Document:

exv4w1

 

Exhibit 4.1

PARKER DRILLING COMPANY

and

THE GUARANTORS FROM TIME TO TIME PARTY HERETO

2.125% Convertible Senior Notes Due 2012

 

INDENTURE

Dated as of July 5, 2007

 

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

TRUSTEE

 

 

 

Cross-Reference Table 1

Trust Indenture Act Section Indenture Section

	 	 	 	 	 
	310

	 	(a)(1)
	 	7.10
	 

	 	(a)(2)
	 	7.10
	 

	 	(a)(3)
	 	N.A.
	 

	 	(a)(4)
	 	N.A.
	 

	 	(a)(5)
	 	N.A.
	 

	 	(b)
	 	7.08,7.10
	 

	 	(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)
	 	4.02
	 

	 	(b)
	 	N.A.
	 

	 	(c)(1)
	 	11.04
	 

	 	(c)(2)
	 	11.04
	 

	 	(c)(3)
	 	N.A.
	 

	 	(d)
	 	N.A.
	 

	 	(e)
	 	11.05
	 

	 	(f)
	 	4.04
	315

	 	(a)
	 	7.01(b)
	 

	 	(b)
	 	7.05
	 

	 	(c)
	 	7.01(a)
	 

	 	(d)
	 	7.01(c)
	 

	 	(e)
	 	6.11
	316

	 	(a)(1)(A)
	 	6.05
	 

	 	(a)(1)(B)
	 	6.04
	 

	 	(a)(2)
	 	N.A.
	 

	 	(b)
	 	6.07
	 

	 	(c)
	 	1.05(e)
	317

	 	(a)(1)
	 	6.08
	 

	 	(a)(2)
	 	6.09
	 

	 	(b)
	 	2.04
	318

	 	(a)
	 	11.01

 

			
	 	 	N.A. means not applicable.
	 
	1	 	This Cross-Reference Table is not part of the Indenture.

i

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE 1

	Definitions and Incorporation by Reference

	 
	 	 	 	 	 	 
	Section 1.01
	 	Definitions	 	 	1	 
	Section 1.02
	 	Other Definitions	 	 	10	 
	Section 1.03
	 	Incorporation by Reference of Trust Indenture Act	 	 	11	 
	Section 1.04
	 	Rules of Construction	 	 	12	 
	Section 1.05
	 	Acts of Holders	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE 2

	The Securities

	 
	 	 	 	 	 	 
	Section 2.01
	 	Form and Dating	 	 	14	 
	Section 2.02
	 	Execution and Authentication	 	 	14	 
	Section 2.03
	 	Registrar, Paying Agent, Bid Solicitation Agent and Conversion Agent	 	 	15	 
	Section 2.04
	 	Paying Agent to Hold Money and Securities in Trust	 	 	16	 
	Section 2.05
	 	Securityholder Lists	 	 	16	 
	Section 2.06
	 	Transfer and Exchange	 	 	16	 
	Section 2.07
	 	Replacement Securities	 	 	17	 
	Section 2.08
	 	Outstanding Securities; Determinations of Holders’ Action	 	 	18	 
	Section 2.09
	 	Temporary Securities	 	 	19	 
	Section 2.10
	 	Cancellation	 	 	19	 
	Section 2.11
	 	Persons Deemed Owners	 	 	19	 
	Section 2.12
	 	CUSIP Numbers	 	 	20	 
	Section 2.13
	 	Payment	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE 3

	Redemption and Repurchases

	 
	 	 	 	 	 	 
	Section 3.01
	 	Optional Redemption upon a Specified Accounting Change; Make Whole Premium upon a Specified Accounting Change	 	 	20	 
	Section 3.02
	 	Repurchase of Securities at Option of the Holder upon a Fundamental Change	 	 	22	 
	Section 3.03
	 	Effect of Fundamental Change Repurchase Notice	 	 	26	 
	Section 3.04
	 	Deposit of Fundamental Change Repurchase Price	 	 	26	 
	Section 3.05
	 	Securities Purchased in Part	 	 	27	 
	Section 3.06
	 	Covenant to Comply with Securities Laws upon Purchase of Securities	 	 	27	 
	Section 3.07
	 	Repayment to the Company	 	 	27	 
	 
	 	 	 	 	 	 
	ARTICLE 4

	Covenants

	 
	 	 	 	 	 	 
	Section 4.01
	 	Payment of Securities	 	 	27	 
	Section 4.02
	 	SEC and Other Reports	 	 	28	 

ii

 

	 	 	 	 	 	 	 
	Section 4.03
	 	Compliance Certificate	 	 	28	 
	Section 4.04
	 	Further Instruments and Acts	 	 	28	 
	Section 4.05
	 	Maintenance of Office or Agency	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE 5

	Successor Company

	 
	 	 	 	 	 	 
	Section 5.01
	 	When Company May Merge or Transfer Assets	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE 6

	Defaults and Remedies

	 
	 	 	 	 	 	 
	Section 6.01
	 	Events of Default	 	 	30	 
	Section 6.02
	 	Acceleration	 	 	32	 
	Section 6.03
	 	Other Remedies	 	 	33	 
	Section 6.04
	 	Waiver of Past Defaults	 	 	33	 
	Section 6.05
	 	Control by Majority	 	 	33	 
	Section 6.06
	 	Limitation on Suits	 	 	34	 
	Section 6.07
	 	Rights of Holders to Receive Payment	 	 	34	 
	Section 6.08
	 	Collection Suit by Trustee	 	 	34	 
	Section 6.09
	 	Trustee May File Proofs of Claim	 	 	34	 
	Section 6.10
	 	Priorities	 	 	35	 
	Section 6.11
	 	Undertaking for Costs	 	 	36	 
	Section 6.12
	 	Waiver of Stay, Extension or Usury Laws	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE 7

	Trustee

	 
	 	 	 	 	 	 
	Section 7.01
	 	Duties of Trustee	 	 	36	 
	Section 7.02
	 	Rights of Trustee	 	 	38	 
	Section 7.03
	 	Individual Rights of Trustee	 	 	39	 
	Section 7.04
	 	Trustee's Disclaimer	 	 	40	 
	Section 7.05
	 	Notice of Defaults	 	 	40	 
	Section 7.06
	 	Reports by Trustee to Holders	 	 	40	 
	Section 7.07
	 	Compensation and Indemnity	 	 	40	 
	Section 7.08
	 	Replacement of Trustee	 	 	41	 
	Section 7.09
	 	Successor Trustee by Merger	 	 	43	 
	Section 7.10
	 	Eligibility; Disqualification	 	 	43	 
	Section 7.11
	 	Preferential Collection of Claims Against Company	 	 	43	 
	 
	 	 	 	 	 	 
	ARTICLE 8

	Discharge of Indenture

	 
	 	 	 	 	 	 
	Section 8.01
	 	Discharge of Liability on Securities	 	 	43	 
	Section 8.02
	 	Repayment to the Company	 	 	43	 
	Section 8.03
	 	Application of Trust Money	 	 	44	 

iii

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ARTICLE 9

	Amendments

	 
	 	 	 	 	 	 
	Section 9.01
	 	Without Consent of Holders	 	 	44
	 
	Section 9.02
	 	With Consent of Holders	 	 	45	 
	Section 9.03
	 	Compliance With Trust Indenture Act	 	 	46	 
	Section 9.04
	 	Revocation and Effect of Consents, Waivers and Actions	 	 	47	 
	Section 9.05
	 	Notice of Amendments, Notation on or Exchange of Securities	 	 	47	 
	Section 9.06
	 	Trustee to Sign Supplemental Indentures	 	 	47	 
	Section 9.07
	 	Effect of Supplemental Indentures	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE 10

	Conversions

	 
	 	 	 	 	 	 
	Section 10.01
	 	Conversion Privilege	 	 	47	 
	Section 10.02
	 	Conversion Procedure; Applicable Conversion Rate; Fractional Shares	 	 	51	 
	Section 10.03
	 	Payment upon Conversion	 	 	53	 
	Section 10.04
	 	Adjustment of Applicable Conversion Rate	 	 	54	 
	Section 10.05
	 	Reserved	 	 	62	 
	Section 10.06
	 	Effect of Reclassification, Consolidation, Merger or Sale	 	 	63	 
	Section 10.07
	 	Taxes on Shares Issued	 	 	64	 
	Section 10.08
	 	Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental Requirements	 	 	65	 
	Section 10.09
	 	Responsibility of Trustee	 	 	65	 
	 
	 	 	 	 	 	 
	ARTICLE 11

	Subsidiary Guarantees

	 
	 	 	 	 	 	 
	Section 11.01
	 	Subsidiary Guarantee	 	 	66	 
	Section 11.02
	 	Subordination on Guarantor Liability	 	 	67	 
	Section 11.03
	 	Guarantors May Consolidate, etc., on Certain Terms	 	 	67	 
	Section 11.04
	 	Releases of Subsidiary Guarantee	 	 	68	 
	Section 11.05
	 	Additional Subsidiary Guarantees	 	 	68	 
	 
	 	 	 	 	 	 
	ARTICLE 12

	Miscellaneous

	 
	 	 	 	 	 	 
	Section 12.01
	 	Trust Indenture Act Controls	 	 	69	 
	Section 12.02
	 	Notices	 	 	69	 
	Section 12.03
	 	Communication by Holders with Other Holders	 	 	70	 
	Section 12.04
	 	Certificate and Opinion as to Conditions Precedent	 	 	70	 
	Section 12.05
	 	Statements Required in Certificate or Opinion	 	 	70	 
	Section 12.06
	 	Separability Clause	 	 	71	 
	Section 12.07
	 	Rules by Trustee, Paying Agent, Conversion Agent and Registrar	 	 	71	 
	Section 12.08
	 	Legal Holidays	 	 	71	 
	Section 12.09
	 	Governing Law	 	 	71	 
	Section 12.10
	 	No Recourse Against Others	 	 	71	 

iv

 

	 	 	 	 	 	 	 
	Section 12.11
	 	Successors	 	 	72	 
	Section 12.12
	 	Multiple Originals	 	 	72	 
	 
	 	 	 	 	 	 
	EXHIBIT A
	 	Form of Global Security	 	 	 	 
	EXHIBIT B
	 	Form of Certificated Security	 	 	 	 
	EXHIBIT C
	 	Notice of Occurrence of Fundamental Change	 	 	 	 
	 
	 	 	 	 	 	 
	SCHEDULE I Number of Additional Shares

v

 

     INDENTURE dated as of July 5, 2007 among PARKER DRILLING COMPANY, a Delaware corporation
(“Company”), the subsidiary guarantors from time to time parties hereto (collectively, the
“Guarantors”) and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association
(“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 2.125% Convertible Senior Notes Due 2012:

ARTICLE 1

Definitions and Incorporation by Reference

     Section 1.01 Definitions.

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

     “Applicable Conversion Price” means, at any given time, $1,000 divided by the Applicable
Conversion Rate at such time.

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

     “Bid Solicitation Agent” means the agent of the Company appointed to obtain quotations for the
Securities as set forth under the definition of Trading Price, which agent shall initially be the
Trustee. The Company may, from time to time, change the Bid Solicitation Agent.

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

     “Board Resolution” means a resolution of the Board of Directors.

 

 

     “Business Day” means, with respect to any Security, any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close in the City of New York.

     “Capital Stock” for any corporation means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
stock issued by that corporation.

     “cash” means U.S. legal tender.

     “Cash Settlement Averaging Period” with respect to any Security means the 20 consecutive
Trading Days beginning on the third Trading Day after the Conversion Date for such Security, except
that (i) with respect to any Security with a Conversion Date occurring on or after June 1, 2012,
the Cash Settlement Averaging Period means the 20 consecutive Trading Days beginning on, and
including, the 22nd Scheduled Trading Day before Stated Maturity and (ii) with respect to any
Security converted in connection with an optional redemption upon a Specified Accounting Change,
the 20 consecutive Trading Days beginning on the Trading Day following the Redemption Date.

     “Certificated Securities” means Securities that are in the form of the Securities attached
hereto as Exhibit B.

     “close of business” means 5:00 p.m. (New York City time).

     “Closing Sale Price” of the Common Stock on any date means the closing sale price per share
(or, if no closing sale price is reported, the average of the bid and asked prices or, if more than
one in either case, the average of the average bid and the average asked prices) on such date as
reported by the New York Stock Exchange or, if the Common Stock is not reported by the New York
Stock Exchange, in composite transactions for the principal U.S. national or regional securities
exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a
U.S. national or regional securities exchange, the closing sale price will be the last quoted bid
price for the Common Stock in the over-the-counter market on the relevant date as reported by the
National Quotation Bureau Incorporated or similar organization. If the Common Stock is not so
quoted, the closing sale price will be the average of the mid-point of the last bid and asked
prices for the Common Stock on the relevant date from each of at least three independent nationally
recognized investment banking firms selected by the Company for this purpose.

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

2

 

     “Common Stock” means the common stock, par value $0.16 2/3  per share, of
the Company existing on the date of this Indenture or any other shares of Capital Stock of the
Company into which such Common Stock shall be reclassified or changed, including, subject to
Section 10.06 below, in the event of a merger, consolidation or other similar transaction involving
the Company that is otherwise permitted hereunder in which the Company is not the surviving Person,
the common stock of such surviving corporation.

     “Company” means the party named as the “Company” in the preamble of this Indenture until a
successor replaces it pursuant to the applicable provisions of this Indenture and, thereafter,
shall mean such successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.

     “Company Notice” means a notice to Holders delivered pursuant to Section 3.02.

     “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by any Officer.

     “Continuing Director” means a director who either was a member of the Board of Directors on
the date of original issuance of the Securities or who becomes a member of the Board of Directors
subsequent to that date and whose appointment, election or nomination for election by the Company’s
stockholders is duly approved by a majority of the Continuing Directors on the Board of Directors
at the time of such approval, either by specific vote or by approval of the proxy statement issued
by the Company on behalf of the Board of Directors in which such individual is named as nominee for
director, it being understood that any director appointed or nominated to fill a vacancy on the
Board of Directors (without regard to the cause of such vacancy) by any Continuing Director shall
be deemed a Continuing Director until the next annual meeting of the Company’s stockholders at
which directors are elected.

     “Conversion Settlement Date” means (A) in the event the Company has not validly made a
Physical Settlement Election, with respect to the Settlement Amount owing by the Company as set
forth in Section 10.03(a), the third Business Day immediately following the date that the
Settlement Amount is determined and (B) with respect to Settlement Shares owing by the Company in
the event the Company has validly made a Physical Settlement Election as set forth in Section
10.03(b), the third Business Day immediately following the Conversion Date for such Securities,
except that (i) in respect of Securities with a Conversion Date on or after June 1, 2012, the
Conversion Settlement Date shall be on Stated Maturity and (ii) in respect of Securities as to
which Additional Shares will be added to the Applicable Conversion Rate pursuant to Section
10.01(c) with a Conversion Date prior to June 1, 2012, the Conversion Settlement Date for the
Settlement Shares (other than the Additional Shares) shall be the third Business Day following the
Conversion Date, and the Conversion Settlement Date for the Additional Shares shall be the later of
(x) the third Business Day following the Conversion Date and (y) the relevant effective date
described in Section 10.01(c) on which the number of Additional Shares is determined.

3

 

     “Corporate Trust Office” means the designated office of the Trustee at which at any time its
corporate trust business shall be principally administered, which office at the date hereof is
located at 601 Travis, 18th Floor, Houston, Texas 77022, or such other address as the
Trustee may designate from time to time by notice to the Holders and the Company, or the principal
corporate trust office of any successor Trustee (or such other address as a successor Trustee may
designate from time to time by notice to the Holders and the Company).

     “Daily Conversion Value” on each of the 20 consecutive Trading Days during the Cash Settlement
Averaging Period, one-twentieth (1/20) of the product of (1) the Applicable Conversion Rate on such
Trading Day and (2) the Daily VWAP on such day.

     “Daily VWAP” means, for each of the 20 consecutive Trading Days during the Cash Settlement
Averaging Period, the per share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page “PKD.N <equity> AQR” (or its equivalent successor if such
page is not available) in respect of the period from scheduled open of trading until the scheduled
close of trading of the primary trading session on that Trading Day (or if such volume-weighted
average price is unavailable, the market value of one share of the Common Stock on that Trading Day
determined, using a volume-weighted average method, by a nationally recognized independent
investment banking firm retained for this purpose by the Company). The Daily VWAP will be
determined without regard to after hours trading or any other trading outside of the regular
trading session trading hours.

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

     “Depositary” means, with respect to the Securities issuable or issued in whole or in part in
global form, DTC and any and all successors thereto appointed as depositary hereunder and having
become such pursuant to the applicable provision of this Indenture.

     “DTC” means The Depository Trust Company.

     “Ex-Dividend Date” means the first date upon which a sale of the Common Stock, regular way on
the relevant exchange or in the relevant market for the Common Stock, does not automatically
transfer the right to receive the relevant distribution from the seller of the Common Stock to its
buyer.

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

     “Fair Market Value” or “fair market value” means the amount which a willing buyer would pay a
willing seller in an arm’s-length transaction.

4

 

     “Fundamental Change” means the occurrence at such time after the original issuance of the
Securities when any of the following has occurred:

     (1) a “Person” or “group” within the meaning of Section 13(d)(3) of the Exchange Act files a
Schedule TO or any schedule, form or report under the Exchange Act disclosing that such Person or
group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, of shares of Common Stock representing more than 50% of the Voting Stock; or

     (2) the first day on which a majority of the members of the Board of Directors does not
consist of Continuing Directors; or

     (3) a consolidation, merger or binding share exchange, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of the Company’s properties and assets to
another Person, or any other transaction pursuant to which all or substantially all of the Common
Stock is exchanged for or converted into cash, securities or other property, in each case other
than:

(a) any transaction (i) that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the Company’s Capital Stock or
(ii) pursuant to which holders of the Company’s Capital Stock immediately prior to
such transaction have the entitlement to exercise, directly or indirectly, 50% or
more of the total Voting Stock of the continuing or surviving or successor Person
immediately after giving effect to such issuance; or

(b) any merger, share exchange, transfer of assets or similar transaction solely for
the purpose of changing the Company’s jurisdiction of incorporation and resulting in
a reclassification, conversion or exchange of outstanding shares of Common Stock, if
at all, solely into shares of common stock, or ordinary shares or common equity
interests of the surviving entity or a direct or indirect parent of the surviving
corporation; or

(c) any consolidation, merger, conveyance, transfer, sale, lease or other
disposition with or into or among any Subsidiary, so long as such merger,
consolidation, conveyance, transfer, sale, lease or other disposition is not part of
a plan or a series of transactions designed to or having the effect of merging or
consolidating with any other Person(other than one or more of Subsidiary); or

     (4) a Termination of Trading.

     The term “Person” as used in this definition includes any syndicate or group that would be
deemed to be a “Person” under Section 13(d)(3) of the Exchange Act.

5

 

     “Global Securities” means Securities that are in the form of the Securities attached hereto as
Exhibit A, and that are registered in the register of Securities in the name of a
Depositary or a nominee thereof.

     “Guarantors” means each of the Subsidiaries of the Company that guarantees the Company’s 95/8%
senior notes due 2013.

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

     “Indenture” means this Indenture, as amended or supplemented from time to time in accordance
with the terms hereof, including the provisions of the TIA that are deemed to be a part hereof.

     “Interest” means interest payable on each Security pursuant to Section 1 of the Securities.

     “Interest Payment Date” means January 15 and July 15 of each year, commencing January 15,
2008.

     “Interest Record Date” means January 1 and July 1 of each year.

     “Issue Date” of any Security means the date on which the Security was originally issued or
deemed issued as set forth on the face of the Security.

     “Market Disruption Event” means, for the purposes of determining the Settlement Amount, (i) a
failure by New York Stock Exchange or, if the Common Stock is not then listed on New York Stock
Exchange, by the principal other U.S. national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional
securities exchange, by the principal other market on which the Common Stock is then traded, to
open for trading during its regular trading session, or (ii) the occurrence or existence before
1:00 p.m., New York City time, on any Trading Day for the Common Stock for an aggregate one half
hour period of any suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any
options, contracts or future contracts relating to the Common Stock.

     “Officer” means the Chairman of the Board, the President, any Executive Vice President, Senior
Vice President or Vice President, the Chief Financial Officer, the Treasurer, the principal
accounting officer, the Controller, or the Secretary of the Company.

6

 

     “Officer’s Certificate” means a written certificate containing the information specified in
Sections 12.04 and 12.05, signed in the name of the Company by any Officer (solely in his or her
capacity as such), and delivered to the Trustee. An Officer’s Certificate given pursuant to Section
4.03 shall be signed by the principal executive officer, principal financial officer or principal
accounting officer of the Company but need not contain the information specified in Sections 12.04
and 12.05.

     “opening of business” means 9:00 a.m. (New York City time).

     “Opinion of Counsel” means a written opinion containing the information specified in Sections
11.04 and 11.05, from legal counsel. The counsel may be an employee of, or counsel to, the Company
who is reasonably acceptable to the Trustee.

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

     “Physical Settlement Election” means the irrevocable election by the Company prior to April
15, 2012, to satisfy its Conversion Obligation in respect of conversions of Securities with a
Conversion Date after the Physical Settlement Election Date solely in shares of Common Stock (plus
cash in lieu of fractional shares) in accordance with Section 10.03(b) hereof.

     “Physical Settlement Election Date” means the date on which a Physical Settlement Election
Notice is delivered to the Trustee and Holders.

     “Physical Settlement Election Notice” means a written notice of a Physical Settlement Election
provided by the Company to the Trustee and each Holder of Securities.

     “Prospectus” means the prospectus of the Company dated June 28, 2007 relating to the offering
of the Securities.

     “Public Acquirer Change in Control” means a Fundamental Change in which the acquirer has a
class of common stock traded on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Global Select Market or the Nasdaq Global Market or which will be so traded or quoted when
issued or exchanged in connection with such Fundamental Change (“Public Acquirer Common Stock”). If
an acquirer does not itself have a class of common stock satisfying the foregoing requirement, it
will be deemed to have Public Acquirer Common Stock if a company that directly or indirectly owns
at least a majority of the acquirer has a class of common stock satisfying the foregoing
requirement, in such case, all references to Public Acquirer Common Stock shall refer to such class
of common stock. Majority owned for these purposes means having “beneficial ownership” (as
determined in accordance with Rule 13d-3

7

 

under the Exchange Act) of more than 50% of the total voting power of all shares of the
respective entity’s capital stock that are entitled to vote generally in the election of directors.

     “Public Acquirer Common Stock” has the meaning specified in the definition of Public Acquirer
Change in Control.

     “Record Date” shall mean, with respect to any dividend, distribution or other transaction or
event in which the holders of Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security) is exchanged for or converted
into any combination of cash, securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other property (whether such date is
fixed by the Board of Directors or by statute, contract or otherwise).

     “Responsible Officer” means, when used with respect to the Trustee, any officer of the Trustee
within the Corporate Trust Office of the Trustee who has direct responsibility for the
administration of this Indenture and, for the purposes of Section 7.01(c)(2) and 7.05 shall also
mean any other officer of the Trustee to whom any corporate trust matter is referred because of
such Person’s knowledge of and familiarity with the particular subject matter.

     “Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the primary U.S.
national or regional securities exchange or market on which the Common Stock is listed or admitted
to trading.

     “SEC” means the Securities and Exchange Commission.

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

     “Security” means any of the Company’s 2.125% Convertible Senior Notes Due 2012, as amended or
supplemented from time to time, issued under this Indenture.

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

     “Significant Subsidiary” means any Subsidiary of the Company that is a significant subsidiary
at any determination date pursuant to Regulation S-X, Rule 1-02(w).

     “Specified Accounting Change” means any changes in generally accepted accounting principles
applicable to any net share settled Securities that require the Company to separately

8

 

account for the liability and equity components of the Securities, cause the Securities to be
re-measured at fair value with changes reported in earnings as they occur, cause Securities to be
treated under the if-converted method for earnings per share or otherwise cause an adverse
accounting impact on the Company’s results of operations solely as a result of having issued the
Securities; provided that the Company’s Board of Directors determines, in its sole discretion, that
such impact is material.

     “Stated Maturity”, when used with respect to any Security, means July 15, 2012.

     “Stock Price” means the price per share of Common Stock paid in connection with a Fundamental
Change transaction pursuant to which Additional Shares will be added to the Applicable Conversion
Rate as set forth in Section 10.01(c) hereof, which shall be equal to (i) if Holders of Common
Stock receive only cash in such Fundamental Change transaction, the cash amount paid per share of
Common Stock and (ii) in all other cases, the average of the Closing Sale Prices of the Common
Stock on the five Trading Days immediately before, but not including, the effective date of such
Fundamental Change transaction.

     “Subsidiary” means any Person of which at least a majority of the outstanding Voting Stock
shall at the time directly or indirectly be owned or controlled by the Company or by one or more
Subsidiaries or by the Company and one or more Subsidiaries.

     “Subsidiary Guarantee” means any guarantee by a Guarantor of the Company’s payment obligations
under this Indenture and on the Securities, executed pursuant to the provisions of this Indenture.

     “Termination of Trading” means the occurrence, at any time, of the Common Stock of the Company
(or other common stock into which the Securities are then convertible) not being listed for trading
on a U.S. national or regional securities exchange.

     “TIA” means the Trust Indenture Act of 1939 as in effect on the date of this Indenture,
provided, however, that in the event the TIA is amended after such date, TIA means, to the extent
required by any such amendment, the TIA as so amended.

     “Trading Day” means a day on which (i) trading in securities generally occurs on the New York
Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, on the
principal other U.S. national or regional securities exchange on which the Common Stock is then
listed or, if the Common Stock is not then listed on a U.S. national or regional securities
exchange, in the principal other market on which the Common Stock is then traded and (ii) a Closing
Sale Price for the Common Stock is available on such securities exchange or market; provided that
for the purposes of determining the amount of payment upon conversion only, “Trading Day” means a
day on which (i) there is no Market Disruption Event

9

 

and (ii) trading generally in the Common Stock occurs on the New York Stock Exchange or, if
the Common Stock is not then listed on the New York Stock Exchange, on the principal other U.S.
national or regional securities exchange on which the Common Stock is then listed or, if the Common
Stock is not then listed on a U.S. national or regional securities exchange, in the principal other
market on which the Common Stock is then traded. If the Common Stock (or other security for which a
Closing Sale Price or Daily VWAP, as applicable, must be determined) is not so traded, “Trading
Day” means a Business Day.

     “Trading Price” of the Securities on any date of determination means the average of the
secondary market bid quotations obtained by the Bid Solicitation Agent for $5,000,000 aggregate
principal amount of the notes at approximately 3:30 p.m., New York City time, on the determination
date from three independent nationally recognized securities dealers the Company selects, provided
that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent, but two such
bids are obtained, then the average of the two bids will be used; and only one such bid can
reasonably be obtained by the Bid Solicitation Agent, that one bid will be used; provided further,
that if no bids can reasonably be obtained with respect to any date, then for purposes of
determining whether the trading price condition has been met, the trading price per $1,000
principal amount of the Securities will be deemed to be less than 98% of the product of the Closing
Sale Price of the Common Stock and the applicable conversion rate of the Securities on that day.

     “Trustee” means the party named as the “Trustee” in the preamble of this Indenture unless and
until a successor replaces it pursuant to the applicable provisions of this Indenture and,
thereafter, shall mean such successor. The foregoing sentence shall likewise apply to any
subsequent such successor or successors.

     “Underwriting Agreement” means the Underwriting Agreement, dated as of June 28, 2007, between
the Company and Banc of America Securities LLC, as representative of the several underwriters,
relating to the Securities.”

     Voting Stock” of a Person means Capital Stock of such Person of the class or classes pursuant
to which the holders thereof have the general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of such Person (irrespective of
whether or not at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

     Section 1.02 Other Definitions.

	 	 	 
	Terms:	 	Defined in Section:
	“Act”

	 	1.05(a)
	“Additional Interest”

	 	6.01(k)
	“Additional Shares”

	 	10.01(c)
	“Applicable Conversion Rate”

	 	10.02(a)

10

 

	 	 	 
	Terms:	 	Defined in Section:
	“Average Price”

	 	3.01(e)
	“Bankruptcy Law”

	 	6.01(h)
	“Conversion Agent”

	 	2.03
	“Conversion Date”

	 	10.02(d)
	“Conversion Notice”

	 	10.02(c)
	“Conversion Obligation”

	 	10.03(a)
	“Daily Excess Amount”

	 	10.03(a)(i)(B)
	“Daily Settlement Amount”

	 	10.03(a)(i)
	“effective date”

	 	10.01(c)
	“Event of Default”

	 	6.01
	“Exchange Property”

	 	10.06(a)
	“Fiscal Quarter”

	 	10.01(a)(1)
	“Fundamental Change Repurchase Date”

	 	3.02(a)
	“Fundamental Change Repurchase Notice”

	 	3.02(c)
	“Fundamental Change Repurchase Price”

	 	3.02(a)
	“Indemnitees”

	 	7.07(c)
	“legal holiday”

	 	12.08
	“Losses”

	 	7.07(c)
	“Measurement Period”

	 	10.01(a)(2)
	“Notice of Default”

	 	6.01
	“Paying Agent”

	 	2.03
	“Registrar”

	 	2.03
	“Settlement Amount”

	 	10.03(a)
	“Settlement Shares”

	 	10.03(b)
	“Specified Accounting Change
Redemption Date”

	 	3.01(b)
	“Specified Accounting Change
Redemption Notice”

	 	3.01(b)
	“Specified Accounting Change
Redemption Price”

	 	3.01(a)
	“Spin Off”

	 	10.04(c)
	“successor company”

	 	5.01(a)
	“Trigger Event”

	 	10.04(c)

     Section 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.

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     “indenture security holder” means a Securityholder.

     “indenture to be qualified” means this Indenture.

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

     “obligor” on the indenture securities means the Company.

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

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

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

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

          (3) “or” is not exclusive;

          (4) “including” means including, without limitation;

          (5) words in the singular include the plural, and words in the plural include the singular;
and

          (6) references to Sections and Articles are to references to Sections and Articles of this
Indenture.

     Section 1.05 Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by Holders may be embodied
in and evidenced by one or more instruments of substantially similar tenor signed by such Holders
in Person or by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments are delivered to
the Trustee and, where it is hereby expressly required, to the Company, as described in Section 12.02. Such
instrument or instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act” of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of

12

 

a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.

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

          (c) The principal amount and serial number of any Security and the ownership of Securities
shall be proved by the register for the Securities.

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

          (e) If the Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to
a Board Resolution, fix in advance a record date for the determination of Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of business 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 authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that purpose the
outstanding Securities shall be computed as of such record date; provided that no such
authorization, agreement or consent by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

13

 

ARTICLE 2

The Securities

     Section 2.01 Form and Dating. (a) The Securities and the Trustee’s certificate of authentication
shall be substantially in the form of Exhibits A and B, which are a part of this Indenture.
The Securities may have notations, legends or endorsements required by law, stock exchange rule or
usage (provided that any such notation, legend or endorsement required by usage is in a form
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. The
Securities may, but need not, have the corporate seal of the Company or a facsimile thereof affixed
thereto or imprinted thereon.

          (b) Global Securities in General. Each Global Security shall represent such of the outstanding
Securities as shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed in the Schedule of Increases
and Decreases of Global Security attached thereto and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, repurchases and conversions.

     Any adjustment of the aggregate principal amount of a Global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented thereby shall be made
by the Trustee in accordance with instructions given by the Holder thereof, and shall be made on
the records of the Trustee and the Depositary.

          (c) Book-Entry Provisions. This Section 2.01(c) shall apply only to Global Securities
deposited with or on behalf of the Depositary.

     The Company shall execute and the Trustee shall, in accordance with this Section 2.01(d),
authenticate and deliver initially one or more Global Securities that (a) shall be registered in
the name of the Depositary or a nominee thereof, (b) shall be delivered by the Trustee to the
Depositary or held by the Trustee pursuant to the Depositary’s instructions and (c) shall be
substantially in the form of Exhibit A attached hereto.

          (d) Certificated Securities. Securities not issued as interests in the Global Securities shall
be registered in the name of the Holder and issued in certificated form substantially in the form
of Exhibit B attached hereto.

     Section 2.02 Execution and Authentication. The Securities shall be executed on behalf of the Company by one Officer. The signature of such
Officer on the Securities may be manual or facsimile.

14

 

     Securities bearing the manual or facsimile signature of an individual who was, at the time of
the execution of the Securities, an Officer shall bind the Company, notwithstanding that such
individual has ceased to hold such office prior to the authentication and delivery of such
Securities or did not hold such office at the date of authentication of such Securities.

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

     The Trustee shall authenticate and deliver the Securities for original issue in an aggregate
principal amount of up to $125,000,000 upon one or more Company Orders without any further action
by the Company. The aggregate principal amount of the Securities due at the Stated Maturity thereof
outstanding at any time may not exceed the amount set forth in the foregoing sentence.

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

     Section 2.03 Registrar, Paying Agent, Bid Solicitation Agent and Conversion Agent. The Company
shall maintain an office or agency where Securities may be presented for registration of transfer
or for exchange (“Registrar”), an office or agency where Securities may be presented for purchase
or payment (“Paying Agent”) and an office or agency 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 have one or more co-registrars, one or more additional
paying agents, one or more additional Bid Solicitation Agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including any named pursuant to
Section 4.05. The term Conversion Agent includes any additional conversion agent, including any
named pursuant to Section 4.05.

     The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent,
Conversion Agent, Bid Solicitation Agent or co-registrar (in each case, if such Registrar, agent or
co-registrar is a Person other than the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall promptly notify the Trustee of the name
and address of any such agent. If the Company fails to maintain a Registrar, Paying Agent,
Conversion Agent or Bid Solicitation Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section
7.07. The Company or any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.

15

 

     The Company initially appoints the Trustee as Registrar, Conversion Agent, Bid Solicitation
Agent and Paying Agent in connection with the Securities.

     Section 2.04 Paying Agent to Hold Money and Securities in Trust. Except as otherwise provided
herein, on or prior to each due date of payments in respect of any Security, the Company shall
deposit with the Paying Agent a sum of money (in immediately available funds if deposited on the
due date) or shares of Common Stock sufficient to make such payments when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in writing that the
Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money and
shares of Common Stock held by the Paying Agent for the making of payments in respect of the
Securities and shall promptly notify the Trustee of any Default by the Company in making any such
payment. At any time during the continuance of any such Default, the Paying Agent shall, upon the
written request of the Trustee, forthwith pay to the Trustee all money and shares of Common Stock
so held in trust. If the Company, a Subsidiary or an Affiliate of either of them acts as Paying
Agent, it shall segregate the money and shares of Common Stock held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money
and shares of Common Stock held by it to the Trustee and to account for any funds and Common Stock
disbursed by it. Upon doing so, the Paying Agent shall have no further liability for the money or
shares of Common Stock.

     Section 2.05 Securityholder Lists. The Trustee shall preserve the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall cause to be furnished to the Trustee at least semiannually on January 1 and July 1 a listing
of Securityholders dated within 15 days of the date on which the list is furnished and at such
other times as the Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.

     Section 2.06 Transfer and Exchange. (a) Upon surrender for registration of transfer of any
Security, together with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder’s attorney duly authorized in writing, at the
office or agency of the Company designated as Registrar or co-registrar pursuant to Section 2.03,
the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any authorized denomination or
denominations, of a like aggregate principal amount. The Company shall not charge a service charge
for any registration
of transfer or exchange, but the Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges that may be imposed in connection with the transfer or
exchange of the Securities from the Securityholder requesting such transfer or exchange.

     At the option of the Holder, Securities may be exchanged for other Securities of any
authorized denomination or denominations, of a like aggregate principal amount upon surrender of
the Securities to be exchanged, together with a written instrument of transfer satisfactory to the
Registrar duly executed by the Securityholder or such Securityholder’s attorney duly authorized in
writing, at such office or agency. Whenever any Securities are so surrendered for

16

 

exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the
Holder making the exchange is entitled to receive.

     The Company shall not be required to make, and the Registrar need not register, transfers or
exchanges of Securities in respect of which a Fundamental Change Repurchase Notice has been given
and not withdrawn by the Holder thereof in accordance with the terms of this Indenture (except, in
the case of Securities to be purchased in part, the portion thereof not to be purchased).

          (b) Successive registrations and registrations of transfers and exchanges as aforesaid may be
made from time to time as desired, and each such registration shall be noted on the register for
the Securities.

          (c) Except as otherwise set forth in this Indenture, any such action taken by a Holder shall
be conclusive and binding upon such Holder and upon all future Holders and owners of such Security
and of any Securities issued in exchange or substitution therefor, irrespective of whether any
notation in regard thereto is made upon such Security or any Security issued in exchange or
substitution therefor.

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

          (e) No Registrar shall be required to make registrations of transfer or exchange of Securities
during any periods designated in the text of the Securities or in this Indenture as periods during
which such registration of transfers and exchanges need not be made.

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

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

17

 

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

     Every new Security issued pursuant to this Section 2.07 in lieu of any mutilated, destroyed,
lost or stolen Security shall constitute an additional obligation of the Company and shall be
entitled to all benefits of this Indenture equally and proportionately with any and all other
Securities duly issued hereunder.

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

     Section 2.08 Outstanding Securities; Determinations of Holders’ Action. Securities outstanding at
any time are all the Securities authenticated by the Trustee except for those cancelled by it,
those purchased pursuant to Section 2.07, those delivered to it for cancellation and those
described in this Section 2.08 as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite principal amount of Securities have given or
concurred in any request, demand, authorization, direction, notice, consent, waiver, or other Act
hereunder, Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other act, only
Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the time of such
determination shall be considered in any such determination (including, without limitation,
determinations pursuant to Article 6 and Article 9).

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

     If the Paying Agent holds, in accordance with this Indenture, on the Business Day immediately
following a Fundamental Change Repurchase Date, or on Stated Maturity, money or securities, if
permitted hereunder, sufficient to pay Securities payable on that date, then from and after such
Fundamental Change Repurchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and Interest on such Securities shall cease to accrue.

     If a Security is converted in accordance with Article 10, then from and after the date of
conversion, such Security shall cease to be outstanding, and Interest shall cease to accrue and the

18

 

rights of the Holders therein shall terminate (other than the right to receive the Settlement
Amount).

     Section 2.09 Temporary Securities. Pending the preparation of Certificated Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the Certificated Securities in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions and other variations
as the Officers executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.

     If temporary Securities are issued, the Company shall cause Certificated Securities to be
prepared without unreasonable delay. After the preparation of Certificated Securities, the
temporary Securities shall be exchangeable for Certificated Securities upon surrender of the
temporary Securities at the office or agency of the Company designated for such purpose pursuant to
Section 2.03, without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of Certificated Securities of authorized denominations.
Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as Certificated Securities.

     Section 2.10 Cancellation. All Securities surrendered for payment, purchase by the Company
pursuant to Article 3, conversion or registration of transfer or exchange shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever,
and all Securities so delivered shall be promptly cancelled by the Trustee. The Company may not
issue
new Securities to replace Securities it has paid or delivered to the Trustee for cancellation other
than in connection with registrations of transfer or exchange or that any Holder has converted
pursuant to Article 10. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Securities held by the Trustee shall be disposed of by the Trustee in accordance with
the Trustee’s customary procedure.

     Section 2.11 Persons Deemed Owners. Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person
in whose name such Security is registered as the owner of such Security for the purpose of
receiving payment of the principal amount of the Security or any portion thereof, or the payment of
any Fundamental Change Repurchase Price in respect thereof, and Interest, for the purpose of
conversion and for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

19

 

     Section 2.12 CUSIP Numbers. The Company may issue the Securities with one or more “CUSIP,” “ISIN”
or other similar numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP,”
“ISIN” or other similar numbers in notices as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a purchase and that reliance may be
placed only on the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any change in the CUSIP, ISIN or other similar numbers.

     Section 2.13 Payment. If any Interest Payment Date, Stated Maturity, Fundamental Change Repurchase
Date, Conversion Settlement Date or other date when payment is required to be made under this
Indenture falls on a day that is not a Business Day, then the required payment will be made on the
next succeeding Business Day with the same force and effect as if made on the date that the payment
was due, and no additional Interest will accrue on that payment for the period from and after the
Interest Payment Date, Stated Maturity, Fundamental Change Repurchase Date, Conversion Settlement
Date or other payment date, as the case may be, to that next succeeding Business Day.

ARTICLE 3

Redemption and Repurchases

     Section 3.01 Optional Redemption upon a Specified Accounting Change; Make Whole Premium upon a
Specified Accounting Change. (a) Upon the occurrence of a Specified Accounting Change, the Company may redeem the Securities
in whole for cash from the date a Specified Accounting Change has become effective until 90 days
after the date such change became effective. The redemption price for any such redemption will be
equal to 102% of the principal amount of the Securities plus accrued and unpaid interest to, but
not including, the Specified Accounting Change Redemption Date (as defined below) (the “Specified
Accounting Change Redemption Price”). For purposes of this paragraph, the effective date of the
Specified Accounting Change shall mean the date the standards with respect to such Specified
Accounting Change under generally accepted accounting principles have been issued. The Securities
shall not otherwise be redeemable at the option of the Company prior to their Stated Maturity.

          (b) If the Company chooses to redeem the Securities upon a Specified Accounting Change, as
described in this Section 3.01, the Company will give written notice (the “Specified Accounting
Change Redemption Notice”) of redemption not less than 30 nor more than 60 days before the
specified date for redemption (the “Specified Accounting Change Redemption Date”) by mail to the
Trustee at the Trustee’s address and to each Securityholder at such Securityholder’s address as it
appears on the registration books of the Registrar.

     The Specified Accounting Change Redemption Notice shall identify the Securities (including
CUSIP numbers) to be redeemed and shall state:

20

 

          (1) the Specified Accounting Change Redemption Date;

          (2) the Specified Accounting Change Redemption Price;

          (3) the then effective Applicable Conversion Rate;

          (4) the name and address of each Paying Agent and Conversion Agent;

          (5) that Securityholders may surrender their Securities for conversion at any time beginning
on the date of the Specified Accounting Change Redemption Notice until the Trading Day immediately
prior to the Specified Accounting Change Redemption Date;

          (6) that Securities called for redemption must be presented and surrendered to a Paying Agent
to collect the Specified Accounting Change Redemption Price;

          (7) that, unless the Company fails to make payment of such Specified Accounting Change
Redemption Price, Securities called for redemption will cease to be outstanding and interest and
additional Interest, if any, will cease to accrue on and after the Specified Accounting Change
Redemption Date; and

          (8) the procedures that the Holder must follow to exercise rights under Article 10 and that
Securities as to which a Specified Accounting Change Redemption Notice has been given may be
converted into Common Stock pursuant to the applicable provisions of Article 10 of this Indenture.

     At the Company’s request, the Trustee shall give such Specified Accounting Change Redemption
Notice in the Company’s name and at the Company’s expense; provided, that, in all cases, the text
of such Specified Accounting Change Redemption Notice shall be prepared by the Company. If any of
the Securities is in the form of a Global Security, then the Company shall modify such notice to
the extent necessary to accord with the Applicable Procedures relating to the purchase of Global
Securities.

          (c) Once the Specified Accounting Change Redemption Notice is mailed, Securities called for
redemption become due and payable on the Specified Accounting Change Redemption Date and at the
Specified Accounting Change Redemption Price stated in the notice, together with accrued and unpaid
interest, if any, except for Securities that are converted in accordance with the provisions of
Article 10. On or after the Specified Accounting Change Redemption Date and upon presentation and
surrender to a Paying Agent, Securities called for redemption will be paid at the Specified
Accounting Change Redemption Price, plus any accrued and unpaid interest to, but not including, the
Specified Accounting Change Redemption Date;

21

 

provided that if the Specified Accounting Change
Redemption Date falls after a Record Date and on or before the related Interest Payment Date, then
interest on the Securities payable on such Interest Payment Date will be payable to the Holders in
whose names the Securities are registered at the close of business on such Record Date.

          (d) On or before 12:00 p.m. (noon), New York City time, on the Specified Accounting Change
Redemption Date, the Company shall deposit with the Trustee or a Paying Agent (or, if the Company,
a Subsidiary or an Affiliate of either of them or an affiliate is acting as Paying Agent, shall
segregate and hold in trust as provided in Section 2.04) an amount of money (in immediately
available funds) sufficient to pay the Specified Accounting Change Redemption Price of and any
accrued and unpaid interest on, all Securities to be redeemed on that date, other than Securities
or portions thereof called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation or have been converted. The Paying Agent shall as promptly as
practicable return to the Company any money not required for that purpose because of the conversion
of Securities pursuant to Article 10 or, if such money is then held by the Company in trust and is
not required for such purpose, it shall be discharged from the trust.

          (e) If a Holder chooses to convert pursuant to Section 3.01, the Company will pay a make whole
premium in the form of an increase in Applicable Conversion Rate, if the Holder converts its
Securities between the date the Company gives notice of the redemption and the day prior to the
Specified Accounting Change Redemption Date. Any make whole premium will have the effect of
increasing the amount of cash or shares otherwise due to Holders of Securities upon conversion.
The increase in the Applicable Conversion Rate will be equal to the
sum of (A) the number of shares indicated in the table attached as Schedule I hereto
where the applicable “effective date” is the proposed Specified Accounting Change Redemption Date
and the applicable “stock price” is the average of the closing prices of the Common Stock for each
of the ten Trading Days ending the third Trading Day prior to the Specified Accounting Change
Redemption Date (the “Average Price”) and (B) an additional number of shares of common stock equal
to $20 per $1,000 principal of Securities divided by the Average Price. To the extent the Average
Price is not one of the stock prices and/or the proposed Specified Accounting Change Redemption
Date is not one of the effective dates set forth on the in the table attached as Schedule I
hereto, relevant adjustments shall be made in the same manner as described in Section 10.01(c).

     Section 3.02 Repurchase of Securities at Option of the Holder upon a Fundamental Change. (a) If a
Fundamental Change occurs, each Holder will have the right, at such Holder’s option, to require the
Company to repurchase for cash all of such Holder’s Securities, or any portion thereof that is
equal to or an integral multiple of $1,000 principal amount, at a repurchase price equal to 100% of
the principal amount of the Securities repurchased, plus accrued and unpaid Interest on those
Securities (the “Fundamental Change Repurchase Price”) to, but not including, the date that is 30
calendar days following the date of the notice of a Fundamental Change mailed by the Company
pursuant to Section 3.02(b) (the “Fundamental Change Repurchase Date”), subject to satisfaction by
or on behalf of the Holder of the requirements set

22

 

forth in Section 3.02(c). If the Fundamental
Change Repurchase Date is on a date that is after an Interest Record Date and on or prior to the
corresponding Interest Payment Date, the Company will pay such interest to the Person to whom
principal is payable.

          (b) No later than 15 calendar days after the occurrence of a Fundamental Change, the Company
will mail a Company Notice of the Fundamental Change (substantially in the form of Exhibit
C) by mail to the Trustee and to each Holder (and to beneficial owners if required by
applicable law). In addition to providing such notice, the Company will issue a press release. The
Company Notice shall include a form of Fundamental Change Repurchase Notice to be completed by the
Holder and shall state:

          (i) briefly, the events causing a Fundamental Change and the date of such Fundamental
Change;

          (ii) whether such Fundamental Change will also constitute a Public Acquirer Change in
Control and the conversion rights available to the Holders in connection with such Public
Acquirer Change in Control, including the period of conversion and any adjustments to the
applicable Conversion Rate;

          (iii) the date by which the Fundamental Change Repurchase Notice pursuant to this
Section 3.02 must be delivered to the Paying Agent in order for a Holder to exercise the
repurchase rights;

          (iv) the Fundamental Change Repurchase Date;

          (v) the Fundamental Change Repurchase Price;

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

          (vii) the Applicable Conversion Rate;

          (viii) that the Securities as to which a Fundamental Change Repurchase Notice has been
given may be converted if they are otherwise convertible pursuant to Article 10 hereof only
if the Fundamental Change Repurchase Notice has been withdrawn in accordance with the terms
of this Indenture;

          (ix) that the Securities must be surrendered to the Paying Agent (by effecting book
entry transfer of the Securities or delivering Certificated Securities, together with
necessary endorsements, as the case may be) to collect payment;

23

 

          (x) that the Fundamental Change Repurchase Price for any Security as to which a
Fundamental Change Repurchase Notice has been duly given and not withdrawn shall be paid
promptly following the later of the Business Day immediately following the Fundamental
Change Repurchase Date and the time of surrender of such Security as described in clause
(ix);

          (xi) briefly, the procedures the Holder must follow to exercise rights under this
Section 3.02;

          (xii) briefly, the conversion rights, if any, that exist on the Securities at the date
of the Company Notice and as a result of such Fundamental Change;

          (xiii) the procedures for withdrawing a Fundamental Change Repurchase Notice;

          (xiv) that, unless the Company defaults in making payment of such Fundamental Change
Repurchase Price on Securities for which a Fundamental Change Repurchase Notice is
submitted, Interest on Securities surrendered for purchase by the Company shall cease to
accrue from and after the Fundamental Change Repurchase Date; and

          (xv) the CUSIP, ISIN or other similar number(s), as the case may be, of the Securities.

     At the Company’s request, the Trustee shall give such Company Notice to each Holder in the
Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of
such Company Notice shall be prepared by the Company.

          (c) A Holder may exercise its rights specified in this Section 3.02 upon delivery of a written
notice of repurchase (a “Fundamental Change Repurchase Notice”) to the Paying Agent at any time on
or prior to the close of business on the Business Day immediately preceding the Fundamental Change
Repurchase Date, stating:

          (i) if Certificated Securities have been issued, the certificate number(s) of the
Securities which the Holder shall deliver to be repurchased or, if Certificated Securities
have not been issued, the Fundamental Change Repurchase Notice shall comply with the
appropriate Depositary procedures for book-entry transfer;

24

 

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

          (iii) that such Security shall be repurchased pursuant to the terms and conditions
specified in Section 4 of the Securities and in this Indenture.

     The delivery of such Security (together with all necessary endorsements) and the Fundamental
Change Repurchase Notice to the Paying Agent at the offices of the Paying Agent shall be a
condition to the receipt by the Holder of the Fundamental Change Repurchase Price therefor;
provided, however, that such Fundamental Change Repurchase Price shall be so paid pursuant to this
Section 3.02 only if the Security (together with all necessary endorsements) so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth in the related
Fundamental Change Repurchase Notice.

     The Company shall repurchase from the Holder thereof, pursuant to this Section 3.02, a portion
of a Security if the principal amount of such portion is $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to the repurchase of all of a Security also
apply to the repurchase of such portion of such Security.

     Any repurchase by the Company contemplated pursuant to the provisions of this Section 3.02
shall be consummated by the delivery of the Fundamental Change Repurchase Price promptly following
the later of the Business Day following the Fundamental Change Repurchase Date or the time of
delivery of such Security (together with all necessary endorsements or notifications of book-entry
transfer).

     Notwithstanding the foregoing, Holders shall not have the right to require the Company to
repurchase the Securities upon a Fundamental Change described in clause (3) of the definition
thereof if (i) more than 90% of the consideration in the transaction or transactions constituting
such Fundamental Change consists of shares of common stock traded or to be traded immediately
following such Fundamental Change on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Global Select Market, the Nasdaq Global Market or another U.S. national securities exchange
and, as a result of such transaction or transactions, the Securities become convertible into such
common stock (and any rights attached thereto) subject to the settlement provisions of Section
10.03.

     Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Repurchase Notice contemplated by this Section 3.02(c) shall have the right to
withdraw such Fundamental Change Repurchase Notice by delivery of a written notice of withdrawal to
the Paying Agent in accordance with Section 3.03(b) at any time prior to the close of business on
the Business Day immediately preceding the Fundamental Change Repurchase Date.

25

 

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

     Section 3.03 Effect of Fundamental Change Repurchase Notice. (a) Upon receipt by the Paying Agent
of the Fundamental Change Repurchase Notice specified in Section 3.02, the Holder of the Security
in respect of which such Fundamental Change Repurchase Notice was given shall (unless such
Fundamental Change Repurchase Notice is withdrawn as specified in Section 3.03(b)) thereafter be
entitled solely to receive the Fundamental Change Repurchase Price with respect to such Security
whether or not the Security is, in fact, properly delivered. Such Fundamental Change Repurchase
Price shall be paid to such Holder, subject to receipt of funds and/or securities by the Paying
Agent, promptly following the later of (x) the Business Day following the Fundamental Change
Repurchase Date with respect to such Security (provided the conditions in Section 3.02 have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by the Holder thereof
in the manner required by Section 3.02. Securities in respect of which a Fundamental Change
Repurchase Notice has been
given by the Holder thereof may not be converted pursuant to and to the extent permitted by Article
10 hereof on or after the date of the delivery of such Fundamental Change Repurchase Notice unless
such Fundamental Change Repurchase Notice has first been validly withdrawn as specified in Section
3.03(b).

          (b) A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent at any time, if received by the Paying Agent
prior to the close of business on the Business Day immediately preceding the Fundamental Change
Repurchase Date specifying:

          (1) the principal amount, if any, of such Security which remains subject to the original
Fundamental Change Repurchase Notice and which has been or shall be delivered for purchase by the
Company,

          (2) if Certificated Securities have been issued, the certificate number, if any, of the
Security in respect of which such notice of withdrawal is being submitted (or, if Certificated
Securities have not been issued, that such withdrawal notice shall comply with the appropriate
Depositary procedures), and

          (3) the principal amount of the Security with respect to which such notice of withdrawal is
being submitted.

     Section 3.04 Deposit of Fundamental Change Repurchase Price. Prior to 11:00 a.m. (local time in
the City of New York) on the Business Day next following the Fundamental Change Repurchase Date the
Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of
either of them is acting as the Paying Agent, shall segregate and hold in trust as provided in
Section 2.04) an amount of cash in immediately available funds

26

 

sufficient to pay the aggregate
Fundamental Change Repurchase Price of all the Securities or portions thereof which are to be
purchased as of the Fundamental Change Repurchase Date.

     Section 3.05 Securities Purchased in Part. Any Certificated Security which is to be purchased only
in part (but any such partial purchase shall be in minimum principal amounts equal to $1,000 or an
integral multiple of $1,000) shall be surrendered at the office of the Paying Agent (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument of transfer
satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s
attorney duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in
exchange for, the portion of the principal amount of the Security so surrendered which is not
purchased.

     Section 3.06 Covenant to Comply with Securities Laws upon Purchase of Securities. When complying
with the provisions of Section 3.02 hereof (provided that such offer or purchase constitutes an
“issuer tender offer” for purposes of Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall, if then applicable,
(i) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) and any other applicable
tender offer rules under the Exchange Act, (ii) file the related Schedule TO (or any successor
schedule, form or report) under the Exchange Act, and (iii) otherwise comply with all Federal and
state securities laws so as to permit the rights and obligations under Section 3.02 to be exercised
in the time and in the manner specified in Section 3.02.

     Section 3.07 Repayment to the Company. The Trustee and the Paying Agent shall return to the
Company any cash that remains unclaimed as provided in Section 12 of the Securities, together with
interest, if any, thereon (subject to the provisions of Section 7.01(f)), held by them for the
payment of the Fundamental Change Repurchase Price.

ARTICLE 4

Covenants

     Section 4.01 Payment of Securities. The Company shall make all payments in respect of the
Securities on the dates and in the manner provided in the Securities or pursuant to this Indenture.
Any amounts of cash in immediately available funds or shares of Common Stock to be given to the
Trustee or Paying Agent shall be deposited with the Trustee or Paying Agent by 11:00 a.m., New York
City time, by the Company on the applicable payment date. The principal amount of, and Interest on
the Securities, and the Fundamental Change Repurchase Price and amounts payable on conversion shall
be considered paid on the applicable date due if on such date (which, in the case of a Fundamental
Change Repurchase Price, shall be on the Business Day immediately following the applicable
Fundamental Change Repurchase Date) the Trustee or

27

 

the Paying Agent holds, in accordance with this
Indenture, cash or securities, if permitted hereunder, sufficient to pay all such amounts then due.

     Section 4.02 SEC and Other Reports. The Company shall deliver to the Trustee, within 15 days after
it files such annual and quarterly reports, information, documents and other reports with the SEC,
copies of its annual
report 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) which the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act; 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. The Company shall also comply with the other provisions of TIA Section 314(a). Delivery of
such reports, information and documents to the Trustee is for informational purposes only and the
Trustee’s receipt of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the Company’s compliance with
any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on
Officer’s Certificates).

     Section 4.03 Compliance Certificate. The Company shall deliver to the Trustee within 120 days
after the end of each fiscal year of the Company (beginning with the fiscal year ending December
31, 2007) an Officer’s Certificate, stating whether or not to the knowledge of the signer thereof,
the Company is in default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and if the Company shall be in default, specifying all such defaults and the
nature and status thereof of which such Officer may have knowledge and otherwise comply with
Section 314(a)(4) of the TIA.

     The Company shall, so long as any of the Securities are outstanding, deliver to the Trustee,
within 30 days of any executive officer of the Company becoming aware of any Default or Event of
Default, an Officer’s Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.

     Section 4.04 Further Instruments and Acts. The Company shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

     Section 4.05 Maintenance of Office or Agency. The Company will maintain an office or agency of the
Trustee, Registrar, Paying Agent and Conversion Agent where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of transfer,
exchange, purchase or conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office of the Trustee, located at 601 Travis,
18th Floor, Houston, Texas 77002 shall initially be such office or agency for all of the
aforesaid purposes. Such office or agency need not be the principal securities clearance or
processing office of the Trustee. The Company shall give prompt written notice to the Trustee of
the location, and of any change in the
location, of any such office or agency (other

28

 

than a change in the location of the office of the
Trustee). If at any time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee set forth in Section 12.02.

     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 an office or agency for such purposes.

ARTICLE 5

Successor Company

     Section 5.01 When Company May Merge or Transfer Assets. The Company shall not consolidate with or
merge with or into any other Person or convey, transfer or lease all or substantially all its
properties and assets to another Person, unless:

          (a) the resulting, surviving transferee or lessee Person (the “successor company”) will be an
entity organized and existing under the laws of the United States of America, any state thereof or
the District of Columbia;

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

          (c) the Company will have delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and, if a supplemental indenture
is required in connection with such transaction, such supplemental indenture, comply with this
Article 5.

     For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise) of the
properties and assets of one or more Subsidiaries (other than to the Company or another
Subsidiary), which, if such assets were owned by the Company, would constitute all or substantially
all of the properties and assets of the Company and its Subsidiaries, taken as a whole, shall be
deemed to be the transfer of all or substantially all of the properties and assets of the Company.

     The successor company formed by such consolidation or into which the Company is merged or the
successor company to which such conveyance, transfer, lease or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor had been named as the

29

 

Company herein; and thereafter, except in the case of a conveyance, transfer or lease of all or
substantially all the Company’s assets (in which case the Company will not be discharged from the
obligation to pay the principal amount of the Securities and Interest) and except for obligations,
if any, that the Company may have under a supplemental indenture, the Company shall be discharged
from all obligations and covenants under this Indenture and the Securities. Subject to Section
9.06, the Company, the Trustee and the successor company shall enter into a supplemental indenture
to evidence the succession and substitution of such successor company and such discharge and
release of the Company.

ARTICLE 6

Defaults and Remedies

     Section 6.01 Events of Default. So long as any Securities are outstanding, each of the following
shall be an “Event of Default”:

          (a) following the exercise by the Holder of the right to convert a Security in accordance with
Article 10 hereof, the Company fails to comply with its obligations to deliver the cash or shares
of Common Stock, if any, required to be delivered as part of the applicable Settlement Shares or
Settlement Amount on the applicable Conversion Settlement Date;

          (b) the Company defaults in its obligation to provide timely notice of a Fundamental Change to
the Trustee and each Holder as required under Section 3.02(b);

          (c) any default in the payment of the principal amount of any Security when due at maturity,
upon repurchase, redemption or otherwise (including, without limitation, the Company’s failure to
repurchase Securities upon the exercise by a Holder of its right to require the Company to
repurchase such Securities pursuant to and in accordance with Section 3.02 hereof or on any other
repurchase date);

          (d) any default in the payment of any Interest, when due and payable, and continuance of such
default for a period of 30 days past the applicable due date;

          (e) the Company or any Guarantor fails to perform or observe any term, covenant or warranty or
agreement in the Securities or this Indenture (other than those referred to in clause (a) through
clause (d) above) and such failure continues for 60 days after receipt by the Company of a Notice
of Default;

          (f) the Company or any of its Significant Subsidiaries fails to make any payment by the end of
any applicable grace period after maturity or acceleration of indebtedness
for borrowed money of the Company or its Significant Subsidiaries in an amount in excess of
$15,000,000 and continuance of such failure;

30

 

          (g) the Company or any of its Significant Subsidiaries fails to pay final judgments
aggregating in excess of $15,000,000, which judgments are not paid, discharged or stayed for a
period of 60 days;

          (h) the entry by a court having jurisdiction in the premises of (i) a decree or order for
relief in respect of the Company or any of its Significant Subsidiaries, in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law (any
“Bankruptcy Law”) or (ii) a decree or order adjudging the Company or any Significant Subsidiary, a
bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any Significant
Subsidiary, under any applicable Bankruptcy Law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or any Significant
Subsidiary or of any substantial part of any of their property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for relief or any such
other decree or order described in clause (i) or (ii) above is unstayed and in effect for a period
of 60 consecutive days;

          (i) (i) the commencement by the Company or any Significant Subsidiary, of a voluntary case or
proceeding under any applicable Bankruptcy Law or of any other case or proceeding to be adjudicated
a bankrupt or insolvent, or (ii) the consent by the Company or any Significant Subsidiary, to the
entry of a decree or order for relief in respect of the Company or any Significant Subsidiary, in
an involuntary case or proceeding under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any Significant Subsidiary, or
(iii) the filing by the Company or any Significant Subsidiary, of a petition or answer or consent
seeking reorganization or relief under any applicable Bankruptcy Law, or (iv) the consent by the
Company or any Significant Subsidiary to the filing of such petition or to the appointment of or
the taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Significant Subsidiary or of any substantial part of
any of their property, or (v) the making by the Company or any Significant Subsidiary, of a general
assignment for the benefit of creditors, or the admission by the Company or any Significant
Subsidiary, in writing of its inability to pay its debts generally as they become due; and

          (j) except as permitted by this Indenture, any Subsidiary Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason (other than in accordance with
the terms of that Subsidiary Guarantee and this Indenture) to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations
under its Subsidiary Guarantee.

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

31

 

     For the avoidance of doubt, clause (e) above shall not constitute an Event of Default until
the Trustee notifies in writing the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding notify in writing the Company and the Trustee, of
such default and the Company does not cure such default (and such default is not waived) within the
time specified in clause (e) above after actual receipt of such notice. Any such notice must
specify the default, demand that it be remedied and state that such notice is a “Notice of
Default.”

          (k) Notwithstanding anything to the contrary in this Indenture, to the extent elected by the
Company in its sole discretion, the sole remedy for an Event of Default described in clause (e)
above relating to the failure to comply with Section 4.02 hereof or the failure to comply with
Section 314(a)(1) of the TIA, if applicable, will for the first 120 days after the occurrence of
such an Event of Default consist exclusively of the right to receive Additional Interest on the
Securities at an annual rate equal to 0.25% of the principal amount of the Securities (the
"Additional Interest”) and will be payable on the same dates and in the same manner as Interest
accruing on the Securities. The Additional Interest will accrue on all outstanding Securities from
and including the date on which an Event of Default relating to the failure to comply with Section
4.02 hereof or the failure to comply with Section 314(a)(1) of the TIA first occurs to, but not
including, the 120th day thereafter (or such earlier date on which the Event of Default
relating to the failure to comply with Section 4.02 or the failure to comply with Section 314(a)(1)
of the TIA shall have been cured or waived). On such 120th day (or earlier, if the Event
of Default relating to the failure to comply with Section 4.02 or the failure to comply with
Section 314(a)(1) of the TIA is cured or waived prior to such 120th day), such
Additional Interest will cease to accrue and, if the Event of Default relating to the failure to
comply with Section 4.02 or the failure to comply with Section 314(a)(1) of the TIA has not been
cured or waived prior to such 120th day, the Securities will be subject to acceleration
as provided in Section 6.02 hereof. The provisions of this paragraph will not affect the rights of
Holders of Securities in the event of the occurrence of any other Event of Default. In the event
the Company does not timely elect to pay the Additional Interest upon an Event of Default relating
to the failure to comply with Section 4.02 or the failure to comply with Section 314(a)(1) of the
TIA in accordance with this paragraph, the Securities will be subject to acceleration as provided
in Section 6.02 hereof. To make such election, the Company must notify the Holders, the Trustee and
the Paying Agent of such election on or prior to the date such failure to comply with Section 4.02
or the failure to comply with Section 314(a)(1) of the TIA becomes an Event of Default.

     Section 6.02 Acceleration. Subject to Section 6.01(k), if an Event of Default (other than an Event
of Default specified in Section 6.01(h) or Section 6.01(i) with respect to the Company) occurs and
is continuing (the
Event of Default not having been cured or waived), the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the Securities at the time outstanding by
notice to the Company and the Trustee, may declare the principal amount of the Securities and any
accrued and unpaid Interest on all the Securities to be immediately due and payable. Upon such a
declaration, such accelerated amount shall be due and payable immediately. If an Event of Default
specified in Section 6.01(h)or Section 6.01(i) with respect to the Company occurs and is
continuing, the principal amount of the Securities and any accrued and unpaid Interest on all the
Securities shall become and be immediately due and

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payable without any declaration or other act on
the part of the Trustee or any Securityholders. The Holders of a majority in aggregate principal
amount of the Securities at the time outstanding, by notice to the Trustee and the Company (and
without notice to any other Securityholder) may rescind an acceleration and its consequences, and
thereby waive the Events of Default giving rise to such acceleration, if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the principal amount of the Securities and any accrued and unpaid
Interest that have become due solely as a result of acceleration, which amounts, if such rescission
is effective, shall no longer be payable as a result of acceleration. No such rescission shall
affect any subsequent Event of Default or impair any right consequent thereto.

     Section 6.03 Other Remedies. If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of the principal amount of the Securities and
any accrued and unpaid Interest on the Securities or to enforce the performance of any provision of
the Securities or this Indenture.

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

     Section 6.04 Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of
the Securities at the time outstanding, by notice to the Trustee (and without notice to any other
Securityholder), may waive any existing or past Default and its consequences except (1) an Event of
Default described in clauses (a), (b), (c) and (d) of Section 6.01 or (2) an Event of Default in
respect of a provision that under Section 9.02 cannot be amended without the consent of each
Securityholder affected, which, in each case may be waived only upon the written consent of each
affected Holder. When a Default is waived, it is deemed cured, but no such waiver shall extend to
any subsequent or other Default or impair any consequent right. This Section 6.04 shall be in lieu
of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) is hereby expressly excluded from
this Indenture, as permitted by the TIA.

     Section 6.05 Control by Majority. The Holders of a majority in aggregate principal amount of the
Securities at the time outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on
the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or
this Indenture or that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; provided, that the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent with such direction or
this Indenture. Prior to taking any action under this Indenture, the Trustee may require indemnity
satisfactory to it in its sole discretion against all losses and expenses caused by taking or not
taking such action.

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     Section 6.06 Limitation on Suits. A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities, except in the case of a Default due to the non-payment of the
principal amount of the Securities, any accrued and unpaid Interest or any unpaid Settlement
Amounts or Settlement Shares, unless:

          (1) the Holder gives to the Trustee written notice stating that a Default is continuing;

          (2) the Holders of at least 25% in aggregate principal amount of the Securities at the time
outstanding make a written request to the Trustee to pursue the remedy;

          (3) the Trustee does not comply with the request within 60 days after receipt of such notice,
of security or indemnity; and

          (4) the Holders of a majority in aggregate principal amount of the Securities at the time
outstanding do not give the Trustee a direction that, in the opinion of the Trustee, is
inconsistent with the request within a 60-day period.

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

     Section 6.07 Rights of Holders to Receive Payment. Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of the principal amount of the Securities and
any accrued and unpaid Interest in respect of the Securities held by such Holder, on or after the
respective due dates expressed in the Securities or any Fundamental Change Repurchase Date, and to
convert the Securities in accordance with Article 10, or to bring suit for the enforcement of any
such payment or the right
to convert on or after such respective dates, shall not be impaired or affected adversely without
the consent of such Holder.

     Section 6.08 Collection Suit by Trustee. If an Event of Default described in Section 6.01 clauses
(a) through (d) (other than (b)) 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 owing with
respect to the Securities and the amounts provided for in Section 7.07.

     Section 6.09 Trustee May File Proofs of Claim. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Securities or the
property of the Company or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal amount of the Securities and any accrued and unpaid Interest in respect of
the Securities shall then be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand on

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the Company for the payment
of any such amount) shall be entitled and empowered, by intervention in such proceeding or
otherwise:

          (a) to file and prove a claim for the whole principal amount of the Securities and any accrued
and unpaid Interest and to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel or any other amounts
due the Trustee under Section 7.07 and of the Holders allowed in such judicial proceeding, and

          (b) to 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 such 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.

     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.

     The Company agrees not to object to the Trustee participating as a member of any official
committee of creditors of the Company as it deems necessary or advisable.

     Section 6.10 Priorities. Any money collected by the Trustee pursuant to this Article 6 and, after
an Event of Default, any money or other property distributable in respect of the Company’s
obligations under this Indenture, shall be paid out in the following order:

     FIRST: to the Trustee (including any predecessor Trustee) for amounts due under Section
7.07;

     SECOND: to Securityholders for amounts due and unpaid on the Securities for the
principal amount of the Securities and any accrued and unpaid Interest, ratably, without
preference or priority of any kind, according to such amounts due and payable on the
Securities; and

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

     The Trustee may fix a record date and payment date for any payment to Securityholders pursuant
to this Section 6.10. At least 15 days before such record date, the Trustee shall mail to

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each
Securityholder and the Company a notice that states the record date, the payment date and the
amount to be paid.

     Section 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 (other than the Trustee) in
the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 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 10% in aggregate principal amount of the
Securities at the time outstanding. This Section 6.11 shall be in lieu of Section 315(e) of the TIA
and such Section 315(e) is hereby expressly excluded from this Indenture, as permitted by the TIA.

     Section 6.12 Waiver of Stay, Extension or Usury Laws. The Company covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of the principal amount of the Securities and any
accrued and unpaid Interest on Securities, as
contemplated herein, or which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.

ARTICLE 7

Trustee

     Section 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
such Person’s own affairs.

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

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          (1) the Trustee need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied duties shall be read into this Indenture against the
Trustee; and

          (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this Indenture, but in the
case of any such certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine such certificates and
opinions to determine whether or not they conform to the requirements of this Indenture, but need
not confirm or investigate the accuracy of mathematical calculations or other facts stated therein.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such Section 315(a) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

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

          (1) this Section 7.01(c) does not limit the effect of Sections 7.01(b) and 7.01(g);

          (2) 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

          (3) 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.

     Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1), 315(d)(2) and
315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby expressly
excluded from this Indenture, as permitted by the TIA.

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

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

          (f) Money held by the Trustee in trust hereunder need not be segregated from other funds
except to the extent required by law. The Trustee (acting in any capacity hereunder) shall be under
no liability for interest on any money received by it hereunder unless otherwise

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agreed in writing
with the Company (provided that any interest earned on money held by the Trustee in trust hereunder
shall be the property of the Company).

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

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

          (a) the Trustee may conclusively rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or
document (whether in original or facsimile form) believed by it to be genuine and to have been
signed or presented by the proper party or parties;

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

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

          (d) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by
it in good faith which it believes to be authorized or within its rights or powers conferred under
this Indenture;

          (e) the Trustee may consult with counsel selected by it and any advice or Opinion of Counsel
shall be full and complete authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

          (f) the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Holders, pursuant to the
provisions of this Indenture, unless such Holders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred
therein or thereby;

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          (g) 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 may be sufficiently evidenced by a Board Resolution;

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

          (i) Except with respect to Section 4.01 and subject to Section 7.05, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the covenants contained in
Article 4;

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

          (k) 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; and

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

     Section 7.03 Individual Rights of Trustee. The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent, Bid Solicitation Agent or co-registrar may do the same with like rights. However, the
Trustee must comply with Section 7.10 and Section 7.11.

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     Section 7.04 Trustee’s Disclaimer. The Trustee makes no representation as to, and shall have no
responsibility for, the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company’s use or application by the Company of the Securities or of the
proceeds from the Securities, it shall not be responsible for the correctness of any statement in
the registration statement for the Securities under the Securities Act or in any offering document
for the Securities, the Indenture or the Securities (other than its certificate of authentication),
or the determination as to which beneficial owners are entitled to receive any notices hereunder.

     Section 7.05 Notice of Defaults. If a Default or an Event of Default occurs and if it is known to
the Trustee, the Trustee shall give to each Securityholder notice of the Default or Event of
Default within 90 days after it occurs, unless such Default or Event of Default shall have been
cured or waived before the giving of such notice. Notwithstanding the preceding sentence, except in
the case of a Default or
Event of Default described in clauses (c) and (d) of Section 6.01, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interest of the Securityholders. The preceding sentence shall be
in lieu of the proviso to Section 315(b) of the TIA and such proviso is hereby expressly excluded
from this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have knowledge of
a Default or an Event of Default except (i) any Default or Event of Default occurring pursuant to
Section 6.01(a), 6.01(c) or 6.01(d) or (ii) any Default or Event of Default of which the Trustee
shall have received written notice from the Company or the Holders of at least 25% in aggregate
principal amount of the Securities, which notice specifically references this Indenture and the
Securities, or obtained actual knowledge

     Section 7.06 Reports by Trustee to Holders. Within 60 days after each December 31 beginning with
December 31, 2007, the Trustee shall mail to each Securityholder a brief report dated as of such
December 31 that complies with TIA Section 313(a), if required by such Section 313(a). The Trustee
also shall comply with TIA Section 313(b). Any reports required by this Section 7.06 shall be
transmitted by mail to Securityholders pursuant to TIA Section 313(c).

     A copy of each report at the time of its mailing to Securityholders shall be filed with the
SEC and each securities exchange, if any, on which the Securities are listed. The Company agrees to
notify the Trustee promptly whenever the Securities become listed on any securities exchange and of
any delisting thereof.

     Section 7.07 Compensation and Indemnity. The Company agrees:

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

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          (b) to reimburse the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses, advances and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be attributable to its own
negligence, willful misconduct or bad faith; and

          (c) to indemnify and hold the Trustee and its directors, officers, agents and employees
(collectively, the “Indemnitees”) harmless from and against any and all claims, liabilities,
losses, damages, fines, penalties and expenses, including out-of-pocket, incidental
expenses, legal fees and expenses and the allocated costs and expenses of in-house counsel and
legal staff (“Losses”) that may be imposed on, incurred by or asserted against the Indemnitees or
any of them for following any instruction or other direction upon which the Trustee is authorized
to rely pursuant to the terms of this Indenture. In addition to and not in limitation of the
immediately preceding sentence, the Company also agrees to indemnify and hold the Indemnitees and
each of them harmless from and against any and all Losses that may be imposed on, incurred by or
asserted against the Indemnitees or any of them in connection with or arising out of the Trustee’s
performance under this Indenture, provided the Trustee has not acted with negligence, acted in bad
faith or engaged in 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 the principal amount of, or the Fundamental Change Repurchase Price or
Interest on, particular Securities.

     The Company’s payment, reimbursement and indemnity obligations pursuant to this Section 7.07
shall survive the satisfaction and discharge of this Indenture, the resignation or removal of the
Trustee and the termination of this Indenture for any reason. In addition to and without prejudice
to its rights hereunder, when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 6.01(h) or Section 6.01(i), the expenses, including the
reasonable charges and expenses of its counsel and the compensation for services payable pursuant
to Section 7.07(a), are intended to constitute expenses of administration under any applicable
federal or state bankruptcy, insolvency or similar laws.

     For the purposes of this Section 7.07, the “Trustee” shall include any predecessor Trustee;
provided, however, that except as may be otherwise agreed among the parties, the negligence,
willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.

     Section 7.08 Replacement of Trustee. The Trustee may resign at any time by so notifying the
Company; provided, however, that no such resignation shall be effective until a successor Trustee
has accepted its appointment pursuant to this Section 7.08. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may remove the

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Trustee by so notifying
the Trustee and the Company in writing. The Company shall remove the Trustee if:

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

          (2) the Trustee is adjudged bankrupt or insolvent;

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

          (4) the Trustee otherwise 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, by resolution of its Board of Directors, a successor
Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company satisfactory in form and substance to the retiring Trustee and 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.

     If a successor Trustee does not take office within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor Trustee.

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

     So long as no Default or Event of Default shall have occurred and be continuing, if the
Company shall have delivered to the Trustee (i) a Board Resolution appointing a successor Trustee,
effective as of a date at least 30 days after delivery of such Resolution to the Trustee, and (ii)
an instrument of acceptance of such appointment, effective as of such date, by such successor
Trustee in accordance with this Indenture, the Trustee shall be deemed to have resigned as
contemplated in this Section 7.08, the successor Trustee shall be deemed to have been accepted as
contemplated in this Indenture, all as of such date, and all other provisions of this Indenture
shall be applicable to such resignation, appointment and acceptance.

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     Section 7.09 Successor Trustee by Merger. Any corporation or association into which the Trustee in
its individual capacity may be merged or converted or with which it may be consolidated or to which
it transfers all or substantially all of its corporate trust business or assets, or any corporation
or association resulting from any merger, conversion or consolidation to which the Trustee in its
individual capacity may be sold or otherwise transferred, shall be the Trustee hereunder without
further act.

     Section 7.10 Eligibility; Disqualification. The Trustee shall at all times satisfy the
requirements of TIA Sections 310(a)(1) and 310(b). The Trustee (or any parent holding company)
shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. Nothing herein contained shall prevent the Trustee from
filing with the Commission the application referred to in the penultimate paragraph of TIA Section
310(b).

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

ARTICLE 8

Discharge of Indenture

     Section 8.01 Discharge of Liability on Securities. When (i) the Company causes to be delivered to
the Trustee all outstanding Securities (other than Securities replaced or repaid pursuant to
Section 2.07) for cancellation or (ii) all outstanding Securities have become due and payable
(whether on conversion, maturity, repurchase or otherwise) and the Company deposits with the
Trustee cash and, if applicable, shares of Common Stock sufficient to pay all amounts due and owing
on all outstanding Securities (other than Securities replaced pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company, then this Indenture
shall, subject to Section 7.07, cease to be of further effect. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officer’s Certificate and Opinion of Counsel
and at the cost and expense of the Company.

     Section 8.02 Repayment to the Company. The Trustee and the Paying Agent shall return to the
Company upon written request any money or securities held by them for the payment of any amount
with respect to the Securities that remains unclaimed for one year, subject to applicable abandoned
property law.

After return to the Company, Holders entitled to the money or securities must look to the Company
for payment as general creditors unless an applicable abandoned property law designates another
Person and the Trustee and the Paying Agent shall have no further liability to

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the Securityholders
with respect to such money or securities for that period commencing after the return thereof.

     Section 8.03 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 amounts due on the Securities. Money and other consideration so held in trust is subject to the
Trustee’s rights under Section 7.07.

ARTICLE 9

Amendments

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

          (a) add guarantees with respect to the Securities or secure the Securities, including without
limitation to add any Subsidiary as an additional Guarantor as provided in Section 11.05 hereof or
to evidence the succession of another Person to any Guarantor pursuant to Section 11.03 hereof and
the assumption by any such successor of the covenants and agreements of such Guarantor contained
herein and in the Subsidiary Guarantee of such Guarantor;

          (b) conform this Indenture and the Securities to the “Description of Notes” as set forth in
the Prospectus;

          (c) add to the covenants of the Company or Events of Default for the benefit of the Holders of
Securities;

          (d) surrender any right or power herein conferred upon the Company;

          (e) eliminate the right of the Company to make a Physical Settlement Election in order to
satisfy its Conversion Obligations pursuant to Section 10.03(b) hereof;

          (f) provide for the assumption by a successor company of the Company’s obligations to the
Holders of Securities in the case of a merger, consolidation, conveyance, transfer, sale or lease
pursuant to Article 5 or Section 10.06 hereof;

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          (g) comply with the requirements of the SEC in order to effect or maintain the qualification
of this Indenture or any supplemental indenture under the TIA;

          (h) cure any ambiguity, manifest error or defect;

          (i) cure any omission or correct any inconsistency in the Indenture, provided that the rights
of the Securityholders are not adversely affected in any material respect;

          (j) make other changes to this Indenture or forms or terms of the Securities so long as no
such change individually or in the aggregate with all other such changes has or will have a
material adverse effect on the interests of the Holders of the Securities;

          (k) establish the form of Securities (substantially in the form of Exhibit B);

          (l) evidence and provide for the acceptance of the appointment under this Indenture of a
successor Trustee in accordance with the terms of this Indenture;

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

          (n) release any Guarantor from any of its obligations under its Subsidiary Guarantee or this
Indenture as provided in the Indenture.

     Section 9.02 With Consent of Holders. Except as provided below in this Section 9.02 and in Section
9.01, this Indenture or the Securities may be amended, modified or supplemented, and noncompliance
in any particular instance with any provision of this Indenture or the Securities may be waived, in
each case with the written consent of the Holders of at least a majority of the principal amount of
the Securities at the time outstanding.

     Without the written consent or the affirmative vote of each Holder of Securities affected
thereby, an amendment, supplement or waiver under this Section 9.02 may not:

          (a) reduce the principal amount of or change the Stated Maturity of any Security;

45

 

          (b) reduce the Fundamental Change Repurchase Price or change the time at which or
circumstances under which the Securities may or shall be repurchased;

          (c) change the currency in which any Security or Interest thereon or the Fundamental Change
Repurchase Price thereof is payable;

          (d) reduce the rate of accrual for, or extend the time for payment of Interest, on any
Security;

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

          (f) impair the right of the Holders of the Securities to convert any Security as provided in
Article 10 or reduce the number of shares or other consideration due upon conversion, except as
otherwise permitted pursuant to Article 5 or Section 10.06 hereof;

          (g) change the Company’s obligation to maintain an office or agency in the places and for the
purposes specified in this Indenture;

          (h) amend or modify any of the provisions of this Section, or reduce the percentage of the
aggregate principal amount of outstanding Securities required to amend, modify, supplement or waive
a provision of the Indenture or the Securities, except to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the Holder of each outstanding
Security affected thereby; or

          (i) reduce the percentage of the aggregate principal amount of the outstanding Securities the
consent of whose Holders is required for any such supplemental indenture entered into in accordance
with this Section 9.02 or the consent of whose Holders is required for any waiver provided for in
this Indenture.

     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, but it shall be sufficient if such consent approves
the substance thereof.

     After an amendment under this Section 9.02 becomes effective, the Company shall mail to each
Holder a notice briefly describing the amendment.

     Section 9.03 Compliance With Trust Indenture Act. Every supplemental indenture executed pursuant
to this Article shall comply with the TIA as then in effect.

46

 

     Section 9.04 Revocation and Effect of Consents, Waivers and Actions. Until an amendment, waiver or
other action by Holders becomes effective, a consent thereto by a Holder of a Security hereunder is
a continuing consent by the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder’s Security, even if notation
of the consent, waiver or action is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to such Holder’s Security or portion
of the Security if the Trustee receives the notice of revocation before the date the amendment,
waiver or action becomes effective. After an amendment, waiver or action becomes effective, it
shall bind every Securityholder.

     Section 9.05 Notice of Amendments, Notation on or Exchange of Securities. Securities authenticated
and delivered after the execution of any supplemental indenture pursuant to this Article 9 may, and
shall if required by the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such
supplemental indenture may be prepared and executed by the Company and authenticated and delivered
by the Trustee in exchange for outstanding Securities.

     Section 9.06 Trustee to Sign Supplemental Indentures. The Trustee shall sign any supplemental
indenture authorized pursuant to this Article 9 if the amendment contained therein does not affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such supplemental indenture the Trustee shall
receive, and (subject to the provisions of Section 7.01) shall be fully protected in relying upon,
an Officer’s Certificate and an Opinion of Counsel stating that such amendment is authorized or
permitted by this Indenture.

     Section 9.07 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

ARTICLE 10

Conversions

     Section 10.01 Conversion Privilege. (a) Subject to and upon compliance with the provisions of this Article 10, a Holder of a
Security shall have the right, at such Holder’s option, to convert all or any portion (if the
portion to be converted is $1,000 principal amount or an integral multiple thereof) of such
Security prior to the close of business on the second Business Day immediately preceding Stated
Maturity into cash and shares of Common Stock, if applicable, based on the Applicable Conversion
Rate only as follows:

47

 

          (1) before April 15, 2012, during any fiscal quarter of the Company (a “Fiscal Quarter”) (and
only during such Fiscal Quarter) commencing after the Fiscal Quarter ending September 30, 2007, if
the Closing Sale Price of the Common Stock for at least 20 Trading Days during the period of 30
consecutive Trading Days ending on the last Trading Day of the immediately preceding Fiscal Quarter
is more than 130% of the Applicable Conversion Price in effect on such last Trading Day;

          (2) during the five Business Days immediately following any five consecutive Trading Day
period (the “Measurement Period”) in which the Trading Price per $1,000 original principal amount
of the Securities (as determined following a request by a Holder of the Securities in accordance
with the procedures described below) for each day of such Measurement Period was less than 98% of
the product of the Closing Sale Price of the Common Stock and the Applicable Conversion Rate on
each such day. The Trustee or another party appointed by the Trustee will, on the Company’s behalf,
determine if the Securities are convertible as a result of the Trading Price of the Securities and
notify the Company and the Trustee if the Trustee has appointed another party to determine if the
Securities are convertible pursuant to this clause (2); provided, that the Trustee or such other
Person appointed by the Trustee shall have no obligation to determine the Trading Price of the
Securities unless the Company has requested such determination and the Company shall have no
obligation to make such request unless requested to do so in writing by a Holder of the Security.
Upon making any such request, any such requesting Holder shall provide reasonable evidence that (A)
such requesting Holder is a Holder of the Security as of the date of such notice, and (B) the
Trading Price per $1,000 principal amount of Securities would be less than 98% of the product of
the Closing Sale Price of the Common Stock and the Applicable Conversion Rate on that day. At such
time, the Company shall instruct the Trustee to determine the Trading Price of the Securities
beginning on the next Trading Day and on each successive Trading Day until the Trading Price per
$1,000 original principal amount of the Securities is greater than or equal to 98% of the product
of the Closing Sale Price of the Common Stock and the Applicable Conversion Rate;

          (3) any time on or after April 15, 2012 and prior to the close of business on the second
Business Day immediately preceding Stated Maturity;

          (4) as provided in clause (b) of this Section 10.01; and

          (5) upon a redemption in connection with a Specified Accounting Change pursuant to Section
3.01, at any time beginning on the date of the notice of redemption until the Trading Day prior to
the Redemption Date.

     The Company or, if applicable, the Conversion Agent (in the case of a conversion pursuant to
clause (1) above) or the Trustee (in the case of a conversion pursuant to clause (2) above) on
behalf of the Company, shall determine on a daily basis during the time periods specified in
Section 10.01(a)(1) or, following a request by a Holder of Securities in accordance

48

 

with the
procedures specified in Section 10.01(a)(2), whether the Securities shall be convertible as a
result of the occurrence of an event specified in such Sections and, if the Securities shall be so
convertible, the Company, the Conversion Agent or the Trustee, as applicable, shall promptly
deliver to the Conversion Agent, the Trustee or the Company, as applicable, written notice thereof.
Whenever the Securities shall become convertible pursuant to this Section 10.01 (as determined in
accordance with this Section 10.01), the Company or, at the Company’s request, the Trustee in the
name and at the expense of the Company, shall promptly notify the Holders of the event triggering
such convertibility in the manner provided in Section 12.02, or the Company shall promptly
disseminate a press release and use its reasonable efforts to post the information on its website
or otherwise publicly disclose the information. Any notice so given shall be conclusively presumed
to have been duly given, whether or not the Holder receives such notice.

          (b) In the event that:

          (1) (A) the Company distributes to all or substantially all holders of Common Stock rights or
warrants entitling them to purchase, for a period expiring within 60 days after the date of such
distribution, Common Stock at less than the average of the Closing Sale Prices of the Common Stock
for the five consecutive Trading Days ending on the Trading Day immediately preceding the public
announcement date for such distribution; or (B) the Company distributes to all or substantially all
holders of Common Stock cash, debt securities, rights or warrants to purchase the Company’s
securities, or other assets (excluding dividends or distributions described in Section 10.04(a)),
which distribution has a per share value as determined by the Board of Directors exceeding 10% of
the average of the Closing Sale Prices of the Common Stock for the five consecutive Trading Days
ending on the Trading Day immediately preceding the public announcement date of such distribution,
then, in either case, the Securities may be surrendered for conversion at any time on and after the
date that the Company gives notice to the Holders of such distribution, which shall be not less
than 30 calendar days prior to the Ex-Dividend Date for such distribution, until the earlier of the
close of business on the Business Day immediately preceding the Ex-Dividend Date for such
distribution or the date on which the Company announces that such distribution shall not take
place, even if the Securities are not otherwise convertible at such time; provided that no Holder
of a Security shall have the right to convert its Securities if the Holder is entitled to
participate in such distribution (based on the Applicable Conversion Rate) without conversion; or

          (2) a Fundamental Change occurs prior to Stated Maturity (regardless of whether Holders have a
right to require the Company to repurchase the Securities upon such
Fundamental Change as set forth in Article 3), then the Securities may be surrendered for
conversion at any time from and after the date that is 30 calendar days prior to the anticipated
effective date of such transaction until and including the date that is 30 calendar days after the
actual effective date of such transaction (or, if such transaction also constitutes a Fundamental
Change pursuant to which Holders have a right to require the Company to repurchase the Securities
pursuant to Section 3.02, until the close of business on the Business Day immediately preceding the
applicable Fundamental Change Repurchase Date). The Company shall notify Holders and the Trustee as
promptly as practicable following the date that it publicly announces

49

 

the Fundamental Change
transaction giving rise to the above conversion right (but in no event less than 30 calendar days
prior to the anticipated effective date of such transaction).

          (c) If a Fundamental Change occurs prior to Stated Maturity and a Holder elects to convert its
Securities in connection with such Fundamental Change (regardless of whether such Holder has the
right to require the Company to repurchase its Securities as set forth in Article 3), the
Applicable Conversion Rate shall be increased by an additional number of shares of Common Stock
(the “Additional Shares”) as described below; provided, however that no increase will be made in
the case of a Fundamental Change if (i) at least 90% of the consideration paid for the Company’s
Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to
dissenters’ appraisal rights) in such Fundamental Change transaction consists of shares of capital
stock traded on the New York Stock Exchange or a U.S. national securities exchange or quoted on
another established automated over-the-counter trading market in the United States (or that will be
so traded or quoted immediately following the transaction) and as a result of such transaction or
transactions the Securities become convertible into such shares of such capital stock or (ii) the
Company elects to adjust the Conversion Rate and the related Conversion Obligation in connection
with a Public Acquirer Change in Control pursuant to subsection (d) of this Section. The Company
shall notify each of the Holders and the Trustee of the Fundamental Change no later than 30
Scheduled Trading Days prior to the anticipated effective date of the Fundamental Change. Such
notice shall also state whether such Fundamental Change will also constitute a Public Acquirer
Change in Control and whether the Company will elect to adjust the Conversion Rate and the related
Conversion Obligation pursuant to subsection (d) of this Section. A conversion of the Securities
will be deemed for these purposes to be “in connection with” a Fundamental Change if the Conversion
Notice is received by the Conversion Agent from and including the date that is 30 calendar days
prior to the anticipated effective date of the Fundamental Change to the close of business on the
date that is the later to occur of (i) 30 calendar days after the actual effective date of the
Fundamental Change and (ii) the Fundamental Change Repurchase Date.

     The number of Additional Shares to be added to the Applicable Conversion Rate as described in
the immediately preceding paragraph shall be determined by reference to the table attached as
Schedule I hereto, based on the effective date of such Fundamental Change transaction and
the Stock Price paid in connection with such transaction; provided that if the Stock Price is
between two Stock Price amounts in the table or such effective date is between two effective dates
in the table, the number of Additional Shares shall be determined by a straight-line interpolation
between the number of Additional Shares set forth for the higher and lower Stock Price amounts and
the two dates, as applicable, based on a 365-day year. The
“effective date” with respect to a Fundamental Change transaction means the date that a
Fundamental Change becomes effective.

     The Stock Prices set forth in the first row of the table in Schedule I hereto shall be
adjusted as of any date on which the Applicable Conversion Rate of the Securities is adjusted
pursuant to Section 10.04. The adjusted Stock Prices shall equal the Stock Prices applicable
immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the

50

 

Applicable Conversion Rate immediately prior to the adjustment giving rise to the Stock Price
adjustment and the denominator of which is the Applicable Conversion Rate as so adjusted. The
number of Additional Shares shall be adjusted in the same manner as the Applicable Conversion Rate
as set forth in Section 10.04.

     Notwithstanding the foregoing, in no event will the maximum conversion rate exceed 95.6937 per
$1,000 principal amount of notes, subject to adjustments in the same manner as the Applicable
Conversion Rate as set forth in Section 10.04.

          (d) In the event of a Fundamental Change constituting a Public Acquirer Change in Control, the
Company may, in lieu of adjusting the applicable Conversion Rate as provided in subsection (c),
elect, by giving notice in writing to all Holders and the Trustee of such election in accordance
with subsection (c) of this Section, to adjust the Conversion Rate and the related Conversion
Obligation such that from and after the effective date of such Public Acquirer Change in Control,
Holders shall be entitled to convert their Securities into a number of shares of Public Acquirer
Common Stock at a Conversion Rate equal to the Conversion Rate in effect immediately prior to the
Public Acquirer Change in Control multiplied by a fraction the numerator of which shall be (i) in
the case of a share exchange, merger or binding share exchange pursuant to which Common Stock is
converted into cash, securities or other property, the average value of all cash and any other
consideration paid or payable per share of Common Stock or (ii) in the case of any other Public
Acquirer Change in Control, the average of the Closing Sale Prices of Common Stock for the ten (10)
consecutive Trading Days prior to but excluding the effective date of such Public Acquirer Change
in Control, and the denominator of which shall be the average of the Closing Sale Prices of the
Public Acquirer Common Stock for the ten (10) consecutive Trading Days commencing on the Trading
Day next succeeding the effective date of such Public Acquirer Change in Control.

     Section 10.02 Conversion Procedure; Applicable Conversion Rate; Fractional Shares. (a) Subject to
the Company’s rights under Section 10.01 and Section 10.03, each Security shall be convertible at
the office of the Conversion Agent into a combination of cash and fully paid and nonassessable
shares (calculated to the nearest 1/10,000th of a share) of Common Stock, if any, at a
rate (the “Applicable Conversion Rate”) equal to, initially, 72.2217 shares of Common Stock for
each $1,000 principal amount of Securities. The Applicable Conversion Rate shall be adjusted in
certain instances as provided in Section 10.04 hereof, but shall not be adjusted for any accrued
and unpaid Interest. Upon conversion, no payment shall be made by the Company with respect to any
accrued and unpaid Interest, unless, as described below, such conversion
occurs between an Interest Record Date and the Interest Payment Date to which such Interest Record
Date relates, in which case the Holders of the Securities on the Interest Record Date shall receive
accrued and unpaid Interest payable on the Securities on the applicable Interest Payment Date.
Instead, such amount shall be deemed paid by the applicable Settlement Amount or Settlement Shares,
as applicable, delivered upon conversion of any Security. In addition, no payment shall be made in
respect of dividends on the Common Stock with a record date prior to the Conversion Date. The
Company shall not issue any fraction of a share of Common Stock in connection with any conversion
of Securities, but instead shall, subject to Section 10.03 hereof,

51

 

make a cash payment (calculated
to the nearest cent) equal to such fraction multiplied by the Daily VWAP on the final Trading Day
of the Cash Settlement Averaging Period or, if the Company has made a valid Physical Settlement
Election, on the third Scheduled Trading Day before the Conversion Settlement Date.

          (b) At any time on or before April 15, 2012, the Company may irrevocably make a Physical
Settlement Election as set forth in Section 10.03(b).

          (c) Before any Holder of a Security shall be entitled to convert the same, such Holder shall
(1) in the case of Global Securities, comply with the procedures of the Depositary in effect at
that time for converting a beneficial interest in a Global Security, and in the case of
Certificated Securities, surrender such Securities, duly endorsed to the Company or in blank, at
the office of the Conversion Agent, and (2) give written notice to the Company in the form on the
reverse of such Certificated Security (the “Conversion Notice”) at said office or place that such
Holder elects to convert the same and shall state in writing therein the principal amount of
Securities to be converted (which shall be equal to or an integral multiple of $1,000 principal
amount) and the name or names (with addresses) in which such Holder wishes the certificate or
certificates for Common Stock included in the Settlement Amount, if any, or Settlement Shares, as
applicable, to be registered.

     Before any such conversion, a Holder also shall pay all taxes or duties, if any, as provided
in Section 10.07 and any amount payable pursuant to Section 10.02(h).

     If more than one Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares of Common Stock, if any, that shall be deliverable upon conversion shall
be computed on the basis of the aggregate principal amount of the Securities (or specified portions
thereof to the extent permitted thereby) so surrendered.

          (d) A Security shall be deemed to have been converted as of the close of business on the date
(the “Conversion Date”) that the Holder has complied with Section 10.02(c).

          (e) The Company shall, on the Conversion Settlement Date, to the extent applicable as set
forth in Section 10.03, (i) pay the cash component (including cash in lieu of any
fraction of a share to which such Holder would otherwise be entitled) of the Conversion
Obligation determined pursuant to Section 10.03 to the Holder of a Security surrendered for
conversion, or such Holder’s nominee or nominees, and (ii) issue, or cause to be issued, and
deliver to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees,
certificates for the number of full shares of Common Stock, if any, to which such Holder shall be
entitled as part of such Conversion Obligation. The Company shall not be required to deliver
certificates for shares of Common Stock while the stock transfer books for such stock or the
security register are duly closed for any purpose, but certificates for shares of Common Stock

52

 

shall be issued and delivered as soon as practicable after the opening of such books or security
register, and the Person or Persons entitled to receive the Common Stock as part of the applicable
Settlement Amount or Settlement Shares, as applicable, upon such conversion shall be treated for
all purposes as the record holder or holders of such Common Stock, as of the close of business on
the applicable Conversion Settlement Date.

          (f) In case any Security shall be surrendered for partial conversion, the Company shall
execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder
of the Security so surrendered, without charge to such Holder (subject to the provisions of Section
10.07 hereof), a new Security or Securities in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Securities.

          (g) By delivering the combination of cash and shares of Common Stock, if any, together with a
cash payment in lieu of any fractional shares to the Conversion Agent or to the Holder or such
Holder’s nominee or nominees, the Company shall have satisfied in full its Conversion Obligation
with respect to such Security, and upon such delivery, accrued and unpaid Interest, if any, with
respect to such Security shall be deemed to be paid in full rather than canceled, extinguished or
forfeited, and such amounts shall no longer accrue.

          (h) If a Securityholder delivers a Conversion Notice after the Interest Record Date for a
payment of Interest but prior to the corresponding Interest Payment Date, such Securityholder must
pay to the Company, at the time such Securityholder surrenders Securities for conversion, an amount
equal to the Interest that has accrued and shall be paid on the related Interest Payment Date. The
preceding sentence shall not apply if (1) the Company has specified a Fundamental Change Repurchase
Date that is after the close of business on an Interest Record Date but on or prior to the opening
of business on the corresponding Interest Payment Date, (2) to the extent of overdue Interest, if
any overdue Interest exists at the time of conversion with respect to the Securities converted, (3)
if a Holder converts its Securities after the close of business on or after April 15, 2012 or (4)
the Company has specified a redemption date pursuant to Article III.

     Section 10.03 Payment upon Conversion. (a) In the event that the Company has not made a Physical
Settlement Election as set forth in clause (b) below, upon conversion of Securities, the Company
shall satisfy its obligation to convert the Securities (the “Conversion Obligation”) by delivering
to Holders surrendering
Securities for conversion, for each $1,000 principal amount of Securities, a settlement amount (the
"Settlement Amount”) equal to the sum of the Daily Settlement Amounts for each of the 20
consecutive Trading days of the related Cash Settlement Averaging Period.

               (i) The “Daily Settlement Amount” for each of the 20 consecutive Trading Days of the
related Cash Settlement Averaging Period, shall consist of:

53

 

                (A) cash equal to the lesser of $50 and the Daily Conversion Value on such
Trading Day; and

                (B) to the extent the Daily Conversion Value on such Trading Day exceeds $50, a
number of shares of Common Stock equal to (x) the difference between such Daily
Conversion Value and $50 (such difference being referred to as the “Daily Excess
Amount”), divided by (y) the Daily VWAP for such day (or the consideration into
which the Common Stock has been converted as described in Section 10.06); provided
that no fractional shares shall be issued, and in lieu thereof, the Company shall
pay an amount in cash as set forth in Section 10.02 above.

               (ii) The Settlement Amount will be delivered on the Conversion Settlement Date.

          (b) At any time on or before April 15, 2012, the Company may irrevocably make a Physical
Settlement Election, in its sole discretion and without the consent of the Holders, by valid
delivery of a Physical Settlement Notice, to satisfy all Conversion Obligations arising out of
conversions of Securities after the Physical Settlement Election Date. In addition to the giving of
such Physical Settlement Election Notice, the Company shall disseminate a press release through Dow
Jones & Company, Inc. or Bloomberg Business News or PR Newswire 02 or another newswire service
announcing such Physical Settlement Election or publish such information in The Wall Street Journal
or another newspaper of general circulation in the City of New York or on the Company’s website.
Upon any such conversion following a valid Physical Settlement Election and the related Physical
Settlement Date, the Company shall, subject to the provisions of this Article 10, satisfy its
Conversion Obligation by delivering to converting Holders on the Conversion Settlement Date a
number of shares of Common Stock (the “Settlement Shares”) equal to the aggregate principal amount
of Securities to be converted divided by $1,000 and multiplied by the Applicable Conversion Rate on
the Conversion Date (which may include increases to reflect any Additional Shares as described
under Section 10.01(c) above); provided that no fractional shares shall be issued, and in lieu
thereof, the Company shall pay an amount in cash as set forth in Section 10.02 above.

     Section 10.04 Adjustment of Applicable Conversion Rate. The Applicable Conversion Rate shall be adjusted, without duplication, from time to time by the
Company in accordance with this Section 10.04, except that the Company will not make any adjustment
if Holders of Securities are entitled to participate on the relevant distribution or payment date,
as a result of holding the Securities, in the transactions described below without having to
convert their Securities (based on the Applicable Conversion Rate in effect immediately before the
relevant Record Date):

     (a) If the Company, at any time or from time to time while any of the Securities are
outstanding, issues shares of Common Stock as a dividend or distribution on

54

 

shares of Common Stock as a dividend or distribution on shares of Common Stock, or if the
Company effects a share split or share combination, then the Applicable Conversion Rate will be
adjusted based on the following formula:

where

	 	 	 	 	 
	CR0

	 	=
	 	the Applicable Conversion Rate in effect
immediately prior to the Record Date of such
dividend or distribution, or the effective date of
such share split or share combination, as
applicable;
	 
	 	 	 	 
	CR1

	 	=
	 	the Applicable Conversion Rate in effect
immediately after such Record Date or effective
date of such share split or combination, as
applicable;
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding
immediately before such Record Date or effective
date; and
	 
	 	 	 	 
	OS1

	 	=
	 	the number of shares of Common Stock outstanding
immediately before such Record Date or effective
date, but after giving effect to such dividend,
distribution, share split or combination, as
applicable.

     Such adjustment will become effective immediately after the Record Date for such dividend or
distribution, or the effective date for such share split or share combination. If any dividend or
distribution of the type described in this Section 10.04(a) is declared but not so paid or made,
the Applicable Conversion Rate shall again be adjusted, as of the date that is the earlier of (i)
the public announcement of the non-payment of the dividend or distribution and (ii) the date that
the dividend or distribution was to be paid or made, to the Applicable Conversion Rate which would
then be in effect if such dividend or distribution had not been declared.

          (b) If the Company, at any time or from time to time while any of the Securities are
outstanding, issues to all holders of Common Stock any rights, warrants or options (other than
pursuant to any dividend reinvestment or share purchase plan) entitling them for a period of not
more than 60 calendar days from the date of issuance of such rights, warrants or options to
subscribe for or purchase shares of Common Stock at an exercise price per share less than the
average of the Closing Sales Prices of Common Stock for the 10 consecutive Trading Day period
ending on the Business Day immediately preceding the date of announcement of such issuance, the
Applicable Conversion Rate shall be adjusted based on the following formula:

where

55

 

	 	 	 	 	 
	CR0

	 	=
	 	the Applicable Conversion Rate in effect immediately prior to the Record
Date for such issuance;
	 
	 	 	 	 
	CR1

	 	=
	 	the Applicable Conversion Rate in effect immediately after such Record Date;
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding immediately before such
Record Date for such issuance;
	 
	 	 	 	 
	X

	 	=
	 	the total number of shares of Common Stock issuable pursuant to such
rights, warrants or options; and
	 
	 	 	 	 
	Y

	 	=
	 	the number of shares of Common Stock equal to the quotient of (A) the
aggregate price payable to exercise such rights, warrants or options
divided by (B) the average of the Closing Sale Prices of Common Stock for
the 10 consecutive Trading Day period ending on the Trading Day immediately
preceding the “ex-date” of announcement of the issuance of such rights,
warrants or options.

     To the extent such rights, warrants or options are not exercised or converted prior to the
expiration of the exercisability or convertability thereof, the Applicable Conversion Rate will be
readjusted, as of such expiration date, to the Applicable Conversion Rate which would then be in
effect had the adjustments made upon the issuance of such rights, warrants or options been made on
the basis of the delivery of only the number of shares of Common Stock actually delivered. In the
event that such rights, warrants or options are not so issued, the Conversion Rate shall again be
adjusted to be the Applicable Conversion Rate which would then be in effect if such rights,
warrants or options had not been issued. In determining whether any rights, warrants or options
entitle the Holders to subscribe for or purchase shares of Common Stock at less than the average of
the Closing Sale Prices of Common Stock for the 10 consecutive Trading Day period ending on the
Business Day immediately preceding the date of announcement of such issuance, and in determining
the aggregate offering price of such shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants and the value of such consideration, if other
than cash, as shall be determined in good faith by the Board of Directors of the Company.

          (c) If the Company, at any time or from time to time while the Securities are outstanding,
distributes shares of any class of Capital Stock of the Company, evidences of indebtedness or other
assets or property of the Company to all, or substantially all, holders of its Common Stock,
excluding:

	 	(i)	 	dividends or distributions referred to in Section 10.04(a);
	 
	 	(ii)	 	rights, warrants or options referred to in Section 10.04(b);
	 
	 	(iii)	 	dividends or distributions paid exclusively in cash; and

56

 

	 	(iv)	 	Spin-Offs (as defined below) to which the provisions set forth below in this
Section 10.04(c) shall apply;
	 
	 	 	 	then the Conversion Rate will be adjusted based on the following formula:

where

	 	 	 	 	 
	CR0

	 	=
	 	the Applicable Conversion Rate in effect
immediately prior to the Record Date for such
distribution;
	 
	 	 	 	 
	CR1

	 	=
	 	the Applicable Conversion Rate in effect
immediately after such Record Date for such
distribution;
	 
	 	 	 	 
	SP0

	 	=
	 	the average of the Closing Sale Prices of the
Common Stock over the 10 consecutive Trading Day
period ending on the Trading Day immediately
preceding the Ex-Dividend Date for such
distribution; and
	 
	 	 	 	 
	FMV

	 	=
	 	the Fair Market Value (as determined by the Board
of Directors of the Company) of the shares of
Capital Stock, evidences of indebtedness, assets
or property distributed with respect to each
outstanding share of the Common Stock on the
earlier of the Record Date or the Ex-Dividend Date
for such distribution.

     Such adjustment shall become effective immediately prior to the opening of business on the day
following the Ex-Dividend Date for such distribution.

     Where there has been a payment of a dividend or other distribution on the Common Stock of
shares of Capital Stock of any class or series, or similar equity interest, of or relating to a
Subsidiary or other business unit (a “Spin-Off”), the Applicable Conversion Rate in effect
immediately before 5:00 p.m., New York City time, on the 10th Trading Day immediately
following the effective date of the Spin-Off shall be increased based on the following formula:

where

	 	 	 	 	 
	CR0

	 	=
	 	the Applicable Conversion Rate in effect on the
10th Trading Day immediately
following, and including, the effective date of
the Spin-Off;
	 
	 	 	 	 
	CR1

	 	=
	 	the Applicable Conversion Rate in effect
immediately after the 10th Trading Day
immediately following, and including, the
effective date of the Spin-Off;

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	FMV0

	 	=
	 	the average of the Closing Sale Prices of the
Capital Stock or similar equity interest
distributed to holders of Common Stock applicable
to one share of Common Stock over the first 10
consecutive Trading Day period after, and
including, the effective date of the Spin-Off;
and
	 
	 	 	 	 
	MP0

	 	=
	 	the average of the Closing Sale Prices of Common
Stock over the first 10 consecutive Trading Day
period after, and including the effective date of
the Spin-Off.

     The adjustment to the Applicable Conversion Rate under the preceding paragraph will occur on
the 10th Trading Day from, and including, the effective date of the Spin-Off; provided
that in respect of any conversion within the 10 Trading Days following the effective date of any
Spin-Off, references within this Section 10.04(c) to “10 Trading Days” shall be deemed replaced
with such lesser number of Trading Days as have elapsed between the effective date of such Spin-Off
and the Conversion Date in determining the Applicable Conversion Rate.

     If any dividend or distribution described in this Section 10.04(c) is declared but not paid or
made, the Applicable Conversion Rate shall be readjusted, as of the date that is the earlier of (i)
the public announcement of the non-payment of the dividend or distribution and (ii) the date on
which the dividend or distribution was to have been paid, in which case, the Applicable Conversion
Rate will be the Applicable Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.

     For the purposes of this Section 10.04(c), rights, warrants or options distributed by the
Company to all holders of Common Stock entitling them to subscribe for or purchase shares of the
Company’s capital stock (either initially or under certain circumstances), which rights, warrants
or options until the occurrence of a specified event or events (a “Trigger Event”): (1) are deemed
to be transferred with such shares of Common Stock; (2) are not exercisable; and (3) are also
issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed
for purposes of this Section 10.04(c), (and no adjustment to the Conversion Rate under this Section
10.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such
rights 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 this Section 10.04(c). If any such right,
warrant or option, including any such existing rights, warrants or options distributed prior to the
date of this Indenture, are subject to events, upon the occurrence of which such rights, warrants
or options 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, warrants or options with such rights
(and a termination or expiration of the existing rights, warrants or options without exercise by
any of the holders thereof). In addition, in the event of any distribution (or deemed distribution)
of rights, warrants or options 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 Applicable Conversion Rate under this Section
10.04(c) was made, (1) in the case of any such rights,

58

 

warrants or options which shall all have
been redeemed or purchased without exercise by any Holders thereof, the Applicable Conversion Rate
shall be readjusted upon such final purchase 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 purchase price received by a holder of
Common Stock with respect to such rights, warrants or options (assuming such holder had retained
such rights, warrants or options), made to all applicable holders of Common Stock as of the date of
such redemption or purchase, and (2) in the case of such rights, warrants or options which shall
have expired or been terminated without exercise by any holders thereof, the Applicable Conversion
Rate shall be readjusted as if such rights, warrants or options had not been issued.

          (d) If any cash dividend or other distribution is made to all, or substantially all, holders
of Common Stock (excluding any dividend or distribution in connection with the Company’s
liquidation, dissolution, or winding up), the Applicable Conversion Rate shall be adjusted based on
the following formula:

where

	 	 	 	 	 
	CR0

	 	=
	 	the Applicable Conversion Rate in effect
immediately prior to the Record Date for such
distribution;
	 
	 	 	 	 
	CR1

	 	=
	 	the Applicable Conversion Rate in effect
immediately after the Record Date for such
distribution;
	 
	 	 	 	 
	SP0

	 	=
	 	the Closing Sale Price of a share of Common Stock
on the Trading Day immediately preceding the
earlier of the Record Date and the day immediately
preceding the Ex-Dividend Date for such
distribution; and
	 
	 	 	 	 
	C

	 	=
	 	the amount in cash per share the Company
distributes to holders of Common Stock.

     If any dividend or distribution described in this Section 10.04(d) is declared but not so paid
or made, the new Applicable Conversion Rate shall be adjusted, as of the date that is the earlier
of (i) the public announcement of the non-payment of the dividend or distribution and (ii) the date
that the dividend or distribution was to be paid, to the Applicable Conversion Rate that would then
be in effect if such dividend or distribution had not been declared.

          (e) If the Company or any Subsidiary makes a payment in respect of a tender offer or exchange
offer for Common Stock, to the extent that the cash and value (which will be, except for the value
of traded securities, determined by the Board of Directors) of any other consideration included in
the payment per share of Common Stock exceeds the Closing Sale Price per share of Common Stock on
the Trading Day next succeeding the last date on which

59

 

tenders or exchanges may be made pursuant to
such tender or exchange offer, the Applicable Conversion Rate shall be adjusted as of the
10th Trading Day following the date the tender or exchange offer expires based on the
following formula:

where

	 	 	 	 	 
	CR0

	 	=
	 	the Applicable Conversion Rate in effect on the
10th day immediately following, and
including, the date such tender or exchange offer
expires;
	 
	 	 	 	 
	CR1

	 	=
	 	the Applicable Conversion Rate in effect
immediately after the 10th Trading Day
immediately following, and including, the date the
tender or exchange offer expires;
	 
	 	 	 	 
	AC

	 	=
	 	the aggregate value of all cash and any other
consideration (as determined by the Board of
Directors) paid or payable for shares purchased in
such tender or exchange offer;
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding
on the Trading Day immediately prior to the date
such tender or exchange offer expires;
	 
	 	 	 	 
	OS1

	 	=
	 	the number of shares of Common Stock outstanding
on the Trading Day immediately after the date such
tender or exchange offer expires (after giving
effect to the purchase or exchange of shares
pursuant to such tender or exchange offer); and
	 
	 	 	 	 
	SP1

	 	=
	 	the average of the Closing Sale Prices of Common
Stock over the 10 consecutive Trading Day period
commencing on the Trading Day immediately after
the date such tender or exchange offer expires.

     The adjustment to the Applicable Conversion Rate under this Section 10.04(e) shall occur on
the 10th Trading Day from, and including, the Trading Day next succeeding the date such
tender or exchange offer expires; provided that in respect of any conversion within the 10 Trading
Days immediately following, and including, the expiration date of any tender or exchange offer,
references within this Section 10.04(e) to “10 Trading Days” shall be deemed replaced with such
lesser number of Trading Days as have elapsed between the expiration date of such tender or
exchange offer and the Conversion Date in determining the Applicable Conversion Rate.

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

60

 

          (f) No adjustment to the Applicable Conversion Rate will be required unless the adjustment
would require an increase or decrease of at least 1% of the Applicable Conversion
Rate. If the adjustment is not made because the adjustment does not change the Applicable
Conversion Rate by at least 1%, then the adjustment that is not made will be carried forward and
taken into account in any future adjustments. In addition, the Company will make any carry forward
adjustments not otherwise effected upon required purchases of the Securities in connection with a
Fundamental Change, upon any conversion of the Securities, on every one year anniversary from the
original issue date and on the Record Date immediately prior to Stated Maturity of the Securities.
Adjustments to the Applicable Conversion Rate will be rounded to the nearest ten-thousandth, with
five one-hundred-thousandths rounded upward (e.g., 0.76545 would be rounded up to 0.7655).

          (g) The Company from time to time may, to the extent permitted by applicable law, increase the
Applicable Conversion Rate by any amount for a period of at least 20 days if the Board of Directors
shall have made a determination that such increase would be in the best interests of the Company,
which determination shall be conclusive. Whenever the Applicable Conversion Rate is increased
pursuant to this Section 10.04(g) or Section 10.04(h) below, the Company shall mail to Holders of
record of the Securities a notice of the increase at least 15 days prior to the date the increased
Applicable Conversion Rate takes effect, and such notice shall state the increased Applicable
Conversion Rate and the period during which it will be in effect.

          (h) The Company may (but is not required to) make such increases in the Applicable Conversion
Rate, in addition to any adjustments required by Section 10.04(a), Section 10.04(b), Section
10.04(c), Section 10.04(d), Section 10.04(e) or Section 10.04(g), as the Board of Directors
considers to be advisable to avoid or diminish income tax to Holders resulting from any dividend or
distribution of Capital Stock issuable on conversion of the Securities (or rights to acquire
shares) or from any event treated as such for income tax purposes.

          (i) Except as otherwise provided in this Indenture, all calculations under this Article 10
shall be made by the Company. No adjustment shall be made for the Company’s issuance of Common
Stock or securities convertible into or exchangeable for shares of Common Stock or rights to
purchase Common Stock or convertible or exchangeable securities, other than as provided in this
Section 10.04. The Company shall make such calculations in good faith and, absent manifest error,
such calculations shall be binding on the Holders.

          (j) Whenever the Applicable Conversion Rate is adjusted as herein provided, the Company shall
promptly file with the Trustee and any Conversion Agent an Officer’s Certificate setting forth the
Applicable Conversion Rate after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Applicable Conversion Rate and may assume without inquiry that the last
Applicable Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of
such certificate, the Company shall prepare a notice of such

61

 

adjustment of the Applicable
Conversion Rate setting forth the adjusted Applicable Conversion Rate, a brief statement of the
facts requiring such adjustment and the date on which each
adjustment becomes effective and shall mail such notice of such adjustment of the Applicable
Conversion Rate to each Securityholder at such Holder’s last address appearing on the list of
Securityholders provided for in Section 2.05, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such adjustment.

          (k) For purposes of this Section 10.04, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company so long as the Company
does not pay any dividend or make any distribution on shares of Common Stock held in the treasury
of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock.

          (l) Notwithstanding anything to the contrary in this Article 10, no adjustment to the
Applicable Conversion Rate shall be made:

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

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

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

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

               (v) for accrued and unpaid Interest; or

               (vi) for the avoidance of doubt, for the issuance of Common Stock by the Company (other
than to all or substantially all holders of Common Stock) or the payment of cash by the
Company upon conversion or repurchase of Securities.

     Section 10.05 Reserved.

62

 

     Section 10.06 Effect of Reclassification, Consolidation, Merger or Sale. (a) If any of the following events occur, namely (i) any reclassification of the outstanding
shares of Common Stock (other than a subdivision or combination to which Section 10.04(c) applies
or a change in par value) as a result of which holders of Common Stock shall be entitled to receive
cash, securities or other property (such property, the “Exchange Property”) with respect to or in
exchange for such Common Stock, (ii) any consolidation, merger, binding share exchange or
combination of the Company with another Person as a result of which holders of Common Stock shall
be entitled to receive Exchange Property with respect to or in exchange for such Common Stock,
(iii) any sale or conveyance of all or substantially all the properties and assets of the Company
to any other Person as a result of which holders of Common Stock shall be entitled to receive
Exchange Property with respect to or in exchange for such Common Stock, or (iv) any Public Acquirer
Change in Control whereby the Company elects to adjust the Conversion Rate and the related
Conversion Obligation pursuant to Section 10.01(d), then the Company or the successor or
purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture
(which shall comply with the TIA as in force at the date of execution of such supplemental
indenture) providing for the conversion and settlement of the Securities as set forth in this
Indenture. Such supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article 10. If, in the
case of any such reclassification, change, consolidation, merger, binding share exchange,
combination, sale or conveyance, the Exchange Property receivable thereupon by a holder of Common
Stock includes shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such reclassification, change,
consolidation, merger, binding share exchange, combination, sale or conveyance, then such
supplemental indenture shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing.

          (b) The Conversion Obligation with respect to each $1,000 principal amount of Securities
converted following the effective date of any such transaction, shall be calculated (as provided in
clause (c) below) based on the Exchange Property. In the event holders of the Common Stock have the
opportunity to elect the form of consideration to be received in such transaction, the Company
shall make adequate provision whereby the Holders of the Securities shall have a reasonable
opportunity to determine the form of consideration, consistent with the election rights and
restrictions applicable to holders of Common Stock, into which all of the Securities, treated as a
single class, shall be convertible from and after the effective date of such transaction. Such
determination shall be made pursuant to Section 1.05 and 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 event and shall be conducted in such a manner as
to be completed by the date which is the earliest of (a) the deadline for elections to be made by
holders of the Common Stock in connection with such transaction, and (b) two Trading Days prior to
the anticipated effective date of such event. 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.
The Company shall not become a party to any such transaction unless its terms are consistent with
the preceding.

63

 

          (c) The Conversion Obligation in respect of any Securities converted following the effective
date of any such transaction shall be computed in the same manner as set forth in Section 10.03(a)
except that (1) if the Securities become convertible into Exchange Property, the Daily VWAP of the
Common Stock shall be deemed to equal the sum of (A) 100% of the value of any Exchange Property
consisting of cash received per share of Common Stock, (B) the Daily VWAP of any Exchange Property
received per share of Common Stock consisting of securities that are traded on a U.S. national
securities exchange and (2) the Fair Market Value of any other Exchange Property received per
share, as determined by an independent nationally recognized investment bank selected by the
Company for this purpose. Settlement (in cash and/or shares) shall occur on the Conversion
Settlement Date, provided, that any amount of the Settlement Amount or Settlement Shares, as
applicable, to be delivered in shares of Common Stock shall be paid in Exchange Property rather
than shares of Common Stock. If the Exchange Property includes more than one kind of property, the
amount of Exchange Property of each kind to be delivered shall be in the proportion that the value
of the Exchange Property (as calculated pursuant to Section 10.03) of such kind bears to the value
of all such Exchange Property. If the foregoing calculations would require the Company to deliver a
fractional share or unit of Exchange Property to a Holder of Securities being converted, the
Company shall deliver cash in lieu of such fractional share or unit based on the value of the
Exchange Property.

          (d) The Company shall cause notice of the execution of such supplemental indenture to be
mailed to each Holder of Securities, at its address appearing on the Security register provided for
in Section 2.05 of this Indenture, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture.

          (e) The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, statutory share exchanges, combinations, sales
and conveyances.

          (f) If this Section 10.06 applies to any event or occurrence, Section 10.04 shall not apply to
such event or occurrence.

     Section 10.07 Taxes on Shares Issued. The issue of stock certificates on conversions of Securities shall be made
without charge to the converting Holder for any tax in respect of the issue thereof, except for
applicable withholding, if any. The Company shall not, however, be required to pay any tax or duty
which may be payable in respect of any transfer involved in the issue and delivery of stock in any
name other than that of the Holder or beneficial owner of any Securities converted, and the Company
shall not be required to issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid or that none is
due.

64

 

     Section 10.08 Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental Requirements. (a)
The Company shall provide, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock for the conversion of the Securities
from time to time as such Securities are presented for conversion.

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

          (c) (i) The Company covenants that all shares of Common Stock which may be issued upon
conversion of Securities shall upon issue be fully paid and non-assessable by the Company and free
from all taxes, liens and charges with respect to the issue thereof.

               (ii) The Company covenants that, if any shares of Common Stock to be provided for the
purpose of conversion of Securities hereunder require registration with or approval of any
governmental authority under any federal or state law before such shares may be validly
issued upon conversion, the Company shall in good faith and as expeditiously as possible, to
the extent then permitted by the rules and interpretations of the SEC (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.

     Section 10.09 Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be
under any duty or responsibility to any Holder of Securities to determine the Applicable Conversion
Rate or whether any facts exist which may require any adjustment of the Applicable Conversion Rate,
or with respect to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture provided to be employed,
in making the same. The Trustee and any other Conversion Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered upon the conversion of any
Security; and the Trustee and any other Conversion Agent make no representations with respect
thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Security for the purpose of conversion or
to comply with any of the duties, responsibilities or covenants of the Company contained in this
Article 10. Without limiting the generality of the foregoing, neither the Trustee nor any
Conversion Agent shall be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into
pursuant to Section 10.06 relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders upon the conversion of their Securities after any
event referred to in such Section 10.06 or to any

65

 

adjustment to be made with respect thereto, but,
subject to the provisions of Section 7.01, may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected in relying upon the Officer’s Certificate (which the
Company shall be obligated to file with the Trustee prior to the execution of any such supplemental
indenture) with respect thereto.

ARTICLE 11

Subsidiary Guarantees

     Section 11.01 Subsidiary Guarantee. Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably guarantee to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the obligations of the Company
hereunder or thereunder, that: (a) the principal of and premium and interest on the Securities will
be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise,
and Interest on the overdue principal of, premium, and Interest on the Securities, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and
thereof and (b) in case of any extension of time of payment or renewal of any Securities or any of
such other obligations, that same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this Subsidiary Guarantee is a general unsecured obligation
of such Guarantor and it is a guarantee of payment and not a guarantee of collection.

     The Guarantors hereby agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder of the Securities
with respect to any provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the Securities and this
Indenture.

     If any Holder or the Trustee is required by any court or otherwise to return to the Company,
the Guarantors or any custodian, trustee, liquidator or other similar official acting in
relation to either the Company or the Guarantors, any amount paid by the Company or a
Guarantor either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.

66

 

     Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to
the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes
of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations
(whether or not due and payable) shall forthwith become due and payable by the Guarantors for the
purpose of this Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the exercise of such right does not impair the rights of the
Holders under this Subsidiary Guarantee.

     Section 11.02 Subordination on Guarantor Liability. Each Guarantor, and by its acceptance of Securities, each
Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee
of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law
or federal and state laws relating to fraudulent conveyances or transfers or the insolvency of
debtors the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention,
the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to such maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are relevant under
such laws, and after giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.

     Section 11.03 Guarantors May Consolidate, etc., on Certain Terms. Except as otherwise provided in Section 11.05,
a Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the surviving Person)
another Person, other than the Company or another Guarantor, unless:

          (a) immediately after giving effect to that transaction, no Default exists; and

          (b) either:

               (i) subject to Section 11.05 hereof, the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving any such consolidation or merger (if
other than a Guarantor or the Company) assumes all the obligations of that Guarantor under
the Securities and this Indenture (including its Subsidiary Guarantee) on the terms set
forth herein or therein pursuant to a supplemental indenture; or

67

 

               (ii) the net proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of this Indenture.

          In case of any such consolidation, merger, sale or other disposition and upon the
assumption by the successor Person, by supplemental indenture, executed and delivered to the
Trustee, of the Subsidiary Guarantee and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor with the same effect as if it
had been named herein as a Guarantor. All the Subsidiary Guarantees so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the execution
hereof.

          Except as set forth in Article 5 hereof, and notwithstanding clauses (a) and (b) above,
any Guarantor may merge with another Subsidiary that has no significant assets or
liabilities and was incorporated solely for the purposes of reincorporating that Guarantor
in another jurisdiction so long as the amount of our indebtedness and the indebtedness of
the Guarantors is not increased as a result of the merger.

     Section 11.04 Releases of Subsidiary Guarantee. The Subsidiary Guarantee of a Guarantor shall be automatically
released and terminated upon the release and termination of such Guarantor’s guarantee of the
Company’s 95/8% senior notes due 2013.

     Upon delivery by the Company to the Trustee of an Officer’s Certificate and an Opinion of
Counsel together to the effect that all conditions precedent set forth in this Section 11.04 to the
release of the Subsidiary Guarantee of a Guarantor have been satisfied, to the extent such
conditions can be satisfied as of such date, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.

     Any Guarantor not released from its obligations under its Subsidiary Guarantee shall remain
liable for the full amount of principal of and interest on the Securities and for the other
obligations of any Guarantor under this Indenture as provided in this Article 11.

     Section 11.05 Additional Subsidiary Guarantees. If any Subsidiary of the Company that is not a Guarantor (the
“New Guarantor”) becomes a guarantor of the Company’s 95/8% senior notes due 2013, then the New
Guarantor shall, within ten Business Days, execute and deliver to the Trustee a supplemental
indenture pursuant to which the New Guarantor shall become a Guarantor and guarantee the
obligations of the Company under this Indenture and the Securities. Concurrently with the execution
and delivery of such supplemental indenture, the Company shall deliver to the Trustee an Opinion of
Counsel and an Officer’s Certificate to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such New Guarantor, and that, subject to the application of
bankruptcy, insolvency, moratorium, fraudulent

68

 

conveyance or transfer or other similar laws
relating to creditors’ rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, and other customary exceptions, such New Guarantor’s Subsidiary
Guarantee is a legal, valid and binding obligation of such New Guarantor. Upon the release,
termination or satisfaction of the New Guarantor’s Subsidiary Guarantee, the New Guarantor’s
Subsidiary Guarantee shall automatically be released and terminated. Upon request of the New
Guarantor, the Trustee will provide written evidence of such release and termination.

ARTICLE 12

Miscellaneous

     Section 12.01 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the TIA, the required
provision shall control.

     Section 12.02 Notices. Any request, demand, authorization, notice, waiver, consent or communication by the
Company or the Trustee to the other is duly given if in writing and delivered in Person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by facsimile transmission
to the following facsimile numbers:

     if to the Company:

Parker Drilling Company

1401 Enclave Parkway, Suite 600

Houston, TX 77077

Attn: Chief Financial Officer

Facsimile: (281) 406-2331

With a copy to (which shall not constitute notice):

Bracewell & Guiliani LLP

711 Louisiana Street, Suite 2300

Houston, TX 77002

Attn: William S. Anderson, Esq.

Facsimile: (713) 437-5370

if to the Trustee:

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

601 Travis, 18th Floor

Houston, Texas 77022

Attn: Mauri Cowen

Facsimile: (713) 483-7038

69

 

     The Company or the Trustee by notice given to the other in the manner provided above may
designate additional or different addresses for subsequent notices or communications.

     Any notice or communication given to a Securityholder shall be delivered to the
Securityholder, in accordance with the procedures of the Registrar or by first-class mail, postage
prepaid, at the Securityholder’s address as it appears on the registration books of the Registrar
and shall be sufficiently given if so mailed within the time prescribed.

     Failure to mail a notice or communication to a Securityholder or any defect in it shall not
affect its sufficiency with respect to other Securityholders. If a notice or communication is
mailed in the manner provided above, it is duly given, whether or not received by the addressee;
provided, however, that no notice to the Trustee shall be deemed to be duly given unless and until
the Trustee actually receives same at the address given above.

     If the Company mails a notice or communication to the Securityholders, it shall mail a copy to
the Trustee and each Registrar, Paying Agent, Conversion Agent or co-registrar.

     Section 12.03 Communication by Holders with Other Holders. Securityholders may communicate pursuant to TIA
Section 312(b) with other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent and
anyone else shall have the protection of TIA Section 312(c).

     Section 12.04 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 (other than to authenticate the Securities under Section 2.02), the Company shall furnish
to the Trustee:

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

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

     Section 12.05 Statements Required in Certificate or Opinion. Each Officer’s Certificate or Opinion of Counsel
delivered pursuant to Section 12.04 with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

70

 

          (1) a statement that each Person making such Officer’s Certificate or Opinion of Counsel has
read such covenant or condition;

          (2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such Officer’s Certificate or Opinion of Counsel are
based;

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

          (4) a statement that, in the opinion of such Person, such covenant or condition has been
complied with.

     Section 12.06 Separability Clause. 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.

     Section 12.07 Rules by Trustee, Paying Agent, Conversion Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The
Registrar, the Conversion Agent, the Bid Solicitation Agent and the Paying Agent may make
reasonable rules for their functions.

     Section 12.08 Legal Holidays. A “legal holiday” is any day other than a Business Day. If any specified date
(including a date for giving notice) is a legal holiday, the action shall be taken on the next
succeeding day that is not a legal holiday, and, if the action to be taken on such date is a
payment in respect of the Securities, no Interest shall accrue with respect to such payment for the
intervening period.

     Section 12.09 Governing Law. THIS INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.

     Section 12.10 No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release all such liability.
The waiver and release shall be part of the consideration for the issue of the Securities.

71

 

     Section 12.11 Successors. All agreements of the Company in this Indenture and the Securities shall bind its
successor. All agreements of the Trustee in this Indenture shall bind its successor.

     Section 12.12 Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. One signed copy is
enough to prove this Indenture.

72

 

     IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this Indenture on
behalf of the respective parties hereto as of the date first above written.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	PARKER DRILLING COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	/s/ W. Kirk Brassfield
	 

	 	 	 	 
	 

	 	 	 	Name: W. Kirk Brassfield
	 

	 	 	 	Title: Senior Vice President
and Chief Financial Officer
	 
	 	 	 	 
	 	 	ANACHORETA, INC
	 	 	CANADIAN RIG LEASING, INC.
	 	 	CHOCTAW INTERNATIONAL RIG CORP.
	 	 	CREEK
INTERNATIONAL RIG CORP.
	 	 	DGH,
INC.
	 	 	INDOCORP OF OKLAHOMA, INC.
	 	 	PARDRIL, INC.
	 	 	PARKER AVIATION, INC.
	 	 	PARKER DRILLEX, LLC
	 	 	PARKER DRILLING COMPANY

 EASTERN HEMISPHERE,
LTD.
	 	 	PARKER DRILLING COMPANY INTERNATIONAL LIMITED
	 	 	PARKER DRILLING COMPANY
 LIMITED LLC
	 	 	PARKER DRILLING COMPANY

 NORTH AMERICA, INC.
	 	 	PARKER DRILLING COMPANY OF ARGENTINA, INC.
	 	 	PARKER DRILLING COMPANY OF BOLIVIA, INC.
	 	 	PARKER DRILLING COMPANY OF MEXICO, LLC
	 	 	PARKER DRILLING COMPANY OF NIGER
	 	 	PARKER DRILLING COMPANY OF 

OKLAHOMA, INCORPORATED
	 	 	PARKER DRILLING COMPANY OF SOUTH AMERICA, INC.

 

	 	 	 	 	 
	 	 	PARKER DRILLING COMPANY

 EURASIA, INC.
	 	 	PARKER DRILLING OFFSHORE CORPORATION
	 	 	PARKER DRILLING OFFSHORE USA, L.L.C.
	 	 	PARKER DRILLING PACIFIC RIM, INC.
	 	 	PARKER NORTH AMERICA

 OPERATIONS, INC.
	 	 	PARKER TECHNOLOGY, INC.
	 	 	PARKER TECHNOLOGY, L.L.C.
	 	 	PARKER TOOLS, LLC
	 	 	PARKER USA DRILLING COMPANY
	 	 	PARKER USA RESOURCES, LLC
	 	 	PARKER-VSE, INC.
	 	 	QUAIL USA, LLC
	 	 	SELECTIVE DRILLING CORPORATION
	 	 	UNIVERSAL RIG SERVICE LLC
	 
	 

	 	By:
	 	/s/ David W. Tucker
	 

	 	 	 	 
	 

	 	 	 	Name: David W. Tucker
	 

	 	 	 	Title: Vice President and Treasurer

	 
	PARKER DRILLING (KAZAKSTAN), LLC

	 
	By: PD Dutch Holdings C.V., its sole member

	          By: Parker 5272, LLC, its sole member

	                     By: PD International Holdings C.V., its sole member

	                               By: Parker Rigsource, LLC, its managing general partner

	                                         By: Parker Drilling Pacific Rim, Inc., its sole member

	 	 	 	 	 
	 

	 	By:
	 	/s/ David W. Tucker
	 

	 	 	 	 	 
	 

	 	 	 	Name: David W. Tucker
	 

	 	 	 	Title: Vice President and Treasurer

 

	 
	PARKER DRILLING COMPANY INTERNATIONAL, LLC

	 

	By: PD Dutch Holdings C.V., its sole member

	           By: Parker 5272, LLC, its sole member

	                     By: PD International Holdings C.V., its sole member

	                               By: Parker Rigsource, LLC, its managing general partner

	                                         By: Parker Drilling Pacific Rim, Inc., its sole member

	 	 	 	 	 
	 

	 	By:
	 	/s/ David W. Tucker
	 

	 	 	 	 	 
	 

	 	 	 	Name: David W. Tucker
	 

	 	 	 	Title: Vice President and Treasurer

	 
	PARKER DRILLING COMPANY OF NEW GUINEA, LLC

	 

	By: PD Selective Holdings C.V., its sole member

	           By: Parker 3source, LLC, its general partner

	                     By: PD Offshore Holdings C.V., its sole member

	                               By: Parker Drillserv, LLC, its managing general partner

	                               By: Parker Drilling Eurasia, Inc., its sole member

	 	 	 	 	 
	 

	 	By:
	 	/s/ David W. Tucker
	 

	 	 	 	 	 
	 

	 	 	 	Name: David W. Tucker 

Title: Vice President and Treasurer

	 
	PARKER DRILLING COMPANY OF SINGAPORE, LLC

	 

	By: PD Selective Holdings C.V., its sole member

	          By: Parker 3source, LLC, its general partner

	                    By: PD Offshore Holdings C.V., its sole member

	                              By: Parker Drillserv, LLC, its managing general partner

	                                        By: Parker Drilling Eurasia, Inc., its sole member

	 	 	 	 	 
	 

	 	By:
	 	/s/ David W. Tucker
	 

	 	 	 	 	 
	 

	 	 	 	Name: David W. Tucker
	 

	 	 	 	Title: Vice President and Treasurer

 

 

	 	 	 	 	 
	 	PARKER DRILLING MANAGEMENT SERVICES, INC.

 	 
	 	By:  	/s/ David W. Tucker
 	 
	 	 	Name:  	David W. Tucker 	 
	 	 	Title:  	President 	 
	 

	 	 	 	 	 
	 	PARKER DRILLSERV,
LLC

PARKER DRILLTECH, LLC

PARKER RIGSOURCE, LLC

 	 
	 	By:  	/s/ Steven L. Carmichael
 	 
	 	 	Name:  	Steven L. Carmichael 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

	 	 	 	 	 
	 	PARKER INTEX, LLC

 	 
	 	By:  	/s/ Steven P. Granger
 	 
	 	 	Name:  	Steven P. Granger 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	 	PARKER OFFSHORE RESOURCES, L.P.
	 
	 	 	 	 
	 	 	By: Parker Drilling Management Services,
Inc., its general partner
	 
	 	 	 	 
	 

	 	 	  By: 
	/s/ David W. Tucker
	 

	 	 	 	 
	 

	 	 	 	Name: David W. Tucker 

Title: President

	 	 	 	 	 
	 	 	PD MANAGEMENT RESOURCES, L.P.
	 
	 	 	By: Parker Drilling Management Services,
Inc., its general partner
	 
	 	 	 	 
	 

	 	 	  By: 
	/s/ David W. Tucker
	 

	 	 	 	 
	 

	 	 	 	Name: David W. Tucker 

Title: Vice President and
Treasurer

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	QUAIL TOOLS, L.P.
	 
	 	 	 	 	 	 
	 	 	By:	 	Quail USA, LLC, its general partner
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ David W. Tucker
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: David W. Tucker
	 

	 	 	 	 	 	Title: Vice President and
Treasurer

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

 	 
	 	By:  	/s/ Mauri Cowen
 	 
	 	 	Name:  	Mauri Cowen 	 
	 	 	Title:  	Vice President 	 
	 

 

 EXHIBIT A

[FORM OF FACE OF GLOBAL SECURITY]

A-1

 

PARKER DRILLING COMPANY

2.125% Convertible Senior Notes Due 2012

			
	 	 	 
	CUSIP: 701081AR2
	 	 
	ISSUE DATE: July 5, 2007
	 	Principal Amount: $125,000,000
	No.
	 	 

     PARKER DRILLING COMPANY, a Delaware corporation, promises to pay to Cede & Co. or registered
assigns, the principal amount of One Hundred Twenty Five Million Dollars, on July 15, 2012.

     Interest Rate: 2.125% per year.

     Interest Payment Dates: January 15 and July 15 of each year, commencing January 15, 2008.

     Interest Record Date: January 1 and July 1 of each year.

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

A-2

 

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

Dated: July____, 2007

	 	 	 	 	 
	 	 	PARKER DRILLING COMPANY
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Ronald C. Potter
	 

	 	 	 	Title: Vice President, General Counsel
and Secretary

A-3

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

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

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 

	 	 	 	Dated July___, 2007

A-4

 

[FORM OF REVERSE OF GLOBAL SECURITY]

2.125% Convertible Senior Notes Due 2012

     This Security is one of a duly authorized issue of 2.125% Convertible Senior Notes Due 2012
(the “Securities”) of Parker Drilling Company, a Delaware corporation (including any successor
corporation under the Indenture hereinafter referred to, the “Company”), issued under an Indenture,
dated as of July 5, 2007 (the “Indenture”), among the Company, the subsidiary guarantors from time
to time parties thereto (the “Guarantors”) and The Bank of New York Trust Company, N.A., as trustee
(the “Trustee”). The terms of the Security include those stated in the Indenture, those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (“TIA”), and those set
forth in this Security. This Security is subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent permitted by applicable law,
in the event of any inconsistency between the terms of this Security and the terms of the
Indenture, the terms of the Indenture shall control. Capitalized terms used but not defined herein
have the meanings assigned to them in the Indenture unless otherwise indicated.

1. Interest.

     The Securities shall bear Interest on the principal amount thereof at a rate of 2.125% per
year.

     Interest shall be payable semi-annually in arrears on each Interest Payment Date to Holders at
the close of business on the preceding Interest Record Date. Interest shall be computed on the
basis of a 360-day year comprised of twelve 30 day months and will accrue from July 5, 2007 or from
the most recent date to which Interest has been paid or duly provided for.

     The Company shall pay Interest to the Securityholder of record on the Interest Record Date,
except that if a Securityholder elects to require the Company to repurchase Securities on a date
that is after an Interest Record Date but on or prior to the corresponding Interest Payment Date,
the Company shall pay accrued and unpaid Interest on the Securities being repurchased to, but not
including, the Fundamental Change Repurchase Date to the Securityholder of record on the
Fundamental Change Repurchase Date.

     If the principal amount of any Security or any accrued and unpaid Interest is not paid when
due (whether upon acceleration pursuant to Section 6.02 of the Indenture, upon the date set for
payment of the Fundamental Change Repurchase Price pursuant to Section 4 hereof, upon the Stated
Maturity of the Securities, upon the Interest Payment Dates), then in each such case the
overdue amount shall, to the extent permitted by law, bear cash interest at the rate of 2.125%
per

A-5 

 

annum, compounded semi-annually, which interest shall accrue from the date such overdue amount
was originally due to the date payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable in cash on demand but if not so demanded
shall be paid quarterly to the Holders on the last day of each quarter.

2. Method of Payment.

     Except as provided below, the Company shall pay Interest on (i) Global Securities, to DTC in
immediately available funds, (ii) any Certificated Security having an aggregate principal amount of
$2,000,000 or less, by check mailed to the Holder of such Security and (iii) any Certificated
Security having an aggregate principal amount of more than $2,000,000, by wire transfer in
immediately available funds if requested by the Holder of any such Security as least five Business
Days prior to the relevant Interest Payment Date.

     At Stated Maturity, the Company shall pay Interest on Certificated Securities at the Company’s
office or agency maintained for that purpose, which initially shall be the office or agency of the
Trustee located at 601 Travis, 18th Floor, Houston, Texas 77002.

     Subject to the terms and conditions of the Indenture, the Company shall make payments in cash
in respect of Fundamental Change Repurchase Prices and at Stated Maturity to Holders who surrender
Securities to a Paying Agent to collect such payments in respect of the Securities. The Company
shall pay cash amounts in money of the United States that at the time of payment is legal tender
for payment of public and private debts. However, the Company may make such cash payments by check
payable in such money.

3. Indenture.

     The Securities are general unsecured obligations of the Company in an initial aggregate
principal amount of $125,000,000 aggregate principal amount. The Company may, without the consent
of the Holders, reopen the Indenture and issue additional Securities under the Indenture with the
same terms and with the same CUSIP number as the Securities in an unlimited aggregate principal
amount, so long as no such additional Securities may be issued with the same CUSIP number unless
they are fungible with the Securities issued on the date the Securities were initially issued under
the Indenture for U.S. federal income tax purposes.

4. Purchase By the Company at the Option of the Holder.

     At the option of any Holder and subject to the terms and conditions of the Indenture, the
Company shall become obligated to repurchase the Securities held by such Holder after the
occurrence of a Fundamental Change for a Fundamental Change Repurchase Price equal to
100% of the principal amount of those Securities plus accrued and unpaid Interest on those

A-6 

 

Securities up to, but not including, the Fundamental Change Repurchase Date. To exercise such
right, a Holder shall deliver to the Paying Agent a Fundamental Change Repurchase Notice containing
the information set forth in the Indenture at any time on or prior to the close of business on the
Business Day immediately preceding the Fundamental Change Repurchase Date and shall deliver the
Securities to the Paying Agent as set forth in the Indenture.

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

     If cash sufficient to pay the Fundamental Change Repurchase Price of all Securities or
portions thereof to be purchased as of the Fundamental Change Repurchase Date is deposited with the
Paying Agent, prior to or on the Business Day following the Fundamental Change Repurchase Date,
Interest shall cease to accrue on such Securities (or portions thereof) on and following such
Fundamental Change Repurchase Date, and the Holder thereof shall have no other rights as such other
than the right to receive the Fundamental Change Repurchase Price upon surrender of such Security.

5. Specified Accounting Change.

     The Company may redeem the Securities in whole for cash from the date a Specified Accounting
Change (as defined in the Indenture) has become effective until 90 days after the date such change
became effective. The Company will give notice of redemption not less than 30 nor more than 60
days before the Redemption Date by mail to the Trustee and each Securityholder. For purposes of
this paragraph, the effective date of the Specified Accounting Change shall mean the date the
standards with respect to such Specified Accounting Change under generally accepted accounting
principles have been issued. The redemption price for any such redemption will be equal to 102% of
the principal amount of the Securities plus accrued and unpaid Interest to, but not including, the
Redemption Date.

     If a Holder chooses to convert pursuant to Section 3.01 of the Indenture, the Company will
pay, to the extent described in the Indenture, a make whole premium in the form of an increase in
Applicable Conversion Rate, if the Holder converts its Securities between the date the Company
gives notice of the redemption and the day prior to the Redemption Date. Any make whole premium
will have the effect of increasing the amount of cash or shares otherwise due to Holders of
Securities upon conversion. The increase in the Applicable Conversion Rate will be as set forth in
Section 3.01 of the Indenture.

6. Conversion.

A-7 

 

     Subject to the occurrence of certain events and in compliance with the provisions of the
Indenture (including, without limitation, the conditions to conversion of this Security set forth
in Section 10.01 thereof), a Holder is entitled, at such Holder’s option, to convert the Holder’s
Security (or any portion of the principal amount thereof that is $1,000 or an integral multiple of
$1,000) at the Applicable Conversion Rate in effect at the time of conversion.

     The Company shall notify Holders of any event triggering the right to convert the Securities
as specified in the Indenture.

     A Security in respect of which a Holder has delivered a Fundamental Change Repurchase Notice
exercising the option of such Holder to require the Company to purchase such Security, may be
converted only if such Fundamental Change Repurchase Notice is withdrawn in accordance with the
terms of the Indenture.

     The initial Applicable Conversion Rate is 72.2217 shares of Common Stock per $1,000 principal
amount, subject to adjustment in certain events described in the Indenture. The Applicable
Conversion Rate shall not be adjusted for any accrued and unpaid Interest. Upon conversion, no
payment shall be made by the Company with respect to accrued and unpaid Interest. Instead, such
amount shall be deemed paid by the cash and shares of Common Stock, if any, delivered upon
conversion of any Security. In addition, no payment or adjustment shall be made in respect of
dividends on the Common Stock, except as set forth in the Indenture.

     In addition, following certain corporate transactions as set forth in Section 10.01(b) of the
Indenture that constitute a Fundamental Change, a Holder who elects to convert its Securities in
connection with such corporate transaction shall be entitled to receive Additional Shares of Common
Stock upon conversion, subject to the terms and conditions set forth in Section 10.01(c) of the
Indenture.

     To surrender a Security for conversion, a Holder must (1) complete and manually sign the
Conversion Notice attached hereto (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Conversion Agent, (2) surrender the Security to the Conversion Agent,
(3) if required, furnish appropriate endorsements and transfer documents, (4) if required by
Section 10.02(h)of the Indenture, pay Interest and (5) pay any transfer or similar tax, if
required.

     No fractional shares of Common Stock shall be issued upon conversion of any Security. Instead
of any fractional share of Common Stock that would otherwise be issued upon conversion of such
Security, the Company shall pay a cash adjustment as provided in the Indenture.

A-8 

 

     If the Company engages in any reclassification of the Common Stock (other than a subdivision
or combination of its outstanding Common Stock, or a change in par value, or from par value to no
par value, or from no par value to par value) or is party to a consolidation, merger, binding share
exchange or transfer of all or substantially all of its assets, and as a result of any such event
the Holders of Common Stock would be entitled to receive Exchange Property for their Common Stock,
upon conversion of the Securities after the effective date of such event, the Conversion Obligation
and the Settlement Amount shall be based on the Applicable Conversion Rate and the Exchange
Property, in each case in accordance with the Indenture. If the transaction also constitutes a
Fundamental Change that would lead to the issuance of Additional Shares as set forth in Section
10.01(c) of the Indenture, if a Holder elects to convert all or a portion of its Securities, such
Holder shall receive Additional Shares upon conversion pursuant to Section 10.01(c) of the
Indenture, subject to the terms and conditions set forth in such Section.

7. Paying Agent, Conversion Agent, Bid Solicitation Agent and Registrar.

     Initially, the Trustee shall act as Paying Agent, Conversion Agent, Bid Solicitation Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion Agent, Bid Solicitation
Agent or Registrar without notice, other than notice to the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion Agent, Bid Solicitation
Agent or Registrar.

8. Denominations; Transfer; Exchange.

     The Securities are in fully registered form, without coupons, in denominations of $1,000 of
principal amount and integral multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not transfer or exchange any Securities in respect
of which a Fundamental Change Repurchase Notice has been given and not withdrawn (except, in the
case of a Security to be purchased in part, the portion of the Security not to be purchased).

9. Persons Deemed Owners.

     Except as otherwise provided in the Indenture, the registered Holder of this Security will be
treated as the owner of this Security for all purposes.

10. Unclaimed Money or Securities.

     The Trustee and the Paying Agent shall return to the Company upon written request any money or
securities held by them for the payment of any amount with respect to the Securities

A-9 

 

that remains unclaimed for one year, subject to applicable abandoned property law. After
return to the Company, Holders entitled to the money or securities must look to the Company for
payment as general creditors unless an applicable abandoned property law designates another Person.

11. Amendment; Waiver.

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities
may be amended with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities and (ii) certain Events of Default may be waived
with the written consent of the Holders of a majority in aggregate principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the Indenture, without the
consent of any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities (i) to add guarantees with respect to the Securities or secure the Securities, (ii) to
conform as necessary, the Indenture and this Security to the “Description of Notes” as set forth in
the Prospectus, (iii) to add to the covenants of the Company or Events of Default for the benefit
of the Holders of Securities, (iv) to surrender any right or power conferred upon the Company in
the Indenture, (v) to eliminate the right of the Company to make a Physical Settlement Election in
order to satisfy its Conversion Obligations pursuant to the Indenture, (vi) to provide for the
assumption by a successor company of the Company’s obligations to the Holders of Securities in the
case of a merger, consolidation, sale conveyance, transfer, sale or lease as provided under the
Indenture, (vii) to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA, (viii) to cure any ambiguity or to correct or
supplement any provision in the Indenture which may be inconsistent with any other provision in the
Indenture, (ix) to make other changes to the Indenture or forms or terms of the Securities so long
as no such change individually or in the aggregate with all other such changes has or will have a
material adverse effect on the interests of the Holders of the Securities, (x) to establish the
form of Securities substantially in the form of Exhibit B to the Indenture, (xi) to
evidence and provide for the acceptance of the appointment under the Indenture of a successor
Trustee in accordance with the terms of the Indenture, (xii) to release any Guarantor from any of
its obligations under its Subsidiary Guarantee or the Indenture as provided in the Indenture, and
(xiii) to provide for uncertificated Securities in addition to or in place of Certificated
Securities; provided, however, that the uncertificated Securities are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code.

12. Defaults and Remedies.

     As set forth in the Indenture, subject to certain exceptions, if any Event of Default with
respect to Securities shall occur and be continuing, the principal amount of the Securities and any
accrued and unpaid Interest on all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.

A-10 

 

13. Trustee Dealings with the Company.

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

14. Calculations in Respect of Securities.

     Except as otherwise provided in the Indenture, the Company or its agents shall be responsible
for making all calculations called for under the Securities including, but not limited to,
determination of the market prices for the Securities and of the Common Stock accrued on the
Securities. Any calculations made in good faith and without manifest error shall be final and
binding on Holders of the Securities. The Company or its agents shall be required to deliver to the
Trustee a schedule of its calculations and the Trustee shall be entitled to conclusively rely upon
the accuracy of such calculations without independent verification.

15. No Recourse Against Others.

     A director, officer, employee or stockholder, as such, of the Company shall not 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. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.

16. Authentication.

     This Security shall not be valid until an authorized signatory of the Trustee manually signs
the Trustee’s Certificate of Authentication on the other side of this Security.

17. Abbreviations.

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

A-11 

 

18. Governing Law.

     THE LAWS OF THE STATE OF NEW YORK WILL GOVERN THE INDENTURE AND THIS SECURITY, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.

19. Copy of Indenture.

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

Parker Drilling Company

1401 Enclave Parkway, Suite 600

Houston, Texas 77077

Attention: General Counsel

Facsimile: (713) 406-2331

A-12 

 

	 	 	 
	ASSIGNMENT FORM	 	CONVERSION NOTICE
	To assign this Security, fill in the form below:

	 	To convert this Security, check the box o
	 
	 	 
	I or we assign and transfer this Security to

                                        

                                        

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

                                        

                                        

                                        

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

	 	To convert only part of this Security, state 

the principal amount to be converted 

(which must be $1,000 or an integral

multiple of $1,000):

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

                                        

                                        

	 
	 	 
	and irrevocably appoint

	 	(Insert the other Person’s
soc. sec. tax ID no.)
	 
	 	 
	                                         agent to transfer this
Security on the books of the Company. The
agent may substitute another to act for
him.

	 	
                                                                           
     

                                                                                

                                                                                

                                                                                

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

Date:                   
Your Signature:                                     

                                                      
                                                      

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

Signature Guaranteed

                                                      
                                                      

Participant in a Recognized Signature

Guarantee Medallion Program

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 

 

 

SCHEDULE OF INCREASES AND DECREASES

OF GLOBAL SECURITY

Initial Principal Amount of Global Security:                                         ($                 
                       ).

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	Amount of	 	 	Principal	 	 	 	 
	 	 	Increase in	 	 	Decrease in	 	 	Amount of	 	 	Notation by	 
	 	 	Principal	 	 	Principal	 	 	Global Security	 	 	Registrar or	 
	 	 	Amount of	 	 	Amount of	 	 	After Increase or	 	 	Security	 
	Date	 	Global Security	 	 	Global Security	 	 	Decrease	 	 	Custodian	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT B

[FORM OF FACE OF CERTIFICATED SECURITY]

B-1

 

PARKER DRILLING COMPANY

2.125% Convertible Senior Notes Due 2012

			
	 	 	 
	CUSIP: 701081AR2

ISSUE DATE: July 5, 2007

No.
	 	Principal Amount: $125,000,000

     PARKER DRILLING COMPANY, a Delaware corporation, promises to pay to                      or registered
assigns, the principal amount of                                         , on July 15, 2012.

     Interest Rate: 2.125% per year.

     Interest Payment Dates: January 15 and July 15 of each year, commencing January 15, 2008.

     Interest Record Date: January 1 and July 1 of each year.

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

B-2

 

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

Dated: July____, 2007

	 	 	 	 	 
	 	PARKER DRILLING COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	W. Kirk Brassfield 	 
	 	 	Title:  	Senior Vice President
and 

Chief Financial Officer 	 

B-3

 

	 	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

	 	 	 	 	 
	 	THE BANK OF NEW YORK TRUST
COMPANY, 

N.A., as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Dated July____, 2007

B-4

 

[FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]

B-5

 

EXHIBIT C

PARKER DRILLING COMPANY

NOTICE OF OCCURRENCE

OF FUNDAMENTAL CHANGE

[DATE]

To the Holders of the 2.125% Convertible Senior Notes Due 2012

(the “Securities”) issued by Parker Drilling Company:

     Parker Drilling Company (the “Company”) by this written notice hereby notifies you, pursuant
to Section 3.02 of that certain Indenture (the “Indenture”), dated as of July 5, 2007, among the
Company, the subsidiary guarantors from time to time parties thereto and The Bank of New York Trust
Company, N.A., that a Fundamental Change (as such term and other capitalized terms used herein and
not otherwise defined herein is defined in the Indenture) as described below has occurred. Included
herewith is the form of Fundamental Change Repurchase Notice to be completed by you if you wish to
have your Securities repurchased by the Company.

1. Fundamental Change: [Insert brief description of the Fundamental Change and the date of the
occurrence thereof].

2. Date by which Fundamental Change Repurchase Notice must be delivered by you to Paying Agent in
order to have your Securities repurchased:

3. Fundamental Change Repurchase Date:

4. Fundamental Change Repurchase Price:

5. Paying Agent and Conversion Agent: [NAME] [ADDRESS]

6. Applicable Conversion Rate: To the extent described in Item 7 below, each $1,000 principal
amount of the Securities is convertible into [insert number of shares] shares of the Company’s
common stock, par value $0.162/3  per share (the “Common Stock”),
subject to adjustment.

C-1

 

7. The Securities as to which you have delivered a Fundamental Change Repurchase Notice to the
Paying Agent may be converted if they are otherwise convertible pursuant to Article 10 of the
Indenture and the terms of the Securities only if you withdraw such Fundamental Change Repurchase
Notice pursuant to the terms of the Indenture. Subject to Section 10.01 of the Indenture, you may
be entitled to have your Securities converted into cash and shares of the Common Stock, if any:

     (i) during any fiscal quarter of the Company commencing after September 30, 2007
(and only during such fiscal quarter), if the Closing Sale Price (as defined in the
Indenture) of the Common Stock for at least 20 Trading Days during the period of 30
consecutive Trading Days ending on the last Trading Day (as defined in the Indenture)
of the immediately preceding fiscal quarter was more than 130% of the Applicable
Conversion Price (as defined in the Indenture) on such last Trading Day;

     (ii) during the five business days immediately following any five consecutive
Trading-Day period in which the Trading Price (as defined in the Indenture) per $1,000
principal amount of the Securities for each day of that period was less than 98% of the
product of the Closing Sale Price of the Common Stock and the Applicable Conversion
Rate (as defined in the Indenture) of the Securities on each such day;

     (iii) on or after April 15, 2012;

     (iv) upon the occurrence of certain specified corporate transactions described in
the Indenture; or

     (v) upon a redemption in connection with a Specified Accounting Change (as defined
in the Indenture), at any time beginning on the date of the notice of redemption until
the Trading Day prior to the Redemption Date.

8. The Securities as to which you have delivered a Fundamental Change Repurchase Notice must be
surrendered by you (by effecting book entry transfer of the Securities or delivering Certificated
Securities, together with necessary endorsements, as the case may be) to [Name of Paying Agent] at
[insert address] in order for you to collect the Fundamental Change Repurchase Price.

9. The Fundamental Change Repurchase Price for the Securities as to which you have delivered a
Fundamental Change Repurchase Notice and not withdrawn such Notice shall be paid, subject to
receipt of funds and/or securities by the Paying Agent, promptly following the later of the
Business Day immediately following such Fundamental Change Repurchase Date and the date you deliver
such Securities to [Name of Paying Agent].

C-2

 

10. In order to have the Company repurchase your Securities, you must deliver the Fundamental
Change Repurchase Notice, duly completed by you with the information required by such Fundamental
Change Repurchase Notice (as specified in Section 3.02 of the Indenture) and deliver such
Fundamental Change Repurchase Notice to the Paying Agent at any time until 5:00 p.m. (New York City
Time) on the Business Day immediately preceding the Fundamental Change Repurchase Date.

11. In order to withdraw any Fundamental Change Repurchase Notice previously delivered by you to
the Paying Agent, you must deliver to the Paying Agent, by 5:00 p.m. (New York City time) on the
Business Day immediately preceding the Fundamental Change Repurchase Date, a written notice of
withdrawal specifying (i) the certificate number, if any, of the Securities in respect of which
such notice of withdrawal is being submitted, (ii) the principal amount of the Securities in
respect of which such notice of withdrawal is being submitted, and (iii) if you are not withdrawing
your Fundamental Change Repurchase Notice for all of your Securities, the principal amount of the
Securities which still remain subject to the original Fundamental Change Repurchase Notice.

12. Unless the Company defaults in making the payment of the Fundamental Change Repurchase Price
owed to you, Interest on your Securities as to which you have delivered a Fundamental Change
Repurchase Notice shall cease to accrue on and after the Fundamental Change Repurchase Date.

13. CUSIP Number: 701081AR2

PARKER DRILLING COMPANY

C-3

 

Exhibit
4.1

SCHEDULE I

The following table sets forth the Stock Prices and the number of Additional Shares per $1,000
principal amount of Securities.

Stock Price

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date	 	$10.45	 	$12.00	 	$13.85	 	$15.00	 	$17.50	 	$20.00	 	$25.00	 	$30.00	 	$35.00	 	$40.00	 	$50.00	 	$60.00
	June 28, 2007
	 	 	23.4720	 	 	 	17.6450	 	 	 	12.9696	 	 	 	10.8916	 	 	 	7.7269	 	 	 	5.6833	 	 	 	3.3863	 	 	 	2.1966	 	 	 	1.5069	 	 	 	1.0708	 	 	 	0.5703	 	 	 	0.3050	 
	July 15, 2008
	 	 	23.4720	 	 	 	17.0366	 	 	 	12.1754	 	 	 	10.0383	 	 	 	6.8583	 	 	 	4.9033	 	 	 	2.7743	 	 	 	1.7460	 	 	 	1.1754	 	 	 	0.8258	 	 	 	0.4337	 	 	 	0.2278	 
	July 15, 2009
	 	 	23.4720	 	 	 	16.2991	 	 	 	11.1631	 	 	 	8.9583	 	 	 	5.7932	 	 	 	3.9368	 	 	 	2.0783	 	 	 	1.2540	 	 	 	0.8326	 	 	 	0.5823	 	 	 	0.3049	 	 	 	0.1566	 
	July 15, 2010
	 	 	23.4720	 	 	 	15.1866	 	 	 	9.7061	 	 	 	7.4250	 	 	 	4.3486	 	 	 	2.6948	 	 	 	1.2503	 	 	 	0.7216	 	 	 	0.4783	 	 	 	0.3408	 	 	 	0.1837	 	 	 	0.0936	 
	July 15, 2011
	 	 	23.4720	 	 	 	13.4433	 	 	 	7.3090	 	 	 	4.9850	 	 	 	2.2012	 	 	 	1.0383	 	 	 	0.3447	 	 	 	0.1970	 	 	 	0.1412	 	 	 	0.1073	 	 	 	0.0609	 	 	 	0.0300	 
	July 15, 2012
	 	 	23.4720	 	 	 	11.1116	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	 

S-1exv10w1

 

Exhibit 10.1

June 28, 2007

	 	 	 
	To:

	 	Parker Drilling Company
	 

	 	1401 Enclave Parkway, Suite 600
	 

	 	Houston, Texas 77077
	 

	 	Attn: General Counsel
	 

	 	Telephone: (281) 406-2000
	 

	 	Facsimile: (281) 406-2001
	 
	 	 
	From:

	 	Bank of America, N.A.
	 

	 	c/o Banc of America Securities LLC
	 

	 	9 West 57th Street
	 

	 	New York, NY 10019
	 

	 	Attn: John Servidio
	 

	 	Telephone: 212-583-8373
	 

	 	Facsimile: 212-230-8610
	 
	 	 
	Re:

	 	Convertible Bond Hedge Transaction
	 

	 	(Transaction Reference Number: NY-30235)

Ladies and Gentlemen:

     The purpose of this communication (this “Confirmation”) is to set forth the terms and
conditions of the above-referenced transaction entered into on the Trade Date specified below (the
"Transaction”) between Bank of America, N.A. (“BofA”) and Parker Drilling Company (“Counterparty”).
This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below.

     1. This Confirmation is subject to, and incorporates, the definitions and provisions of the
2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions
and provisions of the 2002 ISDA Equity Derivatives Definitions (except to the extent expressly
amended by this Confirmation) (the “Equity Definitions”, and together with the 2000 Definitions,
the “Definitions”), in each case as published by the International Swaps and Derivatives
Association, Inc. and as in effect on the date hereof (“ISDA”). In the event of any inconsistency
between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern.
Certain defined terms used herein have the meanings assigned to them in an Indenture to be dated as
of July 5, 2007 between Counterparty and The Bank of New York Trust Company, N.A. as trustee (the
"Indenture”) relating to the USD 115.0 principal amount of 2.125% Convertible Senior Notes due July
15, 2012 (the “Convertible Securities”). In the event of any inconsistency between the terms
defined in the Indenture and this Confirmation, this Confirmation shall govern. For the avoidance
of doubt, references herein to sections of the Indenture are based on the draft of the Indenture
most recently reviewed by the parties at the time of execution of this Confirmation. If any
relevant sections of the Indenture are changed, added or renumbered following execution of this
Confirmation but prior to the execution of the Indenture, the parties will amend this Confirmation
in good faith to preserve the economic intent of the parties.

     This Confirmation evidences a complete and binding agreement between BofA and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall be
subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement (the “ISDA
Form”) as if BofA and Counterparty had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation), except to the extent amended, modified or
supplemented by this Confirmation. For the avoidance of doubt, the Transaction shall be the only
transaction under the Agreement. The parties acknowledge and agree that Counterparty and BofA have
previously entered into an ISDA Master Agreement dated as of December 21, 2001 (as amended,
modified or supplemented from time to time (including by any schedule or annex thereto), the
“Existing ISDA Master Agreement”) and that, notwithstanding any term or provision in the Existing
ISDA Master Agreement, the Transaction evidenced by this Confirmation shall not under any
circumstances constitute (or be deemed to

 

 

constitute) a Transaction or a Specified Transaction (each as defined in the Existing ISDA
Master Agreement) under, or otherwise be subject to, the Existing ISDA Master Agreement.

     All provisions contained in, or incorporated by reference to, the Agreement will govern this
Confirmation except as expressly modified herein. In the event of any inconsistency between this
Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.

     2. The Transaction constitutes a Share Option Transaction for purposes of the Equity
Definitions. The terms of the particular Transaction to which this Confirmation relates are as
follows:

General Terms:

	 	 	 	 	 
	 

	 	Trade Date:
	 	June 28, 2007
	 
	 	 	 	 
	 

	 	Effective Date:
	 	The closing date of the offering of the Convertible Securities.
	 
	 	 	 	 
	 

	 	Option Type:
	 	Call
	 
	 	 	 	 
	 

	 	Seller:
	 	BofA
	 
	 	 	 	 
	 

	 	Buyer:
	 	Counterparty
	 
	 	 	 	 
	 

	 	Shares:
	 	The Common Stock of Counterparty,
par value USD
0.162/3 per share (Ticker Symbol:
	 

	 	 	 	“PKD”).
	 
	 	 	 	 
	 

	 	Number of Options:
	 	60% of the number of Convertible Securities in denominations of USD1,000
principal amount issued by Counterparty on the closing date for the initial issuance of
the Convertible Securities; provided that if the Underwriters, as defined in the
Underwriting Agreement dated the date hereof between the Company and Banc of America
Securities LLC, as representative of the several underwriters (the “Underwriting
Agreement”) exercise their option to purchase additional Securities pursuant to Section
2(c) of the Underwriting Agreement, then on the Additional Premium Payment Date, the
Number of Options shall be automatically increased by 60% of the number of Convertible
Securities in denominations of USD 1,000 principal amount issued pursuant to such
exercise (such Convertible Securities, the “Additional Securities”).
	 
	 	 	 	 
	 

	 	Number of Shares:
	 	As of any date, the product of the Number of Options and the Conversion
Rate in effect on such date.
	 
	 	 	 	 
	 

	 	Conversion Rate:
	 	As defined in the Indenture, but without regard to any adjustments to the
Conversion Rate pursuant to Sections 3.01(e), 10.01(c), 10.01(d), 10.04(g) and 10.04(h)
of the Indenture.
	 
	 	 	 	 
	 

	 	Strike Price:
	 	USD 13.8463
	 
	 	 	 	 
	 

	 	Premium:
	 	USD 17,374,200 provided that if the Number of Options is increased pursuant to the
proviso to the definition of Number of Options above, an additional Premium equal to
the product of the number of Options by which the Number of Options is so

2

 

	 	 	 	 	 
	 

	 	 	 	increased and USD 251.80 shall be paid on the Additional Premium Payment Date.
	 
	 	 	 	 
	 

	 	Premium Payment Date:
	 	July 5, 2007
	 
	 	 	 	 
	 

	 	Additional Premium
	 	The closing date for the purchase and sale of the
	 

	 	Payment Date:
	 	Additional Securities.
	 
	 	 	 	 
	 

	 	Exchange:
	 	New York Stock Exchange
	 
	 	 	 	 
	 

	 	Related Exchange:
	 	All Exchanges
	 
	 	 	 	 
	Procedures for Exercise:	 	 
	 
	 	 	 	 
	 

	 	Potential Exercise Dates:
	 	Each Conversion Date.
	 
	 	 	 	 
	 

	 	Conversion Date:
	 	Each “Conversion Date” as defined in the Indenture.
	 
	 	 	 	 
	 

	 	Required Exercise on

Conversion Dates:
	 	On each Conversion Date, a number
of Options equal to the number of Convertible Securities in denominations of USD1,000
principal amount submitted for conversion on such Conversion Date in accordance with
the terms of the Indenture shall be automatically exercised, subject to “Notice of
Exercise” below.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	July 15, 2012
	 
	 	 	 	 
	 

	 	Automatic Exercise:
	 	As provided above under “Required Exercise on Conversion Dates”.
	 
	 	 	 	 
	 

	 	Notice of Exercise:
	 	Notwithstanding anything to the contrary in the Equity Definitions, in
order to exercise any Options, Counterparty must notify BofA in writing prior to 5:00
PM, New York City time, on the Scheduled Valid Day prior to the scheduled first day of
the applicable Settlement Averaging Period relating to the Convertible Securities
converted on the Conversion Date occurring on the relevant Exercise Date (such
Convertible Securities, the “Relevant Convertible Securities”) of (i) the number of
Options being exercised on such Exercise Date, (ii) the scheduled first day of the
applicable Settlement Averaging Period, (iii) the scheduled settlement date under the
Indenture for the Relevant Convertible Securities and (iv) whether Counterparty has
elected to satisfy its conversion obligations with respect to the Relevant Convertible
Securities in Shares only (as described in Section 10.02(b) of the Indenture) (“Gross
Share Settlement”); provided that with respect to Options relating to Relevant
Convertible Securities with a Conversion Date occurring on or after April 15, 2012,
such Notice of Exercise may be given on or prior to the second Scheduled Valid Day
immediately preceding the Expiration Date and need only specify the number of Options
being exercised.

3

 

	 	 	 	 	 
	 

	 	Notice of Gross Share Settlement:
	 	If Counterparty has elected Gross Share Settlement for all
Convertible Securities with a Conversion Date occurring on or after April 15, 2012,
then with respect to Options relating to such Convertible Securities, Counterparty
shall notify BofA of such election before 5:00 p.m. (New York City time) on or prior to
April 15, 2012.
	 
	 	 	 	 
	 

	 	BofA’s Telephone Number and	 	 
	 
	 	 	 	 
	 

	 	Telex and/or Facsimile Number	 	 
	 
	 	 	 	 
	 

	 	and Contact Details for purpose
of Giving Notice:
	 	To be provided by BofA.
	 
	 	 	 	 
	Settlement Terms:	 	 
	 
	 	 	 	 
	 

	 	Settlement Method:
	 	Net Share Settlement
	 
	 	 	 	 
	 

	 	Net Share Settlement:
	 	BofA will deliver to Counterparty, on or before the relevant
Settlement Date, a number of Shares equal to the Net Shares in respect of any Option
exercised or deemed exercised hereunder. In no event will the Net Shares be less than
zero.
	 
	 	 	 	 
	 

	 	Net Shares:
	 	In respect of any Option exercised or deemed exercised, a number of
Shares equal to (i) the sum of the quotients, for each Valid Day during the Settlement
Averaging Period for such exercisable Option, of (A) the product of (x) excess, if any,
of the Relevant Price less the Strike Price on such Valid Day and (y) the Conversion
Rate on such Valid Day divided by (B) such Relevant Price, divided by (ii) the number
of Valid Days in the Settlement Averaging Period; provided that if the calculation
contained in clause (A) above results in a negative number, such number shall be
replaced with the number zero. Notwithstanding the forgoing, if Counterparty has
elected Gross Share Settlement and so specified in the Notice of Exercise, or if
applicable, the Notice of Gross Share Settlement, then with respect to any Option
relating to the Relevant Convertible Securities with a Conversion Date occurring on or
following April 15, 2012, the Net Shares shall be equal to the lesser of (i) a number
of Shares determined as described above and (ii) a number of Shares equal to the Net
Convertible Value for such Option divided by the Obligation Price. BofA will deliver
cash in lieu of any fractional Shares to be delivered with respect to any Net Shares
valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period.
	 
	 	 	 	 
	 

	 	Net Convertible Value:
	 	With respect to an Option, (i) the Total Convertible Value
for such Option minus (ii) USD 1,000.
	 
	 	 	 	 
	 

	 	Total Convertible Value:
	 	With respect to an Option, (i) the aggregate number of
Shares, if any, that Counterparty is obligated to deliver to the holder of an

4

 

	 	 	 	 	 
	 

	 	 	 	Convertible Security for the relevant Conversion Date
pursuant to Section 10.03(b) of the Indenture,
multiplied by (ii) the Obligation Price.
	 
	 	 	 	 
	 

	 	Obligation Price:
	 	The opening price as displayed under the heading Op on Bloomberg page
PKD.N <equity> (or any successor thereto) on the Obligation Valuation Date.
	 
	 	 	 	 
	 

	 	Obligation Valuation Date:
	 	Settlement Date
	 
	 	 	 	 
	 

	 	Settlement Averaging Period:
	 	For any Option, (i) with respect to an Option with a Conversion
Date occurring prior to April 15, 2012, the twenty (20) consecutive Valid Day period
beginning on, and including, the third Valid Day following such Conversion Date (or the
forty (40) consecutive Valid Day period commencing on, and including, the third Valid
Day following such Conversion Date if Counterparty has elected Gross Share Settlement
and specified Gross Share Settlement in the Notice of Exercise) or (ii) with respect to
an Option with a Conversion Date occurring on or following April 15, 2012, the twenty
(20) consecutive Valid Day period beginning on, and including, the twenty-second (22nd)
Scheduled Valid Day immediately prior to the Expiration Date (or the forty (40)
consecutive Valid Day period commencing on, and including, the forty second (42nd)
Scheduled Valid Day immediately prior to the Expiration Date if Counterparty has
delivered a Notice of Gross Share Settlement to BofA on or prior to April 15, 2012).
	 
	 	 	 	 
	 

	 	Settlement Date:
	 	For any Option, the third Valid Day following the final day of the
applicable Settlement Averaging Period with respect to such Option.
	 
	 	 	 	 
	 

	 	Settlement Currency:
	 	USD
	 
	 	 	 	 
	 

	 	Valid Day:
	 	A day on which (i) there is no Market Disruption Event and (ii) trading
in the Shares generally occurs on the Exchange or, if the Shares are not then listed on
the Exchange, on the principal other U.S. national or regional securities exchange on
which the Shares are then listed or, if the Shares are not then listed on a U.S.
national or regional securities exchange, on the principal other market on which the
Shares are then traded. If the Shares (or other security for which a Relevant Price
must be determined) is not so listed or quoted, a Valid Day means a Business Day.
	 
	 	 	 	 
	 

	 	Scheduled Valid Day:
	 	A day that is scheduled to be a Valid Day on the primary U.S. national
securities exchange or market on which the Shares are listed or admitted to trading.
	 
	 	 	 	 
	 

	 	Market Disruption Event:
	 	Section 6.3 of the Equity Definitions is hereby replaced in its
entirety by the following:
	 
	 	 	 	 
	 

	 	 	 	Market Disruption Event means in respect of a Share,
(i) a failure by the Exchange or, if the Shares are not
then listed on the Exchange, by the principal other
U.S. national or regional

5

 

	 	 	 	 	 
	 

	 	 	 	securities exchange on which the Shares are then listed
or, if the Shares are not then listed on a U.S.
national or regional securities exchange, by the
principal other market on which the Shares are then
traded, to open for trading during its regular trading
session or (ii) the occurrence or existence prior to
1:00 p.m., New York City time, on any trading day for
the Shares for an aggregate one half hour period of any
suspension or limitation imposed on trading (by reason
of movements in price exceeding limits permitted by the
stock exchange or otherwise) in the Shares or in any
options, contracts or future contracts relating to the
Shares.
	 
	 	 	 	 
	 

	 	Relevant Price:
	 	On any Valid Day, the per Share volume-weighted average price as displayed
under the heading Bloomberg VWAP on Bloomberg page PKD.N <equity> AQR (or any
equivalent successor if such page is not available) in respect of the period from the
scheduled opening time of trading on the Exchange to the Scheduled Closing Time of the
Exchange on such Valid Day (or if such volume-weighted average price is unavailable,
the market value of one Share on such Valid Day, as determined by the Calculation Agent
using a volume-weighted method). The Relevant Price will be determined without regard
to after hours trading or any other trading outside of the regular trading session
hours.
	 
	 	 	 	 
	 

	 	Other Applicable Provisions:
	 	To the extent BofA is obligated to deliver Shares
hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in Section 9.11 of the Equity Definitions shall
be modified by excluding any representations therein relating to restrictions,
obligations, limitations or requirements under applicable securities laws arising as a
result of the fact that Counterparty is the Issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable, except that all references in such provisions to
“Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share
Settled” in relation to any Option means that BofA is obligated to deliver Shares
hereunder.
	 
	 	 	 	 
	 

	 	Restricted Certificated Shares:
	 	Notwithstanding anything to the contrary in the Equity
Definitions, BofA may, in whole or in part, deliver Shares in certificated form
representing the Number of Shares to be Delivered to Counterparty in lieu of delivery
through the Clearance System. With respect to such certificated Shares, the
Representation and Agreement contained in Section 9.11 of the Equity Definitions shall
be modified by deleting the remainder of the provision after the word “encumbrance” in
the fourth line thereof.
	 
	 	 	 	 
	Share Adjustments:	 	 
	 
	 	 	 	 
	 

	 	Method of Adjustment:
	 	Notwithstanding Section 11.2 of the Equity Definitions, upon the
occurrence of any event or condition set forth in Sections 10.04(a) through (f) of the
Indenture, the Calculation Agent

6

 

	 	 	 	 	 
	 

	 	 	 	shall upon prior written notice to Counterparty make a
corresponding adjustment, which it reasonably
determines in good faith to be necessary, to the terms
relevant to the exercise, settlement or payment of the
Transaction. Immediately upon the occurrence of any
“Adjustment Event”, as defined in the Indenture,
Counterparty shall notify the Calculation Agent of such
Adjustment Event; and once the adjustments to be made
to the terms of the Indenture and the Convertible Notes
in respect of such Adjustment Event have been
determined, Counterparty shall immediately notify the
Calculation Agent in writing of the details of such
adjustments. Additionally, notwithstanding Section
11.2 of the Equity Definitions, Potential Adjustment
Event shall not apply to this Transaction and, if and
to the extent that any event or condition occurs during
the term of the Transaction with respect to
Counterparty and the Shares of the type described in
Section 11.2(e), the Calculation Agent shall not make
any adjustment to the terms relevant to the exercise,
settlement or payment of the Transaction, except to the
extent otherwise described in this paragraph, without
the prior written consent of Counterparty.
	 
	 	 	 	 
	Extraordinary Events:	 	 
	 
	 	 	 	 
	 

	 	Merger Events:
	 	Section 12.1(b) of the Equity Definitions is hereby amended and restated in
its entirety for purposes of this Confirmation so that “Merger Event” means the
occurrence of any event or condition set forth in Section 10.06 of the Indenture.
	 
	 	 	 	 
	 

	 	Tender Offer:
	 	Section 12.1(d) of the Equity Definitions is hereby amended and restated in
its entirety for purposes of this Confirmation so that a “Tender Offer” means the
occurrence of any event or condition set forth in Clause (1) of the definition of
“Fundamental Change” in Section 1.01 of the Indenture.
	 
	 	 	 	 
	 

	 	Consequences of Merger Events
and Tender Offers:
	 	Notwithstanding Sections 12.2 and 12.3 of the Equity
Definitions, upon the occurrence of a Merger Event or Tender Offer, the Calculation
Agent shall, to the extent that any such Merger Event or Tender Offer results in
adjustments to the terms of the exercise, settlement or payment under the Indenture,
upon prior written notice to Counterparty, make the corresponding adjustment in respect
of any adjustment under the Indenture to any one or more of the nature of the Shares,
the Number of Options, the Option Entitlement and any other variable relevant to the
exercise, settlement or payment for the Transaction; provided that such adjustment
shall be made without regard to (x) any adjustment to the Conversion Rate pursuant to
Sections 10.01(c), 10.04(g), or 10.04(h) of the Indenture and (y) unless and to the
extent otherwise agreed by BofA and Counterparty (and provided that BofA may not be
required so to agree), the election, if any, by Counterparty to adjust the Conversion
Rate and the related conversion obligation pursuant to Section 10.01(d) of the
Indenture.

7

 

	 	 	 	 	 
	 

	 	Nationalization, Insolvency

or Delisting:
	 	Cancellation and Payment (Calculation Agent
Determination); provided that, in addition to the provisions of
Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if
the Exchange is located in the United States and the Shares are not immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market System (or their respective successors);
if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or
quotation system, such exchange or quotation system shall thereafter be deemed to be
the Exchange; provided further that, in determining any Cancellation Amount,
notwithstanding any term or provision in the Agreement or the Equity Definitions, the
Calculation Agent shall comply with the terms and provisions set forth in Section
8(n)(iii) of this Confirmation.
	 
	 	 	 	 
	 

	 	Additional Disruption Events:	 	 
	 
	 	 	 	 
	 

	 	(a) Change in Law:
	 	Applicable (provided that clause (y) of this term set forth in
Section 12.9(a)(ii) of the Equity Definitions shall not apply)
	 
	 	 	 	 
	 

	 	(b) Insolvency Filing:
	 	Applicable
	 
	 	 	 	 
	 

	 	(c) Hedging Disruption:
	 	Applicable
	 
	 	 	 	 
	 

	 	Hedging Party:
	 	For all applicable Additional Disruption Events, BofA
	 
	 	 	 	 
	 

	 	Determining Party:
	 	For all applicable Additional Disruption Events, BofA
	 
	 	 	 	 
	 

	 	Non-Reliance:
	 	Applicable
	 
	 	 	 	 
	 

	 	Agreements and Acknowledgments Regarding Hedging Activities:
	 	Applicable.
	 
	 	 	 	 
	 

	 	Additional Acknowledgments:
	 	Applicable

     3. Calculation Agent: BofA; provided that all calculations, determinations and
adjustments made by BofA in respect of this Transaction as Calculation Agent shall be made in good
faith and in a commercially reasonable manner.

     4. Account Details:

          BofA Payment Instructions:

Bank of America, N.A.

San Francisco, CA

SWIFT: BOFAUS65

Bank Routing: 121-000-358

Account Name: Bank of America

8

 

Account No. : 12333-34172

	 	 	 	Counterparty Payment Instructions:

To be provided by Counterparty.

	 	5.	 	Offices:
	 
	 	 	 	The Office of BofA for the Transaction is:

Bank of America, N.A.

c/o Banc of America Securities LLC

Equity Financial Products

9 West 57th Street, 40th Floor

New York, NY 10019

Telephone:      212-583-8373

Facsimile:       212-847-5124

	 	 	 	The Office of Counterparty for the Transaction is:

Parker Drilling Company

1401 Enclave Parkway, Suite 600

Houston, Texas 77077

Attn:             General Counsel

	 	6.	 	Notices: For purposes of this Confirmation:
	 
	 	(a)	 	Address for notices or communications to Counterparty:

	 	 	 	 	 
	 

	 	To:
	 	Parker Drilling Company
	 

	 	 	 	1401 Enclave Parkway, Suite 600
	 

	 	 	 	Houston, Texas 77077
	 

	 	Attn:
	 	General Counsel
	 

	 	Telephone:
	 	(281) 406-2000
	 

	 	Facsimile:
	 	(281) 406-2001

	 	(b)	 	Address for notices or communications to BofA:

	 	 	 	 	 
	 

	 	To:
	 	Bank of America, N.A.
	 

	 	 	 	c/o Banc of America Securities LLC
	 

	 	 	 	Equity Financial Products
	 

	 	

Attn:

Telephone:

Facsimile:
	 	9 West 57th Street, 40th Floor

New York, NY 10019

Attn: John Servidio

212-583-8373

212-230-8610

9

 

	 	7.	 	Representations, Warranties and Agreements:
	 
	 	(a)	 	In addition to the representations and warranties in the Agreement and those
contained elsewhere herein, Counterparty represents and warrants to and for the benefit
of, and agrees with, BofA as follows:

	 	(i)	 	On the Trade Date, (A) none of Counterparty and its officers
and directors is aware of any material nonpublic information regarding
Counterparty or the Shares and (B) all reports and other documents filed by
Counterparty with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) when
considered as a whole (with the more recent such reports and documents deemed
to amend inconsistent statements contained in any earlier such reports and
documents), do not contain any untrue statement of a material fact or any
omission of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading.
	 
	 	(ii)	 	(A) On the Trade Date, the Shares or securities that are
convertible into, or exchangeable or exercisable for Shares, are not, and shall
not be, subject to a “restricted period,” as such term is defined in Regulation
M under the Exchange Act (“Regulation M”) and (B) Counterparty shall not engage
in any “distribution,” as such term is defined in Regulation M, other than a
distribution meeting the requirements of the exceptions set forth in sections
101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business
Day immediately following the Trade Date.
	 
	 	(iii)	 	On the Trade Date, neither Counterparty nor any “affiliate” or
“affiliated purchaser” (each as defined in Rule 10b-18 of the Exchange Act
(“Rule 10b-18”)) shall directly or indirectly (including, without limitation,
by means of any cash-settled or other derivative instrument) purchase, offer to
purchase, place any bid or limit order that would effect a purchase of, or
commence any tender offer relating to, any Shares (or an equivalent interest,
including a unit of beneficial interest in a trust or limited partnership or a
depository share) or any security convertible into or exchangeable or
exercisable for Shares, except through BofA.
	 
	 	(iv)	 	Without limiting the generality of Section 13.1 of the Equity
Definitions, Counterparty acknowledges that BofA is not making any
representations or warranties with respect to the treatment of the Transaction
under FASB Statements 133, as amended, or 150, EITF Issue No. 00-19 (or any
successor issue statements) or under FASB’s Liabilities & Equity Project.
	 
	 	(v)	 	Without limiting the generality of Section 3(a)(iii) of the
Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4 under the
Exchange Act.
	 
	 	(vi)	 	Prior to the Trade Date, Counterparty shall deliver to BofA a
resolution of Counterparty’s board of directors authorizing the Transaction and
such other certificate or certificates as BofA shall reasonably request.

10

 

	 	(vii)	 	Counterparty is not entering into this Confirmation to create
actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for Shares) in violation of the Exchange Act or to raise
or depress or otherwise manipulate the price of
the Shares (or any security convertible into or exchangeable for Shares) or
otherwise in violation of the Exchange Act.
	 
	 	(viii)	 	Counterparty is not, and after giving effect to the transactions contemplated
hereby will not be, an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.
	 
	 	(ix)	 	On the Trade Date (A) the assets of Counterparty at their fair
valuation exceed the liabilities of Counterparty, including contingent
liabilities, (B) the capital of Counterparty is adequate to conduct the
business of Counterparty and (C) Counterparty has the ability to pay its debts
and obligations as such debts mature and does not intend to, or does not
believe that it will, incur debt beyond its ability to pay as such debts
mature.
	 
	 	(x)	 	On the Trade Date, the representations and warranties of
Counterparty set forth in Section 3 of the Agreement and Section 1(A) of the
Underwriting Agreement are true and correct.
	 
	 	(xi)	 	Counterparty understands no obligations of BofA to it hereunder
will be entitled to the benefit of deposit insurance and that such obligations
will not be guaranteed by any affiliate of BofA or any governmental agency.

	 	(b)	 	Each of BofA and Counterparty agrees and represents that it is an “eligible
contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act,
as amended.
	 
	 	(c)	 	Each of BofA and Counterparty acknowledges that the offer and sale of the
Transaction to it is intended to be exempt from registration under the Securities Act
of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.
Accordingly, Counterparty represents and warrants to BofA that (i) it has the financial
ability to bear the economic risk of its investment in the Transaction and is able to
bear a total loss of its investment, (ii) it is an “accredited investor” as that term
is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account and without a view to the
distribution or resale thereof, and (iv) the assignment, transfer or other disposition
of the Transaction has not been and will not be registered under the Securities Act and
is restricted under this Confirmation, the Securities Act and state securities laws.
	 
	 	(d)	 	Each of BofA and Counterparty agrees and acknowledges that BofA is a “financial
institution,” “swap participant” and “financial participant”, and that Counterparty is
a “swap participant”, in each case within the meaning of Sections 101(22), 101(53C) and
101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”). The parties
hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities
contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with
respect to which each payment and delivery hereunder is a “settlement payment,” as such
term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,”
as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to
which each payment and delivery hereunder is a “transfer,” as such term is defined in
Section 101(54) of the Bankruptcy Code, and (B) that BofA is entitled to the
protections afforded by, 

11

 

	 	 	 	among other sections, Section 362(b)(6), 362(b)(17), 546(e),
546(g), 555 and 560 of the Bankruptcy Code.
	 
	 	(e)	 	Counterparty shall deliver to BofA an opinion of counsel, dated as of the
Effective Date and reasonably acceptable to BofA in form and substance, with respect to
the matters set forth in Section 3(a) of the Agreement.

	 	8.	 	Other Provisions:
	 
	 	(a)	 	Additional Termination Events. The occurrence of (i) an event of default with
respect to Counterparty under the terms of the Convertible Securities as set forth in
Section 6.01 of the Indenture which results in an acceleration of indebtedness
evidenced by the outstanding Securities under the Indenture, (ii) an Amendment Event or
(iii) a Repayment Event shall be an Additional Termination Event with respect to which
the Transaction is the sole Affected Transaction and Counterparty is the sole Affected
Party and BofA shall be the party entitled to designate an Early Termination Date
pursuant to Section 6(b) of the Agreement; provided that in the case of a Repayment
Event the Transaction shall be subject to termination only in respect of the number of
Convertible Securities that cease to be outstanding in connection with or as a result
of such Repayment Event.

     “Amendment Event” means that Counterparty amends, modifies, supplements or waives any
term of the Indenture or the Convertible Securities governing the principal amount, coupon,
maturity, repurchase obligation of Counterparty, redemption right of Counterparty, any term
relating to conversion of the Convertible Securities (including changes to the conversion
price, conversion settlement dates or conversion conditions), or any term that would require
consent of the holders of not less than 100% of the principal amount of the Convertible
Securities to amend.

     “Repayment Event” means that (A) any Convertible Securities are repurchased (whether in
connection with or as a result of a change of control, howsoever defined, or for any other
reason) by Counterparty or any of its subsidiaries, (B) any Convertible Securities are
delivered to Counterparty in exchange for delivery of any property or assets of Counterparty
or any of its subsidiaries (howsoever described), (C) any principal of any of the
Convertible Securities is repaid prior to the final maturity date of the Convertible
Securities (whether following acceleration of the Convertible Securities or otherwise), or
(D) any Convertible Securities are exchanged by or for the benefit of the holders thereof
for any other securities of Counterparty or any of its affiliates (or any other property, or
any combination thereof) pursuant to any exchange offer or similar transaction; provided
that, in the case of clause (B) and clause (D), conversions of the Convertible Securities
pursuant to the terms of the Indenture as in effect on the date hereof shall not be
Repayment Events.

	 	(b)	 	Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If, subject to Section 8(k) below, BofA shall owe Counterparty
any amount pursuant to Section 12.2 or 12.3 of the Equity Definitions and “Consequences
of Merger Events and Tender Offers” above, or Sections 12.6, 12.7 or 12.9 of the Equity
Definitions (except in the event of an Insolvency, a Nationalization, a Tender Offer or
a Merger Event, in each case, in which the consideration or proceeds to be paid to
holders of Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the
Agreement (except in the event of an Event of Default in which Counterparty is the
Defaulting Party or a Termination Event in which Counterparty is the Affected Party,
that resulted from an event or events within Counterparty’s control) (a “Payment
Obligation”), Counterparty shall have the right, in its sole discretion, to require
BofA to satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) by giving 

12

 

	 	 	 	irrevocable telephonic notice to BofA, confirmed in writing
within one Scheduled Trading Day, between the hours of 9:00 A.M. and 4:00 P.M. New York
City time on the Merger Date, Tender Offer Date, Announcement Date or Early Termination
Date, as applicable (“Notice of Share Termination”). Upon such Notice of Share
Termination, the following provisions shall apply on
the Scheduled Trading Day immediately following the Merger Date, the Tender Offer
Date, Announcement Date or Early Termination Date, as applicable:

	 	 	 
	Share Termination Alternative:

	 	Applicable and means that BofA shall
deliver to Counterparty the Share
Termination Delivery Property on the date
on which the Payment Obligation would
otherwise be due pursuant to Section 12.7
or 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement, as
applicable (the “Share Termination
Payment Date”), in satisfaction of the
Payment Obligation.
	 
	 	 
	Share Termination Delivery Property:

	 	A number of Share Termination Delivery
Units, as calculated by the Calculation
Agent, equal to the Payment Obligation
divided by the Share Termination Unit
Price. The Calculation Agent shall
adjust the Share Termination Delivery
Property by replacing any fractional
portion of a security therein with an
amount of cash equal to the value of such
fractional security based on the values
used to calculate the Share Termination
Unit Price. For the avoidance of doubt
(and notwithstanding anything herein, in
the Agreement or otherwise to the
contrary), the Share Termination Delivery
Property may included shares which are
unregistered under the Securities Act.
	 
	 	 
	Share Termination Unit Price:

	 	The value of property contained in one
Share Termination Delivery Unit on the
date such Share Termination Delivery
Units are to be delivered as Share
Termination Delivery Property, as
determined by the Calculation Agent in
its discretion by commercially reasonable
means and notified by the Calculation
Agent to BofA at the time of notification
of the Payment Obligation.
	 
	 	 
	Share Termination Delivery Unit:

	 	In the case of a Termination Event, Event
of Default or Delisting, one Share or, in
the case of an Insolvency,
Nationalization, Merger Event or Tender
Offer, a unit consisting of the number or
amount of each type of property received
by a holder of one Share (without
consideration of any requirement to pay
cash or other consideration in lieu of
fractional amounts of any securities) in
such Insolvency, Nationalization, Merger
Event or Tender Offer. If such
Insolvency, Nationalization, Merger Event
or Tender Offer involves a choice of
consideration to be received by holders,
such holder shall be deemed to have
elected to receive the maximum possible
amount of cash.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other Applicable Provisions:

	 	If Share Termination Alternative is
applicable, the provisions of Sections
9.8, 9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in
Section 9.11(i), (iv) and (v) of the
Equity Definitions shall be modified by
excluding any representations therein
relating to restrictions, obligations,
limitations or requirements under
applicable securities laws arising as a
result of the fact that Counterparty is
the Issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable,
except that all references in such

13

 

	 	 	 
	 

	 	provisions to “Physically-Settled” shall
be read as references to “settled by
Share Termination Alternative” and all
references to “Shares” shall be read as
references to “Share Termination Delivery
Units”.

	 	(c)	 	Disposition of Hedge Shares. Counterparty hereby agrees that if, in the
commercially reasonable judgment of BofA acting in good faith, any Shares (the “Hedge
Shares”) acquired by BofA for the purpose of hedging its obligations pursuant to the
Transaction cannot be sold in the public market by BofA without registration under the
Securities Act (other than as a result of BofA being an affiliate, as such term is used
in the Securities Act and rules and regulations promulgated thereunder, of
Counterparty), Counterparty shall, at its election: (i) in order to allow BofA to sell
the Hedge Shares in a registered offering, make available to BofA an effective
registration statement under the Securities Act to cover the resale of such Hedge
Shares and (A) enter into an agreement, in form and substance satisfactory to BofA,
substantially in the form of an underwriting agreement for a registered offering, (B)
provide accountant’s “comfort” letters in customary form for registered offerings of
equity securities, (C) provide disclosure opinions of nationally recognized outside
counsel to Counterparty reasonably acceptable to BofA, (D) provide other customary
opinions, certificates and closing documents customary in form for registered offerings
of equity securities and (E) afford BofA a reasonable opportunity to conduct a “due
diligence” investigation with respect to Counterparty customary in scope for
underwritten offerings of equity securities; provided, however, that if BofA, in its
commercially reasonable judgment, is not reasonably satisfied with access to
Counterparty’s due diligence materials, the results of its due diligence investigation,
or the procedures and documentation for the registered offering referred to above, then
clause (ii) or clause (iii) of this Section 8(c) shall apply at the election of
Counterparty; (ii) in order to allow BofA to sell the Hedge Shares in a private
placement, enter into a private placement agreement substantially similar to private
placement underwriting agreements customary for private placements of equity
securities, in form and substance reasonably satisfactory to BofA, including customary
representations, covenants, blue sky and other governmental filings and/or
registrations, indemnities to BofA, due diligence rights (for BofA or any designated
buyer of the Hedge Shares from BofA), opinions and certificates and such other
documentation as is customary for private placements agreements, all reasonably
acceptable to BofA (in which case, the Calculation Agent shall make any adjustments to
the terms of the Transaction that are necessary, in its reasonable judgment, to
compensate BofA for any discount from the public market price of the Shares incurred on
the sale of Hedge Shares in a private placement); or (iii) purchase the Hedge Shares
from BofA at the VWAP Price on such Exchange Business Days, and in the amounts,
requested by BofA. “VWAP Price” means, on any Exchange Business Day, the per Share
volume-weighted average price as displayed under the heading “Bloomberg VWAP” on
Bloomberg page PKD.N <equity> VAP (or any successor thereto) in respect of the
period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Exchange Business Day
(or if such volume-weighted average price is unavailable, the market value of one Share
on such Exchange Business Day, as determined by the Calculation Agent using a
volume-weighted method).
	 
	 	(d)	 	Amendment to Equity Definitions. The following amendment shall be made to the
Equity Definitions:

     (i) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1)
deleting from the fourth line thereof the word “or” after the word “official” and
inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection
(B) thereof and inserting the following words therefor “or (C) at BofA’s option, the
occurrence of any of the events specified in Section 6.01(h) or (i) of the
Indenture.”

14

 

     (ii) Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1)
replacing “either party may elect” with “BofA may elect” and (2) replacing “notice
to the other party “with “notice to Counterparty” in the first sentence of such
section.

	 	(e)	 	Repurchase Notices. Counterparty shall, on any day on which Counterparty
effects any repurchase of Shares, promptly give BofA a written notice of such
repurchase (a “Repurchase Notice”) on such day if, following such repurchase, the
Notice Percentage as determined on such day is (i) greater than 6% and (ii) greater by
0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice
(or, in the case of the first such Repurchase Notice, greater than the Notice
Percentage as of the date hereof). The “Notice Percentage” as of any day is the
fraction, expressed as a percentage, the numerator of which is the Number of Shares and
the denominator of which is the number of Shares outstanding on such day. In the event
that Counterparty fails to provide BofA with a Repurchase Notice on the day and in the
manner specified in this Section 8(e) then Counterparty agrees to indemnify and hold
harmless BofA, its affiliates and their respective directors, officers, employees,
agents and controlling persons (BofA and each such person being an “Indemnified Party”)
from and against any and all losses, claims, damages and liabilities (or actions in
respect thereof), joint or several, to which such Indemnified Party may become subject
under applicable securities laws, including without limitation, Section 16 of the
Exchange Act, relating to or arising out of such failure. If for any reason the
foregoing indemnification is unavailable to any Indemnified Party or insufficient to
hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum
extent permitted by law, to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage or liability. In addition, Counterparty will
reimburse any Indemnified Party for all expenses (including reasonable counsel fees and
expenses) reasonably incurred (after notice to Counterparty in the form of a documented
invoice) in connection with the investigation of, preparation for or defense or
settlement of any pending or threatened claim or any action, suit or proceeding arising
from such failure, whether or not such Indemnified Party is a party thereto and whether
or not such claim, action, suit or proceeding is initiated or brought by or on behalf
of Counterparty. This indemnity shall survive the completion of the Transaction
contemplated by this Confirmation and any assignment and delegation of the Transaction
made pursuant to this Confirmation or the Agreement shall inure to the benefit of any
permitted assignee of BofA.
	 
	 	(f)	 	Transfer and Assignment. BofA may transfer or assign its rights and
obligations hereunder and under the Agreement, in whole or in part, to any of its
affiliates, or any entities sponsored or organized by, or on behalf of or for the
benefit of, BofA, provided that such transferees are not less creditworthy than, or
such transferees’ payment and performance obligations under this Transaction are
guaranteed by, Bank of America Corporation, and for so long as the ratings then
assigned to such transferees (or, in the case of any transferee whose payment and
performance obligations under this Transaction are guaranteed by Bank of America
Corporation, Bank of America Corporation’s) long term unsecured debt or deposit
obligations (not supported by third party credit enhancement) is not less than “A” by
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or
“A2” by Moody’s Investors Service, Inc. If at any time at which the Equity Percentage
exceeds 8%, BofA, in its discretion, is unable to effect a transfer or assignment of a
portion of its rights and obligations under this Transaction with the prior written
consent of Counterparty (such consent not to be unreasonably withheld) covering the
number of Shares causing the Equity Percentage to exceed 8% (the “Excess Shares”) after
its commercially reasonable efforts on pricing terms reasonably acceptable to BofA such
that the Equity Percentage is reduced to 8% or less, BofA may designate any Scheduled
Trading Day as an Early Termination Date with respect to a such portion (the
“Terminated Portion”) of the Transaction constituting the Excess Shares, such that the
Equity Percentage following such partial termination will be equal to or less than 8%.
In the event that BofA so designates an Early Termination Date with respect to such a
portion of the Transaction, a payment or delivery shall be made pursuant to Section 6
of the

15

 

	 	 	 	Agreement and Section 8(b) of this Confirmation as if (i) an Early Termination
Date had been designated in respect of a Transaction having terms identical to the
Terminated Portion of the Transaction, (ii) Counterparty shall be the sole Affected
Party with respect to such partial termination and (iii) such portion of the
Transaction shall be the only Terminated Transaction. The “Equity Percentage” as of
any day is the fraction, expressed as a percentage, (A) the numerator of which is the
sum of the number of Shares that BofA or any of its affiliates
beneficially own (within the meaning of Section 13 of the Exchange Act) on such day,
other than any Shares so owned as a hedge of the Transaction, and the Number of
Shares and (B) the denominator of which is the number of Shares outstanding on such
day.

	 	(g)	 	Staggered Settlement. BofA may, by notice to Counterparty prior to any
Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or
more dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal
Settlement Date as follows:

	 	(i)	 	in such notice, BofA will specify to Counterparty the related
Staggered Settlement Dates (each of which will be on or prior to such Nominal
Settlement Date, but not prior to the beginning of the related “Cash Settlement
Averaging Period”) or delivery times and how it will allocate the Shares it is
required to deliver hereunder among the Staggered Settlement Dates or delivery
times;
	 
	 	(ii)	 	the aggregate number of Shares that BofA will deliver to
Counterparty hereunder on all such Staggered Settlement Dates and delivery
times will equal the number of Shares that BofA would otherwise be required to
deliver on such Nominal Settlement Date; and
	 
	 	(iii)	 	BofA shall reimburse Counterparty for all reasonable and
documented operational expenses related to said staggered settlement.

	 	(h)	 	Right to Extend. BofA may postpone any Potential Exercise Date or any other
date of valuation or delivery by BofA, with respect to some or all of the relevant
Options (in which event the Calculation Agent shall make appropriate adjustments to the
Shares it is required to deliver hereunder), if BofA determines, in its reasonable
discretion, and with the prior written consent of Counterparty (such consent not to be
unreasonably withheld), that such extension is reasonably necessary or appropriate to
preserve BofA’s hedging or hedge unwind activity hereunder in light of existing
liquidity conditions or to enable BofA to effect purchases of Shares in connection with
its hedging, hedge unwind or settlement activity hereunder in a manner that would, if
BofA were Counterparty or an affiliated purchaser of Counterparty, be in compliance
with applicable legal, regulatory or self-regulatory requirements, or with related
policies and procedures applicable to BofA.
	 
	 	(i)	 	Disclosure. Effective from the date of commencement of discussions concerning
the Transaction, Counterparty and each of its employees, representatives, or other
agents may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the Transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to Counterparty relating to such tax
treatment and tax structure.
	 
	 	(j)	 	Designation by BofA. Notwithstanding any other provision in this Confirmation
to the contrary requiring or allowing BofA to purchase, sell, receive or deliver any
Shares or other securities to or

16

 

	 	 	 	from Counterparty, BofA may designate any of its
affiliates to purchase, sell, receive or deliver such shares or other securities and
otherwise to perform BofA obligations in respect of the Transaction and any such
designee may assume such obligations. BofA shall be discharged of its obligations to
Counterparty to the extent of any such performance, and shall not be discharged at any
time prior thereto.
	 
	 	(k)	 	No Netting and Set-off. Multiple Transaction Payment Netting and the
provisions of Section 6(f) of the Agreement shall not apply. Each party waives any and
all rights it may have to set-off delivery or payment obligations it owes to the other
party under the Transaction against any delivery or payment obligation owed to it by
the other party, whether arising under the Agreement, under any other agreement between
the parties thereto, by operation or law or otherwise.
	 
	 	(l)	 	Equity Rights. BofA acknowledges and agrees that this Confirmation is not
intended to convey to it rights with respect to the Transaction that are senior to the
claims of common stockholders in the event of Counterparty’s bankruptcy. For the
avoidance of doubt, the parties agree that the preceding sentence shall not apply at
any time other than during Counterparty’s bankruptcy to any claim arising as a result
of a breach by Counterparty of any of its obligations under this Confirmation or the
Agreement.
	 
	 	(m)	 	Early Unwind. In the event the sale by Counterparty of the Convertible
Securities is not consummated with the initial purchasers pursuant to the Underwriting
Agreement for any reason by the close of business in New York on July 5 (or such later
date as agreed upon by the parties, which in no event shall be later than July 10)
(July 5 or such later date being the “Early Unwind Date”), the Transaction shall
automatically terminate (the “Early Unwind”), on the Early Unwind Date and (i) the
Transaction and all of the respective rights and obligations of BofA and Counterparty
thereunder shall be cancelled and terminated and (ii) Counterparty shall pay to BofA an
amount in cash equal to the aggregate amount of costs and expenses reasonably incurred
by BofA relating to the unwinding of BofA’s hedging activities in respect of the
Transaction (including market losses incurred in reselling any Shares purchased by BofA
or its affiliates in connection with such hedging activities). Following such
termination, cancellation and payment, each party shall be released and discharged by
the other party from and agrees not to make any claim against the other party with
respect to any obligations or liabilities of either party arising out of and to be
performed in connection with the Transaction either prior to or after the Early Unwind
Date. BofA and Counterparty represent and acknowledge to the other that upon an Early
Unwind and following the payment referred to above, all obligations with respect to the
Transaction shall be deemed fully and finally discharged.
	 
	 	(n)	 	Amendments to the Agreement. Notwithstanding any term or provision contained
in the Agreement, (i) no Potential Event of Default or Event of Default shall apply
with respect to Counterparty as a defaulting party, and no Termination Event shall
apply with respect to Counterparty as an Affected Party, in each and any such case,
except to the extent any such Event of Default or Termination Event results in the
occurrence and continuance of an Additional Termination Event (as specified in this
Confirmation) or an Extraordinary Event elected as being applicable in this
Confirmation and Counterparty shall have no Specified Entities or Credit Support
Providers for purposes of the Agreement and this Transaction; (ii) without limiting the
generality of the foregoing, the Events of Default specified in Sections 5(a)(i), (ii)
(except to the extent that any violation of any such agreement or obligation described
therein or in this Confirmation (x) would reasonably be expected to have a material
adverse effect on the ability of BofA to perform its obligations under this Transaction
or (y) pertains to the disposition of Hedge Shares pursuant to Section 8(c) of this
Confirmation),), (iii), (iv) (except to the extent any

17

 

	 	 	 	misrepresentation made under
this Confirmation or under the Agreement would reasonably be expected to have a
material adverse effect on the ability of BofA to perform its obligations under this
Transaction), (v), (vi) or (vii) of the Agreement, and the Termination Events specified
in the Agreement, shall not apply with respect to Counterparty; and (iii) with respect
to any early termination of all or any portion of this Transaction for any reason
pursuant to the terms of this Confirmation, the Equity Definitions and/or the
Agreement, and additionally notwithstanding any term or provision in the Equity
Definitions, (A) any amount payable (or to be payable) by either
party hereto to the other party hereto arising as a result of such early termination
(including any costs resulting from unwinding hedging transactions) shall be
determined in good faith and in a commercially reasonable manner and (B) without
limiting the foregoing, the party determining the amount of any such payment
(whether BofA, Counterparty or the Calculation Agent) shall (1) utilize commercially
reasonable procedures and methodologies so as to produce a commercially reasonable
determination of such amount, and (2) disclose in reasonable detail the material
information utilized (or to be utilized) by such party in making such determination.
	 	(o)	 	Waiver of Trial by Jury. EACH OF COUNTERPARTY AND BOFA HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF
ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE
TRANSACTION OR THE ACTIONS OF BOFA OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR
ENFORCEMENT HEREOF.
	 
	 	(p)	 	Governing Law. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO
THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE
COURTS.

18

 

          Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm
that the foregoing (in the exact form provided by BofA) correctly sets forth the terms of the
agreement between BofA and Counterparty with respect to the Transaction, by manually signing this
Confirmation or this page hereof as evidence of agreement to such terms and providing the other
information requested herein and immediately returning an executed copy to John Servidio, Facsimile
No. 212-230-8610.

	 	 	 	 	 
	 	Yours faithfully,

BANK OF AMERICA, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Agreed and Accepted By:

	 	 	 	 	 
	 	PARKER DRILLING COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

19

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