Document:

Exhibit 4.2

Exhibit 4.2

CEREPLAST, INC.

AS ISSUER

AND

WELLS FARGO BANK, NATIONAL ASSOCIATION

AS TRUSTEE

INDENTURE

DATED AS OF MAY 24, 2011

7.00% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2016

 

 

CROSS-REFERENCE TABLE

	 	 	 
	TRUST INDENTURE ACT SECTION	 	INDENTURE SECTION
	 
	 	 
	310 (a)(1)
	 	5.10
	(a) (2)
	 	5.10
	(a) (3)
	 	N/A
	(a) (4)
	 	N/A
	(a) (5)
	 	N/A
	(b)
	 	5.10, 5.08, 14.02
	311 (a)
	 	5.11
	(b)
	 	5.11
	(c)
	 	N/A
	312(a)
	 	2.05
	(b)
	 	14.03
	(c)
	 	14.03
	313 (a)
	 	5.06
	(b)
	 	5.06
	(c)
	 	5.06, 14.02
	(d)
	 	5.06
	314 (a)
	 	8.03
	(a) (4)
	 	8.03, 8.04, 14.06
	(b)
	 	N/A
	(c) (1)
	 	14.05
	(c) (2)
	 	14.05
	(c) (3)
	 	N/A
	(d)
	 	N/A
	(e)
	 	14.06
	(f)
	 	N/A
	315 (a)
	 	5.01 (b)
	(b)
	 	5.05, 14.02
	(c)
	 	5.01 (a)
	(d)
	 	5.01 (c)
	(e)
	 	4.14
	316 (a) (last sentence)
	 	2.09
	(a) (1) (A)
	 	4.05
	(a) (1) (B)
	 	4.04
	(a) (2)
	 	N/A
	(b)
	 	4.07
	(c)
	 	7.04
	317 (a) (1)
	 	4.08
	(a) (2)
	 	4.09
	(b)
	 	2.04
	318 (a)
	 	14.01
	(b)
	 	N/A
	(c)
	 	14.01

	 	 	 
	“N/A” means not applicable.
	 
	*	 	This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.

 

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	1	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Incorporation By Reference Of Trust Indenture Act
	 	 	11	 
	Section 1.03 Rules Of Construction
	 	 	12	 
	ARTICLE II THE NOTES
	 	 	12	 
	Section 2.01 Form And Dating
	 	 	12	 
	Section 2.02 Execution And Authentication
	 	 	14	 
	Section 2.03 Registrar, Paying Agent And Conversion Agent
	 	 	15	 
	Section 2.04 Paying Agent To Hold Money In Trust
	 	 	15	 
	Section 2.05 Holder Lists
	 	 	16	 
	Section 2.06 Transfer And Exchange
	 	 	16	 
	Section 2.07 Replacement Notes
	 	 	16	 
	Section 2.08 Outstanding Notes
	 	 	17	 
	Section 2.09 Notes Held By The Company Or An Affiliate
	 	 	17	 
	Section 2.10 Temporary Notes
	 	 	17	 
	Section 2.11 Cancellation
	 	 	18	 
	Section 2.12 Defaulted Interest
	 	 	18	 
	Section 2.13 CUSIP Numbers
	 	 	18	 
	Section 2.14 Deposit Of Moneys
	 	 	18	 
	Section 2.15 Book-Entry Provisions For Global Notes
	 	 	19	 
	Section 2.16 Special Transfer Provisions
	 	 	20	 
	Section 2.17 Restrictive Securities Legends
	 	 	21	 
	ARTICLE III SATISFACTION AND DISCHARGE
	 	 	23	 
	Section 3.01 Satisfaction And Discharge Of Indenture
	 	 	23	 
	Section 3.02 Deposited Monies To Be Held In Trust
	 	 	24	 
	Section 3.03 Return Of Unclaimed Monies
	 	 	24	 
	Section 3.04 Reinstatement
	 	 	25	 
	ARTICLE IV DEFAULTS AND REMEDIES
	 	 	25	 
	Section 4.01 Events Of Default
	 	 	25	 
	Section 4.02 Acceleration Of Maturity; Rescission and Annulment
	 	 	26	 
	Section 4.03 Other Remedies
	 	 	27	 
	Section 4.04 Waiver Of Past Defaults
	 	 	27	 
	Section 4.05 Control By Majority
	 	 	28	 
	Section 4.06 Limitation On Suit
	 	 	28	 
	Section 4.07 Unconditional Right Of Holders To Receive Payment
	 	 	29	 
	Section 4.08 Collection Of Indebtedness And Suits For Enforcement By The Trustee
	 	 	29	 
	Section 4.09 Trustee May File Proofs Of Claim
	 	 	30	 
	Section 4.10 Restoration Of Rights And Remedies
	 	 	31	 
	Section 4.11 Rights And Remedies Cumulative
	 	 	31	 
	Section 4.12 Delay Or Omission Not Waiver
	 	 	31	 
	Section 4.13 Application Of Money Collected
	 	 	31	 
	Section 4.14 Undertaking For Costs
	 	 	32	 

 

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	 	 	Page	 
	ARTICLE V THE TRUSTEE
	 	 	32	 
	Section 5.01 Duties Of Trustee
	 	 	32	 
	Section 5.02 Rights Of Trustee
	 	 	33	 
	Section 5.03 Individual Rights Of Trustee
	 	 	35	 
	Section 5.04 Trustee’s Disclaimer
	 	 	35	 
	Section 5.05 Notice Of Defaults
	 	 	35	 
	Section 5.06 Reports By Trustee To Holders
	 	 	35	 
	Section 5.07 Compensation And Indemnity
	 	 	36	 
	Section 5.08 Replacement Of Trustee
	 	 	37	 
	Section 5.09 Successor Trustee By Merger, Etc.
	 	 	37	 
	Section 5.10 Eligibility; Disqualification
	 	 	37	 
	Section 5.11 Preferential Collection Of Claims Against The Company
	 	 	37	 
	ARTICLE VI CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	38	 
	Section 6.01 When Company May Merge, Etc.
	 	 	38	 
	Section 6.02 Successor Person Substituted
	 	 	38	 
	Section 6.03 Opinion of counsel to be Given to Trustee
	 	 	39	 
	ARTICLE VII AMENDMENTS, SUPPLEMENTS AND WAIVERS
	 	 	39	 
	Section 7.01 Without Consent Of Holders Of Notes
	 	 	39	 
	Section 7.02 With Consent Of Holders Of Notes
	 	 	40	 
	Section 7.03 Compliance With Trust Indenture Act
	 	 	41	 
	Section 7.04 Revocation Of Consents And Effect Of Consents Or Votes
	 	 	41	 
	Section 7.05 Notation On Or Exchange Of Notes
	 	 	42	 
	Section 7.06 Trustee To Sign Amendment, Etc.
	 	 	42	 
	ARTICLE VIII COVENANTS
	 	 	43	 
	Section 8.01 Payment Of Notes
	 	 	43	 
	Section 8.02 Maintenance Of Office Or Agency
	 	 	43	 
	Section 8.03 Reports
	 	 	43	 
	Section 8.04 Compliance Certificate
	 	 	44	 
	Section 8.05 Stay, Extension And Usury Laws
	 	 	44	 
	Section 8.06 Corporate Existence
	 	 	44	 
	Section 8.07 Notice Of Default
	 	 	45	 
	Section 8.08 Waiver Of Certain Covenants
	 	 	45	 
	ARTICLE IX REDEMPTION OF NOTES
	 	 	45	 
	Section 9.01 No Optional Redemption of Notes
	 	 	45	 
	ARTICLE X REPURCHASE OF NOTES AT THE OPTION OF HOLDERS ON A SPECIFIC DATE
	 	 	45	 
	Section 10.01 Repurchase Of Notes At The Option Of Holders
	 	 	45	 
	Section 10.02 Effect Of Repurchase Notice
	 	 	48	 
	Section 10.03 Deposit Of Repurchase Price
	 	 	48	 
	Section 10.04 Notes Repurchased In Part
	 	 	49	 
	Section 10.05 Covenant To Comply With Securities Laws Upon Repurchase Of Notes
	 	 	49	 
	Section 10.06 Repayment To The Company
	 	 	49	 
	ARTICLE XI REPURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE
	 	 	50	 
	Section 11.01 Repurchase at Option of Holders Upon a Fundamental Change
	 	 	50	 
	Section 11.02 Company Repurchase Notice
	 	 	51	 
	Section 11.03 Effect of Fundamental Change Repurchase Notice; Withdrawal
	 	 	52	 
	Section 11.04 Deposit of Repurchase Price
	 	 	53	 
	Section 11.05 Notes Repurchased in Part
	 	 	54	 
	Section 11.06 Purchase of Notes in the Open Market
	 	 	54	 

 

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	 	 	Page	 
	ARTICLE XII CONVERSION
	 	 	54	 
	Section 12.01 Right to Convert
	 	 	54	 
	Section 12.02 Exercise of Conversion Right; Issuance of Common Stock on Conversion; No
Adjustment for Interest or Dividends
	 	 	55	 
	Section 12.03 Limitation on Beneficial Ownership
	 	 	57	 
	Section 12.04 Cash Payments in Lieu of Fractional Shares
	 	 	57	 
	Section 12.05 Conversion Rate
	 	 	57	 
	Section 12.06 Adjustment of Conversion Rate
	 	 	59	 
	Section 12.07 Effect of Reclassification, Consolidation, Merger or Sale
	 	 	68	 
	Section 12.08 Taxes on Shares Issued
	 	 	69	 
	Section 12.09 Reservation of Shares, Shares to be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock
	 	 	69	 
	Section 12.10 Responsibility of Trustee
	 	 	70	 
	Section 12.11 Notice to Holders Prior to Certain Actions
	 	 	71	 
	Section 12.12 Stockholder Rights Plans
	 	 	71	 
	Section 12.13 Conversion Settlement
	 	 	71	 
	Section 12.14 Company Determination Final
	 	 	72	 
	ARTICLE XIII SUBORDINATION OF NOTES
	 	 	72	 
	Section 13.01 Notes Subordinated To Senior Secured Debt
	 	 	72	 
	Section 13.02 Subrogation
	 	 	74	 
	Section 13.03 Obligation Of The Company Is Absolute And Unconditional
	 	 	75	 
	Section 13.04 Maturity Of Or Default On Senior Secured Debt
	 	 	75	 
	Section 13.05 Payments On Notes Permitted
	 	 	75	 
	Section 13.06 Effectuation Of Subordination By Trustee
	 	 	75	 
	Section 13.07 Knowledge Of Trustee
	 	 	76	 
	Section 13.08 Trustee’s Relation To Senior Secured Debt
	 	 	76	 
	Section 13.09 Rights Of Holders Of Senior Secured Debt Not Impaired
	 	 	76	 
	Section 13.10 Modification Of Terms Of Senior Secured Debt
	 	 	77	 
	Section 13.11 Certain Conversions Not Deemed Payment
	 	 	77	 
	ARTICLE XIV OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	78	 
	Section 14.01 Trust Indenture Act Controls
	 	 	78	 
	Section 14.02 Notices
	 	 	78	 
	Section 14.03 Communication By Holders With Other Holders
	 	 	79	 
	Section 14.04 Acts Of Holders Of Notes
	 	 	79	 
	Section 14.05 Certificate And Opinion As To Conditions Precedent
	 	 	80	 
	Section 14.06 Statements Required In Certificate Or Opinion
	 	 	80	 
	Section 14.07 Effect Of Headings And Table Of Contents
	 	 	81	 
	Section 14.08 Successors And Assigns
	 	 	81	 
	Section 14.09 Separability Clause
	 	 	81	 
	Section 14.10 Benefits Of Indenture
	 	 	81	 
	Section 14.11 Governing Law; Waiver of Jury Trial
	 	 	81	 
	Section 14.12 Counterparts
	 	 	81	 
	Section 14.13 Legal Holidays
	 	 	82	 
	Section 14.14 Recourse Against Others
	 	 	82	 
	Section 14.15 Cancellation of Notes Repurchased
	 	 	82	 
	Section 14.16 U.S.A Patriot Act
	 	 	82	 

 

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	EXHIBIT A

FORM OF NOTE 
	 	 	A-1	 
	EXHIBIT B

FORM OF NOTICE OF TRANSFER PURSUANT TO REGISTRATION
STATEMENT
	 	 	B-1	 
	EXHIBIT C

FORM OF SURRENDER CERTIFICATE 
	 	 	C-1	 
	EXHIBIT D

FORM OF COMMON STOCK RESTRICTIVE LEGEND 
	 	 	D-1	 

 

-iv-

 

INDENTURE dated as of May 24, 2011 among CEREPLAST, INC., a corporation duly organized and
existing under the laws of the State of Nevada, having its principal office at 300 Continental
Blvd., Suite 100, El Segundo, California (the “Company”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association duly organized and existing under the laws of the
United States, as Trustee (the “Trustee”).

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue of its 7.00% Convertible Senior
Subordinated Notes due 2016 (the “Notes”), in substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make (i) the Notes, when the Notes are executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of
the Company and (ii) this Indenture a valid agreement of the Company, in accordance with the Notes
and this Indenture’s terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions.

“Act of the Holders” when used with respect to any Holder of a Note, has the meaning specified
in Section 14.04(a).

“Additional Interest” has the meaning specified in the Securities Purchase Agreement.

“Additional Shares” has the meaning specified in Section 12.05(b).

“Adjustment Event” has the meaning specified in Section 12.06(k).

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

“Agent” means any Registrar, Paying Agent, Conversion Agent or co-registrar.

“Agent Members” has the meaning set forth in Section 2.04(g).

 

 

“Applicable Consideration” has the meaning specified in Section 12.07.

“Bankruptcy Law” means Title 11 of the U.S. Code (or any successor thereto) or any similar
federal, state or foreign law for the relief of debtors.

“Board of Directors” means either the board of directors of the Company or any committee of
such board empowered to act for it with respect to this Indenture.

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

“Business Day” when used with respect to any Place of Payment or Place of Conversion, means
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
institutions in that Place of Payment or Place of Conversion, as the case may be, are authorized or
obligated by law to close.

“Capital Stock” means, with respect to any Person, any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests (however
designated, whether voting or non-voting) in common stock (or other ordinary shares or other common
equity interests or American Depository Shares or similar instruments representing interests
therein) of such Person, whether now outstanding or issued after the date of this Indenture.

“Closing Sale Price” of any share of Common Stock or any other security on any Trading Day
means the closing sale price of such security (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case, the average of the
average closing bid and the average closing ask prices) on such date as reported in composite
transactions for the principal U.S. securities exchange (or if not so listed, on the principal
regional securities exchange) on which the shares of Common Stock are traded or, if the shares of
Common Stock are not listed on a U.S. national or regional securities exchange, as reported by Pink
OTC Markets, Inc. In the absence of such a quotation, the Closing Sale Price shall be determined
by a nationally recognized securities dealer retained by the Company to make such determination.
The Closing Sale Price shall be determined without reference to extended or after hours trading.

“Common Stock” means shares of the common stock, par value $0.001 per share, of the Company
existing on the date of this Indenture or as such stock may be constituted from time to time.
However, subject to the provisions of Section 12.07, shares issuable on conversion or repurchase of
Notes shall include only shares of the class designated as Common Stock, par value $0.001 per
share, of the Company at the date of execution of this Indenture or shares of any class or classes
resulting from any reclassification or reclassifications thereof provided that if at any time there
shall be more than one such resulting class, the shares of each such class then so issuable shall
be substantially in the proportion that the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes resulting from all
such reclassifications.

 

2

 

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

“Company Repurchase Notice” has the meaning specified in Section 11.02.

“Continuing Directors” means, as of any date of determination, any member of the Board of
Directors who (i) was a member of the Board of Directors on the date of this Indenture; or (ii) was
nominated for election or elected to the Board of Directors with the approval of a majority of the
Continuing Directors who were members of the Board of Directors at the time of such new director’s
nomination or election.

“Conversion Agent” has the meaning specified in Section 2.03.

“Conversion Date” has the meaning specified in Section 12.02.

“Conversion Notice” has the meaning specified in Section 12.02.

“Conversion Price” on any date of determination means $1,000 divided by the Conversion Rate as
of such date.

“Conversion Rate” means the number of shares of Common Stock into which each $1,000 principal
amount of Notes is convertible, which is initially 172.4138 shares, subject to adjustments as set
forth herein, rounded to four decimal places (rounded up if the fifth decimal place thereof is 5 or
more and otherwise rounded down).

“Corporate Trust Office” means the office of the Trustee at which at any particular time the
trust created by this Indenture shall be administered, which initially will be the office of Wells
Fargo Bank, National Association, located at 625 Marquette Avenue, 11th Floor, MAC
N93-110, Minneapolis, MN, 55479, Attention: Corporate Trust Services — Administrator for
Cereplast, Inc.

“Current Market Price” has the meaning specified in Section 12.06(g).

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

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

“Defaulted Interest” has the meaning specified in Section 2.12.

“Defaulted Interest Special Record Date” has the meaning specified in Section 2.12.

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

 

3

 

“Designated Senior Secured Debt” means Senior Secured Debt of the Company under that certain
Venture Loan and Security Agreement between the Company and Compass Horizon Funding Company, LLC,
dated December 21, 2010, and other Senior Secured Debt of the Company that, at the date of
determination is specifically designated in the instrument, agreement or other document evidencing
or governing that Senior Debt or in another writing as “Designated Senior Secured Debt” for
purposes of this Indenture (provided, however, that such instrument, agreement or other document
may place limitations and conditions on the right of such Senior Secured Debt to exercise the
rights of Designated Senior Secured Debt).

“Determination Date” has the meaning specified in Section 12.06(k)

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

“Effective Date” has the meaning specified in Section 12.05(b).

“Event of Default” has the meaning specified in Section 4.01.

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

“Ex Date” means, with respect to any dividend, distribution or issuance on shares of Common
Stock or any other equity security, the first Trading Day on which the shares of Common Stock or
such other equity security does not automatically transfer the right to receive such dividend,
distribution or issuance from the seller of Common Stock or such other equity security to its
buyer.

“Expiration Time” has the meaning specified in Section 12.06(f).

“Fair Market Value” has the meaning specified in Section 12.06(g)(iii).

“Fundamental Change” means the occurrence of any of the following after the original issuance
of the Notes:

(a) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person,” directly or indirectly, including through
one or more wholly-owned Subsidiaries, becomes the “beneficial owner” (as these terms are defined
in Rule 13d-3 and Rule 13d-5 under the Exchange Act), of more than 50% of the voting power of the
Company’s Capital Stock that is at the time entitled to vote by the holder thereof in the election
of the Board of Directors (or comparable body);

(b) the first day on which a majority of the members of the Board of Directors are not
Continuing Directors;

(c) the adoption of a plan relating to the liquidation or dissolution of the Company;

 

4

 

(d) the consolidation or merger of the Company with or into any other “person” (as this term
is used in Section 13(d)(3) of the Exchange Act), or the sale, lease, transfer, conveyance or other
disposition, in one or a series of related transactions, of all or substantially all of the
Company’s assets and those of its Subsidiaries taken as a whole to any “person” (as this term is
used in Section 13(d)(3) of the Exchange Act), other than:

(i) any transaction:

(A) that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of the Common Stock; and

(B) pursuant to which the holders of 50% or more of the total voting
power of all shares of the Company’s Capital Stock entitled to vote
generally in elections of directors of the Company immediately prior to such
transaction have the right to exercise, directly or indirectly, 50% or more
of the total voting power of all shares of the Company’s Capital Stock
entitled to vote generally in elections of directors of the continuing or
surviving Person immediately after giving effect to such transaction; or

(ii) any merger primarily 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 solely into shares of common stock of the surviving entity; or

(e) the termination of trading of the Common Stock, which will be deemed to have occurred if
the Common Stock or other common stock or common equity interests into which the Notes are then
convertible, are neither listed for trading on a United States national securities exchange nor
approved for listing on any United States system of automated dissemination of quotations of
securities prices, and no American Depositary Shares certificates or similar instruments for such
common stock or common equity interests are so listed or approved for listing in the United States.

However, a Fundamental Change will be deemed not to have occurred if more than 90% of the
consideration in the transaction or transactions (other than cash payments for fractional shares
and cash payments made in respect of dissenters’ appraisal rights) which otherwise would constitute
a Fundamental Change under clauses (a) or (d) above consists of shares of common stock, depositary
receipts or other common equity interests traded or to be traded immediately following such
transaction on a United States national securities exchange and, as a result of the transaction or
transactions, the Notes become convertible into such common stock, depositary receipts or other
common equity interests (and any rights attached thereto) and other applicable consideration.

“Fundamental Change Repurchase Date” has the meaning specified in Section 11.01(a).

“Fundamental Change Repurchase Notice” has the meaning specified in Section 11.01(c).

 

5

 

“Fundamental Change Repurchase Price” has the meaning specified in Section 11.04.

“Fundamental Change Repurchase Right” has the meaning specified in Section 11.01(a).

“Global Note” has the meaning specified in Section 2.01(e).

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

“Indebtedness” when used with respect to any Person, and without duplication means:

(1) all indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person for borrowed money (including obligations in respect of overdrafts, foreign
exchange contracts, currency exchange agreements, Interest Rate Protection Agreements, and
any loans or advances from banks, whether or not evidenced by notes or similar instruments)
or evidenced by bonds, debentures, notes or other instruments for the payment of money, or
incurred in connection with the acquisition of any property, services or assets (whether or
not the recourse of the lender is to the whole of the assets of such Person or to only a
portion thereof), other than any account payable or other accrued current liability or
obligation to trade creditors incurred in the ordinary course of business in connection with
the obtaining of materials or services;

(2) all reimbursement obligations and other liabilities (contingent or otherwise) of
such Person with respect to letters of credit, bank guarantees, bankers’ acceptances, surety
bonds, performance bonds or other guaranty of contractual performance;

(3) all obligations and liabilities (contingent or otherwise) in respect of (a) leases
of such Person required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such Person and (b)
any lease or related documents (including a purchase agreement) in connection with the lease
of real property which provides that such Person is contractually obligated to purchase or
cause a third party to purchase the leased property and thereby guarantee a minimum residual
value of the leased property to the landlord and the obligations of such Person under such
lease or related document to purchase or to cause a third party to purchase the leased
property;

(4) all obligations of such Person (contingent or otherwise) with respect to an
interest rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or agreement;

(5) all direct or indirect guaranties or similar agreements by such Person in respect
of, and obligations or liabilities (contingent or otherwise) of such Person to purchase or
otherwise acquire or otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in clauses (1) through
(4);

 

6

 

(6) any indebtedness or other obligations described in clauses (1) through (5) secured
by any mortgage, pledge, lien or other encumbrance existing on property which is owned or
held by such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and

(7) any and all deferrals, renewals, extensions, refinancings, replacements,
restatements and refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described in clauses (1) through (6).

“Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including the provisions of the TIA that are deemed to be a part
hereof.

“Interest Make-Whole” has the meaning specified in Section 12.01(b).

“Interest Make-Whole Cap” has the meaning specified in Section 12.01(b).

“Interest Payment Date” means each June 1 and December 1, beginning December 1, 2011.

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

“junior securities” has the meaning specified in Section 13.11(c).

“Make Whole Stock Cap” has the meaning specified in Section 12.05(b).

“Market Disruption Event” means (1) a failure by the primary United States national securities
exchange in which the Common Stock is listed or admitted to trading to open during its regular
trading session or (2) the occurrence or existence prior to 1:00 P.M. 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.

“Maturity” means the date on which the principal of such Note becomes due and payable as
therein or herein provided, whether at its Maturity Date or by acceleration, conversion, exercise
of a Repurchase Right or Fundamental Change Repurchase Right, or otherwise.

“Maturity Date” has the meaning specified in Section 2.01(b).

“Non-Stock Change of Control” means a transaction described under clause (a) or (d) in the
definition of Fundamental Change pursuant to which 10% or more of the consideration for Common
Stock (other than cash payments for fractional shares, if applicable, and cash payments made in
respect of dissenters’ appraisal rights) in such transaction consists of cash or securities (or
other property) that are not shares of common stock, depositary receipts or other common
equity interests traded or scheduled to be traded immediately following such transaction on a
United States national securities exchange.

 

7

 

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

“Officer” means the Chairman or Vice Chairman of the Board of Directors, the Chief Executive
Officer, the President, the Chief Financial Officer, the Treasurer, any Senior Vice President, the
Secretary or Assistant Secretary of the Company.

“Officers’ Certificate” means a certificate from the Company delivered to the Trustee and
signed by its (a) Chairman, Vice Chairman, President, Chief Executive Officer, Chief Financial
Officer or Vice President and (b) Chief Financial Officer, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary.

“Opinion of Counsel” means a written opinion of counsel, who may be counsel to, or a director
or employee of, the Company, reasonably acceptable to the Trustee.

“Order” means a written request or order signed in the name of the Company by its Chairman of
the Board of Directors, its President, its Chief Executive Officer, its Chief Financial Officer or
any Vice President, and delivered to the Trustee.

“Participants” has the meaning specified in Section 2.15(a).

“Paying Agent” has the meaning specified in Section 2.03.

“Payment Blockage Notice” has the meaning specified in Section 13.01(d).

“Person” means an individual, partnership, corporation, limited liability company,
unincorporated organization, trust, estate or joint venture, or any entity similar to any of the
foregoing organized under the laws of other countries, or a governmental agency or political
subdivision thereof.

“Physical Notes” has the meaning specified in Section 2.01(f).

“Place of Conversion” means any city in which any Conversion Agent is located.

“Place of Payment” means any city in which any Paying Agent is located.

“Predecessor Note” of any particular Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.07 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Note.

“Purchased Shares” has the meaning specified in Section 12.06(f).

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

8

 

“Record Date” means with respect to each Interest Payment Date, the May 15 or November 15, as
the case may be, next preceding such Interest Payment Date. The “record date,” with respect to the
Conversion Rate adjustment as provided in Section 12.06 has the meaning specified in Section
12.06(g)(iv).

“Register” has the meaning specified in Section 2.05.

“Registrar” has the meaning specified in Section 2.03.

“Registration Default” has the meaning specified in the Securities Purchase Agreement.

“Regular Record Date” for the interest payable on the Notes (including Additional Interest, if
any) means the close of business on the May 15 or November 15 (whether or not a Business Day), as
the case may be, immediately preceding each respective Interest Payment Date.

“Repurchase Date” has the meaning specified in Section 10.01.

“Repurchase Notice” has the meaning specified in Section 10.01.

“Repurchase Price” has the meaning specified in Section 10.01.

“Repurchase Right” has the meaning specified in Section 10.01.

“Responsible Officer” means, when used with respect to the Trustee, any officer within the
corporate trust department of the Trustee, including any vice president, assistant vice president,
secretary, assistant secretary, the treasurer, any assistant treasurer, or any other officer of the
Trustee customarily performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of such officer’s knowledge of and familiarity with the
particular subject and who shall have responsibility for the administration of this Indenture.

“Restricted Security” means a Note (or Common Stock into which such Note has been converted)
required to bear the Restrictive Securities Legend set forth in Exhibit A (or, in the case
of Common Stock into which such Note has been converted, Exhibit D) of this Indenture.

“Restrictive Securities Legend” has the meaning, in the case of a Note, specified in Section
2.17(a) and, in the case of Common Stock, specified in Section 2.17(b).

“Rule 144” means Rule 144 as promulgated under the Securities Act (including any successor
rule thereof), as the same may be amended from time to time.

“Rule 144A” means Rule 144A as promulgated under the Securities Act (including any successor
rule thereof), as the same may be amended from time to time.

“SEC” means the Securities and Exchange Commission or any successor thereto.

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

 

9

 

“Securities Purchase Agreement” means the Securities Purchase Agreement dated as of May 18,
2011 between the Company and the investors named therein.

“Senior Secured Debt” means the principal of, premium, if any, interest (including all
interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such proceeding) and rent
payable on or termination payments with respect to or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with, Indebtedness of the Company, in
each case whether outstanding on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to, the foregoing), except
for (a) any particular Indebtedness in respect of which the instrument creating or evidencing the
same or the assumption or guarantee thereof expressly provides that such Indebtedness shall not be
senior or pari passu in right of payment to any other Indebtedness of the Company or expressly
provides that such Indebtedness is equal with or junior to the Notes, (b) any Indebtedness which is
not secured by collateral which at the time of original issuance of such Indebtedness had a fair
market value at least equal to 50% of the principal amount of such Indebtedness, (c) any
Indebtedness between or among the Company or any of its Subsidiaries, or any of the Company’s
Affiliates and (d) the Notes. The term “Senior Secured Debt” shall include, without limitation, all
Designated Senior Secured Debt.

“Shelf Registration Statement” has the meaning specified in the Securities Purchase Agreement.

“Significant Subsidiary” has the meaning specified in Rule 1-02(w) under Regulation S-X under
the Securities Act.

“Special Record Date” has the meaning specified in Section 7.04.

“Spin-off” has the meaning specified in Section 12.06(d).

“Spin-off Valuation Period” has the meaning specified in Section 12.06(d).

“Stock Price” has the meaning specified in Section 12.05(b).

“Subsidiary” means any Person a majority of the combined voting power of the total outstanding
ownership interests in which is, at the time of determination, beneficially owned or held, directly
or indirectly, by the Company or one or more other Subsidiaries. For this purpose, “voting power”
means power to vote in an ordinary election of directors (or, in the case of a Person that is not a
corporation, ordinarily to appoint or approve the appointment of Persons holding similar
positions), whether at all times or only as long as no senior class of ownership interests has such
voting power by reason of any contingency.

“Surrender Certificate” means a certificate substantially in the form set forth in Exhibit
C.

“Surrender Securities” has the meaning given to such term in Exhibit C.

 

10

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S. Code Section 67aaa- 77bbbb), as in effect
on the date of execution of this Indenture; provided, however, that in the event the TIA is amended
after such date, “TIA” means, to the extent required by such amendment, the Trust Indenture Act of
1939, as so amended, or any successor statute.

“Trading Day” means a day during which (i) trading in the Common Stock generally occurs, (ii)
there is no Market Disruption Event and (iii) a Closing Sale Price for the Common Stock is provided
on the principal United States national or regional securities exchange on which the Common Stock
is then listed or, if the Common Stock is not listed on a United States national or regional
securities exchange, on the principal other market on which the Common Stock is then traded.

“Transfer Agent” means any Person, which may be the Company, authorized by the Company to
exchange or register the transfer of Notes.

“Trigger Event” has the meaning specified in Section 12.06(d).

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

“Vice President” means any vice president of a corporation, whether or not designated by a
number or a word or words added before or after the title “vice president.”

“Voting Shares” means with respect to any Person, Capital Stock of any class or kind
ordinarily having the power to vote for the election of directors, managers or other voting members
of the governing body of such Person.

Section 1.02 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:

“indenture securities” means the Notes;

“indenture security holder” means a Holder;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

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

 

11

 

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 1.03 Rules Of Construction. For all purposes of this Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

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

(b) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with accounting principles generally accepted in the United States prevailing at the
time of any relevant computation hereunder;

(c) the word “or” shall not be exclusive;

(d) any item or list of items set forth following the word “including,” “include” or
“includes” herein is set forth only for the purpose of indicating that, regardless of whatever
other items are in the category in which such item or items are “included,” such item or items are
in such category and shall not be construed as indicating the items in the category in which such
item or items are “included” are limited to such item or items similar to such items; and

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

ARTICLE II

THE NOTES

Section 2.01 Form And Dating.

(a) The Notes shall be known and designated as the “7.00% Convertible Senior Subordinated
Notes Due 2016” of the Company. The aggregate principal amount of the Notes that may be
authenticated and delivered under this Indenture is limited to $12,500,000, except as provided in
(i) Section 2.07(c) or (ii) Section 2.02(d).

(b) The Notes shall mature on June 1, 2016 (the “Maturity Date”).

(c) Interest shall accrue at a rate of 7.00% per annum on the principal amount of the Notes
from May 24, 2011 or from the most recent date to which interest has been paid until the principal
of the Notes is paid or made available for payment pursuant to the terms of this Indenture.
Interest shall be payable semiannually in arrears on June 1 and December 1 in each year, commencing
December 1, 2011. Each payment of interest on the Notes shall include interest accrued through the
day prior to the applicable Interest Payment Date or the Maturity Date. Any payment of principal
and interest scheduled to be made on any day that is not a
Business Day shall be made on the next succeeding Business Day. Interest on the Notes shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

12

 

Except as provided in the next succeeding paragraph or with respect to any Interest Make-Whole
Payments, a Holder of any Note shall not be entitled to receive any interest (including Additional
Interest, if any) that has accrued on such Note if such Note is converted into shares of Common
Stock on any day other than an Interest Payment Date. By delivering to the Holder of any Note that
is converted, cash or a combination of cash and the full number of shares of Common Stock, together
with a cash payment, if any, in lieu of a fractional share, the Company shall be deemed to have
satisfied in full its obligation with respect to such Note to pay the principal amount of the Note
and accrued and unpaid interest (including Additional Interest, if any) to, but not including, the
Conversion Date. Accordingly, accrued but unpaid interest (including Additional Interest, if any)
shall be deemed to be paid in full rather than cancelled, extinguished or forfeited.

If a Holder of any Note converts such Note after 5:00 P.M., New York City time on a Regular
Record Date but prior to 9:00 A.M., New York City time on the corresponding Interest Payment Date,
the Holder of record on such Regular Record Date shall be entitled to receive on such Interest
Payment Date interest (including Additional Interest, if any) accrued and unpaid on such Note, to,
but excluding, such Interest Payment Date notwithstanding the conversion of such Note prior to such
Interest Payment Date. However, at the time such Holder surrenders such Note for conversion, such
Holder shall pay the Company an amount equal to the interest (including Additional Interest, if
any) that will be paid on the Notes being converted on such Interest Payment Date. However, in the
event that (i) overdue interest, if any, exists at the time of conversion with respect to such
Note, (ii) the Holder converts such Note in connection with a Fundamental Change and the Company
has specified a Repurchase Date for a Note that is after a Record Date for an interest payment but
on or prior to the third Trading Day after the corresponding Interest Payment Date, (iii) the
Holder converts such Note prior to June 2, 2014 or (iv) the Holder converts such Note after the
Regular Record Date for the interest payment due on the Maturity Date, then such Holder shall not
be required to pay the Company at the time such Holder surrenders such Note for conversion the
amount of interest on such Note such Holder shall be entitled to receive on such Interest Payment
Date (in the case of (i) above, only to the extent of such overdue interest).

Principal of, premium, if any, and interest (including Additional Interest, if any) on, Global
Notes shall be payable to the Depositary in immediately available funds.

Principal and premium, if any, of and interest on maturity, on Physical Notes shall be payable
at the office or agency of the Company maintained for such purpose, initially the Corporate Trust
Office of the Trustee. Interest (including Additional Interest, if any) on Physical Notes (other
than at maturity) will be payable (i) by U.S. Dollar check drawn on a bank in The City of New York
mailed to the address of the Holder, or (ii) upon written application to the Registrar not later
than the relevant Record Date by a Holder of an aggregate principal amount in excess of $2,000,000,
by wire transfer in immediately available funds. If a payment date is not a Business Day, payment
shall be made on the next succeeding Business Day, and no additional interest shall accrue thereon.

 

13

 

(d) The Notes and the Trustee’s certificate of authentication shall be substantially in the
form set forth in Exhibit A, which is incorporated in and forms a part of this Indenture.
The Notes may have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication.

(e) The Notes are being offered and sold in reliance on an exception from the registration
requirements under the Securities Act and shall be issued initially in the form of one or more
Global Notes, substantially in the form set forth in Exhibit A, including the “Schedule of
Exchanges of Interests in the Global Note” attached thereto (the “Global Note”), deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided and bearing the Restrictive Securities Legend and the Global Note
Legend. The aggregate principal amount of the Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, as
hereinafter provided; provided, however, that in no event shall the aggregate principal amount of
the Global Note or Notes exceed $12,500,000, except as provided in (i) Section 2.07(c) or (ii)
Section 2.02(d).

(f) Notes issued in exchange for interests in a Global Note pursuant to Section 2.15 may be
issued in the form of permanent certificated Notes in registered form in substantially the form set
forth in Exhibit A (but without the “Schedule of Exchanges of Interests in the Global Note”
attached thereto) (the “Physical Notes”) and, if applicable, bearing any legends required by
Section 2.17.

Section 2.02 Execution And Authentication.

(a) One Officer shall sign the Notes for the Company by manual or facsimile signature.

(b) If an Officer whose signature is on a Note no longer holds that office at the time the
Note is authenticated, the Note shall nevertheless be valid.

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

(d) Upon an Order of the Company specifying the number of separate Notes, the principal amount
of each Note to be authenticated, the date on which the original issue of Notes is to be
authenticated, the registered holder of each of the said Notes, delivery instructions for each such
Note and signed by one Officer, the Trustee shall authenticate Notes for original issue in the
aggregate principal amount of up to $12,500,000 and such additional principal amount, if any, as
shall be determined pursuant to the next sentence of this Section 2.02(d). Upon receipt by the
Trustee of an Officers’ Certificate of the Company stating that additional Notes, which may be an
unlimited aggregate principal amount, will be issued after the initial issue date of the Notes that
have the same terms and “CUSIP” numbers as the Notes and, based on an Opinion of Counsel, are of
the same class with the other Notes for U.S. federal income tax purposes, the Trustee shall
authenticate and deliver such specified principal amount of such additional Notes to or upon the
Order of the Company signed as provided in the immediately
preceding sentence. Such Officers’ Certificate must be received by the Trustee not later than
the proposed date for delivery of such additional Notes. The aggregate principal amount of Notes
outstanding at any time may not exceed $12,500,000, except as provided above or in Section 2.07(c).

 

14

 

(e) Upon an Order of the Company signed by two Officers of the Company, the Trustee shall
authenticate Notes not bearing the Restrictive Securities Legend to be issued to the transferee
when sold pursuant to an effective registration statement under the Securities Act as set forth in
Section 2.16(c).

(f) The Trustee shall act as the initial authenticating agent. Thereafter, the Trustee may
appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating
agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Agent. An authenticating agent has
the same rights as an Agent to deal with the Company and its Affiliates.

(g) The Notes shall be issuable only in registered form without interest coupons and only in
denominations of $2,000 or an integral multiple of $1,000 above such amount.

Section 2.03 Registrar, Paying Agent And Conversion Agent.

(a) The Company shall maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (“Registrar”), an office or agency where Notes may be
presented for payment (“Paying Agent”) and an office or agency where Notes may be presented for
conversion (“Conversion Agent”). The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint or change one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents without notice and may act in
any such capacity on its own behalf. The term “Registrar” includes any co-registrar; the term
“Paying Agent” includes any additional paying agent; and the term “Conversion Agent” includes any
additional conversion agent.

(b) The Company shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture. The agreement shall implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to maintain a Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such. The Company or a Subsidiary or an Affiliate of any of them
may act as Paying Agent.

(c) The Company initially appoints the Trustee as Paying Agent, Registrar and Conversion
Agent.

Section 2.04 Paying Agent To Hold Money In Trust.

Each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all moneys
held by the Paying Agent for the payment of the Notes, and shall notify the Trustee of any default
by the Company in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds and Common Stock disbursed by it. Upon payment over to the Trustee, the
Paying Agent shall have no further liability for the money. If the Company or a Subsidiary or an
Affiliate of any of them acts as Paying Agent, it shall segregate and hold as a separate trust fund
all money held by it as Paying Agent.

 

15

 

Section 2.05 Holder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders (the “Register”). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee on or before each interest payment date and
at such other times as the Trustee may reasonably request in writing the Register.

Section 2.06 Transfer And Exchange.

(a) Subject to Sections 2.15 and 2.16, when Notes are presented to the Registrar with a
request to register their transfer or to exchange them for an equal principal amount of Notes of
other authorized denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transaction are met. To permit registrations of transfer and exchanges,
the Trustee shall authenticate Notes at the Registrar’s request.

(b) No service charge shall be made for any transfer, exchange or conversion of Notes, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer, exchange or conversion of Notes, other than
exchanges pursuant to Sections 2.10, 10.01, 11.01 or 12.01 not involving any transfer.

Section 2.07 Replacement Notes.

(a) If the Holder claims that the Note has been mutilated, lost, destroyed or stolen, the
Company shall issue and the Trustee shall authenticate a replacement Note if the Trustee’s
requirements are met and, in the case of a mutilated Note, such mutilated Note is surrendered to
the Trustee. In the case of lost, destroyed or stolen Notes, an indemnity bond must be provided by
the Holder that is sufficient in the judgment of the Trustee to protect the Company, the Trustee or
any Agent from any cost, expense loss that any of them may suffer if a Note is replaced and
subsequently presented or claimed for payment. The Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation to replacing a Note
and any other reasonable expenses (including the reasonable fees and expenses of the Trustee) in
connection therewith.

(b) In case any such mutilated, lost, destroyed or stolen Note has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such
Note when due.

(c) Every replacement Note is an additional obligation of the Company only as provided in
Section 2.08.

 

16

 

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

Section 2.08 Outstanding Notes.

(a) Notes outstanding at any time are all the Notes authenticated by the Trustee except for
those converted, those cancelled by it, those paid pursuant to Section 2.07, those delivered to it
for cancellation and those described in this Section 2.08 as not outstanding. Except to the extent
provided in Section 2.09, a Note does not cease to be outstanding because the Company or one of its
Subsidiaries or Affiliates holds the Note.

(b) If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it, or a court holds, that the replaced Note is held by a
protected purchaser, as that term is defined in the New York Uniform Commercial Code.

(c) If the Paying Agent (other than the Company or any Affiliate of the Company) holds on a
Repurchase Date, Fundamental Change Repurchase Date or Maturity Date money sufficient to pay Notes
payable on that date (or, if the Company acts as Paying Agent, if the Company has segregated and
holds such money in trust in accordance with Section 2.04), then on and after that date, such Notes
shall be deemed to be no longer outstanding and interest on them shall cease to accrue, and such
Note shall be deemed paid whether or not the Note is delivered to the Paying Agent. Thereafter,
all other rights of the Holders of such Notes shall terminate with respect to such Notes, other
than the right to receive the Repurchase Price, Fundamental Change Repurchase Price or principal
amount, as applicable.

(d) If a Note is converted in accordance with Article XII, then from and after the time of
conversion on the Conversion Date, such Note will cease to be outstanding, and interest (including
Additional Interest, if any) will cease to accrue on such Note.

Section 2.09 Notes Held By The Company Or An Affiliate

In determining whether the Holders of the required aggregate principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Company or any of its
Subsidiaries or an Affiliate shall be considered as though not outstanding, except that for the
purposes of determining whether a Responsible Officer of the Trustee shall be protected in relying
on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee
actually knows are so owned shall be so disregarded.

Section 2.10 Temporary Notes

Until certificates representing Notes are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of
Physical Notes but may have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive
Notes in exchange for temporary Notes. Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.

 

17

 

Section 2.11 Cancellation

The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar,
Paying Agent and Conversion Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange, payment or conversion. The Trustee shall promptly cancel or dispose of all
Notes surrendered for transfer, exchange, payment, conversion or cancellation in accordance with
its customary procedures. The Company may not issue new Notes to replace Notes that it has paid or
delivered to the Trustee for cancellation or that any Holder has converted pursuant to Article XII.

Section 2.12 Defaulted Interest

If and to the extent the Company defaults in a payment of interest on the Notes, the Company
shall pay the defaulted interest in any lawful manner plus, to the extent not prohibited by
applicable statute or case law, interest payable on the defaulted interest at the rate provided in
the Notes (the “Defaulted Interest”). The Company may pay the Defaulted Interest to the persons
who are Holders on a subsequent special record date fixed by the Company (a “Defaulted Interest
Special Record Date”). The Company shall fix such Defaulted Interest Special Record Date and
payment date. At least 15 days before the Defaulted Interest Special Record Date, the Company
shall mail to Holders, with a copy to the Trustee and the Paying Agent, a notice that states the
Defaulted Interest Special Record Date, payment date and amount of interest to be paid.

Section 2.13 CUSIP Numbers

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

Section 2.14 Deposit Of Moneys

Prior to 11:00 A.M., New York City time, on each Interest Payment Date, Maturity Date,
Repurchase Date and Fundamental Change Repurchase Date, the Company shall have deposited with a
Paying Agent (or if the Company or a Subsidiary or an Affiliate of any of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) in immediately
available funds, money sufficient to make cash payments, if any, due on such Interest Payment Date,
Maturity Date, Repurchase Date and Fundamental Change Repurchase Date, as the case may be, in a
timely manner that permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, Maturity Date, Repurchase Date and Fundamental Change Repurchase Date, as the case
may be.

 

18

 

Section 2.15 Book-Entry Provisions For Global Notes

(a) The Global Notes initially shall (i) be registered in the name of the Depositary or the
nominee of such Depositary, (ii) be delivered to the Trustee as custodian for such Depositary and
(iii) bear legends as set forth in Section 2.17. Members of, or participants in, the Depositary
(“Participants”) shall have no rights under this Indenture with respect to any Global Notes held on
their behalf by the Depositary, or the Trustee as its custodian, or under the Global Notes, and the
Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of the Global Notes for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and Participants, the operation of customary
practices governing the exercise of the rights of a Holder.

(b) Transfers of Global Notes shall be limited to transfers in whole, or in part, to the
Depositary, its successors or their respective nominees. In addition, Physical Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests in Global Notes if
(i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary
for any Global Note and a successor Depositary is not appointed by the Company within 90 days of
such notice or (ii) an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depositary to issue Physical Notes.

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

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

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

(f) The Trustee shall have no liability for any actions taken or not taken by the Depositary.

 

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Section 2.16 Special Transfer Provisions

(a) Transfers to QIBs. The following provisions shall apply with respect to the
registration of any proposed transfer of a Restricted Security to a QIB:

(i) the Registrar shall register the transfer of any Restricted Security, whether or
not such Restricted Security bears the Restrictive Securities Legend, if (x) the requested
transfer is after the later of the first anniversary after (i) the issue date for the Notes
and (ii) the last date on which the Company or any Affiliate of the Company was the owner of
such Restricted Security (or any predecessor security) (or such shorter period of time as
permitted by Rule 144 under the Securities Act or any successor provision thereunder) (or
such longer period of time as may be required under the Securities Act or applicable state
securities laws in the opinion of counsel for the Company, unless otherwise agreed between
the Company and the Holder thereof) (such later date being the “Resale Restriction
Termination Date”), or (y) such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification provided for on the
form of Note stating, or has otherwise advised the Company and the Registrar in writing,
that it is purchasing the Security for its own account or an account with respect to which
it exercises sole investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and

(ii) if the proposed transferor is a Participant seeking to transfer an interest in one
Global Note to a transferee who will hold such interest in another Global Note, upon receipt
by the Registrar of (A) written instructions given in accordance with the Depositary’s and
the Registrar’s procedures and (B) the appropriate certificates and other documents, if any,
required by clause (y) of paragraph (i) above, the Registrar shall register the transfer and
reflect on its books and records the date and (x) a decrease in the aggregate principal
amount of the Global Note through which the transferor held such interest in an amount equal
to the aggregate principal amount of the Notes to be transferred and (y) an increase in the
aggregate principal amount of the Global Note through which the transferee proposes to hold
such interest, in an amount equal to the aggregate principal amount of the Notes to be
transferred.

(b) Restrictions On Transfer And Exchange Of Global Notes. Notwithstanding any other
provisions of this Indenture, a Global Note may not be transferred except as a whole or in part by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.

(c) Restrictive Securities Legend. Upon the transfer, exchange or replacement of
Notes not bearing the Restrictive Securities Legend, the Registrar shall deliver Notes that do not
bear the Restrictive Securities Legend. Upon the transfer, exchange or replacement of Notes bearing
the Restrictive Securities Legend, the Registrar shall deliver only Notes that bear the Private
Placement Legend until (A) after the first anniversary of the later of (i) the issue date for the
Notes, (ii) the last date on which the Company or any Affiliate of the Company was the owner of
such Security (or any predecessor security) (or such shorter period of time as permitted by Rule
144 under the Securities Act or any successor provision thereunder) (or such longer period of time
as may be required under the Securities Act or applicable state securities laws in the opinion of
counsel for the Company, unless otherwise agreed between the Company and the Holder thereof), (B)
there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities Act or (C) such Note
has been sold pursuant to an effective registration statement under the Securities Act and the
Holder selling such Notes has delivered to the Registrar or co-Registrar a notice in the form of
Exhibit B hereto.

 

20

 

(d) General. By its acceptance of any Note bearing the Restrictive Securities Legend,
each Holder of such a Note acknowledges the restrictions on transfer of such Note set forth in this
Indenture and in the Restrictive Securities Legend and agrees that it will transfer such Note only
as provided in this Indenture. The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16. The Company shall
have the right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written notice to the
Registrar. The Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or under applicable law
with respect to any transfer of any interest in any Note (including any transfers between or among
Depositary participants or beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are expressly required by, and
to do so if and when expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements hereof.

(e) Transfers Of Notes Held By Affiliates. Any certificate (i) evidencing a Note that
has been transferred to an Affiliate of the Company within one year after the issue date for the
Notes, as evidenced by a notation on the Assignment Form for such transfer or in the representation
letter delivered in respect thereof, or (ii) evidencing a Note that has been acquired from an
Affiliate (other than by an Affiliate) in a transaction or a chain of transactions not involving
any public offering, shall, until one year after the last date on which the Company or any
Affiliate of the Company was an owner of such Note, in each case, bear the Restrictive Securities
Legend, unless otherwise agreed by the Company (with written notice thereof to the Trustee).

Section 2.17 Restrictive Securities Legends.

(a) Each Global Note and Physical Note that constitutes a Restricted Security shall bear the
following legend (the “Restrictive Securities Legend”) on the face thereof until after the first
anniversary of the later of (i) the issue date for the Notes, and (ii) the last date on which the
Company or any Affiliate of the Company was the owner of such Note (or any predecessor security)
(or such shorter period of time as permitted by Rule 144 under the Securities Act or any successor
provision thereunder) (or such longer period of time as may be required under the Securities Act or
applicable state securities laws in the opinion of counsel for the Company, unless otherwise agreed
between the Company and the Holder thereof):

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE
AND THE SHARES OF OUR COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

 

21

 

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO AN INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(1), (2) OR (7) UNDER THE SECURITIES ACT
WHO PURCHASES AT LEAST $100,000 PRINCIPAL AMOUNT OF NOTES, OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED BY
THE SECURITIES ACT.

THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF AND ANY RELATED DOCUMENTATION
MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS NOTE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION
(OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED
SECURITIES GENERALLY. THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF
THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO SUCH AMENDMENT OR SUPPLEMENT.

(b) Each share of Common Stock that constitutes a Restricted Security shall bear the legend as
set forth in Exhibit D (the “Restrictive Securities Legend”) on the reverse thereof until
after the first anniversary of the later of (i) the issue date for such share of Common Stock, and
(ii) the last date on which the Company or any Affiliate of the Company was the owner of such share
of Common Stock (or any predecessor security) (or such shorter period of time as permitted by Rule
144 under the Securities Act or any successor provision thereunder) (or such longer period of time
as may be required under the Securities Act or applicable state securities laws in the opinion of
counsel for the Company, unless otherwise agreed between the Company and the Holder thereof).

 

22

 

(c) Each Global Note shall also bear the following legend (the “Global Note Legend”):

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK
CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

ARTICLE III

SATISFACTION AND DISCHARGE

Section 3.01 Satisfaction And Discharge Of Indenture

When:

(a) the Company shall deliver to the Trustee for cancellation all Notes previously
authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of, or in
substitution for which, other Notes shall have been authenticated and delivered) and not previously
cancelled; or

(b) the Company shall deposit with the Trustee, after the Notes have become due and payable,
whether at the Maturity Date or upon the Notes being scheduled for conversion or otherwise, cash or
shares of Common Stock, pursuant to Article XII, sufficient to pay all of the outstanding Notes and
all other sums payable by the Company under this Indenture;

 

23

 

and, in the case of either clause (a) or (b), the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to be of further
effect, except as to:

(i) remaining rights of registration of transfer, substitution and exchange and
conversion of Notes,

(ii) rights hereunder of Holders to receive payments of principal of, premium, if any,
and interest (including Additional Interest, if any) on, the Notes and the other rights,
duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if
any, so deposited with the Trustee, and

(iii) the rights, obligations and immunities of the Trustee hereunder;

and the Trustee, on written demand of the Company accompanied by an Officers’ Certificate and an
Opinion of Counsel (each stating that all conditions precedent herein relating to the satisfaction
and discharge of this Indenture have been complied with) and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and discharging this
Indenture; provided, however, the Company shall reimburse the Trustee for all amounts due the
Trustee under Section 4.08 and Section 5.07 and for any costs or expenses thereafter reasonably and
properly incurred by the Trustee and shall compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection with this Indenture or the Notes.

Section 3.02 Deposited Monies To Be Held In Trust

Subject to Section 3.03, all monies deposited with the Trustee pursuant to Section 3.01 shall
be held in trust and applied by it to the payment, notwithstanding the provisions of Article XII,
either directly or through any Paying Agent (including the Company if acting as its own Paying
Agent), to the Holders of the particular Notes for the payment of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon for principal, premium, if
any, and interest (including Additional Interest, if any). All monies deposited with the Trustee
pursuant to Section 3.01 (and held by it or any Paying Agent) for the payment of Notes subsequently
converted shall be returned to the Company upon written request of the Company.

Section 3.03 Return Of Unclaimed Monies

The Trustee and the Paying Agent shall promptly notify the Company of, and pay to the Company
upon the request of the Company, any excess money held by them at any time. The Trustee or the
Paying Agent, as the case may be, shall provide written notice to the Company of any money that has
been held by it and has, for a period of two (2) years, remained unclaimed for the payment of the
principal of, premium, if any, or any accrued and unpaid interest (including Additional Interest,
if any) on, the Notes. The Trustee and the Paying Agent shall pay to the Company upon the written
request of the Company any money held by them for the payment of the principal of, premium, if any,
or any accrued and unpaid interest (including Additional Interest, if any), the Notes that remains
unclaimed for two (2) years. After payment to the Company, Holders entitled to the money must look
to the Company for payment as general creditors, subject to applicable law, and all liability of
the Trustee and the Paying Agent with respect to such money and payment shall, subject to
applicable law, cease.

 

24

 

Section 3.04 Reinstatement

If the Trustee or Paying Agent is unable to apply any money in accordance with Sections 3.01
and 3.02 by reason of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Sections 3.01 and 3.02 until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Sections 3.01 and 3.02;
provided, however, that if the Company has made any payment of amounts due with respect to any
Notes because of the reinstatement of its obligations, then the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held by the Trustee or
Paying Agent.

ARTICLE IV

DEFAULTS AND REMEDIES

Section 4.01 Events Of Default

An “Event of Default” shall occur when any of the following occurs (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of Article VII hereof or
be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or governmental body):

(a) the Company shall fail to pay any interest (including Additional Interest, if any) on the
Notes when due and such failure continues for a period of 15 calendar days; or

(b) the Company shall fail to pay the principal of the Notes when due at maturity, or the
Company shall fail to pay the repurchase price upon a Fundamental Change, any make-whole premium
payable, or any Interest Make-Whole payments, in respect of any Notes when due; or

(c) the Company shall fail to deliver shares of Common Stock (including any Additional Shares
payable as a result of a make-whole premium) upon the conversion of any Notes and such failure
continues for five calendar days following the scheduled settlement date for such conversion; or

(d) the Company shall fail to provide the notice required in Section 11.01(b) of an
anticipated effective date or actual effective date of a Fundamental Change for a period of five
Business Days after such notice was required to be delivered; or

(e) the Company fails to perform or observe any other term, covenant or agreement contained in
this Indenture and the failure continues for a period of 30 calendar days after written notice of
such failure, requiring the Company to remedy the same, shall have been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the then-outstanding Notes; or

 

25

 

(f) the Company fails to pay when due (whether at stated maturity or otherwise) or a default
that results in the acceleration of maturity, of any Indebtedness in excess of $1.0 million of the
Company or any Significant Subsidiary of the Company, unless such Indebtedness is discharged or
such acceleration is rescinded, stayed or annulled, within a period of 30 calendar days after
written notice of such failure or default to the Company by the Trustee or to the Company and the
Trustee by Holders of at least 25% in aggregate principal amount of the then-outstanding Notes; or

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

(i) commences a voluntary case;

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

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

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

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

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

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

(ii) appoints a Custodian of the Company or any Significant Subsidiary or for any
substantial part of its property; or

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

or any similar relief is granted under any foreign laws and, in each case, the order or decree
remains unstayed and in effect for 60 days.

Section 4.02 Acceleration Of Maturity; Rescission and Annulment

(a) If an Event of Default with respect to outstanding Notes (other than an Event of Default
specified in Section 4.01(g) or 4.01(h) hereof) occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then-outstanding Notes, by written
notice to the Company and the Trustee, may declare due and payable 100% of the principal amount of
all outstanding Notes plus any accrued and unpaid interest (including Additional Interest, if any)
to the date of payment. Upon a declaration of acceleration, such principal and accrued and unpaid
interest to the date of payment shall be immediately due and payable.

 

26

 

(b) If an Event of Default specified in Section 4.01(g) or 4.01(h) hereof occurs, all unpaid
principal of and accrued and unpaid interest on the outstanding Notes shall become and be
immediately due and payable, without any declaration or other act on the part of the Trustee or any
Holder.

(c) The Holders, through the written consent of not less than a majority in aggregate
principal amount of the outstanding Notes, may rescind and annul an acceleration and its
consequences if:

(i) the Company has paid (or deposited with the Trustee a sum sufficient to pay) (i)
all overdue interest (including Additional Interest, if any) on all Notes; (ii) the
principal amount of any Notes that has become due otherwise than by such declaration of
acceleration; (iii) to the extent that payment of such interest is lawful, interest upon
overdue interest; and (iv) all sums paid or advanced by the Trustee under the Indenture and
the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; and

(ii) all Events of Default, other than the nonpayment of principal or interest
(including Additional Interest, if any) on the Notes which has become due solely because of
the acceleration, have been remedied, cured or waived,

provided, however, that in the event such declaration of acceleration has been made based on the
existence of an Event of Default under Section 4.01(f) hereof and such Event of Default has been
remedied, cured or waived in accordance with Section 4.01(f) hereof, then, without any further
action by the Holders, such declaration of acceleration shall be rescinded automatically and the
consequences of such declaration shall be annulled. No such rescission or annulment shall affect
any subsequent Default or impair any right consequent thereon.

Section 4.03 Other Remedies

If an Event of Default with respect to outstanding Notes occurs and is continuing, the Trustee
may, in its discretion, pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of or interest (including Additional Interest, if any) on the Notes or to
enforce the performance of any provision of the Notes. The Trustee may maintain a proceeding in
which it may prosecute and enforce all rights of action and claims under this Indenture or the
Notes, even if it does not possess any of the Notes or does not produce any of them in the
proceeding.

Section 4.04 Waiver Of Past Defaults

The Holders, through the written consent of not less than a majority in aggregate principal
amount of the outstanding Notes, may, on behalf of the Holders of all of the Notes, waive an
existing Default or Event of Default, except a Default or Event of Default:

(i) in the payment of the principal of or interest (including Additional Interest, if
any) on any Note;

 

27

 

(ii) in respect of the right to convert any Note (and receive an Interest Make-Whole
payment, if any, upon a conversion of Notes) in accordance with Article XII;

(iii) in the payment of the repurchase price on a Repurchase Date or Fundamental Change
Repurchase Date in connection with the repurchase rights under Article X or Article XI, as
the case may be; or

(iv) in respect of a covenant or provision hereof which, under Section 4.02 hereof,
cannot be modified or amended without the consent of the Holder of each outstanding Note
affected.

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

Section 4.05 Control By Majority

The Holders of a majority in aggregate principal amount of the outstanding Notes, through
their written consent shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or power conferred on
the Trustee. However, the Trustee may refuse to follow any direction that:

(a) conflicts with any law or with this Indenture;

(b) the Trustee determines may be unduly prejudicial to the rights of the Holders not joining
therein; or

(c) may expose the Trustee to any cost, expense or personal liability.

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

Section 4.06 Limitation On Suit

Except to enforce the right to receive payment of principal or interest (including any
Additional Interest or Interest Make-Whole payments) when due, no Holder may pursue any remedy with
respect to the Indenture or the Notes unless:

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

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

(c) such Holder or Holders offer to the Trustee security or indemnity reasonably satisfactory
to the Trustee against any loss, liability or expense;

 

28

 

(d) the Trustee does not comply with the request within 60 days after receipt of the request
and the offer of indemnity; and

(e) the Holders of a majority in principal amount of the Notes do not give the Trustee a
direction inconsistent with the request during such 60-day period.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder (it being understood that the Trustee does not have an
affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to
any Holder).

Section 4.07 Unconditional Right Of Holders To Receive Payment

Notwithstanding any other provision in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional and shall not be impaired or affected without the
consent of such Holder, to receive payment of the principal amount, repurchase price upon a
Fundamental Change, repurchase price on a Repurchase Date, interest (including Additional Interest,
if any) or make-whole premium, if any, in respect of the Notes held by such Holder, on or after the
respective due dates expressed in the Notes and this Indenture, and to convert such Note in
accordance with Article XII hereof, and to bring suit for the enforcement of any such payment on or
after such respective due dates or for the right to convert in accordance with Article XII hereof.

Section 4.08 Collection Of Indebtedness And Suits For Enforcement By The Trustee

The Company covenants that if:

(a) a default is made in the payment of any interest (including Additional Interest, if any)
on any Note when such interest (including Additional Interest, if any) becomes due and payable and
such default continues for a period of 30 days; or

(b) a default is made in the payment of the principal of or premium, if any, on any Note at
the maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Notes, the whole amount then due and payable (as expressed therein or as a result of any
acceleration effected pursuant to Section 4.02) on such Notes for principal and premium, if any,
and interest (including Additional Interest, if any) and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and premium, if any, and
on any overdue interest (including Additional Interest, if any), calculated using the applicable
interest rate specified in Section 2.01(c), and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

 

29

 

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

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

Section 4.09 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 its property or creditors, the Trustee (irrespective of whether the principal of the
Notes 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 the Company for the payment of
overdue principal, premium, if any, or interest (including Additional Interest, if any)) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of principal and premium, if any, and
interest (including Additional Interest, if any) owing and unpaid in respect of the Notes 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) and of the Holders of Notes allowed in such
judicial proceeding, and

(b) to collect and receive any moneys or other property payable or deliverable on any such
claim and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceedings is hereby authorized by
each Holder of Notes to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders of Notes, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under Section 5.07.

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

 

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Section 4.10 Restoration Of Rights And Remedies

If the Trustee or any Holder of a Note has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee and the Holders of Notes
shall be restored severally and respectively to their former positions hereunder and thereafter all
rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had
been instituted.

Section 4.11 Rights And Remedies Cumulative

Except as otherwise provided with respect to the replacement or repayment of mutilated,
destroyed, lost or stolen Notes in Section 2.07(d), no right or remedy conferred in this Indenture
upon or reserved to the Trustee or to the Holders of Notes is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 4.12 Delay Or Omission Not Waiver

No delay or omission of the Trustee or of any Holder of any Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or any acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders of Notes may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or the Holders of Notes, as the case
may be.

Section 4.13 Application Of Money Collected

Subject to Articles X, XI, XII and XIII, any money collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such money on account of principal or premium, if any, or interest
(including Additional Interest, if any), upon presentation of the Notes and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 5.07;

SECOND: To the payment of the amounts then due and unpaid for principal of and
premium, if any, and interest (including Additional Interest, if any) on the
Notes in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Notes for principal and premium, if any,
and interest (including Additional Interest, if any), respectively; and

THIRD: Any remaining amounts shall be repaid to the Company.

 

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Section 4.14 Undertaking For Costs

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

ARTICLE V

THE TRUSTEE

Section 5.01 Duties Of Trustee

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

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

(i) the Trustee need perform only those duties that are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into this Indenture against
the Trustee; and

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

 

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

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

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

(iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 4.05.

(d) Every provision of this Indenture that in any way relates to the Trustee in any of its
roles hereunder is subject to the provisions of this Section 5.01.

(e) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.

Section 5.02 Rights Of Trustee

(a) The Trustee may conclusively rely on any document believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need not investigate any fact or matter
stated in any document; if, however, the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled during normal business hours to examine the relevant books,
records and premises of the Company, personally or by agent or attorney upon reasonable prior
notice.

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

(c) Any request or direction of the Company mentioned herein shall be sufficiently evidenced
by an Order from the Company and any resolution of the Board of Directors of the Company shall be
sufficiently evidenced by a Board Resolution.

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

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

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

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

 

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(h) The Trustee shall have no duty to inquire as to the performance of the Company with
respect to the covenants contained in Article XVIII. In addition, the Trustee shall not be deemed
to have notice, or charged with having knowledge of an Event of Default except (i) any Default or
Event of Default occurring pursuant to Sections 4.01(a) and 4.01(b) or (ii) any Default or Event of
Default of which a Responsible Officer of the Trustee shall have received written notification at
the Corporate Trust Office referencing the Notes and this Indenture or obtained actual knowledge.
Delivery of reports, information and documents to the Trustee under Article VIII (other than
Sections 9.03 and 9.06) is for informational purposes only and the Trustee’s receipt of the
foregoing shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’
Certificates of the Company).

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

(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 its directors, officers,
employees and each agent, custodian and other Person employed to act hereunder.

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

(l) 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 its duties hereunder or in the
exercise of any of its rights or powers.

(m) No permissive power, right or remedy conferred upon the Trustee hereunder shall be
construed to impose a duty to exercise such power, right or remedy.

(n) The Trustee shall not be required to give any bond or surety in respect of the performance
of its powers and duties hereunder.

(o) The Trustee shall have no duty to monitor or inquire as to the performance of the Company
or Holders with respect to the registration rights under the Securities Purchase Agreement. The
Trustee shall not be deemed to have knowledge of a Registration Default unless a Responsible
Officer shall have received written notification of such event.

(p) In no event shall the Trustee be responsible or liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.

 

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(q) The Trustee shall not be responsible or liable for any failure or delay in the performance
of its obligations under this Indenture arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including without limitation, acts of God;
earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics;
riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or
communication services; accidents; labor disputes; acts of civil or military authorities and
governmental action; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

Section 5.03 Individual Rights Of Trustee

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Company or any of its Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, must
comply with Sections 5.10 and 5.11.

Section 5.04 Trustee’s Disclaimer

The Trustee makes no representation as to the validity, priority or adequacy of this Indenture
or the Notes; it shall not be accountable for the Company’s use of the proceeds from the Notes; and
it shall not be responsible for any statement in the Notes other than its certificate of
authentication.

Section 5.05 Notice Of Defaults

If a Default or Event of Default occurs and is continuing as to which the Trustee has received
notice pursuant to the provisions of this Indenture, the Trustee shall mail to each Holder a notice
of the Default or Event of Default within 90 days after it occurs unless such Default or Event of
Default has been cured or waived. Except in the case of a Default or Event of Default in payment of
any amounts due with respect to any Note, the Trustee may withhold the notice if and so long as it
in good faith determines that withholding the notice is in the best interests of Holders.

Section 5.06 Reports By Trustee To Holders

(a) Within 60 days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to each Holder if
required by TIA Section 313(a) a brief report dated as of such May 15 that complies with TIA
Section 313(c). In such event, the Trustee also shall comply with TIA Section 313(b) and Section
313(d).

(b) A copy of each report at the time of its mailing to Holders shall be mailed to the Company
and filed by the Trustee with the SEC and each stock exchange, if any, on which the Notes are
listed. The Company shall promptly notify the Trustee in writing when the Notes are listed on any
stock exchange and of any delisting thereof.

 

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Section 5.07 Compensation And Indemnity

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

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

(c) To secure the Company’s payment obligations in this Section 5.07, the Trustee shall have a
lien prior to the Notes on all money or property held or collected by the Trustee, except that held
in trust to pay amounts due on particular Notes.

(d) The indemnity obligations of the Company with respect to the Trustee provided for in this
Section 5.07 shall survive any resignation or removal of the Trustee and the termination of this
Indenture.

(e) When the Trustee incurs expenses or renders services after an Event of Default specified
in Section 4.01(g) or (h) occurs, the expenses and the compensation for the services are intended
to constitute expenses of administration under any Bankruptcy Law.

 

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Section 5.08 Replacement Of Trustee

(a) A resignation or removal of the Trustee and appointment of a successor Trustee shall
become effective only upon the successor Trustee’s acceptance of appointment as provided in this
Section 5.08.

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

(i) the Trustee fails to comply with Section 5.10;

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

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

(iv) the Trustee becomes incapable of acting.

(c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for
any reason, the Company shall promptly appoint a successor Trustee.

(d) If a successor Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed, the retiring Trustee (at the Company’s expense), the Company or the Holders
of at least 10% in aggregate principal amount of the outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

(e) If the Trustee fails to comply with Section 5.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(f) A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders. 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 5.07.

Section 5.09 Successor Trustee By Merger, Etc.

If the Trustee consolidates with, merges or converts into, or transfers by sale or otherwise
all or substantially all of its corporate trust business (including the administration of the trust
created by this Indenture) to, another corporation, the successor corporation without any further
act shall be the successor Trustee, if such successor corporation is otherwise eligible hereunder.

Section 5.10 Eligibility; Disqualification

There shall at all times be a Trustee hereunder that is a corporation organized and doing
business under the laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus (on a consolidated
basis with its Affiliates) of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA Section 310(b).

Section 5.11 Preferential Collection Of Claims Against The 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.

 

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ARTICLE VI

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 6.01 When Company May Merge, Etc.

The Company shall not, in a single transaction or a series of related transactions,
consolidate with or merge into any other Person or sell, convey, transfer or lease its property and
assets substantially as an entirety to another Person unless:

(a) either (i) the Company is the continuing corporation, or (ii) the directly resulting,
surviving or transferee Person (if other than the Company) is a corporation or limited liability
company organized and existing under the laws of the United States of America, any state thereof or
the District of Columbia and such Person assumes, by a supplemental indenture, all of the Company’s
obligations under the Notes and the Indenture;

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

(c) if as a result of such transaction the Notes become convertible into common stock or other
securities issued by a third party, such third party fully and unconditionally assumes or
guarantees all obligations of the Company or such surviving Person under the Notes and the
Indenture; and

(d) the Company has, at or prior to the effective date of such consolidation, merger or
transfer, delivered to the Trustee the Officers’ Certificate and Opinion of Counsel pursuant to
Section 6.03.

Section 6.02 Successor Person Substituted

In case of any such consolidation, merger, sale, conveyance, transfer or lease in which the
Company is not the continuing corporation and upon the assumption by the successor Person, by
supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form
and substance to the Trustee, of the due and punctual payment of the principal of, and premium, if
any, and interest on all of the Notes, and the due and punctual performance and observance of all
of the covenants and conditions of the Indenture to be performed or satisfied by the Company, such
successor Person shall succeed to and be substituted for the Company, with the same effect as if it
had been named herein as the party of this first part, and Cereplast, Inc. shall be discharged from
its obligations under the Notes and the Indenture. Such successor Person thereupon may cause to be
signed, and may issue either in its own name or in the name of the Company any or all of the Notes,
issuable hereunder that theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and subject to all the
terms, conditions and limitations in the Indenture prescribed, the Trustee shall authenticate and
shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have
been signed and delivered by the officers of the Company to the Trustee for authentication, and any
Notes that such successor Person thereafter shall cause to be signed and delivered to the Trustee
for that purpose. All the Notes so issued shall in all respects have the same legal rank and
benefit under the Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of the Indenture as though all of such Notes had been issued at the date of the execution
hereof. In the event of any such consolidation, merger, sale, conveyance, transfer or lease, upon
compliance with this Article VI the Person named as the “Company” in the first paragraph of the
Indenture or any successor that shall thereafter have become such in the manner prescribed in this
Article VI may be dissolved, wound up and liquidated at any time thereafter and such Person shall
be discharged from its liabilities as obligor and maker of the Notes and from its obligations under
the Indenture.

 

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Section 6.03 Opinion of counsel to be Given to Trustee

Prior to execution of any supplemental indenture pursuant to this Article VI, the Trustee
shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance, transfer or lease and any such assumption complies
with the provisions of this Article VI.

ARTICLE VII

AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 7.01 Without Consent Of Holders Of Notes

Without the consent of any Holders of Notes, the Company, when authorized by a Board
Resolution or Board Resolutions, and the Trustee, at any time and from time to time, may amend this
Indenture and the Notes to:

(a) provide for conversion rights of Holders of the Notes and the Company’s repurchase
obligations in connection with a Fundamental Change in the event of any reclassification of the
Common Stock, merger or consolidation, or sale, conveyance, transfer or lease of the Company’s
property and assets substantially as an entirety;

(b) secure the Notes;

(c) provide for the assumption of the Company’s obligations to the Holders of the Notes in the
event of a merger or consolidation, or sale, conveyance, transfer or lease of the Company’s
property and assets substantially as an entirety;

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

(e) add to the covenants of the Company for the benefit of the Noteholders;

(f) cure any ambiguity or correct or supplement any inconsistent or otherwise defective
provision contained in this Indenture or the Notes; provided, that such modification or amendment
does not adversely affect the interests of the Noteholders in any material respect; provided,
further, that any amendment made solely to conform the provisions of this Indenture or the Notes to
the description of the Notes contained in the offering documents shall not be deemed to materially
adversely affect the interests of the holders of the Notes as provided in an Officers’ Certificate;

 

39

 

(g) make any provision with respect to matters or questions arising under this Indenture or
the Notes that the Company may deem necessary or desirable and that shall not be inconsistent with
provisions of this Indenture or the Notes; provided, that such change or modification does not, in
the good faith opinion of the Board of Directors, adversely affect the interests of the Noteholders
in any material respect;

(h) make any changes or modifications necessary in connection with the registration of the
notes and the shares of Common Stock to be delivered upon conversion of the notes under the
Securities Act as contemplated in the registration rights set forth in the Securities Purchase
Agreement relating to the Notes, provided that such change or modification does not, in the good
faith opinion of the Board of Directors and the trustee, materially adversely affect the interests
of the Noteholders;

(i) increase the Conversion Rate;

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

(k) add guarantees of obligations under the Notes; or

(l) provide for a successor trustee.

Section 7.02 With Consent Of Holders Of Notes

Except as provided below in this Section 7.02, this Indenture or the Notes may be amended,
modified or supplemented, and, subject to Sections 4.04 and 4.07, noncompliance by the Company in
any particular instance with any provision of the Indenture or the Notes may be waived, in each
case with the written consent of the Holders of at least a majority in aggregate principal amount
of the outstanding Notes.

Without the written consent of each Holder of Notes affected, an amendment, modification or
waiver under this Section 7.02 may not:

(a) extend the maturity of any Notes;

(b) reduce the rate or extend the time for payment of interest (including Additional Interest,
if any) on any Notes;

(c) reduce the principal amount of any Notes;

(d) reduce any amount payable upon repurchase of any Notes in accordance with Articles X and
XI;

 

40

 

(e) impair the right of a Holder to institute suit for payment of any Notes;

(f) change the currency in which any principal of, or interest on, the Notes is payable;

(g) change the Company’s obligation to repurchase any Notes at the option of the Holder in a
manner adverse to the holders except as provided in Section 7.01(a);

(h) change the Company’s obligation to repurchase any Notes upon a Fundamental Change in a
manner adverse to the Holders after the occurrence of a Fundamental Change;

(i) affect the right of a Holder to convert any Notes into shares of Common Stock or reduce
the number of shares of Common Stock or any other property, including cash, receivable upon
conversion pursuant to Article XII hereof;

(j) modify this paragraph or Section 4.04 hereof; or

(k) reduce the percentage of the Notes required for consent to any modification of this
Indenture that does not require the consent of each affected Holder.

It shall not be necessary for any act of Holders of Notes under this Section 7.02 to approve
the particular form of any proposed supplemental indenture, but it shall be sufficient if such act
shall approve the substance thereof.

After an amendment, supplement or waiver under this Section 7.02 becomes effective, the Company
shall promptly deliver to the Holders affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to deliver such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such amendment,
supplement or waiver.

Section 7.03 Compliance With Trust Indenture Act

Every amendment to this Indenture or the Notes shall be set forth in a supplemental indenture
that complies with the TIA as then in effect.

Section 7.04 Revocation Of Consents And Effect Of Consents Or Votes

Until an amendment, supplement or waiver becomes effective, a written consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent
is not made on any Note; provided, however, that unless a record date shall have been established,
any such Holder or subsequent Holder may revoke the consent as to its Note or portion of a Note if
the Trustee receives written notice of revocation before the date the amendment, supplement or
waiver becomes effective.

 

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An amendment, supplement or waiver becomes effective on receipt by the Trustee of written
consents from or affirmative votes by, as the case may be, the Holders of the requisite percentage
of aggregate principal amount of the outstanding Notes, and thereafter shall bind every Holder of
Notes; provided, however, if the amendment, supplement or waiver makes a change described in any of
the clauses (a) through (k) of Section 7.02, the amendment, supplement or waiver shall bind only
each Holder of a Note that has consented to it or voted for it, as the case may be, and every
subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the Note
of the consenting or affirmatively voting, as the case may be, Holder.

The Company may, but shall not be obligated to, fix a special record date (a “Special Record
Date”) for the purpose of determining the Holders entitled to consent to any amendment, supplement
or waiver, which Special Record Date shall be not more than 30 days prior to the first solicitation
of such consent. If a Special Record Date is fixed, then notwithstanding the proviso in the first
paragraph of this Section 7.04, those Persons who were Holders at such Special Record Date (or
their duly designated proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such Special Record
Date. No such consent shall be valid or effective for more than 90 days after such Special Record
Date unless consents from Holders of the requisite percentage in principal amount of outstanding
Notes required hereunder for the effectiveness of such consents shall have also been given and not
revoked within such 90 day period.

Section 7.05 Notation On Or Exchange Of Notes

If an amendment, supplement or waiver changes the terms of a Note:

(a) the Trustee may require the Holder of a Note to deliver such Notes to the Trustee, the
Trustee may place an appropriate notation on the Note about the changed terms and
return it to the Holder and the Trustee may place an appropriate notation on any Note
thereafter authenticated; or

(b) if the Company or the Trustee so determines, the Company in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the changed terms.

Failure to make the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.

Section 7.06 Trustee To Sign Amendment, Etc.

The Trustee shall sign any amendment authorized pursuant to this Article VII if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If the
amendment does adversely affect the rights, duties, liabilities or immunities of the Trustee, the
Trustee may but need not sign it. In signing or refusing to sign such amendment, the Trustee shall
receive and shall be fully protected in relying upon an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that such amendment is authorized or permitted by this Indenture and
is the legal, valid and binding obligation of the Company enforceable in accordance with its terms.

 

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ARTICLE VIII

COVENANTS

Section 8.01 Payment Of Notes

(a) The Company shall pay all amounts due with respect to the Notes on the dates and in the
manner provided in this Indenture and the Notes. All such amounts shall be considered paid on the
date due if the Paying Agent holds (or, if the Company or a Subsidiary or an Affiliate of any of
them acts as Paying Agent, if it has segregated and holds in trust in accordance with Section 2.04)
on that date money sufficient to pay the amount then due with respect to the Notes.

(b) The Company shall pay interest on any overdue amount (including, to the extent permitted
by applicable law, overdue interest) at the rate borne by the Notes as specified in Sections
2.01(c) and 2.12.

(c) If Additional Interest is payable by the Company, the Company shall deliver to the Trustee
a certificate to that effect stating (i) the amount of such Additional Interest per $1,000
principal amount of the Notes that is payable, (ii) the facts and calculations supporting the
determination of such amount and (iii) the date on which such interest is payable. Unless and until
a Responsible Officer of the Trustee receives such a certificate, the Trustee may assume without
inquiry that no Additional Interest is payable.

Section 8.02 Maintenance Of Office Or Agency

The Company will maintain an office or agency of the Trustee, Registrar and Paying Agent where
Notes may be presented or surrendered for payment, where Notes may be surrendered for registration
of transfer or purchase and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Corporate Trust Office shall initially be one such
office or agency for all of the aforesaid purposes. 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
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 14.02.

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

Section 8.03 Reports

(a) At any time when the Notes or the shares of Common Stock issuable upon conversion of the
Notes are “restricted securities” within the meaning of the Securities Act, the Company shall, upon
request, provide to any Holder or beneficial owner of Notes or prospective purchaser of Notes that
so requests the information required to be delivered pursuant to Rule 144A(d)(4). Whether a Person
is a beneficial owner shall be determined by the Company to the Company’s reasonable satisfaction.

 

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(b) The Company will comply with the provisions of TIA Section 314(a).

(c) The Company (at its own expense) will deliver to the Trustee within 15 days after the
filing of the same with the SEC, copies of the quarterly and annual reports and of the information,
documents and other financial reports, if any, that the Company may be required to file with the
SEC pursuant to Section 12 or 15(d) of the Exchange Act. In the event the Company is at any time no
longer subject to the reporting requirements of Section 12 or 15(d) of the Exchange Act, the
Company shall continue to provide the Trustee with such quarterly and annual reports and other
financial reports, if any, that the Company furnishes to its shareholders or stockholders. 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 an
Officers’ Certificate).

Section 8.04 Compliance Certificate

The Company shall deliver to the Trustee within 120 days after the end of each fiscal year
(beginning with the fiscal year ending on December 31, 2011) of the Company an Officers’
Certificate, one of the signers of which shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company, stating whether or not the
signers know of any continuing Default or Event of Default by the Company in performing
any of its obligations under this Indenture or the Notes. If such signers do know of any such
Default or Event of Default, the Officers’ Certificate shall describe the Default or Event of
Default and its status.

Section 8.05 Stay, Extension And Usury Laws

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

Section 8.06 Corporate Existence

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

 

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Section 8.07 Notice Of Default

In the event that any Default or Event of Default shall occur, the Company will give prompt
written notice of such Default or Event of Default to the Trustee.

Section 8.08 Waiver Of Certain Covenants.

The Company may omit in any particular instance to comply with any covenant or condition set
forth in Sections 8.03 and 8.07 (other than a covenant or condition which under Section 7.02 cannot
be modified or amended without the consent of the Holder of each Note affected), if before the time
for such compliance the Holders shall, through the consent of not less than a majority in principal
amount of the Notes, either waive such compliance in such instance or generally waive compliance
with such covenant or condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee or any Paying Agent or Conversion
Agent in respect of any such covenant or condition shall remain in full force and effect. Nothing
in this Section is intended to limit the application of Sections 4.08, 7.01 and 7.02.

ARTICLE IX

REDEMPTION OF NOTES

Section 9.01 No Optional Redemption of Notes.

The Notes shall not be redeemable at the option of the Company.

ARTICLE X

REPURCHASE OF NOTES AT THE OPTION OF HOLDERS ON A SPECIFIC DATE

Section 10.01 Repurchase Of Notes At The Option Of Holders.

(a) Notes shall be repurchased by the Company for cash, at the option of the Holder thereof
(the “Repurchase Right”), on June 15, 2014 (the “Repurchase Date”) at a price equal to 100% of the
principal amount of those Notes plus accrued and unpaid interest (including Additional Interest, if
any) to, but excluding, the Repurchase Date (the “Repurchase Price”), subject to satisfaction by or
on behalf of the Holder of the requirements set forth in Section 10.01(c).

 

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(b) No later than 20 Business Days prior to a Repurchase Date, the Company shall mail a
written notice of the Repurchase Right by first class mail to the Trustee and to each Holder, at
their addresses shown in the register of the Registrar (and to beneficial owners as required by
applicable law). The notice shall include a form of Repurchase Notice to be completed by the
Holder and shall briefly state, as applicable:

(i) the date by which the Repurchase Notice must be delivered to the Paying Agent in
order for a Holder to exercise the repurchase right;

(ii) the Repurchase Date;

(iii) the Repurchase Price;

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

(v) the conversion rights, if any, of the Notes;

(vi) the Conversion Rate and any adjustments thereto;

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

(viii) the procedures for withdrawing a Repurchase Notice;

(ix) that the Notes must be surrendered to the Paying Agent to collect payment;

(x) that the Repurchase Price for any Note as to which a Repurchase Notice has been
duly given and not withdrawn will be paid promptly following the later of the Repurchase
Date and the time of surrender of such Note;

(xi) the procedures the Holder must follow to exercise its Repurchase Right under this
Section 10.01;

(xii) that, unless the Company defaults in making payment of such Repurchase Price, any
interest (including Additional Interest, if any) on Notes surrendered for repurchase by the
Company will cease to accrue on and after the Repurchase Date; and

(xiii) the CUSIP number(s) of the Notes.

A notice of Repurchase Right may be given by the Company or, at the Company’s request, the
Trustee shall give such notice of Repurchase Right in the Company’s name and at the Company’s
expense; provided, however, that the text of the notice of Repurchase Right shall be prepared by
the Company.

 

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(c) A Holder may exercise its right specified in Section 10.01(a) upon delivery of a written
notice of repurchase (a “Repurchase Notice”) to the Paying Agent at any time during the period
beginning at 9:00 A.M., New York City time, on the date that is 20 Business Days immediately
preceding the Repurchase Date until 5:00 P.M., New York City time, on the Repurchase Date, stating:

(i) the certificate number of the Note which the Holder will deliver to be repurchased,
if such Notes are in certificated form;

(ii) the portion of the principal amount of the Note which the Holder will deliver to
be repurchased, which portion must be in principal amounts of $2,000 or an integral multiple
of $1,000 above such amount; and

(iii) that such Note shall be repurchased by the Company as of the Repurchase Date
pursuant to the applicable terms and conditions specified in the Notes and in this
Indenture.

If such Notes are held in book-entry form through the Depository, the Repurchase Notice must
comply with appropriate Depository procedures.

Upon such delivery of the Notes to the Paying Agent, such Holder shall be entitled to receive,
upon request, from the Paying Agent a nontransferable receipt of deposit evidencing such delivery.

Payment of the Repurchase Price for a Note for which a Repurchase Notice has been delivered
and not withdrawn is conditioned upon book-entry transfer or delivery of such
Note, together with necessary endorsements, to the Paying Agent at its corporate trust office,
or any other office of the Paying Agent, at any time after delivery of such Repurchase Notice,
provided, however, that such Repurchase Price shall be so paid pursuant to this Section 10.01 only
if the Note so delivered to the Paying Agent shall conform in all respects to the description
thereof in the related Repurchase Notice.

The Company shall repurchase from the Holder thereof, pursuant to this Section 10.01, a
portion of a Note, so long as the principal amount of such portion is $2,000 or an integral
multiple of $1,000 above such amount. Provisions of this Indenture that apply to the repurchase of
all of a Note also apply to the repurchase of such portion of such Note.

Any repurchase by the Company contemplated pursuant to the provisions of this Section 10.01
shall be consummated by the delivery of the consideration to be received by the Holder promptly
following the later of the Repurchase Date and the time of delivery of the Note.

Notwithstanding anything contained herein to the contrary, any Holder delivering to the Paying
Agent the Repurchase Notice contemplated by this Section 10.01(c) shall have the right to withdraw
such Repurchase Notice at any applicable time prior to 5:00 P.M., New York City time, on the
Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 10.02.

 

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

Section 10.02 Effect Of Repurchase Notice.

Upon receipt by the Paying Agent of the Repurchase Notice specified in Section 10.01(c), the
Holder of the Note in respect of which such Repurchase Notice was given shall (unless such
Repurchase Notice is withdrawn as specified in the following paragraph) thereafter be entitled to
receive solely the Repurchase Price with respect to such Note. Such Repurchase Price shall be paid
to such Holder, subject to receipt of cash by the Paying Agent, promptly following the later of (a)
the Repurchase Date with respect to such Note (provided the conditions in Section 10.01(c) have
been satisfied) and (b) the time of book-entry transfer or delivery of such Note to the Paying
Agent by the Holder thereof in the manner required by Section 10.01(c). Notes in respect of which
a Repurchase Notice has been given by the Holder thereof may not be converted pursuant to Article
XII hereof on or after the date of the delivery of such Repurchase Notice unless such Repurchase
Notice has first been validly withdrawn as specified in the following paragraph.

A Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent in accordance with the Repurchase Notice at any time prior to 5:00
P.M., New York City time, on the Repurchase Date, specifying:

(a) the certificate number (or such withdrawal notice must comply with the appropriate
Depositary procedures) of the Note in respect of which such notice of withdrawal is being
submitted;

(b) the principal amount of the Note with respect to which such notice of withdrawal is being
submitted; and

(c) the principal amount, if any, of such Note which remains subject to the original
Repurchase Notice and which has been or will be delivered for repurchase by the Company.

There shall be no purchase of any Notes pursuant to Section 10.01 if there has occurred (prior
to, on or after, as the case may be, the giving, by the Holders of such Notes, of the required
Repurchase Notice) and is continuing an Event of Default (other than a default in the payment of
the Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the
respective Holders any Notes (x) with respect to which a Repurchase Notice has been withdrawn in
compliance with this Indenture, or (y) held by it during the continuance of an Event of Default
(other than a default in the payment of the Repurchase Price with respect to such Notes) in which
case, upon such return, the Repurchase Notice with respect thereto shall be deemed to have been
withdrawn.

Section 10.03 Deposit Of Repurchase Price.

Prior to 11:00 A.M., New York City time, on the first Business Day after the Repurchase Date,
the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate
of any of them is acting as the Paying Agent, shall segregate and hold in trust as provided in
Section 2.04) in immediately available funds, money sufficient to make cash payments due on all the
Notes or portions thereof which are to be repurchased on such Repurchase Date.

 

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If the Paying Agent holds, in accordance with the terms hereof, at 11:00 A.M., New York City
time, on the first Business Day after the Repurchase Date, cash sufficient to pay the Repurchase
Price of any Notes for which a Repurchase Notice has been tendered and not withdrawn pursuant to
Section 10.02, then, on and after such date, such Notes shall cease to be outstanding and any
interest (including Additional Interest, if any) shall cease to accrue on such Notes or portions
thereof, whether or not book-entry transfer of such Notes have been made or such Notes are
delivered to the Paying Agent, and the rights of the Holders in respect thereof shall terminate
(other than the right to receive the Repurchase Price upon delivery of such Notes).

Section 10.04 Notes Repurchased In Part.

Any Physical Note which is to be repurchased only in part shall be surrendered at the office
of the Paying Agent (with due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s
attorney duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note, without charge, a new Note or Notes, of any
authorized denomination as requested by such Holder in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Note so surrendered which is not
repurchased.

Section 10.05 Covenant To Comply With Securities Laws Upon Repurchase Of Notes.

In connection with any offer to repurchase Notes under Section 10.01 hereof (provided that
such offer or repurchase 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 under applicable law, the Company shall
(i) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) 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 10.02 to be exercised in the time and in the manner specified in
Section 10.02.

To the extent that the provisions of any securities laws or regulations conflict with the
provisions of this Article X, the Company’s compliance with such laws and regulations including the
extension of the payment or notice periods contemplated by this Article, shall not in and of itself
cause a breach of their obligations under this Article X.

Section 10.06 Repayment To The Company.

To the extent that the aggregate amount of cash deposited by the Company pursuant to Section
10.03 exceeds the aggregate Repurchase Price of the Notes or portions thereof which the Company is
obligated to repurchase on the Repurchase Date, then, promptly after the Repurchase Date, the
Paying Agent shall return any such excess to the Company.

 

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ARTICLE XI

REPURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE

Section 11.01 Repurchase at Option of Holders Upon a Fundamental Change.

(a) If there shall occur a Fundamental Change at any time prior to the Maturity Date of the
Notes, then each Holder shall have the right, at such Holder’s option, to require the Company to
repurchase all of such Holder’s Notes, or any portion thereof that is $2,000 principal amount or an
integral multiple of $1,000 above such amount (the “Fundamental Change Repurchase Right”), on a
date (the “Fundamental Change Repurchase Date”) specified by the Company, that is not less than 20
Business Days nor more than 35 Business Days after the date of the Company Repurchase Notice
related to such Fundamental Change at a cash repurchase price equal to 100% of the principal amount
of the Notes being repurchased, plus accrued and unpaid interest (including Additional Interest, if
any) to, but excluding, the Fundamental Change Repurchase Date, subject to the satisfaction by the
Holder of the requirements set forth in Section 11.01(c); provided, however, that if such
Fundamental Change Repurchase Date falls after a Record Date and on or prior to the corresponding
Interest Payment Date, then the interest payable on such Interest Payment Date shall be paid on
such Interest Payment Date to the holders of record of the Notes on the applicable Record Date
instead of the holders surrendering the Notes for repurchase on such date.

(b) On or before the fifth calendar day after the occurrence of a Fundamental Change, the
Company shall deliver or cause to be delivered to all holders of record of the Notes on the date of
the Fundamental Change at their addresses shown in the Register a Company Repurchase Notice as set
forth in Section 11.02 with respect to such Fundamental Change. The Company shall also deliver a
copy of the Company Repurchase Notice to the Trustee and the Paying Agent at such time as it is
delivered to holders of Notes. Concurrently with the delivery of such Company Repurchase Notice,
the Company shall issue a press release announcing such Fundamental Change referred to in the
Company Repurchase Notice, the form and content of which press release shall be determined by the
Company in its sole discretion.

No failure of the Company to give the foregoing notices and press release and no defect
therein shall limit the repurchase rights of holders of Notes or affect the validity of the
proceedings for the repurchase of the Notes pursuant to this Section 11.01.

(c) For Notes to be repurchased at the option of the Holder, the Holder must deliver to the
Paying Agent, prior to 5:00 p.m., New York City time, on the Fundamental Change Repurchase Date,
(i) a written notice of repurchase (the “Fundamental Change Repurchase Notice”) in the form set
forth on the reverse of the Notes duly completed (if the Notes are certificated) or stating the
following (if the Notes are represented by a Global Note): (A) the certificate number of the Notes
which the Holder will deliver to be repurchased or compliance with the appropriate Depositary
procedures, (B) the portion of the principal amount of the Notes which the Holder will deliver to
be repurchased, which portion must be in principal amounts of $2,000 or an integral multiple of
$1,000 above such amount and (C) that such Notes shall be repurchased by the Company pursuant to
the terms and conditions specified in the Notes and in this Indenture, together with (ii) such
Notes duly endorsed for transfer (if the Notes are certificated) or book-entry transfer of such
Notes (if such Notes are represented by a Global Note). The delivery of such Notes to the Paying
Agent with, or at any time after delivery of, the Fundamental Change Repurchase Notice (together
with all necessary endorsements) at the office of the Paying Agent shall be a condition to the
receipt by the Holder of the repurchase price therefor; provided, however, that such repurchase
price shall be so paid pursuant to this Section 11.01 only if the Notes so delivered to the Paying
Agent shall conform in all respects to the description thereof in the Fundamental Change Repurchase
Notice. All questions as to the validity, eligibility (including time of receipt) and acceptance
of any Notes for repurchase shall be determined by the Company, whose determination shall be final
and binding absent manifest error.

 

50

 

(d) The Company shall repurchase from the Holder thereof, pursuant to this Section 11.01, a
portion of a Note in $1,000 multiples if the principal amount of such remaining portion is $2,000.
Provisions of this Indenture that apply to the repurchase of all of a Note also apply to the
repurchase of such portion of such Note.

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

Any repurchase by the Company contemplated pursuant to the provisions of this Section 11.01
shall be consummated by the delivery of the consideration to be received by the
Holder promptly following the later of the Fundamental Change Repurchase Date and the time of
the book-entry transfer or delivery of the Notes.

Section 11.02 Company Repurchase Notice.

In connection with any repurchase of Notes upon a Fundamental Change, the Company shall on or
before the fifth calendar day after the occurrence of such Fundamental Change give notice to
holders (with a copy to the Trustee) setting forth information specified in this Section 11.02 (in
either case, the “Company Repurchase Notice”).

Each Company Repurchase Notice shall:

(a) state the repurchase price and the Fundamental Change Repurchase Date to which the Company
Repurchase Notice relates;

(b) state the circumstances constituting the Fundamental Change;

(c) state that the repurchase price will be paid in cash;

(d) state that holders must exercise their right to elect repurchase prior to 5:00 p.m., New
York City time, on the Fundamental Change Repurchase Date;

(e) include a form of Fundamental Change Repurchase Notice;

 

51

 

(f) state the name and address of the Paying Agent;

(g) state that Notes must be surrendered to the Paying Agent to collect the repurchase price;

(h) state that a Holder may withdraw its Fundamental Change Repurchase Notice at any time
prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the Fundamental
Change Repurchase Date by delivering a valid written notice of withdrawal in accordance with
Section 11.03;

(i) state the then applicable Conversion Rate, including expected changes in the Conversion
Rate resulting from such Fundamental Change transaction and expected changes in the cash, shares or
other property deliverable upon conversion of the Notes as a result of the occurrence of the
Fundamental Change;

(j) state that Notes as to which a Fundamental Change Repurchase Notice has been given may be
converted only if the Fundamental Change Repurchase Notice is withdrawn in accordance with the
terms of this Indenture;

(k) state the amount of interest (including Additional Interest, if any) accrued and unpaid
per $1,000 principal amount of Notes to, but excluding, the Fundamental Change Repurchase Date; and

(l) state the CUSIP number of the Notes.

A Company Repurchase Notice may be given by the Company or, at the Company’s request, the
Trustee shall give such Company Repurchase Notice in the Company’s name and at the Company’s
expense; provided, however, that the text of the Company Repurchase Notice shall be prepared by the
Company.

The Company will, to the extent applicable, comply with the provisions of Rule 13e-4 and Rule
14e-1 (or any successor provision) under the Exchange Act that may be applicable at the time of the
repurchase of the Notes, file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act and comply with all other federal and state securities laws in connection
with the repurchase of the Notes.

Section 11.03 Effect of Fundamental Change Repurchase Notice; Withdrawal.

Upon receipt by the Paying Agent of the Fundamental Change Repurchase Notice specified in
Section 11.01, the Holder of the Notes in respect of which such Fundamental Change Repurchase
Notice was given shall (unless such Fundamental Change Repurchase Notice is validly withdrawn in
accordance with the following paragraph) thereafter be entitled to receive solely the repurchase
price with respect to such Notes. Such repurchase price shall be paid to such Holder, subject to
receipt of funds and/or the Notes by the Paying Agent, promptly following the later of (x) the
Fundamental Change Repurchase Date with respect to such Notes (provided the Holder has satisfied
the conditions in Section 11.01) and (y) the time of book-entry transfer or delivery of such Notes
to the Paying Agent by the Holder thereof in the manner required by Section 11.01. The Notes in
respect of which a Fundamental Change Repurchase Notice has been given by the Holder thereof may
not be converted pursuant to Article XII 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.

 

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A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the Fundamental Change
Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Fundamental Change Repurchase Date, specifying:

(a) the certificate number, if any, of the Notes in respect of which such notice of withdrawal
is being submitted, or the appropriate Depositary information, in accordance with appropriate
Depositary procedures, if the Notes in respect of which such notice of withdrawal is being
submitted is represented by a Global Note,

(b) the principal amount of the Notes with respect to which such notice of withdrawal is being
submitted, and

(c) the principal amount, if any, of such Notes which remains subject to the original
Fundamental Change Repurchase Notice and which has been or will be delivered for repurchase by the
Company.

If a Fundamental Change Repurchase Notice is properly withdrawn, the Company shall not be
obligated to repurchase the Notes listed in such Fundamental Change Repurchase Notice.

Section 11.04 Deposit of Repurchase Price.

Prior to 10:00 a.m., New York City Time, on the Business Day immediately following the
Fundamental Change Repurchase Date, the Company shall deposit with the Paying Agent or, if the
Company 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 if deposited on the Fundamental Change
Repurchase Date, as the case may be), sufficient to pay the aggregate repurchase price of all the
Notes or portions thereof that are to be repurchased as of the Fundamental Change Repurchase Date
(the “Fundamental Change Repurchase Price”).

If on the Business Day immediately following the Fundamental Change Repurchase Date the Paying
Agent holds cash sufficient to pay the repurchase price of the Notes that holders have elected to
require the Company to repurchase in accordance with Section 11.01, then, on the Fundamental Change
Repurchase Date such Notes will cease to be outstanding, interest will cease to accrue and all
other rights of the holders of such Notes will terminate, other than the right to receive the
repurchase price upon delivery or book-entry transfer of the Notes. This will be the case whether
or not book-entry transfer of the Notes has been made or the Notes have been delivered to the
Paying Agent.

 

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Section 11.05 Notes Repurchased in Part.

Upon presentation of any Notes repurchased only in part, the Company shall execute and the
Trustee shall authenticate and make available for delivery to the Holder thereof, at the expense of
the Company, a new Notes or Notes, of any authorized denomination, in aggregate principal amount
equal to the unrepurchased portion of the Notes presented.

Section 11.06 Purchase of Notes in the Open Market.

The Company may purchase Notes in the open market, by tender at any price or pursuant to
private agreements.

ARTICLE XII

CONVERSION

Section 12.01 Right to Convert.

(a) Subject to and upon compliance with the provisions of this Indenture, on or prior to the
close of business on the Business Day immediately preceding the Maturity Date, the Holder of any
outstanding Notes shall have the right, at such Holder’s option, to convert the principal amount of
the Notes held by such Holder, or any portion of such principal amount which is an integral
multiple of $1,000, into fully paid and non-assessable shares of Common Stock (as such shares shall
then be constituted) at the Conversion Rate in effect at such time, by surrender of the Notes so to
be converted, together with any required funds, under the circumstances described in this Section
12.01 and in the manner provided in Section 12.02 hereof.

(b) If a Holder surrenders Notes for conversion pursuant this Section 12.01 and in the manner
provided in Section 12.02 hereof, such Holder will be entitled to receive upon conversion of such
Holder’s Notes into shares of Common Stock, in addition to the shares of Common Stock, a payment in
cash equal to the amount of the interest that would have accrued under the Notes at the applicable
interest rate for the period from the then most recent Interest Payment Date (or if such Holder
converts after the Record Date for an Interest Payment Date but prior to the corresponding Interest
Payment Date, from the next Interest Payment Date) through and including June 2, 2014 (the
“Interest Make-Whole”). Notwithstanding the foregoing, in no event will the cash payment pursuant
to this section exceed $129.31 per $1,000 principal amount of Notes (the “Interest Make-Whole
Cap”). During any period where the Company has voluntarily increased the Conversion Rate (as
described under Section 12.06(h)—Adjustment of Conversion Rate below) or during any period where
the Company is required to make an adjustment to the Conversion Rate upon a Non-Stock Change of
Control (as described under Section 12.05—Conversion Rate below), the Interest Make-Whole Cap will
be reduced to equal (x) the revised conversion rate per $1,000 principal amount of Notes multiplied
by (y) the number obtained by subtracting (a) $5.05 (the consolidated closing bid price of our
common stock on the date of pricing plus $0.01) from (b) the revised conversion price.

 

54

 

(c) Notes in respect of which a Holder has delivered a Fundamental Change Repurchase Notice
exercising such Holder’s right to require the Company to repurchase such Notes pursuant to Section
11.01 hereof may be converted only if such Fundamental Change Repurchase Notice is withdrawn in
accordance with Section 11.03 hereof prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Fundamental Change Repurchase Date.

(d) A Holder of Notes is not entitled to any rights of a holder of Common Stock until such
Holder has converted his Notes to Common Stock, and only to the extent such Notes are deemed to
have been converted to Common Stock under this Article XII.

Section 12.02 Exercise of Conversion Right; Issuance of Common Stock on Conversion;
No Adjustment for Interest or Dividends.

In order to exercise the conversion right with respect to any Notes in certificated form, the
Company must receive at the office or agency of the Company maintained for that purpose or, at the
option of such Holder, the Corporate Trust Office, such Notes with the original or facsimile of the
form entitled “Conversion Notice” on the reverse thereof, duly completed and manually signed,
together with such Notes duly endorsed for transfer, together with any other required transfer
documents, accompanied by the funds, if any, required by this Section 12.02. Such notice shall
also state the name or names (with address or addresses) in which the certificate or certificates
for shares of Common Stock which shall be issuable on such conversion, if any, shall be issued, and
shall be accompanied by transfer or similar taxes, if required pursuant to Section 12.08 hereof.
Once delivered, a Conversion Notice is irrevocable.

In order to exercise the conversion right with respect to any interest in a Global Note, the
Holder must complete, or cause to be completed, the appropriate instruction form for conversion
pursuant to the Depositary’s book-entry conversion program; deliver, or cause to be delivered, by
book-entry delivery an interest in such Global Note; furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or conversion
agent; and pay the funds, if any, required by this Section 12.02 and any transfer or similar taxes
if required pursuant to Section 12.08 hereof.

A certificate or certificates for the number of full shares of Common Stock into which the
Notes are converted will be delivered to such Holder after satisfaction of the requirements for
conversion set forth above, in accordance with Section 12.13 hereof. In case any Notes of a
denomination greater than $1,000 shall be surrendered for partial conversion, and subject to
Section 2.01 hereof, the Company shall execute and the Trustee shall authenticate and deliver to
the Holder of the Notes so surrendered, without charge to the Holder, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the unconverted portion of the
surrendered Notes.

Each conversion shall be deemed to have been effected as to any such Notes (or portion
thereof) on the date on which the requirements set forth above in this Section 12.02 have been
satisfied as to such Notes (or portion thereof) (the “Conversion Date”) and such Notes will be
deemed to have been converted immediately prior to 5:00 p.m., New York City time, on the Conversion
Date. The Person in whose name any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion, if any, shall be deemed to have become, on said date, the holder of
record of the shares represented thereby; provided that in the event of any such surrender on any
date when the stock transfer books of the Company shall be closed, that Person shall constitute the
Person in whose name the certificates are to be issued as the record holder thereof for all
purposes on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the Conversion Date.

 

55

 

Any Notes or portion thereof surrendered for conversion during the period from 5:00 p.m., New
York City time, on the Record Date for any Interest Payment Date to 5:00 p.m., New York City time,
on the Business Day preceding the applicable Interest Payment Date shall be accompanied by payment,
in immediately available funds or other funds acceptable to the Company, of an amount equal to the
interest otherwise payable on such Interest Payment Date on the principal amount being converted;
provided that no such payment need be made (1) if a Holder converts its Notes in connection with a
Fundamental Change and the Company has specified a Fundamental Change Repurchase Date that is after
a Record Date and on or prior to the corresponding Interest Payment Date, (2) to the extent of any
overdue interest, if any overdue interest exists at the time of conversion with respect to such
Notes (3) the Holder surrenders such Notes for conversion prior to June 2, 2014 or (4) the Holder
converts such Note after the Regular Record Date for the interest payment due on the Maturity Date.
Except as provided above in this Section 12.02, in below in the next paragraph and Section 12.06
hereof, no payment or other adjustment shall be made for interest accrued on any Notes converted or
for dividends on any shares issued upon the conversion of such Notes as provided in this Article
XII.

Upon the conversion of an interest in a Global Note, the Trustee (or other Conversion Agent
appointed by the Company), or the custodian for the Global Note at the direction of the Trustee (or
other Conversion Agent appointed by the Company), shall make a notation on such Global Note as to
the reduction in the principal amount represented thereby.
The Company shall notify the Trustee in writing of any conversions of Notes effected through
any Conversion Agent other than the Trustee.

Each stock certificate representing Common Stock issued upon conversion of the Notes that are
Restricted Securities shall bear the legend in substantially the form of Exhibit D hereto and shall
bear such legend until such time as set forth in Section 2.17(b) herein.

Upon the conversion of any Notes, the accrued but unpaid interest and accrued tax original
issue discount, if any, attributable to the period from the Issue Date of the Notes to the
Conversion Date, with respect to the converted Notes, shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof through delivery of
the shares of Common Stock (and a cash payment in lieu of fractional shares, if any) in exchange
for the Notes being converted pursuant to the provisions hereof.

 

56

 

Section 12.03 Limitation on Beneficial Ownership.

Notwithstanding anything to the contrary in this Article XII, no Holder shall be entitled to
receive shares of Common Stock upon conversion to the extent (but only to the extent) that such
receipt would cause such converting Holder to become, directly or indirectly, a “beneficial owner”
(within the meaning of Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder) of 5.0% or more of the shares of Common Stock outstanding at such time. This limitation
on beneficial ownership shall be terminated (i) upon 61 days’ notice to the Company by any Holder,
solely with respect to the Notes beneficially owned by such Holder, (ii) immediately upon delivery
by the Company of a Company Repurchase Notice or (iii) on May 1, 2016. In addition, no Holder who
holds more than 5.0% of Common Stock outstanding as of the issue date shall be entitled to receive
shares of Common Stock upon conversion to the extent (but only to the extent) that such receipt
would cause such converting Holder to become, directly or indirectly, a beneficial owner of more
than an additional 1% of the shares of Common Stock outstanding at such time in respect of
conversions of the Notes by such 5.0% Holder. Any purported delivery of shares of Common Stock upon
conversion of Notes shall be void and have no effect to the extent (but only to the extent) that
such delivery would result in the converting Holder becoming the beneficial owner of 5.0% or more
of the shares of Common Stock outstanding at such time or, in the case of a 5.0% Holder, more than
an additional 1% of the shares of Common Stock outstanding at such time. If any delivery of shares
of Common Stock owed to a Holder upon conversion of Notes is not made, in whole or in part, as a
result of this limitation, the Company’s obligation to make such delivery shall not be extinguished
and the Company shall deliver such shares of Common Stock as promptly as practicable after any such
converting Holder gives notice to the Company that such delivery would not result in such
limitation being triggered.

Section 12.04 Cash Payments in Lieu of Fractional Shares.

No fractional shares of Common Stock or scrip certificates representing fractional shares
shall be issued upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same Holder, the number of full shares that shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of the Notes (or
specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share
of stock would be issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash to the Holder of Notes at a price equal to the applicable
fraction of the Closing Sale Price on the final Trading Day immediately preceding the Conversion
Date.

Section 12.05 Conversion Rate.

(a) Each $1,000 principal amount of the Notes shall be convertible into cash and the number of
shares of Common Stock, if any, based upon the Conversion Rate which is specified in the form of
Notes in Exhibit A hereto, subject to adjustment as provided in this Section 12.05 and Section
12.06 hereof.

(b) Prior to the Maturity Date, if and only to the extent a Holder elects to convert Notes in
connection with a Non-Stock Change of Control at any time beginning on the Business Day following
the date on which such Non-Stock Change of Control becomes effective (the “Effective Date”) but
before 5:00 p.m., New York City time, on the Business Day immediately preceding the related
Fundamental Change Repurchase Date, the Company shall increase the Conversion Rate applicable to
such converted Notes by a number of additional shares of Common Stock (the “Additional Shares”) as
set forth below. A conversion of Notes shall be deemed to be “in connection with” a Non-Stock
Change of Control if the Conversion Notice is received by the Conversion Agent during the period
specified in the previous sentence. The number of additional shares of Common Stock shall be
determined by reference to the table below, based on the Effective Date and the price (the “Stock
Price”) paid per share for the Common Stock in the Non-Stock Change of Control. If holders of
Common Stock receive only cash in the Non-Stock Change of Control, the Stock Price shall be the
cash amount paid per share. Otherwise, the Stock Price shall be the average of the Closing Sale
Prices of the Common Stock on the five Trading Days prior to, but not including, the Effective Date
of such Non-Stock Change of Control.

 

57

 

The numbers of Additional Shares of Common Stock set forth in the table below shall be
adjusted as of any date on which the Conversion Rate is adjusted in the same manner in which the
Conversion Rate is adjusted. The Stock Prices set forth in the table below shall be adjusted, as
of any date on which the Conversion Rate is adjusted, to equal the Stock Price applicable
immediately prior to such adjustment multiplied by a fraction, of which
the numerator shall be the Conversion Rate immediately prior to the adjustment and
the denominator shall be the Conversion Rate as so
adjusted.

The following table sets forth the Stock Price and number of Additional Shares by which the
Conversion Rate shall be adjusted:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Price	 
	Effective Date	 	$5.05	 	 	$5.50	 	 	$6.00	 	 	$6.50	 	 	$7.00	 	 	$8.00	 	 	$10.00	 	 	$15.00	 	 	$20.00	 
	May 24, 2011
	 	 	25.6060	 	 	 	21.5995	 	 	 	18.0882	 	 	 	15.3005	 	 	 	13.0481	 	 	 	9.6665	 	 	 	5.5492	 	 	 	1.4165	 	 	 	0.2307	 
	June 1, 2012
	 	 	25.6060	 	 	 	23.1591	 	 	 	19.0642	 	 	 	15.8951	 	 	 	13.3938	 	 	 	9.7460	 	 	 	5.4855	 	 	 	1.3855	 	 	 	0.2281	 
	June 1, 2013
	 	 	25.6060	 	 	 	24.4206	 	 	 	19.4815	 	 	 	15.8333	 	 	 	13.0748	 	 	 	9.2570	 	 	 	5.0903	 	 	 	1.2709	 	 	 	0.2033	 
	June 1, 2014
	 	 	25.6060	 	 	 	20.4826	 	 	 	16.0890	 	 	 	13.1596	 	 	 	10.9301	 	 	 	7.7812	 	 	 	4.2735	 	 	 	1.0441	 	 	 	0.1528	 
	June 1, 2015
	 	 	25.6060	 	 	 	18.5337	 	 	 	13.8314	 	 	 	10.5536	 	 	 	8.2338	 	 	 	5.3327	 	 	 	2.6868	 	 	 	0.6379	 	 	 	0.0767	 
	June 1, 2016
	 	 	25.6060	 	 	 	9.4044	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 

If the Stock Price and Effective Date are not set forth on the table above and the Stock Price
is:

(i) between two Stock Prices on the table or the Effective Date is between two days on
the table, the number of additional shares of Common Stock shall be determined by the
Trustee by straight-line interpolation between the number of additional shares of Common
Stock set forth for the higher and lower Stock Price and the two Effective Dates, as
applicable, based on a 360-day year;

(ii) in excess of $20.00 per share (subject to adjustment), no additional shares of
Common Stock shall be issued upon conversion; or

(iii) less than $5.05 per share (subject to adjustment), no additional shares of Common
Stock shall be issued upon conversion.

 

58

 

Notwithstanding the foregoing, in no event will the total number of shares of Common Stock issuable
upon conversion of a Note exceed 198.0198 shares per $1,000 principal amount of Notes (the “Make
Whole Stock Cap”), subject to adjustments in the same manner as the Conversion Rate as set forth in
Section 12.06.

Additional Shares deliverable pursuant to this Section 12.06(b) shall be delivered on the
settlement date applicable to the relevant conversion.

The Company shall provide written notice to all Holders and to the Trustee as soon as
practicable and if possible at least 20 calendar days prior to the anticipated Effective Date of a
Non-Stock Change of Control. The Company must also provide written notice to all Holders and to
the Trustee upon the effectiveness of such Non-Stock Change of Control.

Section 12.06 Adjustment of Conversion Rate.

The Conversion Rate shall be adjusted from time to time by the Company as follows:

(a) In case the Company shall, at any time or from time to time while any of the Notes are
outstanding, pay a dividend in shares of Common Stock or make a distribution in shares of Common
Stock to all or substantially all holders of its outstanding shares of Common Stock, then the
Conversion Rate in effect at the opening of business on the date following the record date fixed
for the determination of stockholders entitled to receive such dividend or other distribution shall
be increased by multiplying such Conversion Rate by a fraction:

(i) the numerator of which shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution plus the total number of shares of
Common Stock constituting such dividend or other distribution; and

(ii) the denominator of which shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination,

such increase to become effective immediately after the opening of business on the day following
the record date fixed for such determination. For the purpose of this paragraph (a), the number of
shares of Common Stock at any time outstanding shall not include shares held in the treasury of the
Company. The Company will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company. If any dividend or distribution of the type described in this
Section 12.06(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted
to the Conversion Rate that would then be in effect if such dividend or distribution had not been
declared.

 

59

 

(b) In case outstanding shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the Conversion Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall be proportionately increased,
and conversely, in case outstanding shares of Common Stock shall be combined into a smaller number
of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be proportionately reduced,
such increase or reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or combination becomes
effective.

(c) In case the Company shall issue rights or warrants to all or substantially all holders of
its outstanding shares of Common Stock entitling them to subscribe or purchase, for a period of up
to 45 calendar days, shares of Common Stock at a price per share less than the then Current Market
Price, the Conversion Rate shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the date fixed for determination of
stockholders entitled to receive such rights or warrants by a fraction,

(i) the numerator of which shall be the number of shares of Common Stock outstanding on
the date fixed for determination of stockholders entitled to receive such rights or warrants
plus the total number of additional shares of Common Stock offered for subscription or
purchase, and

(ii) the denominator of which shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of stockholders
entitled to receive such rights or warrants plus the number of shares that the aggregate
offering price of the total number of shares so offered would purchase at the Current Market
Price on such date.

Such adjustment shall be successively made whenever any such rights or warrants are issued,
and shall become effective immediately after the opening of business on the day following the date
fixed for determination of stockholders entitled to receive such rights or warrants. To the extent
that shares of Common Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. If such rights or warrants are not
so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be
in effect if such date fixed for the determination of stockholders entitled to receive such rights
or warrants had not been fixed. In determining whether any rights or warrants entitle the holders
to subscribe for or purchase shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there shall be taken into
account any consideration received by the Company for such rights or warrants and any amount
payable on exercise or conversion thereof, the value of such consideration, if other than cash, to
be determined by the Board of Directors.

 

60

 

(d) In case the Company shall, by dividend or otherwise, distribute to all or substantially
all holders of its outstanding shares of Common Stock shares of any class of Capital Stock of the
Company or evidences of its Indebtedness or assets (including securities, but excluding (i) any
rights or warrants referred to in Section 12.06(c) hereof, (ii) any dividends or distributions in
connection with a reclassification, consolidation, merger, combination or sale or conveyance to
which Section 12.08 hereof applies, (iii) any dividends or distributions paid exclusively in cash
or (iv) any dividends or distributions referred to in Section 12.06(a) hereof) (any of the
foregoing hereinafter in this Section 12.06(d)) called the “Distributed Assets”), then, in each
such case, the Conversion Rate shall be increased so that the same shall be equal to the rate
determined by multiplying the Conversion Rate in effect on the record date with respect to such
distribution by a fraction,

(i) the numerator of which shall be the Current Market Price on such record date; and

(ii) the denominator of which shall be the Current Market Price on such record date
less the Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive, and set forth in a resolution of the Board of Directors) on the record
date of the portion of the Distributed Assets so distributed applicable to one share of
Common Stock,

such adjustment to become effective immediately prior to the opening of business on the day
following such record date; provided, that if the then Fair Market Value (as so determined) of the
portion of the Distributed Assets so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price on the record date or the Current Market Price exceeds
such Fair Market Value by less than $0.05, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder shall have the right to receive upon conversion the amount of
Distributed Assets such Holder would have received had such Holder converted each Notes solely into
Common Stock immediately prior to the record date; and provided, further, that no adjustment to the
Conversion Rate shall be made if the Holder will otherwise participate in
such distribution without conversion as a result of holding the Notes. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such dividend or distribution had not been
declared.

If the Board of Directors determines the Fair Market Value of any distribution for purposes of
this Section 12.06(d) by reference to the actual or when issued trading market for any Distributed
Assets comprising all or part of such distribution, it must in doing so consider the prices in such
market over the same period (the “Reference Period”) used in computing the Current Market Price
pursuant to Section 12.06(g)(1) hereof to the extent possible, unless the Board of Directors
determines in good faith that determining the Fair Market Value during the Reference Period would
not be a reasonably accurate measure of value. Notwithstanding the foregoing, in the event any
such distribution consists of shares of Capital Stock of, or similar equity interests in, one or
more of the Company’s Subsidiaries (a “Spin-Off”), the Conversion Rate shall be increased so that
the same shall be equal to the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the record date with respect to such distribution by
a fraction:

(iii) the numerator of which shall be the Current Market Price of the Common Stock,
plus the Fair Market Value of the portion of the distributed assets so distributed
applicable to one share of Common Stock (determined on the basis of the number of shares of
Common Stock outstanding on the record date), determined as set forth above, and

(iv) the denominator of which shall be the Current Market Price on such record date,

 

61

 

such increase shall become effective immediately prior to the opening of business on the day
following the last Trading Day of the Spin-Off Valuation Period (as defined below). In the event
that such dividend or distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution
had not been declared. In the case of a Spin-Off of a Subsidiary whose securities are publicly
traded, the Fair Market Value of the securities to be distributed shall equal the average of the
Closing Sale Prices of such securities on the principal securities market on which such securities
are traded for the five consecutive Trading Days commencing on and including the sixth day of
trading of those securities after the effectiveness of the Spin-Off (the “Spin-Off Valuation
Period”), and the Current Market Price shall be measured for the same period. In the event,
however, that an underwritten initial public offering of the securities in the Spin-Off occurs
simultaneously with the Spin-Off, Fair Market Value of the securities distributed in the Spin-Off
shall mean the initial public offering price of such securities and the Current Market Price shall
mean the Closing Sale Price for the Common Stock on the same Trading Day.

Rights or warrants distributed by the Company to all holders of Common Stock entitling the
holders thereof to subscribe for or purchase shares of the Company’s Capital Stock (either
initially or under certain circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of
Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances
of Common Stock, shall be deemed not to have been distributed for purposes of this Section
12.06 (and no adjustment to the Conversion Rate under this Section 12.06 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 12.06(d). If any such right or warrant, including any such
existing rights or warrants distributed prior to the date of this Indenture, are subject to events,
upon the occurrence of which such rights or warrants become exercisable to purchase different
securities, evidences of Indebtedness or other assets, then the date of the occurrence of any and
each such event shall be deemed to be the date of distribution and record date with respect to new
rights or warrants with such rights (and a termination or expiration of the existing rights or
warrants without exercise by any of the holders thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto that was counted for
purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under
this Section 12.06 was made, (1) in the case of any such rights or warrants that shall all have
been repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted
upon such final repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share repurchase price received by a
holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of the date of such
repurchase, and (2) in the case of such rights or warrants that shall have expired or been
terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if
such rights and warrants had not been issued.

 

62

 

No adjustment of the Conversion Rate shall be made pursuant to this Section 12.06(d) in
respect of rights or warrants distributed or deemed distributed on any Trigger Event to the extent
that such rights or warrants are actually distributed or reserved by the Company for distribution
to Holders of Notes upon conversion by such Holders of Notes to Common Stock.

For purposes of this Section 12.06(d) and Sections 12.06(a) and (b) hereof, any dividend or
distribution to which this Section 12.06(d) is applicable that also includes shares of Common
Stock, or rights or warrants to subscribe for or purchase shares of Common Stock (or both), shall
be deemed instead to be (1) a dividend or distribution of the evidences of Indebtedness, assets or
shares of Capital Stock other than such shares of Common Stock or rights or warrants (and any
Conversion Rate adjustment required by this Section 12.06(d) with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend or distribution of such
shares of Common Stock or such rights or warrants (and any further Conversion Rate adjustment
required by Sections 12.06(a) or 12.06(b) hereof with respect to such dividend or distribution
shall then be made), except (A) the record date of such dividend or distribution shall be
substituted as “the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution”, “the date fixed for the determination of stockholders entitled to
receive such rights or warrants” and “the date fixed for such determination” within the meaning of
Sections 12.06(a) and 12.06(b) hereof and (B) any shares of Common Stock included in such dividend
or distribution shall not be deemed “outstanding at the close of business on the date fixed for
such determination” within the meaning of Section 12.06(a) hereof.

(e) In case the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock cash (including any quarterly cash dividend, but excluding (x) any dividend or
distribution in connection with the liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary and (y) any dividend or distribution in connection with a
reclassification, consolidation, merger, binding share exchange or sale to which Section 12.07
hereof applies), then the Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect on the applicable record date by a
fraction,

(i) the numerator of which shall be the Current Market Price on such record date; and

(ii) the denominator of which shall be the Current Market Price on such record date
less the amount of the cash distribution applicable to one share of Common Stock,

such adjustment to be effective immediately prior to the opening of business on the day following
the record date; provided, that if the portion of the cash so distributed applicable to one share
of Common Stock is equal to or greater than the Current Market Price on the record date, in lieu of
the foregoing adjustment, adequate provision shall be made so that each Holder shall have the right
to receive upon conversion the amount of cash such Holder would have received had such Holder
converted each Notes solely into Common Stock immediately prior to the record date. If such
dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be
the Conversion Rate that would then be in effect if such dividend or distribution had not been
declared.

 

63

 

(f) In case a tender or exchange offer made by the Company or any Subsidiary for all or any
portion of the Common Stock shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders of consideration per share of Common
Stock having a Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive and set forth in a resolution of the Board of Directors) that as of the last
time (the “Expiration Time”) tenders or exchanges may be made pursuant to such tender or exchange
offer (as it may be amended) exceeds the Closing Sale Price of a share of Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion Rate shall be increased so that the
same shall equal the rate determined by multiplying the Conversion Rate in effect immediately prior
to the Expiration Time by a fraction,

(i) the numerator of which shall be the sum of (x) the Fair Market Value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed
so accepted up to any such maximum, being referred to as the “Purchased Shares”) and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased Shares) at
the Expiration Time and the Closing Sale Price of a share of Common Stock on the Trading Day
next succeeding the Expiration Time, and

(ii) the denominator of which shall be the number of shares of Common Stock outstanding
(including any Purchased Shares) at the Expiration Time multiplied by the Closing Sale Price
of a share of Common Stock on the Trading Day next succeeding the Expiration Time,

such adjustment to become effective immediately prior to the opening of business on the day
following the Expiration Time. If the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such tender or exchange offer had not
been made.

(g) For purposes of this Section 12.06, the following terms shall have the meaning indicated:

(i) “Current Market Price” on any date means the average of the daily Closing Sale
Prices per share of Common Stock for the ten consecutive Trading Days immediately prior to
such date (the “day in question”); provided that if:

(A) the “ex” date (as hereinafter defined) for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Rate pursuant to Section 12.07 (a), (b), (c),
(d), (e) or (f) occurs during such ten consecutive Trading Days, the Closing
Sale Price for each Trading Day prior to the “ex” date for such other event
shall be adjusted by dividing such Closing Sale Price by the same fraction
by which the Conversion Rate is so required to be multiplied as a result of
such other event;

 

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(B) the “ex” date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (A) of this proviso, the Closing Sale
Price for each Trading Day on or after such “ex” date shall be adjusted by
adding thereto the amount of any cash and the Fair Market Value (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 12.07(d), (e) or (f)) of
the evidences of Indebtedness, shares of Capital Stock or assets being
distributed applicable to one share of Common Stock as of the close of
business on the day before such “ex” date.

Notwithstanding the foregoing, whenever successive adjustments to the Conversion Rate are called
for pursuant to this Section 12.06, such adjustments shall be made to the Current Market Price as
may be necessary or appropriate to effectuate the intent of this Section 12.06 and to avoid unjust
or inequitable results as determined in good faith by the Board of Directors.

(ii) “Ex” date, when used:

(A) (i) with respect to any issuance or distribution, means the first
date on which the shares of Common Stock trade regular

way on the relevant exchange or in the relevant market from which the
Closing Sale Price was obtained without the right to receive such issuance
or distribution;

(B) with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the shares of Common Stock trade
regular way on such exchange or in such market after the time at which such
subdivision or combination becomes effective; and

(C) with respect to any tender or exchange offer, means the first date
on which the shares of Common Stock trade regular way on such exchange or in
such market after the Expiration Time of such offer.

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

(iv) “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).

 

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(h) The Company, in its sole discretion, may make such increases in the Conversion Rate, in
addition to those required by Sections 12.06(a)-(f) hereof, as the Board of Directors considers to
be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or
from any event treated as such for income tax purposes.

To the extent permitted by applicable law, the Company from time to time may increase the
Conversion Rate by any amount for any period of time if the period is at least 20 Business Days,
the increase is irrevocable during the period and the Board of Directors shall have made a
determination that such increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the preceding sentence,
the Company shall deliver to Holders of record of the Notes and the Trustee a written notice of the
increase, which notice will be given at least 15 days prior to the effectiveness of any such
increase, and such notice shall state the increased Conversion Rate and the period during which it
will be in effect. Notwithstanding the foregoing, in no event will the total number of shares of
Common Stock issuable upon conversion of Notes exceed 198.0198 shares per $1,000 principal amount
of Notes, subject to adjustments in the same manner as the Conversion Rate.

(i) No adjustment in the Conversion Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in such rate; provided, however, that
any adjustments that by reason of this Section 12.06(i) are not required
to be made shall be carried forward and the Company shall make such carry forward adjustments,
regardless of whether the aggregate adjustment is less than 1%, (x) annually on the anniversary of
the Closing Date and otherwise (y)(1) five Business Days prior to the maturity of the Notes
(whether at stated maturity or otherwise) or (2) prior to the Fundamental Change Repurchase Date,
unless such adjustment has already been made. All calculations under this Article XII shall be
made by the Company and shall be made to the nearest cent or to the nearest one-ten thousandth
(1/10,000) of a share, as the case may be. No adjustment need be made for rights to purchase
Common Stock pursuant to a Company plan for reinvestment of dividends or interest or for any
issuance of Common Stock or convertible or exchangeable securities or rights to purchase Common
Stock or convertible or exchangeable securities. Interest will not accrue on any cash into which
the Notes are convertible.

(j) Whenever the Conversion Rate is adjusted as herein provided, the Company will issue a
press release through Business Wire or another widely accepted business wire service containing the
relevant information and make this information available on the Company’s website or through
another public medium as the Company may use at that time. In addition, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate
setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has
actual knowledge is still in effect. Promptly after delivery of such certificate, the Company
shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted
Conversion Rate and the date on which each adjustment becomes effective and shall deliver such
notice of such adjustment of the Conversion Rate to the Holder of each Notes at his last address
appearing on the Register, within 20 calendar days after execution of such notice. Failure to
deliver such notice shall not affect the legality or validity of any such adjustment.

 

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(k) In any case in which this Section 12.06 provides that an adjustment shall become effective
immediately after (1) a record date for an event, (2) the date fixed for the determination of
stockholders entitled to receive a dividend or distribution pursuant to Section 12.06(a) hereof,
(3) a date fixed for the determination of stockholders entitled to receive rights or warrants
pursuant to Section 12.06(b) hereof, or (4) the Expiration Time for any tender or exchange offer
pursuant to Section 12.06(f) hereof, (each a “Determination Date”), the Company may elect to defer
until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the
Holder of any Notes converted after such Determination Date and before the occurrence of such
Adjustment Event, the additional shares of Common Stock, if any, or other securities, cash or other
property issuable upon such conversion by reason of the adjustment required by such Adjustment
Event over and above the Common Stock, if any, issuable upon such conversion before giving effect
to such adjustment and (y) paying to such Holder any amount in cash in lieu of any fractional share
pursuant to Section 12.07 hereof. For purposes of this Section 12.06(k), the term “Adjustment
Event” shall mean:

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

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

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

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

(l) For purposes of this Section 12.06, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.

(m) No adjustment to the Conversion Rate shall be made pursuant to this Section 12.06 if the
holders of the Notes may participate in the transaction that would otherwise give rise to
adjustment pursuant to this Section 12.06.

 

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Section 12.07 Effect of Reclassification, Consolidation, Merger or Sale.

If any of the following events occur, namely:

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

(b) any consolidation or merger of the Company with or into another Person, or

(c) any sale, lease, transfer, conveyance or other disposition of all or substantially all of
the Company’s assets and those of its Subsidiaries taken as a whole to any other Person or Persons,
as a result of which holders of Common Stock shall be entitled to receive stock, other securities
or other property or assets (including cash or any combination thereof) with respect to or in
exchange for such Common Stock,

in each case, the Company or the successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act
as in force at the date of execution of such supplemental indenture, if such supplemental indenture
is then required to so comply) providing that such Notes shall, without the consent of any holders
of Notes, be convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash or any combination thereof) (the “Applicable Consideration”)
that such Holder would have been entitled to receive upon such reclassification, change,
consolidation, merger, sale, lease, transfer, conveyance or other disposition had such Notes been
converted into Common Stock immediately prior to such reclassification, change, consolidation,
merger, sale, lease, transfer, conveyance or other disposition; provided, however,
that in the event that holders of Common Stock have the opportunity to elect the form of
consideration to be received in such transaction, then from and after the effective date of such
transaction, the Notes shall be convertible into the consideration that a majority of the holders
of Common Stock who made such an election received in such transaction and the term “Applicable
Consideration” shall be construed accordingly; and provided, further, that Section 12.13 hereof
shall continue to apply following any such transaction. Such supplemental indenture shall provide
for adjustments that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article XII. If, in the case of any such reclassification, change,
consolidation, merger, sale, lease, transfer, conveyance or other disposition, the stock or other
securities and assets 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, sale, lease, transfer,
conveyance or other disposition, 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 Notes as the Board of Directors shall reasonably consider necessary by reason of the
foregoing, including to the extent practicable the provisions providing for the conversion rights
set forth in this Article XII.

The Company shall cause notice of the execution of such supplemental indenture to be delivered
to each Holder, at the address of such Holder as it appears on the register of the Notes maintained
by the Registrar, within 20 days after execution thereof. Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.

 

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The above provisions of this Section 12.07 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales, leases, transfers, conveyances or other
dispositions.

If this Section 12.07 applies to any event or occurrence, Section 12.06 hereof shall not
apply.

Any additional shares of Common Stock that a Holder is entitled to receive upon conversion
pursuant to Section 12.05(b) hereof, if applicable, shall not be payable in shares of Common Stock,
but shall represent a right to receive the aggregate amount of cash, securities or other property
into which the additional shares of Common Stock would convert as a result of such
recapitalization, change, consolidation, merger, sale, lease, transfer, conveyance or other
disposition.

The Company may not become party to any such transaction described in clauses (a), (b) or (c)
of this Section 12.07, unless the terms of such transactions are consistent with this Section
12.07.

Section 12.08 Taxes on Shares Issued.

The issue of stock certificates on conversions of Notes shall be made without charge to the
converting Holder of Notes for any documentary, stamp or similar issue or transfer tax in respect
of the issue thereof. The Company shall not, however, be required to pay any such tax 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 of any Notes 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.

Section 12.09 Reservation of Shares, Shares to be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Stock.

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 to provide for the conversion
of the Notes, including any Additional Shares, from time to time as such Notes are presented for
conversion.

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

The Company covenants that all shares of Common Stock which may be issued upon conversion of
Notes will 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.

 

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The Company covenants that, if any shares of Common Stock to be provided for the purpose of
conversion of Notes 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 will in good faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the SEC, endeavor to secure such registration or approval, as the case
may be.

The Company further covenants that, if at any time the Common Stock shall be listed on any
national securities exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so long as the Common
Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable
upon conversion of the Notes; provided that if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the first conversion of
the Notes into Common Stock in accordance with the provisions of this Indenture, the Company
covenants to list such Common Stock issuable upon conversion of the Notes in accordance with the
requirements of such exchange or automated quotation system at such time.

Section 12.10 Responsibility of Trustee.

The Trustee and any other Conversion Agent shall not at any time be under any duty or
responsibility to any Holder to determine the Conversion Price or the Conversion Rate or whether
any facts exist which may require any adjustment of the Conversion Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with respect
to the method employed, 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 Capital
Stock, other securities or other assets or property, which may at any time be issued or delivered
upon the conversion of any Notes; 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 Notes for
the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article XII. Without limiting the generality of the foregoing, neither
the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant to Section 12.07
hereof relating either to the kind or amount of shares of capital stock or other securities or
other assets or property (including cash) receivable by Holders upon the conversion of their Notes
after any event referred to in such Section 12.07 hereof or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 5.01, may accept as conclusive evidence
of the correctness of any such provisions, and shall be protected in conclusively relying upon, the
Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.

 

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Section 12.11 Notice to Holders Prior to Certain Actions.

In case:

(a) the Company shall declare a dividend (or any other distribution) on its Common Stock that
would require an adjustment in the Conversion Rate pursuant to Section 12.06 hereof; or

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

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

(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company or
any of its Significant Subsidiaries;

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

Section 12.12 Stockholder Rights Plans.

If the rights provided for in any rights plan adopted by the Company have separated from the
shares of Common Stock in accordance with the provisions of the applicable stockholder rights
agreement so that the holders of the Notes would not be entitled to receive any rights in respect
of Common Stock issuable upon conversion of the Notes, the Conversion Rate will be adjusted as
provided in Section 12.06(d) hereof. If such rights have not separated, any shares of Common Stock
delivered upon the conversion of Notes shall be accompanied by such rights.

Section 12.13 Conversion Settlement.

Shares of Common Stock issuable upon conversion of Notes will be delivered to the converting
Holders on the Trading Day following the applicable Conversion Date. A Holder receiving shares of
Common Stock upon conversion shall not be entitled to any rights as a holder of Common Stock,
including, among other things, the right to vote or receive dividends and notices of stockholder
meetings, until the close of business on the applicable Conversion Date.

 

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Section 12.14 Company Determination Final

Any determination that the Company or its Board of Directors must make pursuant to this
Article XII shall be conclusive if made in good faith and in accordance with the provisions of this
Article XII, absent manifest error, and set forth in a Board Resolution.

ARTICLE XIII

SUBORDINATION OF NOTES

Section 13.01 Notes Subordinated To Senior Secured Debt.

Notwithstanding any other provision of this Indenture, the Company and the Trustee each
covenants and agrees, and each Holder, by its acceptance of a Note, likewise covenants and agrees,
that all Notes shall be issued subject to the provisions of this Article XIII and each Person
holding any Note, whether upon original issue or upon transfer, assignment or exchange thereof,
accepts and agrees that the Notes, and all payments in respect thereof, including Additional
Interest and any payments on account of the Make Whole Premium, shall,
to the extent set forth in this Article XIII, be subordinated in right of payment to the prior
payment in full, in cash or cash equivalents, of all amounts that constitute Senior Secured Debt;
provided, however, that the Notes, the Indebtedness represented thereby and the payment of the
principal of and premium, if any, and interest on the Notes in all respects shall rank equally
with, or prior to, all existing and future Indebtedness of the Company that is expressly
subordinated to any Senior Secured Debt.

(a) In the event of any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization of the Company, whether in bankruptcy, insolvency, reorganization
or receivership proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of the Company or otherwise, the holders of all Senior
Secured Debt shall first be entitled to receive payment of the full amount due thereon in respect
of all such Senior Secured Debt and all other amounts due or provision shall be made for such
amount in cash, or other payments satisfactory to the holders of Senior Secured Debt, before the
Holders of any of the Notes are entitled to receive any payment or distribution of any character,
whether in cash, securities or other property, on account of the principal of or premium, if any,
or interest (including Additional Interest, if any) on the Notes.

(b) In the event of any acceleration of Maturity of the Notes because of an Event of Default,
unless the full amount due in respect of all Senior Secured Debt is paid in cash or other form of
payment satisfactory to the holders of Senior Secured Debt, no payment shall be made by the Company
with respect to the principal of, premium, if any, or interest (including Additional Interest, if
any) on the Notes or to acquire any of the Notes (including any conversion or cash repurchase
pursuant to the exercise of the Repurchase Right or otherwise), and the Company shall give prompt
written notice of such acceleration to such holders of Senior Secured Debt.

 

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(c) In the event of and during the continuance of any default in payment of the principal of
or premium, if any, or interest on, rent or other payment obligation in respect of, any Senior
Secured Debt, unless all such payments due in respect of such Senior Secured Debt have been paid in
full in cash or other payments satisfactory to the holders of Senior Secured Debt, no payment shall
be made by the Company with respect to the principal of, premium, if any, or interest (including
Additional Interest, if any) on the Notes or to acquire any of the Notes (including any conversion
or cash repurchase pursuant to the exercise of the Repurchase Right). The Company shall give prompt
written notice to the Trustee of any default under any Senior Secured Debt or under any agreement
pursuant to which Senior Secured Debt may have been issued.

(d) During the continuance of any event of default with respect to any Designated Senior
Secured Debt, as such event of default is defined under any such Designated Senior Secured Debt or
in any agreement pursuant to which any Designated Senior Secured Debt has been issued (other than a
default in payment of the principal of or premium, if any, or interest on, rent or other payment
obligation in respect of any Designated Senior Secured Debt), permitting the holder or holders of
such Designated Senior Secured Debt to accelerate the maturity thereof (or in the case of any
lease, permitting the landlord either to terminate the lease or to require the Company to make an
irrevocable offer to terminate the lease following an event of default thereunder), no payment
shall be made by the Company, directly or indirectly, with
respect to principal of, premium, if any, or interest (including Additional Interest, if any)
on the Notes for 179 days following notice in writing (a “Payment Blockage Notice”) to the Company,
from any holder or holders of such Designated Senior Secured Debt or their representative or
representatives or the trustee or trustees under any indenture or under which any instrument
evidencing any such Designated Senior Secured Debt may have been issued, that such an event of
default has occurred and is continuing, unless such event of default has been cured or waived or
such Designated Senior Secured Debt has been paid in full in cash or other payment satisfactory to
the holders of such Designated Senior Secured Debt; provided, however, if the maturity of such
Designated Senior Secured Debt is accelerated (or in the case of any lease, as a result of such
event of default, the landlord under the lease has given the Company notice of its intention to
terminate the lease or to require the Company to make an irrevocable offer to terminate the lease
following an event of default thereunder), no payment may be made on the Notes until such
Designated Senior Secured Debt has been paid in full in cash or other payment satisfactory to the
holders of such Designated Senior Secured Debt or such acceleration (or termination, in the case of
a lease) has been cured or waived.

(e) For purposes of Section 13.01(d), such Payment Blockage Notice shall be deemed to include
notice of all other events of default under such indenture or instrument which are continuing at
the time of the event of default specified in such Payment Blockage Notice. The provisions of
Section 13.01(d) shall apply only to one such Payment Blockage Notice given in any period of 360
days with respect to any issue of Designated Senior Secured Debt, and no such continuing event of
default that existed or was continuing on the date of delivery of any Payment Blockage Notice shall
be, or shall be made, the basis for a subsequent Payment Blockage Notice, unless such event of
default shall have been cured or waived for a period of not less than 90 consecutive days.

 

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(f) In the event that, notwithstanding the foregoing provisions of Sections 13.1(a), 13.1(b),
13.1(c) and 13.1(d), any payment on account of principal, premium, if any, or interest (including
Additional Interest, if any) on the Notes shall be made by or on behalf of the Company and received
by the Trustee, by any Holder or by any Paying Agent (or, if the Company is acting as its own
Paying Agent, money for any such payment shall be segregated and held in trust):

(i) after the occurrence of an event specified in Section 13.01(a) or 13.1(b),
then, unless all Senior Secured Debt is paid in full in cash, or provision shall be
made therefor;

(ii) after the happening of an event of default of the type specified in
Section 13.01(c), then, unless the amount of such Senior Secured Debt then due shall
have been paid in full, or provision made therefor or such event of default shall
have been cured or waived; or

(iii) after the happening of an event of default of the type specified in
Section 13.01(d) and delivery of a Payment Blockage Notice, then, unless such event
of default shall have been cured or waived or the 179-day period specified in
Section 13.01(d) shall have expired, such payment (subject, in each case, to the
provisions of Section 13.07) shall be held in trust for the benefit
of, and shall be immediately paid over to, the holders of Designated Senior
Secured Debt (unless an event described in Section 13.01(a), (b) or (c) has
occurred, in which case the payment shall be held in trust for the benefit of, and
shall be immediately paid over to all holders of Senior Secured Debt) or their
representative or representatives or the trustee or trustees under any indenture
under which any instruments evidencing any of the Designated Senior Secured Debt or
Senior Secured Debt, as the case may be, may have been issued, as their interests
may appear.

Section 13.02 Subrogation.

Subject to the payment in full of all Senior Secured Debt to which the Indebtedness evidenced
by the Notes is in the circumstances subordinated as provided in Section 13.01, the Holders of the
Notes shall be subrogated to the rights of the holders of such Senior Secured Debt to receive
payments or distributions of cash, property or securities of the Company applicable to such Senior
Secured Debt until all amounts owing on the Notes shall be paid in full, and, as between the
Company, its creditors other than holders of such Senior Secured Debt, and the Holders of the
Notes, no such payment or distribution made to the holders of Senior Secured Debt by virtue of this
Article XIII which otherwise would have been made to the holders of the Notes shall be deemed to be
a payment by the Company on account of such Senior Secured Debt; provided, however, that the
provisions of this Article are and are intended solely for the purpose of defining the relative
rights of the Holders of the Notes, on the one hand, and the holders of Senior Secured Debt, on the
other hand.

 

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Section 13.03 Obligation Of The Company Is Absolute And Unconditional.

Nothing contained in this Article or elsewhere in this Indenture or in the Notes is intended
to or shall impair, as between the Company, its creditors other than the holders of Senior Secured
Debt, and the Holders of the Notes, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Notes the principal of and premium, if any, and
interest (including Additional Interest, if any) on the Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect the relative rights
of the Holders of the Notes and creditors of the Company other than the holders of Senior Secured
Debt, nor shall anything contained herein or therein prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of Senior Secured Debt
in respect of cash, property or securities of the Company received upon the exercise of any such
remedy.

Section 13.04 Maturity Of Or Default On Senior Secured Debt.

Upon the maturity of any Senior Secured Debt by lapse of time, acceleration or otherwise, all
principal of or premium, if any, or interest on, rent or other payment obligations in respect of
all such matured Senior Secured Debt shall first be paid in full, or such payment shall have been
duly provided for, before any payment on account of principal, or premium, if any, or interest
(including Additional Interest, if any) is made upon the Notes.

Section 13.05 Payments On Notes Permitted.

Except as expressly provided in this Article, nothing contained in this Article shall affect
the obligation of the Company to make, or prevent the Company from making, payments of the
principal of, or premium, if any, or interest (including Additional Interest, if any) on the Notes
in accordance with the provisions hereof and thereof, or shall prevent the Trustee or any Paying
Agent from applying any moneys deposited with it hereunder to the payment of the principal of, or
premium, if any, or interest (including Additional Interest, if any) on the Notes.

Section 13.06 Effectuation Of Subordination By Trustee.

Each Holder of Notes, by such Holder’s acceptance thereof, authorizes and directs the Trustee
on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee such Holder’s attorney-in-fact for
any and all such purposes.

Upon any payment or distribution of assets of the Company referred to in this Article XIII,
the Trustee and the Holders of the Notes shall be entitled to rely conclusively upon any order or
decree made by any court of competent jurisdiction in which any such dissolution, winding up,
liquidation or reorganization proceeding affecting the affairs of the Company is pending or upon a
certificate of the trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating trustee or agent or other Person making any payment or distribution, delivered to the
Trustee or to the Holders of the Notes, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, and as to other facts pertinent to the right of such
Persons under this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Persons pending judicial determination as to the right of such Persons to receive
such payment.

 

75

 

Section 13.07 Knowledge Of Trustee.

Notwithstanding the provision of this Article XIII or any other provisions of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any Senior Secured Debt, of any
default in payment of principal of, premium, if any, or interest on, rent or other payment
obligation in respect of any Senior Secured Debt, or of any facts which would prohibit the making
of any payment of moneys to or by the Trustee, or the taking of any other action by the Trustee,
unless a Responsible Officer of the Trustee having responsibility for the administration of the
trust established by this Indenture shall have received written notice thereof from the Company,
any Holder of Notes, any Paying Agent or Conversion Agent of the Company or the holder or
representative of any class of Senior Secured Debt, and, prior to the receipt of any such written
notice, the Trustee shall be entitled in all respects to assume that no such default or facts
exist; provided, however, that unless on the third Business Day prior to the date upon which by the
terms hereof any such moneys may become payable for any purpose the Trustee shall have received the
notice provided for in this Section 13.07, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such moneys and apply
the same to the purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such date.

Section 13.08 Trustee’s Relation To Senior Secured Debt.

The Trustee shall be entitled to all the rights set forth in this Article with respect to any
Senior Secured Debt at the time held by it, to the same extent as any other holder of Senior
Secured Debt and nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.

Nothing contained in this Article XIII shall apply to claims of or payments to the Trustee
under or pursuant to Section 5.07.

With respect to the holders of Senior Secured Debt, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set forth in this Article,
and no implied covenants or obligations with respect to the holders of Senior Secured Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Secured Debt and the Trustee shall not be liable to any holder of
Senior Secured Debt if it shall pay over or deliver to Holders, the Company or any other Person
moneys or assets to which any holder of Senior Secured Debt shall be entitled by virtue of this
Article or otherwise.

Section 13.09 Rights Of Holders Of Senior Secured Debt Not Impaired.

No right of any present or future holder of any Senior Secured Debt to enforce the
subordination herein shall at any time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may
have or be otherwise charged with.

 

76

 

Section 13.10 Modification Of Terms Of Senior Secured Debt.

Any renewal or extension of the time of payment of any Senior Secured Debt or the exercise by
the holders of Senior Secured Debt of any of their rights under any instrument creating or
evidencing Senior Secured Debt, including without limitation the waiver of default thereunder, may
be made or done all without notice to or assent from the Holders of the Notes or the Trustee.

No compromise, alteration, amendment, modification, extension, renewal or other change of, or
waiver, consent or other action in respect of, any liability or obligation under or in respect of,
or of any of the terms, covenants or conditions of any indenture or other instrument under which
any Senior Secured Debt is outstanding or of such Senior Secured Debt, whether or not such release
is in accordance with the provisions or any applicable document, shall in any way alter or affect
any of the provisions of this Article or of the Notes relating to the subordination thereof.

Section 13.11 Certain Conversions Not Deemed Payment.

For the purposes of this Article XIII only:

(a) the issuance and delivery of junior securities upon conversion of Notes in accordance with
Article 13 shall not be deemed to constitute a payment or distribution on account of the principal
of, premium, if any, or interest (including Additional Interest, if any) on Notes or on account of
the purchase or other acquisition of Notes, and

(b) the payment, issuance or delivery of cash (except in satisfaction of fractional shares
pursuant to Section 13.03), property or securities (other than junior securities) upon conversion
of a Security shall be deemed to constitute payment on account of the principal of, premium, if
any, or interest (including Additional Interest, if any) on such Security.

(c) For the purposes of this Section 13.11, the term “junior securities” means:

(i) shares of any Common Stock; or

(ii) other securities of the Company that are subordinated in right of payment
to all Senior Secured Debt that may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Notes are so subordinated as provided in this Article.

(d) Nothing contained in this Article XIII or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company, its creditors (other than holders of Senior
Secured Debt) and the Holders of Notes, the right, which is absolute and unconditional, of the
Holder of any Security to convert such Security in accordance with Article XII.

 

77

 

ARTICLE XIV

OTHER PROVISIONS OF GENERAL APPLICATION

Section 14.01 Trust Indenture Act Controls

This Indenture is subject to the provisions of the TIA that are required to be part of this
Indenture, and shall, to the extent applicable, be governed by such provisions.

Section 14.02 Notices

Any notice or communication to the Company or the Trustee is duly given if in writing
(including facsimile and email in PDF format) and delivered in person or mailed by first-class mail
or by overnight delivery service to the address set forth below:

	 	(a)	 	if to the Company:
	 
	 	 	 	Cereplast, Inc.

300 N. Continental Blvd., Suite 300

El Segundo, CA 90245

Attn: Chief Financial Officer
	 
	 	 	 	with copies to:
	 
	 	 	 	Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, NY 10006

Attn: Gregory Sichenzia, Esq.
	 
	 	 	 	and
	 
	 	 	 	Skadden, Arps, Slate, Meagher & Flom LLP

525 University Avenue

Palo Alto, Ca 94301

Attn: Thomas Ivey
	 
	 	(b)	 	if to the Trustee:
	 
	 	 	 	Wells Fargo Bank, National Association

MAC N9311-110

625 Marquette Avenue, 11th Floor

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services — Administrator for Cereplast, Inc.

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

 

78

 

Any notice or communication to a Holder shall be mailed by first-class mail to his address
shown on the Register kept by the Registrar or, if the Holder is the Depositary, sent by facsimile
or overnight delivery services or email in PDF format. Failure to mail a notice or communication to
a Holder or any defect in such notice or communication shall not affect its sufficiency with
respect to other Holders.

If a notice or communication is mailed or sent in the manner provided above within the time
prescribed, it is duly given as of the date it is mailed, whether or not the addressee receives it,
except that notice to the Trustee shall only be effective upon receipt thereof by the Trustee.

If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee
at the same time.

Section 14.03 Communication By Holders With Other Holders

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

Section 14.04 Acts Of Holders Of Notes

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of Notes may be
embodied in and evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agent or proxy duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act of the Holders” of Notes signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such agent or proxy, or of
the holding by any Person of a Note, shall be sufficient for any purpose of this Indenture and
(subject to Section 6.01) 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
provided in any manner that the Trustee reasonably deems sufficient.

(c) The principal amount and serial numbers of Notes held by any Person, and the date of such
Person holding the same, shall be proved by the Register.

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

 

79

 

Section 14.05 Certificate And Opinion As To Conditions Precedent

In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents. Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the Opinion of Counsel with
respect to the matters upon which such certificate or opinion is based is erroneous. Any such
Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or
representations by, an officer or officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or representations with respect to
such matters are erroneous.

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

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

Section 14.06 Statements Required In Certificate Or Opinion

Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:

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

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

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

 

80

 

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

Section 14.07 Effect Of Headings And Table Of Contents

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

Section 14.08 Successors And Assigns

All covenants and agreements in this Indenture by the Company shall bind their successors and
assigns, whether so expressed or not.

Section 14.09 Separability Clause

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

Section 14.10 Benefits Of Indenture

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

Section 14.11 Governing Law; Waiver of Jury Trial

THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B).

EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

Section 14.12 Counterparts

This instrument may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original but all such counterparts shall together constitute but one and
the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile
or PDF transmission shall constitute effective execution and delivery of this Indenture as to the
parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of
the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures
for all purposes.

 

81

 

Section 14.13 Legal Holidays

In any case where any Interest Payment Date, Repurchase Date, Fundamental Change Repurchase
Date or Maturity Date of any Note shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Notes) payment of interest
(including Additional Interest, if any) or principal or premium, if any, need not be made at such
Place of Payment on such day, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date, Repurchase Date,
Fundamental Change Repurchase Date or at the Maturity Date, provided, that in the case that payment
is made on such succeeding Business Day, no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date, Repurchase Date, Fundamental Change Repurchase
Date or Maturity Date, as the case may be.

Section 14.14 Recourse Against Others

No recourse for the payment of the principal of or premium, if any, or interest (including
Additional Interest, if any) on any Note, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance thereof and as part of the consideration for
the issue thereof, expressly waived and released.

Section 14.15 Cancellation of Notes Repurchased.

The Company may, at its option, surrender any Note repurchased pursuant to Articles X or XI to
the Trustee for cancellation; provided, however, such Notes may not be reissued or resold by the
Company.

Section 14.16 U.S.A Patriot Act.

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act,
the Trustee, like all financial institutions and in order to help fight the funding of terrorism
and money laundering, is required to obtain, verify, and record information that identifies each
person or legal entity that establishes a relationship or opens an account with the Trustee. The
parties to this Indenture agree that they will provide the Trustee with such information as it may
request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

82

 

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

	 	 	 	 	 
	 	CEREPLAST, INC.

 	 
	 	By:  	/s/ Frederic Scheer
 	 
	 	 	Name:  	Frederic Scheer 	 
	 	 	Title:  	CEO 	 
	 
	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Trustee

 	 
	 	By:  	/s/
Richard Prokosch	 
	 	 	Name:  	Richard Prokosch	 
	 	 	Title:  	Vice President	 
	 

 

 

EXHIBIT A

FORM OF NOTE

Form Of Face Of Note

[INCLUDE IF NOTE IS A RESTRICTED SECURITY — THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND THIS NOTE AND THE SHARES OF OUR COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO AN INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(1), (2) OR (7) UNDER THE SECURITIES ACT
WHO PURCHASES AT LEAST $100,000 PRINCIPAL AMOUNT OF NOTES, OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED BY
THE SECURITIES ACT.

THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF AND ANY RELATED DOCUMENTATION
MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS NOTE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION
(OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED
SECURITIES GENERALLY. THE HOLDER OF THIS NOTE
AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED
TO SUCH AMENDMENT OR SUPPLEMENT.]

 

 

[INCLUDE IF SECURITY IS A GLOBAL SECURITY — THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER
THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (“DTC”), A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN
AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

2

 

CEREPLAST, INC.

7.00% Convertible Senior Subordinated Notes 

Due 2016

					
	 	 	 	 	 
	No. [•]
	 	CUSIP NO. 156732AB5
	 	U.S. $[•]

CEREPLAST, INC., a corporation duly organized and validly existing under the laws of the State of
Nevada (herein called the “Company”, which term includes any successor corporation under the
Indenture referred to on the reverse hereof), for value received hereby promises to pay to [•], or
registered assigns, the principal sum of [•] United States Dollars ($•) [INCLUDE IF NOTE IS A
GLOBAL NOTE — (which amount may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary, in accordance with the rules and
procedures of the Depositary)] on June 1, 2016 and to pay interest thereon, as provided on the
reverse hereof, until the principal and accrued interest are paid or duly provided for.

Interest Payment Dates: June 1 and December 1, with the first payment to be made on December 1,
2011.

Record Dates: May 15 and November 15.

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

 

3

 

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

	 	 	 	 	 
	 	CEREPLAST, INC.

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 

Attest:

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	Authorized Signatory	 	 

Trustee’s Certificate Of Authentication

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

	 	 	 	 	 	 	 	 	 
	 	 	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION	 	 
	 	 	 	 	as Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	Dated:

	 	 	 	 	 	 

Authorized Signatory
	 	 
	 

	 	 

	 	 	 	 	 	 

 

4

 

[REVERSE OF NOTE]

CEREPLAST, INC.

7.00% Convertible Senior Subordinated Notes Due 2016

This Note is one of a duly authorized issue of Notes of Cereplast, Inc., a Nevada corporation
(the “Company”), designated as its 7.00% Convertible Senior Subordinated Notes Due 2016 (herein
called the “Notes”), all issued or to be issued under and pursuant to an Indenture dated as of May
24, 2011 (herein called the “Indenture”), between the Company and Wells Fargo Bank, National
Association (herein called the “Trustee”). The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. §§77aaa-77bbbb), as amended and in effect from time to time (the “TIA”). The Notes are
general unsecured unsubordinated obligations of the Company limited to $12,500,000 aggregate
principal amount, except as otherwise provided in the Indenture (except for Notes issued in
substitution for destroyed, mutilated, lost or stolen Notes). Reference is hereby made to the
Indenture and all indentures supplemental thereto for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders
of the Notes. Terms used herein without definition and which are defined in the Indenture have the
meaning assigned to them in the Indenture.

1. Interest. The Company, promises to pay interest on the principal amount of this Note at
the rate of 7.00% per annum from May 24, 2011 or from the most recent date to which interest has
been paid until the principal of the notes is paid or made available for payment pursuant to the
terms of the Indenture. The Company will pay interest semiannually on June 1 and December 1 of
each year commencing on December 1, 2011. Each payment of interest on the Notes shall include
interest accrued through the day prior to the applicable Interest Payment Date or the Maturity
Date. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve
30-day months.

Interest will be paid to the person in whose name a Note is registered at the close of
business on May 15 and November 15, as the case may be, immediately preceding the relevant interest
payment date.

Except as provided in the next succeeding paragraph or with respect to any Interest Make-Whole
payments, a Holder of any Note shall not be entitled to receive any interest (including Additional
Interest, if any) that has accrued on such Note if such Note is converted into shares of Common
Stock or cash on any day other than an Interest Payment Date. By delivering to the Holder of any
Note that is converted, cash or a combination of cash and the full number of shares of Common
Stock, together with a cash payment, if any, in lieu of a fractional share, the Company shall be
deemed to have satisfied in full its obligation with respect to such Note to pay the principal
amount of the Note and accrued and unpaid interest (including Additional Interest, if any) to, but
not including, the Conversion Date. Accordingly, accrued but unpaid interest (including Additional
Interest, if any) shall be deemed to be paid in full rather than cancelled, extinguished or
forfeited.

 

 

If a Holder of any Note converts such Note after 5:00 P.M., New York City time on a Regular
Record Date but prior to 9:00 A.M., New York City time on the corresponding Interest Payment Date,
the Holder of record on such Regular Record Date shall be entitled to receive on such Interest
Payment Date interest (including Additional Interest, if any) accrued and unpaid on such Note, to,
but excluding, such Interest Payment Date notwithstanding the conversion of such Note prior to such
Interest Payment Date. However, at the time such Holder surrenders such Note for conversion, such
Holder shall pay the Company an amount equal to the interest (including Additional Interest, if
any) that will be paid on the Notes being converted on such Interest Payment Date. However, in the
event that (i) overdue interest, if any, exists at the time of conversion with respect to such
Note, (ii) the Holder converts such Note in connection with a Fundamental Change and the Company
has specified a Fundamental Change Repurchase Date for a Note that is after a Record Date for an
interest payment but on or prior to the corresponding Interest Payment Date, (iii) the Holder
converts such Note prior to June 2, 2014 or (iv) the Holder converts such Note after the Regular
Record Date for the interest payment due on June 1, 2016, then such Holder shall not be required to
pay the Company at the time such Holder surrenders such Note for conversion the amount of interest
on such Note such Holder shall be entitled to receive on such Interest Payment Date (in the case of
(i) above, only to the extent of such overdue interest).

2. Maturity. The Notes will mature on June 1, 2016.

3. Method of Payment. The Company will pay interest on the Notes (except defaulted interest)
to the persons who are registered Holders at the close of business on the record date set forth on
the face of this Note next preceding the applicable interest payment date. Holders must surrender
Notes to the Company or its designated agent to collect the principal, Repurchase Price or
Fundamental Change Repurchase Price of the Notes. The Company will pay all amounts due with respect
to the Notes in money of the United States that at the time of payment is legal tender for payment
of public and private debts. If this Note is in global form, the Company will pay interest on the
Notes by wire transfer of immediately available funds to the Depositary. With respect to Notes held
other than in global form, the Company will make payments: (i) by U.S. Dollar check drawn on a bank
in The City of New York mailed to the address of the Holder; or (ii) upon written application to
the Registrar not later than the relevant Record Date by a Holder of an aggregate principal amount
in excess of $2,000,000, by wire transfer in immediately available funds. Any payment of principal
and interest scheduled to be made on any day that is not a Business Day shall be made on the next
succeeding Business Day, and no interest shall accrue on that payment for the additional period of
time.

4. Paying Agent, Registrar, and Conversion Agent. Initially the Trustee shall act as Paying
Agent, Registrar and Conversion Agent. The Company may change any Paying Agent, Registrar or
Conversion Agent without notice.

5. Redemption at the Option of the Company. The Notes shall not be redeemable at the option
of the Company.

6. Purchase by the Company at the Option of the Holder on a Repurchase Date. Subject to the
terms and conditions of the Indenture, the Company shall become obligated to repurchase, at the
option of the Holder, all or any portion of the Notes held by such Holder on
June 15, 2014, (the “Repurchase Date”) in integral multiples of $1,000 at a repurchase price
equal to 100% of the principal amount of those Notes plus accrued and unpaid interest (including
Additional Interest, if any) to, but excluding, such Repurchase Date (the “Repurchase Price”).

 

2

 

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

If the Paying Agent holds, in accordance with the terms of the Indenture, at 11:00 A.M., New
York City time, on the first Business Day following the Repurchase Date, cash sufficient to pay the
Repurchase Price of any Notes for which a Repurchase Notice has been tendered and not withdrawn,
then on and after such date, the Notes shall cease to be outstanding and any interest (including
Additional Interest, if any) shall cease to accrue on such Notes or portions thereof, whether or
not book-entry transfer of such Notes have been made or such Notes are delivered to the Paying
Agent, and the Holder thereof shall have no other rights as such (other than the right to receive
the Repurchase Price upon surrender of such Note). Notes in denominations larger than $2,000 of
principal amount may be repurchased in part but only in integral multiples of $1,000 of principal
amount.

7. Purchase by the Company at the Option of the Holder upon a Fundamental Change. If a
Fundamental Change occurs at any time prior to maturity of the Notes, this Note will be subject to
a repurchase for cash, at the option of the Holder, on a Fundamental Change Repurchase Date,
specified by the Company, that is not less than 20 Business Days nor more than 35 Business Days
after notice thereof, at a repurchase price equal to 100% of the principal amount hereof, together
with accrued and unpaid interest on this Note to, but excluding, the Fundamental Change Repurchase
Date; provided, however, that if such Fundamental Change Repurchase Date falls after a record date
and on or prior the corresponding interest payment date, the accrued and unpaid interest shall be
payable to the Holder of record of this Note on the preceding May 15 or November 15, as the case
may be. The Notes submitted for repurchase must be $2,000 or an integral multiple of $1,000 above
such amount. The Company shall deliver to all holders of record of the Notes a notice of the
occurrence of a Fundamental Change and of the repurchase right arising as a result thereof on or
before the fifth calendar day after the occurrence of such Fundamental Change. For Notes to be so
repurchased at the option of the Holder, the Holder must deliver to the Paying Agent in accordance
with the terms of the Indenture, the Repurchase Notice containing the information specified by the
Indenture, together with such Notes, duly endorsed for transfer, or (if the Notes are Global Notes)
book-entry transfer of the Notes, prior to 5:00 p.m., New York City time, on the Fundamental Change
Repurchase Date. The repurchase price must be paid in cash.

Holders have the right to withdraw any Fundamental Change Repurchase Notice by delivering to
the Paying Agent a written notice of withdrawal at any time prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding the Fundamental Change Repurchase Date, as provided in
the Indenture.

If cash sufficient to pay the repurchase price of and accrued and unpaid interest to, but
excluding, the Fundamental Change Repurchase Date, if any, on all Notes or portions thereof to be
repurchased as of the Fundamental Change Repurchase Date is deposited with the Paying Agent, on the
Business Day immediately following the Fundamental Change Repurchase Date,
then such Notes will cease to be outstanding and interest will cease to accrue, and the Holder
thereof shall have no other rights as such other than the right to receive the repurchase price
upon delivery or book-entry transfer of such Notes.

 

3

 

8. Conversion. In compliance with the provisions of the Indenture, on or prior to the close
of business on the Business Day immediately preceding the Maturity Date of this Note, the Holder
hereof has the right, at its option, to convert each $1,000 principal amount of this Note into
Common Stock based on an initial Conversion Rate of 172.4138 shares of Common Stock per $1,000
principal amount of Notes (a Conversion Price of approximately $5.80 per share), as the same may be
adjusted pursuant to the terms of the Indenture, as such shares shall be constituted at the date of
conversion, upon surrender of this Note (if in certificated form) with the form entitled
“Conversion Notice” on the reverse hereof duly completed and manually signed, to the Company at the
office or agency of the Company maintained for that purpose in accordance with the terms of the
Indenture, or at the option of such Holder, the Corporate Trust Office, together with any funds
required pursuant to the terms of the Indenture, and, unless any shares issuable on conversion are
to be issued in the same name as this Note, duly endorsed by, or accompanied by instruments of
transfer in form satisfactory to the Company duly executed by, the Holder or by such Holder’s duly
authorized attorney. Such Holder will also be entitled, if applicable, to receive upon conversion
of such Holder’s Notes into shares of Common Stock, in addition to the Shares of Common Stock, a
payment in cash equal to the amount of the Interest Make-Whole, subject to the Interest Make-Whole
Cap. In order to exercise the conversion right with respect to any interest in a Global Note, the
Holder must complete the appropriate instruction form pursuant to the Depositary’s book-entry
conversion program, deliver by book-entry delivery an interest in such Global Note, furnish
appropriate endorsements and transfer documents if required by the Company or the Trustee or
Conversion Agent, and pay the funds, if any, required pursuant to the terms of the Indenture. As
specified in the Indenture, upon conversion, the Company will issue shares of Common Stock based on
the Conversion Rate, as adjusted as specified in the Indenture.

Prior to the Maturity Date if and only to the extent holders elect to convert the Notes in
connection with a Non-Stock Change of Control, the Company will increase the Conversion Rate
applicable to such converting Notes as set forth in the Indenture.

No adjustment in respect of interest on any Notes converted or dividends on any shares issued
upon conversion of such Notes will be made upon any conversion except as set forth in the next
sentence and the next paragraph. If this Note (or portion hereof) is surrendered for conversion
during the period from the 5:00 p.m., New York City time, on any applicable Record Date for the
payment of interest to 5:00 p.m., New York City time, on the Business Day preceding the
corresponding Interest Payment Date, this Note (or portion hereof being converted) must be
accompanied by payment, in immediately available funds or other funds acceptable to the Company, of
an amount equal to the interest otherwise payable on such Interest Payment Date on the principal
amount being converted; provided, that no such payment shall be required (1) if the Holder
surrenders this Note in connection with a Fundamental Change and the Company has specified a
Fundamental Change Repurchase Date that is after a Record Date and on or prior to the corresponding
Interest Payment Date or (2) to the extent of any overdue interest, if any overdue interest exists
at the time of conversion with respect to this Note.

 

4

 

No fractional shares will be issued upon any conversion of Notes, but an adjustment and
payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share
which would otherwise be issuable upon the surrender of any Notes for conversion.

A Note in respect of which a Holder is exercising its right to require repurchase may be
converted only if such Holder validly withdraws its election to exercise such right to require
repurchase in accordance with the terms of the Indenture.

9. Denominations, Transfer, Exchange. The Notes are issuable only in registered form in
denominations of $2,000 or an integral multiple of $1,000 above such amount, as provided in the
Indenture and subject to certain limitations therein set forth. Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination, as requested by the
Holder surrendering the same. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. Prior to due presentment of this Note
for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.

As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable in the Register, upon surrender of this Note for registration
of transfer at the office or agency of the Company, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

[INCLUDE IF NOTE IS A GLOBAL SECURITY — In the event of a deposit or withdrawal of an
interest in this Note, including an exchange, transfer, repurchase or conversion of this Note in
part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to
reflect such deposit or withdrawal in accordance with the rules and procedures of the Depositary.]

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

11. Merger or Consolidation. Except as provided in the Indenture, the Company shall not
consolidate with, merge with or into, or convey, transfer or lease all or substantially all of its
assets (in one transaction or a series of related transactions) to any Person unless: (a) either
(A) the Company shall be the resulting, surviving or transferee Person (the “Successor Person”) or
(B) the Successor Person (if other than the Company) (i) shall be a corporation, limited liability
company, partnership, trust or other business entity organized and existing under the laws of the
United States of America or any state thereof or the District of Columbia and (ii) shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all of the Company’s obligations for the due and punctual payment of the principal of,
premium, if any, and interest (including Additional Interest, if any)
on all Notes and the performance and observance of every covenant of this Indenture on the
part of the Company to be performed or observed and shall have provided for conversion rights in
accordance with Section 12.07 of the Indenture; and (b) immediately after giving effect to such
transaction, there is no Event of Default, and no event which after notice or passage of time or
both, would become an Event of Default.

 

5

 

12. Events of Default. If an Event of Default occurs (other than an Event of Default relating
to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount of the then-outstanding
Notes, by written notice to the Company and the Trustee, may declare due and payable 100% of the
principal amount of all outstanding Notes plus any accrued and unpaid interest to the date of
payment. If an Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, all unpaid principal and accrued and unpaid interest on the
outstanding Notes shall become due and immediately payable without any declaration or other act on
the part of the Trustee or any Holder. Under certain circumstances, the Holders of a majority in
aggregate principal amount of the outstanding Notes may rescind and annul any such acceleration
with respect to the Notes and its consequences.

If an Event of Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under the Indenture at the request or direction of any of the
Holders unless such Holders have offered to the Trustee indemnity or security reasonably acceptable
to it against any loss, liability or expense. Subject to certain exceptions, no Holder may pursue
any remedy with respect to the Indenture or the Notes unless (i) such Holder has previously given
the Trustee notice that an Event of Default is continuing, (ii) holders of at least 25% in
principal amount of the outstanding Notes have requested the Trustee in writing to pursue the
remedy, (iii) such Holders have offered the Trustee security or indemnity reasonably satisfactory
to the Trustee against any loss, liability or expense, (iv) the Trustee has not complied with such
request within 60 days after the receipt of the request and the offer of indemnity and (v) the
holders of a majority in principal amount of the outstanding Notes have not given the Trustee a
direction inconsistent with such request within such 60-day period. Subject to certain
restrictions, the holders of a majority in principal amount of the outstanding Notes are given the
right to 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. Subject to the
Indenture, the Trustee, however, may refuse to follow any direction if the Trustee, in good faith
shall, by a Trust Officer of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability. The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Indenture at the request, order or direction of any Holder
pursuant to the provision of the Indenture, unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred therein or thereby.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall
impair, as among the Company and the Holder of the Notes, the obligation of the Company, which is
absolute and unconditional, to pay the principal of, the repurchase price upon a Fundamental
Change, interest or make-whole premium, if any with respect of the Note at the place, at the
respective times, at the rate and in the coin or currency herein and in the Indenture prescribed.

 

6

 

13. Amendments, Supplements and Waivers. Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Notes may be amended without prior notice to any Holder but
with the written consent of the holders of at least a majority in aggregate principal amount of the
outstanding Notes and (ii) any default or noncompliance with any provision may be waived with the
written consent or affirmative vote of the holders of at least a majority in principal amount of
the outstanding Notes. Without the consent of any Holder, the Company and the Trustee may amend
the Indenture or the Notes (i) to provide for conversion rights of Holders and the Company’s
repurchase obligations in connection with a Fundamental Change in the event of any reclassification
of the Common Stock, merger or consolidation, or sale, conveyance, transfer or lease of the
Company’s property and assets substantially as an entirety; (ii) to secure the Notes; (iii) to
comply with Article VI of the Indenture; (iv) to surrender any right or power conferred upon the
Company in the Indenture; (v) to add to the covenants of the Company for the benefit of the
Holders; (vi) to cure any ambiguity or correct or supplement any inconsistent or defective
provision contained in the Indenture; provided, however, that such modification or amendment does
not adversely affect the interests of the Holders in any material respect, provided, further, that
any amendment made solely to conform the provisions of the Indenture or the Notes to the
description of the Notes contained in the Prospectus Supplement shall not be deemed to adversely
affect the interests of the Holders; (vii) to make any provision with respect to matters or
questions arising under the Indenture or the Notes that the Company may deem necessary or desirable
and that shall not be inconsistent with the Indenture or the Notes, provided, however, that such
change or modification does not, in the good faith opinion of the Board of Directors, adversely
affect the interests of the Holders in any material respect; (viii) to increase the Conversion
Rate; (ix) to comply with requirements of the SEC in order to effect or maintain the qualification
of the Indenture under the TIA; (x) to add guarantees of the obligations under the Notes; (xi) to
provide for uncertificated Notes in addition to or in place of certificated Notes; (xii) to make
any change that does not adversely affect the rights of any Holder; and (xiii) to evidence and
provide for the acceptance of appointment by a successor Trustee with respect to the Notes.

14. Unconditional Right of Holders. Notwithstanding any provision in the Indenture or the
Notes, the Holders of any Note shall have the right, which is absolute and unconditional, (i) to
receive payment of the principal or, premium, if any, and interest (including Additional Interest,
if any) on such Note on the Maturity Date expressed in such Note, in the case of the exercise of a
Repurchase Right, on a Repurchase Date, and in the case of the exercise of the Fundamental Change
Repurchase Right, on a Fundamental Change Repurchase Date, (ii) to bring suit for the enforcement
of any such payment on or after such respective dates, and (iii) to convert their Notes on the
terms and subject to the conditions set forth in the Indenture, and such rights shall not be
impaired or adversely affected without the consent of such Holder.

15. Trustee Dealings with Company. The Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with the Company or any of its
Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. The Trustee, however, must comply with Sections 5.10 and 5.11 of the Indenture.

 

7

 

16. No Recourse Against Others. No recourse for the payment of the principal of or premium,
if any, or interest (including Additional Interest, if any) on any Note, or for any claim
based thereon or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the acceptance thereof and as
part of the consideration for the issue thereof, expressly waived and released.

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

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

19. [INCLUDE IF NOTE IS A RESTRICTED SECURITY— Additional Rights of Holders of Restricted
Securities. In addition to the right provided to Holders under the Indenture, Holders of
Restricted Securities shall have all the rights set forth in the Securities Purchase Agreement
dated as of the date of the Indenture, between the Company and the investors named terein (the
“Securities Purchase Agreement”)].

20. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company caused CUSIP numbers to be printed on the Notes and
the Trustee shall use CUSIP numbers in notices repurchases as a convenience to Holders. No
representation is made by the Trustee as to the correctness or accuracy of such numbers either as
printed on the Notes or as contained in any notice of repurchase and reliance may be placed only on
the other identification numbers printed on the Notes, and any such repurchase shall not be
affected by any defect or omission of such numbers.

21. Governing Law. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND
RULES 327(B).

The Company shall furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Securities Purchase Agreement. Requests may be made to:

Cereplast, Inc.

300 N. Continental Blvd., Suite 300

El Segundo, CA 90245

Attention: Chief Financial Officer

 

8

 

ASSIGNMENT FORM

If you want to assign this Note, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Note to:

 

 

 

(Print or type name, address and zip code and social security or tax ID number of assignee)

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

	 	 	 	 	 	 	 
	Date:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 

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

	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 
	 

	 	 

	 	 

			
	Note:	 	Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

 

9

 

In connection with any transfer of this Note occurring prior to the date which is the earlier
of (i) the date of the declaration by the Commission of the effectiveness of a registration
statement under the Securities Act of 1933, as amended (the “Securities Act”), covering resales of
this Note (which effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the first anniversary of the Issue Date set forth on the face of this Note, the
undersigned confirms that it has not utilized any general solicitation or general advertising in
connection with the transfer and that this Note is being transferred:

[Check One]

	 	(1) 	o 	to the Company or a subsidiary thereof; or
	 
	 	(2) 	o 	to a “Qualified Institutional Buyer” pursuant to and in compliance
with Rule 144A under the Securities Act; or
	 
	 	(3) 	o 	outside the United States to a “foreign person” in compliance with
Rule 904 of Regulation S under the Securities Act; or
	 
	 	(4) 	o 	pursuant to the exemption from registration provided by Rule 144
under the Securities Act.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes
evidenced by this certificate in the name of any Person other than the registered Holder thereof,
provided that if box (3) or (4) is checked, the Company may require, prior to registering any such
transfer of the Notes, in its sole discretion, such legal opinions, certifications (including an
investment letter in the case of box (3)) and other information as the Company may reasonably
request to confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.

If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to
register this Note in the name of any Person other than the Holder hereof unless and until the
conditions to any such transfer of registration set forth herein and in Section 2.16 of the
Indenture shall have been satisfied.

	 	 	 	 	 	 	 
	Date:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 

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

	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 
	 

	 	 

	 	 

			
	Note:	 	Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

 

10

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

The undersigned represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

	 	 	 	 	 	 	 
	Date:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 

NOTICE: To be executed by an executive officer.

 

11

 

CONVERSION NOTICE

If you want to convert this Note into cash and if applicable Common Stock of the Company,
check the box: o

To convert only part of this Note, state the principal amount to be converted (which must be
$2,000 or an integral multiple of $1,000 above such amount):

$                                        

If you want the stock certificate and Notes (if any) to be delivered, made out in another
person’s name, fill in the form below:

 

(Insert other person’s social security or tax ID no.)

 

 

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

	 	 	 	 	 	 	 
	Date:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 

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

	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 
	 

	 	 

	 	 

			
	Note:	 	Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee
program” as may be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.

 

12

 

OPTION OF HOLDER TO ELECT REPURCHASE

			
	TO:	 	CEREPLAST, INC.
		 	300 N. Continental Blvd., Suite 300

El Segundo, CA 90245

The undersigned registered owner of this Note hereby elects to have this Note purchased by
Cereplast, Inc. (the “Company”) pursuant to (check the appropriate box) o Section 10.01 or o Section
11.01 and requests and instructs the Company to repay the entire principal amount of this Note, (or
the portion thereof in $1,000 multiples if the principal amount of such remaining portion is
$2,000) below designated, in accordance with the terms of the Indenture referred to in this Note,
together with interest accrued and unpaid to, but excluding, such date, to the registered holder
hereof.

	 	 	 	 	 	 	 
	Dated:                                         	 	Your Name:	 	 	 
	 

	 	 	 	 
	 	 	(Print your name exactly as it appears on the face of this Note)
	 
	 	 	 	 	 	 
	 	 	Your Signature:	 	 
	 

	 	 	 	 	 
	 	 	(Sign exactly as your name appears on the face of this Note)
	 
	 	 	 	 	 	 
	 	 	Signature Guarantee:*	 
	 
	 	 	 	 	 	 
	 	 	Social Security or other Taxpayer Identification
	 

	 	Number: 	 	 	 	 
	 

	 	 	 
	 
	 	 
	 

	 	Principal amount to be repurchase (if less than all): $                                        

 

	 	 	 
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

 

 

SCHEDULE A

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE1.

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal amount of	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	this Global Note	 	 	Signature or	 
	 	 	Amount of decrease	 	 	Amount of increase	 	 	following such	 	 	authorized signatory	 
	 	 	in Principal amount	 	 	in Principal amount	 	 	decrease (or	 	 	of Trustee or Note	 
	Date of Exchange	 	of this Global Note	 	 	of this Global Note	 	 	increase)	 	 	Custodian	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 
	1	 	This is included in Global Notes only.

 

1

 

EXHIBIT B

FORM OF NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

CEREPLAST, INC.

300 N. Continental Blvd., Suite 300

El Segundo, CA 90245

WELLS FARGO BANK, NATIONAL ASSOCIATION

Wells Fargo Bank — DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

Re: CEREPLAST, INC. (the “COMPANY”) 7.00% Convertible Senior Subordinated Notes Due 2016 (the
“NOTES”)

Ladies and Gentlemen:

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

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

	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	(Name)

 

B-1

 

EXHIBIT C

FORM OF SURRENDER CERTIFICATE

In connection with the certification relating to compliance with certain restrictions relating
to transfers of Restricted Notes, such certification shall be provided substantially in the form of
the following certificate, with only such changes thereto as shall be approved by the Company and
Cowen and Company, LLC:

CERTIFICATE

CEREPLAST, INC.

7.00% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2016

This is to certify that as of the date hereof with respect to $_____ principal amount of the
above-captioned Notes surrendered on the date hereof (the “Surrendered Notes”) for conversion or
repurchase where the Notes issuable upon such conversion or repurchase are to be registered in a
name other than that of the undersigned Holder (each such transaction being a “transfer”), the
undersigned Holder (as defined in the Indenture) certifies that the transfer of Surrendered Notes
associated with such transfer complies with the restrictive legend set forth on the face of the
Surrendered Notes for the reason checked below:

	 	 	 
	                    

	 	The transfer of the Surrendered Notes complies with Rule 144
under the United States Securities Act of 1933, as amended (the
“Securities Act”); or
	 
	 	 
	                    

	 	The transfer of the Surrendered Securities complies with Rule
144A under the Securities Act; or
	 
	 	 
	                    

	 	The transfer of the Surrendered Notes has been made to an
institution that is an “accredited investor” within the meaning
of Rule 501(a)(1), (2), or (7) under the Securities Act who
purchases at least $100,000 principal amount in a transaction
exempt from the registration requirements of the Securities Act
and a signed letter containing certain representations and
agreements relating to restrictions on transfer of the Notes
(and an opinion of counsel acceptable to the Company if
requested by the Company, that such transfer is exempt from
registration); or
	 
	 	 
	                    

	 	The transfer of the Surrendered Notes has been made pursuant to
an exemption from registration under the Securities Act and an
opinion of counsel has been delivered to the Company with
respect to such transfer.

[Name of Holder]

Dated:                                         

	 	 	 
	*	 	To be dated the date of surrender

 

C-1

 

EXHIBIT D

THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND, AND ACCORDINGLY, MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM.

THE HOLDER HEREOF AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THE SHARES OF COMMON STOCK
EVIDENCED HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (II)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE
THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD
TO THE SECURITIES EXCEPT AS PERMITTED BY THE SECURITIES ACT.

THE COMMON STOCK EVIDENCED HEREBY MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE
RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE
LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER SUCH SHARES SHALL BE DEEMED BY THE
ACCEPTANCE OF SUCH SHARES TO HAVE AGREED TO SUCH AMENDMENT OR SUPPLEMENT.

 

D-1Exhibit 10.1

Exhibit 10.1

WAIVER TO VENTURE LOAN AND SECURITY AGREEMENT

WAIVER, dated as of May 18, 2011 (this “Waiver”), to the Venture Loan and Security
Agreement dated as of December 21, 2010 (the “Loan Agreement”) by and between Cereplast,
Inc., a corporation organized under the laws of the State of Nevada (the “Borrower”) and
Compass Horizon Funding Company LLC, a limited liability company organized under the laws of the
State of Delaware.

W I T N E S S E T H:

WHEREAS, pursuant to the Loan Agreement, the Lender has agreed to make, and has made, certain
loans to the Borrower;

WHEREAS, the Borrower has requested that certain provisions of the Loan Agreement be waived as
set forth in this Waiver; and

WHEREAS, the Lender is willing to agree to such waiver on the terms and subject to the
conditions set forth in this Waiver;

NOW THEREFORE, in consideration of the premises and mutual covenants contained in this Waiver,
the undersigned hereby agree as follows:

I. Defined Terms; Interpretation; Etc. Capitalized terms used but not defined in this
Waiver shall have the meanings given to them in the Loan Agreement.

II. Waiver of Convertible Notes Offerings. The Lender hereby agrees that the Borrower
may offer and issue an aggregate principal amount of up to $20 million convertible notes on
substantially the terms set forth on Schedule A hereto (the “Note Offering”) and
the Lender hereby waives any restriction in the Loan Agreement with respect to the Note Offering,
including without limitation, Sections 7.10 and 8.2 thereof.

III. No Other Amendments or Waivers; Confirmation. Except as expressly set forth
herein, this Waiver shall not by implication or otherwise limit, impair, constitute a waiver of, or
otherwise affect the rights and remedies of the Lender under the Loan Agreement or any other Loan
Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Loan Agreement or any other Loan Document,
all of which are ratified and affirmed in all respects and shall continue in full force and effect.
Nothing herein shall be deemed to entitle the Borrower to any future consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions, obligations, covenants or
agreements contained in the Loan Agreement or any other Loan Document in similar or different
circumstances. This Waiver shall apply and be effective only with respect to the provisions of the
Loan Agreement specifically referred to herein. After the date hereof, any reference in any Loan
Document to the Loan Agreement shall mean the Loan Agreement as modified hereby. This Waiver is a
Loan Document.

IV. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS WAIVER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH OF BORROWER AND LENDER HEREBY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF CONNECTICUT.
BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS WAIVER OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.

 

 

 

V. Counterparts. This Waiver may be executed in any number of counterparts and by
different parties on separate counterparts (including signatures delivered by facsimile or other
electronic means), each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same Waiver.

VI. Headings. The Section headings used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Waiver.

VII. Notices. All communications and notices hereunder shall be given as provided in
the Loan Agreement.

VIII. Severability. The fact that any term or provision of this Waiver is held
invalid, illegal or unenforceable as to any person in any situation in any jurisdiction shall not
affect the validity, enforceability or legality of the remaining terms or provisions hereof or the
validity, enforceability or legality of such offending term or provision in any other situation, or
jurisdiction or as applied to any person.

IX. Successors. The terms of this Waiver shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.

[Remainder of Page Intentionally Left Blank]

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly executed and
delivered by their respective proper and duly authorized officers as of the day and year first
above written.

	 	 	 	 	 
	 	CEREPLAST, INC.,

as Borrower

 	 
	 	By:  	/s/ Frederic Scheer
 	 
	 	 	Name:  	Frederic Scheer 	 
	 	 	Title:  	CEO 	 

[Signature Page to Waiver]

	 	 	 	 	 

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	COMPASS HORIZON FUNDING COMPANY LLC, as Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Horizon Technology Finance Corporation,

its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Robert D. Pomeroy, Jr.	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert D. Pomeroy, Jr.	 	 
	 

	 	 	 	Title:
	 	CEO	 	 

[Signature Page to Waiver]

 

 

 

SCHEDULE A

DESCRIPTION OF THE NOTES

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