Document:

Exhibit 10.1

 

Execution Copy

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated January 21,
2008, but effective as of December 20, 2007 (the “Effective Date”), is by
and between ZALE CORPORATION, a Delaware corporation (the “Company”), and NEAL
GOLDBERG (“Executive”).

 

WHEREAS Executive and Company desire to enter
into an employment agreement which sets forth the terms and conditions for
Executive’s continued employment with the Company;

 

NOW, THEREFORE, in consideration of the foregoing
recital and of the mutual covenants set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1.  Employment;
Term.  (a)  Executive agrees to
enter in the employment of the Company, and the Company agrees to employ
Executive, on the terms and conditions set forth in this Agreement.  The term of Executive’s employment under this
Agreement commenced on the Effective Date and, subject to its earlier
termination as provided in Section 4, will continue through December 19,
2010 (the “Initial Term”), provided that on each anniversary of the Effective
Date, the term of Executive’s employment shall automatically be extended for an
additional one-year period (collectively with the Initial Term, the “Term”)
unless at least ninety (90) days prior to the anniversary date either party
provides written notice of termination to the other party.

 

2.  Position;
Duties.  During the Term, Executive
will serve as the President and Chief Executive Officer of the Company and his
duties will be those designated from time to time by the Board of Directors of
the Company (the “Board”).  In addition,
the Board shall use its reasonable best efforts to nominate Executive for
election as a director of the Company each year during the Term.  Executive agrees during the Term to devote
his full time, efforts, skills and abilities to the performance of his duties
as described herein and to the furtherance of the Company’s business.  As consideration for this Agreement and
specifically in consideration for the promises described in Section 9, the
Company promises to provide Executive with confidential and proprietary
information and trade secrets, the receipt and sufficiency of which Executive
acknowledges, including, without limitation, Trade Secrets (as defined below)
belonging to the Company for use in the performance of Executive’s duties for
the Company.  Executive will report
directly to the Board.  At the request of
the Board, Executive further agrees to serve, without additional compensation,
as an officer, director or both of any subsidiary, division or affiliate of the
Company or any other entity in which the Company holds a controlling equity
interest, provided, however, that (i) the Company shall indemnify Executive from
liabilities in connection with serving in any such position to the same extent
as his indemnification rights pursuant to the Company’s Certificate of
Incorporation, Bylaws and applicable Delaware law, and (ii) such service
shall not

 

 

materially detract
from the responsibilities of Executive to the Company as set forth herein or
his ability to perform such responsibilities.

 

3.  Compensation.

 

(a)  Base Salary.  During the Term, the Company will pay to
Executive an annual base salary of not less than $925,000 (“Base Salary”),
which will be payable in arrears in accordance with the Company’s normal
payroll procedures in the amount of $35,576.92 per bi-weekly pay period, and
will be reviewed annually by the Board and will be subject to increases at the
discretion of the Board or an authorized committee or representative
thereof.  After any such increase, the
term “Base Salary” as utilized in this Agreement will thereafter refer to the
adjusted amount.

 

(b)  Sign-On Bonus.

 

(i) 
The Company will pay to the Executive a sign-on cash bonus of eight hundred
thousand dollars ($800,000) (the “Relocation and Signing Bonus”), payable
within 30 days of the Effective Date.  If
the Executive’s employment with the Company is terminated for any reason prior
to the first anniversary of the Effective Date, the Executive will repay the
Relocation and Signing Bonus in accordance with the Company’s standard sign-on
bonus agreement.

 

(ii) 
The Company will grant to the Executive on the Effective Date (A) an
option to purchase three hundred thousand (300,000) shares of Company common
stock (the “Common Stock”) with an exercise price equal to the fair market
value of the Common Stock at the close of market on the Effective Date, which
shall vest over four years at a rate of 25% of the stock subject thereto on
each anniversary of the Effective Date; and (B) two hundred fifty thousand
(250,000) restricted stock units, which shall vest over three years at a rate
of 33.33% of the units awarded herein on each anniversary of the Effective Date
(collectively, the “Sign-on Equity Grants”). 
Subject to the provisions of this subsection, the Sign-on Equity Grants
shall be governed by and shall be subject to the rules of the equity and
other long-term incentive programs of the Company under which such grants are
authorized, and of the award agreements pursuant to which such grants are made.

 

(c)  Incentive Bonus.  During the Term, Executive will be eligible
to receive an annual incentive bonus as determined under the Company’s Annual
Bonus Program (as may be amended from time to time) established by the
Board.  The annual incentive bonus for
Executive will be not less than 125% of Executive’s Base Salary (the “Target
Bonus”) and the maximum annual incentive bonus will be 200% of Executive’s Base
Salary, based on achievement of financial goals as agreed to in writing by the
Board.  Notwithstanding the foregoing,
Executive’s annual incentive bonus for (i) the period beginning on the
Effective Date and ending on June 19, 2008 (“Period 1”) shall be no less
than the greater of (A) 50% of the Target Bonus or (B) the actual
annual incentive 

 

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bonus earned for Period 1; and (ii) the period beginning on June 20,
2008 and ending on December 19, 2008 (“Period 2”) shall be no less than
the greater of (A) 50% of the Target Bonus, or (B) the actual annual
incentive bonus earned for Period 2 (each, a “Guaranteed Bonus”).  Executive shall be paid the Guaranteed
Bonuses as follows: (1) 50% of the Target Bonus for Period 1 shall be paid
no later than 30 days following June 20, 2008; and (2) an amount
equal to the excess of (I) the Guaranteed Bonuses over (II) the
amount paid pursuant to Clause (1) of this sentence shall be paid as soon
as administratively possible following December 19, 2008 but in no event
later than March 15, 2009.  For the
period beginning on December 20, 2008 and ending on July 31, 2009 (“Period
3”), Executive will be eligible for a pro-rata portion of any earned bonus for
fiscal year 2009 corresponding to Period 3. 
Except as otherwise specifically provided in this Section 3(c), the
annual incentive bonus will be paid to Executive in accordance with the terms
and conditions of the Annual Bonus Program.

 

(d)  Other Equity and Long-Term
Incentive Awards.  In addition to all
previous grants of restricted stock units and stock options, Executive will be
entitled to participate in equity and other long-term incentive award programs
of the Company, including, without limitation, the Equity Plan, on a basis
generally consistent with that of other senior-level executives.

 

(e)  Vacation.  Executive will be entitled to at least four (4) paid
weeks (160 hours) of vacation per year during each fiscal year of the Term of
this Agreement.

 

(f)  Executive Perquisites; Benefit;
Expenses.

 

(i) 
Executive will be entitled to receive executive perquisites and fringe and
other benefits on a basis which is no less favorable than the basis on which
such perquisites and benefits are provided to any other senior executive
(including for this purpose, to the extent applicable, executive’s family)
under any of the Company’s plans, policies, arrangements or programs in effect
from time to time (including but not limited to (A) coverage under the
Company’s medical plans, (B) the provision of executive life insurance at
two times the Executive’s Base Salary, (C) participation in the Company’s
401(k) Savings and Investment Plan after one year of qualifying service,
and (D) the provision of executive long-term disability insurance).

 

(ii) 
The Company will reimburse Executive for such reasonable and necessary
out-of-pocket business expenses as may be incurred by him in the performance of
his duties hereunder during the Term upon presentation of itemized expense
statements and such other supporting information as may be required by the
Company.  In addition, the Company will
reimburse Executive for, or at Executive’s request pay directly on Executive’s
behalf, the legal fees and other expenses incurred by him in connection with
the negotiation and drafting of this Agreement in an amount not to exceed
$25,000 upon production of receipts and/or invoices to the reasonable
satisfaction of the Board, and the Company 

 

3

 

shall pay to Executive tax
gross-up payments so that the net amount retained by Executive after payment of
all applicable income and employment taxes is equal to the agreed amount to be
reimbursed for such legal fees and expenses, provided, however, that a gross up
payment shall not be made with respect to any reimbursement to the extent the
related expense is deductible or is otherwise excludable from Executive’s
taxable income.  To the extent any such
reimbursements are taxable to Executive (or any legal fees and expenses
referred to in the second sentence of this paragraph), the amount of any such
expenses eligible for reimbursement during any calendar year will not affect
the amount of any such expenses eligible for reimbursement in any other
calendar year, and any such expenses will be reimbursed no later than the last
day of the calendar year following the calendar year in which such expenses are
incurred.

 

(iii) 
Any amounts that Executive becomes entitled to receive in respect of taxes pursuant
to this Section 3(f) shall be paid to Executive (or to the applicable
tax authority on Executive’s behalf) not later than the last day of the
calendar year in the same the calendar year in which Executive remits the
underlying taxes to the applicable taxing authority.

 

(g)  Tax Withholding.  The Company has the right to deduct from any
compensation payable to Executive under this Agreement social security
(FICA) taxes and all Federal, state and local income taxes and charges as
are required by applicable law and regulations.

 

4.  Termination.  Subject to the provisions of Section 5
hereof, the Term will terminate as specified in Section 1(b) or, if
earlier, upon Executive’s termination of employment with the Company as
follows:

 

(a)  Death.  Executive’s employment shall terminate upon
the death of Executive.

 

(b)  Termination for Cause.  The Company may terminate Executive’s
employment at any time for Cause (as hereinafter defined) by delivering a
written termination notice to Executive. 
For purposes of this Agreement, “Cause” shall mean any of the following:

 

(i) 
Executive’s indictment for a felony or a crime involving moral turpitude;

 

(ii) 
Executive’s commission of an act constituting fraud, deceit, or material
misrepresentation with respect to the Company;

 

(iii) 
Executive’s recurrent use of alcohol or prescribed medications at work or
otherwise such that Executive’s job performance is impaired or the use of any
illegal substances or drug such that, in the Company’s sole discretion,
Executive’s job performance is impaired;

 

4

 

(iv) 
Executive’s embezzlement of Company assets or funds; or

 

(v) 
Executive commits any negligent or willful act or omission that causes material
detriment (by reason, without limitation, of financial exposure or loss, damage
to reputation or goodwill, or exposure to civil damages or criminal penalties
or other prosecutorial action by any governmental authority) to the Company or
any parent or subsidiary corporation thereof.

 

(c)  Termination Without Cause.  The Company may terminate Executive’s
employment at any time for any reason other than for Cause in a termination
that constitutes a “separation from service” for purposes of Section 409A
of the Code by delivering a written termination notice to Executive.

 

(d)  Termination by Executive For a
Termination Reason.  Executive may
terminate his employment with the Company at any time for a Termination Reason
(as hereinafter defined) by delivering a written termination notice to the
Company.  For purposes of this Agreement,
“Termination Reason” shall mean any of the following:

 

(i) 
a material reduction by the Company in Executive’s Base Salary or bonus
eligibility unless such reduction has been agreed to in writing by Executive;

 

(ii) 
the Company’s principal executive offices shall be moved to a location which is
more than 50 miles outside of the Dallas/Fort Worth, Texas Metroplex area; or

 

(iii) 
the assignment to Executive by the Company of duties materially inconsistent
with, or the material reduction of the powers and functions associated with,
Executive’s positions, duties, responsibilities and status with the Company or
a material adverse change in Executive’s titles or offices, or he no longer
reports to the Board, unless such action is in lieu of termination by the
Company of Executive’s employment for Executive’s Disability pursuant to Section 4(f).

 

If Executive believes that
an event specified in this Section 4(d) has occurred, Executive must
notify the Company of that belief within ninety (90) days following the
occurrence of such event.  The Company
will have thirty (30) days following receipt of such notice (such period,
the “Termination Reason Designated Period”) in which to either rectify such
event, determine that such an event exists, or determine that such an event
does not exist.  If the Company does not
take any of the foregoing actions within the Termination Reason Designated
Period, Executive may terminate his employment with the Company during the
fourteen-day period following the expiration of the Termination Reason
Designated Period.  If, during the
Termination Reason Designated Period, the Company determines that such an event
exists, the Company shall either 

 

5

 

(A) undertake to cure
such event during the Termination Reason Designated Period and provide
Executive with written notice during the Termination Reason Designated Period
of the Company’s determination that such event has been cured, or (B) provide
written notice to Executive during the Termination Reason Designated Period
that it does not wish to cure such event, in which case Executive may terminate
his employment during the fourteen (14) day period following receipt of the
notice specified in this clause (B). 
If, during the Termination Reason Designated Period, the Company
determines that (1) such event does not exist or (2) the Company has
cured such event pursuant to clause (A) of the preceding sentence,
then (x) Executive will not be entitled to rely on or assert such event as
a Termination Reason, and (y) if Executive disagrees with the Company’s
determination, Executive may file a claim pursuant to Section 15
within thirty (30) days after Executive’s receipt of written notice of the
Company’s determination.

 

(e)  Termination by Executive Without
a Termination Reason.  Executive may
terminate his employment with the Company without a Termination Reason upon
thirty (30) days’ prior written notice to the Company.  In such instance, the Company may accelerate
the effective date of such termination, but Executive shall receive all
compensation and benefits under this Agreement, payable in accordance with the
Company’s normal payroll procedures, for the full thirty (30) day notice
period.

 

(f)  Termination Following Disability.  In the event that, in the Company’s sole
discretion, Executive becomes unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months (a “Disability Event”), the
Company may terminate Executive’s employment under this Agreement by delivering
a written termination notice to Executive.

 

(g)  Payments/Deductions.  Following any expiration or termination of
the Term, and in addition to any amounts owed pursuant to Section 5
hereof, the Company shall pay Executive all amounts earned by Executive
hereunder up to the date of such expiration or termination.  Any such amounts paid in respect of earned
but unpaid Base Salary or vacation shall be paid as part of Executive’s final
ordinary payroll payment from the Company for active employment or
contemporaneously with such payment, but in no event later than thirty (30)
days after such expiration or termination of the Term, and any other such
amounts shall be paid in accordance with the terms of the plan, policy,
agreement or arrangement under which they arose (including with respect to time
of payment or distribution).  Subject to Section 7(e),
Executive agrees that any advances to Executive by the Company outstanding at
the time of the expiration or termination of the Term may be deducted from his
wages, including his final paycheck and/or any severance owed to Executive.

 

5.  Rights
of Executive Upon Termination. 
Subject to Executive’s adherence to the terms of this Agreement,
including but not limited to the non-competition, no-hire/non-solicitation,
non-disclosure and non-disparagement provisions 

 

6

 

set forth in Sections 9, 10, 11 and 12 (subject to Section 7(e)),
Executive shall be entitled to receive the following benefits in the event his
employment is terminated pursuant to Section 4 above or the Company
terminates Executive’s employment in connection with its election not to renew
this Agreement for an additional Term as specified in Section 1(b):

 

(a)  Death.  In the event that Executive’s employment is
terminated upon the occurrence of his death as provided in Section 4(a),
the Company shall continue to pay, in accordance with and at times consistent
with its normal payroll procedures, the Base Salary to Executive’s estate for a
period of twelve (12) months commencing on the first ordinary payroll date
that follows the date that is 60 days after the date of Executive’s death.  All unvested restricted stock or units
granted to Executive will be immediately forfeited and all unvested stock
options granted to Executive will be immediately terminated upon the date of Executive’s
death and any vested stock options will remain exercisable for one (1) year
after Executive’s date of death, subject to the earlier expiration of the term
of such stock option.  For purposes of
this Section 5(a) and elsewhere in this Agreement, Stock Appreciation
Rights shall be treated in the same manner as stock options.

 

(b)  Termination for Cause.  In the event that Executive’s employment is
terminated by the Company for Cause as provided in Section 4(b) Executive
shall not thereafter be entitled to any further compensation from the Company
and all outstanding stock options, whether or not vested, and unvested
restricted stock and units shall be immediately forfeited.

 

(c)  Termination By Non-Renewal,
Without Cause or By Executive For a Termination Reason.  In the event that the Company terminates
Executive’s employment (i) in connection with the Company’s election of
non-renewal of the Term as provided in Section 1(b) or without Cause
as provided in Section 4(c) or Executive terminates his employment
for a Termination Reason as provided in Section 4(d), and (ii) the
termination constitutes a “separation from service” for purposes of Section 409A
of the Code, then Executive shall be entitled to the following:

 

(i) 
Severance.  The Company shall pay
to Executive (or Executive’s estate if Executive dies after termination) an
amount equal to the sum of two (2) times Executive’s annual Base Salary as
of the date of termination and two (2) times the average of the annual
incentive bonus amount earned by Executive with respect to the three fiscal
year period preceding the year in which this Agreement is terminated (or such
shorter period as may apply if this Agreement has been in effect for less than
three years) (hereinafter, the “Severance Amount”); provided, however, that for
purposes of this calculation, the Relocation and Signing Bonus and the
Guaranteed Bonus payable for Period 1 and for Period 2 shall not be utilized
and the actual bonus that would have been earned for such time periods shall be
utilized instead.  The Severance Amount
shall be payable in equal installments in accordance with and at times
consistent with the Company’s ordinary payroll practices, over a twenty-four
(24) month 

 

7

 

period (hereinafter, the “Severance
Period”) commencing on the first ordinary payroll payment date that follows the
date that is 60 days after the date of termination of Executive’s employment.

 

(ii) 
Benefits.  For the duration of the
Severance Period (i.e., twenty-four (24) months) commencing on the date of
termination of Executive’s employment, Executive shall continue to receive the
fringe and other benefits provided under Section 3(f)(i) hereof on
the same basis as such benefits were provided during Executive’s employment
hereunder, provided that the continued participation of Executive under any
benefit plan including, without limitation, group healthcare, dental and life
insurance is possible under the general terms and provisions of such plans.  Such period of coverage shall count against
Executive’s continuation of coverage period required under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  All premium payments paid by Executive for
such continuation coverage during the Severance Period and for any subsequent
COBRA period shall be paid directly to the appropriate insurer or service
provider for such benefit (which may be the Company).  If Executive’s participation in any such plan
is barred or would result in adverse tax consequences to Executive or the
Company, the Company shall arrange to provide Executive with benefits
substantially similar to those which Executive would otherwise have been
entitled to receive under such plan or, alternatively at the option of the Company,
reimburse Executive for the reasonable actual costs of purchasing in the
marketplace substantially similar benefits; provided, however, that in either
case Executive shall pay to the Company, or provide a credit against the
Company’s reimbursement obligation for, the amount equal to the premiums, or
portion thereof, that Executive was required to pay to maintain such benefits
prior to the date of termination of employment.   Except as
permitted by Section 409A of the Code, the continued benefits provided to
Executive pursuant to this Section 5(c)(ii) during any calendar year
will not affect the continued benefits provided to Executive in any other
calendar year, and the amount of any costs of purchasing benefits reimbursed
pursuant to this Section 5(c)(ii) shall be paid to Executive no later
than the last day of the calendar year following the calendar year in which
such costs are incurred by Executive.

 

(iii) 
Equity and Long-Term Incentive Awards. 
All unvested restricted stock or units granted to Executive will be
immediately forfeited and all unvested stock options granted to Executive will
be immediately terminated upon such termination of Executive’s employment and
any vested stock options granted to Executive will remain exercisable for three
months after such termination of Executive’s employment, subject to the earlier
expiration of the term of such stock option.

 

(iv) 
Offset.  Any benefits received by
or available to Executive in connection with any other employment or
consultancy that are reasonably 

 

8

 

comparable to the benefits
then being provided by the Company pursuant to Section 5(c)(ii) hereof,
shall be deemed to be the equivalent thereof and shall terminate the Company’s
responsibility to continue providing the benefits then being provided by the
Company pursuant to Section 5(c)(ii) hereof.

 

(d)  Termination by Executive Without
a Termination Reason.  In the event
that Executive’s employment is terminated by Executive without a Termination Reason
as provided in Section 4(e), Executive shall receive all payments due
under Section 4(g) as of the termination date and thereafter shall
not be entitled to any further compensation from the Company and all
outstanding unvested stock options and all unvested restricted stock and units
shall be immediately forfeited.

 

(e)  Disability.  In the event that Executive’s employment is
terminated due to a Disability Event as provided in Section 4(f),
Executive shall be entitled to continue to receive his Base Salary for a period
of twelve (12) months, commencing on the first ordinary payroll date that
follows the date that is 60 days after the date of termination of Executive’s
employment, and payable in accordance with and at times consistent with the
Company’s ordinary payroll practices.  In
addition, Executive shall be entitled to continue to receive the fringe and
other benefits provided under Section 3(f)(i) hereof for a period of
12 months, commencing on the date of termination of Executive’s employment, subject
to the conditions regarding such benefits specified in Section 5(c)(ii) and
5(c)(iv).  All unvested restricted stock
or units granted to Executive will be immediately forfeited and all unvested
stock options granted to Executive will be immediately terminated upon the date
of such termination of Executive’s employment and any vested stock options will
remain exercisable for one (1) year after such termination of Executive’s
employment, subject to the earlier expiration of the term of such stock option.

 

6.  Effect
of Change of Control. (a)  If within two (2) years following a
Change of Control (as hereinafter defined), Executive terminates his employment
with the Company for Good Reason (as hereinafter defined) or the Company
terminates Executive’s employment for any reason other than for Cause (as
defined in Section 4(b)) in a termination that constitutes a “separation
from service” for purposes of Section 409A of the Code, or a Disability
Event, the Company shall pay to, and provide for, Executive the following
payments and benefits:

 

(i) 
An amount equal to three (3) times the sum of (A) the Executive’s
annual Base Salary as of the date of termination and (B) the average
annual incentive bonus paid to Executive over the prior three years (or such
shorter period as may apply if this Agreement has been in effect for less than
three years) as of the date of termination, payable in a single lump sum within
fifteen (15) days after the date on which the general release required pursuant
to Section 8 is executed and delivered to the Company and becomes
irrevocable in accordance with its terms, provided, however, that for purposes
of the calculation of clause (B), the 

 

9

 

Relocation and Signing Bonus
shall not be utilized and the Guaranteed Bonus payable for Period 1 and for
Period 2 shall be utilized;

 

(ii) 
All benefits under the Company’s various benefit plans, including group
healthcare, dental, and life, for thirty-six (36) months from the date of
termination, on the same basis as such benefits were provided during Executive’s
employment hereunder, provided that the continued participation of Executive is
possible under the general terms and provisions of such plans.  If Executive’s participation in any such plan
is barred or would result in adverse tax consequences to Executive or the
Company, the Company shall arrange to provide Executive with benefits
substantially similar to those which Executive would otherwise have been
entitled to receive under such plan or, alternatively at the option of the
Company, reimburse Executive for the reasonable actual costs of purchasing in
the marketplace substantially similar benefits; provided, however, that in
either case Executive shall pay to the Company, or provide a credit against the
Company’s reimbursement obligation, for the amount equal to the premiums, or
portion thereof, that Executive was required to pay to maintain such benefits
prior to the date of termination of employment. 
Further, any insurance or other benefits and benefits coverage provided
pursuant hereto shall be limited and reduced to the extent reasonably
comparable coverage or benefits are provided by or available from any other
employer of Executive, provided further that except as permitted by Section 409A
of the Code, the continued benefits provided to Executive pursuant to this Section 6(a)(ii) during
any calendar year will not affect the continued benefits provided to Executive
in any other calendar year, and the amount of any costs of purchasing benefits
reimbursed pursuant to this Section 6(a)(ii) shall be paid to
Executive no later than the last day of the calendar year following the
calendar year in which such costs are incurred by Executive; and

 

(iii) 
All unvested restricted stock or units granted to Executive and all unvested
stock options granted to Executive will be immediately vested as of the date on
which Executive’s employment is terminated. 
Further, all vested stock options granted to Executive, including those
vested by reason of the preceding sentence, will remain exercisable for ninety
(90) days after such termination of Executive’s employment, subject to the
earlier expiration of the term of such stock options.

 

(b)  Change of Control.  For purposes of this Agreement, “Change of Control”
means the earliest to occur of the following:

 

(i) 
any “person,” as such term is used in Sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934 (“Person”), becomes a “beneficial owner,”
as such term is used in Rule 13d-3 promulgated under that act, of 30% or
more of the Voting Stock of the Company;

 

10

 

(ii) 
the majority of the Board consists of individuals other than “incumbent”
directors, which term means the members of the Board on the Effective Date;
provided that any person becoming a director subsequent to such date whose
election or nomination for election was supported by two-thirds of the
directors who then comprised the incumbent directors will be considered to be
an incumbent director;

 

(iii) 
the Company adopts any plan of liquidation providing for the distribution of
all or substantially all of its assets;

 

(iv) 
all or substantially all of the assets or business of the Company is disposed
of pursuant to a merger, consolidation or other transaction (unless the
stockholders of the Company immediately prior to such merger, consolidation or
other transaction beneficially own, directly or indirectly, in substantially
the same proportion as they owned the Voting Stock of the Company, all of the
Voting Stock or other ownership interests of the entity or entities, if any,
that succeed to the business of the Company); or

 

(v) 
the Company combines with another company and is the surviving corporation but,
immediately after the combination, the stockholders of the Company immediately
prior to the combination hold, directly or indirectly, 50% or less of the
Voting Stock of the combined company (there being excluded from the number of
shares held by such stockholders, but not from the Voting Stock of the combined
company, any shares received by affiliates of such other company in exchange
for stock of such other company).

 

For purposes of the Change of Control
definition, “Company” will include any entity that succeeds to all or
substantially all, of the business of the Company and “Voting Stock” will mean
securities of any class or classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the directors of a
corporation.

 

(c)  “Good Reason” shall mean any
of the following actions taken by the Company without Executive’s written
consent after a Change of Control:

 

(i) 
the assignment to Executive by the Company of duties inconsistent with, or the
reduction, other than due solely to the fact that the Company no longer is a
publicly traded Company, of the powers and functions associated with, Executive’s
position, duties, responsibilities and status with the Company immediately
prior to a Change of Control or Potential Change of Control (as defined below),
or a material adverse change in Executive’s titles or offices as in effect
immediately prior to a Change of Control or Potential Change of Control, or any
removal of Executive from or any failure to re-elect Executive to any of such
positions, except in connection with the termination of his employment (A) by
the Company for a Disability Event or Cause or as a result of 

 

11

 

Executive’s death or (B) by
Executive other than for the reasons set forth in this Section 6(c);

 

(ii) 
a reduction by the Company in Executive’s Base Salary as in effect on the date
of a Change of Control or Potential Change of Control;

 

(iii) 
the Company’s principal executive offices shall be moved to a location which is
more than 50 miles outside of the Dallas/Fort Worth, Texas Metroplex area, or
the Company shall require Executive to be based anywhere other than at the
Company’s principal executive offices, if such location is more than 50 miles
outside of the Dallas/Fort Worth, Texas Metroplex area;

 

(iv) 
the Company shall fail to continue in effect any Company-sponsored plan that is
in effect on the date of a Change of Control or Potential Change of Control (or
replacement plans therefore that in the aggregate provide the same or more
favorable benefits) that provides (A) incentive or bonus compensation, (B) reimbursement
for reasonable expenses incurred by Executive in connection with the
performance of duties with the Company, and (C) pension benefits such as Section 401(k) plan
within the meaning of the Code;

 

(v) 
any material breach by the Company of any provision of this Agreement; and

 

(vi) 
any failure by the Company to obtain the assumption of this Agreement by any
successor or assign of the Company effected in accordance with the provisions Section 17(h).

 

If Executive believes that
an event specified in this Section 6(c) has occurred, Executive must
notify the Company of that belief within ninety (90) days following the
occurrence of such event.  The Company
will have thirty (30) days following receipt of such notice (such period,
the “Good Reason Designated Period”) in which to either rectify such event,
determine that such an event exists, or determine that such an event does not
exist.  If the Company does not take any
of the foregoing actions within the Good Reason Designated Period, Executive
may terminate his employment with the Company during the fourteen-day period
following the expiration of the Good Reason Designated Period.  If, during the Good Reason Designated Period,
the Company determines that such an event exists, the Company shall either (A) undertake
to cure such event during the Good Reason Designated Period and provide
Executive with written notice during the Good Reason Designated Period of the
Company’s determination that such event has been cured, or (B) provide
written notice to Executive during the Good Reason Designated Period that it
does not wish to cure such event, in which case Executive may terminate his
employment during the fourteen (14) day period following receipt of the 

 

12

 

notice specified in this
clause (B).  If, during the Good
Reason Designated Period, the Company determines that (1) such event does
not exist or (2) the Company has cured such event pursuant to clause (A) of
the preceding sentence, then (x) Executive will not be entitled to rely on
or assert such event as a basis for a termination for Good Reason, and (y) if
Executive disagrees with the Company’s determination, Executive may file a
claim pursuant to Section 15 within thirty (30) days after Executive’s
receipt of written notice of the Company’s determination.

 

(d)  “Potential Change of Control”
shall mean the earliest to occur of the following events within six months
prior to a Change of Control:

 

(i) 
the Company enters into an agreement the consummation of which, or the approval
by stockholders of which, would constitute a Change of Control;

 

(ii) 
proxies for the election of members of the Board are solicited by any person
other than the Company;

 

(iii) 
any person (including, but not limited to, any individual partnership, joint
venture, corporation, association or trust) publicly announces an intention to
take or to consider taking actions which, if consummated, would constitute a
Change of Control; or

 

(iv) 
any other event occurs which is deemed to be a Potential Change of Control by
the Board and the Board adopts a resolution to the effect that a Potential
Change of Control has occurred.

 

(e)  Excise Tax.

 

(i) 
Gross-Up.  In the event that the “Total
Payments” (defined below) would be subject to the “Excise Tax” (defined below)
the Company shall pay to Executive an additional amount (the “Gross-Up Payment”)
such that after payment by Executive of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment and any interest or penalties imposed with
respect to such taxes, Executive retains from the Gross-Up Payment an amount
equal to the Excise Tax imposed upon the Total Payments.

 

(a) 
For purposes of determining whether any of the Total Payments will be subject
to the Excise Tax and the amount of such Excise Tax, (A) all “excess
parachute payments” within the meaning of Section 280G(b)(l) of the
Code shall be treated as subject to the Excise Tax unless, in the opinion of
Tax Counsel (defined below), such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered (within
the meaning of Section 280G(b)(4)(B) of the Code) in excess of the
base amount (within the meaning of 

 

13

 

Section 280G(b)(3) of
the Code) allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (B) the value of any noncash benefits or
any deferred payment or benefit shall be determined by the Auditor (defined
below) in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code.  If the Auditor is prohibited
by applicable law or regulation from performing the duties assigned to it
hereunder, then a different auditor, acceptable to both the Company and
Executive, shall be selected.  The fees
and expenses of Tax Counsel and the Auditor shall be paid by the Company not
later than (a) the last day of the calendar year after the calendar year
in which Executive remits the Excise Tax to the applicable taxing authority
and/or (b) the last day of the calendar year in which the applicable
contest is concluded.

 

(b) 
For purposes of determining the amount of the Gross-Up Payment, Executive shall
be deemed to pay federal income tax at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal rate of taxation
in the state and locality of Executive’s residence on the date of termination
(or if there is no date of termination, then the date on which the Gross-Up
Payment is calculated for purposes of this Section), net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes.

 

(c) 
Notwithstanding the foregoing, if it shall be determined that Executive is
entitled to a Gross-Up Payment, but that the Total Payments would not be
subject to the Excise Tax if the Total Payments were reduced by an amount that
is less than 10% of the portion of the Total Payments that would be treated as “parachute
payments” under Section 280G of the Code, then the amounts payable to
Executive under this Agreement shall be reduced (but not below zero) to that
maximum amount that could be paid to Executive without giving rise to the
Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to
Executive.  For purposes of making the
reduction of amounts payable under this Agreement, such amounts shall be
eliminated in the following order:  (1) any
cash compensation, (2) any health or welfare benefits, (3) any equity
compensation, and (4) any other payments hereunder.  Reductions of such amounts shall take place
in the chronological order with respect to which such amounts would be paid
from the date of termination absent any acceleration of payment.  If the reduction of the amounts payable
hereunder would not result in a reduction of the Total Payments to the Safe
Harbor 

 

14

 

Cap, no amounts payable
under this Agreement shall be reduced pursuant to this provision.

 

(d) 
In the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder in calculating the Gross-Up Payment,
Executive shall repay to the Company, within five (5) business days
following the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and other taxes imposed on that portion of the Gross-Up Payment being
repaid by the Executive).  In the event
that the Excise Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any
payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess within five (5) business days following the time
that the amount of such excess is finally determined.  The provisions of Section 6(e)(i)(c) regarding
the reduction of the payments under this Agreement to the Safe Harbor Cap shall
be applied taking into consideration this Section 6(e)(i)(d).  Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments.

 

(ii) 
Other Terms.  At the time that
payments are made under Section 5(c) or 6(a) of this Agreement,
if requested by Executive, the Company shall provide Executive with a written
statement setting forth the manner in which such payments were calculated and
the basis for such calculations including, without limitation, any opinions, or
other advice the Company has received from Tax Counsel, the Auditor or other
advisors or consultants (and all such opinions or advice shall be in writing,
shall be attached to the statement and shall expressly state that Executive may
rely thereon).  Executive and the Company
shall each reasonably cooperate with the other in connection with any
administrative or judicial proceeding concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.  Notwithstanding anything herein to the
contrary, this Section 6(e) shall be interpreted (and, if determined
by the Company to be necessary, reformed) to the extent necessary to fully
comply with the Sarbanes-Oxley Act; provided that the Corporation agrees to
maintain, to the maximum extent practicable, the original intent and economic
benefit to the Executive of the applicable provision without violating the
provisions of the Sarbanes-Oxley Act.

 

15

 

(iii) 
Definitions.  “Total Payments”
shall mean the payments and benefits received or to be received by Executive,
whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement, that constitute “parachute payments” as defined in Section 280G
of the Code (excluding the Gross-Up Payment) (“Parachute Payments”).  For this purposes, all of the payments and
benefits received by Executive or to be received by Executive in connection
with a Change of Control or in connection with Executive’s termination of
employment in respect of a Change of Control (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company,
any Person whose actions result in a Change of Control or any Person affiliated
with Company or such Person) shall be treated as Parachute Payments unless, in
the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to Executive
and selected by the accounting firm which was, immediately prior to the Change
of Control, the Company’s independent auditor (the “Auditor”), such payments or
benefits (in whole or in part) do not constitute Parachute Payments, including
by reason of Section 280G(b)(4)(A) of the Code. “Excise Tax”
shall mean the excise tax imposed under Section 4999 of the Code.

 

(iv) 
Any Gross-Up Payment that Executive becomes entitled to receive pursuant to
this Section 6(e) shall be paid to Executive not later than the last
day of the calendar year after the calendar year in which Executive remits the
underlying taxes to the applicable taxing authority.

 

7.  Time
of Payment; Section 409A.  (a) 
It is the intention of the Company and Executive that the provisions of this
Agreement comply with Section 409A of the Code and the rules, regulations
and other authorities promulgated thereunder (including the transition rules thereof)
and all provisions of this Agreement will be construed and interpreted in a
manner consistent with Section 409A of the Code.

 

(b)  To the extent Executive is a “specified
employee,” as defined in Section 409A(a)(2)(B)(i) of the Code,
notwithstanding the timing of payment provided in any other Section of
this Agreement, no payment, distribution or benefit under this Agreement that
constitutes a distribution of deferred compensation (within the meaning of
Treasury Regulation Section 1.409A-1(b)) upon separation from service
(within the meaning of Treasury Regulation Section 1.409A-1(h)), after
taking into account all available exemptions, that would otherwise be payable
during the six-month period after separation from service, will be made during
such six-month period, and any such payment, distribution or benefit will
instead be paid on the first business day after such six-month period.

 

(c)  In the event that the Company
determines that any provision of this Agreement does not comply with Section 409A
of the Code, the Company will be entitled, without Executive’s consent, to
amend or modify such provision to comply with Section 409A of the Code;
provided, however, that such amendment or modification will, 

 

16

 

to the greatest extent commercially practicable, maintain the economic
value to Executive of such provision.

 

(d)  For purposes of Section 409A
of the Code, each installment of Base Salary or the Severance Amount under
Sections 5(a) and 5(c)(i) will be deemed to be a separate
payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

(e)  Neither Executive nor any creditor
or beneficiary of Executive shall have the right to subject any deferred
compensation (within meaning of Section 409A of the Code) payable under
this Agreement or under any other plan, policy, arrangement or agreement of or
with the Company or any affiliate thereof (this Agreement and such other plans,
policies, arrangements and agreements, the “Company Plans”) to any
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment.  Except as
permitted by Section 409A of the Code, any deferred compensation (within
the meaning of Section 409A of the Code) payable to or for the benefit of
Executive under any Company Plan may not be reduced by, or offset against, any
amount owing by Executive to the Company or any affiliate thereof.

 

(f)  Notwithstanding anything to the
contrary in this Agreement, if any payment, distribution or provision of a
benefit by the Company to or for the benefit of Executive, whether paid or
payable, distributed or distributable or provided or to be provided pursuant to
the terms of this Agreement or otherwise (a “Payment”), would be subject to an
additional tax pursuant to Section 409A of the Code that would not have
been imposed absent such Payment, or any interest or penalties with respect to
such additional tax are otherwise imposed pursuant to Section 409A of the
Code (such additional tax, together with any such interest or penalties, are
hereinafter collectively referred to as the “Additional Taxes”), the Company
shall pay to Executive an additional payment (a “409A Gross-up Payment”) in an
amount such that after payment by Executive of all Additional Taxes, including
any income taxes and Additional Taxes imposed on any 409A Gross-up Payment,
Executive retains an amount of the 409A Gross-up Payment (taking into account
any similar gross-up payments to Executive under any stock incentive or other
benefit plan or program of the Company) equal to the Additional Taxes imposed
upon the Payments.  The Company and
Executive shall make an initial determination as to whether a 409A Gross-up
Payment is required and the amount of any such 409A Gross-up Payment.  Executive shall notify the Company in writing
of any claim by the Internal Revenue Service which, if successful, would
require the Company to make a 409A Gross-up Payment (or a 409A Gross-up Payment
in excess of that, if any, initially determined by the Company and Executive)
within ten business days after the receipt of such claim.  The Company shall notify Executive in writing
at least ten business days prior to the due date of any response required with
respect to such claim if it plans to contest the claim.  If the Company decides to contest such claim,
Executive shall cooperate fully with the Company in such action; provided,
however, the Company shall bear and pay directly or indirectly all costs and
expenses (including additional interest and penalties) incurred in connection
with such action and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Additional Taxes or income tax, including interest and
penalties with respect thereto, imposed as a result of the Company’s
action.  If, as a result of the Company’s
action with respect to a claim, 

 

17

 

Executive receives a refund of any amount paid by the Company with
respect to such claim, Executive shall promptly pay such refund to the Company,
but in no event later than thirty (30) days after Executive receives such
refund.  If the Company fails to timely
notify Executive whether it will contest such claim or the Company determines
not to contest such claim, then the Company shall immediately pay to Executive
the portion of such claim, if any, which it has not previously paid to
Executive.  Any 409A Gross-Up Payment or
other amounts in respect of taxes, interest or penalties that Executive becomes
entitled to receive pursuant to this Section 7(f) shall be paid to
Executive (or to the applicable taxing authority on Executive’s behalf) not
later than the last day of the calendar year after the calendar year in which
Executive remits the underling taxes to the applicable taxing authority.  Any amounts that Executive becomes entitled
to receive in respect of costs and expenses incurred in connection with a
contest pursuant to this Section 7(f) shall be paid not later than (a) the
last day of the calendar year after the calendar year in which Executive remits
the underlying taxes to the applicable taxing authority and (b) the last
day of the calendar year in which the applicable contest is concluded.

 

8.  Complete
Release.  As a condition of obtaining
benefits under this Agreement, Executive will be required to, within forty-five
(45) days following his termination of employment, execute and deliver a full
and complete release of any and all claims related to his employment or
termination of employment that Executive or his estate, heirs or assigns may
have against the Company, its subsidiaries and affiliates and its and their
officers, directors, employees and agents in a form acceptable to the
Company.  In the event that Executive
fails to execute and deliver such general release within such forty-five (45)
day period or revokes such general release (but only to the extent revocation
is permitted under the terms of such general release), Executive will forfeit
all entitlement to any payment, benefit or other amount hereunder.

 

9.  Non-Competition.  As a material inducement for the Company’s
promise to provide the trade secrets and confidential and proprietary
information described in Section 11 below, Executive agrees that during
the Term and for a period equal to the applicable period in which Executive
receives severance payments under this Agreement from the date of cessation or
termination of Executive’s employment with the Company for any reason
whatsoever, he will not, directly or indirectly, compete with the Company by
providing services relating to retail sales of jewelry to any other person,
partnership, association, corporation, or other entity that is in a “Competing
Business.” As used herein, a “Competing Business” is any business that engages
in whole or in material part in the retail sale of jewelry in the United
States, Canada and/or Puerto Rico, including, but not limited to, specialty
jewelry retailers and other retailers having jewelry divisions or
departments.  The restrictions contained
in this Section 9 shall be tolled on a day-for-day basis for each day
during which Executive participates in any activity in violation of such
restrictions.  The parties agree that the
above restrictions on competition are completely severable and independent
agreements supported by good and valuable consideration and, as such, shall
survive the termination of this Agreement for whatever reason.  The parties further agree that any invalidity
or unenforceability of any one or more of such restrictions on competition shall
not render invalid or unenforceable any remaining restrictions on
competition.  Additionally, should a
court of competent 

 

18

 

jurisdiction determine that the scope of any provision of this Section 9
is too broad to be enforced as written, the parties intend that the court
reform the provision to such narrower scope as it determines to be reasonable
and enforceable.

 

10.  Non-Solicitation
of Employees.  During the
Term and for a period of two (2) years after the termination or cessation
of his employment with the Company for any reason whatsoever, Executive shall
not, on his own behalf or on behalf of any other person, partnership,
association, corporation, or other entity, (a) directly, indirectly, or
through a third party, solicit any employee of the Company or its subsidiaries
or affiliates or (b) in any manner attempt to influence or induce any
employee of the Company or its subsidiaries or affiliates to leave the
employment of the Company or its subsidiaries or affiliates, nor shall he use
or disclose to any person, partnership, association, corporation or other
entity any information obtained concerning the names and addresses of the
Company’s employees.  The restrictions
contained in this Section 10 shall be tolled on a day-for-day basis for
each day during which Executive participates in any activity in violation of
such restrictions.  The parties agree
that the above restrictions on hiring and solicitation are completely severable
and independent agreements supported by good and valuable consideration and, as
such, shall survive the termination of this Agreement for whatever reason.  The parties further agree that any invalidity
or unenforceability of any one or more of such restrictions on hiring and
solicitation shall not render invalid or unenforceable any remaining
restrictions on hiring and
solicitation.  Additionally, should a
court of competent jurisdiction determine that the scope of any provision of
this Section 10 is too broad to be enforced as written, the parties intend
that the court reform the provision to such narrower scope as it determines to
be reasonable and enforceable.

 

11.  Nondisclosure
of Trade Secrets. The Company promises to disclose to Executive and
Executive acknowledges that in and as a result of his employment with the
Company, he will receive, make use of, acquire, have access to and/or become
familiar with various trade secrets and proprietary and confidential
information of the Company, its subsidiaries and affiliates, including, but not
limited to, processes, computer programs, compilations of information, records,
financial information, sales reports, sales procedures, customer requirements,
pricing techniques, customer lists, methods of doing business, identities,
locations, performance and compensation levels of employees and other
confidential information which are owned by the Company, its subsidiaries
and/or affiliates and regularly used in the operation of its business, and as
to which the Company, its subsidiaries and/or affiliates take precautions to prevent
dissemination to persons other than certain directors, officers and employees
(collectively, “Trade Secrets”). 
Executive acknowledges and agrees that the Trade Secrets:

 

(i) 
are secret and not known in the industry;

 

(ii) 
give the Company or its subsidiaries or affiliates an advantage over
competitors who do not know or use the Trade Secrets;

 

(iii) 
are of such value and nature as to make it reasonable and necessary to protect
and preserve the confidentiality and secrecy of the Trade Secrets; and

 

19

(iv) 
are valuable, special and unique assets of the Company or its subsidiaries or
affiliates, the disclosure of which could cause substantial injury and loss of
profits and goodwill to the Company or its subsidiaries or affiliates.

 

Executive promises not to use in any way or
disclose any of the Trade Secrets, directly or indirectly, either during or
after the Term, except as required in the course of his employment under this
Agreement, if required in connection with a judicial or administrative proceeding,
or if the information becomes public knowledge other than as a result of an
unauthorized disclosure by Executive. 
All files, records, documents, information, data compilations and
similar items containing non-public and confidential information relating to
the business of the Company, whether prepared by Executive or otherwise coming
into his possession, will remain the exclusive property of the Company and may
not be removed from the premises of the Company under any circumstances without
the prior written consent of the Company (except in the ordinary course of
business during Executive’s period of active employment under this Agreement),
and in any event must be promptly delivered to the Company upon termination of
Executive’s employment with the Company. 
Executive agrees that upon his receipt of any subpoena, process or other
request to produce or divulge, directly or indirectly, any Trade Secrets to any
entity, agency, tribunal or person, whether received during or after the term
of Executive’s employment with the Company, Executive shall timely notify and
promptly provide a copy of the subpoena, process or other request to the
Company.  For this purpose, Executive
irrevocably nominates and appoints the Company (including any attorney retained
by the Company), as his true and lawful attorney-in-fact, to act in Executive’s
name, place and stead to perform any reasonable and prudent act that Executive
might perform to defend and protect against any disclosure of any Trade
Secrets.

 

The parties agree that the above restrictions
on confidentiality and disclosure are completely severable and independent
agreements supported by good and valuable consideration and, as such, shall
survive the termination of this Agreement for whatever reason.  The parties further agree that any invalidity
or unenforceability of any one or more of such restrictions on confidentiality
and disclosure shall not render invalid or unenforceable any remaining
restrictions on confidentiality and disclosure. 
Additionally, should a court of competent jurisdiction determine that
the scope of any provision of this Section 11 is too broad to be enforced
as written, the parties intend that the court reform the provision to such
narrower scope as it determines to be reasonable and enforceable.

 

12.  Non-Disparagement.  Executive expressly acknowledges, agrees, and
covenants that he will not make any public or private statements, comments, or
communications in any form, oral, written, or electronic (all of the foregoing,
for purposes of this paragraph, “Communications”), which in any way could
constitute libel, slander, or disparagement of the Company, its subsidiaries,
affiliates or parent, its and/or their employees, officers, and/or directors,
or which may be considered to be derogatory or detrimental to its or their good
name or business; provided, however, that the terms of this paragraph shall not
(a) apply to Communications between Executive and his spouse, 

 

20

 

clergy, or attorneys, which are subject to a claim of privilege
existing under common law, statute, or rule of procedure; (b) apply
to Communications required by law or made in response to a valid subpoena or
other lawful order compelling Executive to provide testimony or information;
provided, however, that in responding to a valid subpoena or other lawful
order, Executive agrees to provide the Company with advance notice and an
opportunity to seek a protective order or other safeguard for its confidential
information; (c) be construed to inhibit or limit Executive’s ability to
initiate or cooperate with any investigation by a governmental or regulatory
agency or official; or (d) prohibit Executive from responding to any
derogatory or inaccurate statement contained in a press release of the Company
concerning Executive for the purpose of correcting such inaccuracies or
defending his reputation.  Executive
specifically agrees not to issue any public statement concerning his employment
at Zale and/or the cessation of such employment.

 

13.  Executive
Representations and Agreements.  Executive agrees that Executive and the
Company are engaged in a highly competitive business and, due to Executive’s
position with the Company and the nature of Executive’s work, Executive’s
engaging in any business which is competitive with that of the Company will
cause the Company great and irreparable harm. 
Executive represents and warrants that the time, scope and geographic
area restricted by the foregoing Sections 9, 10, 11, and 12 pertaining to
no hire/non-solicitation, non-competition, confidentiality and nondisclosure,
and non-disparagement are reasonable, that the enforcement of the restrictions
contained in such
Sections would not be unduly burdensome to Executive, and that Executive will
be able to earn a reasonable living while abiding by the terms included
herein.  Executive agrees that the
restraints created by the covenants in Sections 9, 10, 11, and 12
pertaining to no hire/non-solicitation, non-competition, confidentiality and
nondisclosure, and non-disparagement are no greater than necessary to protect
the legitimate interests of the Company, including its confidential business or
proprietary information and trade secrets, including but not limited to, the
Trade Secrets.  Similarly, Executive
agrees that the need of the Company for the protection afforded by the
covenants of Sections 9, 10, 11, and 12 pertaining to no
hire/non-solicitation, non-competition, confidentiality and nondisclosure, and
non-disparagement are not outweighed by either the hardship to Executive or any
injury likely to the public.  Subject to Section 7(e),
Executive agrees that any breach by him of Sections 9, 10, 11, and 12
pertaining to no hire/non-solicitation, non-competition, confidentiality and
nondisclosure and non-disparagement will entitle the Company to discontinue any
payments specified in Sections 3, 5 or 6 above, for which Executive might
be eligible based on the terms of those Sections and to any other remedy
available at law or in equity. 
Notwithstanding the suspension or discontinuation of any such payments,
Executive agrees that the Company is entitled to insist on full compliance by
Executive with the full terms, including time periods, described in his
promises not to hire/solicit, compete, disclose confidential information or
Trade Secrets or disparage.  Any delay by
the Company in discontinuing payment shall not be construed as a waiver of any
rights to discontinue payment.

 

14.  Severability.  If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable and
this Agreement shall be construed 

 

21

 

and enforced as if such illegal, invalid or unenforceable provision
never constituted a part of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance
herefrom.  Furthermore, in lieu of such
illegal, invalid or unenforceable provision, there shall be added as part of
this Agreement, a provision as similar in its terms to such illegal, invalid or
enforceable provision as may be possible and be legal, valid and enforceable.

 

15.  Arbitration.  (a)  The parties agree that any
controversy or claim (including all claims pursuant to common and statutory
law) relating to this Agreement or arising out of Executive’s employment with
the Company, shall be resolved exclusively through arbitration pursuant to the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (“AAA”).  Any
such arbitration proceeding shall take place in Dallas County, Texas.  All disputes shall be resolved by a single
arbitrator.  The arbitrator will have the
authority to award the same remedies, damages and costs that a court could
award.  The arbitrator shall issue a
reasoned award explaining the decision, the reasons for the decision and any
damages awarded.  The arbitrator’s
decision will be final and binding.  The
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.  This
provision can be enforced under the Federal Arbitration Act.

 

(b)  As the sole exception to the
exclusive and binding nature of the arbitration commitment set forth above,
Executive and the Company agree that the Company shall have the right to
initiate an action in a court of competent jurisdiction in order to request
temporary, preliminary and permanent injunctive or other equitable relief,
including, without limitation, specific performance, to enforce the terms of
Sections 9, 10, 11, 12 or 13, above, without the necessity of proving
inadequacy of legal remedies or irreparable harm or posting bond.  However, nothing in this section should be
construed to constitute a waiver of the parties’ rights and obligations to
arbitrate regarding matters other than those specifically addressed in this
paragraph.

 

(c)  Should a court of competent
jurisdiction determine that the scope of any provision of this Section 15
is too broad to be enforced as written, the parties intend that the court
reform the provision to such narrower scope as it determines to be reasonable
and enforceable.

 

16.  Survival.  Executive acknowledges and agrees that this
Agreement, including but not limited to Sections 9, 10, 11, 12, 13, 14,
15, 17, and 17(c), shall survive the termination of Executive’s employment
under this Agreement for whatever reason. 
The existence of any claim or cause of action of Executive against the
Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants of
Executive contained in this Agreement, including but not limited to those
contained in Sections 9, 10, 11, 12, 13, and 15.

 

17.  Miscellaneous.  (a)  Notices.  Any notices, consents, demands, requests,
approvals and other communications to be given under this Agreement by either
party to the other must be in writing and must be either:

 

22

 

(i) 
personally delivered;

 

(ii) 
mailed by registered or certified mail, postage prepaid with return receipt
requested;

 

(iii) 
delivered by overnight express delivery service or same-day local courier
service; or

 

(iv) 
delivered by telex or facsimile transmission, to the address set forth below,
or to such other address as may be designated by the parties from time to time
in accordance with this Section 17:

 

	
  If to the Company:

  	
   

  	
  Zale Corporation  

  901 W. Walnut Hill
  Lane  

  Irving, Texas 75038  

  Attention: General
  Counsel

  
	
   

  	
   

  	
   

  
	
  If to Executive:  

  	
   

  	
  Neal Goldberg  

  18 Whalen Court  

  West Orange, NJ
  07052-3679  

  
	
   

  	
   

  	
   

  
	
  cc:

  	
   

  	
  Hollis Gonerka Bart, Esq.  

  Withers Bergman LLP  

  430 Park Avenue, 10th Floor  

  New York, NY 10022

  

 

Notices delivered personally or by overnight
express delivery service or by local courier service are deemed given as of
actual receipt.  Notices mailed within
the continental United States are deemed given three (3) business days
after mailing.  Notices delivered by
telex or facsimile transmission are deemed given upon receipt by the sender of
the answer back (in the case of a telex) or transmission confirmation (in the
case of a facsimile transmission).

 

(b)  Entire Agreement.  This Agreement and each of the agreements,
plan and programs referenced herein supersedes any and all other agreements,
either oral or written, between the parties with respect to the subject matter
of this Agreement and contains all of the covenants and agreements between the
parties with respect to the subject matter of this Agreement.

 

(c)  Modification.  No change or modification of this Agreement
is valid or binding upon the parties, nor will any waiver of any term or
condition in the future be so binding, unless the change or modification or
waiver is in writing and signed by the parties to this Agreement.

 

(d)  Governing Law and Venue.  The parties acknowledge and agree that this
Agreement and the obligations and undertakings of the parties under this
Agreement will be performable in Irving, Dallas County, Texas.  This Agreement is governed by, 

 

23

 

and construed in accordance with, the laws of the State of Texas. If
any action is brought to enforce or interpret this Agreement, venue for the
action will be in Dallas County, Texas.

 

(e)  No Mitigation.  Except as provided in Sections 5(c)(ii),
5(e), and 6(a)(ii) (regarding continued welfare benefits), in no event
shall Executive be obligated to seek other employment or to take any other
action to mitigate the amounts payable to Executive under any of the provisions
of this Agreement, nor shall the amount of any payment hereunder be reduced by
any compensation earned as a result of Executive’s employment by another
employer

 

(f)  Counterparts.  This Agreement may be executed in
counterparts, each of which constitutes an original, but all of which
constitutes one document.

 

(g)  Costs.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement during Executive’s
lifetime, each party shall bear its own costs and expenses unless Executive
prevails on at least one major issue, in which case Executive’s costs shall be
borne by the Company.  No amount of any
such costs paid by the Company on behalf of Executive in any calendar year will
affect the amount of any such costs to be paid by the Company on behalf of
Executive in any other calendar year, and any reimbursements paid to Executive
for such costs shall be paid no later than the last day of the calendar year
next following the calendar year in which such costs are incurred.

 

(h)  Estate.  If Executive dies prior to the expiration of
the Term or during a period when monies are owing to him, any monies that may
be due him from the Company under this Agreement as of the date of his death
shall be paid to his estate and as when otherwise payable.

 

(i)  Assignment.  The Company shall have the right to assign
this Agreement to its successors or assigns. 
The terms “successors” and “assigns” shall include any person,
corporation, partnership or other entity that buys all or substantially all of
the Company’s assets or all of its stock, or with which the Company merges or
consolidates.  The rights, duties and
benefits to Executive hereunder are personal to him, and no such right or
benefit may be assigned by him.

 

(j)  Binding Effect.  This Agreement is binding upon the parties
hereto, together with their respective executors, administrators, successors,
personal representatives, heirs and permitted assigns.

 

(k)  Waiver of Breach.  The waiver by the Company or Executive of a
breach of any provision of this Agreement by Executive or the Company may not
operate or be construed as a waiver of any subsequent breach.

 

[Signature Page Follows]

 

24

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

 

	
   

  	
  EXECUTIVE,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:
  Neal Goldberg

  
	
   

  	
   

  	
   

  

 

	
   

  	
  ZALE
  CORPORATION,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name: John B. Lowe, Jr.

  
	
   

  	
   

  	
  Title:   Chairman of the Board

  

 

25Exhibit
4.1

 

Regal Entertainment Group

(as Issuer)

 

 

6.25% Convertible Senior Notes due 2011

 

 

 

 

INDENTURE

 

 

Dated as of March 10, 2008

 

 

 

 

U.S. Bank National Association

(as Trustee)

 

 

TABLE
OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  DEFINITIONS AND INCORPORATION

  BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  Definitions

  	
  1

  
	
  SECTION 1.2

  	
  Incorporation by Reference of Trust Indenture Act

  	
  10

  
	
  SECTION 1.3

  	
  Rules of Construction

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  Designations and Amount of Notes.

  	
  11

  
	
  SECTION 2.2

  	
  Form and Dating

  	
  11

  
	
  SECTION 2.3

  	
  Execution and Authentication

  	
  12

  
	
  SECTION 2.4

  	
  Registrar, Paying Agent, Conversion Agent and
  Depositary

  	
  12

  
	
  SECTION 2.5

  	
  Paying Agent to Hold Money in Trust

  	
  12

  
	
  SECTION 2.6

  	
  Holder Lists

  	
  12

  
	
  SECTION 2.7

  	
  Transfer and Exchange; Restrictions on Transfer

  	
  13

  
	
  SECTION 2.8

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
  17

  
	
  SECTION 2.9

  	
  Outstanding Notes

  	
  17

  
	
  SECTION 2.10

  	
  Treasury Notes

  	
  17

  
	
  SECTION 2.11

  	
  Temporary Notes

  	
  17

  
	
  SECTION 2.12

  	
  Cancellation

  	
  18

  
	
  SECTION 2.13

  	
  Defaulted Interest

  	
  18

  
	
  SECTION 2.14

  	
  CUSIP Numbers

  	
  19

  
	
  SECTION 2.15

  	
  Payment of Interest

  	
  19

  
	
  SECTION 2.16

  	
  Additional Notes

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  No Redemption By The Company

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  Payment of Notes

  	
  20

  
	
  SECTION 4.2

  	
  Maintenance of Office or Agency

  	
  20

  
	
  SECTION 4.3

  	
  SEC Reports and Reports to Holders

  	
  21

  
	
  SECTION 4.4

  	
  Compliance Certificate

  	
  21

  
	
  SECTION 4.5

  	
  Stay, Extension and Usury Laws

  	
  21

  
	
  SECTION 4.6

  	
  Limitation on Status as Investment Company

  	
  22

  
	
  SECTION 4.7

  	
  Corporate Existence

  	
  22

  
	
  SECTION 4.8

  	
  Payment of Additional Interest

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  Merger, Consolidation or Sale of Assets

  	
  23

  
	
  SECTION 5.2

  	
  Successor Corporation Substituted

  	
  23

  

 

i

 

	
  ARTICLE VI

  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  Events of Default

  	
  24

  
	
  SECTION 6.2

  	
  Acceleration

  	
  25

  
	
  SECTION 6.3

  	
  Other Remedies

  	
  26

  
	
  SECTION 6.4

  	
  Waiver of Past Defaults

  	
  26

  
	
  SECTION 6.5

  	
  Control by Majority

  	
  26

  
	
  SECTION 6.6

  	
  Limitation on Suits

  	
  26

  
	
  SECTION 6.7

  	
  Rights of Holders of Notes to Receive Payment

  	
  27

  
	
  SECTION 6.8

  	
  Collection Suit by Trustee

  	
  27

  
	
  SECTION 6.9

  	
  Trustee May File Proofs of Claim

  	
  27

  
	
  SECTION 6.10

  	
  Priorities

  	
  28

  
	
  SECTION 6.11

  	
  Undertaking for Costs

  	
  28

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  Duties of Trustee

  	
  28

  
	
  SECTION 7.2

  	
  Rights of Trustee

  	
  29

  
	
  SECTION 7.3

  	
  Individual Rights of Trustee

  	
  30

  
	
  SECTION 7.4

  	
  Trustee’s Disclaimer

  	
  30

  
	
  SECTION 7.5

  	
  Notice of Defaults

  	
  30

  
	
  SECTION 7.6

  	
  Reports by Trustee to Holders of the Notes

  	
  31

  
	
  SECTION 7.7

  	
  Compensation and Indemnity

  	
  31

  
	
  SECTION 7.8

  	
  Replacement of Trustee

  	
  32

  
	
  SECTION 7.9

  	
  Successor Trustee by Merger, etc

  	
  32

  
	
  SECTION 7.10

  	
  Eligibility; Disqualification

  	
  32

  
	
  SECTION 7.11

  	
  Preferential Collection of Claims Against Company

  	
  33

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  Satisfaction and Discharge of Indenture

  	
  33

  
	
  SECTION 8.2

  	
  Application of Trust Money

  	
  34

  
	
  SECTION 8.3

  	
  Repayment to Company

  	
  34

  
	
  SECTION 8.4

  	
  Reinstatement

  	
  34

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
  Without Consent of Holders of Notes

  	
  34

  
	
  SECTION 9.2

  	
  With Consent of Holders of Notes

  	
  35

  
	
  SECTION 9.3

  	
  Compliance with Trust Indenture Act

  	
  36

  
	
  SECTION 9.4

  	
  Revocation and Effect of Consents

  	
  36

  
	
  SECTION 9.5

  	
  Notation on or Exchange of Notes

  	
  37

  
	
  SECTION 9.6

  	
  Trustee to Sign Amendments, etc

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  CONVERSION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.1

  	
  Conversion Privilege

  	
  37

  
	
  SECTION 10.2

  	
  Conversion Procedures; Settlement Upon Conversion

  	
  39

  
	
  SECTION 10.3

  	
  Increased Conversion Rate Applicable to Certain
  Notes Surrendered in Connection with Fundamental Change

  	
  41

  

 

ii

 

	
  SECTION 10.4

  	
  Adjustment of Conversion Rate

  	
  42

  
	
  SECTION 10.5

  	
  No Adjustment

  	
  46

  
	
  SECTION 10.6

  	
  Treatment of Stockholder Rights

  	
  47

  
	
  SECTION 10.7

  	
  Voluntary Increase in Conversion Rate

  	
  47

  
	
  SECTION 10.8

  	
  Notice of Conversion Rate Adjustment

  	
  47

  
	
  SECTION 10.9

  	
  Taxes on Conversion

  	
  48

  
	
  SECTION 10.10

  	
  Company to Provide Class A Common Stock

  	
  48

  
	
  SECTION 10.11

  	
  Notice of Certain Transactions

  	
  48

  
	
  SECTION 10.12

  	
  Effect of Reclassification, Consolidation, Merger or
  Sale

  	
  49

  
	
  SECTION 10.13

  	
  Trustee’s Disclaimer

  	
  50

  
	
  SECTION 10.14

  	
  Company Determination Final

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  FUNDAMENTAL CHANGE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
  Repurchase of Notes at Option of the Holder Upon
  Fundamental Change

  	
  50

  
	
  SECTION 11.2

  	
  Effect of Fundamental Change Repurchase Notice

  	
  52

  
	
  SECTION 11.3

  	
  Deposit of Fundamental Change Repurchase Price

  	
  52

  
	
  SECTION 11.4

  	
  Notes Repurchased In Part

  	
  53

  
	
  SECTION 11.5

  	
  Compliance With Securities Laws Upon Repurchase of
  Notes

  	
  53

  
	
  SECTION 11.6

  	
  Repayment to the Company

  	
  53

  
	
  SECTION 11.7

  	
  No Repurchase on Fundamental Change if Acceleration
  of Notes Has Occurred

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.1

  	
  Trust Indenture Act Controls

  	
  53

  
	
  SECTION 12.2

  	
  Notices

  	
  54

  
	
  SECTION 12.3

  	
  Communication by Holders of Notes with Other Holders
  of Notes

  	
  55

  
	
  SECTION 12.4

  	
  Certificate and Opinion as to Conditions Precedent

  	
  55

  
	
  SECTION 12.5

  	
  Statements Required in Certificate or Opinion

  	
  55

  
	
  SECTION 12.6

  	
  Rules by Trustee and Agents

  	
  55

  
	
  SECTION 12.7

  	
  No Personal Liability of Directors, Officers,
  Employees and Stockholders

  	
  55

  
	
  SECTION 12.8

  	
  Governing Law

  	
  56

  
	
  SECTION 12.9

  	
  No Adverse Interpretation of Other Agreements

  	
  56

  
	
  SECTION 12.10

  	
  Successors

  	
  56

  
	
  SECTION 12.11

  	
  Severability

  	
  56

  
	
  SECTION 12.12

  	
  Counterpart Originals

  	
  56

  
	
  SECTION 12.13

  	
  Table of Contents, Headings, etc

  	
  56

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A

  	
   

  	
   

  
	
  FORM OF
  NOTE

  	
  A-1

  	
   

  
				

 

iii

 

CROSS-REFERENCE
TABLE*

 

	
  TIA Section

  	
   

  	
  Indenture Section

  	
   

  
	
  310(a)(1)

  	
   

  	
  7.10

  	
   

  
	
  (a)(2)

  	
   

  	
  7.10

  	
   

  
	
  (a)(3)

  	
   

  	
  N.A.

  	
   

  
	
  (a)(4)

  	
   

  	
  N.A.

  	
   

  
	
  (a)(5)

  	
   

  	
  7.8; 7.10

  	
   

  
	
  (b)

  	
   

  	
  .7.8; 7.10

  	
   

  
	
  (c)

  	
   

  	
  N.A.

  	
   

  
	
  311(a)

  	
   

  	
  7.11

  	
   

  
	
  (b)

  	
   

  	
  7.11

  	
   

  
	
  (c)

  	
   

  	
  N.A.

  	
   

  
	
  312(a)

  	
   

  	
  2.5

  	
   

  
	
  (b)

  	
   

  	
  12.3

  	
   

  
	
  (c)

  	
   

  	
  12.3

  	
   

  
	
  313(a)

  	
   

  	
  7.6

  	
   

  
	
  (b)(1)

  	
   

  	
  N.A.

  	
   

  
	
  (b)(2)

  	
   

  	
  7.6

  	
   

  
	
  (c)

  	
   

  	
  7.6; 12.2

  	
   

  
	
  (d)

  	
   

  	
  7.6

  	
   

  
	
  314(a)

  	
   

  	
  4.3; 4.4; 12.2

  	
   

  
	
  (b)

  	
   

  	
  N.A.

  	
   

  
	
  (c)(1)

  	
   

  	
  12.4

  	
   

  
	
  (c)(2)

  	
   

  	
  12.4

  	
   

  
	
  (c)(3)

  	
   

  	
  N.A.

  	
   

  
	
  (d)

  	
   

  	
  N.A.

  	
   

  
	
  (e)

  	
   

  	
  12.5

  	
   

  
	
  (f)

  	
   

  	
  N.A.

  	
   

  
	
  315(a)

  	
   

  	
  7.1(b)

  	
   

  
	
  (b)

  	
   

  	
  7.5; 12.2

  	
   

  
	
  (c)

  	
   

  	
  7.1(a)

  	
   

  
	
  (d)

  	
   

  	
  7.1(c)

  	
   

  
	
  (e)

  	
   

  	
  6.11

  	
   

  
	
  316(a)(last sentence)

  	
   

  	
  2.9

  	
   

  
	
  (a)(1)(A)

  	
   

  	
  6.5

  	
   

  
	
  (a)(1)(B)

  	
   

  	
  6.4

  	
   

  
	
  (a)(2)

  	
   

  	
  N.A.

  	
   

  
	
  (b)

  	
   

  	
  6.7

  	
   

  
	
  (c)

  	
   

  	
  6.4

  	
   

  
	
  317(a)(1)

  	
   

  	
  6.8

  	
   

  
	
  (a)(2)

  	
   

  	
  6.9

  	
   

  
	
  (b)

  	
   

  	
  2.4

  	
   

  
	
  318(a)

  	
   

  	
  12.1

  	
   

  
	
  (c)

  	
   

  	
  12.1

  	
   

  

 

N.A. means not applicable

*This Cross-Reference
table shall not, for any purpose, be deemed to be part of this Indenture.

 

iv

 

INDENTURE,
dated as of March 10, 2008, among Regal Entertainment Group, a  Delaware corporation (the “Company”) and U.S. Bank National
Association, as trustee (the “Trustee”).

 

Each
party agrees as follows for the benefit of each other and for the equal and
ratable benefit of the Holders of the 6.25% Convertible Senior Notes due 2011
issued hereunder:

 

ARTICLE I

DEFINITIONS AND INCORPORATION

BY REFERENCE

 

SECTION 1.1         DEFINITIONS

 

“Additional Interest” has the meaning
specified in Section 4.8.

 

“Additional Shares” has the meaning
specified in Section 10.3.

 

“Affiliate” means, with respect to any
Person, any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person. For purposes of this
definition, the term “control” means the power to direct the management and policies
of a Person, directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise.

 

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

 

“Agent Members” has the meaning specified in
Section 2.2.

 

“Applicable Procedures” means, with respect
to any transfer or exchange of or for beneficial interests in any Global Note,
the rules and procedures of the Depositary that apply to such transfer or
exchange at the relevant time.

 

“Authentication Order” has the meaning
specified in Section 2.3.

 

“Bankruptcy Law” means Title 11, United
States Code, or any similar Federal, state or foreign law for the relief of
debtors.

 

“Base Dividend Amount” means $0.30 in the
aggregate in any single quarterly period per outstanding share of Common Stock,
subject to inversely proportional adjustment if the Conversion Rate is
adjusted; provided, however, that
no adjustment will be made to the Base Dividend Amount for any adjustment made
to the Conversion Rate pursuant to Section 10.4(d).

 

“Board of Directors” means the board of
directors of the Company or any committee of the board of directors authorized,
with respect to any particular matter, to exercise the power of the board of
directors of the Company.

 

“Business Day” means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York, New York are authorized or obligated by law or executive order to
close.

 

“Capitalized Lease Obligation” means, as to
any Person, the obligations of such Person under a lease that are required to
be classified and accounted for as capital lease obligations under GAAP and,
for purposes of this definition, the amount of such obligations at any date
shall be the capitalized amount of such obligations at such date, determined in
accordance with GAAP; provided, however,
that any Permitted Lease Financing Arrangements shall not be considered “Capitalized
Lease Obligations” of the Company or any of its Subsidiaries.

 

1

 

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

 

“Certificated Note” means one or more
certificated Notes registered in the name of the Holder thereof and issued in
accordance with Section 2.7 hereof, in the form of Exhibit A
hereto except that such Note shall not include the information referred to in
footnotes 1 and 2 thereof or the “Schedule of Exchanges of Interests in the
Global Note” thereto.

 

“Class A Common Stock” means the Class A
common stock of the Company, $0.001 par value, as it exists on the date of this
Indenture and any shares of any class or classes of capital stock of the
Company resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided, however, that if at any time
there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion of Notes shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

 

“Class B Common Stock” means the Class B
common stock of the Company, $0.001 par value, as it exists on the date of this
Indenture and any shares of any class or classes of capital stock of the
Company resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided, however, that if at any time
there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion of Notes shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

 

“Closing Sale Price” on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the average bid and the average ask prices) for the Class A
Common Stock as reported in composite transactions for the principal United
States securities exchange on which the Class A Common Stock is traded or,
if the Class A Common Stock is not listed on a United States national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation system or by the National Quotation
Bureau Incorporated.  In the absence of
such a quotation, the Company shall be entitled to make a good faith
determination of the sale price on the basis it considers appropriate.

 

“Common Stock” means the Class A Common
Stock and the Class B Common Stock of the Company.

 

“Company Order” means a written request or
order signed in the name of the Company by one of its Chairman of the Board, a
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, any Assistant Secretary or any Vice President.

 

“Conversion Agent” has the meaning specified
in Section 2.4.

 

“Conversion Date” has the meaning specified
in Section 10.2(a).

 

“Conversion Notice” has the meaning
specified in Section 10.2(a).

 

“Conversion Obligation” has the meaning
specified in Section 10.1.

 

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

 

2

 

“Conversion Rate” has the meaning specified
in Section 10.1.

 

“Conversion Value,” for every $1,000
principal amount of a Note being converted, means an amount equal to the sum of
the Daily Conversion Values for each of the thirty (30) Settlement Period
Trading Days in the Settlement Period.

 

“Corporate Trust Office” shall be at the
address of the Trustee specified in Section 12.2 hereof or such other
address as to which the Trustee may give notice to the Company.

 

“Current Market Price” of the Class A
Common Stock on any day means the average of the Last Reported Sale Price of
the Class A Common Stock for each of the ten (10) consecutive Trading
Days ending on the earlier of the day in question and the day before the
Ex-Dividend Date with respect to the issuance or distribution requiring such
computation.

 

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

 

“Daily Conversion Value” for any Settlement
Period Trading Day equals 1/30th of (x) the Conversion Rate in effect on
that Settlement Period Trading Day multiplied by (y) the VWAP of the Class A
Common Stock on that Settlement Period Trading Day.

 

“Default” means any event that is or with
the passage of time or the giving of notice or both would be an Event of
Default.

 

“Defaulted Interest” has the meaning
specified in Section 2.13.

 

“Depositary” means, with respect to the
Notes issuable or issued in whole or in part in global form, the Person
specified in Section 2.4 hereof as the Depositary with respect to the
Notes, until a successor shall have been appointed and become such pursuant to
the applicable provisions of this Indenture, and thereafter “Depositary” shall
mean or include such successor.

 

“DTC” has the meaning specified in Section 2.4.

 

“Event 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).

 

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

 

“Ex-Dividend Date” means, in respect of a
dividend or distribution to holders of Class A Common Stock, the first
date upon which a sale of the Class A Common Stock does not automatically
transfer the right to receive the relevant dividend or distribution from the
seller of the Class A Common Stock to its buyer.  For the avoidance of doubt, if the exchange
or market on which the Class A common stock is listed declares an
ex-dividend date, the Company will use such declared ex-dividend date as the
Ex-Dividend Date hereunder.

 

“Expiration Date” has the meaning specified
in Section 10.4(e).

 

“fair market value” means the price that
would be paid in an arm’s-length transaction between an informed and willing
seller under no compulsion to sell and an informed and willing buyer under no
compulsion to buy, as determined in good faith by the Company.

 

3

 

“Fixed Cash Amount” has the meaning
specified in Section 10.2(b).

 

A “Fundamental Change” shall be deemed to have
occurred if any of the following occurs after the Issue Date:

 

(1)           (a)
any person or group (other than Permitted Holders) (i) becomes the beneficial
owner of Voting Stock of the Company representing 50% or more of the total
voting power of all of outstanding classes of Voting Stock of the Company or (ii) has
the power, directly or indirectly, to elect a majority of the members of the
Board of Directors; or (b) the Permitted Holders become beneficial owners
of Voting Stock of the Company representing 100% of the total voting power of
all of our outstanding classes of Voting Stock;

 

(2)           any
merger or consolidation of the Company with or into any person or any sale,
transfer or other conveyance, whether direct or indirect, of all or
substantially all of the assets of the Company, on a consolidated basis, in one
transaction or a series of related transactions, if, immediately after giving
effect to such transaction(s), (a) any person or group (other than
Permitted Holders) becomes the beneficial owner of shares of Voting Stock of
the Company representing 50% or more of the total voting power of all
outstanding classes of Voting Stock of the Company or (b) the Permitted
Holders become beneficial owners of shares of Voting Stock of the Company
representing 100% of the total voting power of all outstanding classes of
Voting Stock;

 

(3)           the
Class A common stock (or other common stock into which the Notes are then
convertible) ceases to be quoted or listed for trading on a national securities
exchange or market or another established automated over-the-counter trading
market in the United States, for a period of twenty (20) consecutive Trading
Days; or

 

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

 

As
used in this definition, (i) “person”
or “group” has the meaning given
by Sections 13(d) and 14(d) of the Exchange Act or any successor
provisions and the term “group” includes any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, or any successor provision, in each case, whether or not such
Sections or Rule is then applicable to the Company or the Company’s
securities, and (ii) “beneficial owner”
has the meaning attributed to it in Rules 13d-3 under the Exchange Act (as
in effect on the Issue Date), except that the number of shares of the Company’s
Voting Stock shall be deemed to include, in addition to all outstanding shares
of the Company’s Voting Stock and Unissued Shares deemed to be held by the “person”
or “group” (as defined within the definition of Fundamental Change) or other
person with respect to which the Fundamental Change determination is being
made, all Unissued Shares deemed to be held by all other persons.

 

Notwithstanding
the foregoing, it will not constitute a Fundamental Change if at least 90% of
the consideration for the Common Stock (excluding cash payments for fractional
shares and cash payments made pursuant to dissenters’ appraisal rights) in the
transaction or transactions otherwise constituting the Fundamental Change
consists of common stock quoted or listed for trading on a national securities
exchange or market on which will be so listed or quoted when issued or exchanged
in connection with such transaction or transactions, and as a result of such
transaction or transactions the Notes become convertible, upon the satisfaction
of the conditions for conversion and actual conversion in accordance with the
terms of the Notes, into such publicly traded securities.

 

“Fundamental Change Notice” has the meaning
specified in Section 11.1.

 

 “Fundamental
Change Repurchase Date” has the meaning specified in Section 11.1.

 

4

 

“Fundamental Change Repurchase Notice” has
the meaning specified in Section 11.1.

 

“Fundamental Change Repurchase Price” has
the meaning specified in Section 11.1.

 

“GAAP” means United States generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession in the United States as in
effect on the Issue Date.

 

“Global Notes” means one or more Notes in
the form of Exhibit A hereto that includes, as applicable, the
information referred to in footnotes 1 and 2 thereof and the “Schedule of
Exchanges of Interests in the Global Note” thereto, that is deposited with or
on behalf of and registered in the name of the Depositary or its nominee.

 

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

 

“Indebtedness” of any Person means, without
duplication,

 

(a)           all
liabilities and obligations, contingent or otherwise, of such Person, to the
extent such liabilities and obligations would appear as a liability upon the
consolidated balance sheet of such Person in accordance with GAAP, (1) in
respect of borrowed money (whether or not the recourse of the lender is to any
of the assets of such Person), (2) evidenced by bonds, notes, debentures
or similar instruments, (3) representing the balance deferred and unpaid
of the purchase price of any property or services, except those incurred in the
ordinary course of its business that would constitute ordinarily a trade
payable to trade creditors;

 

(b)       all liabilities and obligations,
contingent or otherwise, of such Person (1) evidenced by bankers’
acceptances or similar instruments issued or accepted by banks, (2) relating
to any Capitalized Lease Obligation, or (3) evidenced by a letter of
credit or a reimbursement obligation of such Person with respect to any letter
of credit;

 

(c)       all liabilities and obligations of others
of the kind described in the preceding clause (a) or (b) that such
Person has guaranteed or provided credit support or that is otherwise its legal
liability or which are secured by any assets or property of such Person; provided that, in the case of such
liabilities and obligations of others that have been secured solely by assets
or property of such Person, without any other recourse to such Person or any
other assets of such Person, the amount of such Indebtedness shall be limited
in amount to the fair market value of the assets or property of such Person
securing such liabilities or assets; and

 

(d)       any and all deferrals, renewals,
extensions, refinancing and refundings (whether direct or indirect) of, or
amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a), (b) or (c), or this clause
(d), whether or not between or among the same parties.

 

For purposes of this definition, any Permitted Lease Financing
Arrangements shall not be considered “Indebtedness.”

 

The amount of any Indebtedness outstanding as of any date shall be (1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount, but the accretion of original issue discount in accordance with
the original terms of Indebtedness issued with an original issue discount shall
not be deemed to be an incurrence and (2) the principal amount thereof,
together with any interest thereon that is more than thirty (30) calendar days
past due, in the case of any other Indebtedness.

 

5

 

“Indenture” means this Indenture, as amended
or supplemented from time to time in accordance with the terms hereof.

 

“Initial Conversion Rate” has the meaning
specified in Section 10.1.

 

“Initial Purchasers” means Credit Suisse
Securities (USA) LLC and Lehman Brothers Inc.

 

“Instrument” has the meaning specified in Section 6.1.

 

“Interest Payment
Date” means each March 15 and September 15 of each year,
beginning on September 15, 2008; provided,
however, that if any Interest
Payment Date falls on a date that is not a Business Day, such payment of
interest (or principal in the case of the Stated Maturity of the Notes) will be
postponed until the next succeeding Business Day, and no interest or other
amount will be paid as a result of such postponement.

 

“Investment Company Act” has the meaning
specified in Section 4.6.

 

“Issue Date” means the date on which the
Notes are originally issued under this Indenture.

 

“Last Reported Sale Price” on any date means
the closing sale price per share of Class A Common Stock (or if no closing
sale price is reported, the average of the bid and asked prices or, if more
than one in either case, the average of the average bid and the average asked
prices) on that date as reported by the New York Stock Exchange or, if the Class A
Common Stock is not listed on the New York Stock Exchange, as reported in
composite transactions for the principal securities exchange on which the Class A
Common Stock is traded or, if the Class A Common Stock is not traded on
such an exchange, the market value of the Class A Common Stock is as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company.

 

“Lease Financing Arrangement” means any
lease or other arrangement as a result of which, pursuant to Emerging Issues
Task Force Issue No. 97-10, “The Effect of Lessee Involvement in Asset
Construction,” a Person is considered the owner of an asset during the asset’s
construction period and such Person is considered to have entered into a sale
and leaseback of the asset when construction of the asset is complete and the
lease term begins.

 

“Market Capitalization” means, as of any
date of calculation, the Closing Sale Price on the Trading Day immediately
prior to such date of calculation multiplied by the aggregate number of shares
of Common Stock outstanding on such Trading Day.

 

“Market Disruption Event” means, if the Class A
Common Stock is listed on the New York Stock Exchange or listed on another
United States national or regional securities exchange, the occurrence or
existence during the one-half hour period ending on the scheduled close of
trading on any Trading Day of any material suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the
stock exchange or otherwise) in the Class A Common Stock or in any
options, contracts or future contracts relating to the Class A Common
Stock.

 

“Net Share Settlement” has the meaning
specified in Section 10.2(b).

 

“Note  Measurement Period” has the meaning
specified in Section 10.1(b).

 

“Notes” means the 6.25% Convertible Senior
Notes due 2011 issued by the Company, that are issued pursuant to this
Indenture from time to time, all of which are treated as a single class of
securities.

 

“Notice of Default” has the meaning
specified in Section 6.1.

 

6

 

“Obligation” means any principal, premium or
interest payment, or monetary penalty, or damages, due by the Company under the
terms of the Notes or this Indenture, including any Additional Interest.

 

“Offering Circular” means the Offering
Circular, dated March 5, 2008, relating to the initial offering of the
Notes.

 

“Officer” means, with respect to any Person,
a Chairman of the Board, a Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice
President of such Person.

 

“Officers’ Certificate,” when used with
respect to the Company, means a certificate signed by (a) one Officer of
the Company and (b) another officer of the Company or one of the Treasurer
or any Assistant Treasurer, Secretary or any Assistant Secretary or Controller
of the Company that is delivered to the Trustee.  Each such certificate shall include the
statements provided for in Section 12.4 if and to the extent required by
the provisions of such Section.  One of
the officers giving an Officers’ Certificate pursuant to Section 4.4 shall
be the principal executive, financial or accounting officer of the Company.

 

“Opinion of Counsel” means an opinion from
legal counsel who is reasonably acceptable to the Trustee, that meets the
requirements of Sections 12.4 and 12.5 hereof. 
The counsel may be an employee of or counsel to the Company or any
Subsidiary of the Company.

 

“Paying Agent” has the meaning specified in Section 2.4.

 

“Permitted Holders” means Anschutz Company
and any of its Affiliates.

 

“Permitted Lease Financing Arrangements”
means any Lease Financing Arrangement entered into by the Company or any of its
Subsidiaries in the ordinary course of business, consistent with customary
industry practices, in amounts and for the purposes customary in the Company’s
industry.

 

“Person” or “person” means any corporation, individual, limited liability
company, joint stock company, joint venture, partnership, limited liability
company, unincorporated association, governmental regulatory entity, country,
state or political subdivision thereof, trust, municipality or other entity.

 

“Purchase Agreement” means that certain
Purchase Agreement, dated as of March 5, 2008, among the Company and the
Initial Purchasers.

 

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

 

“Record Date,”
with respect to any Interest Payment Date, shall mean the February 28 or August 31
(whether or not such day is a Business Day) immediately preceding the applicable
Interest Payment Date.

 

“Reference Property”  has the meaning specified in Section 10.12.

 

“Registrar” has the meaning specified in Section 2.4.

 

“Reorganization
Event” has the meaning specified in Section 10.12.

 

“Resale Restriction
Termination Date” shall have the meaning specified in Section 2.7(c).

 

“Responsible Officer” when used with respect
to the Trustee, means any officer within the Corporate Trust Division of the
Trustee (or any successor group of the Trustee) or any other officer of 

 

7

 

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 his knowledge of and familiarity with the particular
subject.

 

“Restricted Global Note” means one or more
Global Notes that includes, as applicable, the information referred to in
footnote 3 to thereof.

 

“Restricted Securities” shall have the
meaning specified in Section 2.7(c).

 

“Rule 144” means Rule 144
promulgated under the Securities Act, as it may be amended from time to time,
and any successor provision thereto.

 

“Rule 144A” means Rule 144A
promulgated under the Securities Act, as it may be amended from time to time,
and any successor provision thereto.

 

“Scheduled Trading Day” means any day on
which the primary national securities exchange or market on which the Class A
Common Stock is listed or admitted for trading is scheduled to be open for
trading.  If the Class A Common
Stock is not so listed or admitted for trading, Scheduled Trading Day shall
mean a Business Day.

 

“SEC” means the United States Securities and
Exchange Commission, or any successor agency.

 

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

 

“Securities  Custodian” means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.

 

“Settlement Period” means the thirty (30)
consecutive Settlement Period Trading Days during: (i) with respect to
Conversion Dates occurring during the period beginning on the thirty-fifth
(35th) Scheduled Trading Day preceding the Stated Maturity of the Notes, the
period beginning on and including the thirty-third (33rd) Scheduled Trading Day
immediately preceding the Stated Maturity of the Notes; and (ii) in all
other cases, the period beginning on and including the third (3rd) Trading Day
following the Conversion Date.

 

“Settlement Period Market Disruption Event”
means (i) a failure by the primary United States national securities
exchange or market on which the Class A Common Stock is listed or admitted
to trading to open for trading during its regular trading session or  (ii) the occurrence or existence prior to
1:00 p.m., New York City time, on any Trading Day for the Class A
Common Stock of an aggregate one-half hour period, of any material suspension
or limitation imposed on trading (by reason of movements in price exceeding
limits permitted by the stock exchange or otherwise) in the Class A Common
Stock or in any options, contracts or future contracts relating to the Class A
Common Stock.

 

“Settlement Period Trading Day” means a day
during which (i) trading in the Class A Common Stock generally occurs
on the primary United States national securities exchange or market on which
the Class A Common Stock is listed or admitted for trading and (ii) there
is no Settlement Period Market Disruption Event; provided, however, that if the Class A Common Stock is
not traded on any market, then “Settlement Period Trading Day” shall mean a day
for which the VWAP of the Class A Common Stock can be obtained.

 

“Share Price” means the average of the Last
Reported Sale Prices of the Class A Common Stock over a 10 Trading Day
period ending on the Trading Day immediately preceding the effective date of
the Fundamental Change; provided, however,
that if holders of Common Stock receive 

 

8

 

only cash consideration for their Common Stock in connection with such
Fundamental Change, then the Share Price will be the cash amount paid per share
of Common Stock.

 

“Significant Subsidiary” has the meaning
provided under Regulation S-X of the Securities Act as in effect on the Issue
Date.

 

“Special Record Date” means, for payment of
any Defaulted Interest, a date fixed by the Paying Agent pursuant to Section 2.13
hereof.

 

“Spin-Off” has the meaning specified in Section 10.4(c).

 

“Spin-Off Valuation Period” has the meaning
specified in Section 10.4(c).

 

“Stated Maturity” when used with respect to
any Note, means March 15, 2011.

 

“Subsidiary” with respect to any Person,
means (1) a corporation a majority of whose capital stock with voting
power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person, and (2) any
other Person (other than a corporation) in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of
such Person, directly or indirectly, at the date of determination thereof has a
majority ownership interest, or (3) a partnership in which such Person or
a Subsidiary of such Person is, at the time, a general partner and in which
such Person, directly or indirectly, at the date of determination thereof has a
majority ownership interest.  Unless the
context requires otherwise, Subsidiary means each direct and indirect
Subsidiary of the Company.

 

“TIA” means the Trust Indenture Act of 1939
(15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.

 

“Trading Day” means a day during which (i) the
New York Stock Exchange is open for trading, or if the Common Stock is not
listed on the New York Stock Exchange, the principal United States national or
regional securities exchange on which the Common Stock is listed is open for
trading, or if the Common Stock is not so listed, any Business Day; and there
is no Market Disruption Event.

 

“Trading Price” of the Notes on any day
means the average secondary market bid quotations per $1,000 principal amount
of Notes obtained by the Trustee for $5,000,000 principal amount of Notes at
approximately 3:30 p.m., New York City time, on such day from three
independent nationally recognized securities dealers to be selected by the
Company, however, if the Trustee can reasonably obtain only two such bids, then
the average of the two bids will instead be used, and if the Trustee can
reasonably obtain only one such bid, then that one bid will be used.  If on any given day (a) the Trustee
cannot reasonably obtain at least one bid for $5,000,000 principal amount of
Notes from an independent nationally recognized securities dealer or (b) in
the Company’s reasonable, good faith judgment, the bid quotation or quotations
that the Trustee has obtained are not indicative of the secondary market value
of the Notes, then the Trading Price per $1,000 principal amount of the Notes
will be deemed to be less than 95% of the product of the Last Reported Sale
Price on that day and the Conversion Rate in effect on that day (assuming the
Notes were then convertible).

 

“Trading Price
Condition” has the meaning specified in Section 10.1(b).

 

“Trustee” means the party named as such
above until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means such successor serving
hereunder.

 

“Unissued Shares” means shares of Voting
Stock not outstanding that are subject to options, warrants, rights to purchase
or conversion privileges exercisable within sixty (60) calendar days of the
date of determination of a Fundamental Change.

 

9

 

“VWAP” for the Class A Common Stock
means, with respect to any Settlement Period Trading Day during the Settlement
Period, the per share volume-weighted average price of the Class A Common
Stock as displayed under the heading “Bloomberg VWAP” on Bloomberg page RGC
<equity> AQR in respect of the period from 9:30 a.m. to 4:00 p.m.,
New York City time, on such Settlement Period Trading Day; or if such
volume-weighted average price is unavailable, the market value per share of the
Class A Common Stock on such Settlement Period Trading Day as determined,
using a volume-weighted average method, by a nationally recognized independent
investment banking firm retained for this purpose by the Company.

 

“Voting Stock” means any class or classes of
capital stock or other interests then outstanding and normally entitled
(without regard to the occurrence of any contingency) to vote in the election
of, as applicable, the board of directors, managers or trustees.

 

SECTION 1.2         INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT

 

Whenever
this Indenture refers to a provision of the TIA, such 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:

 

“obligor” on the Notes means the Company and
any successor obligor upon the Notes.

 

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

 

SECTION 1.3         RULES OF CONSTRUCTION

 

Unless
the context otherwise requires:

 

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

 

(2)           an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

 

(3)           “or”
is not exclusive;

 

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

 

(5)           provisions
apply to successive events and transactions;

 

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

 

(7)           references
to sections of or rules under the Securities Act and the Exchange Act
shall be deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.

 

10

 

ARTICLE
II

THE NOTES

 

SECTION 2.1         DESIGNATIONS AND AMOUNT OF NOTES.

 

The Notes shall be designated as the “6.25%
Convertible Senior Notes due 2011.”  The
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is initially limited to $190,000,000 (or $210,000,000 if
the Initial Purchasers exercise their option to purchase additional Notes in
full as set forth in the Purchase Agreement), subject to Section 2.16 and
other than as provided in Section 2.8.

 

SECTION 2.2         FORM AND DATING

 

(a)       General.  The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A
hereto.  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.  The Notes shall
be in denominations of $1,000 and integral multiples thereof.

 

The
terms and provisions contained in the Notes shall constitute, and are hereby
expressly made, a part of this Indenture and the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. 
However, to the extent any provision of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.

 

(b)       Restricted
Global Notes.  All of the
Notes are initially being offered and sold to QIBs in reliance on Rule 144A
and shall be issued initially in the form of one or more Restricted Global
Notes, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its Corporate Trust Office, as
custodian for the Depositary, and registered in the name of its nominee, Cede &
Co., duly executed by the Company and authenticated by the Trustee as
hereinafter provided.  The aggregate
principal amount of the Restricted Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Securities
Custodian as hereinafter provided, subject in each case to compliance with the
Applicable Procedures.

 

(c)       Global
Notes in General.  Notes
issued in global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without
the Global Note Legend thereon and without the “Schedule of Exchanges of
Interests in the Global Note” attached thereto).  Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time
to time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.7
hereof.

 

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Note held on their behalf by the
Depositary or under the Global Note, and the Depositary (including, for this
purpose, its nominee) may be treated by the Company, the Trustee and any agent
of the Company or the Trustee as the absolute owner and Holder of such Global
Note for all purposes whatsoever.  Notwithstanding
the foregoing, nothing herein shall (A) 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 (B) impair,
as between the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Note.

 

11

 

SECTION 2.3         EXECUTION AND AUTHENTICATION

 

Two
Officers shall sign the Notes for the Company by manual or facsimile
signature.  In the case of Certificated
Notes, such signatures may be imprinted or otherwise reproduced on such
Notes.  If an Officer whose signature is
on a Note no longer holds that office at the time a Note is authenticated, the
Note shall nevertheless be valid.  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.  The Trustee shall, upon a
Company Order (an “Authentication Order”),
authenticate Notes for issuance up to the aggregate principal amount stated in
such Authentication Order.  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 Holders or an Affiliate of the Company.

 

SECTION 2.4         REGISTRAR, PAYING AGENT, CONVERSION
AGENT AND DEPOSITARY

 

The
Company shall maintain an office or agency in the Borough of Manhattan, The
City of New York, 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 one or more
co-registrars and one or more additional paying agents or conversion
agents.  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.  The Company may change any Paying Agent,
Registrar or Conversion Agent without notice to any Holder.  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
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.  The Company initially appoints The Depository
Trust Company (“DTC”) to act as
Depositary with respect to the Global Notes. 
The Company initially appoints the Trustee to act as the Registrar,
Paying Agent and Conversion Agent and to act as Securities Custodian with
respect to the Global Notes.

 

SECTION 2.5         PAYING AGENT TO HOLD MONEY IN TRUST

 

The
Company shall require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal,
premium or Additional Interest, if any, or interest on 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.  Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary of the Company) shall have no
further liability for the money.  If the
Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.  Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.

 

SECTION 2.6         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 all Holders and
shall otherwise comply with TIA § 312(a). 
If the Trustee is not the Registrar, the Company shall furnish, or shall
cause the Registrar (if other than the Company) to furnish, to the Trustee at
least seven (7) Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Company shall otherwise comply with
TIA § 312(a).

 

12

 

SECTION 2.7         TRANSFER AND EXCHANGE; RESTRICTIONS ON
TRANSFER

 

(a)       Upon surrender for registration of
transfer of any Note to the Registrar or any co-registrar, and satisfaction of
the requirements for such transfer set forth in this Section 2.7, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Indenture.

 

Notes may be exchanged for other Notes of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at any such office or agency maintained
by the Company pursuant to Section 4.2. 
Whenever any Notes are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Notes that the
Holder making the exchange is entitled to receive, bearing registration numbers
not contemporaneously outstanding.

 

All Notes presented or surrendered for registration of
transfer or for exchange, repurchase or conversion shall (if so required by the
Company, the Trustee, the Registrar or any co-registrar) be duly endorsed, or
be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and duly executed, by the Holder thereof or its
attorney-in-fact duly authorized in writing.

 

No service charge shall be charged to the Holder for
any exchange or registration of transfer of Notes, but the Company or the
Trustee may require payment of a sum sufficient to cover any tax, assessments
or other governmental charges that may be imposed in connection therewith as a
result of the name of the Holder of the new Notes issued upon such exchange or
registration of transfer of Notes being different from the name of the Holder
of the old Notes presented or surrendered for such exchange or registration of
transfer.

 

None of the Company, the Trustee, the Registrar or any
co-registrar shall be required to exchange or register a transfer of (i) any
Notes surrendered for conversion or, if a portion of any Note is surrendered
for conversion, such portion thereof surrendered for conversion or (ii) any
Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn)
in accordance with Article XI hereof.

 

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

 

(b)       So long as the Notes are eligible for
book-entry settlement with the Depositary, unless otherwise required by law,
all Notes shall be represented by one or more Notes in global form (each, a “Global Note”) registered in the name of the
Depositary or the nominee of the Depositary. 
The transfer and exchange of beneficial interests in a Global Note that
does not involve the issuance of a Certificated Note, shall be effected through
the Depositary (but not the Trustee or the Custodian) in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.

 

(c)       Every Note that bears or is required
under this 2.7(c) to bear the legend set forth in this Section 2.7(c) (together
with any Class A Common Stock issued upon conversion of the Notes and
required to bear the legend set forth in Section 2.7(e), collectively, the
“Restricted Securities”) shall be
subject to the restrictions on transfer set forth in this Section 2.7(c) (including
the legend set forth below), unless such restrictions on transfer shall be
eliminated or otherwise waived by written consent of the Company, and the
holder of each such Restricted Security, by such holder’s acceptance thereof,
agrees to be bound by all such restrictions on transfer.  As used in Section 2.7(c) and Section 2.7(e),
the term “transfer” encompasses
any sale, pledge, transfer or other disposition whatsoever of any Restricted
Security.

 

13

 

Until the date (the “Resale
Restriction Termination Date”) the later of (1) the date that
is one year after the last date of original issuance of the Notes, or such
other period of time as permitted by Rule 144 under the Securities Act or
any successor provision thereto, and (2) such later date, if any, as may
be required by applicable laws, any certificate evidencing such Note (and all
securities issued in exchange therefor or substitution thereof, other than Class A
Common Stock, if any, issued upon conversion thereof which shall bear the legend
set forth in Section 2.7(e), if applicable) shall bear a legend in
substantially the following form (unless such Notes have been transferred
pursuant to a registration statement that has become or been declared effective
under the Securities Act and that continues to be effective at the time of such
transfer, pursuant to the exemption from registration provided by Rule 144
or any similar provision then in force under the Securities Act, or unless
otherwise agreed by the Company in writing, with notice thereof to the
Trustee):

 

THIS SECURITY AND THE CLASS A
COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE ACQUIRER: (1) REPRESENTS THAT IT AND ANY
ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND (2) AGREES
FOR THE BENEFIT OF REGAL ENTERTAINMENT GROUP (THE “COMPANY”) THAT IT WILL NOT
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER
THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT: (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR (B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES
ACT, OR (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, OR (D) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION
OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.

 

No transfer of any Note prior to the Resale
Restriction Termination Date will be registered by the Note Registrar unless
the applicable box on the Form of Assignment and Transfer has been
checked.

 

Any Note (or security issued in exchange or
substitution therefor) as to which such restrictions on transfer shall have
expired in accordance with their terms may, upon surrender of such Note for
exchange to the Note Registrar in accordance with the provisions of this Section 2.7,
be exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this Section 2.7(c).  The Company shall notify the Trustee upon the
occurrence of the Resale Restriction Termination Date.

 

14

 

Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in this Section 2.7(c), a Global Note
may not be transferred as a whole or in part except (i) 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 and (ii) for transfers of portions of a Global Note in certificated
form made upon request of a member of, or a participant in, the Depositary (for
itself or on behalf of a beneficial owner) by written notice given to the
Trustee by or on behalf of the Depositary in accordance with customary
procedures of the Depositary and in compliance with this Section.

 

(d)       The Depositary shall be a clearing agency
registered under the Exchange Act.  The
Company initially appoints DTC to act as Depositary with respect to the Global
Note.  Initially, the Global Note shall
be issued to the Depositary, registered in the name of Cede & Co., as
the nominee of the Depositary, and deposited with the Trustee as custodian for
Cede & Co.

 

If (i) the Depositary notifies the Company at any
time that the Depositary is unwilling or unable to continue as depositary for
the Global Notes and a successor depositary is not appointed within ninety (90)
calendar days, (ii) the Depositary ceases to be registered as a clearing
agency under the Exchange Act and a successor depositary is not appointed
within ninety (90) calendar days or (iii) an Event of Default in respect
of the Notes has occurred and is continuing, upon the request of the beneficial
owner of the Notes, the Company will execute, and the Trustee, upon receipt of
an Officers’ Certificate and a Company Order for the authentication and
delivery of Notes, will authenticate and deliver Notes in definitive form to
each such beneficial owner of the related Notes (or a portion thereof) in an
aggregate principal amount equal to the principal amount of such Global Note,
in exchange for such Global Note, and upon delivery of the Global Note to the
Trustee such Global Note shall be cancelled.

 

Certificated Notes issued in exchange for all or a
part of the Global Note pursuant to this Section 2.7(e) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. 
Upon execution and authentication, the Trustee shall deliver such
Certificated Notes to the Persons in whose names such Certificated Notes are so
registered.

 

At such time as all interests in a Global Note have
been converted, cancelled, repurchased or transferred, such Global Note shall
be, upon receipt thereof, cancelled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the
Custodian.  At any time prior to such
cancellation, if any interest in a Global Note is exchanged for Certificated
Notes, converted, cancelled, repurchased or transferred to a transferee who
receives Certificated Notes therefor or any Certificated Note is exchanged or
transferred for part of such Global Note, the principal amount of such Global
Note shall, in accordance with the standing procedures and instructions
existing between the Depositary and the Custodian, be appropriately reduced or
increased, as the case may be, and an endorsement shall be made on such Global
Note, by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction or increase.

 

None of the Company, the Trustee nor any agent of the
Company or the Trustee will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of a Global Note or maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.

 

(e)       Until the Resale Restriction Termination
Date, any stock certificate representing Class A Common Stock issued upon
conversion of such Note shall bear a legend in substantially the following form
(unless the Note or such Class A Common Stock has been transferred
pursuant to a registration statement that has become or been declared effective
under the Securities Act and that continues to be effective at the time of such
transfer or pursuant to the exemption from registration provided by Rule 144
under the Securities Act or any similar provision then in force under the
Securities Act, or such Class A Common Stock has been issued upon
conversion of Notes that have been transferred pursuant to a registration
statement that has become or been declared effective under the Securities Act
and that continues to be effective at the time of such transfer or pursuant to
the exemption from registration 

 

15

 

provided by Rule 144 under the Securities Act, or
unless otherwise agreed by the Company with written notice thereof to the
Trustee and any transfer agent for the Class A Common Stock):

 

THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER: (1) REPRESENTS THAT IT AND
ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND (2) AGREES
FOR THE BENEFIT OF REGAL ENTERTAINMENT GROUP (THE “COMPANY”) THAT IT WILL NOT
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER
THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT: (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR (B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES
ACT, OR (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, OR (D) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION
OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE
RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.

 

Any such Class A Common Stock as to which such
restrictions on transfer shall have expired in accordance with their terms may,
upon surrender of the certificates representing such shares of Class A
Common Stock for exchange in accordance with the procedures of the transfer
agent for the Class A Common Stock, be exchanged for a new certificate or
certificates for a like aggregate number of shares of Class A Common
Stock, which shall not bear the restrictive legend required by this Section 2.7(e).

 

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

 

(g)       Notwithstanding any provision of Section 2.7
to the contrary, in the event Rule 144 as promulgated under the Securities
Act (or any successor rule) is amended to change the one-year holding period
thereunder (or the corresponding period under any successor rule), (i) each
reference in Section 2.7(c) to “one year” and in the restrictive
legend set forth in such paragraph to “ONE YEAR” shall be deemed for all
purposes hereof to be references to such changed period, (ii) each
reference in Section 2.7(e) to “one year” and in the restrictive
legend set forth in such paragraph to “ONE YEAR” shall be deemed for all
purposes hereof to be references to such changed period and (iii) all
corresponding references in the Notes (including the definition of Resale
Restriction Termination Date) and the restrictive 

 

16

 

legends thereon shall be deemed for all purposes
hereof to be references to such changed period, provided that such changes shall not become effective if
they are otherwise prohibited by, or would otherwise cause a violation of, the
then-applicable federal securities laws. 
The provisions of this Section 2.7(g) will not be effective
until such time as the Opinion of Counsel and Officers’ Certificate have been
received by the Trustee, notifying the Trustee of such amendment to Rule 144
(or any successor rule) and that Sections 2.7(c) and (e) and the
related restrictive legends shall be changed accordingly.  This Section 2.7(g) shall apply to
successive amendments to Rule 144 (or any successor rule) changing the
holding period thereunder.

 

SECTION 2.8         MUTILATED, DESTROYED, LOST OR STOLEN
NOTES

 

If any
mutilated Note is surrendered to the Trustee or the Company and the Trustee and
the Company receive evidence (which evidence may be from the Trustee) to their
satisfaction of the destruction, loss or theft of any Note, the Company shall
issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Company, in
the case of a lost, stolen or destroyed Note, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and
the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced.  The Company may charge for its
expenses in replacing a Note.  Every
replacement Note is an additional obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.

 

SECTION 2.9         OUTSTANDING NOTES

 

The
Notes outstanding at any time are all the Notes authenticated by the Trustee
(including any Note represented by a Global Note) except for those cancelled by
it or at its direction, those delivered to it for cancellation, those
reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.9
as not outstanding.  Except as set forth
in Section 2.10 hereof, a Note does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Note.  If a Note is replaced pursuant to Section 2.8
hereof, such Note ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide
purchaser.  If the principal amount of
any Note is considered paid under Section 4.1 hereof, it ceases to be
outstanding and interest on it ceases to accrue.  If the Paying Agent (other than the Company
or a Subsidiary thereof) holds, on the Stated Maturity of the Notes, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.

 

SECTION 2.10       TREASURY NOTES

 

In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Company, or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company, shall be considered as though
not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.

 

SECTION 2.11       TEMPORARY NOTES

 

Until certificates
representing Notes are ready for delivery, the Company may prepare and the
Trustee, upon receipt of an Authentication Order, shall authenticate temporary
Notes.  Temporary Notes shall be
substantially in the form of Certificated Notes but may have variations that
the Company considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. 
Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Certificated Notes in exchange for temporary Notes.  Holders of temporary Notes shall be entitled
to all of the benefits of this Indenture.

 

17

 

SECTION 2.12       CANCELLATION

 

The Company at any time
may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment.  The Trustee, or at
the direction of the Trustee, the Registrar or the Paying Agent (other than the
Company or an Affiliate of the Company), and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act).  All
Notes delivered to the Trustee shall be cancelled promptly by the Trustee.  Certification of the destruction of all
cancelled Notes shall be delivered to the Company.  The Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.

 

SECTION 2.13       DEFAULTED INTEREST

 

Any interest on any Note
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date plus, to the extent lawful, any interest payable on the
defaulted interest at the rate and in the manner provided in Section 4.1
hereof and in the Note (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the registered
holder on the relevant Record Date, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in clause (1) or (2) below:

 

(1)         The Company may elect to make payment
of any Defaulted Interest to the Persons in whose names the Notes are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee and the
Paying Agent in writing of the amount of Defaulted Interest proposed to be paid
on each Note and the date of the proposed payment, and at the same time the
Company shall deposit with the Paying Agent an amount of cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements reasonably satisfactory to the Paying Agent for such
deposit prior to the date of the proposed payment, such cash when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as provided in this clause (1). 
Thereupon the Paying Agent shall fix a “Special Record Date” for the
payment of such Defaulted Interest which shall be not more than fifteen (15)
calendar days and not less than 10 days prior to the date of the proposed
payment and not less than ten (10) calendar days after the receipt by the
Paying Agent of the notice of the proposed payment.  The Paying Agent shall promptly notify the
Company and the Trustee of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at its address as it appears in the
Note register maintained by the Registrar not less than ten (10) calendar
days prior to such Special Record Date. 
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the persons in whose names the Notes (or their
respective predecessor Notes) are registered on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).

 

(2)           The Company may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee and the Paying Agent of the proposed payment
pursuant to this clause, such manner shall be deemed practicable by the Trustee
and the Paying Agent.

 

Subject to the foregoing
provisions of this Section 2.13, each Note delivered under this Indenture
upon registration of transfer of or in exchange for or in lieu of any other
Note shall carry the rights to interest accrued and unpaid, and to accrue,
which were carried by such other Note.

 

18

 

SECTION 2.14       CUSIP NUMBERS

 

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

 

SECTION 2.15       PAYMENT OF INTEREST

 

Interest on the Notes
will accrue at the rate of 6.25% per annum, from March 10, 2008 until the
principal thereof is paid or made available for payment.  Interest shall be payable on the Interest
Payment Date to the person in whose name any Note is registered on the Register
at the close of business on any Record Date with respect to the applicable
Interest Payment Date.  Except as
provided in this Section 2.15, upon conversion of Notes pursuant to Article X,
Holders shall not receive any additional cash payment or shares of Class A
Common Stock for accrued and unpaid interest on the Notes.  Upon conversion, accrued and unpaid interest
to the Conversion Date is deemed to be paid in full rather than cancelled,
extinguished or forfeited. 
Notwithstanding the foregoing, a Holder of Notes as of a Record Date
that are converted after the close of business on such Record Date and prior to
the applicable Interest Payment Date shall receive interest on the principal
amount of such Notes, notwithstanding the conversion of such Notes prior to
such Interest Payment Date.  Any Notes or
portion thereof surrendered for conversion after the close of business on the
Record Date for an Interest Payment Date but prior to 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:

 

(a)       with respect to conversions after the
close of business on February 28, 2011 (the Record Date for the final
Interest Payment Date);

 

(b)       if the Company has specified a
Fundamental Change Repurchase Date pursuant to Section 11.1(a) that
is after a Record Date but on or prior to the first (1st) Scheduled Trading Day
immediately succeeding the related Interest Payment Date; or

 

(c)       with respect to any overdue interest, if
overdue interest exists at the time of conversion with respect to such Notes.

 

Interest on the Notes will be computed on the basis of
a three-hundred sixty (360)-day year comprised of twelve (12) thirty (30)-day
months.

 

The Company shall pay interest on any Global Notes by
wire transfer of immediately available funds to the account of the Depositary
or its nominee; any Notes in certificated form having a principal amount of
less than $2,000,000, by check mailed to the address of the Person entitled
thereto as it appears in the Register; and any Notes in certificated form
having a principal amount of $2,000,000 or more, by wire transfer in
immediately available funds at the election of the Holder if the Holder has
duly delivered wire transfer instructions to the Trustee at least ten (10) Business
Days prior to the relevant Interest Payment Date.

 

SECTION 2.16       ADDITIONAL NOTES

 

(a)       The Company may, without the consent of
the Holders and notwithstanding Section 2.1, reopen this Indenture and
issue additional Notes hereunder with the same terms and with the same CUSIP
number as the Notes initially issued hereunder in an unlimited aggregate
principal amount, which will form the same series with the Notes initially
issued hereunder; provided that 

 

19

 

no such additional Notes may be issued unless they
will be fungible with the original Notes for U.S. federal income tax and
securities law purposes.  Prior to the
issuance of any such additional Notes, the Company shall deliver to the Trustee
a Company Order, an Officers’ Certificate and an Opinion of Counsel, such
Officers’ Certificate and Opinion of Counsel to cover such matters, in addition
to those required by Section 12.5, as the Trustee shall reasonably
request.

 

(b)       The Company may, to the extent permitted
by law, purchase Notes in the open market or by tender offer at any price or by
private agreement.  Any notes purchased
by the Company may, to the extent permitted by law, be reissued or resold or
may, at the Company’s option, be surrendered to the Trustee for cancellation
pursuant to Section 2.12.

 

ARTICLE
III

REDEMPTION

 

SECTION 3.1         NO REDEMPTION BY THE COMPANY

 

The
Notes may not be redeemed by the Company at any time prior to the Stated
Maturity of the Notes.  The Company shall
not be required to make mandatory redemption payments with respect to the Notes
(however, the Company is required to offer to repurchase Notes in accordance
with the provisions of Article XI below). 
The Notes shall not have the benefit of any sinking fund.

 

ARTICLE
IV

COVENANTS

 

SECTION 4.1         PAYMENT OF NOTES

 

The
Company shall promptly make all payments in respect of the Notes on the dates
and in the manner provided in the Notes and this Indenture. An installment of
principal (and premium, if any) or interest (and Additional Interest, if any)
shall be considered paid on the date it is due if the Paying Agent (other than
the Company or a Subsidiary of the Company) holds by 11:00 a.m., New York City
time, on that date money, deposited by the Company or an Affiliate thereof,
sufficient to pay the installment. The Company shall, (in immediately available
funds) to the fullest extent permitted by law, pay interest on overdue
principal (and premium, if any) and overdue installments of interest (and
Additional Interest, if any) at the rate borne by the Notes per annum.

 

Payment
of principal (and premium, if any) and interest (and Additional Interest, if
any) on the Notes shall be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
or at the Corporate Trust Office in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address appears in
the Register; provided further
that a Holder with an aggregate principal amount in excess of $2,000,000 will
be paid by wire transfer in immediately available funds at the election of such
Holder if such Holder has provided wire transfer instructions to the Company at
least ten (10) Business Days prior to the payment date.

 

SECTION 4.2         MAINTENANCE OF OFFICE OR AGENCY

 

The
Company shall maintain in the Borough of Manhattan, The City of New York, an
office or agency (which may be an office of the Trustee or an affiliate of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange or conversion and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served.  The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency.  If at any time
the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office.

 

20

 

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 additional designations; provided that no such designation or rescission
shall in any manner relieve the Company of their obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York.  The Company shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

 

The
Company hereby designates the Corporate Trust Office as one such office or
agency of the Company in accordance with Section 2.4 hereof.

 

SECTION 4.3         SEC REPORTS AND REPORTS TO HOLDERS

 

Whether
or not the Company is subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall deliver or make available
to the Trustee and to each Holder and prospective purchasers of Notes
identified to the Company, within five (5) calendar days after the Company
is or would have been (if the Company was subject to such reporting
obligations) required to file such with the SEC, annual and quarterly financial
statements substantially equivalent to financial statements that would have
been included in reports on Forms 10-K or 10-Q, if the Company were subject to
the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company’s certified independent public accountants as such would be required in
such reports to the SEC, and, in each case, together with a management’s
discussion and analysis of financial condition and results of operations which
would be so required and, unless the SEC shall not accept such reports, file
with the SEC the annual, quarterly and other reports which it is or would have
been required to file with the SEC.  In
addition, the Company agrees that it shall make available to the Holders and to
Notes analysts and prospective investors, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act until such time as the Notes are no longer “restricted
securities” within the meaning of Rule 144 under the Securities Act,
assuming the Notes have not been held by an Affiliate of the Company.

 

SECTION 4.4         COMPLIANCE CERTIFICATE

 

(a)       The Company shall deliver to the Trustee,
within one hundred and twenty (120) calendar days after the end of each fiscal
year, an Officers’ Certificate stating that a review of the activities of the
Company during the preceding fiscal year has been made under the supervision of
the signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to his
or her knowledge the Company is not in default in the performance or observance
of any of the terms, provisions and conditions of this Indenture (or, if a
Default or Event of Default shall have occurred and be continuing, describing
all such Defaults or Events of Default of which he or she may have knowledge
and what action the Company is taking or proposes to take with respect thereto)
and that to his or her knowledge no event has occurred and remains in existence
by reason of which payments on account of the principal (and premium, if any)
or interest (and Additional Interest, if any) on the Notes is prohibited or if
such event has occurred, a description of the event and what action the Company
is taking or proposes to take with respect thereto.  The Company shall provide the Trustee with
timely written notice of any change in its fiscal year end, which currently ends
on the first Thursday after December 25.

 

(b)       The Company shall, so long as any of the
Notes are outstanding, deliver to the Trustee, within five (5) Business
Days of any Officer becoming aware of any Default or Event of Default, an
Officers’ Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.

 

SECTION 4.5         STAY, EXTENSION AND USURY LAWS

 

The
Company covenants (to the extent that it may lawfully do so) that it shall 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, that may affect the 

 

21

 

covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not, by
resort to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law has been enacted.

 

SECTION 4.6         LIMITATION ON STATUS AS INVESTMENT
COMPANY

 

The
Company and its Subsidiaries shall be prohibited from being required to
register as an “investment company” (as that term is defined in the Investment
Company Act of 1940, as amended (the “Investment
Company Act”)), or from otherwise becoming subject to regulation
under the Investment Company Act.

 

SECTION 4.7         CORPORATE EXISTENCE

 

Subject
to Article V and Article XI hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) 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, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries, taken as a whole, and that
the loss thereof would not have a material adverse effect on the ability of the
Company to satisfy its obligations under the Notes and this Indenture.

 

SECTION 4.8         PAYMENT OF ADDITIONAL INTEREST

 

If
during the six month to one year period following the Issue Date, the Company
fails to have on file any document or report that it is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as
applicable, other than reports on Form 8-K, the Company shall make a one
time payment of 25 basis points (“Additional
Interest”) on the Notes (or an equivalent amount for any outstanding
shares of Class A Common Stock issued upon conversion of the Notes),
whether or not the failure to so file initially arose prior to such period; provided that the Company shall have
fourteen (14) calendar days, in the aggregate, during such six month to one
year period to cure all such missed filings. 
Any such Additional Interest will be payable on the Interest Payment
Date immediately following the expiration of the fourteen (14) calendar day
cure period.

 

If at
any time Additional Interest is payable by the Company, the Company shall promptly
deliver to the Trustee a certificate to the effect stating (i) the amount
of such Additional Interest that is payable and (ii) the date on which
such Additional Interest is payable. 
Unless and until a Responsible Officer of the Trustee receives such a
certificate, the Trustee may assume without inquiry that no such Additional
Interest is payable.  If the Company has
paid Additional Interest directly to the Persons entitled to it, the Company
shall deliver to the Trustee a certificate setting forth the particulars of
such payment.

 

Whenever
in this Indenture there is mentioned, in any context, the payment of interest
on, or in respect of, any Note, such mention shall be deemed to include mention
of the payment of “Additional Interest” to the extent that, in such context,
Additional Interest is, was or would be payable in respect thereof pursuant to
this Section 4.8 and express mention of the payment of Additional Interest
(if applicable) in any provisions hereof shall not be construed as excluding
Additional Interest in those provisions hereof where such express mention is
not made.

 

22

 

ARTICLE
V

SUCCESSORS

 

SECTION 5.1         MERGER, CONSOLIDATION OR SALE OF ASSETS

 

The
Company shall not consolidate with or merge with or into another Person or,
directly or indirectly, sell, lease, convey or transfer all or substantially
all of the Company’s assets (such amounts to be computed on a consolidated
basis), whether in a single transaction or a series of related transactions, to
another Person or group of affiliated Persons, unless, subject to Section 10.12:

 

(a)       the Company shall be the surviving Person
(the “Surviving Person”) in such merger or consolidation, or the Surviving
Person (if other than the Company) formed by such merger or consolidation or to
which such sale, lease, conveyance or transfer is made shall be a corporation
organized and existing under the laws of the United States of American, any
State thereof or the District of Columbia;

 

(b)       the Surviving Person (if other than the
Company) expressly assumes, by supplemental indenture in form reasonably
satisfactory to the Trustee, executed and delivered to the Trustee by such
Surviving Person, the due and punctual payment of the principal of, and
premium, if any, and interest on (and Additional Interest, if any) on all
Notes, according to their tenor and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be
performed by the Company;

 

(c)       immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing; and

 

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

 

The Surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of the Company under
this Indenture.

 

SECTION 5.2         SUCCESSOR CORPORATION SUBSTITUTED

 

Upon
any consolidation or merger or any transfer of all of the Company’s assets in
accordance with the foregoing, the successor corporation formed by such
consolidation or into which the Company are merged or to which such transfer is
made shall succeed to and (except in the case of a lease) be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation had been named therein as
the Company, and (except in the case of a lease) the Company shall be released
from the obligations under the Notes and this Indenture except with respect to
any obligations that arise from, or are related to, such transaction.

 

For
purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Company’s interest in which constitutes all or
substantially all of the Company’s properties and assets, shall be deemed to be
the transfer of all or substantially all of the Company’s properties and
assets.

 

23

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

SECTION 6.1         EVENTS OF DEFAULT

 

An “Event of Default,” wherever used herein,
means any one of the following events:

 

(1)         the
Company defaults in the payment of any principal or premium on any Note when
the same becomes due and payable;

 

(2)         the
Company fails to deliver shares of its Class A Common Stock, or any cash
settlement amount, if applicable, upon conversion of any Note as required under
this Indenture;

 

(3)         the
Company defaults in the payment of any interest or Additional Interest on any
Note when the same becomes due and payable and the default continues for a
period of thirty (30) calendar days;

 

(4)         the
Company fails to pay the Fundamental Change Repurchase Price when the same
becomes due and payable;

 

(5)         the
Company fails to comply with any covenant or agreement contained in the Notes
or this Indenture (other than a failure that is the subject clauses (1), (2),
(3), (4) or (8) of this Section 6.1) and the default continues
for sixty (60) calendar days after the Notice of Default is given to the
Company as specified in this Section 6.1;

 

(6)         a
court having jurisdiction in the premises enters a decree or order for (a) relief
in respect of the Company or any Significant Subsidiary in an involuntary case
under any applicable Bankruptcy Law now or hereafter in effect, (b) appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any Significant
Subsidiary or (c) the winding up or liquidation of the affairs of the
Company or any Significant Subsidiary and, in each case, such decree or order
shall remain unstayed and in effect for a period of sixty (60) consecutive
days;

 

(7)         the
Company or any Significant Subsidiary (a) commences a voluntary case under
any applicable Bankruptcy Law now or hereafter in effect, or consents to the
entry of an order for relief in an involuntary case under any such law, (b) consents
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (c) effects any
general assignment for the benefit of creditors;

 

(8)         the
Company fails to provide a Fundamental Change Repurchase Notice when required
by Article XI; or

 

(9)         any
Indebtedness under any bond, debenture, note or other evidence of Indebtedness
for money borrowed by the Company or any Significant Subsidiary (all or
substantially all of the outstanding voting securities of which are owned,
directly or indirectly, by the Company) or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any Significant
Subsidiary (all or substantially all of the outstanding voting securities of
which are owned, directly or indirectly, by the Company) (an “Instrument”) with a principal amount then
outstanding in excess of U.S. $25,000,000, whether such Indebtedness now exists
or shall hereafter be created, is not paid at final maturity of the Instrument
(either at its stated 

 

24

 

maturity or upon
acceleration thereof), and such Indebtedness is not discharged, or such
acceleration is not cured or rescinded, within a period of thirty (30) calendar
days after the Notice of Default is given to the Company as specified in this Section 6.1.

 

A Default under Sections 6.1(3) and (8) is
not an Event of Default until there shall have been given, by registered or
certified mail, 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 outstanding
Notes a written of the Default and such Default is not cured within the time
specified hereunder after receipt of such notice.  Such notice must specify the Default, demand
that it be remedied and state that such notice is a “Notice of Default.”

 

SECTION 6.2         ACCELERATION

 

(a)       If an Event of Default
occurs and is continuing (other than an Event of Default specified in clauses (6) and
(7) of Section 6.1 hereof relating to the Company or any of the
Company’s Significant Subsidiaries), then in every such case, unless the
principal of all of the Notes shall have already become due and payable, either
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, by notice in writing to the Company (and to the Trustee
if given by Holders) (an “Acceleration Notice”),
may declare all principal (and premium, if any) and accrued interest (and
Additional Interest, if any) thereon to be immediately due and payable.  If an Event of Default specified in clause (6) or
(7) under Section 6.1 hereof, relating to the Company or any of the
Company’s Significant Subsidiaries occurs, all principal (and premium, if any)
and interest (and Additional Interest, if any) thereon shall be immediately due
and payable on all outstanding Notes without any declaration or other act on
the part of the Trustee or the Holders.

 

(b)       At any time after such a
declaration of acceleration being made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter
provided in this Article VI, the Holders of not less than a majority in
aggregate principal amount of then outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul, on behalf of all Holders, any
such declaration of acceleration and its consequences if:

 

(1)           the
Company has paid or deposited with the Trustee cash sufficient to pay: (a) all
overdue interest (and Additional Interest, if any) on all Notes; (b) the
principal of (and premium, if any, applicable to) any Notes which would become
due other than by reason of such declaration of acceleration, and to the extent
such interest is lawful, interest thereon at the rate borne by the Notes; (c) to
the extent that payment of such interest is lawful, interest upon overdue
interest (and Additional Interest, if any) at the rate borne by the Notes; and (d) all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee and its agents and counsel,
and all other amounts due the Trustee under Section 7.7 hereof; and

 

(2)           all
Events of Default, other than the non-payment of the principal (and premium, if
any) and interest (and Additional Interest, if any) on the Notes which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 6.4 hereof.

 

(c)       Notwithstanding clause (c)(2) of
this Section 6.2, no waiver shall be effective against any Holder for any
Event of Default or event which with notice or lapse of time or both would be
an Event of Default with respect to any covenant or provision which cannot be
modified or amended without the consent of the Holder of each outstanding Note
affected thereby, unless all such affected Holders agree, in writing, to waive
such Event of Default or other event.  No
such waiver shall cure or waive any subsequent default or impair any right
consequent thereon.

 

25

 

SECTION 6.3         OTHER REMEDIES

 

If an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of principal (and premium, if any) and interest
(and Additional Interest, if any) on the Notes or to enforce the performance of
any provision of the Notes or this Indenture.

 

The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder
of a Note in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default.  All remedies
are cumulative to the extent permitted by law.

 

SECTION 6.4         WAIVER OF PAST DEFAULTS

 

(a)       Subject to Section 6.7,
prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in principal amount of the outstanding Notes by written
notice to the Company and to the Trustee, may, on behalf of all Holders, waive
any existing or past Default or Event of Default hereunder and its consequences
under this Indenture, except:

 

(1)           in
the payment of principal (and premium, if any) or interest (and Additional
Interest, if any) not yet cured as specified in clauses (1) and (2) of
Section 6.2(c) hereof;

 

(2)           in
respect of a covenant or provision hereof which, under Article IX, cannot
be modified or amended without the consent of the Holder of each outstanding
Note affected, unless all such affected Holders agree, in writing, to waive
such default;

 

(3)           in
the conversion of any Note into Class A Common Stock pursuant to Article X;
or

 

(4)           the
rescission of which would conflict with any judgment or decree of a court of
competent jurisdiction.

 

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

 

SECTION 6.5         CONTROL BY MAJORITY

 

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

 

SECTION 6.6         LIMITATION ON SUITS

 

A
Holder of a Note may pursue a remedy with respect to this Indenture or the
Notes only if:

 

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

 

26

 

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

 

(3)           such
Holder of a Note or Holders of Notes offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any costs, liability or
expense;

 

(4)           the
Trustee does not comply with the request within sixty (60) calendar days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and

 

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

 

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

 

SECTION 6.7         RIGHTS OF HOLDERS OF NOTES TO RECEIVE
PAYMENT

 

Notwithstanding
any other provision of this Indenture, except as permitted by Section 9.2
hereof, the right of any Holder of a Note to receive payment of the principal
(and premium, if any) and interest (and Additional Interest, if any) on the
Notes, on or after the respective due dates expressed in the Notes (including
in connection with an offer to repurchase) or the right to convert the Note in
accordance with Article X or to bring suit for the enforcement of any such
payment on or after such respective dates or such conversion, shall not be
impaired or affected without the consent of such Holder.

 

SECTION 6.8         COLLECTION SUIT BY TRUSTEE

 

If an
Event of Default specified in Section 6.1 hereof occurs and is continuing,
the Trustee is authorized to recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of the principal (and
premium, if any) and interest (and Additional Interest, if any) remaining
unpaid on the Notes and, to the extent lawful, interest on overdue principal
and, to the extent lawful, interest and 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.

 

SECTION 6.9         TRUSTEE MAY FILE PROOFS OF CLAIM

 

The
Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect, receive and distribute any
money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay 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 7.7 hereof.  To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7
hereof out of the estate in any such proceeding, shall be denied for any
reason, payment of the same shall be secured by a Lien on, and shall be paid
out of, any and all distributions, dividends, money, Notes and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of 

 

27

 

reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the creditor’s
committee.

 

SECTION 6.10       PRIORITIES

 

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

 

FIRST:  to the Trustee, its agents and attorneys for
amounts due under Section 7.7 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection (including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel);

 

SECOND:  to Holders of Notes for amounts due and
unpaid on the Notes for the principal (and premium, if any) and interest (and
Additional Interest, if any), ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for the principal
(and premium, if any) and interest (and Additional Interest, if any),
respectively; and

 

THIRD:  to the Company or to such party as a court of
competent jurisdiction shall direct.

 

The
Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section 6.10.

 

SECTION 6.11       UNDERTAKING FOR COSTS

 

In any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee for any action taken or omitted by it as a Trustee, a
court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in aggregate principal amount of
the then outstanding Notes.

 

ARTICLE VII

TRUSTEE

 

SECTION 7.1         DUTIES OF TRUSTEE

 

(a)       If an Event of Default of
which the Trustee has knowledge 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 its exercise, as a prudent man
would exercise or use under the circumstances in the conduct of its own
affairs.

 

(b)       Except during the
continuance of an Event of Default of which the Trustee has knowledge:

 

(1)           the
duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those 

 

28

 

duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and

 

(2)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. 
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture.

 

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

 

(1)           this
paragraph (c) does not limit the effect of paragraph (b) of this Section 7.1;

 

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

 

(3)           the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.5
hereof.

 

(d)       Whether or not therein
expressly so provided, every provision of this Indenture that in any way
relates to the Trustee is subject to Sections 7.1 and 7.2 hereof.

 

(e)       No provision of this
Indenture shall require the Trustee to expend or risk its own funds or incur
any liability.  The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.

 

(f)        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 7.2         RIGHTS OF TRUSTEE

 

(a)       In connection with the
Trustee’s rights and duties under this Indenture, the Trustee may conclusively
rely upon any document believed by it to be genuine and to have been signed or
presented by the proper Person.  The
Trustee need not investigate any fact or matter stated in the document.

 

(b)       Before the Trustee acts or
refrains from acting under this Indenture, it may require an Officers’
Certificate or an Opinion of Counsel or both. 
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.  The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

 

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

 

29

 

(d)       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 the rights or powers conferred upon it by this
Indenture.

 

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

 

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

 

(g)       Except with respect to Section 4.1
hereof, the Trustee shall have no duty to inquire as to the performance of the
Company’s covenants in Article IV hereof. 
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(1), 6.1(3) and 4.1 hereof or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification in the manner set forth in this Indenture or an officer in the
corporate trust administration of the Trustee shall have obtained actual knowledge.  Delivery of reports, information and
documents to the Trustee under Section 4.3 hereof 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
their covenants thereunder (as to which the Trustee is entitled to rely
exclusively on an Officer’s Certificate).

 

(h)       The Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee may, in its
discretion, make such further inquiry or investigation into such facts or
matters as it may see fit.

 

SECTION 7.3         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 Affiliate of the
Company with the same rights it would have if it were not Trustee.  However, in the event that the Trustee
acquires any conflicting interest (as defined in the TIA) it must eliminate
such conflict within ninety (90) calendar days, apply to the SEC for permission
to continue as trustee or resign.  Any
Agent may do the same with like rights and duties.  The Trustee is also subject to Sections 7.10
and 7.11 hereof.

 

SECTION 7.4         TRUSTEE’S DISCLAIMER

 

The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company’s use of the proceeds from the Notes or any money
paid to the Company or upon the Company’s direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.

 

SECTION 7.5         NOTICE OF DEFAULTS

 

If a
Default or Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to Holders of Notes a notice in the manner and
to the extent provided by TIA § 313(c) of the Default or Event of Default
within ninety (90) calendar days after it occurs.  Except in the case of a Default or Event of
Default in payment of the principal (and premium, if any) or interest (and 

 

30

 

Additional Interest, if any), the Trustee may withhold the notice if
and so long as a committee of its officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.

 

SECTION 7.6         REPORTS BY TRUSTEE TO HOLDERS OF THE
NOTES

 

Within
sixty (60) calendar 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 the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA § 313(a) (but if no
event described in TIA § 313(a) has occurred within the 12 months
preceding the reporting date, no report need be transmitted).  The Trustee also shall comply with TIA §
313(b)(2).  The Trustee shall also
transmit by mail all reports as required by TIA § 313(c).

 

A copy
of each report at the time of its mailing to the Holders of Notes shall be
mailed to the Company and filed with the SEC and each stock exchange on which
the Notes are listed in accordance with TIA § 313(d).  The Company shall promptly notify the Trustee
when the Notes are listed on any stock exchange.

 

SECTION 7.7         COMPENSATION AND INDEMNITY

 

The Company shall
pay to the Trustee from time to time reasonable compensation for its acceptance
of this Indenture and services hereunder. 
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 promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services.  Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee’s agents and counsel.

 

The
Company shall indemnify the Trustee against any and all losses, liabilities or
expenses (including reasonable attorneys’ fees) incurred by it arising out of
or in connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.7) and defending itself against any
claim (whether asserted by the Company or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability or expense
may be attributable to its negligence, bad faith or willful misconduct.  The Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. 
Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. 
The Company shall defend the claim and the Trustee shall cooperate in
the defense.  The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel.  The Company need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.

 

The
obligations of the Company under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.

 

To
secure the Company’s payment obligations in this Section 7.7, 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 the principal (and premium, if
any) and interest (and Additional Interest, if any) on particular Notes.  Such Lien shall survive the satisfaction and
discharge of this Indenture.

 

When
the Trustee incurs expenses or renders services after an Event of Default
specified in Sections 6.1(5) or 6.1(6) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.

 

The
Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent
applicable.

 

31

 

SECTION 7.8                          REPLACEMENT OF TRUSTEE

 

A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.8.

 

The
Trustee may resign in writing at any time and be discharged from the trust
hereby created by so notifying the Company. 
The Holders of Notes of a majority in principal amount of the then
outstanding Notes may remove the Trustee by so notifying the Trustee and the
Company in writing.  The Company may
remove the Trustee if:

 

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

 

(2)           the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

 

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

 

(4)           the
Trustee becomes incapable of acting.

 

If the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company shall promptly appoint a successor Trustee.  Within one year after the successor Trustee
takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.

 

If a
successor Trustee does not take office within sixty (60) calendar days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of Notes of at least 10% in aggregate principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

 

If the
Trustee, after written request by any Holder of a Note who has been a Holder of
a Note for at least six months, fails to comply with Section 7.10 hereof,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.  Thereupon, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of
its succession to Holders of the Notes. 
The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee; provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. 
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company’s obligations under Section 7.7 hereof shall continue for the
benefit of the retiring Trustee.

 

SECTION 7.9                          SUCCESSOR TRUSTEE BY MERGER, ETC

 

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

 

SECTION 7.10                    ELIGIBILITY; DISQUALIFICATION

 

There
shall at all times be a Trustee hereunder that is a corporation or trust
company (or a member of a bank holding company) organized and doing business
under the laws of the United States of 

 

32

 

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 (or the bank holding company of
which it is a member has) a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.

 

This
Indenture shall always have a Trustee who satisfies the requirements of TIA §
310(a)(1), (2) and (5).  The Trustee
is subject to TIA § 310(b).

 

SECTION 7.11       PREFERENTIAL COLLECTION OF CLAIMS
AGAINST COMPANY

 

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

 

ARTICLE VIII

SATISFACTION AND DISCHARGE

 

SECTION 8.1         SATISFACTION AND DISCHARGE OF INDENTURE

 

This Indenture
shall cease to be of further effect (except as to any surviving rights of
conversion, registration of transfer or exchange of Notes herein expressly
provided for and except as further provided below), and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

 

(1)                         either

 

(A)          all Notes theretofore authenticated and delivered
(other than (i) Notes which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.8 and (ii) Notes
for whose payment money has theretofore been deposited in trust and thereafter
repaid to the Company as provided in Section 8.3) have been delivered to
the Trustee for cancellation; or

 

(B)           all such Notes not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will
become due and payable at the Stated Maturity of the Notes within one year, and
the Company, in the case of clause (i) or (ii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Trustee or a Paying
Agent (other than the Company or any Subsidiary of the Company) as trust funds
in trust for the purpose cash in an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for the principal (and premium, if any) and interest (and
Additional Interest, if any) to the date of such deposit (in the case of Notes
which have become due and payable) or to the Stated Maturity of the Notes;

 

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

 

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

 

Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 7.7 shall survive and, if money shall
have been deposited with the 

 

33

 

Trustee pursuant to subclause (B) of clause (1) of this Section 8.1,
the provisions of Sections 2.4, 2.5, 2.6, 2.7, 2.8, and 9.4, Article X and
this Article VIII, shall survive until the Notes have been paid in full.

 

SECTION 8.2         APPLICATION OF TRUST MONEY

 

Subject
to the provisions of Section 8.3, the Trustee or a Paying Agent shall hold
in trust, for the benefit of the Holders, all money deposited with it pursuant
to Section 8.1 and shall apply the deposited money in accordance with this
Indenture and the Notes to the payment of the principal (and premium, if any)
and interest (and Additional Interest, if any) on the Notes.

 

SECTION 8.3         REPAYMENT TO COMPANY

 

The
Trustee and each Paying Agent shall promptly pay to the Company upon request
any excess money (i) deposited with them pursuant to Section 8.1 and (ii) held
by them at any time.

 

The
Trustee and each Paying Agent shall pay to the Company upon request any money
held by them for the payment of the principal (and premium, if any) or interest
(and Additional Interest, if any) that remains unclaimed for two years after a
right to such money has matured; provided,
however, that the Trustee or such Paying Agent, before being
required to make any such payment, may at the expense of the Company cause to
be mailed to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein, which shall be at least
thirty (30) calendar days from the date of such mailing, any unclaimed balance
of such money then remaining will be repaid to the Company. After payment to
the Company, Holders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.

 

SECTION 8.4         REINSTATEMENT

 

If the
Trustee or any Paying Agent is unable to apply any money in accordance with Section 8.2
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1 until such time as the Trustee or such Paying
Agent is permitted to apply all such money in accordance with Section 8.2;
provided, however, that if the
Company has made any payment of the principal (and premium, if any) or interest
(and Additional Interest, if any) on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders
of such Notes to receive any such payment from the money held by the Trustee or
such Paying Agent.

 

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

 

SECTION 9.1         WITHOUT CONSENT OF HOLDERS OF NOTES

 

Notwithstanding
Section 9.2 hereof, the Company and the Trustee may amend or supplement
this Indenture or the Notes, without the consent of any Holder of a Note:

 

(a)       to cure any ambiguity,
defect or inconsistency;

 

(b)       to comply with Section 10.12.

 

(c)       to provide for
uncertificated Notes in addition to or in place of Certificated Notes;

 

34

 

(d)       to provide for the
assumption of the Company’s obligations to the Holders of the Notes in the case
of a merger or consolidation pursuant to Article V hereof;

 

(e)       to increase the Conversion
Rate in the manner described in this Indenture; provided  that the
increase will not adversely affect the interests of the Holders of the Notes in
any material respect;

 

(f)        to make any change that
would provide any additional rights or benefits to the Holders of the Notes or
that does not adversely affect the rights hereunder of any Holder of the Note;

 

(g)       to comply with the
provisions of the Depositary or the Trustee with respect to the provisions of
this Indenture or the Notes relating to transfers and exchanges of Notes or
beneficial interests therein;

 

(h)       to provide for the issuance
of additional Notes in accordance with this Indenture; or

 

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

 

Upon
the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section 9.6
hereof, the Trustee shall join with the Company in the execution of any amended
or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.

 

SECTION 9.2         WITH CONSENT OF HOLDERS OF NOTES

 

Except
as expressly stated otherwise in this Section 9.2, and subject to Section 6.7
hereof, the Company and the Trustee may amend or supplement this Indenture or
the Notes, with the consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest or Additional
Interest, if any, on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, the Notes).

 

Subject
to Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance in a
particular instance by the Company or any Subsidiary with any provision of this
Indenture or the Notes.

 

However,
without the consent of each Holder affected (it being understood that, except
as expressly stated otherwise in paragraphs (a) through (d) below, Article XI
hereof may be amended, waived or modified in accordance with the first
paragraph of this Section 9.2) an amendment or waiver may not (with
respect to any Notes held by a non-consenting Holder):

 

(a)       change the maturity of the
principal of, premium, if any, or interest or Additional Interest, if any, on
any Note, or reduce the principal amount of, premium, if any, or interest or
Additional Interest, if any, on any Notes (or extend the time for payment
thereof), or reduce the amount of principal payable upon acceleration of
maturity of, or change the coin or currency or place in which, the principal
of, premium, if any, or interest or Additional Interest, if any, on any Note is
payable, or impair the 

 

35

 

right to institute suit for the enforcement of any
such payment on or after the maturity thereof, or after a Fundamental Change
has occurred reduce the Fundamental Change Repurchase Price with respect to the
corresponding Fundamental Change, or upon conversion of any Note,

 

(b)       reduce the percentage in
principal amount of the outstanding Notes, the consent of whose Holders is
required for any such amendment, supplemental indenture or waiver provided for
in this Indenture,

 

(c)       modify the provisions with
respect to the Holders’ rights upon a Fundamental Change in a manner adverse to
Holders of the Notes, including the Company’s obligation to repurchase the
Notes following a Fundamental Change,

 

(d)       modify any of the waiver
provisions of this Section 9.2, except to increase any required percentage
or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each outstanding Note
affected thereby, or

 

(e)       impair the right of a
holder to convert any Note or reduce the number of shares or the amount of any
other property receivable upon conversion;

 

In
connection with any amendment, supplement or waiver under this Article IX,
the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders, consideration
for such Holder’s consent to such amendment, supplement or waiver.

 

Upon
the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 9.6 hereof, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture adversely
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.

 

It
shall not be necessary for the consent of the Holders of Notes under this Section 9.2
to approve the particular form of any proposed amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof.

 

After
an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver.

 

SECTION 9.3         COMPLIANCE WITH TRUST INDENTURE ACT

 

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

 

SECTION 9.4         REVOCATION AND EFFECT OF CONSENTS

 

Until
an amendment, supplement or waiver becomes effective (as determined by the
Company and which may be prior to any such amendment, supplement or waiver
becoming operative), a consent to it by a Holder of a Note is a continuing
consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same Indebtedness as the consenting Holder’s
Note, even if notation of the consent is not made on any Note.  However, any such Holder of a Note or 

 

36

 

subsequent Holder of a Note may revoke the consent as to its Note if
the Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective (as determined by the Company), which
may be prior to any such amendment, supplement or waiver becoming operative.

 

The
Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Holders entitled to consent to any amendment, supplement or
waiver, which record date shall be the date so fixed by the Company
notwithstanding the provisions of the TIA. 
If a record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those Persons who were Holders at such record
date, and only those Persons (or their duly designated proxies), shall be
entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date.

 

After
an amendment, supplement or waiver becomes effective, it shall bind every
Holder unless it makes a change described in any of clauses (a) through (e) of
Section 9.2 hereof, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt
as the consenting Holder’s Note; provided
that any such waiver shall not impair or affect the right of any Holder to
receive payment of principal of, premium, if any, and interest and Additional
Interest, if any, on a Note, on or after the respective dates set for such
amounts to become due and payable expressed in such Note, or to bring suit for
the enforcement of any such payment on or after such respective dates.

 

SECTION 9.5         NOTATION ON OR EXCHANGE OF NOTES

 

The
Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated. 
The Company in exchange for all Notes may issue and the Trustee shall
authenticate new Notes that reflect the amendment, supplement or waiver.

 

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 9.6         TRUSTEE TO SIGN AMENDMENTS, ETC

 

The
Trustee shall sign any amended or supplemental Indenture authorized pursuant to
this Article IX if the amendment or supplement does not adversely affect
the rights, duties, liabilities or immunities of the Trustee.  The Company may not sign an amended or
supplemental Indenture until the Board of Directors approves it.  In executing any amended or supplemental
Indenture, the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive and (subject to Section 7.1 hereof)
shall be fully protected in relying upon, an Officers’ Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
Indenture is authorized or permitted by this Indenture.

 

ARTICLE X

CONVERSION

 

SECTION 10.1       CONVERSION PRIVILEGE

 

Upon compliance with the provisions of this Article X,
a Holder shall have the right, at such Holder’s option, to convert all or any
portion (if the portion to be converted is $1,000 principal amount or multiple
thereof) of such Holder’s Notes, at any time prior to the close of business on
the Business Day immediately preceding the Stated Maturity of the Notes at an
initial conversion rate (the “Initial
Conversion Rate”) of 43.4148
shares of Class A Common Stock (subject to adjustments as provided in
Sections 10.3 and 10.4, as so adjusted from time to time, the “Conversion Rate”) per $1,000 principal amount
of Notes (the “Conversion Obligation”)
only under any of the following circumstances:

 

37

 

(a)       Conversion Based on Sale Price of Class A
Common.  During any calendar quarter commencing at any
time after June 30, 2008, and only during such calendar quarter, if the
Last Reported Sale Price for at least twenty (20) Trading Days in the period of
thirty (30) consecutive Trading Days ending on the last Trading Day of the
immediately preceding calendar quarter exceeds 130% of the Conversion Price per
share on the last Trading Day of such immediately preceding calendar quarter.  The Company will determine at the beginning
of each calendar quarter commencing at any time after June 30, 2008
whether the Notes are convertible as a result of the price of the Class A
common stock and shall promptly notify the Trustee and the Conversion Agent
thereof.  Upon determining that the
Holders are entitled to convert their Notes in accordance with this subsection
(a), the Company will promptly provide notice to the Holders, including through
the facilities of DTC.

 

(b)       Conversion Based on
Trading Price.  During the five (5) consecutive Business
Days immediately after any ten (10) consecutive Trading Day period (such
ten (10) consecutive Trading Day period, the “Note Measurement Period”) in which the Trading Price
(calculated using the Trading Price for each of the Trading Days in the Note
Measurement Period) per $1,000 principal amount of the Notes was less than
ninety-five percent (95%) of the product of the Last Reported Sale Price on
such Trading Day and the Conversion Rate in effect on such Trading Day for each
day of the Note Measurement Period (the “Trading
Price Condition”), as determined following a request by a Holder of
the Notes in accordance with the procedures described below.  The Trustee shall not have any obligation to
determine the Trading Price unless the Company has requested such
determination, and the Company shall have no obligation to make such request
unless a Holder of at least five million dollars ($5,000,000) in principal
amount of the Notes provides the Company with reasonable evidence that the Trading
Price per $1,000 principal amount of the Notes would be less than ninety-five
percent (95%) of the product of the Last Reported Sale Price on such Trading
Day and the Conversion Rate in effect on such Trading Day.  Upon receipt of such evidence, the Company
shall instruct the Trustee to determine the Trading Price per $1,000 principal
amount of the Notes for each of the ten (10) successive Trading Days
immediately after the Company receives such evidence and on each Trading Day
thereafter until the first Trading Day on which the Trading Price Condition is
no longer satisfied.  Promptly after the
Notes become convertible in accordance with this clause (b) and promptly
after the Notes become no longer so convertible in accordance with this clause
(b), the Company will provide notice to the Holders, including through the
facilities of DTC, the Conversion Agent and the Trustee.  Simultaneously with such notice, the Company
will issue a press release containing the relevant information and make this
information available on its website.

 

(c)       Conversion Upon Specified
Distributions to Holders of Common Stock and Upon Occurrence of Specified
Corporate Transactions.

 

(i)  Specified Distributions. 
If the Company elects to distribute to all holders of Common Stock:

 

(1)           rights or warrants entitling them to
purchase, for a period expiring within sixty (60) calendar days of the record
date for such distribution, shares of Common Stock at a price less than the
average of the Last Reported Sale Price of the Class A Common Stock for
the five (5) consecutive Trading Days ending on the date immediately
preceding the declaration date of the distribution; or

 

(2)           shares of capital stock, evidences of
debt or other assets (excluding distributions pursuant to Section 10.4(a) or
Section 10.4(b) and excluding quarterly dividends not in excess of
the Base Dividend Amount), which distribution has a per share value as
determined by the Board of Directors exceeding 10% of the Last Reported Sale
Price of the Class A Common Stock on the day immediately preceding the
declaration date for such distribution,

 

then, in each case, the
Company will promptly notify the Holders, the Trustee and the Conversion Agent
at least thirty-five (35) Scheduled Trading Days prior to the Ex-Dividend Date for
such distribution.  Simultaneously with
providing such notice, the 

 

38

 

Company will issue a
press release containing the relevant information and make this information
available on its website.  Once the
Company has given such notice, Holders may surrender their Notes for conversion
at any time until the earlier of the close of business on the Business Day
immediately prior to the Ex-Dividend Date or the announcement that such
distribution will not take place.  Holder
may not convert any of its Notes based on this Section 10.1(c)(i) if
such Holder is entitled to participate in the distribution without conversion.

 

(ii) Specified Corporate
Transactions.  In the event of a
Fundamental Change or if the Company is a party to a consolidation, merger,
binding share exchange, or transfer or lease of all or substantially all of its
assets pursuant to which the Common Stock would be converted into cash,
securities or other assets, a Holder may surrender all or a portion of its
Notes for conversion at any time beginning on the thirty-fifth (35th) Scheduled
Trading Day prior to the anticipated effective date of such transaction until the close of business on the
thirtieth (30th) Scheduled Trading Day after the actual effective date of such
transaction or, if such transaction also constitutes a Fundamental Change, the
Business Day immediately preceding the Fundamental Change Repurchase Date
corresponding to such Fundamental Change. 
To the extent practicable, the Company shall notify all Holders, the
Trustee and the Conversion Agent of the anticipated occurrence of such
Fundamental Change, consolidation, merger, binding share exchange or transfer
or lease of all or substantially all of the Company’s assets no later than
thirty-five (35) Scheduled Trading Days prior to the anticipated effective date
of such transaction.  Simultaneously with
providing such notice, the Company shall issue a press release containing the
relevant information and make this information available on its website.

 

(d)       Conversion During Period Commencing December 15,
2010.  At any time on or after December 15,
2010 until the close of business on the Business Day immediately preceding the
Stated Maturity of the Notes.

 

SECTION 10.2       CONVERSION
PROCEDURES; SETTLEMENT UPON CONVERSION

 

(a)       In order to exercise the conversion right with respect
to any Notes in certificated form, a Holder must (i) complete and manually
sign an irrevocable notice of conversion in the form entitled “Form of Conversion Notice” attached to
the reverse of such Certificated Note (or a facsimile thereof) (a “Conversion Notice”), (ii) deliver such
Conversion Notice and Certificated Note to the Conversion Agent at the office
of the Conversion Agent, (iii) to the extent any shares of Class A
Common Stock issuable upon conversion are to be issued in a name other than the
Holder’s, furnish endorsements and transfer documents as may be required by the
Conversion Agent, (iv) if required pursuant to Section 10.9, pay all
transfer or similar taxes or duties and (v) if required pursuant to Section 2.15,
pay funds equal to interest payable on the next Interest Payment Date.

 

In order to exercise the conversion right with respect
to any interest in a Global Note, a Holder must (i) comply with the
Depositary’s procedures for converting a beneficial interest in a Global Note, (ii) to
the extent any shares of Class A common stock issuable upon conversion are
to be issued in a name other than the Holder’s, furnish endorsements and
transfer documents as may be required by the Conversion Agent and, if required
pursuant to Section 10.9, pay all transfer or similar taxes or duties; and
(iii) if required pursuant to Section 2.15, pay funds equal to
interest payable on the next Interest Payment Date.

 

The date that the Holder satisfies the foregoing
requirements is the “Conversion Date.”

 

A Holder of Notes is not entitled to any rights of a
holder of Class A Common Stock until such Holder has converted its Notes
to Class A Common Stock, and only to the extent such Notes are deemed to
have been converted to Class A Common Stock under this Article X.

 

39

 

(b)       Except as provided
below, the Company may elect to deliver shares of Class A Common Stock,
cash or a combination of cash and shares of Class A Common Stock in
satisfaction of the Company’s Conversion Obligation.  In addition, the Company may elect to satisfy
its Conversion Obligation in a combination of cash and shares of Class A Common Stock with
a Fixed Cash Amount of $1,000 per $1,000 principal amount of the Notes (such
settlement method, “Net Share Settlement”).

 

The Company shall from time to time make an election
with respect to the method it chooses to satisfy its Conversion Obligation in
its sole discretion without any consent of the Holders.  Such election shall be effective until the
Company provides notice of an election of a different method of
settlement.  The Company may not elect a
different method of settlement on or after the thirty-fifth (35th) Scheduled
Trading Day preceding the Stated Maturity of the Notes.  As of the date of this Indenture, the Company
elects to settle its Conversion Obligation through Net Share Settlement.  The newly chosen method of settlement shall
become effective three (3) Business Days following the date of such
election.  The Company will provide to
the Holders, including through the facilities of DTC, the Trustee and the
Conversion Agent a notice of the newly chosen method of settlement and the
effective date of such newly chosen method. 
Simultaneously with providing such notice, the Company shall issue a
press release containing the relevant information and make this information
available on its website.  If the Company elects to
satisfy its Conversion Obligation by delivering a combination of cash and
shares of Class A Common Stock, the Company shall specify in such notice
the portion to be paid in cash as the lesser of (a) the Fixed Cash Amount
and (b) the Conversion Value.

 

Settlement (a) in Class A Common Stock only shall occur on the
third (3rd) Trading Day following the final Settlement Period Trading Day of
the Settlement Period that would be applicable if settlement were in cash or a
combination of cash and shares of Class A
Common Stock,
and (b) in cash or in a combination of cash and Class A Common Stock
shall occur on the third (3rd) Trading Day following the final Settlement
Period Trading Day of the applicable Settlement Period.

 

Settlement amounts shall be computed as follows:

 

(i)            if the Company
elects to satisfy the entire Conversion Obligation in Class A Common Stock
only, the Company shall deliver to such Holder, for each $1,000 principal
amount of Notes converted, a number of shares of Class A Common Stock
equal to the Conversion Rate in effect on the final Settlement Period Trading
Day of the Settlement Period that would be applicable if settlement were in
cash or a combination of cash and shares of Class A Common Stock;

 

(ii)           if the Company
elects to satisfy the entire Conversion Obligation in cash only, the Company
shall deliver to such Holder, for each $1,000 principal amount of Notes
converted, cash in an amount equal to the Conversion Value;

 

(iii)          if the Company
elects to satisfy the Conversion Obligation in a combination of cash and Class A
Common Stock, the Company shall deliver to such Holder, for each $1,000
principal amount of Notes converted:

 

(1)           the fixed dollar amount per $1,000
principal amount of the Notes of the Conversion Obligation to be satisfied in
cash specified in the notice regarding the Company’s chosen method of
settlement (the “Fixed Cash Amount”)
or, if lower, the Conversion Value in cash; and

 

(2)           a number of shares of Class A Common
Stock equal to the sum, for each of the thirty (30) Settlement Period Trading
Days in the Settlement Period, of 1/30th of the greater of (A) zero and (B) (1) the
Conversion Rate then in effect minus (2) the quotient of (x) the
Fixed Cash Amount divided by (y) the VWAP of the Class A Common Stock
on that Settlement Period Trading Day.

 

40

 

(c)       If more than one Note shall be surrendered for
conversion at one time by the same Holder, the Conversion Obligation with
respect to such Notes, if any, that shall be payable upon conversion shall be
computed on the basis of the aggregate principal amount of the Notes (or
specified portions thereof to the extent permitted thereby) so surrendered.

 

(d)       No fractional shares of Class A Common Stock
shall be issued upon conversion of any Note or Notes.  The number of shares of Class A Common
Stock issuable upon the conversion of any Note or Notes shall be rounded down
to the next lower whole number.

 

(e)       Subject to compliance with any restrictions on
transfer, if shares of Class A Common Stock are issuable on conversion and
are to be issued in a name other than that of the Holder (as if such transfer
were a transfer of the Notes (or portion thereof) so converted), the Company
shall issue and shall deliver to such Holder at the office of the Conversion
Agent, a certificate or certificates for the number of full shares of Class A
Common Stock issuable upon the conversion of such Notes or portion thereof in
accordance with the provisions of this Article X, unless the Holder holds
Notes in book-entry form with DTC, then the shares of Class A Common Stock
shall be delivered in accordance with DTC’s customary practices.  In case any Notes of a denomination greater
than $1,000 shall be surrendered for partial conversion, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of the
Notes so surrendered, without charge to the Holder, new 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 on the Conversion Date and, if
Class A Common Stock is issuable upon such conversion, the person in whose
name any certificate or certificates of Class A Common Stock issuable upon
such conversion shall be deemed to have become on said date the Holder of
record of the shares of Class A Common Stock represented thereby as of the
close of business on the final Settlement Period Trading Day of the applicable
Settlement Period.

 

(f)        If a Holder has submitted any Notes for repurchase
pursuant to Section 11.1, such Notes may be converted only if the Holder
submits a withdrawal notice in accordance with Section 11.2 prior to the
close of business on the Business Day immediately preceding the Fundamental
Change Repurchase Date, and if such Notes are evidenced by a Global Note, if
the Holder complies with appropriate Depositary procedures.

 

(g)       Upon the conversion of an interest in Global Notes,
the Trustee (or other Conversion Agent appointed by the Company) shall make a
notation on such Global Notes 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.

 

SECTION 10.3       INCREASED
CONVERSION RATE APPLICABLE TO CERTAIN NOTES SURRENDERED IN CONNECTION WITH
FUNDAMENTAL CHANGE

 

(a)       If the effective date (or anticipated effective date
in the case of a transaction described clause (2) of the definition of
Fundamental Change) of a Fundamental Change occurs on or prior to March 15,
2011, and a Holder elects to convert Notes during the period commencing on such
effective date (or during the period commencing fifteen (15) calendar days
prior to the anticipated effective date in the case of a transaction described
clause (2) of the definition of Fundamental Change) and ending on the
later of (A) the day before the Fundamental Change Repurchase Date and (B) thirty
(30) calendar days following the effective date (but in any event prior to the
close of business on the Business Day prior to the Stated Maturity of the
Notes), the Conversion Rate applicable to each $1,000 principal amount of Notes
so converted shall be increased by an additional number of shares of Class A
common stock (the “Additional Shares”)
as specified in paragraph (b) below; provided
that, in the case of a transaction described in clause (2) of the
definition of Fundamental Change, if a Holder converts its Notes on or after
the fifteenth (15th) calendar day prior to the anticipated effective date of a
Fundamental Change, and such Fundamental Change does not occur, such Holder
will not be entitled to an increased Conversion Rate as described in paragraph (b) below.  In connection with a Fundamental Change, the
Company will provide a Fundamental Change Notice pursuant to Section 11.1.  If a Fundamental Change does not occur as 

 

41

 

anticipated, the Company shall issue a press release
and notify Holders who have elected to convert their Notes promptly after the Company
determines not to increase the Conversion Rate, and each such Holder may elect
to withdraw any election to convert by a written notice of withdrawal delivered
to the Conversion Agent within ten (10) Business Days after the Company
announces that the Fundamental Change will not occur as anticipated.

 

(b)       The number of Additional Shares by which the
Conversion Rate will be increased shall be determined by reference to the
following table, based on the effective date of the Fundamental Change and the
Share Price:

 

	
   

  	
   

  	
  Share Price

  	
   

  
	
  Effective Date

  	
   

  	
  $19.52

  	
   

  	
  $20.00

  	
   

  	
  $21.00

  	
   

  	
  $22.00

  	
   

  	
  $23.00

  	
   

  	
  $24.00

  	
   

  	
  $25.00

  	
   

  	
  $26.00

  	
   

  	
  $27.00

  	
   

  	
  $28.00

  	
   

  	
  $29.00

  	
   

  	
  $30.00

  	
   

  
	
  March 10,
  2008

  	
   

  	
  7.81

  	
   

  	
  7.02

  	
   

  	
  5.56

  	
   

  	
  4.35

  	
   

  	
  3.35

  	
   

  	
  2.52

  	
   

  	
  1.85

  	
   

  	
  1.30

  	
   

  	
  0.86

  	
   

  	
  0.52

  	
   

  	
  0.25

  	
   

  	
  0.07

  	
   

  
	
  March 15,
  2009

  	
   

  	
  7.81

  	
   

  	
  7.02

  	
   

  	
  5.45

  	
   

  	
  4.17

  	
   

  	
  3.12

  	
   

  	
  2.28

  	
   

  	
  1.61

  	
   

  	
  1.08

  	
   

  	
  0.67

  	
   

  	
  0.36

  	
   

  	
  0.14

  	
   

  	
  0.01

  	
   

  
	
  March 15,
  2010

  	
   

  	
  7.81

  	
   

  	
  6.58

  	
   

  	
  4.84

  	
   

  	
  3.45

  	
   

  	
  2.37

  	
   

  	
  1.55

  	
   

  	
  0.94

  	
   

  	
  0.51

  	
   

  	
  0.22

  	
   

  	
  0.04

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  
	
  March 15,
  2011

  	
   

  	
  7.81

  	
   

  	
  6.52

  	
   

  	
  4.14

  	
   

  	
  1.99

  	
   

  	
  0.14

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  

 

provided, however, that if the actual Share Price is
between two Share Prices in the table or the relevant effective date of a
Fundamental Change is between two effective dates in the table, the number of
Additional Shares shall be determined by a straight-line interpolation between
the number of Additional Shares set forth for the next higher and next lower
Share Prices and the two Effective Dates, as applicable, based on a 365-day
year; and provided further that (1) if
the Share Price is in excess of $30.00 per share, subject to adjustment as
described in paragraph (c) below, then the Conversion Rate will not be
increased, and (2) if the Share Price is less than $19.52 per share,
subject to adjustment as described in paragraph (c) below, then the
Conversion Rate will not be increased. 
Notwithstanding the foregoing, in no event will the Conversion Rate
exceed 51.2295 per $1,000 principal amount of Notes, subject to adjustment as
described in Section 10.4.

 

(c)       The Share Prices set forth in the first row of the
table above shall be adjusted as of any date on which the Conversion Rate is
adjusted.  The adjusted Share Prices
shall equal the Share Prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate in
effect immediately prior to the Share Price adjustment and the denominator of
which is the Conversion Rate as so adjusted. 
The number of Additional Shares in the table above shall be adjusted in
the same manner as the Conversion Rate as set forth in Section 10.4.

 

SECTION 10.4       ADJUSTMENT
OF CONVERSION RATE

 

The
Conversion Rate will be adjusted from time to time by the Company as
follows:  provided that the Company shall not make any adjustments to
the Conversion Rate if Holders participate, as a result of holding the Notes,
in any of the transactions described below without having to convert their
Notes as if they held the full number of shares underlying their Notes:

 

(a)           If the Company shall issue shares of
Common Stock as a dividend or distribution on shares of Common Stock, or if the
Company effects a subdivision or combination of the outstanding Common Stock,
the Conversion Rate will be adjusted based on the following formula:

 

 

where

 

CR0       =        the Conversion Rate in effect at the close of business
immediately prior to the Ex-Dividend Date

 

42

 

CR1       =        the Conversion Rate in effect immediately after the
opening of business on the Ex-Dividend Date

 

OS0       =        the number of shares of Common Stock outstanding at
the close of business immediately prior to the Ex-Dividend Date

 

OS1       =        the number of shares of Common Stock outstanding at
the close of business immediately prior to the Ex-Dividend Date, assuming, for
this purpose only, the completion of the event immediately prior to the
Ex-Dividend Date

 

Such adjustment shall
become effective immediately after (x) the opening of business on the
Ex-Dividend Date for such dividend or distribution or (y) the effective
date of such share subdivision or combination. 
If any dividend or distribution described in this Section 10.4(a) is
declared but not so paid or made, the conversion rate shall be readjusted to
the conversion rate that would then be in effect if such dividend or
distribution had not been declared.

 

(b)           If the Company distributes to all holders
of Common Stock any rights or warrants that allow the stockholders, for a
period ending not more than sixty (60) calendar days after the record date for
such issuance, to purchase shares of Common Stock at less than the Current
Market Price, the Conversion Rate will be adjusted based on the following
formula:

 

 

where

 

CR0       =        the Conversion Rate in effect at the close of business
immediately prior to the Ex-Dividend Date

 

CR1       =        the Conversion Rate in effect immediately after the
opening of business on the Ex-Dividend Date

 

OS0          =        the number of shares of Common Stock
outstanding at the close of business immediately prior to the Ex-Dividend Date

 

X          =        the
total number of shares of Common Stock issuable pursuant to such rights or
warrants

 

Y           =        the
number of shares of Common Stock equal to the aggregate price payable to
exercise such rights or warrants divided by the Current Market Price

 

Any adjustment shall
become effective immediately after the opening of business on the Ex-Dividend
Date for such distribution.  In the event
that such rights or warrants described in this Section 10.4(b) are
not so distributed, the Conversion Rate shall be readjusted to the Conversion
Rate that would then be in effect if the Ex-Dividend Date for such distribution
had not occurred.  To the extent that
such rights or warrants are not exercised prior to their expiration or shares
of the Common Stock are otherwise not delivered pursuant to such rights or
warrants upon the exercise 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 the delivery of only the number of shares of Common Stock actually
delivered.  In determining the aggregate
price payable for such shares of Common Stock, there shall be taken into
account any consideration received for such rights or warrants, with the value
of such consideration, if other than cash, to be determined by the Board of
Directors.

 

43

 

(c)           If the Company shall distribute to all
holders of Common Stock shares of its capital stock, evidences of debt or other
assets (excluding (i) dividends or distributions referenced in Section 10.4(a),
(ii) rights or warrants referenced in Section 10.4(b), (iii) cash
referenced in Section 10.4(d) and (iv) distributions in
connection with any liquidation, dissolution or winding up), then, in each case
the Conversion Rate will be adjusted based on the following formula:

 

 

where

 

CR0       =        the Conversion Rate in effect at the close of business
immediately prior to the Ex-Dividend Date

 

CR1       =        the Conversion Rate in effect immediately after the
opening of business on the Ex-Dividend Date

 

SP0       =        the Current Market Price

 

FMV    =        the fair market value (as determined by
the Board of Directors) of the shares of capital stock, evidences of debt or
other assets distributed with respect to each outstanding share of Common Stock
on the Ex-Dividend Date for such distribution

 

With respect to an adjustment pursuant to this Section 10.4(c),
where there has been a payment of a dividend or other distribution
on Common Stock of shares of capital stock of, or similar equity interests in,
a Subsidiary or other business unit of the Company (a “Spin-Off”) that are, or when issued, will
be listed on a national securities exchange or market or another established
automated over-the-counter trading market in the United States, the Conversion
Rate will instead be adjusted based on the following formula:

 

 

where

 

	
  CR0

  	
  =

  	
  the Conversion Rate in effect at the close of
  business immediately prior to the end of the Spin-Off Valuation Period

  
	
   

  	
   

  	
   

  
	
  CR1

  	
  =

  	
  the Conversion Rate in effect immediately after the
  end of the Spin-Off Valuation Period

  
	
   

  	
   

  	
   

  
	
  FMV0

  	
  =

  	
  the average of the Last Reported Sale Prices of the
  capital stock or similar equity interest distributed to holders of Common
  Stock applicable to one share of Common Stock over the ten (10) Trading
  Days commencing on and including the effective date of the Spin-Off (the “Spin-Off Valuation Period”); provided that, in the case of
  conversions that occur within such ten (10) Trading-Day period, in
  respect of any VWAP Trading Day that occurs within the ten (10) Trading
  Days commencing on, and including, the effective date of any Spin-Off, the
  Spin-Off Valuation Period shall be deemed to include only those Trading

  

 

44

 

 

                        Days falling on or between the effective date of such
Spin-Off and such VWAP Trading Day

 

MP0      =        the average of the Last Reported Sale Prices of the Class A
Common Stock over the Spin-Off Valuation Period

 

For the avoidance of doubt, the adjustment in this Section 10.4(c) does
not apply to any distributions to the extent that the right to convert Notes
has been changed into the right to convert into Reference Property in respect
of such distribution as set forth in Section 10.12.

 

Any other adjustment made pursuant to this Section 10.4(c) shall
become effective immediately after the opening of business on the Ex-Dividend
Date for such dividend or distribution. 
If such dividend or distribution is not so paid or made, the Conversion
Rate shall be readjusted to be the Conversion Rate that would then be in effect
if such dividend or distribution had not been declared.

 

(d)           If the Company distributes to all or
substantially all holders of Common Stock cash in excess of the Base Dividend
Amount in the aggregate in any single quarterly period, excluding any
distributions in connection with any liquidation, dissolution or winding up,
then the Conversion Rate will be adjusted based on the following formula:

 

 

where

 

CR0   
=           the Conversion Rate in effect at the
close of business immediately prior to the Ex-Dividend Date

 

CR1    
=          the Conversion Rate in effect immediately
after the opening of business on the Ex-Dividend Date

 

SP0    
=           the Last Reported Sale Price of Class A
Common Stock on the Trading Day immediately preceding the Ex-Dividend Date

 

C        =           the aggregate amount by which the cash per share the
Company distributes to holders of Common Stock in the aggregate in any single
quarterly period exceeds the Base Dividend Amount

 

For the avoidance of doubt, the adjustment in this Section 10.4(d) does
not apply to any distributions to the extent that the right to convert Notes
has been changed into the right to convert into Reference Property in respect
of such distribution as set forth in Section 10.12.

 

Such adjustment shall become effective immediately
after the opening of business on the Ex-Dividend Date for such dividend or
distribution.  If any distribution
described in this Section 10.4(d) is declared but not so paid or
made, the Conversion Rate shall be readjusted to the Conversion Rate that would
then be in effect if such distribution had not been declared.

 

(e)           If the Company or any of its Subsidiaries
makes a payment in respect of a tender offer or exchange offer for the Common
Stock, to the extent that the cash and/or value of any other consideration
included in the payment per share of Common Stock exceeds the Last Reported
Sale Price per share of Class A Common Stock on the Trading Day next
succeeding the last date (the “Expiration
Date”) on which tenders or exchanges may be made pursuant to such
tender or exchange offer, in which event the Conversion Rate will be adjusted
based on the following formula:

 

45

 

 

where

 

CR0       =        the Conversion Rate in effect at the close of business
on the Expiration Date

 

CR1       =        the Conversion Rate in effect immediately after the
Expiration Date

 

FMV    =        the
fair market value (as determined by the Board of Directors) of the aggregate
value of all cash and/or any other consideration paid or payable for shares
validly tendered or exchanged and not withdrawn as of the Expiration Date

 

OS0       =        the number of shares of Common Stock outstanding
immediately prior to the Expiration Date

 

OS1       =        the number of shares of Common Stock outstanding immediately
after the Expiration Date, excluding any purchased shares

 

SP1       =        the average of the Last Reported Sale Price of the Class A
Common Stock over the ten (10) Trading Days beginning on the Trading Date
after the Expiration Date

 

For the avoidance of doubt, the adjustment in this Section 10.4(e) does
not apply to the purchase of Common Stock by the Company pursuant to a formal
stock repurchase program.

 

Any adjustment made pursuant to this Section 10.4(e) shall
become effective immediately prior to the opening of business on the Trading
Day immediately succeeding the Expiration Date. 
In the event that the Company, or one of its Subsidiaries, is obligated
to purchase shares of Common Stock pursuant to any such tender offer or
exchange offer, but the Company, or such Subsidiary, is permanently prevented
by applicable law, or otherwise, from effecting any such purchases, or all such
purchases are rescinded, then the Conversion Rate shall be adjusted to be the
Conversion Rate which would then be in effect if such tender offer or exchange
offer had not been made.  Except as set
forth in the preceding sentence, if the application of this Section 10.4(e) to
any tender offer or exchange offer would result in a decrease in the Conversion
Rate, no such adjustment shall be made for such tender offer or exchange offer
under this Section 10.4(e).

 

For purposes of this Section 10.4, 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 so
long as the Company does not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.

 

In any case in which this Section 10.4 provides
that an adjustment shall become effective immediately after an Event Record
Date for an event, the Company may defer until the occurrence of such event
issuing to the Holder of any Notes converted after such Event Record Date and
before the occurrence of such event the additional shares of Class A
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Class A Common Stock issuable upon such
conversion before giving effect to such adjustment.

 

46

 

SECTION 10.5       NO
ADJUSTMENT

 

Except as otherwise provided in this Article X,
no adjustment need be made for the issuance or acquisition of Class A
Common Stock or any securities convertible into or exchangeable for Class A
Common Stock or that carry the right to purchase any of the foregoing.  Without limiting the generality of any other
provision hereof, the Conversion Rate shall not be adjusted for:

 

(i)            the issuance of Class A
Common Stock pursuant to any present or future plan providing for the
reinvestment of distributions or interest payable on securities of the Company
and the investment of additional optional amounts in Class A Common Stock
under any such plan;

 

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

 

(iii)          upon the issuance
of Class A Common Stock pursuant to any option, warrant, right or
exercisable, exchangeable or convertible security;

 

(iv)          for a change in the
par value (or a change to no par value) of Class A Common Stock; or

 

(v)           for accumulated and
unpaid dividends.

 

To the extent that the Notes become convertible into
the right to receive cash, no adjustment need be made thereafter as to the
cash. Interest will not accrue on the cash.

 

Notwithstanding anything in this Article X herein
to the contrary, no adjustment in the Conversion Rate shall be required unless
the adjustment would require an increase or decrease of at least 1% in the
Conversion Rate as last adjusted; provided,
however, that any adjustments which by reason of this Section 10.5
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment.  In addition,
the Company will make any carry forward adjustments not otherwise effected (a) upon
conversion of the Notes, (b) upon repurchases of the Notes in connection
with a Fundamental Change and (c) thirty-five (35) Scheduled Trading Days
prior to the Stated Maturity of the Notes. 
No adjustment to the Conversion Rate will be made if it results in a
Conversion Price that is less than the par value (if any) of the Class A
Common Stock.  No adjustment to the
Conversion Rate will be made if the Holders participate, as a result of holding
the Notes, in any of the transactions described in Section 10.4 without
conversion.  All calculations under this Article X
shall be made to the nearest cent or to the nearest 1/1000th of a share, as the
case may be.

 

SECTION 10.6       TREATMENT
OF STOCKHOLDER RIGHTS

 

In the event that the Company implements a shareholder
rights plan, upon conversion of the Notes into Class A Common Stock, the
Holders will receive, in addition to any Class A Common Stock issuable
upon such conversion, the rights issued under such rights plan unless, prior to
any conversion, the rights plan expires or terminates or the rights have
separated from the Class A Common Stock in accordance with the provisions
of the applicable shareholder rights agreement so that the Holder of the Notes
would not be entitled to receive any rights in respect of Class A Common
Stock issuable upon conversion of the Notes, in which case the Conversion Rate
will be adjusted at the time of separation as if the Company distributed, to
all holders of Class A Common Stock, shares of the Company’s capital
stock, evidences of debt or other assets issuable upon exercise of the rights
as described in subsection (a) or (c) of Section 10.4, subject
to readjustment in the event of the expiration, termination or redemption of
the rights.  Any distribution of rights
pursuant to a shareholder rights plan complying with the requirements set 

 

47

 

forth in the immediately preceding sentence of this paragraph shall not
constitute a distribution of securities for the purposes of Section 10.4(b) or
Section 10.4(c).

 

SECTION 10.7       VOLUNTARY
INCREASE IN CONVERSION RATE

 

The Company may make such increases in the Conversion
Rate, in addition to any adjustments required by Section 10.4, as the
Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Class A Common Stock or rights to purchase Class A
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 twenty (20) calendar 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 mail to
Holders of record of the Notes a notice of the increase at least fifteen (15) calendar
days prior to the date the increase Conversion Rate takes effect, and such
notice shall state the increased Conversion Rate and the period during which it
will be in effect.

 

SECTION 10.8       NOTICE OF
CONVERSION RATE ADJUSTMENT

 

Whenever the Conversion Rate is adjusted as herein
provided, the Company shall promptly file with the Trustee and any Conversion
Agent 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 without inquiry that the last
Conversion Rate of which it has knowledge is still in effect.  Promptly after delivery of such certificate,
the Company shall prepare a notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the date on which each adjustment
becomes effective and shall mail such notice of such adjustment of the
Conversion Rate to each Holder of Notes at such Holder’s last address appearing
on the list of Holders provided for in Section 2.6, within twenty (20)
calendar days after execution thereof. 
Failure to deliver such notice shall not affect the legality or validity
of any such adjustment.

 

SECTION 10.9       TAXES ON
CONVERSION

 

If a
Holder converts a Note, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of shares of Class A Common Stock
upon such conversion.  However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder’s name.  The Conversion Agent may refuse to deliver
the certificate representing the Class A Common Stock being issued in a
name other than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder’s name. 
Nothing herein shall preclude any tax withholding required by law or
regulation.

 

SECTION 10.10     COMPANY TO
PROVIDE CLASS A COMMON STOCK

 

The
Company shall, prior to issuance of any Notes hereunder, and from time to time
as may be necessary, reserve, out of its authorized but unissued Class A
Common Stock, a sufficient number of shares of Class A Common Stock to
permit the conversion of all outstanding Notes into shares of Class A
Common Stock.

 

48

 

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

 

The
Company will endeavor promptly to comply with all federal and state securities
laws regulating the offer and delivery of shares of Class A Common Stock
upon conversion of Notes, if any, and will list or cause to have quoted such
shares of Class A Common Stock on the New York Stock Exchange or on the
Nasdaq Global Select Market or other over-the-counter market or such other
market on which the Class A Common Stock is then listed or quoted, if any;
provided, however, that if rules of
such automated quotation system or exchange permit the Company to defer the
listing of such Class A Common Stock until the first conversion of the
Notes into Class A Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Class A Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such automated quotation system or exchange, if any, at such time.  Any Class A Common Stock issued upon
conversion of a Note hereunder which at the time of conversion was a Restricted
Security will also be a Restricted Security.

 

SECTION 10.11     NOTICE OF
CERTAIN TRANSACTIONS

 

Except where notice is required pursuant to Section 10.1, in case:

 

(1)           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 10.4; or

 

(2)           the Company shall authorize the granting
to all or substantially all of the holders of its Common Stock of rights or
warrants to subscribe for or purchase any share of any class or any other
rights or warrants that would require an adjustment in the Conversion Rate
pursuant to Section 10.4; or

 

(3)           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

 

(4)           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 Conversion
Agent and to be mailed to each Holder of Securities at such Holder’s address
appearing on the list of Holders provided for in Section 2.6 of this
Indenture, as promptly as practicable but in any event at least fifteen (15)
calendar days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose
taking such action, 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 the benefits of such
action 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.

 

49

 

SECTION 10.12     Effect of Reclassification, Consolidation,
Merger or Sale

 

If any of the following events occur:

 

(a)       any reclassification of the outstanding
Common Stock (other than a change only 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
share combination to which Section 10.4(a) applies);

 

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

 

(c)       any conveyance, transfer, sale, lease or
other disposition to any other Person or Persons of all or substantially all of
the Company’s consolidated assets,

 

and, in either case, the
holders of Common Stock received cash, securities or other property (the “Reference Property”) in exchange for such
Common Stock (any such event or transaction, a “Reorganization Event”), in each case, the Company or the
Successor Company, 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, become convertible based on the type
and amount of consideration that holders of Common Stock received in such
Reorganization Event.  If the
Reorganization Event causes the Common Stock to be converted into the right to
receive more than a single type of consideration (determined based in part upon
any form of stockholder election), the Reference Property into which the Notes
will be convertible will be deemed to be the weighted average of the types and
amounts of consideration received by the holders of Common Stock that
affirmatively made such an election.  In
all cases, the provisions under Section 10.2 shall continue to apply with
respect to the calculation of the Conversion Obligation and the method of
settlement.  Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as practicable
to the adjustments provided for in this Article X.

 

The Company shall cause
notice of the execution of such supplemental indenture to be provided to each
Holder within twenty (20) calendar days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.

 

The above provisions of
this Section 10.12 shall similarly apply to successive reclassifications,
consolidations, mergers, conveyances, transfers, sales, leases or other
dispositions.

 

If this Section 10.12
applies to any event or occurrence, Section 10.4 shall not apply.

 

SECTION 10.13     TRUSTEE’S DISCLAIMER

 

The
Trustee or any other Conversion Agent shall have the duty to determine when an
adjustment under this Article X should be made, how it should be made or
what such adjustment should be, but may accept as conclusive evidence of that
fact or the correctness of any such adjustment, and shall be protected in
relying upon, an Officers’ Certificate including the Officers’ Certificate with
respect thereto which the Company is obligated to file with the Trustee and the
Conversion Agent pursuant to Sections 10.7 and 10.10.  The Trustee and any other Conversion Agent
make no representation as to the validity or value of any securities or assets
issued upon conversion of Notes, and the Trustee shall not be responsible for
the Company’s failure to comply with any provisions of this Article X.

 

The
Trustee and any Conversion Agent shall not be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture executed pursuant to Section 10.12, but may accept as conclusive
evidence of the correctness thereof, and shall be fully protected in relying
upon, the Officers’ Certificate with respect thereto which the Company is
obligated to file with the Trustee and the Conversion Agent pursuant to Section 10.12.

 

50

 

SECTION 10.14     COMPANY DETERMINATION FINAL

 

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

 

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

 

ARTICLE XI

FUNDAMENTAL CHANGE

 

SECTION 11.1       REPURCHASE OF NOTES AT OPTION OF THE HOLDER UPON FUNDAMENTAL
CHANGE

 

(a)       If at any time that Notes remain
outstanding there shall occur a Fundamental Change, Notes shall be repurchased
by the Company at the option of the Holders thereof as of a date selected by
the Company that is not less than twenty (20) and not more than thirty-five
(35) calendar days after the occurrence of the Fundamental Change (or longer
period if required by applicable law) (the “Fundamental
Change Repurchase Date”) at a repurchase price equal to the
principal amount plus accrued and unpaid interest up to but excluding the
Fundamental Change Repurchase Date (the “Fundamental
Change Repurchase Price”), subject to satisfaction by or on behalf
of any Holder of the requirements set forth in subsection (c) of this Section 11.1;
provided that if the Fundamental
Change Repurchase Date is after a Record Date and on or prior to the next
succeeding Interest Payment Date, the interest will be paid on the Interest
Payment Date to the holder of record on such Record Date and will not be
included in the Fundamental Change Repurchase Price.

 

(b)       The Company will provide written notice
(the “Fundamental Change Notice”)
to the Holders, including through the facilities of DTC, and the Trustee of any
such Fundamental Change within fifteen (15) calendar days after the occurrence
of a Fundamental Change described in clause (2) or (4) of the
definition of Fundamental Change and, in the case of a Fundamental Change
described in clause (1) or (3) of the definition of Fundamental
Change, no later than the later of (x) one (1) Business Day following
the effective date of the Fundamental Change or (y) two (2) Business
Days following the date on which officers of the Company first learned of such
Fundamental Change following the effective date of such Fundamental
Change.  The Fundamental Change notice
shall include the form of a Fundamental Change Repurchase Notice to be
completed by the Holder and shall state:

 

	
   

  	
  (i)

  	
  the date of such Fundamental Change
  and, briefly, the events causing such 

  
	
  Fundamental Change;

  
	
   

  
	
   

  	
  (ii)

  	
  the date by which the Fundamental Change Repurchase
  Notice pursuant to this 

  
	
  Section 11.1 must be given;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  the Fundamental Change Repurchase Date;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  the Fundamental Change Repurchase Price;

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  briefly, the conversion rights of the Notes;

  
	
   

  	
   

  	
   

  
	
   

  	
  (vi)

  	
  the name and address of each Paying Agent and
  Conversion Agent;

  

 

51

 

(vii)  that the Notes are
eligible to be converted, the applicable Conversion Rate and any adjustments to
the applicable Conversion Rate resulting from such Fundamental Change
transaction;

 

(viii) that Notes as to which a
Fundamental Change Repurchase Notice has been given may be converted pursuant
to Article X only to the extent that the Fundamental Change Repurchase
Notice has been withdrawn in accordance with the terms of this Indenture;

 

(ix)   that
the Holder must satisfy the requirements set forth in the Notes in order to
convert the Notes;

 

(x)    the
procedures that the Holder must follow to exercise rights under this Section 11.1;
and

 

(xi)   the procedures
for withdrawing a Fundamental Change Repurchase Notice, including a form of
notice of withdrawal.

 

If any
of the Notes is in the form of a Global Note, then the Company shall modify such
notice to the extent necessary to accord with the procedures of the Depositary
applicable to the repurchase of Global Notes.

 

(c)       A Holder may exercise its rights
specified in subsection (a) of this Section 11.1 upon delivery of a
written notice (which shall be in substantially the form included as an
attachment to the Note and which may be delivered by letter, overnight courier,
hand delivery, facsimile transmission or in any other written form) of the
exercise of such rights (a “Fundamental
Change Repurchase Notice”) to any Paying Agent at any time prior to
the close of business on the Business Day immediately preceding the Fundamental
Change Repurchase Date.

 

The
delivery of such Note to any Paying Agent (together with all necessary
endorsements) at the office of such Paying Agent shall be a condition to the
receipt by the Holder of the Fundamental Change Repurchase Price therefor.

 

The
Company shall repurchase from the Holder thereof, pursuant to this Section 11.1,
a portion of a Note if the principal amount of such portion is $1,000 or an
integral multiple of $1,000.  Provisions
of this Indenture that apply to the repurchase of all of a Note also apply to
the repurchase of such portion of such Note.

 

Notwithstanding
anything herein to the contrary, any Holder delivering to a Paying Agent the
Fundamental Change Repurchase Notice contemplated by this subsection (c) shall
have the right to withdraw such Fundamental Change Repurchase Notice in whole
or in a portion thereof that is a principal amount of $1,000 or in an integral
multiple thereof at any time prior to the close of business on the Business Day
next preceding the Fundamental Change Repurchase Date by delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 11.2.

 

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

 

Anything
herein to the contrary notwithstanding, in the case of Global Notes, any
Fundamental Change Repurchase Notice may be delivered or withdrawn and such
Notes may be surrendered or delivered for repurchase in accordance with the
applicable procedures of the Depositary as in effect from time to time.

 

52

 

SECTION 11.2       EFFECT OF FUNDAMENTAL CHANGE REPURCHASE NOTICE

 

Upon
receipt by any Paying Agent of the Fundamental Change Repurchase Notice
specified in Section 11.1(c), the Holder of the Note in respect of which
such Fundamental Change Repurchase Notice was given shall (unless such
Fundamental Change Repurchase Notice is withdrawn as specified below)
thereafter be entitled to receive the Fundamental Change Repurchase Price with
respect to such Note. Such Fundamental Change Repurchase Price shall be paid to
such Holder promptly following the later of (a) the Fundamental Change
Repurchase Date with respect to such Note (provided the conditions in Section 11.1(c) have
been satisfied) and (b) the time of delivery of such Note to a Paying
Agent by the Holder thereof in the manner required by Section 11.1(c).  Notes in respect of which a Fundamental
Change Repurchase Notice has been given by the Holder thereof may not be
converted into Common Stock 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.

 

A
Fundamental Change Repurchase Notice may be withdrawn by means of a written
notice (which may be delivered by letter, overnight courier, hand delivery,
facsimile transmission or in any other written form and, in the case of Global
Notes, may be delivered electronically or by other means in accordance with the
Depositary’s customary procedures) of withdrawal delivered by the Holder to a
Paying Agent at any time prior to the close of business on the Business Day
immediately preceding the Fundamental Change Repurchase Date, specifying the
principal amount of the Note or portion thereof (which must be a principal
amount of $1,000 or an integral multiple of $1,000 in excess thereof) with
respect to which such notice of withdrawal is being submitted.

 

SECTION 11.3       DEPOSIT OF FUNDAMENTAL CHANGE REPURCHASE PRICE

 

On or
before 11:00 a.m. New York City time on the Fundamental Change Repurchase
Date, the Company shall deposit with the Trustee or with a Paying Agent (other
than the Company or a Subsidiary of the Company) an amount of money (in
immediately available funds if deposited on such Fundamental Change Repurchase
Date) sufficient to pay the aggregate Fundamental Change Repurchase Price of
all the Notes or portions thereof that are to be repurchased as of such
Fundamental Change Repurchase Date. The manner in which the deposit required by
this Section 11.3 is made by the Company shall be at the option of the
Company, provided that such
deposit shall be made in a manner such that the Trustee or a Paying Agent shall
have immediately available funds on the Fundamental Change Repurchase Date.

 

If a
Paying Agent holds, in accordance with the terms hereof, money sufficient to
pay the Fundamental Change Repurchase Price of any Note for which a Fundamental
Change Repurchase Notice has been tendered and not withdrawn in accordance with
this Indenture then, on the Fundamental Change Repurchase Date, such Note will
cease to be outstanding and the rights of the Holder in respect thereof shall
terminate (other than the right to receive the Fundamental Change Repurchase
Price as aforesaid). The Company shall publicly announce the principal amount
of Notes repurchased as a result of such Fundamental Change on or as soon as
practicable after the Fundamental Change Repurchase Date.

 

SECTION 11.4       NOTES REPURCHASED IN PART

 

Any
Note which is to be repurchased only in part shall be surrendered at the office
of the Paying Agent (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder’s
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Note, without
service charge, a new Note or 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
that is not repurchased.

 

53

 

SECTION 11.5       COMPLIANCE WITH SECURITIES LAWS UPON REPURCHASE OF NOTES

 

In
connection with any offer to repurchase Notes under this Article XI, the
Company shall (a) comply with Rule 13e-4 (or any successor to either
such Rule), if applicable, under the Exchange Act, (b) file the related
Schedule TO (or any successor or similar schedule, form or report) if required
under the Exchange Act, and (c) otherwise comply with all federal and
state securities laws in connection with such offer, all so as to permit the
rights of the Holders and obligations of the Company under this Article XI
to be exercised in the time and in the manner specified therein.

 

SECTION 11.6       REPAYMENT TO THE COMPANY

 

To the
extent that the aggregate amount of cash deposited by the Company pursuant to Section 11.3
exceeds the aggregate Fundamental Change Repurchase Price together with
interest, if any, thereon of the Notes or portions thereof that the Company is
obligated to repurchase, then promptly after the Fundamental Change Repurchase
Date the Trustee or a Paying Agent, as the case may be, shall return any such
excess to the Company.

 

SECTION 11.7       NO REPURCHASE ON FUNDAMENTAL CHANGE IF ACCELERATION OF NOTES
HAS OCCURRED

 

There
shall be no repurchase of any Notes pursuant to this Article XI 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 Fundamental Change Repurchase Notice) an
acceleration of the Notes pursuant to Section 6.2.  The Paying Agent will promptly return to the
respective Holders thereof any Notes (x) with respect to which a
Fundamental Change 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 Fundamental Change Repurchase Price
with respect to such Notes) in which case, upon such return, the Fundamental Change
Repurchase Notice with respect thereto shall be deemed to have been withdrawn.

 

ARTICLE XII

MISCELLANEOUS

 

SECTION 12.1       TRUST INDENTURE ACT CONTROLS

 

If any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by the TIA, the imposed duties shall control.

 

SECTION 12.2       NOTICES

 

Any
notice or communication by the Company or the Trustee to the other is duly
given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight
air courier guaranteeing next day delivery, to the others’ address:

 

If to
the Company:

 

	
  Regal
  Entertainment Group

  	
   

  	
   

  
	
  7132 Regal Lane

  	
   

  	
   

  
	
  Knoxville,
  Tennessee 37918

  	
   

  	
   

  
	
  Attention:

  	
   Amy Miles, Chief Financial Officer

  
	
   

  	
   Peter Brandow, General Counsel

  
	
  Facsimile:  (865) 922-6085

  	
   

  	
   

  
				

 

54

 

with
copies (which shall not constitute notice) to:

 

	
  Hogan &
  Hartson, LLP

  	
   

  	
   

  
	
  One Tabor
  Center, Suite 1500

  	
   

  	
   

  
	
  1200 Seventeenth
  Street

  	
   

  	
   

  
	
  Denver, Colorado
  80202

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   Richard J. Mattera, Esq.

  
	
  Facsimile:  (303) 899-7333

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. Bank National
  Association

  	
   

  	
   

  
	
  60 Livingston Avenue

  	
   

  	
   

  
	
  St. Paul, Minnesota
  55107-2292

  	
   

  	
   

  
	
  Attention: Corporate
  Trust Services

  	
   

  	
   

  
					

 

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

 

All
notices and communications (other than those sent to Holders) shall be deemed
to have been duly given: (i) at the time delivered by hand, if personally
delivered; (ii) the third (3rd) Business Day after sent by mail; (iii) when
receipt acknowledged, if telecopied; and (iv) the next Business Day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.

 

Any
notice or communication to a Holder shall be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar.  Any notice or communication
shall also be so mailed to any Person described in TIA § 313(c), to the extent
required by the TIA.  Failure to mail a
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.

 

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

 

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

 

SECTION 12.3       COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES

 

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

 

SECTION 12.4       CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT

 

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

 

(a)       an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.5 hereof) stating that, in the opinion
of the signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and

 

55

 

(b)       an Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.5 hereof) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been
satisfied.

 

SECTION 12.5       STATEMENTS REQUIRED IN CERTIFICATE OR OPINION

 

Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall
include:

 

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

 

(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 such
Person, he or she 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 satisfied; and

 

(d)       a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been satisfied; provided, however, that with respect to
matters of fact, an Opinion of Counsel may rely on an Officers’ Certificate or
certificate of public officials.

 

SECTION 12.6       RULES BY TRUSTEE AND AGENTS

 

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

 

SECTION 12.7       NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS

 

No
past, present or future director, officer, employee, incorporator or
stockholder (direct or indirect) of the Company (or any such successor entity),
as such, shall have any liability for any Obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of, or by reason
of, such Obligations or their creation, except in their capacity as an obligor
of the Notes in accordance with this Indenture. 
Each Holder by accepting a Note waives and releases all such
liability.  The waiver and release are
part of the consideration for issuance of the Notes.

 

SECTION 12.8       GOVERNING LAW

 

THE
INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
INDENTURE AND THE NOTES, 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).

 

SECTION 12.9       NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS

 

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

 

56

 

SECTION 12.10     SUCCESSORS

 

All
agreements of the Company in this Indenture and the Notes shall bind their
successors.  All agreements of the
Trustee in this Indenture shall bind its successors.

 

SECTION 12.11     SEVERABILITY

 

In
case any one or more of the provisions of this Indenture or in the Notes shall
be held invalid, illegal or unenforceable, in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.

 

SECTION 12.12     COUNTERPART ORIGINALS

 

The
parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.

 

SECTION 12.13     TABLE OF CONTENTS, HEADINGS, ETC

 

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

 

[Signatures on following
page]

 

57

 

SIGNATURES

 

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

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  THE COMPANY:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  REGAL ENTERTAINMENT
  GROUP

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By

  	
   /s/ Amy E. Miles

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Amy E. Miles

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  THE TRUSTEE:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By

  	
   /s/ Richard Prokosch

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Richard Prokosch

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
										

 

58

 

EXHIBIT A

 

[FORM OF
NOTE]

 

REGAL
ENTERTAINMENT GROUP

6.25%
Convertible Senior Notes due 2011

 

	
   

  	
   

  	
  CUSIP:  758766 AC3

  
	
   

  	
   

  	
  ISIN:  US758766AC37

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $                         

  
	
  No.

  	
   

  	
   

  

 

Regal
Entertainment Group, a Delaware corporation (hereinafter called the “Company”
which term includes any successors under the Indenture hereinafter referred
to), for value received, hereby promises to pay to                      ,
or registered assigns, the principal sum of                    
Dollars, on March 15, 2011.

 

Interest
Payment Dates:  March 15 and September 15

 

Record
Dates:  February 28 and August 31

 

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

 

A-1

 

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

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Regal Entertainment
  Group

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

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

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  U.S. Bank National
  Association

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-2

 

(Back of Note)

 

REGAL
ENTERTAINMENT GROUP

6.25%
Convertible Senior Notes due 2011

 

[THIS GLOBAL NOTE IS HELD
BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTION 2.7 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.7(H) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.](1)

 

[UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](2)

 

[THIS SECURITY AND THE CLASS A
COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE ACQUIRER: (1) REPRESENTS THAT IT AND ANY
ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND (2) AGREES
FOR THE BENEFIT OF REGAL ENTERTAINMENT GROUP (THE “COMPANY”) THAT IT WILL NOT
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER
THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT: (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR (B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES
ACT, OR (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, OR (D) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED 

 

(1) To be included
on Global Notes deposited with the Depositary.

 

(2) To be included
on Global Notes with the Depositary.

 

A-3

 

BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION
OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE
AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.](3)

 

Capitalized
terms used herein shall have the meanings assigned to them in the Indenture (as
defined below) unless otherwise indicated.

 

1.             Interest.  The Company promises to pay interest on the
principal amount of this Note at the rate of 6.25% per annum.  The Company shall pay interest semiannually
on March 15 and September 15 of each year, commencing September 15,
2008.  Interest on the Notes shall accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of original issue; provided, however, that if there is not an existing default
in the payment of interest and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding interest payment
date, interest shall accrue from such Interest Payment Date.  Interest will be computed on the basis of a
360-day year of twelve 30-day months. 
Any reference herein to interest accrued or payable as of any date shall
include any Additional Interest accrued or payable on such date.

 

If
during the six month to one year period following the Issue Date, the Company
fails to have on file any document or report that it is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as
applicable, other than reports on Form 8-K, the Company shall make a one
time payment of 25 basis points (“Additional
Interest”) on the Notes (or an equivalent amount for any outstanding
shares of Class A Common Stock issued upon conversion of the Notes),
whether or not the failure to so file initially arose prior to such period; provided that the Company shall have
fourteen (14) calendar days, in the aggregate, during such six month to one
year period to cure all such missed filings. 
Any such Additional Interest will be payable on the Interest Payment
Date immediately following the expiration of the fourteen (14) calendar day
cure period.

 

2.             Method
of Payment.  The Company shall
pay interest on this Note (except defaulted interest) to the person who is the
Holder of this Note at the close of business on February 28 or August 31,
as the case may be, next preceding the related interest payment date.  The Holder must surrender this Note to a
Paying Agent to collect payment of principal. 
The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.  The Company may, however,
pay principal and interest in respect of any Certificated Note by check or wire
payable in such money; provided, however,
that a Holder with an aggregate principal amount in excess of $2,000,000 will
be paid by wire transfer in immediately available funds at the election of such
Holder if such Holder has provided wire transfer instructions to the Company at
least ten (10) Business Days prior to the payment date.  The Company may mail an interest check to the
Holder’s registered address. 
Notwithstanding the foregoing, so long as this Note is registered in the
name of a Depositary or its nominee, all payments hereon shall be made by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.

 

3.             Paying
Agent, Registrar and Conversion Agent.  Initially, U.S. Bank National Association
(the “Trustee”, which term shall
include any successor trustee under the Indenture hereinafter referred to) will
act as Paying Agent, Registrar and Conversion Agent.  The Company may change any Paying Agent,
Registrar or Conversion Agent without notice to the Holder.  The Company or any of its Subsidiaries may,
subject to certain limitations set forth in the Indenture, act as Paying Agent
or Registrar.

 

(3) To be included only on Restricted Notes.

 

A-4

 

4.             Indenture.  The Company issued the Notes under an
Indenture dated as of March 10, 2008 (“Indenture”)
by and between the Company and 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, as
amended (15 U.S. Code §§ 77aaa-77bbbb). 
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms.

 

5.             Redemption.  The Company shall have no right to redeem the
Notes at its option prior to the Stated Maturity of the Notes.  The Company shall not be required to make any
mandatory redemption payments with respect to the Notes.  The Notes shall not have the benefit of any
sinking fund.

 

6.             Repurchase
Upon a Fundamental Change. 
Upon the occurrence of a Fundamental Change, the Holder has the right,
at such Holder’s option, to require the Company to repurchase all of such
Holder’s Notes or any portion thereof (in principal amounts of $1,000 or
multiples thereof) on the Fundamental Change Repurchase Date at a price equal
to 100% of the principal amount of the Notes such Holder elects to require the
Company to repurchase, together with accrued and unpaid interest to, but
excluding, the Fundamental Change Repurchase Date.  The Company or, at the written request of the
Company, the Trustee shall mail 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 fifteenth (15th) calendar day after the
occurrence of such Fundamental Change.

 

7.             Conversion.  Upon compliance with the provisions of the
Indenture, the Holder has the right, at such Holder’s option, during certain
periods and upon the occurrence of conditions specified in the Indenture, to
convert all or any portion (if the portion to be converted is $1,000 principal
amount or multiple thereof) of such Notes, at any time prior to the close of
business on the Business Day immediately preceding the Stated Maturity of the
Notes.  Upon conversion, the Company
shall satisfy its Conversion Obligation in shares of Class A Common Stock,
cash or a combination of cash and shares of Class A Common Stock in
accordance with the Indenture.  In
addition, the Company may elect Net Share Settlement in accordance with the
Indenture.  As of the date of the
Indenture, the Company elects to settle its Conversion Obligation through Net
Share Settlement.  The initial Conversion
Rate shall be 43.4148 shares of Class A Common Stock (subject to adjustment
as provided in the Indenture) per $1,000 principal amount of Notes.  No fractional shares of Class A Common
Stock will be issued upon any conversion, and the number of shares of Class A
Common Stock issuable upon conversion shall be rounded down to the next lower
whole number.  No adjustment shall be
made for dividends or any shares issued upon conversion of such Note except as
provided in the Indenture.

 

8.             Denominations,
Transfer, Exchange.  The Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture.  The Company need not exchange or register the
transfer of any Notes for a period of fifteen (15) calendar days during the
period between a Record Date and the next succeeding Interest Payment Date.

 

9.             Persons
Deemed Owners.  The registered Holder of a Note may be
treated as its owner for all purposes.

 

10.           Amendment,
Supplement and Waiver. 
Subject to certain exceptions, the Indenture contains provisions
permitting an amendment of the Indenture or the Notes with the written consent
of the Holders of at least a majority in principal amount of the then
outstanding Notes and the waiver of any Event of Default (other than any
continuing Event of Default in payment of interest or principal amount of the
Notes or in respect of provisions that cannot be amended without the written
consent of each Holder affected) or noncompliance with any provision with the
written consent of the Holders of a majority in principal amount of the then
outstanding Notes.

 

In
addition, the Indenture permits an amendment of the Indenture or the Notes
without the consent of any Holder under circumstances specified in the
Indenture.  The Indenture also permits an

 

A-5

 

amendment of the Indenture or the Notes only with the
consent of any Holder affected thereby under circumstances specified in the
Indenture.

 

11.           Defaults
and Remedies.  Except as
specified in the Indenture, 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 principal amount of the outstanding Notes may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable.  If an Event of Default relating
to certain events of bankruptcy, insolvency or reorganization of the Company
occurs, the principal of and interest on all the Notes will become immediately
due and payable without any declaration or other act on the part of the Trustee
or any Hlders.  Under certain
circumstances, the Holders of a majority in principal amount of the outstanding
Notes may rescind any such acceleration with respect to the Notes and its
consequences.

 

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.

 

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 and interest on this Note at the place, at the respective times,
at the rate and in the coin or currency herein and in the Indenture prescribed.

 

12.           Satisfaction
and Discharge.  The Company’s
obligation under this Note and the Indenture shall cease to be of further
effect (except as to any surviving rights of conversion, registration of
transfer or exchange of Notes expressly provided for in the Indenture and
except as further provided below), and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when (1) either (A) all
Notes theretofore authenticated and delivered (other than (i) Notes which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.8 of the Indenture and (ii) Notes for whose
payment money has theretofore been deposited in trust and thereafter repaid to
the Company as provided in Section 8.3 of the Indenture) have been
delivered to the Trustee for cancellation; or (B) all such Notes not
theretofore delivered to the Trustee for cancellation (i) have become due
and payable, or (ii) will become due and payable at the Stated Maturity of
the Notes within one year, and the Company, in the case of clause (i) or (ii) above,
has irrevocably deposited or caused to be irrevocably deposited with the
Trustee or a Paying Agent (other than the Company or any of its Affiliates) as
trust funds in trust for the purpose cash in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to
the Trustee for cancellation, for principal (including premium, if any) and
interest (including Additional Interest, if any) to the date of such deposit
(in the case of Notes which have become due and payable) or to the Stated
Maturity of the Notes ; (2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and (3) the Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of the Indenture have been complied with.

 

Notwithstanding
the satisfaction and discharge of the Indenture, the obligations of the Company
to the Trustee under Section 7.7 thereof shall survive and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this paragraph 12, the provisions of Sections 2.4, 2.5, 2.6, 2.7, 2.8, and 9.4,
Article X and Article VIII of the Indenture, shall survive until the
Notes have been paid in full.

 

13.           Trustee
Dealings with Company.  The
Trustee, in its individual or any other capacity, may become the owner of
pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee.

 

14.           No
Recourse Against Others.  No
past, present or future director, officer, employee, incorporator or
stockholder (direct or indirect) of the Company, as such, shall have any
liability for any Obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect 

 

A-6

 

of, or by reason of, such Obligations or their
creation, except in their capacity as an obligor of the Notes in accordance
with the Indenture.  Each Holder by
accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.

 

15.           Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

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

 

17.           CUSIP
Numbers.  Pursuant to a
recommendation promulgated by the Committee on Uniform Note Identification
Procedures, the Company has caused CUSIP and/or ISIN numbers to be printed on
the Notes and the Trustee shall use CUSIP and/or ISIN numbers in notices as a
convenience to Holders.  No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice and reliance may be placed only on the
other identification numbers placed thereon.

 

18.           Governing
Law.  THE INDENTURE AND THE
NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE 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 LAWS AND RULES 327(b).

 

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

 

	
  Regal
  Entertainment Group

  	
   

  	
   

  
	
  7132 Regal Lane

  	
   

  	
   

  
	
  Knoxville,
  Tennessee 37918

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  General Counsel

  
	
  (865) 922-1123

  	
   

  	
   

  
					

 

A-7

 

[FORM OF CONVERSION NOTICE]

 

	
  TO:

  	
   

  	
  REGAL ENTERTAINMENT GROUP

  
	
   

  	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Conversion Agent

  

 

The undersigned registered owner of this Note hereby
irrevocably exercises the option to convert this Note, or the portion thereof
(which is $1,000 or a multiple thereof) below designated in accordance with the
terms of the Indenture referred to in this Note, and directs that the shares of
Class A Common Stock, cash or a combination of cash and shares of Common
Stock deliverable or payable upon such conversion and any Notes representing
any unconverted principal amount hereof, be issued and delivered to the
registered Holder hereof unless a different name has been indicated below.  Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture.  If shares or any portion of this Note not
converted are to be issued in the name of a person other than the undersigned,
the undersigned will provide the appropriate information below and pay all
transfer taxes payable with respect thereto. 
Any amount required to be paid by the undersigned on account of interest
accompanies this Note.

 

 

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
  Signature(s) 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.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee

  

 

A-8

 

Fill in the registration of shares of Class A
Common Stock, if any, if to be issued, and Notes if to be delivered, and the
person to whom cash, if any, is to be made, if to be made, other than to and in
the name of the registered Holder:

 

Please print name and address

 

	
   

  	
   

  
	
  (Name)

  
	
   

  
	
   

  	
   

  
	
  (Street Address)

  
	
   

  
	
   

  	
   

  
	
  (City, State and Zip Code)

  
	
   

  
	
  Principal amount to be converted

  
	
   (if less than
  all):

  
	
   

  
	
  $

  	
   

  	
   

  
	
   

  
	
  Social Security or Other Taxpayer

  
	
   Identification Number:

  
	
   

  	
   

  
			

 

NOTICE:  The signature on this
Conversion Notice must correspond with the name as written upon the face of the
Notes in every particular without alteration or enlargement or any change
whatever.

 

A-9

 

[FORM OF FUNDAMENTAL CHANGE
REPURCHASE NOTICE]

 

	
  TO:

  	
   

  	
  REGAL ENTERTAINMENT GROUP

  
	
   

  	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Paying Agent

  

 

The undersigned registered owner of this Note hereby
irrevocably acknowledges receipt of a notice from Regal Entertainment Group
(the “Company”) regarding the right of holders to elect to require the Company
to repurchase the Notes and requests and instructs the Company to repay the
entire principal amount of this Note, or the portion thereof (which is $1,000
or an integral multiple thereof) below designated, in accordance with the terms
of the Indenture at the price of 100% of such entire principal amount or
portion thereof, together with accrued and unpaid interest to, but excluding,
the Fundamental Change Repurchase Date, to the registered holder hereof.  Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture.  The Notes shall be repurchased by the Company
as of the Fundamental Change Repurchase Date pursuant to the terms and
conditions specified in the Indenture.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

NOTICE:  The above signatures of the Holder(s) hereof
must correspond with the name as written upon the face of the Notes in every
particular without alteration or enlargement or any change whatever.

 

Notes Certificate Number (if applicable):                                             

 

Principal amount to be repurchased (if less than all, must be $1,000 or
whole multiples thereof):                                                      

 

Social Security or Other Taxpayer Identification Number:                                 

 

A-10

 

[FORM OF ASSIGNMENT AND
TRANSFER]

 

For value received                                                  hereby
sell(s), assign(s) and transfer(s) unto                                 (Please
insert social security or Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints                                    
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.

 

In connection with any transfer of the within Note
occurring prior to the Resale Restriction Termination Date, as defined in the
Indenture governing such Note, the undersigned confirms that such Note is being
transferred:

 

	
  o

  	
   

  	
  To Regal
  Entertainment Group or a subsidiary thereof; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Pursuant to the
  registration statement that has become or been declared effective under the
  Securities Act of 1933, as amended; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Pursuant to and
  in compliance with Rule 144A under the Securities Act of 1933, as
  amended; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Pursuant to and
  in compliance with Rule 144 under the Securities Act of 1933, as
  amended; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Pursuant to
  another available exemption from registration under the Securities Act of
  1933, as amended.

  

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature(s)

  
	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee

  
				

 

Signature(s) must be
guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings
and loan associations and credit unions) with membership in an approved
signature guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 Notes are to be delivered, other than to and in
the name of the registered holder.

 

NOTICE:  The signature on the assignment must
correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever.

 

A-11

 

 

SCHEDULE OF
EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

REGAL ENTERTAINMENT GROUP

6.25% Convertible Senior Notes due 2011

 

The
initial principal amount of this Global Note is $[                   ].  The following exchanges of an interest in
this Global Note for an interest in another Global Note or for a Certificated
Note, or exchanges of an interest in another Global Note or Certificated Note
for an interest in this Global Note, have been made:

 

	
  Date of 

  Exchange

  	
   

  	
  Amount of decrease in

  Principal Amount of this

  Global Note

  	
   

  	
  Amount of increase in

  Principal Amount of this

  Global Note

  	
   

  	
  Principal Amount of this

  Global Note following

  such decrease or increase

  	
   

  	
  Signature of

  authorized

  signatory of

  Trustee or

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-12

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