  	
   

  	
  3.09

  	
   

  
	
  “Physical Securities”

  	
   

  	
  2.01

  	
   

  
	
  “Purchase at Holder’s Option”

  	
   

  	
  3.01

  	
   

  
	
  “Purchased Shares”

  	
   

  	
  10.06

  	
   

  
	
  “Redemption”

  	
   

  	
  3.01

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Repurchase Upon Fundamental Change”

  	
   

  	
  3.01

  	
   

  
	
  “Resale Restriction Termination Date”

  	
   

  	
  2.17

  	
   

  
	
  “Restricted Security”

  	
   

  	
  2.16

  	
   

  
	
  “Rights”

  	
   

  	
  10.06

  	
   

  
	
  “Spin-Off Ex-Dividend Date”

  	
   

  	
  10.06

  	
   

  
	
  “Trigger Event”

  	
   

  	
  10.07

  	
   

  

 

1.03                           Incorporation by Reference
of Trust Indenture Act.

 

Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture.

 

The
following TIA terms used in this Indenture have the following meanings:

 

“Commission” means the SEC;

 

“Indenture Securities” means the Securities;

 

“Indenture Security Holder” means a Securityholder or a
Holder;

 

“Indenture to be Qualified” means this Indenture;

 

“Indenture Trustee” or

 

“Institutional Trustee” means the Trustee; and

 

“Obligor” on the indenture securities means the Company or
any successor thereof.

 

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

 

1.04                           Rules of Construction.

 

Unless
the context otherwise requires:

 

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

 

10

 

(ii)           an accounting
term not otherwise defined has the meaning assigned to it in accordance with
U.S. generally accepted accounting principles in effect from time to time;

 

(iii)          “or” is not
exclusive;

 

(iv)          words in the
singular include the plural and in the plural include the singular;

 

(v)           provisions
apply to successive events and transactions;

 

(vi)          “close of
business” on a date shall refer to 5:00 pm, New York City time, on such date;

 

(vii)         the term “Interest” includes Liquidated Damages Amounts, unless the
context otherwise requires or unless the terms of the Exchange Agreement
provide otherwise;

 

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

 

(ix)           references to
currency shall mean the lawful currency of the United States of America, unless
the context requires otherwise.

 

II.  THE SECURITIES

 

2.01                           Form and Dating.

 

The
Securities and the Trustee’s certificate of authentication shall be
substantially in the form set forth in Exhibit A, which is
incorporated in and forms a part of this Indenture.  The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage; provided such
notations, legends or endorsements are in form reasonably acceptable to the
Company.  The Company shall provide any
such notations, legends or endorsements to the Trustee in writing.  Each Security shall be dated the date of its
authentication.

 

Securities
offered and sold in reliance on Section 4(2) of the Securities Act
and not eligible for book-entry settlement with the Depositary or Securities
issued in exchange for interests in a Global Security pursuant to Section 2.15
may be issued in the form of permanent certificated Securities in registered
form in substantially the form set forth in Exhibit A (the “Physical Securities”) and, if applicable, bearing any
legends required by Section 2.17. 
The Securities shall be issued initially in the form of Physical
Securities.

 

If
the Securities become, and for so long as they are, eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, Securities
offered and sold in reliance on Section 4(2) of the Securities Act
shall be issued in the form of one or more Global Securities, in registered
form, substantially in the form set forth in Exhibit A (the “Global Security”), deposited with the Trustee, as custodian
for the Depositary, and registered in the name of the 

 

11

 

Depositary
or a nominee thereof, duly executed by the Company and authenticated by the
Trustee as hereinafter provided and bearing the Restricted Securities Legend
set forth in Exhibits B-1 and the legend set forth in B-2.  The aggregate principal amount of the Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary, as hereinafter
provided; provided that in no event shall the aggregate principal amount of the
Global Security or Securities exceed $31,631,000.

 

2.02                           Execution and
Authentication.

 

One
duly authorized Officer shall sign the Securities for the Company by manual
signature.

 

A
Security’s validity shall not be affected by the failure of an Officer whose
signature is on such Security to hold, at the time the Security is
authenticated, the same office at the Company.

 

A
Security shall not be valid until authenticated by the manual signature of the
Trustee.  The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.

 

Upon
a written order of the Company signed by one Officer of the Company, the
Trustee shall authenticate Securities for original issue in the aggregate
principal amount of $31,631,000.  The
aggregate principal amount of Securities outstanding at any time may not exceed
$31,631,000.

 

Upon
a written order of the Company signed by one Officer of the Company, the
Trustee shall authenticate Securities not bearing the Restricted Securities
Legend to be issued to the transferee when sold pursuant to an effective
registration statement under the Securities Act as set forth in Section 2.16(b).

 

The
Trustee shall act as the initial authenticating agent.  Thereafter, the Trustee may appoint an
authenticating agent reasonably acceptable to the Company to authenticate
Securities.  An authenticating agent may
authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such authenticating
agent.  An authenticating agent has the
same rights as the Registrar, Paying Agent, Conversion Agent or any
co-Registrar to deal with the Company and its Affiliates.

 

If
a written order of the Company pursuant to this Section 2.02 has been,
or simultaneously is, delivered, any instructions by the Company to the Trustee
with respect to endorsement, delivery or redelivery of a Security issued in
global form shall be in writing but need not comply with Section 11.04
hereof and need not be accompanied by an Opinion of Counsel.

 

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

 

12

 

2.03                           Registrar, Paying Agent and
Conversion Agent.

 

The
Company shall maintain, or cause to be maintained, (i) an office or agency
in the Borough of Manhattan, The City of New York, where Securities may be
presented for registration of transfer or for exchange (“Registrar”);
(ii) an office or agency in the Borough of Manhattan, The City of New
York, where Securities may be presented for payment (“Paying Agent”);
and (iii) an office or agency in the Borough of Manhattan, The City of New
York, where Securities may be presented for conversion (“Conversion
Agent”).  The Registrar shall
keep a register of the Securities and of their transfer and exchange.  The Company may appoint or change one or more
co-Registrars, one or more additional paying agents and one or more additional
conversion agents without notice and may act in any such capacity on its own
behalf.  The term “Registrar”
includes any co-Registrar; the term “Paying Agent”
includes any additional paying agent; and the term “Conversion
Agent” includes any additional conversion agent.

 

If
the Company fails to maintain a Registrar, Paying Agent or Conversion Agent,
the Trustee shall act as such and shall be entitled to reasonable compensation
therefor pursuant to Section 7.07.

 

The
Company initially appoints the Trustee as Paying Agent, Registrar and
Conversion Agent and designates the Corporate Trust Office of the Trustee for
the purposes enumerated in the first paragraph of this Section 2.03.

 

2.04                           Paying Agent to Hold Money
in Trust.

 

Each
Paying Agent shall hold in trust for the benefit of the Securityholders or the
Trustee all moneys and, if applicable, other property held by the Paying Agent
for the payment of the Securities, and shall notify the Trustee of any Default
by the Company in making any such payment. 
While any such Default continues, the Trustee may require a Paying Agent
to pay all money and, if applicable, other property held by it to the
Trustee.  The Company at any time may
require a Paying Agent to pay all money and, if applicable, other property held
by it to the Trustee and account for any funds so paid by it.  Upon payment over to the Trustee, the Paying
Agent shall have no further liability for such money and, if applicable, other
property.  If the Company acts as Paying
Agent, it shall segregate and hold as a separate trust fund all money and, if
applicable, other property held by it as Paying Agent.

 

2.05                           Securityholder Lists.

 

The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of
Securityholders.  If the Trustee is not
the Registrar, the Company shall (i) furnish to the Trustee on or before
each interest payment date, a list of the names and addresses of
Securityholders appearing on the security register of the Registrar; and (ii) furnish,
within thirty (30) days after the receipt by the Company of such request, to
the Trustee, at such other times as the Trustee reasonably may request in
writing, a list of similar form and content, which list shall be as of a date
not more than fifteen (15) days before the date such list is furnished.

 

13

 

2.06                           Transfer and Exchange.

 

Subject
to Sections 2.15 and 2.16 hereof, where Securities are presented
to the Registrar with a request to register their transfer or to exchange them
for an equal principal amount of Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange if its
requirements for such transaction are met. 
To permit registrations of transfer and exchanges, the Trustee shall
authenticate Securities at the Registrar’s request or upon the Trustee’s
receipt of a Company Order therefor.  The
Company or the Trustee, as the case may be, shall not be required to register
the transfer of or exchange any Security (i) for a period of fifteen (15)
days before selecting, pursuant to Section 3.03, Securities to be
redeemed or (ii) during a period beginning at the opening of business
fifteen (15) days before the mailing of a notice of redemption of the
Securities selected for Redemption under Section 3.04 and ending at
the close of business on the day of such mailing or (iii) that has been
selected for Redemption or for which a Purchase Notice has been delivered, and
not withdrawn, in accordance with this Indenture, except the unredeemed or
unrepurchased portion of Securities being redeemed or repurchased in part.

 

No
service charge shall be made for any transfer, exchange or conversion of
Securities, but the Company may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge that may be imposed in
connection with any transfer, exchange or conversion of Securities, other than
exchanges pursuant to Sections 2.10, 9.05 or 10.02, or Article III,
not involving any transfer.

 

2.07                           Replacement Securities.

 

If
the Holder of a Security claims that the Security has been mutilated, lost,
destroyed or wrongfully taken, the Company shall, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, issue and the Trustee, upon receipt of a Company Order therefor,
shall authenticate a replacement Security upon surrender to the Trustee of the
mutilated Security, or upon delivery to the Trustee of evidence of the loss,
destruction or theft of the Security satisfactory to the Trustee and the
Company.  In the case of a lost,
destroyed or wrongfully taken Security, the Trustee or the Company may require
the Holder of such Security to deliver, prior to the issuance and
authentication of a replacement Security, an indemnity bond that is reasonably
satisfactory to the Trustee and the Company to indemnify and hold harmless the
Company, the Trustee and any Registrar, Paying Agent, Conversion Agent or co-Registrar
(if different than the Trustee) from any loss that any of them may suffer if
such Security is replaced.  The Company
and the Trustee may charge such Holder for their expenses (including taxes or
governmental charges incurred) in replacing a Security.

 

In
case any such mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable (whether at maturity, upon
Redemption, on an Option Purchase Date with respect to a Purchase at Holder’s
Option or on a Fundamental Change Repurchase Date with respect to a Repurchase
Upon Fundamental Change), the Company in its discretion may, instead of issuing
a new Security, pay such Security when due.

 

Every
replacement Security is an additional obligation of the Company only as
provided in Section 2.08.

 

14

 

2.08                           Outstanding Securities.

 

Securities
outstanding at any time are all the Securities authenticated by the Trustee
except for those converted, those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not
outstanding.

 

If
a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it, or a court
holds, that the replaced Security is held by a bona fide purchaser.

 

If
the Paying Agent (other than the Company) holds on an Option Purchase Date,
Redemption Date, Fundamental Change Repurchase Date or Maturity Date, money
sufficient to pay the aggregate Option Purchase Price, Redemption Price,
Fundamental Change Repurchase Price or principal amount, as the case may be,
with respect to all Securities to be redeemed, purchased or paid upon Purchase
at Holder’s Option, Redemption, Repurchase Upon Fundamental Change or maturity,
as the case may be, payable as herein provided upon Purchase at Holder’s
Option, Redemption, Repurchase Upon Fundamental Change or maturity, then
(unless there shall be a Default in the payment of such aggregate Option
Purchase Price, Redemption Price, Fundamental Change Repurchase Price or
principal amount) on and after such date such Securities shall be deemed to be
no longer outstanding, interest on such Securities shall cease to accrue, and
such Securities shall be deemed paid whether or not such Securities are
delivered to the Paying Agent. 
Thereafter, all rights of the Holders of such Securities shall terminate
with respect to such Securities, other than the right to receive the Option
Purchase Price, Redemption Price, Fundamental Change Repurchase Price or
principal amount, as the case may be, in accordance with this Indenture.

 

If
a Security is converted in accordance with Article X, then, from
and after the time of such conversion on the Conversion Date, such Security
shall cease to be outstanding, and interest, if any, shall cease to accrue on
such Security.

 

2.09                           Securities Held by the
Company or an Affiliate.

 

(a)           In determining whether the
Holders of the required aggregate principal amount of Securities have concurred
in any request, demand, direction, waiver or consent, Securities owned by the
Company or any of its Subsidiaries or Affiliates shall be considered as though
not outstanding, except that, for the purposes of determining whether a
Responsible Officer of the Trustee shall be protected in relying on any such
request, demand, direction, waiver or consent, only Securities that the Trustee
knows are so owned shall be so disregarded. 
Securities so owned that have been pledged in good faith may be
considered to be outstanding for purposes of this Section 2.09 if
the pledgee establishes, to the reasonable satisfaction of the Trustee, the
pledgee’s right so to concur with respect to such Securities and that the
pledgee is not, and is not acting at the direction or on behalf of, the Company,
any other obligor on the Securities, an Affiliate of the Company or an
affiliate of any such other obligor.  The
Trustee may rely on the advice of counsel or on an Officer’s Certificate in
order to be reasonably satisfied that the pledgee has established the
foregoing.

 

15

 

(b)           Any Securities or shares of
Common Stock issued upon the conversion of Securities that is purchased or
owned by the Company or any Affiliate thereof may not be resold by the Company
or such Affiliate unless registered under the Securities Act or resold pursuant
to an exemption from the registration requirements of the Securities Act in a
transaction that results in such Securities or shares of Common Stock, as the
case may be, no longer being “restricted securities” (as defined under Rule 144
under the Securities Act).

 

2.10                           Temporary Securities.

 

Until
definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall, upon its receipt of a Company Order therefor, authenticate
temporary Securities.  Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary
Securities.  Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.  Until so exchanged, each temporary Security
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities, and such temporary Security shall be exchangeable for
definitive Securities in accordance with the terms of this Indenture.

 

2.11                           Cancellation.

 

The
Company at any time may deliver Securities (which the Company may have duly
acquired in any manner whatsoever) to the Trustee for cancellation.  The Registrar, Paying Agent and Conversion
Agent shall forward to the Trustee any Securities surrendered to them for
Redemption, Purchase at Holder’s Option, Repurchase Upon Fundamental Change,
transfer, exchange, payment or conversion. 
The Trustee shall promptly cancel all Securities surrendered for
transfer, exchange, payment (whether at maturity, upon Redemption, upon a
Purchase at Holder’s Option, or upon a Repurchase Upon Fundamental Change),
conversion or cancellation in accordance with its customary procedures.  The Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for
cancellation or that any Securityholder has converted pursuant to Article X.  All cancelled Securities held by the Trustee
shall be destroyed, and certification of their destruction shall be delivered
by the Trustee to the Company unless the Company shall, by a Company Order,
direct that cancelled Securities be returned to it.

 

2.12                           Defaulted Interest.

 

If
and to the extent the Company defaults in a payment of interest on the
Securities, the Company shall pay in cash the defaulted interest in any lawful
manner plus, to the extent not prohibited by applicable statute or case law,
interest on such defaulted interest at the rate provided in the
Securities.  The Company may pay the
defaulted interest (plus interest on such defaulted interest) to the persons
who are Securityholders on a subsequent special record date.  The Company shall fix such record date and
payment date.  At least fifteen (15)
calendar days before such record date, the Company shall mail to
Securityholders a notice that states the record date, payment date and amount
of interest to be paid, and the Company shall cause any such defaulted interest
(plus interest on such defaulted interest) to be paid to Holders of record of
each applicable Security at 5:00 p.m., New York City time, on such record
date.  Upon such due 

 

16

 

payment
in full, such defaulted interest (plus interest on such defaulted interest)
shall no longer be payable pursuant to this Section 2.12.

 

2.13                           CUSIP Numbers.

 

The
Company in issuing the Securities may use one or more “CUSIP” numbers, and, if
so, the Trustee shall use the CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided, however, that no representation
is hereby deemed to be made by the Trustee as to the correctness or accuracy of
the CUSIP numbers printed on the notice or on the Securities; provided further,
that reliance may be placed only on the other identification numbers printed on
the Securities, and the effectiveness of any such notice shall not be affected
by any defect in, or omission of, such CUSIP numbers.  The Company shall promptly notify the Trustee
of any change in the CUSIP numbers.

 

2.14                           Deposit of Moneys and
Property.

 

Prior
to 11:00 A.M., New York City time, on each interest payment date, Maturity
Date, Redemption Date, Option Purchase Date or Fundamental Change Repurchase
Date, the Company shall have deposited with a Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust in accordance
with Section 2.04) money, in funds immediately available on such
date, and, if applicable as provided herein, such other consideration,
sufficient to make cash payments and deliver such other consideration, if any,
due on such interest payment date, Maturity Date, Redemption Date, Option
Purchase Date or Fundamental Change Repurchase Date, as the case may be.  The Paying Agent shall remit payment to the
Holders on such interest payment date, Maturity Date, Redemption Date, Option
Purchase Date or Fundamental Change Repurchase Date, as the case may be.  If, pursuant to Section 4.01 hereof
and paragraph 3 of the Securities, payment shall be made to Holders by
check, then such deposit shall be made in such manner as will permit such
remittance to be made by check drawn upon a bank in the city in which the
Paying Agent’s principal office, or the Corporate Trust Office of the Trustee,
shall be located.

 

2.15                           Book-Entry Provisions for
Global Securities.

 

(a)           The Global Securities
initially shall (i) be registered in the name of the Depositary or the
nominee of the Depositary, (ii) be delivered to the Trustee as custodian
for the Depositary and (iii) bear legends as set forth in Section 2.16(a).

 

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

 

17

 

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

 

(c)           In connection with the
transfer of a Global Security in its entirety to beneficial owners pursuant to Section 2.15(b),
such Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in
such Global Security, an equal aggregate principal amount of Physical
Securities of authorized denominations.

 

(d)           Any Physical Security
constituting a Restricted Security delivered in exchange for an interest in a
Global Security pursuant to Section 2.15(b) shall, except as
otherwise provided by Section 2.16, bear the Restricted Securities
Legend.

 

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

 

2.16                           Special Transfer Provisions.

 

(a)           Notwithstanding any other
provisions of this Indenture, but except as provided in Section 2.15(b),
a Global Security may not be transferred except as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.  Each Global Security shall bear the legend
set forth in Exhibit B-2.

 

(b)           Every Security that bears or
is required under this Section 2.16(b) to bear the restricted
securities legend set forth in Exhibit B-1 (the “Restricted Securities Legend”), and any Common Stock that
bears or is required under this Section 2.16(b) to bear the
common stock legend set forth in Exhibit B-1 (the “Common Stock Legend”) (collectively, the “Restricted Securities”) shall be subject to the restrictions
on transfer set forth in the Restricted Securities Legend or the Common Stock
Legend, as the case may be, unless such restrictions on transfer shall be
waived by written consent of the Company, and the holder of each such
Restricted Security, by such Securities holder’s acceptance thereof, agrees to
be bound by all such restrictions on transfer. 
As used in this Section 2.16(b), the term “Transfer” encompasses any sale, pledge, loan, transfer or
other disposition whatsoever of any Restricted Security or any interest
therein.

 

18

 

Until
the expiration of the holding period applicable to sales thereof under Rule 144
under the Securities Act (or any successor provision), any certificate
evidencing such Security (and all securities issued in exchange therefor or
substitution thereof), and any stock certificate representing shares of Common
Stock issued upon conversion of any Security, shall bear a Restricted
Securities Legend or a Common Stock Legend, as the case may be, unless such
Security or such shares of Common Stock have been sold pursuant to a
registration statement that has been declared effective under the Securities
Act (and which continues to be effective at the time of such transfer) or
pursuant to Rule 144 under the Securities Act or any similar provision
then in force, or such shares of Common Stock have been issued upon conversion
of Securities that have been transferred pursuant to a registration statement
that has been declared effective under the Securities Act or pursuant to Rule 144
under the Securities Act, or unless otherwise agreed by the Company in writing,
with written notice thereof to the Trustee.

 

Any
Security (or security issued in exchange or substitution therefor) as to which
such restrictions on transfer shall have expired in accordance with their terms
or as to conditions for removal of the Restricted Security Legend set forth
therein have been satisfied may, upon surrender of such Security for exchange
to the Registrar in accordance with the provisions of Section 2.06,
be exchanged for a new Security or Securities, of like tenor and aggregate
principal amount, which shall not bear the Restricted Security Legend.  If the Restricted Security surrendered for
exchange is represented by a Global Security bearing the Restricted Security
Legend, the principal amount of the legended Global Security shall be reduced
by the appropriate principal amount and the principal amount of a Global
Security without the Restricted Security Legend shall be increased by an equal
principal amount.  If a Global Security
without the Restricted Security Legend is not then outstanding, the Company
shall execute and the Trustee shall authenticate and deliver an unlegended
Global Security to the Depositary.

 

Any
such shares of Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for
removal of the Common Stock Legend set forth therein have been satisfied may,
upon surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the Common Stock Legend required
by this Section 2.16.

 

(c)           By its acceptance of any
Security bearing the Restricted Securities Legend, each Holder of such a
Security acknowledges the restrictions on transfer of such Security set forth
in this Indenture and in the Restricted Securities Legend and agrees that it
will transfer such Security only as provided in this Indenture and as permitted
by applicable law.

 

The
Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.15 or this Section 2.16.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time during normal hours of operation of the Registrar upon the
giving of reasonable notice to the Registrar.

 

19

 

2.17                           Ranking.

 

The
indebtedness of the Company arising under or in connection with this Indenture
and every outstanding Security issued under this Indenture from time to time
constitutes and will constitute a senior unsecured obligation of the Company,
ranking equally with other existing and future senior indebtedness of the
Company and ranking senior to any existing or future indebtedness of the
Company that, by its terms, is made subordinate to senior indebtedness of the
Company.

 

III.  REDEMPTION AND REPURCHASE

 

3.01                           Right of Redemption.

 

(a)           Redemption of the
Securities, as permitted by any provision of this Indenture, shall be made:

 

(i)            with respect to
a repurchase at the Company’s option, in accordance with paragraphs 6 and 7
of the Securities (a “Redemption”),

 

(ii)           with respect to
a repurchase at the Holder’s option, in accordance with paragraph 8 of
the Securities (a “Purchase at Holder’s
Option”) and

 

(iii)          with respect to
any repurchase upon a Fundamental Change, in accordance with paragraph 9 of
the Securities (a “Repurchase Upon
Fundamental Change”),

 

in
each case in accordance with the applicable provisions of this Article III.

 

(b)           The Company will comply with
all applicable federal and state securities laws, and any applicable laws of
any foreign jurisdiction, in connection with any offer to sell or solicitations
of offers to buy Securities pursuant to this Article III.

 

(c)

 

(i)            The Company
shall have the right, at the Company’s option, at any time, and from time to time,
prior to October 1, 2013, to redeem all or any part of the Securities at a
price payable in cash equal to the Redemption Price plus the Applicable
Premium, if the Closing Sale Price of the Common Stock has exceeded 200% of the
Conversion Price for at least twenty (20) Trading Days in any consecutive
thirty (30) Trading Day period ending on the Trading Day prior to the date of
mailing of the relevant notice of Redemption. 
The Applicable Premium shall be payable in shares of Common Stock, cash
or a combination of cash and shares of Common Stock, at the Company’s election
made prior to the giving of notice of Redemption pursuant to Section 3.04.  If the Company elects to pay the Applicable
Premium, or any part thereof, in shares of Common Stock, the Company shall
deliver in respect of the Applicable Premium or part thereof being paid in
Common Stock, a number of whole shares of Common Stock determined by dividing (x) the
Applicable Premium or part thereof to be so paid by (y) the Current Market
Price on the applicable Redemption Date, together with a check in the 

 

20

 

amount
equal to the fraction of a share otherwise payable computed on the basis of the
Closing Sale Price on the Redemption Date.

 

(ii)           The Company
shall have the right, at the Company’s option, at any time, and from time to
time, on or after October 1, 2013, to redeem all or any part of the
Securities at a price payable in cash equal to the Redemption Price,
irrespective of the Closing Sale Price of the Common Stock.

 

(d)           Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in
integral multiples of $1,000 principal amount.

 

3.02                           Notices to Trustee.

 

If
the Company elects to redeem Securities pursuant to paragraph 6 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
applicable provision of this Indenture pursuant to which the Redemption is to
be made and the aggregate principal amount of Securities to be redeemed, which notice
shall be provided to the Trustee by the Company at least fifteen (15) days
prior to the mailing, in accordance with Section 3.04, of the
notice of Redemption (unless a shorter notice period shall be satisfactory to
the Trustee).

 

3.03                           Selection of Securities to
be Redeemed.

 

If
the Company has elected to redeem less than all the Securities pursuant to paragraph
6 of the Securities, the Trustee shall, within five (5) Business Days
after receiving the notice specified in Section 3.02, select the
Securities to be redeemed by lot, on a pro rata basis or in accordance with any
other method the Trustee considers reasonably fair and appropriate.  The Trustee shall make such selection from
Securities then outstanding and not already to be redeemed by virtue of having
been previously called for Redemption. 
The Trustee may select for Redemption portions of the principal amount
of Securities that have denominations larger than $1,000 principal amount.  Securities and portions of them the Trustee
selects for Redemption shall be in amounts of $1,000 principal amount or
integral multiples of $1,000 principal amount. 
The Trustee shall promptly notify the Company in writing of the
Securities selected for Redemption and the principal amount thereof to be
redeemed.

 

The
Registrar need not register the transfer of or exchange any Securities that
have been selected for Redemption, except the unredeemed portion of the
Securities being redeemed in part.  The
Registrar need not issue, authenticate, register the transfer of or exchange
any Security for a period of fifteen (15) days before selecting, pursuant to
this Section 3.03, Securities to be redeemed.

 

3.04                           Notice of Redemption.

 

At
least thirty (30) days but not more than sixty (60) days before a Redemption
Date, the Company shall mail, or cause to be mailed, by first-class mail a
notice of Redemption to each Holder whose Securities are to be redeemed, at the
address of such Holder appearing in the security register.

 

21

 

The
notice of Redemption shall identify the Securities and the aggregate principal
amount thereof to be redeemed pursuant to the Redemption and shall state:

 

(i)            the Redemption
Date;

 

(ii)           the Redemption
Price and the Applicable Premium, if any (including whether and to the extent
to which the Company has elected to pay the Applicable Premium in shares of
Common Stock);

 

(iii)          the Conversion
Rate and the Conversion Price;

 

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

 

(v)           that the right
to convert the Securities called for Redemption will terminate at the close of
business on the Business Day immediately preceding the Redemption Date, unless
there shall be a Default in the payment of the Redemption Price  and the Applicable Premium, if any, payable
as herein provided upon Redemption;

 

(vi)          that Holders
who want to convert Securities must satisfy the requirements of Article X;

 

(vii)         the paragraph
of the Securities pursuant to which the Securities are to be redeemed;

 

(viii)        that Securities
called for Redemption must be surrendered to the Paying Agent to collect the
Redemption Price and the Applicable Premium, if any, payable as herein provided
upon Redemption;

 

(ix)           that, unless
there shall be a Default in the payment of the Redemption Price, and the
Applicable Premium, if any, payable as herein provided upon Redemption,
interest on Securities called for Redemption ceases to accrue on and after the
Redemption Date, such Securities will cease to be convertible after the close
of business on the Business Day immediately preceding the Redemption Date, and
all rights of the Holders of such Securities shall terminate on and after the
Redemption Date, other than the right to receive, upon surrender of such
Securities and in accordance with this Indenture, the Redemption Price and the
Applicable Premium, if any; and

 

(x)            the CUSIP
number or numbers, as the case may be, of the Securities.

 

The
right, pursuant to Article X, to convert Securities called for
Redemption shall terminate at the close of business on the Business Day
immediately preceding the Redemption Date, unless there shall be a Default in
the payment of the Redemption Price and the Applicable Premium, if any, payable
as herein provided upon Redemption.

 

At
the Company’s request, upon reasonable prior notice, the Trustee shall mail the
notice of Redemption to each Holder whose Securities are to be redeemed in the
Company’s name and at the Company’s expense; provided, however, that the form
and content of such notice shall be approved in advance by the Company.

 

22

 

3.05                           Effect of Notice of
Redemption.

 

Once
notice of Redemption is mailed, Securities called for Redemption become due and
payable on the Redemption Date at the Redemption Price and the Applicable
Premium, if any, and, on and after such Redemption Date (unless there shall be
a Default in the payment of the Redemption Price and the Applicable Premium, if
any), such Securities shall cease to bear interest, and all rights of the Holders
of such Securities shall terminate, other than the right to receive, upon
surrender of such Securities and in accordance with the next sentence, the
Redemption Price and the Applicable Premium, if any.  Upon surrender to the Paying Agent of a Security
subject to Redemption, such Security shall be paid, to the Holder surrendering
such Security, at the Redemption Price and the Applicable Premium, if any.

 

Notwithstanding
the foregoing, if a Redemption Date falls after a record date and on or prior
to the corresponding interest payment date, the Company shall pay the full
amount of accrued and unpaid interest, if any, on such interest payment date to
the Holder of record at the close of business on the corresponding record date,
and the Redemption Price will be 100% of the principal amount of the Securities
to be redeemed in connection with such Redemption and the Applicable Premium,
if any.

 

If
any Security shall not be fully and duly paid upon surrender thereof for
Redemption, the principal of, and accrued and unpaid interest on, such Security
shall, until paid, bear interest from, and including, the Redemption Date at
the rate borne by such Security on the principal amount of such Security, and
such Security shall continue to be convertible pursuant to Article X.

 

Notwithstanding
anything herein to the contrary, there shall be no purchase of any Securities
pursuant to a Redemption if the principal amount of the Securities has been
accelerated, and such acceleration has not been rescinded, on or prior to the
relevant Redemption Date.  The Paying
Agent will promptly return to the respective Holders thereof any Securities
held by it during the continuance of any such acceleration.

 

3.06                           Deposit of Redemption Price.

 

Prior
to 11:00 A.M., New York City time on the Redemption Date, the Company
shall deposit with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust in accordance with Section 2.04)
(a) money, in funds immediately available on the Redemption Date, sufficient
to pay the Redemption Price and the cash portion of the Applicable Premium, if
any, of all Securities to be redeemed on that date and (b) shares of
Common Stock sufficient to pay the Common Stock portion of the Applicable
Premium, if any, of all Securities to be redeemed on that date.  The Paying Agent shall return to the Company,
as soon as practicable, any money or shares of Common Stock not required for
that purpose.

 

3.07                           Securities Redeemed In Part.

 

Any
Security to be submitted for Redemption only in part shall be delivered
pursuant to Section 3.05 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or its attorney duly authorized in writing).  Upon receipt of such Security together 

 

23

 

with
any such required endorsements or transfer instruments, the Company shall
execute, and the Trustee shall, upon its receipt of a Company Order therefor,
authenticate and make available for delivery to the Holder of such Security
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, of the same tenor and in aggregate
principal amount equal to the portion of such Security not submitted for
Redemption.

 

If
any Security selected for partial Redemption is converted in part, the
principal of such Security subject to Redemption shall be reduced by the
principal amount of such Security that is converted.

 

3.08                           Purchase Of Securities At
Option Of The Holder.

 

(a)           At the option of the Holder
thereof, Securities (or portions thereof that are integral multiples of $1,000
in principal amount) shall be purchased by the Company pursuant to paragraph
8 of the Securities on October 1, 2013, October 1, 2015 and October 1,
2020 (each, an “Option Purchase Date”), at a
purchase price, payable in cash, equal to one hundred percent (100%) of the
principal amount of the Securities (or such portions thereof) to be so
purchased, plus accrued and unpaid interest, if any, to, but excluding, the
applicable Option Purchase Date (the “Option Purchase Price”)
(provided, however, that any such accrued and unpaid interest shall be paid not
to the Holder submitting the relevant Security for purchase on the Option
Purchase Date but instead to the Holder of record at the close of business on
the corresponding record date), upon:

 

delivery
to the Company (if it is acting as its own Paying Agent), or to a Paying Agent
designated by the Company for such purpose in the Option Purchase Notice (as
defined below), by such Holder, at any time from 9:00 a.m., New York City
time, on the date that is twenty (20) Business Days prior to the applicable
Option Purchase Date until 5:00 p.m., New York City time, on the Business
Day immediately preceding the applicable Option Purchase Date, of a Purchase
Notice, in the form set forth in the Securities, duly completed and signed,
with appropriate signature guarantee, stating:

 

(a)           the certificate number(s) of the Securities
that the Holder will deliver to be purchased, if such Securities are in the
form of Physical Securities;

 

(b)           the principal amount of Securities to be purchased,
which must be $1,000 or an integral multiple thereof; and

 

(c)           that such principal amount of Securities are to be
purchased as of the applicable Option Purchase Date pursuant to the terms and
conditions specified in paragraph 8 of the Securities and in this
Indenture; and(ii) delivery to the Company (if it is acting as its own
Paying Agent), or to a Paying Agent designated by the Company for such purpose
in the Option Purchase Notice (as defined below), at any time after delivery of
such Purchase Notice, of such Securities (such Securities to conform in all
material respects to the description thereof in the related Option Purchase
Notice(as defined below)), together with all necessary endorsements, such
delivery being a condition to receipt by the Holder 

 

24

 

of
the Option Purchase Price therefor payable as herein provided upon Purchase at
Holder’s Option.

 

If
such Securities are held in book-entry form through the Depositary, the
Purchase Notice shall comply with applicable procedures of the Depositary.

 

Upon
such delivery of Securities to the Company (if it is acting as its own Paying
Agent) or such Paying Agent, such Holder shall be entitled, upon reasonable
request, to receive from the Company or such Paying Agent, as the case may be,
a nontransferable receipt of deposit evidencing such delivery.

 

Notwithstanding
anything herein to the contrary, any Holder that has delivered the Purchase
Notice contemplated by this Section 3.08(a) to the Company (if
it is acting as its own Paying Agent) or to a Paying Agent designated by the
Company for such purpose in the Option Purchase Notice (as defined below) shall
have the right to withdraw such Purchase Notice by delivery, at any time prior
to 5:00 p.m., New York City time, on the Business Day immediately preceding
the applicable Option Purchase Date, of a written notice of withdrawal to the
Company (if acting as its own Paying Agent) or the Paying Agent, which notice
shall contain the information specified in Section 3.08(b)(vii).

 

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

 

(b)           The Company shall give
notice (the “Option Purchase Notice”) on a
date not less than twenty (20) Business Days prior to each Option Purchase Date
to all Holders at their addresses shown in the register of the Registrar and to
beneficial owners as required by applicable law.  Such notice shall state:

 

(i)            the Option
Purchase Price and the Conversion Rate;

 

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

 

(iii)          that Securities
with respect to which a Purchase Notice is given by a Holder may be converted
pursuant to Article X only if such Purchase Notice has been
withdrawn in accordance with this Section 3.08 or if there shall be
a Default in the payment of such Option Purchase Price payable as herein
provided upon Purchase at Holder’s Option;

 

(iv)          that Securities
must be surrendered (together with any necessary endorsements) to the Paying
Agent to collect payment of the Option Purchase Price payable as herein
provided upon Purchase at Holder’s Option;

 

(v)           that the Option
Purchase Price for any Security as to which a Purchase Notice has been given
and not withdrawn will be paid no more than three (3) Business Days,
following the later of such Option Purchase Date or the time of delivery of the
Security as described in clause (iv) above;

 

25

 

(vi)          the procedures
the Holder must follow to exercise rights under this Section 3.08
(including the name and address of the Paying Agent) and a brief description of
those rights;

 

(vii)         that a Holder
will be entitled to withdraw its election in the Purchase Notice if the Company
(if acting as its own Paying Agent) or the Paying Agent receives, at any time
prior to 5:00 p.m., New York City time, on the Business Day immediately
preceding the applicable Option Purchase Date, or such longer period as may be
required by law, a letter or telegram, telex or facsimile transmission (receipt
of which is confirmed and promptly followed by a letter) setting forth (I) the
name of such Holder, (II) a statement that such Holder is withdrawing its
election to have Securities purchased by the Company on such Option Purchase
Date pursuant to a Purchase at Holder’s Option, (III) the certificate
number of such Securities to be so withdrawn (if such Securities are in the
form of Physical Securities), (IV) the principal amount of the Securities
of such Holder to be so withdrawn, which amount must be $1,000 or an integral
multiple thereof and (V) the principal amount, if any, of the Securities
of such Holder that remain subject to the Purchase Notice delivered by such
Holder in accordance with this Section 3.08, which amount must be
$1,000 or an integral multiple thereof;

 

(viii)        that, on and
after the applicable Option Purchase Date (unless there shall be a Default in
the payment of such Option Purchase Price), interest on Securities subject to
Purchase at Holder’s Option will cease to accrue, and all rights of the Holders
of such Securities shall terminate, other than the right to receive, upon
surrender of such Securities and in accordance with this Section 3.08,
the Option Purchase Price; and

 

(ix)           the CUSIP
number or numbers, as the case may be, of the Securities.

 

At
the Company’s request, upon reasonable prior notice, the Trustee shall mail
such Option Purchase Notice in the Company’s name and at the Company’s expense;
provided, however, that the form and content of such Option Purchase Notice
shall be approved in advance by the Company.

 

No
failure of the Company to give an Option Purchase Notice shall limit any Holder’s
right pursuant hereto to exercise its rights to require the Company to purchase
such Holder’s Securities pursuant to a Purchase at Holder’s Option.

 

(c)           Subject to the provisions of
this Section 3.08, the Company shall pay, or cause to be paid, the
Option Purchase Price with respect to each Security subject to Purchase at
Holder’s Option to the Holder of record thereof no more than three (3) Business
Days, following the later of the applicable Option Purchase Date and the time
such Security (together with all necessary endorsements) is surrendered to the
Paying Agent.

 

(d)           Prior to 11:00 A.M.,
New York City time on the applicable Option Purchase Date, the Company shall
deposit with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust in accordance with Section 2.04)
money, in funds immediately available on the applicable Option Purchase Date,
sufficient to pay the Option Purchase Price of all of the Securities that are
to be purchased by the Company on such Option Purchase Date 

 

26

 

pursuant to a Purchase at
Holder’s Option.  The Paying Agent shall
return to the Company, as soon as practicable, any money not required for that
purpose.

 

(e)           Once the Purchase Notice has
been duly delivered in accordance with this Section 3.08, the
Securities to be purchased pursuant to the Purchase at Holder’s Option shall,
on the applicable Option Purchase Date, become due and payable at the Option
Purchase Price applicable thereto, and, on and after such date (unless there
shall be a Default in the payment of the Option Purchase Price), such
Securities shall cease to bear interest, and all rights of the Holders of such
Securities shall terminate, other than the right to receive, in accordance with
this Section 3.08, the Option Purchase Price.

 

(f)            Securities with respect to
which a Purchase Notice has been duly delivered in accordance with this Section 3.08
may be converted pursuant to Article X, if otherwise convertible in
accordance with Article X, only if such Purchase Notice has been
withdrawn in accordance with this Section 3.08 or if there shall be
a Default in the payment of the Option Purchase Price payable as herein
provided upon Purchase at Holder’s Option.

 

(g)           If any Security shall not be
paid upon surrender thereof for Purchase at Holder’s Option, the principal of,
and accrued and unpaid interest on, such Security shall, until paid, bear
interest from, and including, the applicable Option Purchase Date at the rate
borne by such Security on the principal amount of such Security, and such
Security shall continue to be convertible pursuant to Article X.

 

(h)           Any Security that is to be
submitted for Purchase at Holder’s Option only in part shall be delivered
pursuant to this Section 3.08 (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or its attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, of the
same tenor and in aggregate principal amount equal to the portion of such
Security not submitted for Purchase at Holder’s Option.

 

(i)            Notwithstanding anything herein
to the contrary, there shall be no purchase of any Securities pursuant to this Section 3.08
if the principal amount of the Securities has been accelerated, and such
acceleration has not been rescinded, on or prior to the relevant Option
Purchase Date.  The Paying Agent will
promptly return to the respective Holders thereof any Securities held by it
during the continuance of any such acceleration.

 

(j)            Notwithstanding anything
herein to the contrary, if the option granted to Holders to require the purchase
of the Securities on the applicable Option Purchase Date is determined to
constitute a tender offer, the Company shall comply with all applicable tender
offer rules under the Exchange Act, including Rule 13e-4 and
Regulation 14E, and with all other applicable laws, and will file a Schedule TO or any other
schedules required under the Exchange Act or any other applicable laws.

 

27

 

3.09                           Repurchase at Option Of
Holder Upon a Fundamental Change.

 

(a)           In the event any Fundamental
Change shall occur, each Holder of Securities shall have the right (the “Fundamental Change Repurchase Right”), at such Holder’s
option, to require the Company to repurchase all of such Holder’s Securities
(or portions thereof that are integral multiples of $1,000 in principal
amount), on a date selected by the Company (the “Fundamental
Change Repurchase Date”), which Fundamental Change Repurchase Date
shall be not less than twenty (20) nor more than thirty-five (35) Business Days
after the date the Fundamental Change Notice (as defined below) is mailed in
accordance with Section 3.09(b), at a price, payable in cash, equal
to one hundred percent (100%) of the principal amount of the Securities (or
portions thereof) to be so repurchased, plus accrued and unpaid interest, if
any, to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”), upon:

 

(i)            delivery to the
Company (if it is acting as its own Paying Agent), or to a Paying Agent
designated by the Company for such purpose in the Fundamental Change Notice, no
later than 5:00 p.m., New York City time, on the Business Day immediately
preceding the Fundamental Change Repurchase Date, of a Purchase Notice, in the
form set forth in the Securities, duly completed and signed, with appropriate
signature guarantee, stating:

 

(a)           the certificate number(s) of the Securities
that the Holder will deliver to be repurchased, if such Securities are in the
form of Physical Securities;

 

(b)           the principal amount of Securities to be
repurchased, which must be $1,000 or an integral multiple thereof; and

 

(c)           that such principal amount of Securities are to be
repurchased pursuant to the terms and conditions specified in paragraph 9
of the Securities and in this Indenture; and

 

(ii)           delivery to the
Company (if it is acting as its own Paying Agent), or to a Paying Agent
designated by the Company for such purpose in the Fundamental Change Notice, at
any time after the delivery of such Purchase Notice, of such Securities (such
Securities to conform in all material respects to the description thereof in
the related Purchase Notice), together with all necessary endorsements, with
respect to which the Fundamental Change Repurchase Right is being exercised,
such delivery being a condition to receipt by the Holder of the Fundamental
Change Repurchase Price therefor payable as herein provided upon Repurchase
Upon Fundamental Change.

 

Notwithstanding
the foregoing, if a Fundamental Change Repurchase Date falls after a record
date and on or prior to the corresponding interest payment date, the Company
shall pay the full amount of accrued and unpaid interest, if any, on such
interest payment date to the Holder of record at the close of business on the
corresponding record date, and the Fundamental Change Repurchase Price will be
100% of the principal amount of the Securities repurchased in connection with
such Fundamental Change.

 

28

 

If such Securities are held in book-entry form
through the Depositary, the Purchase Notice shall comply with applicable
procedures of the Depositary.

 

Upon such delivery of Securities to the Company (if
it is acting as its own Paying Agent) or such Paying Agent, such Holder shall
be entitled, upon request, to receive from the Company or such Paying Agent, as
the case may be, a nontransferable receipt of deposit evidencing such delivery.

 

Notwithstanding anything herein to the contrary, any
Holder that has delivered the Purchase Notice contemplated by this Section 3.09(a) to
the Company (if it is acting as its own Paying Agent) or to a Paying Agent
designated by the Company for such purpose in the Fundamental Change Notice
shall have the right to withdraw such Purchase Notice by delivery, at any time
prior to 5:00 p.m., New York City time, on the Business Day immediately
preceding the Fundamental Change Repurchase Date, of a written notice of
withdrawal to the Company (if acting as its own Paying Agent) or the Paying
Agent, which notice shall contain the information specified in Section 3.09(b)(xi).

 

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

 

(b)                                 Within fifteen (15) days
after the occurrence of a Fundamental Change, the Company shall mail, or cause
to be mailed, to all Holders of record of the Securities at their addresses
shown in the register of the Registrar, and to beneficial owners as required by
applicable law, a notice (the “Fundamental Change Notice”)
of the occurrence of such Fundamental Change and the Fundamental Change
Repurchase Right arising as a result thereof. 
The Company shall deliver a copy of the Fundamental Change Notice to the
Trustee and shall issue the Fundamental Change Notice in a press release
through a public medium that is customary for such press releases and publish
the Fundamental Change Notice on the Company’s website, or another comparable
public medium that the Company uses at that time.

 

Each Fundamental Change Notice shall state:

 

(i)                                     the events
causing the Fundamental Change;

 

(ii)                                  the date of
such Fundamental Change;

 

(iii)                               the Fundamental
Change Repurchase Date;

 

(iv)                              the date by
which the Fundamental Change Repurchase Right must be exercised;

 

(v)                                 the Fundamental
Change Repurchase Price;

 

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

 

(vii)                           a description
of the procedures that a Holder must follow to exercise the Fundamental Change
Repurchase Right;

 

29

 

(viii)                        that, in order
to exercise the Fundamental Change Repurchase Right, the Securities (together
with all necessary endorsements) must be surrendered for payment of the
Fundamental Change Repurchase Price payable as herein provided upon Repurchase
Upon Fundamental Change;

 

(ix)                                that the
Fundamental Change Repurchase Price for any Security as to which a Purchase
Notice has been given and not withdrawn will be paid no more than three (3) Business
Days, following the later of such Fundamental Change Repurchase Date and the
time of delivery of the Security (together with all necessary endorsements) as
described in clause (viii) above;

 

(x)                                   that, on and
after such Fundamental Change Repurchase Date (unless there shall be a Default
in the payment of such Fundamental Change Repurchase Price), interest on
Securities subject to Repurchase Upon Fundamental Change will cease to accrue,
and all rights of the Holders of such Securities shall terminate, other than the
right to receive, upon surrender of such Securities (together with all
necessary endorsements), the Fundamental Change Repurchase Price;

 

(xi)                                that a Holder
will be entitled to withdraw its election in the Purchase Notice if the Company
(if acting as its own Paying Agent), or the Paying Agent receives, prior to
5:00 p.m., New York City time, on the Business Day immediately preceding
the Fundamental Change Repurchase Date, or such longer period as may be
required by law, a letter or telegram, telex or facsimile transmission (receipt
of which is confirmed and promptly followed by a letter) setting forth (I) the
name of such Holder, (II) a statement that such Holder is withdrawing its
election to have Securities purchased by the Company on such Fundamental Change
Repurchase Date pursuant to a Repurchase Upon Fundamental Change, (III) the
certificate number of such Securities to be so withdrawn (if such Securities
are in the form of Physical Securities), (IV) the principal amount of the
Securities of such Holder to be so withdrawn, which amount must be $1,000 or an
integral multiple thereof and (V) the principal amount, if any, of the
Securities of such Holder that remain subject to the Purchase Notice delivered
by such Holder in accordance with this Section 3.09, which amount
must be $1,000 or an integral multiple thereof;

 

(xii)                             the Conversion
Rate and any adjustments to the Conversion Rate that will result from such
Fundamental Change;

 

(xiii)                          that Securities
with respect to which a Purchase Notice is given by a Holder may be converted
pursuant to Article X only if such Purchase Notice has been
withdrawn in accordance with this Section 3.09 or if there shall be
a Default in the payment of the Fundamental Change Repurchase Price payable as
herein provided upon Repurchase Upon Fundamental Change; and

 

(xiv)                         the CUSIP
number or numbers, as the case may be, of the Securities.

 

At the Company’s request, upon reasonable prior
notice, the Trustee shall mail such Fundamental Change Notice in the Company’s
name and at the Company’s expense; provided, 

 

30

 

however, that the form and
content of such Fundamental Change Notice shall be approved in advance by the
Company.

 

No failure of the Company to give a Fundamental
Change Notice shall limit any Holder’s right pursuant hereto to exercise a
Fundamental Change Repurchase Right.

 

(c)                                  Subject to the provisions of
this Section 3.09, the Company shall pay, or cause to be paid, the
Fundamental Change Repurchase Price with respect to each Security as to which
the Fundamental Change Repurchase Right shall have been exercised to the Holder
thereof no more than three (3) Business Days, following the later of the
Fundamental Change Repurchase Date and the time such Security is surrendered to
the Paying Agent.

 

(d)                                 Prior to 11:00 A.M.,
New York City time on a Fundamental Change Repurchase Date, the Company shall
deposit with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust in accordance with Section 2.04)
money, in funds immediately available on the Fundamental Change Repurchase
Date, sufficient to pay the Fundamental Change Repurchase Price of all of the
Securities that are to be repurchased by the Company on such Fundamental Change
Repurchase Date pursuant to a Repurchase Upon Fundamental Change.  The Paying Agent shall return to the Company,
as soon as practicable, any money not required for that purpose.

 

(e)                                  Once the Fundamental Change
Notice and the Purchase Notice have been duly given in accordance with this Section 3.09,
the Securities to be repurchased pursuant to a Repurchase Upon Fundamental
Change shall, on the Fundamental Change Repurchase Date, become due and payable
at the Fundamental Change Repurchase Price applicable thereto, and, on and
after such date (unless there shall be a Default in the payment of the
Fundamental Change Repurchase Price), such Securities shall cease to bear
interest, and all rights of the Holders of such Securities shall terminate,
other than the right to receive, in accordance with this Section 3.09,
the Fundamental Change Repurchase Price.

 

(f)                                    (f) Securities with
respect to which a Purchase Notice has been duly delivered in accordance with
this Section 3.09 may be converted pursuant to Article X,
if otherwise convertible in accordance with Article X, only if such
Purchase Notice has been withdrawn in accordance with this Section 3.09
or if there shall be a Default in the payment of the Fundamental Change
Repurchase Price payable as herein provided upon Repurchase Upon Fundamental
Change.

 

(g)                                 If any Security shall not be
paid upon surrender thereof for Repurchase Upon Fundamental Change, the
principal of, and accrued and unpaid interest on, such Security shall, until
paid, bear interest, payable in cash, from, and including, the Fundamental
Change Repurchase Date at the rate borne by such Security on the principal
amount of such Security, and such Security shall continue to be convertible
pursuant to Article X.

 

(h)                                 Any Security that is to be
submitted for Repurchase Upon Fundamental Change only in part shall be
delivered pursuant to this Section 3.09 (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or its attorney duly authorized in 

 

31

 

writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, of the same tenor and in
aggregate principal amount equal to the portion of such Security not duly
submitted for Repurchase Upon Fundamental Change.

 

(i)                                     Notwithstanding anything
herein to the contrary, there shall be no purchase of any Securities pursuant
to this Section 3.09 if the principal amount of the Securities has
been accelerated, and such acceleration has not been rescinded, on or prior to
the relevant Fundamental Change Repurchase Date.  The Paying Agent will promptly return to the
respective Holders thereof any Securities held by it during the continuance of
any such acceleration.

 

(j)                                     Notwithstanding anything
herein to the contrary, if the option granted to Holders to require the
repurchase of the Securities upon the occurrence of a Fundamental Change is
determined to constitute a tender offer, the Company shall comply with all
applicable tender offer rules under the Exchange Act, including Rule 13e-4
and Regulation 14E, and with all other applicable laws, and will file a
Schedule TO or any other schedules required under the Exchange Act or any other
applicable laws.

 

3.10                           Conversion Arrangement on
Call for Redemption.

 

In connection with a
Redemption of Securities, the Company may arrange, in lieu of Redemption, for
the purchase and conversion of any Securities called for Redemption by an
agreement with one or more investment banks or other purchasers to purchase all
or a portion of such Securities by paying, on or before 11:00 A.M., New
York City time on the Redemption Date, to the Paying Agent in trust for the
Holders whose Securities are to be so purchased, an amount of money, in funds
immediately available on the Redemption Date, that, together with any amounts
deposited with the Paying Agent by the Company for Redemption of such
Securities, is not less than the aggregate Redemption Price of such Securities
and the Applicable Premium, if any. 
Notwithstanding anything to the contrary contained in this Article III,
the obligation of the Company to pay the Redemption Price of such Securities
and the Applicable Premium, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no such
agreement shall relieve the Company of its obligation to pay such Redemption
Price and the Applicable Premium, if any. 
If such an agreement is entered into, any Securities not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article X) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date, subject to payment of the above amount as aforesaid.  The Paying Agent shall hold and pay to the
Holders whose Securities are selected for Redemption any such amount paid to it
for purchase and conversion in the same manner as it would moneys deposited
with it by the Company for the Redemption of Securities.  Without the prior written consent of the
Trustee and the Paying Agent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Securities shall increase or
otherwise affect any of the powers, duties, rights, immunities,
responsibilities or obligations of the Trustee or Paying Agent as set forth in
this Indenture, and the Company agrees to indemnify the Trustee and Paying
Agent from, and hold them harmless against, any and all loss, liability or
expense

 

32

 

arising out of or in connection with any such
arrangement for the purchase and conversion of any Securities between the
Company and such purchasers, including the incurred costs and expenses
(including reasonable counsel fees and expenses) incurred by the Trustee or
Paying Agent in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of their powers, duties,
responsibilities or obligations under this Indenture except to the extent
arising from their bad faith, willful misconduct or negligence.

 

IV.  COVENANTS

 

4.01                           Payment of Securities.

 

The Company shall pay all amounts due with respect
to the Securities on the dates and in the manner provided in the Securities and
this Indenture, which amounts, if payable hereunder in cash, shall be paid (A) in
the case of a Global Security, by wire transfer of immediately available funds
to the account specified by the Holder hereof; or (B) in the case a
Physical Security held by a Holder who is the record holder of more than five
million dollars ($5,000,000) aggregate principal amount of Securities, by wire
transfer of immediately available funds to the account specified by such Holder
or, if no such account is specified, or if such Security is not a Global
Security held by a Holder who is the record holder of five million dollars
($5,000,000) or less in aggregate principal amount of Securities, by mailing a
check to such Holder’s address shown in the register of the Registrar.  All such amounts shall be considered paid on
the date due if the Paying Agent holds (or, if the Company is acting as Paying
Agent, the Company has segregated and holds in trust in accordance with Section 2.04)
on that date money sufficient to pay the amount then due with respect to the
Securities (unless there shall be a Default in the payment of such amounts to
the respective Holder(s)).

 

The Company shall pay interest on any overdue amount
(including, to the extent permitted by applicable law, overdue interest) at the
rate borne by the Securities.

 

4.02                           Maintenance of Office or
Agency.

 

The Company will maintain, or cause to be
maintained, in the Borough of Manhattan, the City of New York, an office or
agency (which may be an office of the Trustee or an affiliate of the Trustee,
Registrar or co-Registrar) where Securities may be surrendered for registration
of transfer or exchange, payment or conversion and where notices and demands to
or upon the Company in respect of the Securities and this Indenture may be
served.  The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency.  If at any time
the Company 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 of the Trustee.  The Company may
also from time to time designate one or more other offices or agencies where
the Securities may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain, or cause to be maintained, an office or agency in the
Borough of Manhattan, the City of New York for such purposes.  The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

 

33

 

The Company hereby designates the Corporate Trust
Office of the Trustee as an agency of the Company in accordance with Section 2.03.

 

4.03                           Rule 144A Information
and Annual Reports.

 

(a)                                  At any time the Company is
not subject to Sections 13 or 15(d) of the Exchange Act, the Company
shall, so long as any of the Securities or shares of Common Stock issuable upon
conversion thereof shall, at such time, constitute “restricted securities”
within the meaning of Rule 144(a)(3) under the Securities Act,
promptly provide to the Trustee and shall, upon written request, provide to any
Holder, beneficial owner or prospective purchaser of Securities or shares of
Common Stock issued upon conversion of any Securities, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
to facilitate the resale of such Securities or shares of Common Stock pursuant
to Rule 144A under the Securities Act. 
The Company shall take such further action to the extent required from
time to time to enable such Holder or beneficial holder to sell its Securities
or shares of Common Stock in accordance with Rule 144A under the
Securities Act, as such rule may be amended from time to time.

 

(b)                                 The Company shall, in
accordance with TIA Section 314(a), deliver to the Trustee, such annual
reports, information, documents and other reports required to be filed with the
SEC, copies of the Company’s annual reports (which shall contain audited
financial statements of the Company) and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) that the Company is required to
file with the SEC pursuant to Section 13 or Section 15(d) of the
Exchange Act; provided that any such information, documents or reports required
to be filed with the SEC shall be delivered to the Trustee within thirty (30)
days after the same is so required to be filed with the SEC; provided, however,
that to the extent permitted by law, any such document, information and other
reports filed and publicly available through the SEC’s EDGAR filing system
shall be deemed to have been received by the Trustee.  In the event the Company is at any time no
longer subject to the reporting requirements of Section 13 or Section 15(d) of
the Exchange Act, the Company shall continue to provide the Trustee and, upon
written request, to each Holder, within thirty (30) calendar days after the
date the Company would have been required to file such reports with the SEC,
annual and quarterly consolidated financial statements substantially equivalent
to financial statements that would have been included in reports filed with the
SEC if the Company were subject to the reporting requirements of Section 13
or Section 15(d) of the Exchange Act, including, with respect to
annual information only, a report thereon by the Company’s certified
independent public accountants as such would be required in such reports filed
with the SEC and, in each case, together with a management’s discussion and
analysis of financial condition and results of operations that would be so
required.  The Company also shall comply
with the other provisions of TIA Section 314(a).

 

4.04                           Compliance Certificate.

 

The Company shall deliver to the Trustee, within one
hundred and twenty (120) calendar days after the end of each fiscal year of the
Company, an Officer’s Certificate stating whether or not the signatory to such
Officer’s Certificate has actual knowledge of any Default or Event of Default
by the Company in performing any of its obligations under this Indenture or the

 

34

 

Securities.  If such signatory does know of any such
Default or Event of Default, then such certificate shall describe such Default
or Event of Default and its status.

 

4.05                           Stay, Extension and Usury
Laws.

 

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

 

4.06                           Corporate Existence.

 

Subject to Article V, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate existence of each of its
Subsidiaries, in accordance with the respective organizational documents of the
Company and of each Subsidiary of the Company, and the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate existence of any Subsidiary of the
Company, if in the good faith judgment of the Board of Directors the loss of
such right, license or franchise or the dissolution of such Subsidiary does not
have a material adverse impact on the Holders.

 

4.07                           Limitations on Indebtedness

 

(a)                                  The Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect any Indebtedness other than
Permitted Indebtedness.

 

(b)                                 Section 4.07(a) will not
prohibit the incurrence of any of the following (collectively, “Permitted Indebtedness”):

 

(i)                                     the incurrence
by the Company of Indebtedness represented by the Securities;

 

(ii)                                  Indebtedness
represented by the Company’s 5.00% Convertible Senior Notes due 2025 (the “5.00%
Convertible Senior Notes”) outstanding after giving effect to the
transactions contemplated by the Exchange Agreement or any Indebtedness of the
Company that serves to refund or refinance the 5.00% Convertible Senior Notes
so long as the principal amount of the refunding or refinancing Indebtedness
does not exceed the outstanding principal amount of the 5.00% Convertible
Senior Notes;

 

(iii)                               Indebtedness
incurred by the Company or its Subsidiaries not to exceed the sum of (i) the
product of (x) $7.00 and (y) the number of barrels of Proved Plus 

 

35

 

Probable
Reserves and (ii) Cash Equivalents less the aggregate principal amount of
the Securities outstanding less the aggregate principal amount of the 5.00%
Convertible Senior Notes less any Indebtedness incurred to refund or refinance
the 5.00% Convertible Senior Notes;

 

(iv)                              Indebtedness
that is nonrecourse to the Company or any of its Subsidiaries used to finance
projects or acquisitions, joint ventures or partnerships, including
Indebtedness of Persons that are acquired by the Company or any Subsidiary or
merged into the Company or a Subsidiary;

 

(v)                                 Indebtedness
incurred by the Company or any of its Subsidiaries constituting reimbursement
obligations with respect to letters of credit issued in the ordinary course of
business, including letters of credit in respect of workers’ compensation
claims, health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance or other Indebtedness with respect to
reimbursement-type obligations regarding workers’ compensation claims;

 

(vi)                              Indebtedness
arising from agreements of the Company or one of its Subsidiaries providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary of the Company;

 

(vii)                           Indebtedness of
the Company owed to and held by any of its Subsidiaries or Indebtedness of a
Subsidiary of the Company owed to and held by the Company or one of its
Subsidiaries;

 

(viii)                        shares of
preferred stock of a Subsidiary of the Company issued to the Company or a
Subsidiary of the Company;

 

(ix)                                Hedging
Obligations of the Company or any of its Subsidiaries incurred in the ordinary
course of business and not for speculative purposes;

 

(x)                                   obligations in
respect of performance and surety bonds and performance and completion
guarantees provided by the Company or any of its Subsidiaries or obligations in
respect of letters of credit related thereto, in each case in the ordinary
course of business or consistent with past practice;

 

(xi)                                any guarantee
by the Company of Indebtedness of any Subsidiary of the Company so long as the
incurrence of such Indebtedness incurred by such Subsidiary is permitted under
the terms of this Indenture;

 

(xii)                             Indebtedness
arising in connection with customary cash management services and from the
honoring by a bank or financial institution of a check, draft or similar
instrument drawn against insufficient funds in the ordinary course of business;
and

 

36

 

(xiii)                          any guarantee
by the Company of other obligations of any Subsidiary of the Company so long as
the incurrence of such Indebtedness incurred by such Subsidiary is permitted
under the terms of this Indenture.

 

(c)                                  The Company shall not permit
Total Consolidated Net Debt as of any date to exceed the product of (x) $7.00
and (y) the number of barrels of Proved Plus Probable Reserves.

 

4.08                           Notice of Default.

 

Upon the Company’s becoming aware of the occurrence
of any Default or Event of Default, the Company shall give prompt written
notice of such Default or Event of Default, and any remedial action proposed to
be taken, to the Trustee.

 

4.09                           Further Instruments and Acts.

 

Upon the reasonable written request of the Trustee,
the Company shall execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out the purposes
of this Indenture.

 

V.  SUCCESSORS

 

5.01                           When Company May Merge,
etc.

 

The Company shall not consolidate with, or merge
with or into, or sell, transfer, lease, convey or otherwise dispose of all or
substantially all of the property or assets of the Company to, another person,
whether in a single transaction or series of related transactions, unless:

 

(a)                                  either:

 

(i)                                     such
transaction or series of related transactions shall be a merger or
consolidation where the Company shall be the surviving corporation; or

 

(ii)                                  the surviving,
resulting or transferee person both (A) is a corporation organized and
existing under the laws of the United States, any State thereof or the District
of Columbia; and (B) assumes by supplemental indenture all the obligations
of the Company under the Securities and this Indenture; and

 

(b)                                 immediately after giving
effect to such transaction or series of related transactions, no Default or
Event of Default shall exist.

 

The Company shall deliver to the Trustee prior to
the consummation of the proposed transaction an Officer’s Certificate to the
foregoing effect and an Opinion of Counsel (which may rely upon (i) such
Officer’s Certificate as to the absence of Defaults and Events of Default and (ii) a
certificate of the appropriate official of the jurisdiction in which any such
surviving, resulting or transferee person is organized certifying that such
person is a corporation organized in such jurisdiction) stating that the
proposed transaction and such supplemental indenture will, upon consummation of
the proposed transaction, comply with this Article V and with Articles
IX and X and that all conditions precedent herein provided to such
transaction have been satisfied.

 

37

 

5.02                           Successor Substituted.

 

Upon any consolidation, merger or any sale,
transfer, lease, conveyance or other disposition of all or substantially all of
the property or assets of the Company, the successor person formed by such
consolidation or into which the Company is merged or to which such sale,
transfer, lease, conveyance or other disposition is made shall, except in the
case of a lease, be substituted for, may exercise every right and power of, and
shall assume every duty and obligation of, the Company under this Indenture
with the same effect as if such successor had been named as the Company
herein.  When the successor assumes all
obligations of the Company hereunder, except in the case of a lease, all
obligations of the predecessor shall terminate.

 

VI.  DEFAULTS AND REMEDIES

 

6.01                           Events of Default.

 

An “Event of Default”
occurs if:

 

(i)                                     the Company
defaults in the payment of the principal of, or premium, if any, on, any
Security when the same becomes due and payable, whether at maturity, upon
Redemption, on an Option Purchase Date with respect to a Purchase at Holder’s
Option, on a Fundamental Change Repurchase Date with respect to a Repurchase
Upon Fundamental Change or otherwise;

 

(ii)                                  the Company
defaults in the payment of an installment of interest or any Liquidated Damages
Amount on any Security when due, if such failure continues for thirty (30) days
after the date when due;

 

(iii)                               the Company
fails to satisfy its conversion obligations upon exercise of a Holder’s conversion
rights pursuant hereto;

 

(iv)                              the Company
fails to provide a Fundamental Change Notice within 15 days after the
occurrence of a Fundamental Change, as required by the provisions of this
Indenture;

 

(v)                                 the Company
fails to comply with any other term, covenant or agreement set forth in the
Securities or this Indenture and such failure continues for the period, and
after the notice, specified below;

 

(vi)                              failure by the
Company or any of its Subsidiaries to pay when due at maturity, or a default that
results in the acceleration of, any Indebtedness of the Company or its
Subsidiaries (other than Indebtedness that is nonrecourse to the Company or any
of its Subsidiaries) in an aggregate amount of $10,000,000 or more, unless such
failure is cured or such acceleration is rescinded, stayed or annulled within
30 days after written notice to the Company from the Trustee or to the Company
and the Trustee from the Holders of at least twenty-five percent (25%) in
aggregate principal amount of the Securities then outstanding has been received
by the Company;

 

38

 

(vii)                           the Company or
any of its Subsidiaries fails to pay any final judgments in excess of
$10,000,000 in the aggregate and such judgments remain outstanding for a period
of 15 days and are not discharged, bonded, waived or stayed within 15 days
after the Trustee notifies the Company by written notice (or Holders of at
least twenty five (25%) in principal amount of then outstanding Securities
notify the Company and the Trustee by written notice);

 

(viii)                        the Company or
any of its Significant Subsidiaries (or, within any period of one (1) year,
each of two (2) or more Subsidiaries that, in the aggregate, would
constitute a Significant Subsidiary of the Company), pursuant to, or within the
meaning of, any Bankruptcy Law, insolvency law, or other similar law now or
hereafter in effect or otherwise:

 

(A)                              commences a
voluntary case,

 

(B)                                consents to the
entry of an order for relief against it in an involuntary case,

 

(C)                                consents to the
appointment of a Custodian of it or for all or substantially all of its property,
or

 

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

 

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

 

(A)                              is for relief
against the Company or any of its Significant Subsidiaries in an involuntary
case or proceeding, or adjudicates the Company or any of its Significant
Subsidiaries insolvent or bankrupt,

 

(B)                                appoints a
Custodian of the Company or any of its Significant Subsidiaries for all or
substantially all of the property of the Company or any such Significant
Subsidiary, as the case may be, or

 

(C)                                orders the
winding up or liquidation of the Company or any of its Significant
Subsidiaries,

 

and, in the case of each of the foregoing
clauses (A), (B) and (C) of this Section 6.01(ix), the
order or decree remains unstayed and in effect for at least thirty (30)
consecutive days (provided, that there shall be deemed to occur an Event of
Default pursuant to this Section 6.01(ix) if, during any
single period of thirty (30) consecutive days, there shall have remained
unstayed any one or more such orders or decrees with respect to two (2) or
more Subsidiaries that, in the aggregate, would constitute a Significant
Subsidiary of the Company).

 

The term “Bankruptcy Law”
means Title 11, U.S. Code or any similar Federal or U.S. State law for the
relief of debtors.  The term “Custodian” means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.

 

39

 

A Default under clause (v) above is not
an Event of Default until (I) the Trustee notifies the Company, or the
Holders of at least twenty five percent (25%) in aggregate principal amount of
the Securities then outstanding notify the Company and the Trustee, of the Default
and (II) the Default is not cured within thirty (30) days after receipt of
such notice; provided that such cure period shall be ninety (90) days after the
receipt of a notice relating to a failure to comply with the covenant in Section 4.07.  Such notice must specify the Default, demand
that it be remedied and state that the notice is a “Notice Of
Default.”  If the Holders of
at least twenty five percent (25%) in aggregate principal amount of the
outstanding Securities request the Trustee to give such notice on their behalf,
the Trustee shall do so.  When a Default
is cured, it ceases to exist for every purpose under this Indenture.

 

6.02                           Acceleration.

 

If an Event of Default (excluding an Event of
Default specified in Section 6.01(viii) or (ix) with respect
to the Company (but including an Event of Default specified in Section 6.01(viii) or
(ix) solely with respect to a Significant Subsidiary of the Company
or any group of Subsidiaries that in the aggregate would constitute a
Significant Subsidiary of the Company)) occurs and is continuing, the Trustee
by written notice to the Company, or the Holders of at least twenty five
percent (25%) in aggregate principal amount of the Securities then outstanding
by written notice to the Company and the Trustee, may declare the principal of,
and any accrued and unpaid interest, if any, and any premium on, all Securities
to be immediately due and payable.  Upon
such declaration, the principal of, and any premium and accrued and unpaid
interest (including any Liquidated Damages Amount) on, all Securities shall be
due and payable immediately.  If an Event
of Default specified in Section 6.01(viii) or (ix) with
respect to the Company (excluding, for purposes of this sentence, an Event of
Default specified in Section 6.01(viii) or (ix) solely
with respect to a Significant Subsidiary of the Company or any group of
Subsidiaries that in the aggregate would constitute a Significant Subsidiary of
the Company) occurs, the principal of, and any premium and accrued and unpaid
interest (including any Liquidated Damages Amount) on, all the Securities shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding by written notice to the
Trustee and the Company may rescind or annul an acceleration and its
consequences if (A) the rescission would not violate any governmental or
court order or decree, (B) all existing Events of Default, except the
nonpayment of principal, premium, if any, or interest that has become due
solely because of the acceleration, have been cured or waived and (C) all
amounts due to the Trustee under Section 7.07 have been paid.

 

6.03                           Other Remedies.

 

Notwithstanding any other provision of this
Indenture, if an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of amounts due with respect to the Securities or to enforce the
performance of any provision of the Securities or this Indenture.

 

The Trustee may maintain a proceeding even if it
does not possess any of the Securities or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the 

 

40

 

right or remedy or
constitute a waiver of or acquiescence in the Event of Default.  All remedies are cumulative.

 

6.04                           Waiver of Past Defaults.

 

Subject to Sections 6.07 and 9.02, the
Holders of a majority in aggregate principal amount of the Securities then
outstanding may, by notice to the Trustee, waive any past Default or Event of
Default and its consequences, other than (A) a Default or Event of Default
in the payment of the principal of, or premium, if any, or interest or any
Liquidated Damages Amount on, any Security, or in the payment of the Redemption
Price and the Applicable Premium, if any, the Option Purchase Price or the
Fundamental Change Repurchase Price, (B) a Default or Event of Default
arising from a failure by the Company to convert any Securities into shares of
Common Stock in accordance with this Indenture or (C) any Default or Event
of Default in respect of any provision of this Indenture or the Securities
that, under Section 9.02, cannot be modified or amended without the
consent of the Holder of each outstanding Security affected.  When a Default or an Event of Default is
waived, it is cured and ceases to exist for every purpose of this indenture;
provided, however, that no waiver of a Default or Event of Default shall extend
to any subsequent or other Default or Event of Default or impair any consequent
right.  This Section 6.04
shall be in lieu of TIA Section 316(a)(1)(B), and, as permitted by the
TIA, TIA Section 316(a)(1)(B) is hereby expressly excluded from this
Indenture.

 

6.05                           Control by Majority.

 

The Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, is unduly prejudicial to the rights of other
Holders or would involve the Trustee in personal liability unless the Trustee
is offered indemnity reasonably satisfactory to it; provided, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction.  This Section 6.05
shall be in lieu of TIA Section 316(a)(1)(A), and, as permitted by the
TIA, TIA Section 316(a)(1)(A) is hereby expressly excluded from this
Indenture.

 

6.06                           Limitation on Suits.

 

Except as provided in Section 6.07, a
Securityholder may not institute any proceeding under this Indenture, or for
the appointment of a receiver or a trustee, or for any other remedy under this
Indenture unless:

 

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

 

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

 

41

 

(iii)                               such Holder or
Holders offer and, if requested, provide to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to or of the
Trustee in connection with pursuing such remedy;

 

(iv)                              the Trustee
does not comply with the request within sixty (60) days after receipt of such
notice, request and offer of indemnity; and

 

(v)                                 during such
sixty (60) day period, the Holders of a majority in aggregate principal amount
of the Securities then outstanding do not give the Trustee a direction
inconsistent with the request.

 

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

 

6.07                           Rights of Holders to Receive
Payment.

 

Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of all amounts due with
respect to the Securities, on or after the respective due dates as provided
herein, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Holder.

 

Notwithstanding any other provision of this
Indenture, the right of any Holder to bring suit for the enforcement of the right
to convert the Security in accordance with this Indenture shall not be impaired
or affected without the consent of the Holder.

 

6.08                           Collection Suit by Trustee.

 

If an Event of Default specified in Section 6.01(i) or
(ii) occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company for the
whole amount due with respect to the Securities, including any unpaid and
accrued interest.

 

6.09                           Trustee May File Proofs
of Claim.

 

The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee, any predecessor Trustee and the Securityholders allowed
in any judicial proceedings relative to the Company or its creditors or
properties.

 

The Trustee may collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or similar official in any judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay
the Trustee any amount due 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 7.07.

 

42

 

Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

6.10                           Priorities.

 

If the Trustee collects any money pursuant to this Article VI,
it shall pay out the money in the following order:

 

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

 

Second:                             to Securityholders
for all amounts due and unpaid on the Securities, without preference or
priority of any kind, according to the amounts due and payable on the
Securities; and

 

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

 

The Trustee, upon prior written notice to the
Company and with the Company’s prior written consent, may fix a record date and
payment date for any payment by it to Securityholders pursuant to this Section 6.10.  After the Trustee has provided prior written
notice to the Company, and at least fifteen (15) days before each such record
date, with the Company’s prior consent, the Trustee shall mail to each Holder
and the Company a written notice that states such record date and payment date
and the amount of such payment.

 

6.11                           Undertaking for Costs.

 

In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit other than the Trustee of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than ten percent (10%) in aggregate principal
amount of the outstanding Securities.

 

VII.  TRUSTEE

 

7.01                           Duties of Trustee.

 

(a)                                  If 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 person would exercise or use under the
circumstances in the conduct of his or her own affairs.

 

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

 

43

 

(i)                                     the Trustee
need perform only those duties that 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, willful misconduct or negligence on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).

 

(c)                                  Without limiting Section 7.01(b),
the Trustee may not be relieved from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct, except that:

 

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

 

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

 

(d)                                 Every provision of this
Indenture that in any way relates to the Trustee is subject to the provisions
of this Section 7.01.

 

(e)                                  No provision of this
Indenture will require the Trustee to expend or risk its own funds or incur any
liability, except the Trustee’s bad faith, negligence or willful
misconduct.  The Trustee shall not be
liable for interest on any money received by it except as the Trustee may agree
in writing with the Company.  Money held
in trust by the Trustee shall be segregated from other funds, as directed by
the Company or as required by law, and shall be invested by the Trustee pursuant
to the written instructions of the Company reasonably satisfactory to the
Trustee; provided, however, that the Trustee shall have no liability hereunder
with respect to any such investment, other than by reason of the willful
misconduct or negligence of the Trustee; provided, further that in no event
shall the Trustee be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits) with respect to such investments, even if the Trustee has been
advised of the likelihood of such loss or damage; provided, further that
nothing in this Section 7.01(e) shall affect the Company’s
obligations to make all payments due under the Securities.

 

7.02                           Rights of Trustee.

 

(a)                                  Subject to Section 7.01,
the Trustee may conclusively rely on any document believed by it to be genuine
and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or
matter stated in the document; if, however, the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled during normal 

 

44

 

business hours of the Company to examine the
relevant books, records and premises of the Company, personally or by agent or
attorney upon reasonable prior notice.

 

(b)                                 Before the Trustee acts or
refrains from acting, it may reasonably require an Officer’s Certificate and/or
an Opinion of Counsel that conforms to the requirements of Section 11.05.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officer’s
Certificate or Opinion of Counsel.

 

(c)                                  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.

 

(d)                                 The Trustee may consult with
counsel (such counsel to be reasonably acceptable to the Company), 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 may act through
agents or attorneys and shall not be responsible for the misconduct or
negligence of any agent or attorney appointed with due care.

 

(f)                                    The Trustee shall not be
liable for any action it takes or omits to take in good faith that it believes
to be authorized or within its discretion, rights or powers conferred upon it
by this Indenture.

 

(g)                                 Except with respect to Section 6.01,
the Trustee shall have no duty to inquire as to the performance of the Company
with respect to the covenants contained in Article IV.  In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event
of Default occurring pursuant to Sections 6.01(i) or (ii) or
(ii) any Default or Event of Default of which a Responsible Officer of the
Trustee shall have received written notification or obtained actual
knowledge.  Delivery of reports,
information and documents to the Trustee under Article IV (other
than Sections 4.04 and 4.07) is for informational purposes only
and the Trustee’s receipt of the foregoing shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely on Officer’s
Certificates).

 

(h)                                 Subject to Section 7.01(a),
the Trustee shall be under no obligation to exercise any of the rights or
powers vested by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities that might be incurred by it in compliance
with such request or direction.

 

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

 

45

 

(j)                                     The Trustee may request that
the Company deliver an Officer’s Certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture, which Officer’s Certificate may be signed
by any person authorized to sign an Officer’s Certificate, including any person
specified as so authorized in any such certificate previously delivered and not
superseded.

 

7.03                           Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or any of its Affiliates with the same rights the Trustee would have if
it were not Trustee.  Any Registrar,
Paying Agent, Conversion Agent or co-Registrar may do the same with like
rights.  The Trustee, however, must
comply with Sections 7.10 and 7.11.

 

7.04                           Trustee’s Disclaimer.

 

The Trustee makes no representation as to the
validity or adequacy of this Indenture or the Securities; the Trustee shall not
be accountable for the Company’s use of the proceeds from the Securities, for
the Company’s performance hereunder or for the Company’s representations and
warranties contained herein; and the Trustee shall not be responsible for any
statement in the Securities (other than the Trustee’s certificate of
authentication), any shelf registration statement related to the Securities
(other than any statement of eligibility executed by the Trustee and filed with
any such shelf registration statement pursuant to Item 601(b)(25) of Regulation
S-K promulgated under the Securities Act) or any other offering document
related to the Securities.

 

7.05                           Notice of Defaults.

 

If a Default or Event of Default occurs and is
continuing as to which the Trustee has received notice pursuant to the
provisions of this Indenture, or as to which a Responsible Officer of the
Trustee shall have actual knowledge, then the Trustee shall provide written
notice to the Company of such Default or Event of Default and shall mail to
each Holder a notice of the Default or Event of Default within thirty (30) days
after the Trustee has received such notice or after such Responsible Officer
shall have acquired such actual knowledge, whichever is earlier, unless such
Default or Event of Default has been cured or waived; provided, however, that,
except in the case of a Default or Event of Default in payment of any amounts
due with respect to any Security, the Trustee may withhold such notice if, and
so long as it in good faith determines that, withholding such notice is in the
best interests of Holders.

 

7.06                           Reports by Trustee to
Holders.

 

Within sixty (60) days after
each May 15, beginning with May 15, 2010, the Trustee shall mail to
each Securityholder, pursuant to Section 11.02, if required by TIA Section 313(a) a
brief report dated as of such May 15 that complies with TIA Section 313.

 

A copy of each report at the time of its mailing to
Securityholders shall be mailed by first class mail to the Company and filed by
the Trustee with the SEC and each stock exchange, if any, on which the
Securities are listed.  The Company shall
promptly notify the Trustee of the listing or delisting of the Securities on or
from any stock exchange.

 

46

 

7.07                           Compensation and Indemnity.

 

The Company shall pay to the Trustee from time to
time such compensation for its services as shall be agreed upon in
writing.  The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express
trust.  The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it
pursuant to, and in accordance with, any provision hereof.  Such expenses shall include the reasonable
compensation and reasonable out-of-pocket expenses of the Trustee’s agents and
counsel.

 

The Company shall indemnify the Trustee against any
and all loss, liability, damage, claim or expense (including the reasonable
fees and expenses of counsel and taxes other than those based upon the income
of the Trustee) incurred by it in connection with the acceptance or
administration of this trust and the performance of its duties hereunder,
including the reasonable costs and expenses of defending itself against any
claim (whether asserted by the Company, any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers
and duties hereunder.  The Company need
not pay for any settlement made without its consent.  The Trustee shall notify the Company promptly
of any claim for which it may seek indemnification.  Failure by the Trustee to so notify the
Company will not relieve the Company of its obligations hereunder.  The Trustee may have separate counsel and the
Company will pay the reasonable fees and expenses of such counsel.  The Issuer need not pay for any settlement
made without its consent, which consent will not be unreasonably withheld.  The Company need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through the
Trustee’s negligence, bad faith or willful misconduct.

 

To secure the Company’s payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay amounts due
on particular Securities.

 

The indemnity obligations of the Company with
respect to the Trustee provided for in this Section 7.07 shall
survive any resignation or removal of the Trustee and the satisfaction and
discharge of this Indenture.

 

When the Trustee incurs reasonable expenses or
renders reasonable services after an Event of Default specified in Section 6.01(viii) or
(ix) occurs, such expenses and the compensation for such services
are intended to constitute expenses of administration under any Bankruptcy Law.

 

7.08                           Replacement of Trustee.

 

A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

The Trustee may resign by so notifying the Company
in writing thirty (30) Business Days prior to such resignation.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding may remove the Trustee by
so notifying the Trustee and the Company in writing and may appoint a successor
Trustee with the Company’s written consent. 
The Company may remove the Trustee if:

 

47

 

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

 

(ii)                                  the Trustee is
adjudged a bankrupt or an insolvent;

 

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

 

(iv)                              the Trustee
becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee.  If a
successor Trustee does not take office within thirty (30) days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the Company’s
expense), the Company or the Holders of at least ten percent (10%) in aggregate
principal amount of the outstanding Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee fails to comply with Section 7.10,
the Company or any Holder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.

 

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

 

7.09                           Successor Trustee by Merger,
etc.

 

If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee, if such successor corporation is otherwise eligible
hereunder.

 

7.10                           Eligibility;
Disqualification.

 

There shall at all times be a Trustee hereunder that
is a corporation organized and doing business under the laws of the United
States of America or of any state thereof, which Trustee (A) is authorized
under such laws to exercise corporate trust powers, (B) is subject to
supervision or examination by federal, state or District of Columbia
authorities and (C) has a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of
condition.  The Trustee shall comply with
TIA Section 310(b).  Nothing in this
Indenture shall prevent the Trustee from filing with the SEC the application
referred to in the penultimate paragraph of TIA Section 310(b).  This Indenture shall at all times have a
Trustee that satisfies the requirements of TIA Section 310(a)(5).

 

48

 

7.11         Preferential Collection of Claims against Company.

 

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

 

VIII.  DISCHARGE OF
INDENTURE

 

8.01         TERMINATION OF THE OBLIGATIONS OF THE COMPANY.

 

This
Indenture shall cease to be of further effect if (a) either (i) all
outstanding Securities (other than Securities replaced pursuant to Section 2.07
hereof) have been delivered to the Trustee for cancellation or (ii) all
outstanding Securities have become due and payable at their scheduled maturity
or upon Purchase at Holder’s Option, Redemption or Repurchase Upon Fundamental
Change, and in either case the Company irrevocably deposits, prior to the
applicable due date, with the Trustee or the Paying Agent (if the Paying Agent
is not the Company or any of its Affiliates) cash, and, if applicable as herein
provided and in accordance herewith, such other consideration, sufficient to
pay all amounts due and owing on all outstanding Securities (other than
Securities replaced pursuant to Section 2.07 hereof) on the
Maturity Date or an Option Purchase Date, Redemption Date or Fundamental Change
Repurchase Date, as the case may be; (b) the Company pays to the Trustee
all other sums payable hereunder by the Company; (c) no Default or Event
of Default with respect to the Securities shall exist on the date of such
deposit; (d) such deposit will not result in a breach or violation of, or
constitute a Default or Event of Default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it is
bound; and (e) the Company has delivered to the Trustee an Officer’s
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for herein relating to the satisfaction and discharge of
this Indenture have been complied with; provided, however, that Sections
2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.15, 2.16, 2.17, 3.05, 3.08, 3.09, 4.01,
4.02, 4.05, 7.07 and 7.08 and Articles VIII
and X shall survive any discharge of this Indenture until such time as
the Securities have been paid in full and there are no Securities outstanding.

 

8.02         APPLICATION OF TRUST MONEY.

 

The
Trustee shall hold in trust all money and other consideration deposited with it
pursuant to Section 8.01 and shall apply such deposited money and
other consideration through the Paying Agent and in accordance with this
Indenture to the payment of the amounts due on the Securities.

 

8.03         REPAYMENT TO COMPANY.

 

The
Trustee and the Paying Agent shall promptly notify the Company of, and pay to
the Company upon the written request of the Company, any excess money held by
them at any time.  In addition, the
Trustee or the Paying Agent, as the case may be, shall provide written notice
to the Company of any money that has been held by it and has, for a period of
two (2) years, remained unclaimed for the payment of the principal of, or
any accrued and unpaid interest on, the Securities.  The Trustee and the Paying Agent shall pay to
the Company, upon the written request of the Company, any money held by them
for the payment of the principal of, premium, 

 

49

 

if
any, or any accrued and unpaid interest or any Liquidated Damages Amount on,
the notes that remains unclaimed for two (2) years; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may, at the expense of the Company, reasonably cause to be published
once in a newspaper of general circulation in the City of New York or cause to
be mailed to each Holder, in accordance with Section 11.02, notice
stating that such money remains unclaimed and that, after a date specified
therein, which shall not be less than thirty (30) days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company.  After payment
to the Company, Securityholders entitled to the money must look to the Company
for payment as general creditors, subject to applicable law, and all liability
of the Trustee and the Paying Agent with respect to such money and payment
shall, subject to applicable law, cease.

 

8.04         REINSTATEMENT.

 

If
the Trustee or Paying Agent is unable to apply any money or other consideration
in accordance with Sections 8.01 and 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Sections
8.01 and 8.02 until such time as the Trustee or Paying Agent is permitted
to apply all such money or other consideration in accordance with Sections
8.01 and 8.02; provided, however, that if the Company has made any
payment of amounts due with respect to any Securities because of the reinstatement
of its obligations, then the Company shall be subrogated to the rights of the
Holders of such Securities to receive such payment from the money held by the
Trustee or Paying Agent.

 

IX.  AMENDMENTS

 

9.01         WITHOUT CONSENT OF HOLDERS.

 

The
Company, with the consent of the Trustee, which consent shall not be
unreasonably withheld, may amend or supplement this Indenture or the Securities
without notice to or the consent of any Securityholder:

 

(i)            to comply with Sections 5.01 and 10.12
and, in accordance with Section 10.15(f), to give effect to an
election, pursuant to such Section 10.15(f), by the Company to make
an Acquirer Stock Conversion Right Adjustment with respect to a Public Acquirer
Fundamental Change;

 

(ii)           to make any changes or modifications to this
Indenture necessary in connection with the registration of the public offer and
sale of the Securities under the Securities Act or the qualification of this
Indenture under the TIA;

 

(iii)          to secure the obligations of the Company in respect
of the Securities;

 

(iv)          to add to the covenants of the Company described in
this Indenture for the benefit of Securityholders or to surrender any right or
power conferred upon the Company;

 

50

 

(v)           to make provision with respect to adjustments to the
Conversion Rate as required by this Indenture or to increase the Conversion
Rate in accordance with this Indenture;

 

(vi)          to add additional events that shall constitute Event
of Defaults hereunder;

 

(vii)         to provide for a successor Trustee in accordance
herewith; and

 

(viii)        if, at any time, the Securities are in the form of
Physical Securities, to provide for such Securities to be held as Global
Securities in addition to or in place of such Physical Securities.

 

In
addition, the Company and the Trustee may enter into a supplemental indenture
without the consent of Holders of the Securities to cure any ambiguity, defect,
omission or inconsistency in this Indenture in a manner that does not
individually or in the aggregate adversely affect the rights of any Holder in
any material respect; provided, that the Trustee upon reasonable request to the
Company shall be entitled to receive and conclusively rely upon an Opinion of
Counsel as to whether any such cure does not individually or in the aggregate
adversely affect the rights of any Holder in any material respect.

 

The
Company and the Trustee may also enter into a supplemental indenture without
the consent of the Holders of the Securities to add or modify any other provisions
with respect to matters or questions arising under this Indenture that the
Company and the Trustee may deem necessary or desirable and that will not
adversely affect the interests of the Holders of the Securities in any material
respect.

 

9.02         WITH CONSENT OF HOLDERS.

 

The
Company, with the consent of the Trustee, may amend or supplement this
Indenture or the Securities without notice to any Securityholder but with the
written consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Securities. 
Subject to Sections 6.04 and 6.07, the Holders of a
majority in aggregate principal amount of the outstanding Securities may, by
notice to the Trustee, waive compliance by the Company with any provision of
this Indenture or the Securities without notice to any other
Securityholder.  Notwithstanding anything
herein to the contrary, without the consent of each Holder of each outstanding
Security affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:

 

(a)           change the Maturity Date of
the principal of, or the payment date of any installment of interest or any
premium on, any Security;

 

(b)           reduce the principal amount
of, or any premium, interest or any Liquidated Damages Amount on, any Security;

 

(c)           change the place or currency
of payment of principal of, or any premium, interest  or any Liquidated Damages Amount on, any
Security;

 

51

 

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

 

(e)           modify, in a manner adverse
to Holders, the provisions with respect to the right of Holders pursuant to Article III
to require the Company to purchase Securities on an Option Purchase Date or to
repurchase Securities upon the occurrence of a Fundamental Change;

 

(f)            modify the provisions of Section 2.17
in a manner adverse to Holders;

 

(g)           adversely affect the right
of Holders to convert Securities in accordance with Article X;

 

(h)           reduce the percentage of the
aggregate principal amount of the outstanding Securities whose Holders must
consent to a modification to or amendment of any provision of this Indenture or
the Securities;

 

(i)            reduce the percentage of the
aggregate principal amount of the outstanding Securities whose Holders must
consent to a waiver of compliance with any provision of this Indenture or the
Securities or a waiver of any Default or Event of Default; or

 

(j)            modify the provisions of
this Indenture with respect to modification and waiver (including waiver of a
Default or an Event of Default), except to increase the percentage required for
modification or waiver or to provide for consent of each affected Holder.

 

Promptly
after an amendment, supplement or waiver under Section 9.01 or this
Section 9.02 becomes effective, the Trustee shall mail, or cause to
be mailed, to Securityholders a notice briefly describing such amendment,
supplement or waiver.  Any failure of the
Trustee to mail such notice shall not in any way impair or affect the validity
of such amendment, supplement or waiver.

 

It
shall not be necessary for the consent of the Holders under this Section 9.02
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.

 

9.03         COMPLIANCE WITH TRUST INDENTURE ACT.

 

Every
amendment, waiver or supplement to this Indenture or the Securities shall
comply with the TIA as then in effect.

 

9.04         REVOCATION AND EFFECT OF CONSENTS.

 

If
the Company shall solicit from the Holders a consent to any amendment or
supplement to the Indenture or any waiver hereunder, in each case in accordance
herewith, the Company may, but shall not be obligated to, establish a record
date for the purpose of determining the Holders of record entitled to give such
consent; provided, however, that (i) such record date shall not be more
than fifteen (15) days prior to the first solicitation of such consent, and (ii) at
least fifteen (15) days prior to such record date, the Company shall, in
accordance with Section 11.02, mail, or cause to be mailed, by
first class mail a notice of such record date to each Holder and 

 

52

 

shall
publicly announce through a public medium that is customary for such
announcements, such record date.  If a
record date is so fixed in accordance herewith, then (A) only the Holders
of record at 5:00 p.m., New York City time, on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of outstanding Securities have consented to such
amendment, supplement or waiver, and for that purpose the outstanding
Securities shall be computed as of such record date; and (B) those persons
who were Holders as of 5:00 p.m., New York City time, on such record date
(or their duly designated proxies), and only those persons, shall be entitled
to revoke any consent previously given, whether or not any such person
continues to be a Holder after such record date; provided, however, that no
such consent by the Holders on such record date shall be effective unless the
applicable amendment, supplement or waiver shall become effective pursuant to
the provisions hereof no later than six (6) months after such record date.

 

Until
an amendment, supplement or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the
consenting Holder’s Security, even if notation of the consent is not made on
any Security.  However, any such Holder
or subsequent Holder may revoke the consent as to its Security or portion of a
Security if the Trustee receives written notice of revocation before the date
the amendment, supplement or waiver becomes effective.  An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder
(including subsequent Holders).

 

Nothing
in this Section 9.04 shall impair the Company’s rights pursuant Section 9.01(i) to
amend this Indenture or the Securities without the consent of any
Securityholder in the manner set forth in, and permitted by, such Section 9.01(i).

 

9.05         NOTATION ON OR EXCHANGE OF SECURITIES.

 

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

 

9.06         TRUSTEE PROTECTED.

 

The
Trustee shall sign any amendment, supplemental indenture or waiver authorized
pursuant to this Article IX; provided, however, that the Trustee
need not sign any amendment, supplement or waiver authorized pursuant to this Article IX
that adversely affects the Trustee’s rights, duties, liabilities or
immunities.  The Trustee shall be
entitled to receive upon reasonable request and conclusively rely upon an
Opinion of Counsel as to legal matters and an Officer’s Certificate as to
factual matters that any supplemental indenture, amendment or waiver is
permitted or authorized pursuant to this Indenture.

 

53

 

9.07         EFFECT OF SUPPLEMENTAL INDENTURES.

 

Upon
the due execution and delivery of any supplemental indenture in accordance with
this Article IX, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture
for all purposes, and, except as set forth in Sections 9.02 and 9.04,
every Holder of Securities shall be bound thereby.

 

X.  CONVERSION

 

10.01       CONVERSION PRIVILEGE.

 

(a)           Subject to the provisions of
Article III, the Securities shall be convertible into shares of
Common Stock in accordance with this Article X (i) prior to February 1,
2011 if and only if there is a Change of Control, an Event of Default has
occurred and is continuing or, if to the extent the Company elects to redeem
the Securities in accordance with Section 3.01(c)(i) and
(ii) at any time on or after February 1, 2011 and prior to the close
of business on the Business Day immediately preceding the Maturity Date, upon
the satisfaction of the conditions set forth in the second paragraph of paragraph
10 of the Securities.  If (i) the
Company elects to redeem the Securities in accordance with Section 3.01(c)(i) and
(ii) a Security is converted in accordance with this Article X after
the date the notice of Redemption is mailed and before the Redemption Date, the
Applicable Premium, plus accrued and unpaid interest, if any, to, but excluding
the Redemption Date, shall be paid on such Security.

 

(b)           The initial Conversion Rate shall be
72.9927  shares of Common Stock per $1,000 principal amount of Securities.  The Conversion Rate shall be subject to
adjustment in accordance with Sections 10.06 through 10.15.

 

(c)           A Holder may convert a
portion of the principal amount of a Security if the portion is $1,000
principal amount or an integral multiple of $1,000 principal amount.  Provisions of this Indenture that apply to
conversion of all of a Security also apply to conversion of a portion of it.

 

10.02       CONVERSION PROCEDURE.

 

(a)           To convert a Security, a
Holder must satisfy the requirements of paragraph 10 of the
Securities.  No later than the third
(3rd) Business Day immediately following the date (the “Conversion
Date”) on which the Holder satisfies all those requirements, the
Company shall deliver to the Holder through the Conversion Agent a certificate
for the number of full shares of Common Stock issuable upon the conversion, as
provided in paragraph 10 of the Securities, and a check for the amount
of cash payable in lieu of any fractional share and any installment of interest
payable as provided in the following paragraph. 
Immediately before the close of business on the Conversion Date, and thereafter,
the person in whose name such certificate is to be registered shall be treated
as a stockholder of record of the Company, and all rights of the Holder of the
Security to be converted shall terminate, other than the right to receive the
shares of Common Stock and cash deliverable as provided in the preceding
sentence.  A Holder of Securities is not
entitled, as such, to any rights of a holder of Common Stock until such Holder
has converted its Securities into shares of Common Stock, or is deemed to be a
stockholder of record of the Company, as provided in this Section 10.02(a),
and then only to the extent such 

 

54

 

Securities
are deemed to have been so converted or such Holder is so deemed to be a
stockholder of record.

 

If
a Security is duly surrendered for conversion in accordance herewith, the
Company shall have fully satisfied its obligations with respect to such
Security once the Company shall have duly delivered or paid, as the case may
be, in accordance herewith, both (i) the shares of Common Stock, together
with any cash payment for fractional shares, due hereunder upon such
conversion; and (ii) if such Security shall have been surrendered for such
conversion after the close of business on the record date for the payment
pursuant hereto of an installment of interest but before the related interest
payment date, such installment of interest.

 

(b)           Except as provided in the
Securities or in this Article X, no payment or adjustment will be
made for accrued interest on, or any Liquidated Damages Amount with respect to,
a converted Security or for dividends on any Common Stock issued on or prior to
conversion.  If any Holder surrenders a
Security for conversion after the close of business on the record date for the
payment of an installment of interest and prior to the related interest payment
date, then, notwithstanding such conversion, the interest payable with respect
to such Security on such interest payment date shall be paid on such interest
payment date to the Holder of record of such Security at the close of business
on such record date; provided, however, that such Security, when surrendered
for conversion, must be accompanied by payment in cash to the Conversion Agent
on behalf of the Company of an amount equal to the interest payable on such
interest payment date on the portion so converted; provided further, however,
that such payment to the Conversion Agent described in the immediately
preceding proviso in respect of a Security surrendered for conversion shall not
be required (i) if the Company has specified a Redemption Date that is
after a record date but on or prior to the next interest payment date, (ii) if
the Company has specified a Fundamental Change Repurchase Date that is after a
record date but on or prior to the next interest payment date, or (iii) to
the extent of any overdue interest, if any overdue interest exists at the time
of conversion with respect to such Security.

 

(c)           If a Holder converts more
than one Security at the same time, the number of full shares of Common Stock
issuable upon such conversion shall be based on the total principal amount of
all Securities converted.

 

(d)           Upon surrender of a Security
that is converted in part, the Trustee shall authenticate for the Holder a new
Security equal in principal amount to the unconverted portion of the Security
surrendered.

 

10.03       FRACTIONAL SHARES.

 

The
Company will not issue fractional shares of Common Stock upon conversion of
Securities and instead will deliver a check in an amount equal to the value of
such fraction computed on the basis of the Closing Sale Price on the Trading
Day immediately before the Conversion Date.

 

10.04       TAXES ON CONVERSION.

 

If
a Holder converts its Security, the Company shall pay any documentary, stamp or
similar issue or transfer tax or duty due on the issue, if any, of shares of
Common Stock upon the 

 

55

 

conversion.  However, such Holder shall pay any such tax
or duty that is due because such shares are issued in a name other than such Holder’s
name.  The Conversion Agent may refuse to
deliver a certificate representing the shares of Common Stock to be issued in a
name other than such Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax or duty that will be due because such shares are to
be issued in a name other than such Holder’s name.  Nothing herein shall preclude any tax
withholding required by law or regulation.

 

10.05       COMPANY TO PROVIDE STOCK.

 

The
Company shall at all times reserve out of its authorized but unissued Common
Stock or Common Stock held in its treasury enough shares of Common Stock to
permit the conversion, in accordance herewith, of all of the Securities into
shares of Common Stock.  The shares of
Common Stock due upon conversion of a Global Security shall be delivered by the
Company in accordance with the Depositary’s customary practices.

 

All
shares of Common Stock that may be issued upon conversion of the Securities
shall be validly issued, fully paid and non-assessable and shall be free of
preemptive or similar rights and free of any lien or adverse claim.

 

The
Company shall comply with all securities laws regulating the offer and delivery
of shares of Common Stock upon conversion of Securities and shall list such
shares on each national securities exchange or automated quotation system on
which the Common Stock is then listed or quoted, as the case may be.

 

10.06       ADJUSTMENT OF CONVERSION RATE.

 

The
Conversion Rate shall be subject to adjustment from time to time as follows:

 

(a)           In case the Company shall (1) pay
a dividend in shares of Common Stock to all holders of Common Stock, (2) make
a distribution in shares of Common Stock to all holders of Common Stock, (3) subdivide
the outstanding shares of Common Stock into a greater number of shares of
Common Stock or (4) combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock, the Conversion Rate shall be adjusted
by multiplying the Conversion Rate in effect immediately prior to close of
business on the record date or effective date, as applicable, of such dividend,
distribution, subdivision or combination by the number of shares of Common
Stock that a person who owns only one share of Common Stock immediately before
the record date or effective date, as applicable, of such dividend,
distribution, subdivision or combination would own immediately after giving
effect to such dividend, distribution, subdivision or combination (without
giving effect to any arrangement pursuant to such dividend, distribution, subdivision
or combination not to issue fractional shares of Common Stock).  Any adjustment made pursuant to this Section 10.06(a) shall
become effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision or combination.

 

(b)           If the Company shall
dividend or distribute rights or warrants to all holders of Common Stock,
entitling them, for a period expiring not more than forty-five (45) days immediately
following the record date for the determination of holders of Common Stock
entitled to receive such rights or warrants, to subscribe for or purchase
shares of Common Stock, 

 

56

 

at
a price per share that is less than the Current Market Price per share of
Common Stock on the declaration date for such dividend or distribution, then
the Conversion Rate shall be increased by multiplying the Conversion Rate in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase, and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding at the
close of business on the date fixed for determination of stockholders entitled
to receive such rights or warrants plus the number of shares of Common Stock
that the aggregate offering price of the total number of shares of Common Stock
so offered would purchase at a price equal to the Current Market Price of the
Common Stock on the Trading Day immediately preceding the declaration date for
such distribution.  Such increase shall
become effective immediately prior to the opening of business on the day
following the date fixed for determination of stockholders entitled to receive
such rights or warrants.  Notwithstanding
the foregoing and subject to Section 10.14, the Company shall not
be required to make an adjustment to the Conversion Rate pursuant to this Section 10.06(b) on
account of a distribution of rights (whether by distribution of separate
certificates representing such rights or otherwise) that are distributed
pursuant to a stockholders’ rights plan. 
In no event shall the Conversion Rate be decreased pursuant to this Section 10.06(b).

 

(c)           In case the Company shall
dividend or distribute to all holders of Common Stock shares of Capital Stock
of the Company (other than Common Stock), evidences of indebtedness or other
assets (other than dividends or distributions requiring an adjustment to the
Conversion Rate in accordance with Sections 10.06(d)), or shall dividend
or distribute to all holders of Common Stock rights or warrants to subscribe
for or purchase securities of the Company (other than dividends or
distributions of rights or warrants requiring an adjustment to the Conversion
Rate in accordance with Section 10.06(b)), then in each such case
the Conversion Rate shall be increased by multiplying the Conversion Rate in
effect immediately prior to the close of business on the record date for the
determination of stockholders entitled to such dividend or distribution by a
fraction the numerator of which shall be the Current Market Price of the Common
Stock on such record date, and the denominator of which shall be the Current
Market Price of the Common Stock on such record date less the Fair Market Value
(as determined by the Board of Directors, whose determination shall be
conclusive, and described in a resolution of the Board of Directors) on the
record date of the portion of Capital Stock of the Company, evidences of
indebtedness, other assets, rights or warrants, as the case may be, so
distributed applicable to one share of Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
such record date; provided that if the then Fair Market Value (as so
determined) of the portion of Capital Stock of the Company, evidences of
indebtedness, other assets, rights or warrants, as the case may be, so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive on the date of such dividend or distribution the amount of
Capital Stock of the Company, evidences of indebtedness, other assets, rights
or warrants, as the case may be, such holder would have received had such
holder converted each Security on the record date.  If the Board of Directors determines the Fair
Market Value of any distribution for purposes of this Section 10.06(c) by
reference to the actual or when issued trading market for any securities, it 

 

57

 

must
in doing so consider the prices in such market over the same period used in
computing the Current Market Price on the applicable record date.  Any distribution of rights (whether by
distribution of separate certificates representing such rights or otherwise) or
warrants pursuant to a stockholders’ rights plan complying with Section 10.14
shall not constitute a distribution of rights or warrants pursuant to this Section 10.06(c).  In no event shall the Conversion Rate be
decreased pursuant to this Section 10.06(c).

 

Notwithstanding
the foregoing, if the Capital Stock distributed by the Company to all holders
of its Common Stock consists of Capital Stock of, or similar equity interests
in, a Subsidiary or other business unit of the Company (unless such Capital
Stock or similar equity interests are distributed to the Holders in such
distribution as if such Holders had converted their Securities into Common
Stock), the Conversion Rate shall be increased so that the same shall be equal
to the rate determined by multiplying the Conversion Rate in effect immediately
prior to the close of business on the record date with respect to such
distribution by a fraction, the numerator of which shall be the sum of (A) the
average of the Closing Sale Prices of the Common Stock for the ten (10) consecutive
Trading Days commencing on and including the fifth Trading Day after the date
on which “ex-dividend trading” commences for such distribution on the New York
Stock Exchange, the Nasdaq Global Market or such other national or regional
exchange or market on which such securities are then listed or quoted (the “Spin-Off Ex-Dividend Date”), plus (B) the average of
the Closing Sale Prices of the securities distributed in respect of each share
of Common Stock for the ten (10) consecutive Trading Days commencing on
and including the Spin-Off Ex-Dividend Date; and the denominator of which shall
be the average of the Closing Sale Prices of the Common Stock for the ten (10) consecutive
Trading Days commencing on and including the Spin-Off Ex-Dividend Date, such adjustment
to become effective immediately after the opening of business on the day
following such record date; provided that if (x) the average of the
Closing Prices of the Common Stock for the ten (10) consecutive Trading
Days commencing on and including the fifth Trading Day after the date on which “ex-dividend
trading” commences for such dividend or distribution on the New York Stock
Exchange, the Nasdaq Global Market or such other national or regional exchange
or market on which such securities are then listed or quoted, minus (y) the
average of the Closing Prices of the securities distributed in respect of each
share of Common Stock for the ten (10) consecutive Trading Days commencing
on and including the fifth Trading Day after the date on which “ex-dividend
trading” commences for such dividend or distribution on the New York Stock
Exchange, the Nasdaq Global Market or such other national or regional exchange
or market on which such securities are then listed or quoted is less than
$1.00, then the adjustment provided by for by this paragraph shall not be made
and in lieu thereof the provisions of the first paragraph of this Section 10.06(c) shall
apply to such distribution (provided that the fair market value for such
purposes shall equal the amount specified in clause (y)).  In any case in which this paragraph is
applicable, Section 10.06(a), Section 10.06(b) and
the first paragraph of this Section 10.06(c) shall not be
applicable.

 

For
purposes of this Section 10.06(c) and Section 10.06(a) and
Section 10.06(b), any dividend or distribution to which this Section 10.06(c) is
applicable that also includes Common Stock, or rights or warrants to subscribe
for or purchase Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such Common Stock or rights or warrants (and any
Conversion Rate adjustment required by this Section 10.06(c) with
respect to such dividend or distribution 

 

58

 

shall
then be made) immediately followed by (2) a dividend or distribution of
such Common Stock or such rights or warrants (and any further Conversion Rate
adjustment required by Section 10.06(a) and Section 10.06(b) with
respect to such dividend or distribution shall then be made), except the record
date of such dividend or distribution shall be substituted as “the record date
or effective date, as applicable, of such dividend, distribution, subdivision
or combination”, “the record date for the determination of holders of Common
Stock entitled to receive such rights or warrants,” “the record date in the
case of a dividend or distribution” and “the effective date in the case of a
subdivision or combination” within the meaning of Section 10.06(a) and
Section 10.06(b).

 

(d)           In case the Company shall,
by dividend or otherwise, at any time make a distribution of cash (excluding
any cash that is distributed as part of a distribution requiring a Conversion
Rate adjustment pursuant to Section 10.06(e) or any dividend
or distribution in connection with the liquidation, dissolution or winding up
of the Company) to all holders of Common Stock, the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to the
close of business on the record date for the determination of holders of Common
Stock entitled to such distribution by a fraction the numerator of which shall
be the Current Market Price on such record date; and the denominator of which
shall be the Current Market Price on such record date less the amount of cash
so distributed applicable to one share of Common Stock, such adjustment to be
effective immediately prior to the opening of business on the day following the
record date; provided that if the portion of the cash so distributed applicable
to one share of Common Stock is equal to or greater than the Current Market
Price on the record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive on
the date of such dividend or distribution the amount of cash such holder would
have received had such holder converted each Security on such record date.  In no event shall the Conversion Rate be
decreased pursuant to this Section 10.06(d).

 

(e)           In case the Company or any
Subsidiary of the Company shall distribute cash or other consideration in
respect of a tender offer or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Common Stock where the
sum of the aggregate amount of such cash distributed and the aggregate Fair
Market Value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and set forth in a Board Resolution), as of
the Expiration Date (as defined below), of such other consideration distributed
(such sum, the “Aggregate Amount”) expressed as
an amount per share of Common Stock validly tendered or exchanged, and not
withdrawn, pursuant to such tender offer or exchange offer as of the Expiration
Time (as defined below) (such tendered or exchanged shares of Common Stock, the
“Purchased Shares”) exceeds the Current
Market Price per share of Common Stock on the Trading Day immediately following
the last date (such last date, the “Expiration Date”)
on which tenders or exchanges could have been made pursuant to such tender
offer or exchange offer (as the same may be amended through the Expiration
Date), then the Conversion Rate shall be increased by multiplying the
Conversion Rate in effect immediately prior to the close of business on the
Expiration Date by a fraction (A) whose numerator is equal to the sum of (I) the
Aggregate Amount and (II) the product of (a) the Current Market Price
per share of Common Stock on the Trading Day immediately following the
Expiration Date and (b) an amount equal to (i) the number of shares
of Common Stock outstanding as of the last time (the “Expiration
Time”) at which tenders or exchanges could have been made pursuant
to such 

 

59

 

tender
offer or exchange offer (including all Purchased Shares) less (ii) the
Purchased Shares and (B) whose denominator is equal to the product of (I) the
number of shares of Common Stock outstanding as of the Expiration Time
(including all Purchased Shares) and (II) the Current Market Price per
share of Common Stock on the Trading Day immediately following the Expiration
Date.

 

An
increase, if any, to the Conversion Rate pursuant to this Section 10.06(e) shall
become effective immediately prior to the opening of business on the Business
Day following the Expiration Date.  In
the event that the Company or a Subsidiary of the Company is obligated to
purchase shares of Common Stock pursuant to any such tender offer or exchange
offer, but the Company or such Subsidiary is permanently prevented by
applicable law from effecting any such purchases, or all such purchases are
rescinded, then the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such tender offer or exchange
offer had not been made.  If the
application of this Section 10.06(e) to any tender offer or
exchange offer would result in a decrease in the Conversion Rate, no adjustment
shall be made for such tender offer or exchange offer under this Section 10.06(e).

 

(f)            If after the date
hereof through October 1, 2010, the Company sells shares of Common Stock
for cash consideration per share in an equity or equity-linked offering (the “New Securities Issuance Price”), other than issuances to employees,
officers, directors and consultants in connection with compensation, such that
120% of the New Securities Issuance Price is less than the Conversion Price then in
effect, the Conversion Price shall be reduced to an amount equal to 120% of the
New Securities Issuance Price; provided that the Conversion Price shall in no
event be adjusted to a price lower than the Conversion Price that would require
the Company to, and the Company shall not, issue shares of Common Stock upon
conversion of the aggregate principal amount of the Securities issued on the
Issue Date to the extent such shares of Common Stock (i) would exceed
19.9% of the outstanding shares of Common Stock immediately prior to the
execution of the Exchange Agreement (subject to adjustment for stock dividends,
stock splits or similar events) or immediately prior to such adjustment or
applicable conversion or (ii) with respect to any particular conversion,
otherwise exceed the maximum number of shares of Common Stock that the Company
may issue without stockholder approval (the “Maximum
Share Amount”) as may be required by law (including under the rules of
any national securities exchange on which the Company’s securities are listed),
and in the case of (i) or (ii) above would be adjusted to the price
that would result in an issuance that would not be so prohibited; and provided
further that no such adjustment to the Conversion Price shall be made after the
Company received proceeds of $20,000,000 or more in the aggregate from
subsequent such equity or equity-linked offerings.  For the purposes of an equity-linked
offering, the New Securities Issuance Price will refer to the reference price
from which any premium/conversion price is determined.  With respect to each Holder, the Maximum
Share Amount shall refer to such Holder’s pro rata share thereof based on the principal amount
of Securities then held by such Holder relative to the total aggregate
principal amount of Securities then outstanding plus, for purposes of
determining whether such shareholder approval would be required, the value of
any shares of capital stock or rights to acquire shares of capital stock issued
by the Company or otherwise held by the Holder which may be aggregated or
integrated with the Common Stock issued or issuable upon conversion of the
Securities.

 

60

 

(g)           In addition to the foregoing
adjustments in Subsections (a), (b), (c), (d), (e) and (f) above, the
Company, from time to time and to the extent permitted by law and by the rules of
the Nasdaq Global Market, may increase the Conversion Rate by any amount for a
period of at least twenty (20) Business Days or such longer period as may be
permitted by law, if the Board of Directors has made a determination, which
determination shall be conclusive, that such increase would be in the best
interests of the Company.  Such
Conversion Rate increase shall be irrevocable during such period.  The Company shall give written notice to the
Trustee and cause notice of such increase to be mailed, in accordance with Section 11.02,
to each Holder of Securities, at least ten (10) Business Days prior to the
date on which such increase commences.

 

(h)           If the Ex Date for any event
(other than the event requiring such computation) that requires an adjustment
to the Conversion Rate pursuant to Subsection (a), (b), (c), (d), (e) or (f) above
occurs on or after the tenth (10th) Trading Day prior to the date of
determination or Expiration Date, whichever is applicable, and prior to the Ex
Date for the issuance or distribution requiring such computation, the Closing
Sale Price for each Trading Day prior to the Ex Date for such other event shall
be adjusted by multiplying such Closing Sale Price by the reciprocal of the
fraction by which the Conversion Rate is so required to be adjusted as a result
of such other event, (ii) if the Ex Date for any event (other than the
event requiring such computation) that requires an adjustment to the Conversion
Rate pursuant to Subsection (a), (b), (c), (d), (e) or (f) above
occurs on or after the Ex Date for the issuance or distribution requiring such
computation and on or prior to the date of determination or the Expiration
Date, whichever is applicable, the Closing Sale Price for each Trading Day on
and after the Ex Date for such other event shall be adjusted by multiplying
such Closing Sale Price by the same fraction by which the Conversion Rate is so
required to be adjusted as a result of such other event, and (iii) if the
Ex Date for the event requiring such computation is on or prior to the date of
determination or Expiration Date, whichever is applicable, after taking into
account any adjustment required pursuant to Clause (i) or (ii) of
this proviso, the Closing Sale Price for each Trading Day on and after such Ex
Date shall be adjusted by adding thereto the amount of any cash and the Fair
Market Value (as determined in good faith by the Board of Directors in a manner
consistent with any determination of such value for the purposes of this Section 10.06,
whose determination shall be conclusive and described in a Resolution of the
Board of Directors) of the evidences of indebtedness, shares of Capital Stock
or other securities or assets or cash being distributed (in the event requiring
such computation) applicable to one share of Common Stock as of the close of
business on the day before such Ex Date.

 

10.07       NO ADJUSTMENT.

 

Notwithstanding
anything to the contrary in Section 10.06, no adjustment in the
Conversion Rate pursuant to Section 10.06 shall be required unless
the adjustment would result in a change of at least one percent (1%) or more of
the Conversion Rate as last adjusted (or, if never adjusted, the initial
Conversion Rate); provided, however, that any adjustments to the Conversion
Rate that by reason of this Section 10.07 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment to the Conversion Rate.  All
calculations under this Article X shall be made to the nearest cent
or to the nearest one-millionth of a share, as the case may be.

 

61

 

Rights,
options or warrants distributed by the Company to all holders of Common Stock
entitling the holders thereof to subscribe for or purchase shares of the
Company’s capital stock (either initially or under certain circumstances),
which rights, options or warrants, until the occurrence of a specified event or
events (“Trigger Event”): (i) are deemed to
be transferred with such Common Stock; (ii) are not exercisable; and (iii) are
also issued in respect of future issuances of Common Stock, shall be deemed not
to have been distributed for purposes of Section 10.06 (and no
adjustment to the Conversion Rate under Section 10.06 will be
required) until the occurrence of the earliest Trigger Event, whereupon such
rights, options and warrants shall be deemed to have been distributed and an
appropriate adjustment (if any is required) to the Conversion Rate shall be
made under Section 10.06.  If
any such right, options or warrant, including any such existing rights, options
or warrants distributed prior to the date of this Indenture, are subject to
events, upon the occurrence of which such rights, options or warrants become
exercisable to purchase different securities, evidences of indebtedness or
other assets, then the date of the occurrence of any and each such event shall
be deemed to be the date of distribution and record date with respect to new
rights, options or warrants with such rights (and a termination or expiration
of the existing rights, options or warrants without exercise by any of the
holders thereof).  In addition, in the
event of any distribution (or deemed distribution) of rights, options or
warrants, or any Trigger Event or other event of the type described in the
preceding sentence with respect thereto that was counted for purposes of
calculating a distribution amount for which an adjustment to the Conversion
Rate under Section 10.06 was made, (1) in the case of any such
rights, options or warrants that shall all have been redeemed or repurchased
without exercise by any holders thereof, the Conversion Rate shall be
readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights, options or
warrants (assuming such holder had retained such rights, options or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights, options or warrants that
shall have expired or been terminated without exercise by any holders thereof,
the Conversion Rate shall be readjusted as if such rights, options and warrants
had not been issued.

 

Notwithstanding
anything to the contrary in Section 10.06, if any dividend or
distribution is declared and the Conversion Rate is adjusted pursuant to Section 10.06
on account of such dividend or distribution, but such dividend or distribution
is thereafter not paid or made, the Conversion Rate shall again be adjusted to
the Conversion Rate that would then be in effect had such dividend or
distribution not been declared.

 

Notwithstanding
anything to the contrary in Section 10.06, no adjustment to the
Conversion Rate need be made pursuant to Section 10.06 for a
transaction if Holders are to participate in the transaction without conversion
on a basis and with notice that the Board of Directors determines in good faith
to be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction (which determination shall be
described in a Board Resolution).

 

The
applicable conversion rate will not be adjusted:

 

62

 

(1)           upon 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 or Common Stock under any plan; and

 

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

 

(3)           upon issuance of any shares of Common
Stock pursuant to any option, warrant, right or exercisable, exchangeable, or
convertible security not described in the preceding bullet and outstanding as
of the Issue;

 

(4)           for a change in the par value of the
Common Stock; and

 

(5)           for accrued and unpaid interest,
including contingent interest and any Liquidated Damages Amount.

 

10.08       OTHER ADJUSTMENTS.

 

In
the event that, as a result of an adjustment made pursuant to Section 10.06
hereof, the Holder of any Security thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock other than shares of
Common Stock, thereafter the Conversion Rate of such other shares so receivable
upon conversion of any Security shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to Common Stock contained in this Article X.

 

10.09       ADJUSTMENTS FOR TAX PURPOSES.

 

Except
as prohibited by law or by the rules of the Nasdaq Global Market, the
Company may make such increases in the Conversion Rate, in addition to those
required by Section 10.06 hereof, as it determines to be advisable
in order to eliminate or diminish any income taxes to holders of Common Stock
resulting from any stock dividend, subdivision of shares, distribution of
rights to purchase stock or securities or distribution of securities
convertible into or exchangeable for stock made by the Company or to its
stockholders.

 

10.10       NOTICE OF ADJUSTMENT.

 

Whenever
the Conversion Rate is adjusted, the Company shall promptly mail, or cause
there to be mailed, to Holders at the addresses appearing on the Registrar’s
books a notice of the adjustment and file with the Trustee an Officer’s
Certificate briefly stating the facts requiring the adjustment and the manner
of computing it.  The certificate shall
be conclusive evidence of the correctness of such adjustment.

 

10.11       NOTICE OF CERTAIN TRANSACTIONS.

 

In
the event that:

 

63

 

(1)           the Company takes any action, or becomes
aware of any event, that would require an adjustment in the Conversion Rate,

 

(2)           the Company takes any action that would
require a supplemental indenture pursuant to Section 10.12, or

 

(3)           there is a dissolution or liquidation of
the Company,

 

the
Company shall mail to Holders at the addresses appearing on the Registrar’s
books and the Trustee a written notice stating the proposed record, effective
or expiration date, as the case may be, of any transaction referred to in
Clause (1), (2) or (3) of this Section 10.11.  The Company shall mail such notice at least
twenty (20) days before such date; however, failure to mail such notice or any
defect therein shall not affect the validity of any transaction referred to in
Clause (1), (2) or (3) of this Section 10.11.

 

10.12       EFFECT OF RECLASSIFICATIONS, CONSOLIDATIONS,
MERGERS, BINDING SHARE EXCHANGES OR SALES ON CONVERSION PRIVILEGE.

 

Except
as provided in Section 10.15(f), if any of the following shall
occur, namely: (i) any reclassification or change in the Common Stock
issuable upon conversion of Securities (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination of the Common Stock), (ii) any
consolidation, merger or binding share exchange to which the Company is a party
other than a merger in which the Company is the continuing Person and that does
not result in any reclassification of, or change (other than a change in name,
or par value, or from par value to no par value, or from no par value to par
value or as a result of a subdivision or combination) in, the Common Stock or (iii) any
sale, transfer, lease, conveyance or other disposition of all or substantially
all of the property or assets of the Company, in each case, pursuant to which
the Common Stock would be converted into, or exchanged for, cash, securities or
other property, then the Company or such successor or purchasing Person, as the
case may be, shall, as a condition precedent to such reclassification, change,
consolidation, merger, binding share exchange, sale, transfer, lease,
conveyance or disposition, execute and deliver to the Trustee a supplemental
indenture in form reasonably satisfactory to the Trustee providing that, at and
after the effective time of such reclassification, change, consolidation,
merger, binding share exchange, sale, transfer, lease, conveyance or
disposition, the Holder of each Security then outstanding shall have the right
to convert such Security into the kind and amount of shares of stock and other
securities and property (including cash), if any, receivable upon such
reclassification, change, consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition by a holder of the number of shares
of Common Stock deliverable upon conversion of such Security immediately prior
to such reclassification, change, consolidation, merger, binding share
exchange, sale, transfer, lease, conveyance or disposition.

 

Such
supplemental indenture shall provide for adjustments of the Conversion Rate
that shall be as nearly equivalent as may be practicable to the adjustments of
the Conversion Rate provided for in this Article X.  The foregoing, however, shall not in any way
affect the right a Holder of a Security may otherwise have, pursuant to Section 10.14,
to receive rights upon conversion of a Security.  If, in the case of any such consolidation,
merger, binding share 

 

64

 

exchange,
sale, transfer, lease, conveyance or disposition, the stock or other securities
and property (including cash) receivable thereupon by a holder of Common Stock
includes shares of stock or other securities and property of a Person other
than the successor or purchasing Person, as the case may be, in such
consolidation, merger, binding share exchange, sale, transfer, lease,
conveyance or disposition, then such supplemental indenture shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holders of the Securities as the Board of
Directors in good faith shall reasonably determine necessary by reason of the
foregoing (which determination shall be described in a Board Resolution).  The provisions of this Section 10.12
shall similarly apply to successive consolidations, mergers, binding share
exchanges, sales, transfers, leases, conveyances or dispositions.

 

In
the event the Company shall execute a supplemental indenture pursuant to this Section 10.12,
the Company shall promptly file with the Trustee an Officer’s Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders of the Securities
upon the conversion of their Securities after any such reclassification,
change, consolidation, merger, binding share exchange, sale, transfer, lease,
conveyance or disposition and any adjustment to be made with respect thereto.

 

In
the event holders of the Common Stock have the opportunity to elect the form of
consideration to be received in such reclassification, change, consolidation,
merger, binding share exchange, sale, transfer, lease, conveyance or
disposition, the Company shall make adequate provision whereby the holders of
the Securities shall have a reasonable opportunity to determine the form of
consideration into which all of the Securities, treated as a single class,
shall be convertible from and after the effective date of such
reclassification, change, consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition. 
Such determination shall be subject to any limitations to which all of
the holders of the Common Stock are subject, such as pro-rata reductions
applicable to any portion of the consideration payable in such
reclassification, change, consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition and shall be conducted in such a
manner as to be completed by the date that is the earlier of (a) the deadline
for elections to be made by holders of the Common Stock in connection with such
reclassification, change, consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition, and (b) two Trading Days prior
to the anticipated effective date of such reclassification, change,
consolidation, merger, binding share exchange, sale, transfer, lease,
conveyance or disposition.  The Company
shall provide notice of the opportunity to determine the form of such
consideration, as well as notice of the determination made by holders of the
Securities by issuing a press release and providing a copy of such notice to
the Trustee.  None of the foregoing
provisions shall affect the right of a holder of Securities to convert its
Securities into shares of Common Stock, as set forth in this Article X
prior to the effective date of such reclassification, change, consolidation,
merger, binding share exchange, sale, transfer, lease, conveyance or
disposition.

 

10.13       TRUSTEE’S DISCLAIMER.

 

The
Trustee has no duty to determine when an adjustment under this Article X
should be made, how it should be made or what such adjustment should be, but
may accept as conclusive evidence of the correctness of any such adjustment,
and shall be protected in relying upon, the Officer’s Certificate with respect
thereto which the Company is obligated to file with the Trustee 

 

65

 

pursuant
to Section 10.10 hereof.  The
Trustee makes no representation as to the validity or value of any securities
or assets issued upon conversion of Securities, and the Trustee shall not be
responsible for the failure by the Company to comply with any provisions of
this Article X.

 

The
Trustee shall not be under any responsibility to determine the correctness of
any provisions contained in any supplemental indenture executed pursuant to Section 10.12,
but may accept as conclusive evidence of the correctness thereof, and shall be
protected in relying upon, the Officer’s Certificate with respect thereto which
the Company is obligated to file with the Trustee pursuant to Section 10.12
hereof.  Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to (A) make
any cash payment or issue, transfer or deliver any shares of Common Stock or
stock certificates or other securities or property upon the surrender of any
Security for conversion hereunder, or (B) subject to Article VII,
comply with any of the covenants of the Company hereunder.

 

10.14       RIGHTS DISTRIBUTIONS PURSUANT TO STOCKHOLDERS’
RIGHTS PLANS.

 

Upon
conversion of any Security or a portion thereof, the Company shall make
provision for the Holder thereof to receive, in addition to, and concurrently
with the delivery of, the consideration otherwise payable hereunder upon such
conversion, the rights described in each and any stockholders’ rights plan the
Company may have in effect at such time (unless the rights have been separated
from the Common Stock prior to the time of conversion, in which case the
provisions of Section 10.06(c) shall apply).  In the event that the Company implements a
stockholders’ rights plan after the date hereof, the Company shall provide that
the Holders will receive upon conversion of their Securities, in addition to
the consideration otherwise payable hereunder upon such conversion, the rights
described therein (unless the rights have been separated from the Common Stock
prior to the time of conversion, in which case the provisions of Section 10.06(c) shall
apply).

 

10.15       INCREASED CONVERSION RATE APPLICABLE TO CERTAIN
NOTES SURRENDERED IN CONNECTION WITH MAKE-WHOLE FUNDAMENTAL CHANGES.

 

(a)           Notwithstanding anything
herein to the contrary, the Conversion Rate applicable to each Security that is
surrendered for conversion, in accordance with this Article X, at
any time from, and including, the effective date of a Make-Whole Fundamental
Change until, and including, the close of business on the Business Day
immediately preceding the Fundamental Change Repurchase Date corresponding to
such Make-Whole Fundamental Change, shall be increased to an amount equal to
the Conversion Rate that would, but for this Section 10.15,
otherwise apply to such Security pursuant to this Article X, plus
an amount equal to the Make-Whole Conversion Rate Adjustment; provided,
however, that such increase to the Conversion Rate shall not apply if:

 

(i)            such Make-Whole Fundamental Change constitutes a
Public Acquirer Fundamental Change with respect to which the Company shall have
duly made, and given full effect to, an election, pursuant to and in accordance
with Section 10.15(f), to make an Acquirer Stock Conversion Right
Adjustment;

 

66

 

(ii)           such Make-Whole Fundamental Change is announced by
the Company but shall not be consummated; or

 

(iii)          such Make-Whole Fundamental Change occurs on or
after October 1, 2013.

 

The
additional consideration payable hereunder on account of any Make-Whole
Conversion Rate Adjustment with respect to a Security surrendered for
conversion is herein referred to as the “Make-Whole Consideration.”

 

(b)           As used herein, “Make-Whole Conversion Rate Adjustment” shall mean, with
respect to each Make-Whole Fundamental Change and each applicable Security, an
amount equal to the Applicable Increase. 
As used herein, “Applicable Increase”
shall mean, with respect to a Make-Whole Fundamental Change, the amount, set
forth in the following table, which corresponds to the effective date of such
Make-Whole Fundamental Change (the “Effective Date”)
and the Applicable Price of such Make-Whole Fundamental Change:

 

APPLICABLE
INCREASE

(per $1,000 principal amount of Securities)

 

	
  Effective

  Date

  	
   

  	
  Applicable Price

  	
   

  
	
  Year

  	
   

  	
  $12.81

  	
   

  	
  $13.00

  	
   

  	
  $13.25

  	
   

  	
  $13.50

  	
   

  	
  $13.75

  	
   

  	
  $14.00

  	
   

  	
  $14.50

  	
   

  	
  $15.00

  	
   

  	
  $15.50

  	
   

  	
  $16.00

  	
   

  	
  $17.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0

  	
   

  	
  12.9820

  	
   

  	
  12.6790

  	
   

  	
  12.3270

  	
   

  	
  12.0110

  	
   

  	
  11.7280

  	
   

  	
  11.4680

  	
   

  	
  11.0020

  	
   

  	
  10.5870

  	
   

  	
  10.2060

  	
   

  	
  9.8500

  	
   

  	
  9.1950

  	
   

  
	
  1

  	
   

  	
  12.9820

  	
   

  	
  9.6830

  	
   

  	
  9.1960

  	
   

  	
  8.7950

  	
   

  	
  8.4650

  	
   

  	
  8.1900

  	
   

  	
  7.7600

  	
   

  	
  7.4280

  	
   

  	
  7.1500

  	
   

  	
  6.8980

  	
   

  	
  6.4490

  	
   

  
	
  2

  	
   

  	
  12.9820

  	
   

  	
  8.3000

  	
   

  	
  7.2900

  	
   

  	
  6.4340

  	
   

  	
  5.7200

  	
   

  	
  5.1550

  	
   

  	
  4.3900

  	
   

  	
  3.9810

  	
   

  	
  3.7700

  	
   

  	
  3.6100

  	
   

  	
  3.3670

  	
   

  
	
  3

  	
   

  	
  12.9820

  	
   

  	
  11.8700

  	
   

  	
  10.4180

  	
   

  	
  9.0210

  	
   

  	
  7.6740

  	
   

  	
  6.3750

  	
   

  	
  3.9120

  	
   

  	
  1.6130

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  

 

	
  Effective

  Date

  	
   

  	
  Applicable Price

  	
   

  
	
  Year

  	
   

  	
  $18.00

  	
   

  	
  $19.00

  	
   

  	
  $20.00

  	
   

  	
  $21.00

  	
   

  	
  $22.00

  	
   

  	
  $23.00

  	
   

  	
  $24.00

  	
   

  	
  $25.00

  	
   

  	
  $26.00

  	
   

  	
  $27.00

  	
   

  	
  $27.40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0

  	
   

  	
  8.5920

  	
   

  	
  8.0130

  	
   

  	
  7.4330

  	
   

  	
  6.8300

  	
   

  	
  6.1890

  	
   

  	
  5.5110

  	
   

  	
  4.8020

  	
   

  	
  4.0790

  	
   

  	
  3.3580

  	
   

  	
  2.6530

  	
   

  	
  2.3780

  	
   

  
	
  1

  	
   

  	
  6.0520

  	
   

  	
  5.6930

  	
   

  	
  5.3590

  	
   

  	
  5.0330

  	
   

  	
  4.6940

  	
   

  	
  4.3230

  	
   

  	
  3.9030

  	
   

  	
  3.4280

  	
   

  	
  2.9040

  	
   

  	
  2.3460

  	
   

  	
  2.1170

  	
   

  
	
  2

  	
   

  	
  3.1620

  	
   

  	
  2.9790

  	
   

  	
  2.8130

  	
   

  	
  2.6640

  	
   

  	
  2.5270

  	
   

  	
  2.3980

  	
   

  	
  2.2680

  	
   

  	
  2.1190

  	
   

  	
  1.9250

  	
   

  	
  1.6620

  	
   

  	
  1.5340

  	
   

  
	
  3

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  

 

provided,
however, that:

 

(i)            if the actual Applicable Price of such Make-Whole
Fundamental Change is between two (2) Applicable Prices listed in the
table above immediately under the row titled “Applicable Price,” or if the
actual Effective Date of such Make-Whole Fundamental Change is between two
Effective Dates listed under the column titled “Effective Date,” then the
Applicable Increase for such Make-Whole Fundamental Change shall be determined
by linear interpolation between the Applicable Increases set forth for such two
Applicable Prices, or for such two Effective Dates based on a three hundred and
sixty five (365) day year, as applicable;

 

67

 

(ii)           if the actual Applicable Price of such Make-Whole
Fundamental Change is greater than $27.40 per share (subject to adjustment as
provided in Section 10.15(b)(iii)), or if the actual Applicable
Price of such Make-Whole Fundamental Change is less than $12.81 per share
(subject to adjustment as provided in Section 10.15(b)(iii)), then
the Applicable Increase shall be equal to zero (0) and this Section 10.15
shall not require the Company to increase the Conversion Rate with respect to
such Make-Whole Fundamental Change;

 

(iii)          if an event occurs that requires, pursuant to this Article X
(other than solely pursuant to this Section 10.15), an adjustment
to the Conversion Rate, then, on the date and at the time such adjustment is so
required to be made, each price set forth in the table above immediately under
the row titled “Applicable Price” shall be deemed to be adjusted so that such
Applicable Price, at and after such time, shall be equal to the product of (1) such
Applicable Price as in effect immediately before such adjustment to such
Applicable Price and (2) a fraction whose numerator is the Conversion Rate
in effect immediately before such adjustment to the Conversion Rate and whose
denominator is the Conversion Rate to be in effect, in accordance with this Article X,
immediately after such adjustment to the Conversion Rate;

 

(iv)          each Applicable Increase amount set forth in the
table above shall be adjusted in the same manner in which, and for the same
events for which, the Conversion Rate is to be adjusted pursuant to Section 10.01
through Section 10.14; and

 

(v)           in no event will the total number of shares of
Common Stock issuable upon conversion of the Securities exceed 150.0224 per
$1,000 principal amount of Securities, subject to adjustment in the same manner
as the Conversion Rate pursuant to Section 10.06.

 

(c)           As used herein, “Applicable Price” shall have the following meaning with
respect to a Make-Whole Fundamental Change: (i) if the consideration
(excluding cash payments for fractional shares or pursuant to statutory
appraisal rights) for the Common Stock in the relevant Make-Whole Fundamental
Change consists solely of cash, then the “Applicable Price”
will be the cash amount paid per share of Common Stock in such Make-Whole
Fundamental Change and (ii) in all other events, the “Applicable
Price” will be the average of the Closing Sale Prices per share of
Common Stock for the five (5) consecutive Trading Days immediately
preceding the Effective Date of the relevant Make-Whole Fundamental
Change.  The Board of Directors will make
appropriate adjustments, in its good faith determination, to account for any
adjustment to the Conversion Rate that becomes effective, or any event
requiring an adjustment to the Conversion Rate where the Ex-Date of the event
occurs, during those five consecutive Trading Days.

 

(d)           [Reserved.]

 

(e)           At least fifteen (15)
Business Days before the anticipated effective date of any proposed Make-Whole
Fundamental Change, the Company shall mail to each Holder, in accordance with Section 11.02,
written notice of, and shall publicly announce, through a public medium that is
customary for such announcements, and publish on the Company’s website, the 

 

68

 

anticipated
effective date of such proposed Make-Whole Fundamental Change.  Each such notice, announcement and
publication shall also state (i) that the Company either (a) has
elected, in accordance with Section 10.15(f), to make an Acquirer
Stock Conversion Right Adjustment with respect to such Make-Whole Fundamental
Change in lieu of increasing the Conversion Rate pursuant to Section 10.15(a) or
(b) has elected not to make an Acquirer Stock Conversion Right
Adjustment with respect to such Make-Whole Fundamental Change; and (ii) if
the Company has elected not to make such Acquirer Stock Conversion Right
Adjustment with respect to such Make-Whole Fundamental Change, that, in
connection with such Make-Whole Fundamental Change, the Company shall increase,
in accordance herewith, the Conversion Rate applicable to Securities entitled
as provided herein to such increase (along with a description of how such
increase shall be calculated and the time periods during which Securities must
be surrendered in order to be entitled to such increase).  No later than the actual Effective Date of
each Make-Whole Fundamental Change, the Company shall mail, in accordance with Section 11.02,
written notice of, and shall publicly announce, through a public medium that is
customary for such announcements, and publish on the Company’s website, such
Effective Date.

 

(f)            Notwithstanding anything to
the contrary in this Section 10.15, if the Company shall make any
mailing, announcement or publication referred to in Section 10.15(e) in
respect of a Make-Whole Fundamental Change that shall also constitute a Public
Acquirer Fundamental Change, then the Company shall have the right at its sole
option to, in lieu of increasing the Conversion Rate pursuant to Section 10.15(a) in
connection with such Make-Whole Fundamental Change, cause the right to convert
the Securities in accordance with this Article X to change such
that, from and after the effective time of such Public Acquirer Fundamental
Change, the right of each Holder of any Security to convert such Security into
shares of Common Stock and cash for fractional shares shall be changed into the
right to convert such Security solely into shares of Public Acquirer Common
Stock applicable to such Public Acquirer Fundamental Change and cash for
fractional shares thereof, at an initial Conversion Rate (which shall take
effect at such effective time, but that shall thereafter be subject to
adjustment in the same manner in which, and for the same events for which, the
Conversion Rate is to be adjusted pursuant to this Article X) equal
to the Conversion Rate in effect immediately before such effective time
multiplied by a fraction the numerator of which is the Fair Market Value (as
determined in good faith by the Board of Directors), as of the effective time
of the Public Acquirer Fundamental Change, of the cash, securities and other
property paid or payable per share of Common Stock and the denominator of which
is the average of the Closing Sale Prices per share of the Public Acquirer
Common Stock for the five (5) consecutive Trading Days commencing on, and
including, the Trading Day immediately after the Effective Date of the Public
Acquirer Fundamental Change.  Any such
change in the right to convert the Securities in accordance with this Section 10.15(f) is
herein referred to as an “Acquirer Stock Conversion
Right Adjustment.”

 

If
the Company shall have elected, in accordance with this Section 10.15(f),
to make an Acquirer Stock Conversion Right Adjustment with respect to a Public
Acquirer Fundamental Change, then:

 

(i)            the Company shall cause there to be executed and
delivered to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee, which supplemental indenture shall (a) give
due effect to such election in accordance with this 

 

69

 

Section 10.15(f), including,
without limitation, evidencing a binding and enforceable obligation of the
issuer of the applicable Public Acquirer Common Stock to satisfy the right of
Holders to convert Securities in accordance with this Article X and
this Section 10.15(f); (b) be executed by, without limitation,
such issuer; (c) contain such additional provisions, if any, necessary to
protect the interests of the Holders of the Securities as the Board of
Directors in good faith shall reasonably determine (which determination shall
be described in a Board Resolution); and (d) be in full force and effect
no later than the effective time of such Public Acquirer Fundamental Change;

 

(ii)           the Company shall promptly file with the Trustee an
Officer’s Certificate briefly stating the reasons for such supplemental
indenture, the nature of the change in the conversion right pursuant to such
Acquirer Stock Conversion Right Adjustment and the Conversion Rate as adjusted
therefor;

 

(iii)          the provisions of Section 10.12 shall
not apply to such Public Acquirer Fundamental Change, provided such Public
Acquirer Fundamental Change shall have been duly given effect in accordance
with this Section 10.15(f); and

 

(iv)          such election shall be irrevocable with respect to
such Public Acquirer Fundamental Change and shall be deemed to have been made
at the time the Company shall, with respect to such Public Acquirer Fundamental
Change, mail the first notice, or make the first public announcement or
publication, whichever shall occur earlier, referred to in Section 10.15(e) (it
being understood that the Company shall discharge its obligations hereunder in
good faith in determining whether an announced transaction and a completed
transaction are deemed, for purposes of this Clause (iv), to be the same Public
Acquirer Fundamental Change despite differences in the announced terms and the
terms as such transaction was consummated);

 

provided,
however, that the Company shall not be required to give effect to such election
to make an Acquirer Stock Conversion Right Adjustment with respect to such
Public Acquirer Fundamental Change if such Public Acquirer Fundamental Change is
not consummated.

 

For
avoidance of doubt, any change, pursuant to this Section 10.15(f),
in the right of Holders to convert Securities shall apply to all Holders.

 

(g)           For avoidance of doubt, the
provisions of this Section 10.15 shall not affect or diminish the
Company’s obligations, if any, pursuant to Article V with respect
to a Public Acquirer Fundamental Change or Make-Whole Fundamental Change.

 

(h)           Nothing in this Section 10.15
shall prevent an adjustment to the Conversion Rate pursuant to Section 10.06
in respect of a Make-Whole Fundamental Change or a Public Acquirer Fundamental
Change.

 

70

 

XI.  MISCELLANEOUS

 

11.01      TRUST INDENTURE ACT CONTROLS.

 

If any
provision of this Indenture limits, qualifies or conflicts with another
provision that is required or deemed to be included in this Indenture by the
TIA, then such provision of the TIA shall control.

 

11.02      NOTICES.

 

Any notice or
communication by the Company or the Trustee to the other shall be deemed to be
duly given if made in writing and delivered:

 

(a)           by hand (in which case
such notice shall be effective upon delivery);

 

(b)           by facsimile (in which
case such notice shall be effective upon receipt of confirmation of good
transmission thereof); or

 

(c)           by overnight delivery
by a nationally recognized courier service (in which case such notice shall be
effective on the Business Day immediately after being deposited with such
courier service),

 

in each case
to the other party’s address or facsimile number, as applicable, stated in this
Section 11.02.  The Company
or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.

 

Any notice or
communication to a Holder shall be mailed to its address shown on the register
kept by the Registrar.  Failure to mail a
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.

 

If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.

 

If the Company
mails a notice or communication to Holders, it shall mail a copy to the Trustee
and each Registrar, Paying Agent, Conversion Agent or co-Registrar (if
different than the Trustee) at the same time.

 

All notices or
communications shall be in writing.

 

The Company’s
address is:

 

71

 

Toreador
Resources Corporation

13760 Noel Road, Suite 1100

Dallas, TX 75240-1383

Fax: (214) 559-3945

Attn: Chief Financial Officer

 

The Trustee’s
address is:

 

The Bank of
New York Mellon Trust Company, N.A.

Attn: Houston Corp.

601 Travis Street, 16th floor

Houston, TX 77002

Telephone: (713) 483-6535

Fax: (713) 483-6954

 

If the Trustee
is required, pursuant to the express terms of this Indenture, to mail a notice
or communication to Holders, the Trustee shall also provide such notice or
communication to the Company in a manner set forth in this Section 11.02.

 

11.03      COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

 

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

 

11.04      CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.

 

Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:

 

(i)            an Officer’s
Certificate stating that, in the opinion of the signatory to such Officer’s
Certificate, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

 

(ii)           an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent
have been complied with.

 

Each signatory
to an Officer’s Certificate or an Opinion of Counsel may (if so stated) rely,
effectively, upon an Opinion of Counsel as to legal matters and an Officer’s
Certificate or certificates of public officials as to factual matters if such
signatory reasonably and in good faith believes in the accuracy of the document
relied upon.

 

11.05      STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

 

Each Officer’s
Certificate or Opinion of Counsel with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

 

72

 

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

 

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

 

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

 

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

 

11.06      RULES BY TRUSTEE AND AGENTS.

 

The Trustee
may make reasonable rules for action by or at a meeting of Holders.  The Registrar, Paying Agent or Conversion
Agent may make reasonable rules and set reasonable requirements for their
respective functions.

 

11.07      LEGAL HOLIDAYS.

 

If a payment
date is a not a Business Day at a place of payment, payment may be made at that
place on the next succeeding day that is a Business Day, and no interest shall
accrue on that payment for the intervening period.

 

11.08      DUPLICATE ORIGINALS.

 

The parties
may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.  Delivery of an executed counterpart by
facsimile shall be effective as delivery of a manually executed counterpart
thereof.

 

11.09      GOVERNING LAW.

 

The laws of
the State of New York shall govern this Indenture and the Securities.

 

11.10      NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

 

This Indenture
may not be used to interpret another indenture, loan or debt agreement of the
Company or any of its Subsidiaries.  Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.

 

11.11      SUCCESSORS.

 

All agreements
and covenants of the Company in this Indenture and the Securities shall bind
its successors.  All agreements and
covenants of the Trustee in this Indenture shall bind its successors.

 

73

 

11.12      SEPARABILITY.

 

In case any
provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby and a Holder shall have no
claim therefor against any party hereto.

 

11.13      TABLE OF CONTENTS, HEADINGS, ETC.

 

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

 

11.14      CALCULATIONS IN RESPECT OF THE SECURITIES.

 

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

 

11.15      FORCE MAJEURE

 

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

 

11.16      NO PERSONAL LIABILITY OF DIRECTORS, EMPLOYEES OR
STOCKHOLDERS

 

None of the
Company’s past, present or future directors, officers, employees or
stockholders, as such, shall have any liability for any of the Company’s
obligations under this Indenture or the Securities or for any claim based on,
or in respect or by reason of, such obligations or their creation.  Except as otherwise provided by applicable
law, by accepting a Security, each Holder waives and releases all such
liability and such waiver and release is part of the consideration for the
issue of the Securities.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE
FOLLOWS]

 

74

 

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

 

	
   

  	
  TOREADOR
  RESOURCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc Sengès

  
	
   

  	
   

  	
  Name: 

  	
  Marc Sengès

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer

  

 

 

[Signature Page to Indenture]

 

 

 

	
   

  	
  THE BANK
  OF NEW YORK MELLON 

  TRUST COMPANY, N.A.,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rafael
  Martinez

  
	
   

  	
   

  	
  Name: 

  	
  Rafael
  Martinez

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Associate

  

 

 

[Signature Page to Indenture]

 

 

Exhibit A

 

[Face of Security]

 

Toreador Resources
Corporation

 

Certificate
No.

 

[Insert Private Placement Legend and Global
Security Legend as requested]

8.00%/7.00% Convertible Senior Note due 2025

 

CUSIP No. 891050
AC0

 

Toreador
Resources Corporation, a Delaware corporation (the “Company”),
for value received, hereby promises to pay to
                                          ,
or its registered assigns, the principal sum of
                                          
dollars
($                    )
on October 1, 2025 and to pay interest thereon, as provided on the reverse
hereof, until the principal and any unpaid and accrued interest are paid or
duly provided for.

 

Interest
Payment Dates: February 1 and August 1, with the first payment to be
made on August 1, 2010.

 

Record Dates: January 15
and July 15.

 

The provisions
on the back of this certificate are incorporated as if set forth on the face
hereof.

 

IN WITNESS
WHEREOF, Toreador Resources Corporation has caused
this instrument to be duly signed.

 

	
   

  	
  TOREADOR RESOURCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
					

 

A-1

 

Trustee’s
Certificate Of Authentication

 

This is one of
the Securities referred to

in the within-mentioned Indenture.

 

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

  
	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  

 

A-2

 

[Reverse Of Security]

 

Toreador Resources
Corporation

 

8.00%/7.00%
Convertible Senior Note Due 2025

 

1.             Interest.  Toreador Resources Corporation, a Delaware
corporation (the “Company”), promises to pay
interest on the principal amount of this Security at 8.00% from February 1,
2010 until January 31, 2011 and at 7.00% per annum thereafter.  The Company will pay interest, payable
semi-annually in arrears, on February 1 and August 1 of each year,
with the first payment to be made on August 1, 2010.  Interest on the Securities will accrue on the
principal amount from, and including, the most recent date to which interest
has been paid or provided for or, if no interest has been paid or provided for,
from, and including, February 1, 2010, in each case to, but excluding, the
next interest payment date or Maturity Date, as the case may be.  Interest will be computed on the basis of a
360-day year of twelve 30-day months.

 

2.             Maturity.  The Securities will mature on October 1,
2025.

 

3.             Method of Payment.  Except as provided in the Indenture (as
defined below), the Company will pay interest on the Securities to the persons
who are Holders of record of Securities at the close of business on the Record
Date set forth on the face of this Security next preceding the applicable
Interest Payment Date.  Holders must
surrender Securities to a Paying Agent to collect the principal amount,
Redemption Price, Option Purchase Price or Fundamental Change Repurchase Price
of the Securities payable as herein provided upon Redemption, Purchase at
Holder’s Option or Repurchase Upon Fundamental Change, as the case may be.  The Company will pay, in money of the United
States that at the time of payment is legal tender for payment of public and
private debts, all amounts due in cash with respect to the Securities, which
amounts shall be paid (A) in the case this Security is a Global Security,
by wire transfer of immediately available funds to the account specified by the
Holder hereof; or (B) in the case this Security is a Physical Security
held by a Holder who is the record holder of more than five million dollars
($5,000,000) aggregate principal amount of Securities, by wire transfer of
immediately available funds to the account specified by such Holder or, if no
such account is specified, or if this Security is a Physical Security held by a
Holder who is the record holder of five million dollars ($5,000,000) or less in
aggregate principal amount of Securities, by mailing a check to such Holder’s
address shown in the register of the Registrar.

 

4.             Paying Agent, Registrar,
Conversion Agent.  Initially,
The Bank of New York Mellon Trust Company, N.A. (the “Trustee”),
will act as Paying Agent, Registrar and Conversion Agent.  The Company may change any Paying Agent,
Registrar or Conversion Agent without notice.

 

5.             Indenture.  The Company issued the Securities under an
Indenture dated as of February 1, 2010 (the “Indenture”)
between the Company and the Trustee.  The
terms of the Securities include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) (the “TIA”) as
amended and in effect from time to time. 
The Securities are subject to all such terms, and 

 

A-3

 

Holders
are referred to the Indenture and the TIA for a statement of such terms.  The Securities are general unsecured senior
obligations of the Company limited to $31,631,000 aggregate principal amount,
except as otherwise provided in the Indenture (except for Securities issued in
substitution for destroyed, mutilated, lost or stolen Securities).  Terms used herein without definition and that
are defined in the Indenture have the meanings assigned to them in the
Indenture.

 

6.             Redemption.

 

The Company shall have the
right, at the Company’s option, at any time, and from time to time, on a
Redemption Date, prior to October 1, 2013, to redeem all or any part of
the Securities at a price payable in cash at a Redemption Price equal to one
hundred percent (100%) of the outstanding principal amount of such Security to
be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the
Redemption Date, plus the Applicable Premium, if the Closing Sale Price of the
Common Stock has exceeded 200% of the Conversion Price for at least twenty (20)
Trading Days in any consecutive thirty (30) Trading Day period ending on the
Trading Day prior to the date of mailing of the relevant notice of
Redemption.  The Applicable Premium shall
be payable in shares of Common Stock, cash or a combination of cash and shares
of Common Stock, at the Company’s election made prior to the giving of notice
of Redemption pursuant to Section 3.04 of the Indenture.

 

If the Company elects to pay
the Applicable Premium, or any part thereof, in shares of Common Stock, the
Company shall deliver in respect of the Applicable Premium or part thereof
being paid in Common Stock, a number of whole shares of Common Stock determined
by dividing (x) the Applicable Premium or part thereof to be so paid by (y) the
Current Market Price on the applicable Redemption Date, together with a check
in the amount equal to the fraction of a share otherwise payable computed on
the basis of the Closing Sale Price on the Redemption Date

 

The Company shall have the
right, at the Company’s option, at any time, and from time to time, on a
Redemption Date on or after October 1, 2013, to redeem all or any part of
the Securities at a price payable in cash at a Redemption Price equal to one
hundred percent (100%) of the outstanding principal amount of such Security to
be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the
Redemption Date, irrespective of the Closing Sale Price of the Common Stock.

 

Notwithstanding the
foregoing, if a Redemption Date falls after a Record Date and on or prior to
the corresponding Interest Payment Date, the Company shall pay the full amount
of accrued and unpaid interest, if any, on such Interest Payment Date to the
Holder of record at the close of business on the corresponding Record Date, and
the Redemption Price will be 100% of the principal amount of the Securities to
be redeemed in connection with such Redemption, and the Applicable Premium, if
any.

 

If the Paying Agent (other
than the Company) holds on a Redemption Date money sufficient to pay the
aggregate Redemption Price and the Applicable Premium, if any, with respect to
all Securities to be redeemed payable as provided in the Indenture upon
Redemption, then (unless there shall be a Default in the payment of such
aggregate Redemption Price and the Applicable Premium, if any) on and after
such date such Securities shall be deemed to be no 

 

A-4

 

longer outstanding, interest
on such Securities shall cease to accrue, and such Securities shall be deemed
paid whether or not such Securities are delivered to the Paying Agent.  Thereafter, all rights of the Holders of such
Securities shall terminate with respect to such Securities, other than the
right to receive the Redemption Price and the Applicable Premium, if any, in
accordance with the Indenture.

 

7.             Notice of Redemption.  Notice of Redemption will be mailed at least
thirty (30) days but not more than sixty (60) days before the Redemption Date
to each Holder of Securities to be redeemed at its address appearing in the
security register.  Securities in
denominations larger than $1,000 principal amount may be redeemed in part but
only in integral multiples of $1,000 principal amount.

 

8.             Purchase by the Company at the
Option of the Holder.  Subject to
the terms and conditions of the Indenture, the Company shall become obligated
to purchase, at the option of the Holder, the Securities held by such Holder on
October 1, 2013, October 1, 2015 and October 1, 2020 (each, an “Option Purchase Date”) at an Option
Purchase Price, payable in cash, equal to one hundred percent (100%) of the
principal amount of the Securities to be purchased, plus accrued and unpaid
interest, if any, to, but excluding, the applicable Option Purchase Date, upon
delivery to the Paying Agent by the Holder of a Purchase Notice containing the
information set forth in the Indenture (provided, however, that any such
accrued and unpaid interest will be paid not to the Holder submitting the
Security for purchase on the relevant Option Purchase Date but instead to the
Holder of record at the close of business on the corresponding Record Date), at
any time from 9:00 a.m., New York City time, on the date that is twenty
(20) Business Days prior to the applicable Option Purchase Date until 5:00 p.m.,
New York City time, on the Business Day immediately preceding the applicable
Option Purchase Date and upon delivery of the Securities to the Paying Agent by
the Holder as set forth in the Indenture.

 

Holders have the right to
withdraw any Purchase Notice by delivering to the Paying Agent a written notice
of withdrawal in accordance with the provisions of the Indenture.

 

If the Paying Agent (other
than the Company) holds on an Option Purchase Date money sufficient to pay the
aggregate Option Purchase Price with respect to all Securities to be purchased
upon Purchase at Holder’s Option payable as provided in the Indenture upon
Purchase at Holder’s Option, then (unless there shall be a Default in the
payment of such aggregate Option Purchase Price) on and after such date such
Securities shall be deemed to be no longer outstanding, interest on such
Securities shall cease to accrue, and such Securities shall be deemed paid
whether or not such Securities are delivered to the Paying Agent.  Thereafter, all rights of the Holders of such
Securities shall terminate with respect to such Securities, other than the
right to receive the Option Purchase Price in accordance with the Indenture.

 

9.             Repurchase at Option of
Holder Upon a Fundamental Change.  Subject to the terms and conditions of the
Indenture, in the event of a Fundamental Change, each Holder of the Securities
shall have the right, at the Holder’s option, to require the Company to
repurchase such Holder’s Securities including any portion thereof which is
$1,000 in principal amount or any integral multiple thereof on a date selected
by the Company (the “Fundamental Change
Repurchase Date”), which date is not less than twenty (20) nor
more than thirty-five (35) Business Days after the date on which the
Fundamental Change Notice is mailed in accordance 

 

A-5

 

with
the Indenture, at a price payable in cash equal to one hundred percent (100%)
of the principal amount of such Security, plus accrued and unpaid interest to,
but excluding, the Fundamental Change Repurchase Date (provided, however, that
if a Fundamental Change Repurchase Date falls after a Record Date and on or
prior to the corresponding Interest Payment Date, the Company shall pay the
full amount of accrued and unpaid interest, if any, on such Interest Payment
Date to the Holder of record at the close of business on the corresponding
Record Date, and the Fundamental Change Repurchase Price shall be 100% of the
principal amount of the Securities repurchased).

 

Within fifteen (15) days
after the occurrence of the Fundamental Change, the Company must mail, or cause
to be mailed, notice of the occurrence of such Fundamental Change to each
Holder at the address of such Holder appearing in the register of the
Registrar.  Such notice shall include,
among other things, a description of the procedure that a Holder must follow to
exercise the Fundamental Change Repurchase Right.  To exercise the Fundamental Change Repurchase
Right, a Holder of Securities must, in accordance with the provisions of the
Indenture, (i) deliver, no later than 5:00 p.m., New York City time,
on the Business Day immediately preceding the Fundamental Change Repurchase
Date, a Purchase Notice to the Company (if it is acting as its own Paying
Agent) or to the Paying Agent; and (ii) deliver, at any time after the
delivery of such Purchase Notice, the Securities with respect to which the
Holder is exercising its Fundamental Change Repurchase Right (together with all
necessary endorsements).  If the
Securities delivered in connection with a Holder’s exercise of its Fundamental
Change Repurchase Right are held in book-entry form through the Depositary,
then such Purchase Notice must comply with applicable procedures of the
Depositary.

 

10.           Conversion.

 

Subject to earlier
Redemption, Purchase at Holder’s Option or Repurchase Upon Fundamental Change,
Holders may surrender Securities in integral multiples of $1,000 principal
amount for conversion into shares of Common Stock in accordance with Article X
of the Indenture (a) prior to February 1, 2011 if and only if there
is a Change in Control, an Event of Default has occurred and is continuing or,
and to the extent which the Company elects to redeem the Securities in accordance
with Section 3.01(c)(i) of the Indenture and (b) at any
time on or after February 1, 2011 and prior to the close of business on
the Business Day immediately preceding the Maturity Date.

 

If (i) the Company
elects to redeem the Securities in accordance with Section 3.01(c)(i) of
the Indenture and (ii) a Security is converted in accordance with Article X
of the Indenture after the date the notice of Redemption is mailed and before
the Redemption Date, the Applicable Premium, plus accrued and unpaid interest,
if any, to, but excluding the Redemption Date, shall be paid on such Security.

 

To convert a Security, a
Holder must (1) complete and sign the Conversion Notice, with appropriate
signature guarantee, on the back of the Security, (2) surrender the Security
to a Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Registrar or Conversion Agent, (4) pay the
amount of interest, if any, the Holder must pay in accordance with the
Indenture and (5) pay any tax or duty if required pursuant to the
Indenture.  

 

A-6

 

A Holder may convert a
portion of a Security if the portion is $1,000 principal amount or an integral
multiple of $1,000 principal amount.

 

The initial Conversion Rate
is 72.9927 shares of Common Stock per $1,000 principal amount of Securities
(which results in an effective initial Conversion Price of approximately $13.70
per share) subject to adjustment in the event of certain circumstances as
specified in the Indenture.  The Company
will deliver cash in lieu of any fractional share.  Except as other otherwise provided herein or
in the Indenture, on conversion, no payment or adjustment for any unpaid and
accrued interest on, or any Liquidated Damages Amount with respect to, the
Securities will be made.  If a Holder
surrenders a Security for conversion after the close of business on the record
date for the payment of an installment of interest and prior to the related
interest payment date, such Security, when surrendered for conversion, must be
accompanied by cash payment of an amount equal to the interest thereon which
the registered Holder at the close of business on such record date is to
receive unless (i) the Company has specified a Redemption Date that is after
a Record Date but on or prior to the next Interest Payment Date, (ii) if
the Company has specified a Fundamental Change Repurchase Date that is after a
Record Date but on or prior to the next Interest Payment Date, or (iii) to
the extent of any overdue interest, if any overdue interest exists at the time
of conversion with respect to such Security.

 

The Conversion Rate
applicable to each Security that is surrendered for conversion, in accordance
with the Securities and Article X of the Indenture, at any time
from, and including, the effective date of a Make-Whole Fundamental Change
until, and including, the close of business on the Business Day immediately
preceding the Fundamental Change Repurchase Date corresponding to such
Make-Whole Fundamental Change, shall be increased to an amount equal to the
Conversion Rate that would, but for Section 10.15 of the Indenture,
otherwise apply to such Security pursuant to Article X of the
Indenture, plus an amount equal to the Make-Whole Conversion Rate Adjustment; provided,
however, that such increase to the Conversion Rate shall not apply if (i) such
Make-Whole Fundamental Change constitutes a Public Acquirer Fundamental Change
with respect to which the Company shall have duly made, and given full effect
to, an election, pursuant to and in accordance with Section 10.15(f) of
the Indenture, to make an Acquirer Stock Conversion Right Adjustment; (ii) such
Make-Whole Fundamental Change is announced by the Company but shall not be
consummated; or (iii) such Make-Whole Fundamental Change occurs on or
after October 1, 2013.

 

Until the expiration of the
holding period applicable to sales thereof under Rule 144 under the
Securities Act (or any successor provision), any stock certificate representing
shares of Common Stock issued upon conversion of any Security shall bear the
Common Stock Legend, unless such shares of Common Stock have been sold pursuant
to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such
transfer) or pursuant to Rule 144 under the Securities Act or any similar
provision then in force, or such shares of Common Stock have been issued upon
conversion of Securities that have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act or pursuant
to Rule 144 under the Securities Act, or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee.

 

11.           Denominations, Transfer,
Exchange.  The Securities
are in registered form, without coupons, in denominations of $1,000 principal
amount and integral multiples of $1,000 

 

A-7

 

principal
amount.  The transfer of Securities may
be registered and Securities may be exchanged as provided in the
Indenture.  The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents.  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 cover any tax or similar governmental
charge that may be imposed in connection with certain transfers or
exchanges.  The Company or the Trustee,
as the case may be, shall not be required to register the transfer of or
exchange any Security (i) during a period beginning at the opening of
business fifteen (15) days before the mailing of a notice of redemption of the
Securities selected for Redemption under Section 3.04 of the
Indenture and ending at the close of business on the day of such mailing or (ii) for
a period of fifteen (15) days before selecting, pursuant to Section 3.03
of the Indenture, Securities to be redeemed or (iii) that has been
selected for Redemption or for which a Purchase Notice has been delivered, and
not withdrawn, in accordance with the Indenture, except the unredeemed or
unrepurchased portion of Securities being redeemed or repurchased in part.

 

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

 

13.           Merger or Consolidation.  Except as provided in the Indenture, the
Company shall not consolidate with, or merge with or into, or sell, transfer,
lease, convey or otherwise dispose of all or substantially all of the property
or assets of the Company to, another person, whether in a single transaction or
series of related transactions, unless (A) either (i) such
transaction or series of transactions shall be a merger or consolidation where
the Company shall be the surviving corporation; or (ii) the surviving,
resulting or transferee person both (a) is a corporation organized and
existing under the laws of the United States, any State thereof or the District
of Columbia; and (b) assumes by supplemental indenture all the obligations
of the Company under the Securities and the Indenture; and (B) immediately
after giving effect to such transaction or series of transactions, no Default
or Event of Default shall exist.

 

14.           Amendments, Supplements and
Waivers.  Subject to certain exceptions,
the Indenture or the Securities may be amended or supplemented and certain
existing Defaults or Events of Default may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding.  In accordance with the
terms of the Indenture, the Company, with the consent of the Trustee, may amend
or supplement this Indenture or the Securities without notice to or the consent
of any Securityholder: (i) to comply with Sections 5.01 and 10.12
of the Indenture and, in accordance with Section 10.15(f) of
the Indenture, to give effect to an election, pursuant to such Section 10.15(f),
by the Company to make an Acquirer Stock Conversion Right Adjustment with
respect to a Public Acquirer Fundamental Change;(ii) to make any changes
or modifications to the Indenture necessary in connection with the registration
of the public offer and sale of the Securities under the Securities Act or the
qualification of the Indenture under the TIA; (iii) to secure the
obligations of the Company in respect of the Securities; (iv) to add to
the covenants of the Company described in the Indenture for the benefit of
Securityholders or to surrender any right or power conferred upon the Company; (v) to
make provision with respect to adjustments to the Conversion Rate as required
by the Indenture or to increase the Conversion Rate in accordance with the
Indenture; (vi) to add additional events that shall constitute an Event of
Default under the Indenture; (vii) to provide for a successor Trustee in
accordance with the Indenture; and (viii) if, at any time, the 

 

A-8

 

Securities
are in the form of Physical Securities, to provide for such Securities to be
held as Global Securities in addition to or in place of such Physical
Securities.  In addition, the Company and
the Trustee may enter into a supplemental indenture without the consent of
Holders of the Securities to (x) cure any ambiguity, defect, omission or
inconsistency in the Indenture in a manner that does not individually or in the
aggregate adversely affect the rights of any Holder in any material respect or (y) add
or modify any other provisions with respect to matters or questions arising
under the Indenture that the Company and the Trustee may deem necessary or
desirable and that shall not adversely affect the interests of the Holders of
the Securities in any material respect.

 

15.           Defaults and Remedies.  Subject to the provisions of the Indenture,
an “Event of Default” occurs if (i) the
Company defaults in the payment of the principal of, or premium, if any, on,
any Security when the same becomes due and payable, whether at maturity, upon
Redemption, on an Option Purchase Date with respect to a Purchase at Holder’s
Option, on a Fundamental Change Repurchase Date with respect to a Repurchase
Upon Fundamental Change or otherwise; (ii) the Company defaults in the
payment of an installment of interest or any Liquidated Damages Amount on any
Security when due, if such failure continues for thirty (30) days after the
date when due; (iii) the Company fails to satisfy its conversion
obligations upon exercise of a Holder’s conversion rights pursuant to the
Indenture; (iv) the Company fails to provide a Fundamental Change Notice
within 15 days after the occurrence of a Fundamental Change as required by the
provisions of the Indenture; (v) the Company fails to comply with any
other term, covenant or agreement set forth in the Securities or the Indenture
and such failure continues for the period, and after the notice, specified in
the Indenture; (vi) failure by the Company or any of its Subsidiaries to
pay when due at maturity, or a default that results in the acceleration of any
Indebtedness of the Company or its Subsidiaries (other than Indebtedness that
is nonrecourse to the Company or any of its Subsidiaries) in an aggregate
amount of $10,000,000 or more, unless such failure is cured or such
acceleration is rescinded, stayed or annulled within 30 days after written
notice to the Company from the Trustee or to the Company and the Trustee from
the Holders of at least twenty-five percent (25%) in aggregate principal amount
of the Securities then-outstanding has been received by the Company; (vii) the
Company or any of its Subsidiaries fails to pay any final judgments in excess
of $10,000,000 in the aggregate and such judgments remain outstanding for a
period of 15 days and are not discharged, bonded, waived or stayed within 15
days after the Trustee notifies the Company by written notice (or Holders of at
least twenty five (25%) in principal amount of the outstanding Securities
notify the Company and the Trustee by written notice); or (viii) there
occur certain events of bankruptcy or insolvency involving the Company or any
of its Significant Subsidiaries or any group of Subsidiaries that in the
aggregate would constitute a Significant Subsidiary of the Company.

 

If an Event of Default
(excluding an Event of Default specified in Section 6.01(viii) or
(ix) of the Indenture with respect to the Company (but including an Event
of Default specified in Section 6.01(viii) or (ix) of
the Indenture solely with respect to a Significant Subsidiary of the Company or
any group of Subsidiaries that in the aggregate would constitute a Significant
Subsidiary of the Company)) occurs and is continuing, the Trustee by written
notice to the Company or the Holders of at least twenty five percent (25%) in
principal amount of the Securities then outstanding by written notice to the
Company and the Trustee may declare the principal of, and any accrued and
unpaid interest, if any, and any premium on, all Securities to be 

 

A-9

 

immediately due and
payable.  Upon such declaration, the
principal of, and any premium and accrued and unpaid interest (including any
Liquidated Damages Amount) on, all Securities shall be due and payable
immediately.  If an Event of Default
specified in Section 6.01(viii) or (ix) of the
Indenture with respect to the Company (excluding, for purposes of this
sentence, an Event of Default specified in Section 6.01(viii) or
(ix) of the Indenture solely with respect to a Significant
Subsidiary of the Company or any group of Subsidiaries that in the aggregate
would constitute a Significant Subsidiary of the Company) occurs, the principal
of, and premium and accrued and unpaid interest (including any Liquidated
Damages Amount) on, all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.  The Holders
of a majority in aggregate principal amount of the Securities then outstanding
by written notice to the Trustee and the Company may rescind or annul an
acceleration and its consequences if (A) the rescission would not violate
any governmental or court order or decree, (B) all existing Events of
Default, except the nonpayment of principal, premium, if any, or interest that
has become due solely because of the acceleration, have been cured or waived
and (C) all amounts due to the Trustee under Section 7.07 of
the Indenture have been paid.

 

Holders may not enforce the
Indenture or the Securities except as provided in the Indenture.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture, is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability
unless the Trustee is offered indemnity reasonably satisfactory to it;
provided, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction.

 

If a Default or Event of
Default occurs and is continuing as to which the Trustee has received notice
pursuant to the provisions of the Indenture, or as to which a Responsible
Officer of the Trustee shall have actual knowledge, then the Trustee shall mail
to the Company and to each Holder a notice of the Default or Event of Default
within thirty (30) days after the Trustee has received such notice or after
such Responsible Officer shall have acquired such actual knowledge, whichever
is earlier, unless such Default or Event of Default has been cured or waived;
provided, however, that, except in the case of a Default or Event of Default in
payment of any amounts due with respect to any Security, the Trustee may withhold
such notice if, and so long as it in good faith determines that, withholding
such notice is in the best interests of Holders.  The Company must deliver to the Trustee an
annual compliance certificate.

 

16.           Trustee Dealings with the
Company.  The Trustee under the
Indenture, or any banking institution serving as successor Trustee thereunder,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for, the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.

 

17.           No Recourse Against Others.  No past, present or future director, officer,
employee or stockholder, as such, of the Company shall have any liability
for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder, by accepting a
Security, waives and 

 

A-10

 

releases
all such liability.  The waiver and
release are part of the consideration for the issue of the Securities.

 

18.           Authentication.  This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent
in accordance with the Indenture.

 

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

 

The company will furnish to any
holder upon written request and without charge a copy of the indenture.  Requests may be made to:

 

Toreador Resources Corporation

13760 Noel Road, Suite 1100

Dallas, TX 75240-1383

Attn: Chief Financial Officer

 

A-11

 

[Form of Assignment]

 

I or we assign to

 

Please Insert Social Security Or

Other Identifying Number

 

	
   

  	
   

  

 

	
   

  
	
   

  
	
   

  
	
  (please
  print or type name and address)

  

 

the within Security and all
rights thereunder, and hereby irrevocably constitute and appoint Attorney to
transfer the Security on the books of the Company with full power of
substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature on
  this assignment must correspond with the name as it appears upon the face of
  the within Security in every particular without alteration or enlargement or
  any change whatsoever and be guaranteed by a guarantor institution
  participating in the Securities Transfer Agents Medallion Program or in such
  other guarantee program acceptable to the Trustee.

  

 

	
  Signature Guarantee:

  	
   

  

 

A-12

 

In connection with any
transfer of this Security occurring prior to the expiration of the holding
period applicable to sales thereof under Rule 144 under the Securities Act
(or any successor provision), unless such Security has been sold pursuant to a
registration statement that has been declared effective under the Securities
Act (and which continues to be effective at the time of such transfer) or
pursuant to Rule 144 under the Securities Act or any similar provision
then in force, the undersigned confirms that it is making, and it has not
utilized any general solicitation or general advertising in connection with,
the transfer:

 

[Check
One]

 

(1)               o  to
the Company or any Subsidiary thereof, or

 

(2)               o  pursuant
to a registration statement that has become effective under the Securities Act
of 1933, as amended, or

 

(3)               o  to
a “qualified institutional buyer” in compliance with Rule 144A under the
Securities Act of 1933, as amended, or

 

(4)               o  pursuant
to an exemption from registration provided by Rule 144 under the
Securities Act of 1933, as amended, or any other available exemption from the
registration requirements of the Securities Act of 1933,

 

and, the undersigned
confirms that this Security is not being transferred to an “affiliate” of the
Company (an “Affiliate”) as defined in Rule 144
under the Securities Act of 1933, as amended.

 

Unless one of the items (1) through
(4) is checked, the Trustee will refuse to register any of the Securities evidenced
by this certificate in the name of any person other than the registered Holder
thereof; provided, however, that if item (4) is checked, the Company and
the Trustee reserve the right to require the delivery of such legal opinions,
certifications or other evidence as may reasonably be required in order to
determine that the proposed transfer is being made in compliance with the
Securities Act of 1933, as amended and applicable state securities laws.  If item (3) is checked, the purchaser
must complete the certification below.

 

If none of the foregoing
items are checked, the Trustee or Registrar shall not be obligated to register
this Security in the name of any person other than the Holder hereof unless and
until the conditions to any such transfer of registration set forth herein and
in the Indenture shall have been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as name appears on

    the other side of this Security)

  

 

	
  Signature Guarantee:

  	
   

  

 

A-13

 

To be Completed by Purchaser if (3) Above
is Checked

 

The undersigned represents
and warrants that it is purchasing this Security for its own account or an
account with respect to which it exercises sole investment discretion and that
it and any such account is a “qualified institutional buyer” within the meaning
of Rule 144A under the Securities Act of 1933, as amended, and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A and acknowledges that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE: To be executed by
  an executive officer

  

 

A-14

 

Conversion Notice

 

To convert this Security in
accordance with the Indenture, check the box: o

 

To convert only part of this
Security, state the principal amount to be converted (must be in multiples of
$1,000):

 

	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  

 

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

 

	
   

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

  

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

	
   

  

 

	
  Date:

  	
   

  	
   

  	
  Signature(s):

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name(s) appear(s) on

  the other side of this Security)

  

 

	
  Signature(s) guaranteed
  by:

  	
   

  
	
   

  	
  (All signatures must be
  guaranteed by a guarantor institution participating in the Securities
  Transfer Agents Medallion Program or in such other guarantee program
  acceptable to the Trustee.)

  

 

A-15

 

PURCHASE
NOTICE

 

	
  Certificate No. of Security:

  	
   

  	
   

  

 

If you want to elect to have
this Security purchased by the Company pursuant to Section 3.08 of
the Indenture, check the box: o

 

If you want to elect to have
this Security purchased by the Company pursuant to Section 3.09 of
the Indenture, check the box: o

 

If you want to elect to have
only part of this Security purchased by the Company pursuant to Sections
3.08 or 3.09 of the Indenture, as applicable, state the principal
amount to be so purchased by the Company:

 

	
   

  	
  $

  	
   

  	
   

  

(in an integral multiple of
$1,000)

 

	
  Date:

  	
   

  	
   

  	
  Signature(s):

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign
  exactly as your name(s) appear(s) on

  the other side of this Security)

  

 

	
  Signature(s) guaranteed
  by:

  	
   

  
	
   

  	
  (All signatures must be
  guaranteed by a guarantor institution participating in the Securities
  Transfer Agents Medallion Program or in such other guarantee program
  acceptable to the Trustee.)

  

 

A-16

 

Schedule A

 

Schedule of Exchanges of Interests in the Global Security(1)

 

The following exchanges of a part of this Global
Security for an interest in another Global Security or for Securities in
certificated form, have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of decrease

  in Principal amount

  of this Global

  Security

  	
   

  	
  Amount of Increase

  in Principal amount

  of this Global

  Security

  	
   

  	
  Principal amount of

  this Global Security

  following such

  decrease or increase

  	
   

  	
  Signature or

  authorized signatory

  of Trustee or Note

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1) This is included in
Global Securities only.

 

A-17

 

EXHIBIT B-1

 

FORM OF RESTRICTED SECURITIES LEGEND

 

THIS SECURITY AND THE COMMON
STOCK, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER:

 

(1)           REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS
ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH
RESPECT TO EACH SUCH ACCOUNT, AND

 

(2)           AGREES FOR THE BENEFIT OF TOREADOR RESOURCES
CORPORATION (“THE COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER
OF (X) ONE YEAR AFTER THE DATE OF THE LAST ORIGINAL ISSUANCE OF THIS
SECURITY AND (Y) NINETY (90) DAYS AFTER IT CEASES TO BE AN AFFILIATE
(WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY,
EXCEPT ONLY:

 

(A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

 

(B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT,
OR

 

(C) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, OR

 

(D) PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF
ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE
RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

 

B-1-1

 

FORM OF COMMON STOCK LEGEND

 

THESE SHARES OF COMMON STOCK
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER:

 

(1)           REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS
ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH
RESPECT TO EACH SUCH ACCOUNT, AND

 

(2)           AGREES FOR THE BENEFIT OF TOREADOR RESOURCES
CORPORATION (“THE COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE
TRANSFER THESE SHARES OF COMMON STOCK OR ANY BENEFICIAL INTEREST HEREIN PRIOR
TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE DATE OF THE LAST
ORIGINAL ISSUANCE OF THIS SECURITY AND (Y) NINETY (90) DAYS AFTER IT
CEASES TO BE AN AFFILIATE (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES
ACT) OF THE COMPANY, EXCEPT ONLY:

 

(A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

 

(B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT,
OR

 

(C) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, OR

 

(D) PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF
ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE
RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

 

B-1-2

 

EXHIBIT B-2

 

FORM OF LEGEND FOR GLOBAL SECURITY

 

Any Global Security authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required
in the case of a Restricted Security) in substantially the following form:

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY.  THIS SECURITY IS NOT EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

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.  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE
INDENTURE.

 

B-2-1

 

EXHIBIT C

 

Form of Notice of Transfer Pursuant to Registration
Statement

 

Toreador Resources Corporation

13760 Noel Road, Suite 1100

Dallas, TX 75240-1383

Attention: Chief Financial Officer

 

The Bank of New York Mellon Corporation

Attn: Corporate Trust Operations

101 Barclay Street- 7 East

New York, NY 10286

Fax: (212) 29801915

 

	
  Re:

  	
   

  	
  Toreador Resources
  Corporation (the “COMPANY”) 8.00%/7.00% Convertible Senior Notes due 2025
  (the “SECURITIES”)

  

 

Ladies and Gentlemen:

 

Please be advised that                           
has transferred $                      
aggregate principal amount of the Securities and                 
shares of the Common Stock, $0.15625 par value per share, of the Company issued
on conversion of the Securities (“STOCK”) pursuant to an effective Shelf
Registration Statement on Form S-3 (File No. 333-                ).

 

We hereby certify that the
prospectus delivery requirements, if any, of the Securities Act of 1933 as
amended, have been satisfied with respect to the transfer described above and
that the above-named beneficial owner of the Securities or Stock is named as a “Selling
Security Holder” in the Prospectus dated
                  ,
or in amendments or supplements thereto, and that the aggregate principal
amount of the Securities and the number of shares of Stock transferred are [a
portion of] the Securities and Stock listed in such Prospectus, as amended or
supplemented, opposite such owner’s name.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name)

  

 

C-1

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