Document:

Exhibit 4.1

    
 

    EXECUTION
COPY

    
      

       

        
          

        

      

      

    

    PATRIOT
COAL CORPORATION

     

    as
Issuer

     

     

    AND

     

     

    U.S. BANK
NATIONAL ASSOCIATION

     

    as
Trustee

     

     

    

     

    ____________________

     

    Indenture

     

    Dated as
of May 28, 2008

     

    ___________________

     

     

    3.25%
Convertible Senior Notes due 2013

     

    

     

      
        

      

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      

      
        	
                TABLE
      OF CONTENTS

              	 
      
	 
      	
                Page

              
	
                ARTICLE
      1

              	 
      
	
                DEFINITIONS
      AND OTHER PROVISIONS OF GENERAL APPLICATION

              	 
      
	 	 
	
                Section
      1.01.
      Definitions.

              	
                1

              
	
                Section
      1.02. Rules of
      Construction.

              	
                13

              
	
                Section
      1.03. Compliance
      Certificates and Opinions.

              	
                14

              
	
                Section
      1.04. Form of
      Documents Delivered to Trustee.

              	
                14

              
	
                Section
      1.05. Acts of
      Holders; Record Dates.

              	
                15

              
	
                Section
      1.06. Notices,
      Etc., to Trustee and Company

              	
                16

              
	
                Section
      1.07. Notice to
      Holders; Waiver.

              	
                16

              
	
                Section
      1.08. Effect of
      Headings and Table of Contents

              	
                17

              
	
                Section
      1.09.
      Severability Clause

              	
                17

              
	
                Section
      1.10. Benefits of
      Indenture

              	
                17

              
	
                Section
      1.11. Governing
      Law

              	
                17

              
	
                Section
      1.12. No Recourse
      Against Others

              	
                18

              
	 	 
	
                ARTICLE
      2

              	 
      
	
                THE
      SECURITIES

              	 
      
	 	 
	
                Section
      2.01.
      Designation, Amount and Issuance of Securities

              	
                18

              
	
                Section
      2.02. Form of the
      Securities.

              	
                18

              
	
                Section
      2.03. Date and
      Denomination of Securities and Interest

              	
                19

              
	
                Section
      2.04. Payments on
      the Securities.

              	
                19

              
	
                Section
      2.05. Execution
      and Authentication.

              	
                20

              
	
                Section
      2.06. Security
      Registrar, Paying Agent and Conversion Agent.

              	
                21

              
	
                Section
      2.07. Paying
      Agent To Hold Money in Trust.

              	
                22

              
	
                Section
      2.08. Exchange
      and Registration of Transfer of Securities.

              	
                23

              
	
                Section
      2.09. Global
      Securities.

              	
                24

              
	
                Section
      2.10. Transfer
      Restrictions.

              	
                26

              
	
                Section
      2.11.
      Responsibilities and Obligations Relating to the
      Depositary.

              	
                27

              
	
                Section
      2.12. Replacement
      Securities.

              	
                28

              
	
                Section
      2.13. Outstanding
      Securities.

              	
                29

              
	
                Section
      2.14. Temporary
      Securities.

              	
                30

              
	
                Section
      2.15.
      Cancellation.

              	
                31

              
	
                Section
      2.16. CUSIP and
      ISIN Numbers

              	
                31

              
	
                Section
      2.17. Additional
      Securities.

              	
                31

              
	 	 
	
                ARTICLE
      3

              	 
      
	
                PARTICULAR
      COVENANTS OF THE COMPANY

              	 
      
	 	 

      

      

      
        	
                Section
      3.01. Payment of
      Principal and Interest

              	
                32

              
	
                Section
      3.02. Rule 144A
      Information Requirement

              	
                32

              

      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
      3.03. Resale of
      Certain Securities

              	
                32

              
	
                Section
      3.04. Notice of
      Event of Default

              	
                32

              
	
                Section
      3.05. Late Filing
      Additional Interest.

              	
                32

              
	 	 
	
                ARTICLE
      4

              	 
      
	
                REPURCHASE
      OF SECURITIES

              	 
      
	 	 
	
                Section
      4.01. Fundamental
      Change Repurchase Right Notice.

              	
                33

              
	
                Section
      4.02. Right to
      Require Repurchase Upon Fundamental Change.

              	
                34

              
	
                Section
      4.03. Settlement
      Of Fundamental Change Repurchases.

              	
                36

              
	
                Section
      4.04.
      Restrictions On Repurchases

              	
                37

              
	 	 
	
                ARTICLE
      5

              	 
      
	
                CONVERSION

              	 
      
	 	 
	
                Section
      5.01. Conversion
      Rights.

              	
                37

              
	
                Section
      5.02. Notice Of
      Conversion Rights.

              	
                39

              
	
                Section
      5.03. Make-Whole
      Fundamental Changes.

              	
                40

              
	
                Section
      5.04. Exercise of
      Conversion Privilege.

              	
                41

              
	
                Section
      5.05. Settlement
      of Conversion Obligation.

              	
                42

              
	
                Section
      5.06. Fractions
      of Shares.

              	
                45

              
	
                Section
      5.07. Adjustment
      of Conversion Rate.

              	
                45

              
	
                Section
      5.08. Notice of
      Adjustments of Conversion Rate.

              	
                56

              
	
                Section
      5.09. Company To
      Reserve Common Stock.

              	
                56

              
	
                Section
      5.10. Certain
      Covenants.

              	
                57

              
	
                Section
      5.11.
      Cancellation of Converted Securities.

              	
                57

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

              	
                57

              
	
                Section
      5.13.
      Responsibility of Trustee for Conversion
Provisions.

              	
                59

              
	
                Section
      5.14. Stockholder
      Rights Plan

              	
                59

              
	
                Section
      5.15. Company
      Determination Final

              	
                60

              
	
                Section
      5.16. Exchange in
      Lieu of Conversion.

              	
                60

              
	 	 
	
                ARTICLE
      6

              	 
      
	
                REDEMPTION
      OF THE SECURITIES

              	 
      
	 	 
	
                Section
      6.01. Redemption
      Upon Termination Of Merger Agreement.

              	
                61

              
	
                Section
      6.02. Other
      Redemption Rights.

              	
                61

              
	
                Section
      6.03. Redemption
      Price.

              	
                61

              
	
                Section
      6.04. Selection
      of Securities to be Redeemed.

              	
                62

              
	
                Section
      6.05. Redemption
      Notice.

              	
                63

              
	
                Section
      6.06. Payment of
      Securities Called for Redemption.

              	
                64

              
	
                Section
      6.07. Fractions
      of Shares.

              	
                65

              
	
                Section
      6.08.
      Restrictions On Redemption.

              	
                65

              

      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      
 

      
        	
                ARTICLE
      7

              	 
      
	
                EVENTS
      OF DEFAULT; REMEDIES

              	 
      
	 	 
	
                Section
      7.01. Events of
      Default.

              	
                66

              
	
                Section
      7.02.
      Acceleration of Maturity; Rescission and Annulment.

              	
                68

              
	
                Section
      7.03. Default
      Additional Interest.

              	
                68

              
	
                Section 7.04.
      Collection of
      Indebtedness and Enforcement by Trustee.

              	
                69

              
	
                Section
      7.05. Trustee May
      File Proofs of Claim.

              	
                70

              
	
                Section
      7.06. Application
      of Money Collected

              	
                70

              
	
                Section
      7.07. Limitation
      on Suits.

              	
                71

              
	
                Section
      7.08.
      Unconditional Right of Holders To Receive Payment

              	
                71

              
	
                Section
      7.09. Restoration
      of Rights and Remedies

              	
                71

              
	
                Section
      7.10. Rights and
      Remedies Cumulative

              	
                72

              
	
                Section
      7.11. Delay or
      Omission Not Waiver

              	
                72

              
	
                Section
      7.12. Control by
      Holders

              	
                72

              
	
                Section
      7.13. Waiver of
      Past Defaults.

              	
                72

              
	
                Section
      7.14. Undertaking
      for Costs

              	
                73

              
	
                Section
      7.15. Waiver of
      Stay or Extension Laws

              	
                73

              
	
                Section
      7.16. Violations
      of Certain Covenants

              	
                73

              
	 	 
	
                ARTICLE
      8

              	 
      
	
                CONSOLIDATION,
      MERGER, CONVEYANCE, TRANSFER OR LEASE

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

              	
                74

              
	
                Section
      8.02. Foreign
      Jurisdiction Transactions

              	
                74

              
	
                Section
      8.03.
      Effectiveness of Consolidation, Merger or Transfer.

              	
                75

              
	 	 
	
                ARTICLE
      9

              	 
      
	
                THE
      TRUSTEE

              	 
      
	 	 
	
                Section
      9.01. Duties and
      Responsibilities of Trustee.

              	
                76

              
	
                Section
      9.02. Notice of
      Defaults.

              	
                77

              
	
                Section
      9.03. Reliance on
      Documents, Opinions, Etc

              	
                78

              
	
                Section
      9.04. No
      Responsibility for Recitals, Etc

              	
                79

              
	
                Section
      9.05. Trustee,
      Security Registrar and Agents May Own Securities

              	
                80

              
	
                Section
      9.06. Monies To
      Be Held in Trust

              	
                80

              
	
                Section
      9.07.
      Compensation and Expenses of Trustee.

              	
                80

              
	
                Section
      9.08. Officers_
      Certificate as Evidence

              	
                81

              
	
                Section
      9.09. Conflicting
      Interests of Trustee

              	
                81

              
	
                Section
      9.10. Eligibility
      of Trustee

              	
                81

              
	
                Section
      9.11. Resignation
      or Removal of Trustee.

              	
                81

              
	
                Section
      9.12. Acceptance
      by Successor Trustee.

              	
                83

              
	
                Section
      9.13. Succession
      by Merger, Etc.

              	
                84

              

      

      
        	
                Section
      9.14.
      Preferential Collection of Claims

              	
                84

              
	
                Section
      9.15. Trustee's
      Application for Instructions from the Company

              	
                85

              

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	 	 
	
                ARTICLE
      10

              	 
      
	
                HOLDERS'
      LISTS AND REPORTS BY TRUSTEE

              	 
      
	 	 
	
                Section
      10.01. Company To
      Furnish Names and Addresses of Holders

              	
                85

              
	
                Section
      10.02.
      Preservation of Information; Communications to Holders.

              	
                85

              
	
                Section
      10.03. Reports by
      Company.

              	
                86

              
	 	 
	
                ARTICLE
      11

              	 
      
	
                SATISFACTION
      AND DISCHARGE

              	 
      
	 	 
	
                Section
      11.01. Discharge
      of Indenture.

              	
                86

              
	
                Section
      11.02. Deposited
      Monies To Be Held in Trust by Trustee

              	
                87

              
	
                Section 11.03.
      Paying Agent To
      Repay Monies Held

              	
                88

              
	
                Section 11.04.
      Return of
      Unclaimed Monies

              	
                88

              
	
                Section
      11.05. Reinstatement

              	
                88

              
	 	 
	
                ARTICLE
      12

              	 
      
	
                MODIFICATIONS
      AND AMENDMENTS

              	 
      
	 	 
	
                Section
      12.01. Consent
      Requirements for Modifications and Amendments.

              	
                88

              
	
                Section
      12.02. Amendments
      Without Consent Of Holders.

              	
                89

              
	
                Section
      12.03. Amendments
      Requiring Consent of Holders.

              	
                89

              
	
                Section
      12.04. Execution
      of Supplemental Indentures.

              	
                90

              
	
                Section
      12.05. Effect of
      Supplemental Indentures.

              	
                91

              
	
                Section
      12.06. Reference
      in Securities to Supplemental Indentures.

              	
                91

              
	
                Section 12.07.
      Notice to Holders
      of Supplemental Indentures.

              	
                91

              
	 	 
	
                ARTICLE
      13

              	 
      
	
                MISCELLANEOUS

              	 
      
	 	 
	
                Section
      13.01. Rules by
      Trustee, Paying Agent and Security Registrar

              	
                91

              
	
                Section
      13.02.
      Successors

              	
                91

              
	
                Section
      13.03. Multiple
      Originals

              	
                92

              
	
                Section
      13.04. Calculations

              	
                92

              
	
                Section
      13.05. Waiver of
      Jury Trial

              	
                92

              
	
                Section
      13.06. Force
      Majeure

              	
                92

              
	 	 
	
                Schedule
      A -
      Make-Whole
      Table

              	 
      
	
                Exhibit
      A - Form
      of Security

              	 
      

      

      
        	
                Exhibit
      B - Form
      of Restrictive Legend for Common Stock Issued Upon
      Conversion or Redemption

              
	
                 

              

      

    

     

     

     

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    
      

      
        
          INDENTURE,
dated as of May 28, 2008, between PATRIOT COAL CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware, as Issuer (the
“Company”),
having its principal office at 12312 Olive Boulevard, Suite 400, St. Louis,
Missouri and U.S. BANK NATIONAL ASSOCIATION, a Minneapolis banking corporation,
as Trustee (the “Trustee”).

           

          RECITALS
OF THE COMPANY

           

          WHEREAS,
the Company has duly authorized the creation of an issue of 3.25% Convertible
Senior Notes due 2013 (each a “Security” and
collectively, the “Securities”) of
the tenor and amount hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this Indenture;
and

           

          WHEREAS,
all things necessary to make the Securities, when executed by the Company and
authenticated and delivered hereunder and duly issued by the Company, the valid
and legally binding obligations of the Company, and to make this Indenture a
valid and legally binding agreement of the Company, in accordance with the terms
of the Securities and the Indenture, have been done;

           

          NOW,
THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of the premises
and the purchases of the Securities by the Holders thereof, it is mutually
agreed, for the benefit of the Company and the equal and proportionate benefit
of all Holders of the Securities, as follows:

           

           

          ARTICLE
1

          Definitions
and Other Provisions of General Application

           

          Section 1.01.  Definitions.

           

          “Act,” when used
with respect to any Holder, has the meaning specified in Section 1.05(a).

           

          “Additional
Interest” means
Default Additional Interest and Late Filing Additional Interest.

           

          “Additional
Securities” has the meaning specified in Section 2.17.

           

          “Additional
Shares” has the meaning specified in Section 5.03(a).

           

          “Affiliate” of
any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person.  For the purposes of this definition, “control” when

           

          
            
              
              

            

            
              1

              
                

              

            

            
              
              

            

          

           

          used
with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the
foregoing.

           

          “Agent Members”
has the meaning specified in Section 2.09(f).

           

          “Average Redemption
VWAP” means, in respect of any Securities called for redemption pursuant
to Section
6.01, the average of the Daily VWAP for
the five consecutive Trading Days ending on the third VWAP Trading Day
immediately preceding the Redemption Date for such
Securities.

           

          “Averaging
Period” has the meaning specified in Section 5.07(f).

           

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

           

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

           

           “Beneficial
Owner” means a “beneficial owner” as determined in accordance with Rule
13d-3 under the Exchange Act.

           

          “Bid Solicitation
Agent” means initially the Company, or any agent the Company may appoint
in the future.  The Company may appoint any Person, including the
Trustee (who may accept such appointment in its discretion), as Bid Solicitation
Agent without prior notice to the Holders.

           

          “Board of
Directors” means, with respect to any Person, either the board of
directors of such Person or any duly authorized committee of that
board.

           

          “Board
Resolution” means, with respect to any Person, a copy of a resolution
certified by the Secretary or an Assistant Secretary of such Person to have been
duly adopted by the Board of Directors of such Person and to be in full force
and effect on the date of such certification.

           

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

           

          “Capital Stock”
means any and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock and limited liability company interests
and, with respect to partnerships, partnership interests (whether general or
limited) and any other interest or participation that confers on a Person

           

          
            
              
              

            

            
              2

              
                

              

            

            
              
              

            

          

           

          the
right to receive a share of the profits and losses of, or distributions of
assets of, such partnership.

           

          “Cash Percentage”
has the meaning specified in Section 5.05(c).

           

          “Cash Percentage
Notice” has the meaning specified in Section 5.05(c).

           

          “Clause B
Distribution” has the meaning specified in Section 5.07(d).

           

          “Clause C
Distribution” has the meaning specified in Section 5.07(d).

           

          “Clause D
Distribution” has the meaning specified in Section 5.07(d).

           

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

           

          “Commission”
means the United States Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act.

           

          “Common Stock”
means the shares of common stock, par value $0.01 per share, of the Company as
they exist on the date of this Indenture or any other Reference Property into
which the Common Stock shall be reclassified, changed, converted into or
exchanged for in accordance with to Section 5.12.

           

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

           

          “Continuing
Directors” means (i) individuals who on the Issue Date were members of
the Board of Directors of the Company and (ii) any new directors whose election
or appointment to the Board of Directors of the Company or nomination for
election by the Company’s stockholders was approved by at least a majority of
the Company’s directors then still in office (or a duly constituted committee
thereof), either who were directors on the Issue Date or whose election,
appointment or nomination for election was previously so approved.

           

          “Conversion
Agent” has the meaning specified in Section 2.06(a) and shall include any additional conversion agents
appointed pursuant to Section 2.06(a).

           

          “Conversion Date”
has the meaning specified in Section 5.04(b).

           

          “Conversion
Notice” has the meaning specified in Section 5.04(a).

           

          “Conversion
Obligation” has the meaning specified in Section 5.05(a).

           

          
            
              
              

            

            
              3

              
                

              

            

            
              
              

            

          

           

          “Conversion
Price” means, at any time, $1,000 divided by the
Conversion Rate as at that time.

           

          “Conversion Rate”
means the Initial Conversion Rate, as it may be adjusted pursuant to Section 5.03 or Section 5.07.

           

          “Corporate Trust
Office” means the office of the Trustee at which the corporate trust
business of the Trustee shall, at any particular time, be principally
administered, which office is, as of the date of this Indenture, located at U.S.
Bank National Association, 60 Livingston Avenue, EP-MN-WS3C, St. Paul, MN
55107-2292, Attention: Corporate Trust Administration, or such other address as
the Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as such successor Trustee may designate from time to time by
notice to the Holders and the Company).

           

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

           

          “Custodian” means
the Trustee, as custodian with respect to the Global Securities, or any
successor entity.

           

          “Daily Conversion
Value” means, for each of the 20 consecutive VWAP Trading Days during the
Observation Period, one-twentieth of the product of (a) the Conversion Rate on
such VWAP Trading Day and (b) the Daily VWAP of the Common Stock (or the
Reference Property into which the Securities are convertible pursuant to
Section
5.12, as the case may be) on such VWAP
Trading Day. Any such determination of the Daily Conversion Value by the Company
shall be conclusive absent manifest error.

           

          “Daily Settlement
Amount” has the meaning specified in Section 5.05(b).

           

          “Daily Share
Amount” has the meaning specified in Section 5.05(b).

           

          “Daily VWAP”
means, in respect of Common Stock, for each of the 20 consecutive VWAP Trading
Days during the Observation Period, the per share volume-weighted average price
as displayed under the heading “Bloomberg VWAP” on Bloomberg page PCX.N
<equity> AQR (or any equivalent successor page if such page is not
available) in respect of the period from the scheduled open of trading on the
Relevant Exchange to the scheduled close of trading on the Relevant Exchange on
such VWAP Trading Day, or if such volume-weighted average price is unavailable,
the market value of one share of the Common Stock on such VWAP Trading Day using
a volume-weighted method as determined by a nationally recognized independent
investment banking firm retained by the 

           

          
            
              
              

            

            
              4

              
                

              

            

            
              
              

            

          

           

          Company
for such purpose.  Daily VWAP shall be determined without regard to
after-hours trading or any other trading outside of the regular trading session
trading hours.

           

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

           

          “Default Additional
Interest” has the
meaning specified in Section 7.03(a).

           

          “Delegending
Date”
has the meaning specified in Section
2.10(d).

           

          “Depositary”
means The Depository Trust Company until a successor Depositary shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Depositary”
shall mean such successor Depositary.

           

          “Distributed
Property” has the meaning
specified in Section 5.07(d).

           

          “Effective Date”
has the meaning specified in Section 5.03(c).

           

          “Event of
Default” has the meaning specified in Section 7.01.

           

          “Ex-Date” means,
with respect to any issuance or distribution to holders of the Common Stock, the
first date on which the shares of the Common Stock trade on the Relevant
Exchange, regular way, without the right to receive such issuance or
distribution.

           

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

           

          “Foreign Jurisdiction
Transaction” has the meaning specified in Section 8.02.

           

          “Fundamental
Change” means the occurrence of any one of the following events at any
time after the Issue Date:

           

          (a)        any
Person other than the Company, its Subsidiaries or its or their employee benefit
plans, files a Schedule TO or any similar schedule, form or report under the
Exchange Act disclosing that such Person has become the direct or indirect
ultimate Beneficial Owner of the Company’s Capital Stock representing more than
50% of the total voting power of all shares of the Capital Stock of the Company
entitled to vote generally in elections of directors;

           

          (b)        the
Company (1) merges or consolidates with or into any other Person, another Person
merges with or into the Company, or the Company conveys, sells, transfers or
leases all or substantially all of its assets to another Person (excluding a
pledge of securities issued by the Company or any of its 

           

          
            
              
              

            

            
              5

              
                

              

            

            
              
              

            

          

           

          Subsidiaries)
or (2) engages in any recapitalization, reclassification or other acquisition
transaction or series of transactions in which all or substantially all the
Common Stock is exchanged for or converted into cash, securities or other
property, in each case, other than any merger or consolidation:

           

          (i)          pursuant
to which the holders of the Common Stock immediately prior to the transaction
have the entitlement to exercise, directly or indirectly, 50% or more of the
voting power of all shares of Capital Stock entitled to vote generally in the
election of directors of either (A) the continuing or surviving corporation
immediately after the transaction or (B) the corporation that directly or
indirectly owns 100% of the Capital Stock of such continuing or surviving
corporation;

           

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

           

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

           

          (c)        at
any time the Continuing Directors do not constitute a majority of Board of
Directors of the Company (or, if applicable, of a successor person to the
Company); or

           

          (d)        if
shares of the Common Stock, or shares of any other Capital Stock into which the
Securities are convertible pursuant to the terms of this Indenture, are not
listed for trading on any United States national or regional securities
exchange.

           

                     Notwithstanding
the foregoing, any transaction or event described above shall not constitute a
Fundamental Change if, in connection with such transaction or event, or as a
result therefrom, a transaction described in clause (b) above occurs (without
regard to any exclusion to such clause described in the paragraphs (i), (ii) or
(iii) thereunder) and at least 90% of the consideration paid for the Common
Stock (excluding cash payments for fractional shares, cash payments made
pursuant to dissenters’ appraisal rights and cash dividends) consists of shares
of common stock (or depositary receipts in respect thereof) traded on any of the
New York Stock Exchange, the NASDAQ Global Market, the NASDAQ Global Select
Market or the American Stock Exchange (or any of their respective successors)
(or will be so traded or quoted immediately following the completion of the
merger or consolidation or such other transaction) and, as a result of such
transaction, the Securities become convertible into a combination of cash (in
respect of the Principal Portion of such Securities) and Reference Property
pursuant to Section
5.12.  For the avoidance of
doubt, the Magnum Acquisition 

           

          
            
              
              

            

            
              6

              
                

              

            

            
              
              

            

          

           

          pursuant to the Merger Agreement, as such Merger Agreement
is in effect as at the Issue Date, shall not constitute a Fundamental
Change.

           

          For the
purposes of this definition, the term “Person” has the
meaning specified in Section 1.01 and
also includes any syndicate or group that would be deemed to be a “person” under
Section 13(d)(3) of the Exchange Act.

           

          “Fundamental Change
Expiration Time” has the meaning specified in Section 4.02(b).

           

          “Fundamental Change
Repurchase Date” has the meaning specified in Section 4.02(a).

           

          “Fundamental Change
Repurchase Notice” has the meaning specified in Section 4.02(b).

           

          “Fundamental Change
Repurchase Price” has the meaning specified in Section 4.02(a).

           

          “Fundamental Change
Repurchase Right Notice” has the meaning specified in Section 4.01(a).

           

          “GAAP” means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Public Company Accounting Oversight Board and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, in each case, as in effect in the United States
from time to time.

           

          “Global Security”
means a Security in global form registered in the Security Register in the name
of a Depositary or a nominee thereof.

           

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

           

          “Indenture” means
this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.

           

          “Initial Conversion
Rate” means 7.3889 shares of Common Stock per $1,000 principal amount of
Securities.

           

          “Initial Conversion
Value” means, for each $1,000 principal amount of Securities to be
redeemed pursuant to Section 6.01, an
amount equal to (a) the Initial Conversion Rate, multiplied by
(b) $96.67, being the Last Reported Sale Price of the Common Stock on May 21,
2008.

           

          
            
              
              

            

            
              7

              
                

              

            

            
              
              

            

          

           

          “interest” means,
when used with reference to the Securities, any interest payable under the terms
of the Securities, including any Additional Interest payable under the terms of
the Securities.

           

          “Interest Payment
Date” means each May 31 and November 30 of each year.

           

          “Issue Date”
means May 28, 2008, being the date the Securities are originally
issued.

           

          “Last Reported Sale
Price” means, with respect to the Common Stock or any other security for
which a Last Reported Sale Price must be determined, on any date, the closing
sale price per share of Common Stock or unit of such other security (or, if no
closing sale price is reported, the average of the last bid and last ask prices
or, if more than one in either case, the average of the average last bid and the
average last ask prices) on such date as reported in composite transactions for
the principal United States national or regional securities exchange on which it
is then traded, if any. If the Common Stock or such other security is not listed
for trading on a United States national or regional securities exchange on such
date, the “Last
Reported Sale Price” shall be the average of the last quoted bid and ask
prices per share of Common Stock or unit of such other security in the
over-the-counter market on such date, as reported by Pink Sheets LLC or similar
organization. If the Common Stock or such other security is not so quoted, the
“Last Reported
Sale Price” shall be the average of the mid-point of the last bid and ask
prices for the Common Stock or such other security on such date from each of at
least three nationally recognized independent investment banking firms, selected
from time to time by the Company for that purpose. The Last Reported Sale Price
shall be determined without reference to extended or after hours trading. Any
such determination shall be conclusive absent manifest error.

           

          “Late Filing Additional
Interest” has the meaning specified in Section 3.05(a).

           

          “Magnum
Acquisition” means the acquisition by the Company of Magnum Coal Company
pursuant to the terms of the Merger Agreement.

           

          “Make-Whole
Fundamental Change”
means any transaction or event that constitutes a Fundamental Change pursuant to
clauses (a) or (b) of the definition thereof other than, for the avoidance of
doubt, any such transaction or event that is not a Fundamental Change as a
result of the paragraph following clause (d) thereof.

           

          “Market Disruption
Event” means the occurrence or existence on any Scheduled Trading Day for
the Common Stock of any suspension or limitation imposed on trading (by reason
of movements in price exceeding limits permitted 

           

          
            
              
              

            

            
              8

              
                

              

            

            
              
              

            

          

           

          by
the Relevant Exchange or otherwise) in the Common Stock or in any options
contracts or futures contracts relating to the Common Stock on the Relevant
Exchange, and such suspension or limitation occurs or exists at any time within
the 30 minutes prior to the closing time of the Relevant Exchange on such
day.

           

          “Maturity” means,
in respect of any Security, the date on which the principal, Fundamental Change
Repurchase Price or Redemption Price of such Security becomes due and payable
pursuant to this Indenture, whether at the Stated Maturity Date, Fundamental
Change Repurchase Date or Redemption Date, by declaration of acceleration or
otherwise.

           

          “Measurement
Period” has the meaning specified in Section 5.01(b).

           

          “Merger
Agreement” means the Merger Agreement dated April 2, 2008 between the
Company, Colt Merger Corporation, ArcLight Energy Partners Fund I, L.P. and
ArcLight Energy Partners Fund II, L.P, as amended or supplemented from time to
time.

           

          “Notice of
Default” has the meaning specified in Section 7.01(e).

           

          “Observation
Period” means, with respect to any Security to be converted:

           

          (i)           if
the Conversion Date for such Security occurs during the period beginning on, and
including, April 30, 2013, and ending at 5:00 p.m., New York City time, on the
Business Day immediately preceding the Stated Maturity Date (other than in
respect of Securities called for redemption), the period of 20 consecutive VWAP
Trading Days beginning on and including the 22nd
Scheduled Trading Day prior to the Stated Maturity Date (whether or not the
Stated Maturity Date is a Scheduled Trading Day);

           

          (ii)           if
such Security has been called for redemption by the Company, the period of 20
consecutive VWAP Trading Days beginning on, and including, the 22nd
Scheduled Trading Day prior to the Redemption Date for such Security;
and

           

          (iii)           in
all other instances, the period of 20 consecutive VWAP Trading Days beginning
on, and including, the third VWAP Trading Day immediately following the
Conversion Date for such Security.

           

          “Officer” means
each of the Chief Executive Officer, the President, the Chief Financial Officer,
the Treasurer and the Secretary, of the Company.

           

          “Officers’
Certificate” means a certificate signed by two Officers, or by one
Officer and any Senior Vice President of the company, and delivered to the
Trustee.

           

          
            
              
              

            

            
              9

              
                

              

            

            
              
              

            

          

           

          “Opinion of
Counsel” means a written opinion of counsel for the Company, who may be
external or in-house counsel.

           

          “Outstanding”
means, in respect of a Security, that such Security is outstanding pursuant to
the terms of Section
2.13.

           

          “Paying Agent”
has the meaning specified in Section 2.06(a) and shall include any additional paying agents
appointed pursuant to Section 2.06(a).

           

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

           

          “Physical
Securities” means permanent certificated Securities in registered form
issued in denominations of $1,000 principal amount and integral multiples
thereof.

           

          “Principal
Portion” has the meaning specified in Section 5.05(b).

           

          “Protected
Purchaser” has the meaning specified in Section 2.12(a).

           

          “Record Date”
means (a) with respect to an Interest Payment Date falling on May 31, the May 15
immediately preceding such Interest Payment Date (whether or not a Business
Day), and (b) with respect to an Interest Payment Date falling on November 30,
the November 15 immediately preceding such Interest Payment Date (whether or not
a Business Day).

           

          “Redemption Conversion
Value” means, for each $1,000 principal amount of Securities to be
redeemed pursuant to Section 6.01, an
amount equal to (a) the Conversion Rate in effect on the Redemption Date for
such Securities, multiplied by
(b) the Average Redemption VWAP for such Securities.

           

          “Redemption Date”
means, with respect to any Security to be redeemed, the date fixed for
redemption of such Security by the Company.

           

          “Redemption
Notice” has the meaning specified in Section 6.05(a).

           

          “Redemption
Price” has the meaning specified in Section 6.03(a).

           

          “Reference
Property” has the meaning specified in Section 5.12(a).

           

          “Relevant
Exchange” means, at any time, the principal United States national or
regional securities exchange or market on which the Common Stock is listed or
admitted for trading at such time.

           

          “Reorganization
Event” has the meaning specified in Section 5.12(a).

           

          
            
              
              

            

            
              10

              
                

              

            

            
              
              

            

          

           

          “Resale Restriction
Termination Date” has the meaning specified in Section 2.10(a).

           

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

           

          “Restricted
Security” has the meaning specified in Section 2.10(b).

           

          “Restricted Security
Legend” has the meaning specified in Section 2.10(a).

           

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

           

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

           

          “Scheduled Trading
Day” means a day during which trading in the Common Stock is scheduled to
occur on the Relevant Exchange.  If the Common Stock is not then
listed or admitted for trading on a United States national or regional
securities exchange or market, “Scheduled Trading
Day” shall mean a Business Day.

           

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

           

          “Security” has
the meaning specified in the first paragraph of the Recitals of the
Company.

           

          “Security
Register” has the meaning specified in Section 2.06(b).

           

          “Security
Registrar” has the meaning specified in Section 2.06(a) and shall include any co-registrars appointed
pursuant to Section
2.06(a).

           

          “Significant
Subsidiary” means any subsidiary, or group of subsidiaries, that would
constitute a “significant subsidiary” under Regulation S-X under the Securities
Act.

           

          “Spin-Off” has
the meaning specified in Section 5.07(d).

           

          
            
              
              

            

            
              11

              
                

              

            

            
              
              

            

          

           

          “Stated Maturity
Date” means, for any Security,  May 31, 2013.

           

          “Stock Price”
means, for a Make-Whole Fundamental Change (a) if holders of the Common Stock
receive only cash consideration for their shares of Common Stock in connection
with such Make-Whole Fundamental Change, the cash amount paid per share of
Common Stock and (b) in all other cases, the average of the Last Reported Sale
Prices of the Common Stock over the ten consecutive Trading Day period ending on
the Trading Day immediately preceding the Effective Date of such Make-Whole
Fundamental Change.

           

          “Stock Price
Condition” has the meaning specified in Section 5.01(c).

           

          “Subsidiary”
means a Corporation more than 50% of the outstanding voting stock or other
voting interests of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.  For the purposes of this definition, “voting stock or
other voting interests” means stock or other voting interests which ordinarily
have voting power for the election of directors or comparable governing body,
whether at all times or only so long as no senior class of stock or other
interests has such voting power by reason of any contingency.

           

          “Substitution
Event” has the meaning specified in Section 5.07(d).

           

          “Successor
Company” has the meaning specified in Section
8.01(a)(i).

           

          “Trading Day”
means a day during which (a) trading in the Common Stock generally occurs on the
Relevant Exchange and (b) there is no Market Disruption Event.  If the
Common Stock is not then listed or admitted for trading on a United States
national or regional securities exchange or market, then “Trading Day”
means a Business Day.

           

          “Trading Price”
with respect to the Securities, on any date of determination, means the average
of the secondary market bid quotations per $1,000 principal amount of the
Securities obtained by the Bid Solicitation Agent for $2.0 million principal
amount of such Securities at approximately 3:30 p.m., New York City time, on
such determination date from three independent nationally recognized securities
dealers selected by the Company; provided that
if three such bids cannot reasonably be obtained by the Bid Solicitation Agent,
but two such bids are obtained, then the average of the two bids shall be used,
and if only one such bid can reasonably be obtained by the Bid Solicitation
Agent, that one bid shall be used. If at least one bid for $2.0 million
principal amount of Securities cannot reasonably be obtained from an independent
nationally recognized securities dealer, then the Trading Price per $1,000
principal amount of Securities shall be deemed to be less than 97% of the
product of the Last 

           

          
            
              
              

            

            
              12

              
                

              

            

            
              
              

            

          

           

          Reported
Sale Price of the Common Stock and the Conversion Rate in effect at such time.
Any such determination shall be conclusive absent manifest error.

           

          “Trading Price
Condition” has the meaning specified in Section 5.01(b).

           

          “Trigger Event”
has the meaning specified in Section 5.07(d).

           

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

           

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

           

          “United States”
means the United States of America.

           

          “Valuation
Period” has the meaning specified in Section 5.07(d).

           

          “VWAP Market Disruption
Event” means (a) a failure by the Relevant Exchange to open for trading
during its regular trading session or (b) the occurrence or existence prior to
1:00 p.m. (local time on the applicable securities exchange or market) on any
Scheduled Trading Day for the Common Stock for an aggregate one half-hour period
or longer of any suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by the applicable securities
exchange or market or otherwise) in the Common Stock or in any options contracts
or futures contracts relating to the Common Stock, in each case, on the Relevant
Exchange or the principal United States national or regional securities exchange
or market on which such options contracts or futures contracts trade or are
quoted, as the case may be.

           

          “VWAP Trading
Day” means a day during which (i) trading in the Common Stock generally
occurs on the Relevant Exchange and (ii) there is no VWAP Market Disruption
Event.  If the Common Stock is not then listed or admitted for trading
on a United States national or regional securities exchange or market, then
“VWAP Trading
Day” shall mean a Business Day.

           

          “Wholly Owned
Subsidiary” of any Person means a Subsidiary of such Person, all the
Capital Stock of which (other than directors’ qualifying shares) is owned by
such Person or another Wholly Owned Subsidiary of such Person.

           

          Section 1.02.  Rules of
Construction.

           

          
            
              
              

            

            
              13

              
                

              

            

            
              
              

            

          

           

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

           

          (a)        the
terms defined in Section 1.01 have the meanings assigned to them in Section 1.01 and include the plural as well as the
singular;

           

          (b)        all
accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with GAAP; and

           

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

           

          Section 1.03.  Compliance
Certificates and Opinions.

           

          (a)        Upon
any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee
such certificates and opinions as may be required hereunder.  Each
such certificate or opinion shall be given in the form of an Officers’
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with any other requirement
set forth in this Indenture.

           

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

           

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

           

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

           

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

           

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

           

          Section 1.04.  Form of
Documents Delivered to Trustee.

           

          (a)        In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such

           

          
            
              
              

            

            
              14

              
                

              

            

            
              
              

            

          

           

          matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

           

          (b)        Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous.  Any such certificate or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows that the certificate or
opinion or representations with respect to such matters are
erroneous.

           

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

           

          Section 1.05.  Acts of
Holders; Record Dates.

           

          (a)        Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company.  Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as an “Act” of the
Holders signing such instrument or instruments.  Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 9.01) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section 1.05.

           

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

           

          
            
              
              

            

            
              15

              
                

              

            

            
              
              

            

          

           

          The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee reasonably deems sufficient.

           

          (c)        The
Company may fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders.  If not set by the Company
prior to the first solicitation of a Holder made by any Person in respect of any
such action, or, in the case of any such vote, prior to such vote, the record
date for any such action or vote shall be the 30th
day (or, if later, the date of the most recent list of Holders required to be
provided pursuant to Section 10.01) prior
to such first solicitation or vote, as the case may be.  With regard
to any record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant
action.

           

          (d)        The
ownership of the Securities shall be proved by the Security
Register.

           

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

           

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

           

          (i)           the
Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee
at its applicable Corporate Trust Office; or

           

          (ii)           the
Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address of
its principal office specified in the first paragraph of this instrument or at
any other address previously furnished in writing to the Trustee by the Company,
Attention: General Counsel.

           

          Section 1.07.  Notice to
Holders; Waiver.

           

          
            
              
              

            

            
              16

              
                

              

            

            
              
              

            

          

          (a)        Where
this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder affected by such event,
at such Holder’s address as it appears in the Security Register, not later than
the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice.  In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.  Notices
will be deemed to have been given on the date of mailing.  Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
notice.  Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

           

          (b)        In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

           

          (c)        Whenever
under this Indenture the Trustee is required to provide any notice by mail, in
all cases the Trustee may alternatively provide notice by overnight courier or
by telefacsimile, with confirmation of transmission.

           

          Section
1.08.  Effect of
Headings and Table of Contents.  The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof, and all Article and Section references are to
Articles and Sections, respectively, of this Indenture unless otherwise
expressly stated.

           

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

           

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

           

          Section
1.11.  Governing
Law.  This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New York.

           

          
            
              
              

            

            
              17

              
                

              

            

            
              
              

            

          

           

          Section
1.12.  No
Recourse Against Others.  No director, officer, employee,
stockholder or Affiliate of the Company from time to time shall have any
liability for any obligations of the Company under the Securities or this
Indenture.  Each Holder by accepting a Security waives and releases
such liability.

           

           

          ARTICLE
2

          The
Securities

           

          Section 2.01.  Designation,
Amount and Issuance of Securities.  The Securities shall be
designated as “3.25% Convertible Senior Notes due 2013.”  The
Securities shall be limited to an aggregate principal amount of $200,000,000,
subject to Section
2.17.  Upon the execution of
this Indenture, or from time to time thereafter, Securities may be executed by
the Company and delivered to the Trustee for authentication in accordance with
Section
2.05.

           

          Section 2.02.  Form of
the Securities. 

           

          (a)        The
Securities and the Trustee’s certificate of authentication to be borne by such
Securities shall be substantially in the form set forth in Exhibit A
hereto.  The terms and provisions contained in the form of Securities
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, 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.

           

          (b)        Any
of the Securities may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the custodian for the Global
Securities, the Depositary or by The Financial Industry Regulatory Authority in
order for the Securities to be tradable on The PORTAL Market or as may be
required for the Securities to be tradable on any other market developed for
trading of securities pursuant to Rule 144A or as may be required to comply with
any applicable law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any securities exchange or automated quotation system
on which the Securities may be listed, or to conform to usage, or to indicate
any special limitations or restrictions to which any particular Securities are
subject.

           

          (c)        So long
as the Securities are eligible for book-entry settlement with the Depositary, or
unless otherwise required by law, subject to Section 2.09, all of the Securities will be represented by one or more
Global Securities.  The transfer and exchange of beneficial interests
in any such Global Securities shall be 

           

          
            
              
              

            

            
              18

              
                

              

            

            
              
              

            

          

           

          effected through the Depositary in accordance with this
Indenture and the applicable procedures of the Depositary.  Except as
provided in Section
2.09, beneficial owners of a Global
Security shall not be entitled to have certificates registered in their names,
will not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Global
Security.

           

          (d)        Any
Global Security shall represent such of the outstanding Securities as shall be
specified therein and shall provide that it shall represent the aggregate amount
of outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be increased or reduced to reflect issuances, repurchases, conversions,
transfers or exchanges permitted hereby.  Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee or the
custodian for the Global Security, at the direction of the Trustee, in such
manner and upon instructions given by the Holder of such Securities in
accordance with this Indenture.

           

          Section
2.03.  Date and Denomination
of Securities and Interest.  The Securities shall be issuable
in fully registered form without coupons in denominations of $1,000 principal
amount and integral multiples thereof.  Each Security shall be dated
the date of its authentication and shall bear interest from the date specified
on the face of the form of Securities attached as Exhibit A
hereto.  Interest on the Securities shall be computed on the basis of
a 360-day year comprised of twelve 30-day months.

           

          Section 2.04.  Payments
on the Securities.

           

          (a)        On
the Stated Maturity Date, each Holder shall be entitled to receive on such date
the principal amount of the Securities held, plus accrued
and unpaid interest to,
but not including, the Stated Maturity Date.

           

          (b)        On
each Interest Payment Date, the Person in whose name a Security is registered on
the Register at 5:00 p.m., New York City time, on the Record Date for such
Interest Payment Date shall be entitled to receive the interest payable on such
Interest Payment Date, except that the interest payable upon Maturity shall be
payable to the Person to whom principal is payable upon Maturity.

           

          (c)        If
any Interest Payment Date or any date on which principal or any other amount is
payable in respect of the Securities falls on a day that is not a Business Day,
such payment of interest or principal, as the case may be, shall be postponed to
the next succeeding Business Day and no interest or other amount shall be paid
as a result of such postponement.

           

          
            
              
              

            

            
              19

              
                

              

            

            
              
              

            

          

           

          (d)        The
Company shall pay any amount of principal when due:

           

          (i)          with
respect to Global Securities, to the Depositary or its nominee in immediately
available funds; and

           

          (ii)          with
respect to Physical Securities, at the office of the Paying Agent, which
initially shall be the Corporate Trust Office.

           

          (e)        The
Company shall pay interest on each Interest Payment Date:

           

          (i)           with
respect to any Global Securities by wire transfer of immediately available funds
to the account of the Depositary or its nominee;

           

          (ii)          with
respect to any Physical Securities having a principal amount of $5,000,000 or
less, by check mailed to the address of the Person entitled thereto as it
appears in the Security Register; provided that
at Maturity, interest will be payable at the office of the Company maintained by
the Company for such purposes, which shall initially be the Corporate Trust
Office; and

           

          (iii)         with
respect to any Physical Securities having a principal amount of more than
$5,000,000, either (A) by check mailed to the address of the Person entitled
thereto as it appears in the Security Register or (B) at the election of the
Person entitled thereto, by wire transfer in immediately available funds to an
account within the United States of such Person if such Person has duly
delivered notice of such election and applicable wire instructions to the
Registrar not later than the Record Date for such Interest Payment Date and has
not delivered notice to the Registrar revoking such election prior to such
Record Date; provided that
at Maturity, interest will be payable at the office of the Company maintained by
the Company for such purposes, which shall initially be the Corporate Trust
Office.

           

          (f)        If the
Company is required to pay any Additional Interest under this Indenture, the
Company shall pay such Additional Interest to Holders on the same dates and in
the same manner as regular interest is paid to Holders, except as set forth in
Section
3.05 and Section 7.03.

           

          Section 2.05.  Execution
and Authentication. 

           

          (a)        One
or more Officers shall sign the Securities for the Company by manual or
facsimile signature.  If an Officer whose signature is on a Security
no longer holds that office at the time the Trustee authenticates the Security,
the Security shall be valid nevertheless.

           

          
            
              
              

            

            
              20

              
                

              

            

            
              
              

            

          

           

          (b)        The
Company shall deliver the Securities executed by the Company to the Trustee for
authentication together with an Officers’ Certificate ordering the
authentication and delivery of such Securities, which Officers’ Certificate
shall set forth the number of separate Securities certificates, the principal
amount of each of the Securities to be authenticated, the date on which the
original issue of Securities is to be authenticated, the Holder of each such
Security and delivery instructions.  Upon receipt of such executed
Securities and such Officers’ Certificate, the Trustee shall authenticate and
deliver such Securities in accordance with such Officers’
Certificate.

           

          (c)        A
Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security.  The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

           

          (d)        The
Trustee may appoint an authenticating agent reasonably acceptable to the Company
to authenticate the Securities.  Any such appointment shall be
evidenced by an instrument signed by a Responsible Officer, a copy of which
shall be furnished to the Company.  Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the same rights as any Security
Registrar, Paying Agent or agent for service of notices and
demands.

           

          Section 2.06.  Security
Registrar, Paying Agent and Conversion Agent. 

           

          (a)        The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the “Security
Registrar”), an office or agency where Securities may be presented for
payment (the “Paying Agent”)
and an office or agency where Securities may be presented for conversion (the
“Conversion
Agent”), in each case, in the Borough of Manhattan, The City of New
York.  The Company initially appoints the Trustee as Security
Registrar, Conversion Agent and Paying Agent in connection with the
Securities.  The Corporate Trust Office shall be considered as one
such office or agency of the Company for each of the aforesaid
purposes.  The Company or any of its domestically organized Wholly
Owned Subsidiaries may act as Paying Agent, Conversion Agent or Security
Registrar.  The Company may from time to time appoint one or more
additional Conversion Agents, Paying Agents and co-registrars and may from time
to time rescind such designations.

           

          (b)        The
Security Registrar shall keep a register of the Securities (the “Security Register”) and
of their transfer and exchange.  

           

          
            
              
              

            

            
              21

              
                

              

            

            
              
              

            

          

           

          (c)        The
Company shall enter into an appropriate agency agreement with any Security
Registrar, Paying Agent or Conversion Agent not a party to this
Indenture.  Each such agreement shall implement the provisions of this
Indenture that relate to such agent.

           

          (d)        The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of each such office or agency, if not the Trustee, or if
not designated or appointed by the Trustee.

           

          (e)        If
at any time the Company fails to maintain a Security Registrar, Paying Agent or
Conversion Agent or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.

           

          (f)        The
Company may remove any Security Registrar, Paying Agent or Conversion Agent at
any time and without prior notice to Holders by written notice to such Security
Registrar, Paying Agent or Conversion Agent and to the Trustee; provided that
no such removal shall become effective until (i) acceptance of an appointment by
a successor as evidenced by an appropriate agreement entered into by the Company
and such successor Security Registrar, Paying Agent or Conversion Agent, as the
case may be, and delivered to the Trustee or (ii) notification to the Trustee
that the Trustee shall serve as Security Registrar, Paying Agent or Conversion
Agent until the appointment of a successor in accordance with clause (i)
above.  The Security Registrar, Paying Agent or Conversion Agent may
resign at any time upon written notice; provided that
the Trustee may resign as Paying Agent, Conversion Agent or Security Registrar
only if the Trustee also resigns as Trustee in accordance with Section 9.11.

           

          Section 2.07.  Paying
Agent To Hold Money in Trust.

           

          (a)         On or
prior to each due date of the principal and interest on any Security, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest when so becoming due.  If the Company or a
Wholly Owned Subsidiary of the Company acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund for
the benefit of the Persons entitled thereto.  If such deposit is made,
or such segregation is effected, on a due date for such principal or interest,
such deposit shall be received, or such segregation shall be effected, by 11:00
a.m., New York City time, on such due date.

           

          (b)        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 

           

          
            
              
              

            

            
              22

              
                

              

            

            
              
              

            

          

           

          payment
of principal of or interest on the Securities and shall notify the Trustee of
any default by the Company in making any such payment.

           

          (c)        The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying
Agent.  Upon complying with this Section 2.07, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.

           

          Section 2.08.  Exchange
and Registration of Transfer of Securities.

           

          (a)        The
Company shall cause to be kept at the Corporate Trust Office the Security
Register in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities.  The Security Register shall be in written form or in any
form capable of being converted into written form within a reasonably prompt
period of time.

           

          (b)        Upon
surrender for registration of transfer of any Securities to the Security
Registrar, and satisfaction of the requirements for such transfer set forth in
this Section
2.08 and in Section 2.10, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.

           

          (c)        Securities
may be exchanged for other Securities of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture, upon surrender of the Securities to be exchanged at
the office of the Security Registrar.  Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.

           

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

           

          (e)        All
Securities presented or surrendered for registration of transfer or for
exchange, repurchase, redemption or conversion shall (if so required by the
Company or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, duly executed by the Holder thereof or his attorney duly authorized in
writing.

           

          
            
              
              

            

            
              23

              
                

              

            

            
              
              

            

          

           

          (f)        No
service charge shall be made to any Holder for any registration of, transfer or
exchange of Securities, but the Company may require payment by the Holder of a
sum sufficient to cover any tax, assessment or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities.

           

          (g)        Neither
the Company nor the Trustee nor any Security Registrar shall be required to
exchange, issue or register a transfer of any Securities or portions thereof (i)
tendered for repurchase (and not withdrawn) pursuant to Article 4, (ii) surrendered for conversion pursuant to Article 5 or (iii) selected for redemption pursuant to
Article
6.

           

          Section 2.09.  Global
Securities. 

           

          (a)        Each
Global Security authenticated under this Indenture shall be registered in the
name of the Depositary or a nominee thereof and delivered to the Depositary or a
nominee thereof or custodian for the Global Securities therefor, and each such
Global Security shall constitute a single Security for all purposes of this
Indenture.

           

          (b)        Notwithstanding
any other provision in this Indenture, no Global Security may be exchanged in
whole or in part for Securities registered, and no transfer of a Global Security
in whole or in part may be registered, in the name of any Person other than the
Depositary or a nominee thereof unless:

           

          (i)          the
Depositary (A) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (B) has ceased to be a
clearing agency registered under the Exchange Act, and in each case, a successor
depositary has not been appointed by the Company within 90 calendar days;
or

           

          (ii)          in
accordance with clause (c) below.

           

          Any Global
Securities exchanged pursuant to this Section 2.09(b) shall be so exchanged in whole and not in
part.

           

          (c)        In
addition, Physical Securities shall be issued in exchange for beneficial
interests in a Global Security upon request by or on behalf of the Depositary in
accordance with customary procedures following the request of a beneficial owner
seeking to enforce its rights under the Securities or this Indenture upon the
occurrence and during the continuance of an Event of Default.

           

          (d)        Securities
issued in exchange for a Global Security or any portion thereof pursuant to
Section
2.09(b) or Section 2.09(c) shall be issued in definitive, fully registered form,
without interest coupons, shall have an aggregate principal amount equal to that
of such Global Securities or portion thereof to be so 

           

          
            
              
              

            

            
              24

              
                

              

            

            
              
              

            

          

           

          exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall bear any
legends required hereunder.  Any Global Securities to be exchanged
shall be surrendered by the Depositary to the Trustee, as Security Registrar,
provided
that pending completion of the exchange of a Global Security, the Trustee acting
as custodian for the Global Securities for the Depositary or its nominee with
respect to such Global Securities, shall reduce the principal amount thereof, by
an amount equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee.  Upon any
such surrender or adjustment, the Trustee shall authenticate and make available
for delivery the Securities issuable on such exchange to or upon the written
order of the Depositary or an authorized representative
thereof.

           

          (e)        In the
event of the occurrence of any of the events specified in Section 2.09(b) above or upon any request described in Section 2.09(c), the Company will promptly make available to the Trustee a
sufficient supply of Physical Securities in definitive, fully registered form,
without interest coupons.

           

          (f)        Neither
any members of, or participants in, the Depositary (“Agent Members”)
nor any other Persons on whose behalf Agent Members may act shall have any
rights under this Indenture with respect to any Global Securities registered in
the name of the Depositary or any nominee thereof, and the Depositary or such
nominee, as the case may be, 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 Securities for all purposes whatsoever.  Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent Members and any
other Person on whose behalf an Agent Member may act, the operation of customary
practices of such Persons governing the exercise of the rights of a Holder of
any Securities.

           

          (g)        At
such time as all interests in a Global Security have been redeemed, repurchased,
converted, cancelled or exchanged for Physical Securities, such Global Security
shall, upon receipt thereof, be canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
custodian for the Global Security.  At any time prior to such
cancellation, if any interest in a Global Security is redeemed, repurchased,
converted, cancelled or exchanged for Physical Securities, the principal amount
of such Global Security shall, in accordance with the standing procedures and
instructions existing between the Depositary and the custodian for the Global
Security, be appropriately reduced, and an endorsement shall be made on such
Global Security, by the Trustee or the custodian for the Global Security, at the
direction of the Trustee, to reflect such reduction.

           

          
            
              
              

            

            
              25

              
                

              

            

            
              
              

            

          

           

          Section 2.10.  Transfer
Restrictions.

           

          (a)        Until
the date (the “Resale Restriction
Termination Date”) that is the later of (1) one year after the Issue Date
or such shorter period of time as permitted under Rule 144, and (2) such later
date, if any, as may be required by applicable law:

           

          (i)          any
certificate evidencing a Security shall bear a legend in substantially the form
identified as “Form of Restricted Security Legend” in the form of Security set
forth in Exhibit A; and

           

          (ii)         any
certificate representing Common Stock issued upon conversion or redemption of a
Security shall bear a legend substantially in the form identified as “Form of
Restricted Security Legend for Common Stock Issued Upon Conversion or
Redemption” in Exhibit B,

           

          (each a “Restricted Security
Legend”), in each case, unless (A)
such Security or such Common Stock, as the case may be, has been sold pursuant
to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such
transfer) or sold pursuant to Rule 144, (B) such Restricted Security Legend has
been removed pursuant to Section 2.10(d), or
(C) otherwise agreed by the Company in writing with written notice thereof to
the Trustee.

           

          (b)        Every
Security (and all securities issued in exchange therefor or in substitution
thereof) and any Common Stock issued upon conversion or redemption of any
Security that bears or is required under Section 2.10(a) to bear a Restricted Security Legend (each a “Restricted
Security”) shall be subject to the restrictions on transfer set forth in
this Section
2.10 and in the Restricted Security
Legend for such Restricted Security, unless such restrictions on transfer shall
be waived by written consent of the Company following receipt of legal advice
supporting the permissibility of the waiver of such transfer restrictions, and
the Holder of any Restricted Securities, by such Holder’s acceptance thereof,
agrees to be bound by all such restrictions on transfer.

           

          (c)        In
connection with any transfer of a Physical Security that is a Restricted
Security, the Holder must complete and deliver the form of assignment set forth
on the certificate representing the Securities with the appropriate box checked
to the Trustee.  If the proposed transfer is pursuant to clause (2)(D)
of the Restricted Security Legend (other than a transfer pursuant to Rule 144),
the Holder must, prior to such transfer, furnish to the Trustee, such
certifications, legal opinions or other information as the Company may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.

           

          
            
              
              

            

            
              26

              
                

              

            

            
              
              

            

          

           

          (d)        The
Company shall cause the Restricted Securities Legend to be removed from any
Restricted Security on the date (the “Delegending
Date”) that is earlier of (1) the date that is one year after the Issue
Date for any Security Outstanding, (2) the transfer of such Restricted Security
pursuant to an effective registration statement or (3) on any transfer of such
Restricted Security under Rule 144, in each case  as
follows:

           

          (i)          with
respect to any Restricted Security that is a Physical Security, upon surrender
of such Restricted Security by the Holder thereof to the Security Registrar for
exchange, such Restricted Security shall be exchanged for a new Security, of
like tenor and aggregate principal amount, which shall not bear the Restricted
Security Legend; and

           

          (ii)         with
respect to any Restricted Security represented by a Global Security, the Company
shall, on or promptly after the Delegending Date direct the Depositary to remove
the Restricted Securities Legend from the Global Security; provided that
if such a direction is not permitted under the applicable rules, regulations,
policies and procedures of the Depositary as at the Delegending Date, the
Company shall, upon surrender of such Restricted Security by the Holder thereof,
reduce the principal amount of such Global Security by the principal amount of
such Restricted Security and increase the principal amount of a Global Security
without the Restricted Security Legend by an equal principal
amount.  If a Global Security without the Restricted Security Legend
is not then outstanding, the Company shall execute, and the Trustee shall
authenticate and deliver to the Depositary, a Global Security without the
Restricted Security Legend.

           

          Section 2.11.  Responsibilities
and Obligations Relating to the Depositary.

           

          (a)        Neither
the Company nor the Trustee shall have any responsibility or obligation to any
Agent Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice or the payment of any amount under or
with respect to such Securities.

           

          (b)        All
notices and communications to be given to the Holders of Securities and all
payments to be made to Holders of Securities under the Securities shall be given
or made only to or upon the order of the registered Holders of Securities (which
shall be the Depositary or its nominee in the case of a Global
Security).

           

          
            
              
              

            

            
              27

              
                

              

            

            
              
              

            

          

           

          (c)        The
rights of beneficial owners in any Global Securities shall be exercised only
through the Depositary subject to the customary procedures of the
Depositary.

           

          (d)        The
Company and the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depositary with respect to its Agent
Members.

           

          (e)        The
Company and the Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Securities (including any transfers between or among Agent Members) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements
hereof.

           

          Section 2.12.  Replacement
Securities.

           

          (a)        If
a mutilated Security is surrendered to the Security Registrar or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met, such that the Holder:

           

          (i)          notifies
the Company or the Trustee within a reasonable time after he has notice of such
loss, destruction or wrongful taking and the Security Registrar does not
register a transfer prior to receiving such notification;

           

          (ii)         makes
such request to the Company or the Trustee prior to the Security being acquired
by a protected purchaser as defined in Section 8-303 of the Uniform Commercial
Code (a “Protected
Purchaser”); and

           

          (iii)        satisfies
any other reasonable requirements of the Trustee and the Company.  If
required by the Trustee or the Company, such Holder shall furnish an indemnity
bond sufficient in the judgment of the Trustee to protect the Company, the
Trustee, the Paying Agent, the Conversion Agent and the Security Registrar from
any loss or liability that any of them may suffer if a Security is replaced and
subsequently presented or claimed for payment.

           

          (b)        The
Company and the Trustee may charge the Holder for their expenses in replacing a
Security.

           

          
            
              
              

            

            
              28

              
                

              

            

            
              
              

            

          

          (c)        In
case any Security which (i) has matured or is about to mature, (ii) has been
properly tendered for repurchase on a Fundamental Change Repurchase Date (and
not withdrawn), (iii) is to be converted into or redeemed for cash and, if
applicable, shares of Common Stock, shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of, repurchase or authorize the repurchase of, convert or
authorize the conversion of, or redeem or authorize redemption of, the same
(without surrender thereof except in the case of a mutilated Securities), as the
case may be, if the applicant for such payment, conversion, repurchase or
redemption shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or in connection with such substitution, and, in every case of destruction, loss
or theft, the applicant shall also furnish to the Company, the Trustee and, if
applicable, any Paying Agent or Conversion Agent evidence to their satisfaction
of the destruction, loss or theft of such Securities and of the ownership
thereof.

           

          (d)        The
provisions of this Section 2.12 are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, lost,
destroyed or wrongfully taken Securities.

           

          Section 2.13.  Outstanding
Securities.

           

          (a)        At
any time, the Securities outstanding as that time are all Securities that have
been authenticated by the Trustee and delivered under this Indenture as at that
time, other than:

           

          (i)          Securities
cancelled by the Trustee or accepted by the Trustee for cancellation as at that
time;

           

          (ii)         Securities
replaced pursuant to Section 2.12 as
at that time, unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a Protected
Purchaser;

           

          (iii)        Securities
repurchased pursuant to Article 4 which
are no longer outstanding as at that time pursuant to Section 4.03(d);

           

          (iv)        Securities
converted pursuant to Article 5 which
are no longer outstanding as at that time pursuant to Section 5.05(g);

           

          (v)         Securities
redeemed pursuant to Article 6 which
are no longer outstanding as at that time pursuant to Section 6.06(c); and

           

          (vi)        Securities
that have matured at the Stated Maturity in respect of which the Paying Agent
segregates and holds in trust, in accordance with this Indenture, as of the
Stated Maturity Date, sufficient 

           

          
            
              
              

            

            
              29

              
                

              

            

            
              
              

            

          

           

          funds
to pay all amounts due on the Stated Maturity Date with respect to such
Securities maturing and the Paying Agent is not prohibited from paying such
money to the Holders on such date pursuant to the terms of this
Indenture.

           

          (b)        Subject
to Section
2.13(c), a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.

           

          (c)        Notwithstanding
anything else in this Section 2.13, in
determining whether the Holders of the requisite principal amount of Securities
outstanding have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded.  Securities so owned which have been
pledged in good faith may be regarded as outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee’s right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other
obligor.

           

          Section 2.14.  Temporary
Securities.

           

          (a)        Pending
the preparation of Securities in certificated form, the Company may execute and
the Trustee or an authenticating agent appointed by the Trustee shall, upon the
written request of the Company, authenticate and deliver temporary Securities
(printed or lithographed).  Temporary Securities shall be issuable in
any authorized denomination, and substantially in the form of the Securities in
certificated form, but with such omissions, insertions and variations as may be
appropriate for temporary Security, all as may be determined by the
Company.  Every such temporary Security shall be executed by the
Company and authenticated by the Trustee or such authenticating agent upon the
same conditions and in substantially the same manner, and with the same effect,
as the Securities in certificated form.

           

          (b)        Without
unreasonable delay, the Company will execute and deliver to the Trustee or such
authenticating agent Securities in certificated form and thereupon any or all
temporary Securities may be surrendered in exchange therefor, at the office of
the Security Registrar and the Trustee or such authenticating agent shall
authenticate and make available for delivery in exchange for such temporary
Securities an equal aggregate principal amount of Securities in certificated
form.  Such exchange shall be made by the Company at

           

          
            
              
              

            

            
              30

              
                

              

            

            
              
              

            

          

           

          its
own expense and without any charge therefor.  Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as Securities in
certificated form authenticated and delivered hereunder.

           

          Section 2.15.  Cancellation.

           

          (a)        The
Company may, at any time, deliver Securities to the Trustee for
cancellation.  The Security Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment.  The Trustee and no one else shall
cancel all Securities surrendered for registration of transfer, exchange,
payment or cancellation and deliver canceled Securities to the Company pursuant
to written direction by an Officer.

           

          (b)        The
Company may not issue new Securities to replace Securities it has redeemed,
repurchased, converted, paid or delivered to the Trustee for
cancellation.  The Trustee shall not authenticate Securities in place
of canceled Securities other than pursuant to the terms of this
Indenture.

           

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

           

          Section 2.17.  Additional
Securities.

           

                     The
Company may, from time to time without the consent of the Holders of Outstanding
Securities, increase the aggregate principal amount of the Securities by issuing
additional Securities in the future pursuant to this Indenture (“Additional
Securities”) having terms and conditions identical to those of the other
Outstanding Securities, except that Additional Securities may have a different
initial date from which interest begins to accrue thereon so that the Additional
Securities are fungible with Outstanding Securities; provided that
the Additional Securities may have the same CUSIP number as the Securities
issued on the Issue Date, only if:

           

          (a)        such
issuance of Additional Securities is permissible as a “qualified reopening” for
United States federal income tax purposes; and

           

          
            
              
              

            

            
              31

              
                

              

            

            
              
              

            

          

           

          (b)        the
resale of such Additional Securities by non-affiliates of the Company would not
require registration under the Securities Act.

           

           

          ARTICLE
3

          Particular
Covenants of the Company

           

          Section
3.01.  Payment
of Principal and Interest.  The Company covenants and agrees
that it shall duly and punctually pay or cause to be paid the principal of, and
interest on, each of the Securities at the places, at the respective times and
in the manner provided herein and in the Securities.

           

          Section
3.02.  Rule 144A
Information Requirement.  The Company covenants and agrees that
it shall, during any period in which it is not subject to Section 13 or 15(d)
under the Exchange Act, make available to any Holder or beneficial owner of any
Restricted Securities which continue to be Restricted Securities in connection
with any sale thereof, and any prospective purchaser of Restricted Securities
designated by such Holder or beneficial owner, the information, if any, required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of such
Holder or beneficial owner, the extent required from time to time to enable such
Holder or beneficial owner to sell its Restricted Securities without
registration under the Securities Act pursuant to the exemption provided by Rule
144A.

           

          Section 3.03.  Resale of
Certain Securities.  Subject
to Section
2.17, the Company shall not, and shall not
permit any of its “affiliates” (as defined under Rule 144 or any successor
provision thereto) to, resell any Securities that have been reacquired by any of
them.  The Trustee shall have no responsibility in respect of the
Company’s performance of its agreement in the preceding
sentence.

           

          Section 3.04.  Notice of
Event of Default.  The Company shall deliver to the Trustee, as
soon as possible and in any event within 30 days after the Company becomes aware
of the occurrence of any Event of Default or an event which, with notice or the
lapse of time or both, would constitute an Event of Default, an Officers’
Certificate setting forth the details of such Event of Default or Default, its
status and the action which the Company proposes to take with respect
thereto.  Any notice required to be given under this Section 3.04 shall be delivered to a Responsible Officer of the
Trustee at its Corporate Trust Office.

           

          Section 3.05.  Late
Filing Additional Interest.

           

          (a)        If, at
any time during the six-month period beginning on, and including, November 28,
2008, the Company fails to timely file any document or report that it is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act (giving effect to any grace period provided by Rule

           

          
            
              
              

            

            
              32

              
                

              

            

            
              
              

            

          

           

           

          12b-25 under the Exchange Act), as applicable (other than
reports on Form 8-K), the Company shall pay additional interest (the “Late Filing Additional
Interest”) in accordance with this Section 3.05.

           

          (b)        Late
Filing Additional interest shall accrue on all Restricted Securities then
Outstanding at an annual rate of 0.50% per annum of the principal amount of such
Restricted Securities for each day during such period for which the Company’s
failure to file continues until May 28, 2009; provided that
the Company shall have 14 days, in the aggregate, to cure any such late filings
before any Late Filing Additional Interest shall begin to accrue under this
Section
3.05.

           

          (c)        Late
Filing Additional Interest shall be payable in arrears on each Interest Payment
Date following the late filing in the same manner as regular interest on the
Securities.

           

          (d)        No
Late Filing Additional Interest shall accrue after the end of such six-month
period, regardless of whether any such failure has occurred or is
continuing.  No Late Filing Additional Interest or other amounts shall be
payable in respect of any Common Stock delivered upon conversion or redemption
of the Securities.    

           

           

          ARTICLE
4

          Repurchase
of Securities

           

          Section 4.01.  Fundamental
Change Repurchase Right Notice.

           

          (a)        On
or before the 10th
day following the occurrence of a Fundamental Change, the Company shall provide
to all Holders and the Trustee and Paying Agent a notice (the “Fundamental Change
Repurchase Right Notice”) of the occurrence of such Fundamental Change
and of the repurchase right, if any, at the option of the Holders arising as a
result thereof.  

           

          (b)        A
Fundamental Change Repurchase Right Notice shall specify (if
applicable):

           

          (i)          the
events causing a Fundamental Change;

           

          (ii)         the
date of the Fundamental Change;

           

          (iii)        the
Fundamental Change Repurchase Date and the last date on which a Holder may
exercise the repurchase right;

           

          (iv)        the
Fundamental Change Repurchase Price;

           

          
            
              
              

            

            
              33

              
                

              

            

            
              
              

            

          

           

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

           

          (vi)        the
Conversion Rate and any adjustments to the Conversion Rate;

           

          (vii)       that
the Securities with respect to which a Fundamental Change Repurchase Notice has
been delivered by a Holder may be converted only if the Holder withdraws the
Fundamental Change Repurchase Notice in accordance with the terms of this
Indenture;

           

          (viii)      that
the Holder must exercise the repurchase right on or prior to the Fundamental
Change Expiration Time;

           

          (ix)        that
the Holder shall have the right to withdraw any Securities surrendered for
repurchase prior to the Fundamental Change Expiration Time; and

           

          (x)  
      the procedures that Holders must follow to
require the Company to repurchase their Securities.

           

          (c)        No
failure of the Company to give a Fundamental Change Repurchase Right Notice and
no defect therein shall limit the Holders’ repurchase rights or affect the
validity of the proceedings for the repurchase of the Securities pursuant to
this Article
4.

           

          Section 4.02.  Right to
Require Repurchase Upon Fundamental Change.

           

          (a)        If
a Fundamental Change occurs, each Holder shall have the right, at such Holder’s
option, to require the Company to repurchase all of such Holder’s Securities or
any portion thereof that is an integral multiple of $1,000 principal amount, for
cash on the date (the “Fundamental Change
Repurchase Date”) specified by the Company that is not less than 20 days
and not more than 35 days after the date of the Fundamental Change Repurchase
Right Notice at a repurchase price equal to 100% of the principal amount
thereof, plus
accrued and unpaid interest thereon to, but excluding, the Fundamental
Change Repurchase Date (the “Fundamental Change
Repurchase Price”).  However, if such Fundamental Change
Repurchase Date falls after a Record Date for the payment of interest and on or
prior to the corresponding Interest Payment Date, the Company shall pay the full
amount of accrued and unpaid interest payable on such Interest Payment Date to
the holder of record at 5:00 p.m., New York City time, on such Record Date and
the Fundamental Change Repurchase Price shall not include such accrued and
unpaid interest.

           

          (b)        In
order to exercise the repurchase right, a Holder shall:

           

          
            
              
              

            

            
              34

              
                

              

            

            
              
              

            

          

           

          (i)          deliver
to the Trustee (or other Paying Agent appointed by the Company) a duly completed
notice (the “Fundamental Change
Repurchase Notice”) in the form set forth on the reverse of the Security
prior to 5:00 p.m., New York City time, on the Scheduled Trading Day immediately
preceding the Fundamental Change Repurchase Date (the “Fundamental Change
Expiration Time”); and

           

          (ii)         deliver
or effect a book-entry transfer of the Securities to the Trustee (or other
Paying Agent appointed by the Company) at any time after delivery of the
Fundamental Change Repurchase Notice (together with all necessary endorsements)
at the office of the Paying Agent, such delivery being a condition to receipt by
the Holder of the Fundamental Change Repurchase Price therefor; provided that
such Fundamental Change Repurchase Price shall be so paid pursuant to this
Section
4.02 only if the Security so
delivered to the Paying Agent shall conform in all respects to the description
thereof in the related Fundamental Change Repurchase Notice.

           

          (c)        A
Fundamental Change Repurchase Notice shall state:

           

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

           

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

           

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

           

          (d)        A
Fundamental Change Repurchase Notice may be withdrawn by means of a written
notice of withdrawal, delivered to the Paying Agent in accordance with the
Fundamental Change Repurchase Right Notice at any time prior to the Fundamental
Change Expiration Time, specifying:

           

          (i)          if
certificated Securities have been issued, the certificate numbers of the
withdrawn Securities;

           

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

           

          (iii)        the
principal amount, if any, of such Securities that remain subject to the original
Fundamental Change Repurchase Notice, which portion must be in principal amounts
of $1,000 or an integral multiple of $1,000.

           

          
            
              
              

            

            
              35

              
                

              

            

            
              
              

            

          

          (e)        If
the Securities to be repurchased are represented by a Global Security, any
Fundamental Change Repurchase Notice or notice of withdrawal thereof in respect
of such Securities must comply with appropriate procedures of the
Depositary.

           

          (f)        The
Paying Agent shall promptly notify the Company of the receipt by it of any
Fundamental Change Repurchase Notice or notice of withdrawal thereof in
accordance with the provisions of this Section 4.02.

           

          Section 4.03.  Settlement
Of Fundamental Change Repurchases.

           

          (a)        Any
repurchase by the Company pursuant to this Article 4 shall
be consummated by the delivery of the consideration to be received by the Holder
promptly following the later of the Fundamental Change Repurchase Date and the
time of the book-entry transfer or delivery of the Security.

           

          (b)        Any
Security that is to be repurchased in part only shall be surrendered to the
Trustee (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 his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Security without service
charge, a new Security or Securities, containing identical terms and conditions,
each in an authorized denomination in aggregate principal amount equal to and in
exchange for the unrepurchased portion of the principal of the Security so
surrendered.

           

          (c)        On
or prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase
Date, the Company shall deposit with the Paying Agent (or if the Company is
acting as its own Paying Agent, set aside, segregate and hold in trust) an
amount of money sufficient to repurchase on the Fundamental Change Repurchase
Date all of the Securities to be repurchased on such date at the Fundamental
Change Repurchase Price. Subject to receipt of funds and/or Securities by the
Trustee (or other Paying Agent appointed by the Company), payment for Securities
surrendered for repurchase (and not withdrawn) prior to the Fundamental Change
Expiration Time shall be made promptly after the later of:

           

          (i)          the
Fundamental Change Repurchase Date with respect to such Security; provided that
the Holder has satisfied the conditions to the payment of the Fundamental Change
Repurchase Price in this Section 4.03;
and

           

          
            
              
              

            

            
              36

              
                

              

            

            
              
              

            

          

           

          (ii)         the
time of book-entry transfer or the delivery of such Security to the Paying Agent
by the Holder thereof in the manner required by this Section 4.03.

           

          The
Trustee shall, promptly after such payment and upon written demand by the
Company, return to the Company any funds in excess of the Fundamental Change
Repurchase Price.

           

          (d)        If
the Paying Agent holds money sufficient to repurchase on the Fundamental Change
Repurchase Date all the Securities or portions thereof that are to be purchased
as of the Business Day following the Fundamental Change Repurchase Date, then on
and after the Fundamental Change Repurchase Date Article 1 such
Securities shall cease to be outstanding, Article 2 interest
shall cease to accrue on such Securities, and Article 3 all
other rights of the Holders of such Securities shall terminate (other than the
right to receive the Fundamental Change Repurchase Price in respect of such
Securities), in each case, whether or not book-entry transfer of the Securities
has been made or the Securities have been delivered to the Paying
Agent.

           

          (e)        In
connection with any repurchase of Securities pursuant to this Article 4, the Company hereby agrees to:

           

          (i)          comply
with the provisions of Rule 13e-1, Rule 13e-4, Rule 14e-1 and any other tender
offer rules under the Exchange Act that may then be applicable; and

           

          (ii)         otherwise
comply with all applicable federal and state securities laws.

           

          Section
4.04.  Restrictions
On Repurchases.  No Securities may be repurchased at the option
of Holders upon a Fundamental Change if the principal amount of the Securities
has been accelerated, and such acceleration has not been rescinded, on or prior
to such date.

           

           

          ARTICLE
5

          Conversion

           

          Section 5.01.  Conversion
Rights.

           

          (a)        At any
time prior to 5:00 p.m. on the Business Day immediately preceding February 15,
2013, a Holder shall have the right, at such Holder’s option, to convert all its
Securities or any portion thereof that is an integral multiple of $1,000
principal amount at the Conversion Rate only in accordance with the conditions
described in clauses (b), (c), (d), (e) and (f) of this
Section

           

          
            
              
              

            

            
              37

              
                

              

            

            
              
              

            

          

           

           

          5.01.  At any
time on or after February 15, 2013 until 5:00 p.m., New York City time, on the
Business Day immediately preceding the Stated Maturity Date, a Holder shall have
the right, at such Holder’s option, to convert all its Securities or any portion
thereof that is an integral multiple of $1,000 principal amount at the
Conversion Rate regardless of such conditions.

           

          (b)        The
Securities shall be convertible during the five Trading Day period immediately
after any ten consecutive Trading Day period (the “Measurement
Period”) in which the Trading Price per $1,000 principal amount of the
Securities for each Trading Day of such Measurement Period was less than 97% of
the product of (i) the Last Reported Sale Price of the Common Stock on such
Trading Day and (ii) the Conversion Rate on such Trading Day (the “Trading Price
Condition”).  The Bid Solicitation Agent shall have no
obligation to determine the Trading Price of the Securities unless the Company
has requested such determination, and the Company has no obligation to make such
a request unless a Holder provides the Company with reasonable evidence that the
Trading Price of the Securities would be less than 97% of the product of (A) the
Last Reported Sale Price of the Common Stock and (B) the Conversion Rate of the
Securities at such time.  If such evidence is provided to the Company,
then the Company shall instruct the Bid Solicitation Agent to determine the
Trading Price of the Securities beginning on the next Trading Day and on each
successive Trading Day until the date on which the Trading Price per Security is
greater than or equal to 97% of the product of (a) the Conversion Rate and (b)
the Last Reported Sale Price (as provided to the Bid Solicitation Agent by the
Company on each such date).  

           

          (c)        The
Securities shall be convertible during any calendar quarter after the calendar
quarter ending September 30, 2008 (and only during such calendar quarter), if
the Last Reported Sale Price of the Common Stock for 20 or more Trading Days in
a period of 30 consecutive Trading Days ending on the last Trading Day of the
immediately preceding calendar quarter exceeds 130% of the Conversion Price in
effect on each such Trading Day, all as determined by the Company and
communicated to the Trustee (the “Stock Price
Condition”). 

           

          (d)        If the
Company calls any of the Securities for redemption (other than pursuant to
Section
6.01), the Securities shall be convertible
at any time on and after the Company calls such Securities for redemption until
5:00 p.m., New York City time, on the Business Day immediately preceding the
Redemption Date.

           

          (e)        If
the Company elects to:

           

          (i)          distribute
to all or substantially all holders of the Common Stock any rights or warrants
entitling them for a period of not more than 60 days after the date of issuance
to subscribe for or purchase shares of the 

           

           

          
            
              
              

            

            
              38

              
                

              

            

            
              
              

            

          

           

          Common
Stock at a price per share less than the Last Reported Sale Price of the Common
Stock for the Trading Day immediately preceding the declaration date of such
distribution; or

           

          (ii)         distribute
to all or substantially all holders of the Common Stock assets (including cash),
debt securities of the Company or other property, which distribution has a per
share value (as determined by the Board of Directors) exceeding 10% of the Last
Reported Sale Price of the Common Stock on the Trading Day immediately preceding
the date of declaration of such distribution,

           

          then, in either case, the Securities shall be convertible
at any time on and after the date that the Company provides the notice to such
Holders referred to in the next sentence until the earlier of (A) 5:00 p.m., New
York City time, on the Business Day immediately preceding the Ex-Date for such
distribution and (B) the date the Company announces that such distribution will
not take place even if the Securities are not otherwise convertible at such
time. The Company shall notify Holders of any distribution referred to in either
clause (i) or (ii) of this Section 5.01(e) and of the resulting conversion right no later than
30 Scheduled Trading Days prior to the Ex-Date for such distribution. A Holder
may not exercise this right if such Holder is permitted to participate (as a
result of holding the Securities, and at the same time as holders of the Common
Stock participate) in any distribution referred to in clause (i) or (ii) of this
Section
5.01(e) as if such Holder held a
number of shares of Common Stock equal to the Conversion Rate, multiplied by
the principal amount (expressed in thousands) of Securities held by such Holder,
without having to convert its Securities.

           

          (f)        If
the Company is a party to any transaction or event that (i) constitutes a
Fundamental Change or (ii) would constitute a Fundamental Change but for the
paragraph immediately following clause (d) of the definition thereof (other
than, for the avoidance of doubt, the sentence of such paragraph relating to the
Merger Agreement), the Securities shall be convertible at any time from, and
including, the effective date of such transaction or event to, and including,
(A) the Business Day immediately preceding related Fundamental Change Repurchase
Date or (B) if there is no such Fundamental Change Repurchase Date, 30 Scheduled
Trading Days following the effective date of such transaction or
event.

           

          Section 5.02.  Notice Of
Conversion Rights.

           

          The Company shall use its commercially reasonable efforts
to notify the Holders and the Trustee that the Securities have become
convertible as soon as practicable after the Company becomes aware that any of
the conditions described in clauses (b), (c), (d), (e) and (f) of Section 5.01 have occurred.  However, nothing in this
Section
5.02 requires the Company to actively
monitor any such condition.

           

          
            
              
              

            

            
              39

              
                

              

            

            
              
              

            

          

           

          Section 5.03.  Make-Whole
Fundamental Changes. 

           

          (a)        If a
Holder elects to convert Securities in connection with a Make-Whole Fundamental
Change that occurs prior to the Stated Maturity Date, the Conversion Rate
applicable to each $1,000 principal amount of Securities so converted shall be
increased by an additional number of shares of Common Stock (the “Additional
Shares”) as described below.  For purposes of this Section 5.03, a conversion shall be deemed to be “in connection
with” a Make-Whole Fundamental Change if the Conversion Date for such
conversion occurs at any time from, and including, the Effective Date of such
Make-Whole Fundamental Change to, and including, the Business Day prior to the
related Fundamental Change Repurchase Date (regardless of whether the Securities
are otherwise convertible because of the conditions set forth in Section 5.01).

           

          (b)        The
Company shall notify Holders and the Trustee of the occurrence of any Make-Whole
Fundamental Change on the Effective Date of the Make-Whole Fundamental
Change.

           

          (c)        The
number of Additional Shares shall be determined by the Company by reference to
the table set forth in Schedule A, based on the date on which the Make-Whole
Fundamental Change becomes effective (the “Effective Date”)
and the Stock Price.  If the exact Stock Price and Effective Date are
not set forth in such table, then:

           

          (i)          if
the actual Stock Price is between two Stock Prices in the table or the Effective
Date is between two Effective Dates in the table, the number of Additional
Shares shall be determined by a straight-line interpolation between the number
of Additional Shares set forth for the next higher and next lower Stock Prices
and the two nearest Effective Dates, as applicable, based on a 365-day
year;

           

          (ii)         if
the Stock Price is greater than $400.00 per share of Common Stock (subject to
adjustment in the same manner and at the same time as the Stock Prices as set
forth in clause (d) of this
Section
5.03), no Additional Shares shall be added
to the Conversion Rate; and

           

          (iii)        if the
Stock Price is less than $96.67 per share (subject to adjustment in the same
manner and at the same time as the Stock Prices as set forth in clause (d) of this Section 5.03), no
Additional Shares shall be added to the Conversion Rate.

           

          (d)        The
Stock Prices set forth in the first column of the table in Schedule A shall be
adjusted by the Company as of any date on which the Conversion Rate of the
Securities is adjusted (other than pursuant to this Section 5.03). The adjusted Stock Prices shall equal the Stock Prices
applicable 

           

          
            
              
              

            

            
              40

              
                

              

            

            
              
              

            

          

           

           

          immediately prior to such adjustment, multiplied by a
fraction, the numerator of which is the Conversion Rate in effect immediately
prior to the adjustment giving rise to the Stock Price adjustment and the
denominator of which is the Conversion Rate as so adjusted. The number of
Additional Shares within the table shall be adjusted in the same manner as the
Conversion Rate is adjusted (other than pursuant to this Section 5.03).

           

          (e)        Notwithstanding
the foregoing, in no event shall the Conversion Rate exceed 10.3444 per $1,000
principal amount of Securities (subject to adjustment in the same manner as the
Conversion Rate is adjusted pursuant to Section 5.07) as a
result of any increase under this Section 5.03.

           

          Section 5.04.  Exercise
of Conversion Privilege. 

           

          (a)        Before
any Holder shall be entitled to convert its Securities as forth above, such
Holder shall:

           

          (i)          in
the case of a Global Security, comply with the procedures of the Depositary in
effect at that time and, if required under Section 5.05(f), pay
funds equal to interest payable on the next Interest Payment Date to which such
Holder is not entitled as set forth in Section 5.05(f) and, if required under Section 5.04(g), pay any taxes or duties such Holder is required to pay as
set forth in Section
5.04(g); and

           

          (ii)         in
the case of a Physical Security, (A) complete and manually sign and deliver an
irrevocable written notice to the Conversion Agent in the form attached to such
Physical Security as set forth in Exhibit A (or a facsimile thereof) (a “Conversion
Notice”) at the office of the Conversion Agent and shall state in writing
therein the principal amount of Securities to be converted and the name or names
(with addresses) in which such Holder wishes the certificate or certificates for
any shares of Common Stock, if any, to be delivered upon settlement of the
Conversion Obligation to be registered, (B) surrender such Securities, duly
endorsed to the Company or in blank (and accompanied by appropriate endorsement
and transfer documents), at the office of the Conversion Agent, (C) if required
under Section
5.05(f), pay funds equal to interest
payable on the next Interest Payment Date to which such Holder is not entitled
as set forth in Section 5.05(f) and, (D) if required under Section 5.04(g), pay any taxes or duties such Holder is required to pay as
set forth in Section
5.04(g).

           

          (b)        The date
on which the Holder has complied with the requirements set forth in Section 5.04(a) in respect of a Security shall be deemed to be the
“Conversion
Date” for such Security. 

           

          
            
              
              

            

            
              41

              
                

              

            

            
              
              

            

          

          (c)        No
Conversion Notice with respect to any Securities may be tendered by a Holder
thereof if such Holder has also tendered a Fundamental Change Repurchase Notice
and not validly withdrawn such Fundamental Change Repurchase Notice in
accordance with the applicable provisions of Article 4.

           

          (d)        No
Conversion Notice with respect to any Security may be tendered by a Holder
thereof if the Company has previously delivered a Redemption Notice in respect
of such Security under Section 6.01.

           

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

           

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

           

          (g)        If
a Holder submits a Security for conversion, the Company shall pay all stamp and
other duties, if any, which may be imposed by the United States or any political
subdivision thereof or taxing authority thereof or therein with respect to the
issuance of shares of Common Stock, if any, upon the conversion. However, the
Holder shall pay any such tax which is due because the Holder requests any
shares of Common Stock to be issued in a name other than the Holder’s name. The
Company may refuse to deliver the certificates representing the shares of Common
Stock being issued in a name other than the Holder’s name until the Company
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 regulations.

           

          (h)        Upon
the conversion of an interest in a Global Security, the Trustee, or the
Custodian at the direction of the Trustee, shall make a notation on such Global
Security as to the reduction in the principal amount represented thereby. The
Company shall notify the Trustee in writing of any conversion of Securities
effected through any Conversion Agent other than the Trustee.

           

          Section 5.05.  Settlement
of Conversion Obligation.

           

          (a)        Subject
to clause (d) of this
Section
5.05, upon conversion of any Securities in
accordance with this Article 5, the
Company shall deliver, with respect to each $1,000 principal amount of
Securities converted, on the third 

           

           

          
            
              
              

            

            
              42

              
                

              

            

            
              
              

            

          

           

          Business Day immediately following the last VWAP Trading
Day of the Observation Period for such Securities, the aggregate of the Daily
Settlement Amounts for each VWAP Trading Day of such Observation Period (the
“Conversion
Obligation”).

           

          (b)        The
“Daily Settlement
Amount” means, with respect to a Security:

           

          (i)          an
amount of cash (the “Principal
Portion”) equal to the lesser of (A) one-twentieth of $1,000 and (B) the
Daily Conversion Value on such VWAP Trading Day; and

           

          (ii)         if
such Daily Conversion Value exceeds one-twentieth of $1,000, a number of shares
of Common Stock (the “Daily Share
Amount”) equal to (A) the difference between such Daily Conversion Value
and one-twentieth of $1,000, divided by (B)
the Daily VWAP of the Common Stock for such VWAP Trading Day, subject to the
Company’s right to pay cash in lieu of all or a portion of the Daily Share
Amount in accordance with Section 5.05(c).

           

          The
Daily Settlement Amounts for a Security shall be determined by the Company
promptly following the last VWAP Trading Day of the Observation Period for such
Security.

           

          (c)        The
Company may elect, subject to the requirements set forth in this clause
(c), to deliver cash in lieu of all or a portion of the Daily
Share Amount.  By the close of business on the VWAP Trading Day prior
to the first Scheduled Trading Day of the applicable Observation Period, the
Company may specify a percentage of each Daily Share Amount that will be settled
in cash (the “Cash
Percentage”) and shall notify the Holder of such Cash Percentage through
written notice to the Trustee (the “Cash Percentage
Notice”).  With respect to any Securities converted on or after
February 15, 2013 or any converted Securities called for redemption, any Cash
Percentage the Company specifies shall apply to all such
conversions.  If the Company elects to specify a Cash
Percentage:

           

          (i)          the
amount of cash that the Company will deliver in lieu of all or an applicable
portion of the Daily Share Amount in respect of each VWAP Trading Day in the
applicable Observation Period will equal the (A) the Cash Percentage, multiplied by
(B) the Daily Share Amount for such Trading Day (assuming for this
purpose the Company has not specified a Cash Percentage), multiplied by
(C) the Daily VWAP for such VWAP Trading Day; and

           

          (ii)         the
number of shares of Common Stock deliverable in respect of each VWAP Trading Day
in the applicable Observation Period (in lieu of the full Daily Share Amount for
such Trading Day) will be a 

           

           

          
            
              
              

            

            
              43

              
                

              

            

            
              
              

            

          

           

          percentage
of the Daily Share Amount (assuming the Company has not specified a Cash
Percentage) equal to 100% minus the Cash
Percentage.

           

          The
Company may, at its option, revoke any Cash Percentage Notice through written
notice to the Trustee by 5:00 p.m., New York City time, on the VWAP Trading Day
prior to the first Scheduled Trading Day of the applicable Observation
Period.  If the Company does not specify a Cash Percentage, the
Company shall settle 100% of the Daily Share Amount for each VWAP Trading Day in
the applicable Observation Period in shares of Common Stock.

           

          (d)        Notwithstanding
clauses (a) and
(c) above, if, following a Make-Whole Fundamental Change,
Securities are surrendered for conversion following the related Effective Date
and the Reference Property into which the Securities are convertible consists
solely of cash as set forth in Section 5.12, then
the Company shall satisfy the related Conversion Obligations by delivering, on
the third Business Day following the Conversion Date, cash in an amount equal to
the Stock Price multiplied by
the Conversion Rate then in effect.

           

          (e)        Any
cash amounts due upon conversion by a Holder of Securities surrendered for
conversion shall be paid by the Company to such Holder, or such Holder’s nominee
or nominees.  In addition, the Company shall issue, or shall cause to
be issued, any shares of Common Stock due upon conversion to such Holder, or
such Holder’s nominee or nominees, certificates or a book-entry transfer through
the Depositary (together with any cash in lieu of fractional
shares).

           

          (f)        Upon
conversion, a Holder shall not receive any separate cash payment for accrued and
unpaid interest except as set forth in this clause (f). The Company’s settlement of the Conversion Obligation as
described above shall be deemed to satisfy its obligation to pay the principal
amount of the Security and accrued and unpaid interest to, but not including,
the Conversion Date. As a result, accrued and unpaid interest to, but not
including, the Conversion Date shall be deemed to be paid in full rather than
cancelled, extinguished or forfeited. Notwithstanding the preceding sentence, if
Securities are converted after 5:00 p.m., New York City time, on a Record Date
for the payment of interest, Holders of such Securities as of 5:00 p.m., New
York City time, on the Record Date shall receive the interest payable on such
Securities on the corresponding Interest Payment Date notwithstanding the
conversion. Securities surrendered for conversion during the period from 5:00
p.m., New York City time, on any Record Date to 9:00 a.m., New York City time,
on the corresponding Interest Payment Date must be accompanied by payment of an
amount equal to the interest payable on the Securities so converted; provided that
no such payment need be made with respect to any Security:

           

          
            
              
              

            

            
              44

              
                

              

            

            
              
              

            

          

           

          (i)          if
the Company has specified a Fundamental Change Repurchase Date that is after a
Record Date and on or prior to the corresponding Interest Payment
Date;

           

          (ii)         if
the Company has called such Security for redemption and specified a Redemption
Date for such Security that is after a Record Date and on or prior to the
corresponding Interest Payment Date;

           

          (iii)        to
the extent of any overdue interest on such Security which remains unpaid at the
time of conversion with respect to such Security; or

           

          (iv)        if
the Conversion Date for such Security occurs after the close of business on the
Record Date immediately preceding the Stated Maturity Date.

           

          Except
as described above, no payment or adjustment shall be made for accrued interest
on converted Securities.

           

          (g)        Any
Security converted pursuant to this Article 5 shall
be deemed to have been converted and shall cease to be outstanding immediately
prior to the close of business on the Conversion Date and, as of the close of
business on the last VWAP Trading Day of the related Observation Period, the
Holder of such Securities shall be deemed to be a holder of record of any shares
of the Common Stock issuable as a result of the conversion of such
Securities.  

           

          Section 5.06.  Fractions
of Shares.

           

          (a)        No
fractional shares of Common Stock shall be issued upon conversion of any
Security.

           

          (b)        If
more than one Security shall be surrendered for conversion at one time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered.

           

          (c)        Instead
of any fractional share of Common Stock that would otherwise be issuable upon
conversion of any Securities (or specified portions thereof), the Company shall
calculate and pay a cash adjustment in respect of such fraction (calculated to
the nearest 1/100th of a share) in an amount equal to the same fraction of the
Daily VWAP of the Common Stock on the last VWAP Trading Day of the relevant
Observation Period.

           

          Section 5.07.  Adjustment
of Conversion Rate.

           

          
            
              
              

            

            
              45

              
                

              

            

            
              
              

            

          

           

          (a)        The
Conversion Rate shall be adjusted from time to time by the Company as set forth
in this  Section 5.07; provided that
the Company shall not make any adjustments to the Conversion Rate if Holders of
the Securities participate (as a result of holding the Securities, and at the
same time as holders of the Common Stock participate) in any of the transactions
described below as if such Holders held a number of shares of Common Stock equal
to the Conversion Rate, multiplied by
the principal amount (expressed in thousands) of Securities held by such
Holders, without having to convert their Securities.

           

          (b)                   In
case the Company shall issue shares of Common Stock as a dividend or
distribution on shares of Common Stock, or shall effect a share split or share
combination, the Conversion Rate shall be adjusted based on the following
formula:

           

          

           

          where,

           

          
            	
                     
      

                  	
                    CR1
      =

                  	
                    the
      Conversion Rate in effect immediately after the open of business on the
      Ex-Date for such dividend or distribution or the effective date of such
      share split or combination, as the case may
be;

                  

          

           

          
            	
                     
      

                  	
                    CR0
      =

                  	
                    the
      Conversion Rate in effect immediately prior to the open of business on the
      Ex-Date for such dividend or distribution or the effective date of such
      share split or combination, as the case may
be;

                  

          

           

          
            	
                     
      

                  	
                    OS1
      =

                  	
                    the
      number of shares of Common Stock outstanding immediately prior to the open
      of business on the Ex-Date for such dividend or distribution or the
      effective date of such share split or combination, in each case, after
      giving effect to such dividend, distribution or share split or
      combination, as the case may be;
and

                  

          

           

          
            	
                     
      

                  	
                    OS0
      =

                  	
                    the
      number of shares of Common Stock outstanding immediately prior to the open
      of business on the Ex-Date for such dividend or distribution or the
      effective date of such share split or combination, as the case may
      be.

                  

          

           

          Such adjustment shall become effective immediately after
the open of business on the Ex-Date for such dividend or distribution, or the
effective date for such share split or share combination. If any dividend or
distribution of the type described in this Section 5.07(b) is declared but not so paid or made, or the

           

          
            
              
              

            

            
              46

              
                

              

            

            
              
              

            

          

           

           

          outstanding shares of Common Stock are not split or
combined, as the case may be, the Conversion Rate shall be immediately
readjusted, effective as of the date the Company determines not to pay such
dividend or distribution, or split or combine the outstanding shares of Common
Stock, as the case may be, to the Conversion Rate that would then be in effect
if such dividend, distribution, share split or share combination had not been
declared.

           

          (c)        In
case the Company shall distribute to all or substantially all holders of its
outstanding shares of Common Stock any rights or warrants entitling them for a
period of not more than 60 days from the issuance date for such distribution to
subscribe for or purchase shares of Common Stock at a price per share less than
the Last Reported Sale Price of the Common Stock on the Trading Day immediately
preceding the declaration date of such distribution, the Conversion Rate shall
be increased based on the following formula:

           

          

           

          where,

           

          
            	
                     
      

                  	
                    CR1
      =

                  	
                    the
      Conversion Rate in effect immediately after the open of business on the
      Ex-Date for such distribution;

                     

                  

          

          
            	
                     
      

                  	
                    CR0
      =

                  	
                    the
      Conversion Rate in effect immediately prior to the open of business on the
      Ex-Date for such distribution;

                     

                  

          

          
            	
                     
      

                  	
                    OS0
      =

                  	
                    the
      number of shares of Common Stock outstanding immediately prior to the open
      of business on the Ex-Date for such distribution;

                     

                  

          

          
            	
                     
      

                  	
                    X
      =

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

                  

          

           

          
            	
                     
      

                  	
                    Y
      =

                  	
                    the
      number of shares of Common Stock equal to the aggregate price payable to
      exercise such rights or warrants, divided
      by the average of the Last Reported Sale Prices of the Common Stock
      over the 10 consecutive Trading Day period ending on the Trading Day
      immediately preceding the Ex-Date for such
  distribution.

                  

          

           

          Such
adjustment shall be successively made whenever any such rights or warrants are
distributed and shall become effective immediately after the open of business on
the Ex-Date for such distribution. To the extent such rights or warrants are not
exercised prior to their expiration or shares of the Common Stock are not
delivered after the expiration of such rights or warrants, the Conversion

           

           

          
            
              
              

            

            
              47

              
                

              

            

            
              
              

            

          

           

          Rate
shall be readjusted to the Conversion Rate that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect
if such Ex-Date for such distribution had not been fixed.

           

          In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Last Reported Sale Price,
and in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company for
such rights or warrants and any amount payable on exercise or conversion
thereof, the value of such consideration, if other than cash, to be determined
by the Board of Directors.

           

          (d)        In
case the Company shall, by dividend or otherwise, distribute to all or
substantially all holders of its Common Stock shares of any class of Capital
Stock of the Company, evidences of its indebtedness or other assets or property
of the Company, excluding:

           

          (i)          dividends
or distributions as to which an adjustment was effected pursuant to Section 5.07(b) or Section 5.07(c);

           

          (ii)         dividends
or distributions paid exclusively in cash; and

           

          (iii)        distributions
described below in this clause (d) with respect
to Spin-Offs),

           

          (any of such shares of Capital Stock, indebtedness, or
other asset or property hereinafter in this clause (d) called the “Distributed
Property”), then, in each such case the Conversion Rate shall be
increased based on the following formula:

           

          

           

          where,

           

          
            	
                     
      

                  	
                    CR1
      =

                  	
                    the
      Conversion Rate in effect immediately after the open of business on the
      Ex-Date for such distribution;

                     

                  

          

          
            	
                     
      

                  	
                    CR0
      =

                  	
                    the
      Conversion Rate in effect immediately prior to the open of business on the
      Ex-Date for such distribution;

                     

                  

          

          
            	
                     
      

                  	
                    SP0
      =

                  	
                    the
      average of the Last Reported Sale Prices of the Common Stock over the 10
      consecutive Trading Day period ending on

                  

          

           

          
            
              
              

            

            
              48

              
                

              

            

            
              
              

            

          

           

          
            	 	 	the
      Trading Day immediately preceding the Ex-Date for such distribution;
      and
	 	 	 
	
                     
      

                  	
                    FMV
      =

                  	
                    the
      fair market value as determined by the Board of Directors of the
      Distributed Property distributed with respect to each outstanding share of
      Common Stock as of the open of business on the Ex-Date for such
      distribution.

                  

          

           

          Such adjustment shall become effective immediately after
the open of business on the Ex-Date for such distribution.  If “FMV”
as set forth above is equal to or greater than “SP0”
as set forth above, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder of Securities has the right to receive, for
each $1,000 principal amount of Securities, the amount of Distributed Property
such Holder would have received had such Holder owned a number of shares of
Common Stock equal to the Conversion Rate on the record date for such
distribution, without being required to convert the Securities; provided that
the Company may, at its option, elect to pay an amount of cash in lieu of
delivering such Distributed Property equal to the fair market value (as
determined by the Board of Directors) of such Distributed
Property.  If such distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared. If the Board of
Directors determines “FMV” for purposes of this Section 5.07(d) by reference to the actual or when issued trading
market for any securities, it must in doing so consider the prices in such
market over the same period used in computing the Last Reported Sale Prices of
the Common Stock over the ten consecutive Trading Day period ending on the
Trading Day immediately preceding the Ex-Date for such
distribution.

           

          With respect to an adjustment pursuant to this clause
(d) where there has been a payment of a dividend or other
distribution on the Common Stock or shares of Capital Stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other
business unit of the Company that are listed on a national or regional
securities exchange (a “Spin-Off”), the
Conversion Rate shall be increased based on the following
formula:

           

          

           

          where,

           

          
            	
                     
      

                  	
                    CR1
      =

                  	
                    the
      Conversion Rate in effect immediately after the open of business on the
      Ex-Date for the Spin-Off;

                     

                  

          

          
            	
                     
      

                  	
                    CR0
      =

                  	
                    the
      Conversion Rate in effect immediately prior to the open of business on the
      Ex-Date for the Spin-Off;

                     

                  

          

           

          
            
              
              

            

            
              49

              
                

              

            

            
              
              

            

             

          

          
            	
                     
      

                  	
                    FMV
      =

                  	
                    the
      average of the Last Reported Sale Prices of the Capital Stock or similar
      equity interest distributed to holders of the Common Stock applicable to
      one share of Common Stock over the first 10 consecutive Trading Day period
      immediately following, and including, the third Trading Day after the
      Ex-Date for the Spin-Off (such period, the “Valuation
      Period”); and

                  

          

           

          
            	
                     
      

                  	
                    MP0
      =

                  	
                    the
      average of the Last Reported Sale Prices of the Common Stock over the
      Valuation Period.

                     

                  

          

           

          Such adjustment to the Conversion Rate under the foregoing
provisions of this clause (d) shall be
made immediately after the open of business on the day after the last Trading
Day of the Valuation Period, but shall be given effect as of the open of
business on the Ex-Date for the Spin-Off. To the extent that the final day of
the Observation Period for any converted Securities occurs during the Valuation
Period, the Company shall satisfy the Conversion Obligation with respect to such
Securities on the third Business Day immediately following the last day of the
Valuation Period.

           

          Rights or warrants distributed by the Company to all
holders of Common Stock, entitling the holders thereof to subscribe for or
purchase shares of the Company’s Capital Stock, including Common Stock (either
initially or under certain circumstances), which rights or warrants, until the
occurrence of a specified event or events (a “Trigger Event”)
(1) are deemed to be transferred with such shares of Common Stock, (2) are not
exercisable, and (3) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this
Section
5.07 (and no adjustment to the
Conversion Rate under this Section shall be required) until the occurrence of
the earliest Trigger Event, whereupon such rights and warrants shall be deemed
to have been distributed and an appropriate adjustment (if any is required) to
the Conversion Rate shall be made under this clause (d).  If any such rights or warrants are subject to
events, upon the occurrence of which such rights or warrants become exercisable
to purchase different securities, evidences of indebtedness or other assets (a
“Substitution
Event”), then each such Substitution Event shall be deemed to be a
distribution of new rights or warrants and the date of each such Substitution
Event shall be deemed to be the Ex-Date of such deemed distribution (in which
case the original rights or warrants shall be deemed to terminate and expire on
such date without exercise by any of the holders and the Conversion Rate shall
be readjusted as if such original rights or warrants had not been
issued).  In addition, in the event of any distribution or deemed
distribution of rights or warrants, or any Trigger Event with respect thereto
that was counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Rate under this Section 5.07 was made, (A) in the case of any such rights or
warrants that shall all have been redeemed or

           

           

          
            
              
              

            

            
              50

              
                

              

            

            
              
              

            

          

        

      

    

    
      repurchased
for cash without exercise by any holders thereof, upon such final redemption or
repurchase (x) the Conversion Rate shall be readjusted as if such rights or
warrants had not been issued and (y) the Conversion Rate shall then be again
readjusted to give effect to such distribution, deemed distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to the
per share redemption or repurchase price received by a holder or holders of
Common Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of the
date of such redemption or repurchase, and (B) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.

      

      For the
purposes of this clause (d) and clauses (b) and (c) of this Section 5.07, any
dividend or distribution to which this clause (d) applies which also includes
one or both of:

       

      (A)   
a dividend or distribution of shares of Common Stock to which clause (b) would,
but for clause (i) above, apply (the “Clause
B Distribution”); 

       

      (B)   
a dividend or distribution of rights or warrants to which clause (c) would, but
for clause (i) above, apply (the “Clause
C Distribution”),

      

      then (1)
such dividend or distribution, other than the Clause B Distribution and the
Clause C Distribution, shall be deemed to be a dividend or distribution to which
this clause (d) applies (the “Clause
D Distribution”) and any Conversion Rate adjustment required by this
clause (d) with respect thereto shall then be made, and (2) the Clause B
Distribution and Clause C Distribution shall be deemed to immediately follow the
Clause D Distribution and any Conversion Rate adjustment required by clauses (b)
and (c) with respect thereto shall then be made, except, if determined by the
Company, (I) the “Ex-Date” of the Clause B Distribution and the Clause C
Distribution shall be deemed to be the Ex-Date of the Clause D Distribution and
(II) any shares of Common Stock included in the Clause B Distribution or Clause
C Distribution shall be deemed not to be “outstanding immediately prior to the
open of business on the Ex-Date for such dividend or distribution or the
effective date of such share split or combination, as the case may be” within
the meaning of clause (b) or “outstanding immediately prior to the open of
business on the Ex-Date for such distribution” within the meaning of clause
(c).

      

      (e)   
In case the Company shall pay cash dividends or make cash distributions to all
or substantially all holders of the Common Stock, the Conversion Rate shall be
increased based on the following formula:

      

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

         

      

      
        	 	
                 CR1= CR0 x  
      

              	
                SP0
      

              	 
	 	
                SP0 –
      C

              	 

      

      

      where,

       

      
        	 	
                CR1

              	
                 =

              	
                the
      Conversion Rate in effect immediately after the open of business
      on the Ex-Date for such distribution;

              
	 	 
      	 
      	
                 

              
	 	
                CR0

              	
                 =

              	
                the
      Conversion Rate in effect immediately prior to the open of business
      on the Ex-Date for such distribution;

              
	 	 
      	 
      	
                 

              
	 	
                SP0

              	
                 =

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

              
	 	 
      	 
      	
                 

              
	 	
                C
      =

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

              

      

      

      Such
adjustment shall become effective immediately after the open of business on the
Ex-Date for such dividend or distribution. If the portion of the cash so
distributed applicable to one share of the Common Stock is equal to or greater
than “SP0”
as set forth above, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder of Securities shall receive on the date on
which such cash dividend is distributed to holders of Common Stock, for each
$1,000 principal amount of Securities, the amount of cash such holder would have
received had such Holder owned a number of shares equal to the Conversion Rate
on the Ex-Date for such distribution, without being required to convert the
Securities. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.

      

      (f)   
In case the Company or any of its Subsidiaries makes a payment in respect of a
tender offer or exchange offer for all or any portion of the Common Stock, to
the extent that the cash and value of any other consideration included in the
payment per share of Common Stock exceeds the Last Reported Sale Price of the
Common Stock on the Trading Day next succeeding the last date on which tenders
or exchanges may be made pursuant to such tender or exchange offer (as it may be
amended), the Conversion Rate shall be increased based on the following
formula:

       

      
        
          	 	
                  CR1 = CR0 x  
      

                	
                  AC+
      (SP1 x
      OS1)

                	 
	 	
                   
      OS0 x SP1

                	 

        

      

       

      where,

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

      

      
        	 	
                CR1
      =

              	
                the
      Conversion Rate in effect immediately after the open of business
      on the Trading Day next succeeding the date such tender
      or exchange offer expires; 

              
	 	 
      	
                 

              
	 	
                CR0
      =

              	
                the
      Conversion Rate in effect immediately prior to the open of business
      on the Trading Day next succeeding the date such tender
      or exchange offer expires;

              
	 	 
      	
                 

              
	 	
                AC
      =

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

                

              
	 	 
      	
                 

              
	 	
                SP1
      =

              	
                
                  the
      average of the Last Reported Sale Prices of the Common Stock over the 10
      consecutive Trading Day period commencing on, and including, the Trading
      Day next succeeding the date such tender or exchange offer expires
      (the“Averaging
      Period”);

                

              
	 	 
      	
                 

              
	 	
                OS1
      =

              	
                
                  the
      number of shares of Common Stock outstanding immediately after the close
      of business on the date such tender or exchange offer expires (after
      giving effect to such tender offer or exchange offer);
      and

                

              
	 	 
      	
                 

              
	 	
                OS0
      =

              	
                
                  the
      number of shares of Common Stock outstanding immediately prior to the date
      such tender or exchange offer expires (prior to giving effect to such
      tender offer or exchange
offer).

                

              

      

      

      Such
adjustment shall be made immediately prior to the open of business on the day
following the last day of the Averaging Period, but shall be given effect as of
the open of business on the Trading Day next succeeding the date such tender or
exchange offer expires. To the extent that the final day of the Observation
Period for any converted Securities occurs during the Averaging Period, the
Company shall satisfy the Conversion Obligation with respect to such Securities
on the third Business Day immediately following the last day of the Averaging
Period.

      

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

      

      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      

      

      (g)   
For purposes of this Section 5.07 the term “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
shareholders 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). 

      

      (h)   
For the avoidance of doubt, for purposes of clauses (b), (c), (d), (e) and (f)
of this Section 5.07 in the event of any reclassification of the Common Stock,
as a result of which the Securities become convertible into more than one class
of Common Stock, if an adjustment to the Conversion Rate is required pursuant to
any of clauses (b), (c), (d), (e) and (f), references in those clauses to one
share of Common Stock or Last Reported Sale Price of one share of Common Stock
shall be deemed to refer to a unit or to the price of a unit consisting of the
number of shares of each class of Common Stock into which the Securities are
then convertible equal to the numbers of shares of such class issued in respect
of one share of Common Stock in such reclassification. The above provisions of
this paragraph shall similarly apply to successive
reclassifications.

      

      (i)   
In addition to those required by clauses (b), (c), (d), (e) and (f) of this
Section 5.07, and to the extent permitted by applicable law and the rules of The
New York Stock Exchange or any other securities exchange or market on which the
Common Stock is then listed, the Company from time to time may, in its sole
discretion, increase the Conversion Rate by any amount for a period of at least
20 Business Days if the Board of Directors determines that such increase would
be in the Company’s best interest. Whenever the Conversion Rate is increased
pursuant to the preceding sentence, the Company shall mail to the Holder of each
Security at his last address appearing on the Register provided for in Section
1.07 a notice of the increase at least 20 Business Days prior to the date the
increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect. In
addition, the Company may also (but is not required to) increase the Conversion
Rate to avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock in connection with any dividend or distribution of shares
(or rights to acquire shares) or similar event.

      

      (j)  
 Without limiting the foregoing, no adjustment to the Conversion Rate need
be made

      

      (i)   
upon the issuance of shares of Common Stock to stockholders of Magnum Coal
Company pursuant to the Merger Agreement as such Merger Agreement is in effect
on the Issue Date;

      

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

       

      

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

      

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

      

      (iv)  
 upon the issuance of any shares of Common Stock pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security not
described in clause (iii) above and outstanding as of the date of this
Indenture;

      

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

      

      (vi)  
 for accrued and unpaid interest (including any Additional
Interest).

      

      (k)   
The Company shall not make any adjustment to the Conversion Rate under clauses
(b), (c), (d), (e) and (f) of this Section 5.07 unless the adjustments would
result in a change of at least 1% in the Conversion Rate. However, the Company
will carry forward any adjustment that it would otherwise have to make and take
that adjustment into account in any subsequent adjustment. In addition,
regardless of whether the aggregate adjustment is less than 1%, the Company will
make such carried-forward adjustments not otherwise effected with respect to any
Security (i) upon conversion of a Security, (ii) within one year of the first
date upon which an adjustment would otherwise have been made, and (iii)
otherwise, on February 15, 2013, except to the extent such adjustment has
already been made.

      

      (l)   
All calculations and other determinations under this Article 5 shall be made by
the Company and shall be made to the nearest cent or to the nearest
1/10,000th of a
share, as the case may be. 

      

      (m)   
If, in respect of any VWAP Trading Day within the Observation Period for a
converted Security:

      

      (i)   
shares of Common Stock are deliverable to settle the Daily Share Amount for such
VWAP Trading Day;

      

      (ii)  
 any event has occurred that requires an adjustment to the Conversion Rate
under any of clauses (b), (c), (d), (e) and (f) of this  

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

      

      Section
5.07, but such adjustment has not been made to the Conversion Rate as of such
VWAP Trading Day; and

      

      (iii)  
 the shares of Common Stock the Holder of such Security shall receive in
respect of such VWAP Trading Day are not entitled to participate in the
distribution or transaction giving rise to such adjustment event because,
pursuant to the terms of Section 5.05(g), such shares were not held by such
Holder on the record date corresponding to such distribution or
transaction,

      

      then the
Company will adjust the daily share amount for such VWAP trading day to reflect
such adjustment event.

      

      (n)   
For purposes of this Section 5.07, 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.

      

      Section 5.08. Notice of Adjustments of
Conversion Rate.

      

      (a)  
 Whenever the Conversion Rate is adjusted as herein provided:

      

      (i)   
the Company shall compute the adjusted Conversion Rate in accordance with
Section 5.07 and shall prepare a certificate signed by an Officer setting forth
the adjusted Conversion Rate and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall promptly be filed
with the Trustee and with each Conversion Agent (if other than the Trustee);
and

      

      (ii)   
as soon as reasonably practicable after each such adjustment, the Company shall
provide a notice to all Holders stating that the Conversion Rate has been
adjusted and setting forth the adjusted Conversion Rate.

      

      (b)  
 Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.

      

      Section 5.09. Company To Reserve Common
Stock.

      

      The
Company shall at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock, for the purpose of
effecting the conversion of Securities, the full number of shares of Common
Stock then issuable upon the conversion of all Outstanding
Securities.

      

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

         

      

      Section 5.10. Certain
Covenants.

      

      Before
taking any action which would cause an adjustment reducing the Conversion Rate
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Securities, the Company shall take all corporate action which
it reasonably determines may be necessary in order that the Company may validly
and legally issue shares of such Common Stock at such adjusted Conversion
Rate.

      

      Section 5.11. Cancellation of Converted
Securities.

      

      All
Securities delivered for conversion shall be delivered to the Trustee or its
agent and canceled by the Trustee as provided in Section 2.15.

      

      Section 5.12. Effect of Reclassification,
Consolidation, Merger or Sale.

      

      (a)   
If there shall be:

      

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

      

      (ii)   
a consolidation, binding share exchange, recapitalization, reclassification,
merger, combination or other similar event; or

      

      (iii)  
 any sale or conveyance to another Person of all or substantially all of
the property and assets of the Company (excluding a pledge of securities issued
by any of the Company’s subsidiaries),

      

      in any
case as a result of which holders of Common Stock shall be entitled to receive
cash, securities or other property or assets with respect to or in exchange for
such Common Stock (any such event described in clauses (i) through (iii), a
“Reorganization
Event”), then at the effective time of such Reorganization Event, the
right to convert each $1,000 principal amount of Securities shall be changed to
a right to convert such Securities by reference to the kind and amount of cash,
securities or other property or assets that a holder of a number of shares of
Common Stock equal to the Conversion Rate immediately prior to such transaction
would have owned or been entitled to receive (the “Reference
Property”).

      

      (b)   
From and after the effective time of a Reorganization Event, upon conversion of
a Security:

      

      (i)   
the portion of the Daily Settlement Amount payable in cash shall continue to be
payable in cash; and

      

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

      

      (ii)  
 the portion, if any, of each Daily Settlement Amount payable in shares of
Common Stock shall be payable in units of Reference Property based upon the
Daily Conversion Value of such Reference Property.

      

      The Daily
Conversion Value shall be calculated based on the value of a unit of Reference
Property corresponding to the amount of Reference Property that a holder of one
share of the Common Stock would have received in the Reorganization Event. The
Daily VWAP and the Last Reported Sale Price shall be calculated with respect to
a unit of Reference Property corresponding to the amount of Reference Property
that a holder of one share of the Common Stock would have received in the
Reorganization Event.

      

      (c)  
 For purposes of determining the constitution of Reference Property, the
type and amount of consideration that a holder of Common Stock would have been
entitled to in the case of reclassifications, consolidations, mergers, sales or
conveyance of assets or other transactions that cause the Common Stock to be
converted into the right to receive more than a single type of consideration
(determined based in part upon any form of stockholder election) shall be deemed
to be the (i) weighted average of the types and amounts of consideration
received by the holders of Common Stock that affirmatively make such an election
or (ii) if no holders of Common Stock affirmatively make such election, the
types and amounts of consideration actually received by such
holders.

      

      (d)   
The Company or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture permitted under Section 12.01
providing for the conversion and settlement of the Securities as set forth in
this Indenture. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 5 and the Trustee may conclusively rely on the determination
by the Company of the equivalency of such adjustments.

      

      (e)   
In the event a supplemental indenture is executed pursuant to this Section 5.12,
the Company shall promptly file with the Trustee an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of cash, securities or
property or assets that will constitute the Reference Property after any such
Reorganization Event, any adjustment to be made with respect thereto and that
all conditions precedent have been complied with, and shall promptly mail notice
thereof to all Holders. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.

      

      (f)   
The Company shall not become a party to any such transaction unless its terms
are consistent with this Section 5.12. None of the foregoing provisions shall
affect the right of a holder of Securities to convert its Securities
in

      

      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

      

       

      accordance
with the provisions of this Article 5 prior to the effective date of a
Reorganization Event.

      

      (g)   
The provisions of this Section 5.12 shall similarly apply to successive
Reorganization Events.

      

      Section 5.13. Responsibility of Trustee for
Conversion Provisions.

      

      (a)   
The Trustee, subject to the provisions of Article 9, and any Conversion Agent,
shall not at any time be under any duty or responsibility to any Holder of
Securities or to the Company to determine whether any facts exist which may
require any adjustment of the Conversion Rate, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed,
herein or in any supplemental indenture provided to be employed, in making the
same, or whether a supplemental indenture need be entered into.

      

      (b)   
Neither the Trustee, subject to the provisions of Article 9, nor any Conversion
Agent shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Securities, and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Article 9, nor any Conversion
Agent shall be responsible for any failure of the Company to make or calculate
any cash payment or to issue, transfer or deliver any shares of Common Stock or
share certificates or other securities or property or cash upon the surrender of
any Security for the purpose of conversion; and the Trustee, subject to the
provisions of Article 9, and any Conversion Agent shall not be responsible for
any failure of the Company to comply with any of the covenants of the Company
contained in this Article 5.

      

      Section
5.14.
Stockholder Rights Plan. To the extent shares of Common Stock traded on
the Relevant Exchange trade with rights, if any, as may be provided by the terms
of any stockholder rights plan adopted by the Company, as the same may be
amended from time to time, each share of Common Stock issued upon conversion of
Securities pursuant to this Article 5 shall be entitled to receive the
appropriate number of such rights and the certificates representing the Common
Stock issued upon such conversion shall bear such legends, if any, in each case
as may be provided by the terms of any such stockholder rights plan adopted by
the Company, as the same may be amended from time to time. If prior to any
conversion, however, such rights have separated from the shares of Common Stock
in accordance with the provisions of the applicable stockholder rights
agreement, the Conversion Rate shall be adjusted at the time of separation as if
the Company distributed to all holders of the Common Stock, shares of the
Company’s Capital Stock, evidences of indebtedness, assets, property, rights
or

      

      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

         

      

      warrants
as described in Section 5.07(d), subject to readjustment in the event of the
expiration, termination or redemption of such rights.

      

      Section
5.15.
Company Determination Final. Any determination that the Company or the
Board of Directors must make pursuant to this Article 5 shall be conclusive if
made in good faith, absent manifest error.

      

      Section 5.16. Exchange in Lieu of
Conversion.

      

      (a)   
Notwithstanding anything herein to the contrary, when a Holder surrenders
Securities for conversion, the Company may direct the Conversion Agent to
surrender, prior to the commencement of the applicable Observation Period, such
Securities to a financial institution designated by the Company for exchange in
lieu of conversion.

      

      (b)   
In order to accept any Securities surrendered for conversion, the designated
institution must agree to deliver to the Conversion Agent for delivery to such
Holder, in exchange for such Securities to be delivered to such designated
institution by the Conversion Agent, all cash or a combination of cash and
shares of Common Stock equal to the consideration otherwise due upon conversion,
as provided under this Article 5 (assuming for this purpose and for the purpose
of determining the related Observation Period that the date such Holder
surrenders such Securities for conversion is the Conversion Date for such
Securities) at the sole option of the designated institution and as is
designated to the Conversion Agent by the Company.

      

      (c)   
By the close of business on the Trading Day immediately preceding the start of
the Observation Period, the Company will notify the Holder surrendering
Securities for conversion that it has directed the designated financial
institution to make an exchange in lieu of conversion and such designated
institution will be required to notify the Conversion Agent, who will then
notify the Holder, whether it will deliver, upon exchange, all cash or a
combination of cash and shares of Common Stock (by specifying a Cash Percentage
as provided under this Article 5).

      

      (d)   
If the designated institution accepts any such Securities, it will deliver cash
and, if applicable, the appropriate number of shares of Common Stock to the
Conversion Agent on the date such cash and shares of Common Stock, if any, would
otherwise be due as set forth in this Article 5 and the Conversion Agent will
promptly deliver the cash and those shares to Holders. Any Securities exchanged
by the designated institution will remain outstanding. If the designated
institution agrees to accept any Securities for exchange but does not timely
deliver the cash consideration, or if such designated financial institution does
not accept the Securities for exchange, the Company shall, no later than the
third Business Day immediately following the last day of the
related

      

      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

         

        Observation
Period, convert the Securities into cash and shares of Common Stock, if any, in
accordance with this Article 5 (based on such assumed Conversion Date as
described above and the specified Cash Percentage as described
above).

      

      

      (e)   
The Company’s designation of an institution to which the Securities may be
submitted for exchange does not require the institution to accept any
Securities.

      

      ARTICLE
6

      REDEMPTION OF THE SECURITIES

      

      Section 6.01. Redemption Upon Termination Of
Merger Agreement.

      

      (a)   
The Securities shall be redeemable at the Company’s option in accordance with
this Article 6, in whole or in part, at any time on or before December 31, 2008
if the Merger Agreement has been terminated.

      

      (b)   
The Company may elect to redeem any Securities pursuant to this Section 6.01 by
providing notice to each Holder of such Securities in accordance with Section
6.05 not less than 10 days nor more than 30 days prior to the Redemption Date
for such Securities.

      

      Section 6.02. Other Redemption
Rights.

      

      (a)   
The Securities shall be redeemable at the Company’s option in accordance with
this Article 6:

      

      (i)   
in whole or in part, at any time on or after May 31, 2011, if the Last Reported
Sale Price of the Common Stock for 20 or more Trading Days in a period of 30
consecutive Trading Days ending on the Trading Day prior to the date the Company
provides a Redemption Notice in accordance with this Article 6 exceeds 130% of
the Conversion Price in effect on each such Trading Day; and

      

      (ii)   
in whole but not in part, at any time if less than $20,000,000 aggregate
principal amount of Securities are then Outstanding. 

      

      (b)   
The Company may elect to redeem any Securities pursuant to this Section 6.02 by
providing notice to each Holder of such Securities in accordance with Section
6.05 not less than 25 Scheduled Trading Days nor more than 60 days prior to the
Redemption Date for such Securities.

      

      Section 6.03. Redemption
Price.

      

      
        
          
          

        

        
          61

          
            

          

        

        
          
          

      

      (a)   
The “Redemption
Price” for any Securities redeemed shall be:

      

      (i)   
in the case of Securities redeemed pursuant to Section 6.01:

      

      (A)   
an amount in cash equal to 100% of the principal amount of the Securities being
redeemed, plus
any accrued and unpaid interest to the Redemption Date; and

      

      (B)   
an amount in shares of Common Stock, for each $1,000 principal amount of the
Securities being redeemed, equal to the lesser of:

      

      (1)   
a number of shares of Common Stock equal to (I) the sum of $20 plus
80% of the amount, if any, by which the Redemption Conversion Value exceeds the
Initial Conversion Value of such Securities, divided
by (II) the Average Redemption VWAP for such Securities; and

      

      (2)   
26.6221 shares of Common Stock, subject to adjustment in the same manner as the
Conversion Rate is adjusted under Section 5.07; and

      

      (ii)   
in the case of Securities redeemed pursuant to Section 6.02, an amount in cash
equal to 100% of the principal amount of the Securities being redeemed, plus
any accrued and unpaid interest to the Redemption Date.

      

      (b)   
If the Redemption Date for any Security falls after a Record Date for the
payment of interest and on or prior to the corresponding Interest Payment Date,
the Company shall pay the full amount of accrued and unpaid interest payable on
such Interest Payment Date to the holder of record at 5:00 p.m., New York City
time, on such Record Date and the cash portion of the Redemption Price shall not
include such accrued and unpaid interest.

      

      Section 6.04. Selection of Securities to be
Redeemed.

      

      (a)   
If less than all the Securities are to be redeemed, the particular Securities to
be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities not previously called for
redemption, by lot, on a pro rata basis or in accordance with such other method
as the Trustee shall deem fair and appropriate; provided
that the unredeemed portion of the principal amount of any Security shall be in
a denomination (which shall not be less than the minimum authorized
denomination) for such Security. 

      

      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

         

      

      (b)   
The Trustee shall promptly notify the Company in writing of the Securities
selected for partial redemption and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security that has been or is to be
redeemed.

      

      (c)   
If the Trustee selects a portion of a Holder’s Security for partial redemption
and such Holder converts a portion of the same Security, the converted portion
shall be deemed to be from the portion selected for redemption.

      

      Section 6.05. Redemption
Notice.

      

      (a)   
Notice of redemption (a “Redemption
Notice”) shall be given by first-class mail, postage prepaid, to each
Holder of Securities to be redeemed, at the address of such Holder as it appears
in the Securities Register.

      

      (b)   
The Redemption Notice for any Securities to be redeemed shall
state:

      

      (i)   
the Redemption Date;

      

      (ii)   
the Redemption Price or, if the Redemption Price cannot be calculated prior to
the time the Redemption Notice is required to be sent, a statement of how the
Redemption Price will be calculated;

      

      (iii)   
if less than all Outstanding Securities are to be redeemed, the identification
(and, in the case of partial redemption, the respective principal amounts) of
the particular Securities to be redeemed;

      

      (iv)   
that on the Redemption Date, the Redemption Price will become due and payable
upon each such Security or portion thereof, and that interest thereon, if any,
shall cease to accrue on and after said date; and

      

      (v)   
the place or places where such Securities are to be surrendered for payment of
the Redemption Price.

      

      (c)   
A Redemption Notice shall be given by the Company or, at the Company’s request,
by the Trustee in the name and at the expense of the Company; provided
that the Company shall have delivered to the Trustee, at least five
Business Days before the Redemption Notice is required to be mailed (or such
shorter period agreed to by the Trustee), an Officers’ Certificate requesting
that the Trustee give such notice and setting forth the complete form of such
notice and the information to be stated in such notice.

      

      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

         

      

      (d)   
A Redemption Notice shall not be irrevocable.

      

      (e)   
A Redemption Notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such Redemption Notice by
mail or any defect in the Redemption Notice to the Holder of any Security
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Security.

      

      Section 6.06. Payment of Securities Called for
Redemption.

      

      (a)   
If any Redemption Notice has been given in respect of any Securities in
accordance with Section 6.05, such Securities or portion of such Securities
shall become due and payable on the Redemption Date at the place or places
stated in the Redemption Notice and at the applicable Redemption Price. On
presentation and surrender of such Securities at the place or places stated in
the Redemption Notice, such Securities or the portions thereof specified in the
Redemption Notice shall be paid and redeemed by the Company at the applicable
Redemption Price.

      

      (b)   
On or prior to 11:00 a.m., New York City time, on the Redemption Date, the
Company shall deposit with the Paying Agent (or, if the Company is acting as its
own Paying Agent, set aside, segregate and hold in trust) an amount of money and
shares of Common Stock, if any, sufficient to pay the Redemption Price of all of
the Securities to be redeemed on such Redemption Date. Subject to receipt of
funds and Common Stock, if any, by the Paying Agent, payment for the Securities
to be redeemed shall be made promptly after the later of:

      

      (i)   
the Redemption Date for such Securities; and

      

      (ii)   
the time of presentation of such Security to the Trustee (or other Paying Agent
appointed by the Company) by the Holder thereof in the manner required by this
Section 6.06.

      

      The Paying
Agent shall, promptly after such payment and upon written demand by the Company,
return to the Company any funds in excess of the Redemption Price.

      

      (c)   
If the Paying Agent holds money and, if applicable, shares of Common Stock
sufficient to pay the Redemption Price for all the Securities or portions
thereof that are to be redeemed as of the Business Day immediately following the
Redemption Date, then on and after the Redemption Date (i) such Securities shall
cease to be outstanding, (ii) interest shall cease to accrue on such Securities,
and (iii) all other rights of the Holders of such Securities shall terminate
(other than the right to receive the Redemption Price in respect of
such

      

      
        
          
          

        

        
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      Securities),
in each case, whether or not such Securities have been presented for redemption
or the Securities have been delivered to the Paying Agent.

      

      (d)   
Any cash amounts due upon redemption in respect of Securities presented for
redemption shall be paid by the Company to such Holder, or such Holder’s nominee
or nominees. In addition, the Company shall issue, or shall cause to be issued,
any shares of Common Stock due upon redemption to such Holder, or such Holder’s
nominee or nominees, certificates or a book-entry transfer through the
Depositary (together with any cash in lieu of fractional shares).

      

      (e)   
A Holder of Securities redeemed pursuant to Section 6.01 shall be deemed to be a
holder of record of the shares of Common Stock, if any, issuable as a result of
the redemption of such Securities as of the date such Holder presents such
Securities for redemption or such Securities have been delivered to the Trustee
or Paying Agent.

      

      (f)   
Upon presentation of any Security redeemed in part only, the Company shall
execute and, upon receipt of an Officer’s Certificate, the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Security or Securities, of authorized denominations, in aggregate principal
amount equal to the unredeemed portion of the Security so presented and having
the same Issue Date, Stated Maturity and terms. If a Global Security is so
surrendered, such new Security (subject to Section 2.08) will also be a new
Global Security.

      

      Section 6.07. Fractions of
Shares.

      

      (a)   
No fractional shares of Common Stock shall be issued upon redemption of any
Security pursuant to Section 6.01.

      

      (b)   
If more than one Security of the same Holder shall be called for redemption
pursuant to Section 6.01 at one time, the number of full shares of Common Stock
which shall be issuable upon redemption thereof shall be computed on the basis
of the aggregate principal amount of the Securities (or specified portions
thereof) so called.

      

      (c)   
Instead of any fractional share of Common Stock that would otherwise be issuable
upon redemption of any Securities (or specified portions thereof), the Company
shall calculate and pay a cash adjustment in respect of such fraction
(calculated to the nearest 1/100th of a share) in an amount equal to the same
fraction of the Average Redemption VWAP for such Securities.

      

      Section 6.08. Restrictions On
Redemption.

      

      
        
          
          

        

        
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      The
Company may not redeem any Security on any date if the principal amount of the
Securities has been accelerated in accordance with the terms of this Indenture,
and such acceleration has not been rescinded on or prior to such
date.

      

      ARTICLE
7

      EVENTS OF DEFAULT; REMEDIES

      

      Section 7.01. Events of
Default.

      

      An “Event
of Default” means any one of the following events with respect to the
Securities (whatever the reason for such event or whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): 

      

      (a)   
default in any payment of interest on any Security when due and payable and the
default continues for a period of 30 days; or

      

      (b)   
default in the payment of principal of any Security when due and payable at the
Stated Maturity Date, upon redemption, upon required repurchase, upon
acceleration or otherwise; or

      

      (c)   
failure by the Company to comply with its obligation to convert the Securities
into cash and, if applicable, shares of Common Stock upon exercise of a Holder’s
conversion right and such failure continues for five days; or

      

      (d)   
failure by the Company to comply with its obligations under Article 8;
or

      

      (e)   
default in the performance, or breach of any covenant or agreement by the
Company under this Indenture (other than a covenant or agreement otherwise
described as a separate “Event of Default” hereunder) and continuance of such
default or breach by the Company for 60 days after written notice (a “Notice
of Default”) has been given, by registered or certified mail, to the
Company from the Trustee or to the Company and the Trustee from the Holders of
at least 25% principal amount of the Securities then Outstanding, which written
notice shall specify such default or breach and requiring it to be remedied and
stating that such notice is a “Notice of Default” under this Indenture;
or

      

      (f)   
failure by the Company to comply with its obligation to issue a Fundamental
Change Repurchase Right Notice in accordance with Section 4.01, or to comply
with its notice obligations under Section 5.01(e) or Section 5.03(b);
or

      

      
        
          
          

        

        
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      (g)   
failure by the Company or any of its Subsidiaries to make any payment by the end
of the applicable grace period, if any, after the maturity date or required
repurchase date of any indebtedness for borrowed money where the aggregate
principal amount to which such failure relates is more than $25 million, or
acceleration of any indebtedness for borrowed money due to a default with
respect to such indebtedness where the aggregate principal amount accelerated is
more than $25 million and such indebtedness is not discharged or such
acceleration is not cured, waived, rescinded or annulled, in either case, for a
period of 30 days after written notice to the Company by the Trustee or to the
Company and the Trustee by holders of at least 25% in aggregate principal amount
of the notes then outstanding; or

      

      (h)   
one or more judgments or orders for the payment of money are entered against the
Company or any of its Subsidiaries in an aggregate uninsured amount exceeding
$25 million that are not vacated, discharged, stayed or bonded pending appeal
within 60 days; or

      

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

      

      (i)   
commences a voluntary case; or

      

      (ii)   
consents to the entry of an order for relief against the Company or such
Significant Subsidiary in an involuntary case, as the case may be;
or

      

      (iii)   
consents to the appointment of a Bankruptcy Custodian of the Company or such
Significant Subsidiary, or of all or substantially all of the property of the
Company or such Significant Subsidiary, as the case may be; or

      

      (iv)   
makes a general assignment for the benefit of creditors of the Company or such
Significant Subsidiary, as the case may be; or

      

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

      

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

      

      (ii)   
appoints a Bankruptcy Custodian of the Company or a Significant Subsidiary of
the Company, or of all or substantially all of the property of the Company or a
Significant Subsidiary of the Company; or

       

      
        
          
          

        

        
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      (iii)   
orders the liquidation of the Company or a Significant Subsidiary of the Company
and the order or decree remains unstayed and in effect for 60 days.

      

      Section 7.02. Acceleration of Maturity;
Rescission and Annulment.

      

      (a)   
If an Event of Default (other than an Event of Default specified in Section
7.01(i) or Section 7.01(j)) occurs and is continuing, then in every such case
(except as provided in the immediately following paragraph) the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
may declare the principal of all such Securities to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders), and upon any such declaration such principal shall become
immediately due and payable.

      

      (b)   
If an Event of Default specified in Section 7.01(i) or Section 7.01(j) occurs,
the principal of, and accrued interest on, all of the Securities shall become
immediately due and payable without any declaration or other Act of the Holders
or any act on the part of the Trustee.

      

      (c)   
At any time following an Event of Default and after such a declaration of
acceleration has been made, the Holders of a majority in aggregate principal
amount of the Outstanding Securities, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences (other than
with respect to an Event of Default under Sections 7.01(a), Section 7.01(b),
Section 7.01(c), Section 7.01(i) or Section 7.01(j)) if:

      

      (i)   
such rescission and annulment will not conflict with any judgment or decree of a
court of competent jurisdiction; and

      

      (ii)   
all Events of Default, other than the non-payment of the principal amount plus
accrued and unpaid interest on Securities that have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
7.13.

      

      No such
rescission shall affect any subsequent default or impair any right consequent
thereon.

      

      Section 7.03. Default Additional
Interest.

      

      (a)   
Notwithstanding Section 7.02, if the Company so elects, the sole remedy of
Holders for an Event of Default specified in Section 7.01(e) relating to the
failure by the Company to comply with its obligations under Section 10.03 shall,
for the first 365 days after the occurrence of such an Event of Default (which
shall be the 60th day
after written notice is provided to the Company in accordance with Section
7.01(e)) consist exclusively of the right to receive 

      

      
        
          
          

        

        
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      additional
interest (“Default
Additional Interest”) at an annual rate equal to 0.25% per annum of the
principal amount of the Outstanding Securities for each day of such 365-day
period during which time such Event of Default continues. The Company may elect
to pay Default Additional Interest as the sole remedy under this Section 7.03(a)
by giving notice to the Holders, the Trustee and Paying Agent of such election
on or before the close of business on the date on which such Event of Default
occurs. If the Company fails to timely give such notice or pay Default
Additional Interest, the Securities will be immediately subject to acceleration
as provided in Section 7.02. If such Event of Default has not been cured or
waived prior to the 366th day
after its occurrence, then the Securities shall be subject to acceleration in
accordance with Section 7.02.

      

      (b)   
Default Additional Interest shall be payable on all Outstanding Securities from
and including the date on which the relevant Event of Default under Section
7.01(e) first occurs. Default Additional Interest shall be payable in arrears on
each Interest Payment Date following the occurrence of such Event of Default in
the same manner as regular interest on the Securities.

      

      (c)   
If Default Additional Interest is payable under this Section 7.03, the Company
shall deliver to the Trustee a certificate to that effect stating that Default
Additional Interest is payable and the date upon which such Default Additional
Interest shall begin to accrue. Unless and until a Responsible Officer of the
Trustee receives at the Corporate Trust Office such a certificate, the Trustee
may assume without inquiry that Default Additional Interest is not payable. If
Default Additional Interest has been paid by the Company directly to the Persons
entitled to it, the Company shall deliver to the Trustee a certificate setting
forth the particulars of such payment.

      

      Section 7.04. Collection of Indebtedness and
Enforcement by Trustee.

      

      (a)   
The Company covenants that if a Default is made in the payment of the principal
amount and accrued and unpaid interest at the Maturity thereof or in the payment
of the Fundamental Change Repurchase Price in respect of any Security, the
Company shall, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities, and, in addition thereto, such further amounts required pursuant to
Section 7.08.

      

      (b)   
If an Event of Default occurs and is continuing, the Trustee may, but shall not
be obligated to, pursue any available remedy to collect the payment of the
principal amount, plus
accrued but unpaid interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture. The Trustee may maintain a
proceeding even if the Trustee does not possess any of the Securities or does
not produce any of the Securities in the proceeding. A delay or omission by the
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      upon an
Event of Default shall not impair the right or remedy or constitute a waiver of,
or acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.

      

      Section 7.05. Trustee May File Proofs of
Claim.

      

      (a)   
In case of any judicial proceeding relative to the Company (or any other obligor
upon the Securities), its property or its creditors, the Trustee shall be
entitled and empowered, by intervention in such proceeding or otherwise, to take
any and all actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 9.07.

      

      (b)   
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

      

      Section
7.06.
Application of Money Collected. Any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money to
Holders, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully
paid:

      

      FIRST: To
the payment of all amounts due the Trustee under Section 9.07;

      

      SECOND: To
the payment of the amounts then due and unpaid on the Securities for the
principal amount, Fundamental Change Repurchase Price, Redemption Price or
interest, as the case may be, in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities;
and

      

      THIRD: To
the payment of the remainder, if any, to the Company or any other Person
lawfully entitled thereto.

      

      
        
          
          

        

        
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      Section 7.07. Limitation on
Suits.

      

      No Holder
of any Security shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder (other than in the case of an
Event of Default specified in Section 7.01(a), Section 7.01(b) or Section
7.01(c)), unless:

      

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

      

      (b)   
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities shall have made written request to the Trustee to pursue such remedy
in its own name as Trustee hereunder;

      

      (c)   
such Holder or Holders have provided to the Trustee security or indemnity
reasonably satisfactory to the Trustee against the expenses, losses and
liabilities to be incurred in compliance with such request;

      

      (d)   
the Trustee, for 60 days after its receipt of such notice, request and provision
of adequate security or indemnity, has failed to institute any such proceeding;
and

      

      (e)   
no direction, in the opinion of the Trustee, inconsistent with such written
request has been given to the Trustee during such 60-day period by the Holders
of a majority in aggregate principal amount of the Outstanding
Securities,

      

      it being
understood and intended that no one or more Holders shall have any right in any
manner whatever by virtue of, or by availing itself of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holders, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all the Holders.

      

      Section 7.08 . Unconditional Right of Holders To
Receive Payment.

      

      Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of the principal amount, Fundamental Change Repurchase Price, Redemption
Price or accrued and unpaid interest in respect of the Securities held by such
Holder, on or after the respective due dates expressed in the Securities or any
Fundamental Change Repurchase Date, as applicable, and to convert the Securities
in accordance with Article 5, or to bring suit for the enforcement of any such
payment on or after such respective dates or the right to convert, shall not be
impaired or affected adversely without the consent of such Holder.

      

      Section
7.09.
Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this

      

      
        
          
          

        

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

      

      Section
7.10.
Rights and Remedies Cumulative. Except as otherwise provided with respect
to the replacement or payment of mutilated, destroyed, lost or stolen Securities
in the last paragraph of Section 2.12, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder shall not prevent the
concurrent assertion or employment of any other appropriate right or
remedy.

      

      Section
7.11.
Delay or Omission Not Waiver. No delay or omission of the Trustee or of
any Holder of any Security to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.

      

      Section
7.12.
Control by Holders. The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided
that:

      

      (i)   
such direction shall not be in conflict with any rule of law or with this
Indenture; and

      

      (ii)   
the Trustee may refuse to follow any such direction that the Trustee determines
is unduly prejudicial to the rights of any other Holder or that would involve
the Trustee in personal liability.

      

      Section 7.13. Waiver of Past
Defaults.

      

      (a)   
The Holders of not less than a majority in principal amount of the Outstanding
Securities may on behalf of the Holders of all the Securities waive any past
Default hereunder and its consequences, except a Default:

       

      
        
          
          

        

        
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      (i)   
described in Section 7.01(a), Section 7.01(b), Section 7.01(c), Section 7.01(i)
or Section 7.01(j); or

      

      (ii)   
in respect of a covenant or provision hereof which under Section 12.03 cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected.

      

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

      

      Section
7.14.
Undertaking for Costs. In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, in either case in respect of the Securities,
a court may require any party litigant in such suit to file an undertaking to
pay the costs of the suit, and the court may assess reasonable costs, including
reasonable attorney’s fees and expenses, against any party litigant in the suit
having due regard to the merits and good faith of the claims or defenses made by
the party litigant; but the provisions of this Section 7.14 shall not apply to
any suit instituted by the Company, to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal
amount on any Security on or after Maturity of such Security or the Fundamental
Change Repurchase Price.

      

      Section
7.15.
Waiver of Stay or Extension Laws. The Company covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of or interest on the Securities
as contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

      

      Section
7.16.
Violations of Certain Covenants. A violation of any covenant or agreement
in this Indenture that expressly provides that a violation of such covenant or
agreement shall not constitute an Event of Default may only be enforced by the
Trustee by instituting a legal proceeding against the Company for enforcement of
such covenant or agreement.

      

      
        
          
          

        

        
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      ARTICLE
8

      CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

      

      Section 8.01. Company May Consolidate, Etc.,
Only on Certain Terms.

      

      (a)   
The Company shall not consolidate with or merge with or into any other Person
or, transfer all or substantially all its assets to another Person (excluding a
pledge of securities issued by any of the Company’s subsidiaries),
unless:

      

      (i)   
the resulting, surviving or transferee person (the “Successor
Company”) assumes by supplemental indenture all of the Company’s
obligations under the Securities and this Indenture; 

      

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

      

      (iii)   
if the Securities become convertible into common stock or other securities
issued by a Person other than the Successor Company as a result of such
transaction, such Person shall fully and unconditionally guarantee all
obligations of the Successor Company under the Securities and this Indenture;
and

      

      (iv)   
the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article
8.

      

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

      

      Section
8.02. 
Foreign Jurisdiction Transactions. If the Successor Company in any
merger, consolidation, or transfer is not organized and existing under the laws
of the United States, any state thereof or the District of Columbia (any such
merger, consolidation or transfer, a “Foreign
Jurisdiction Transaction”), then in addition to the conditions set forth
in Section 8.01, the Company shall also deliver to the Trustee:

      

      (a)   
an Opinion of Counsel to the effect that the Holders will not recognize income,
gain or loss for United States Federal income tax purposes as a result of such
transaction and will be subject to United States Federal income tax

      

      
        
          
          

        

        
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      on the
same amounts and at the same times as would have been the case if such
transaction had not occurred; and

      

      (b)   
an Opinion of Counsel in the jurisdiction of the Successor Company to the effect
that:

      

      (i)   
any payment of interest, principal, or any other payment or amount delivered
under the Securities under or with respect to the Securities will, after giving
effect to such transaction, be exempt from any withholding or deduction for or
on account of any present or future tax, duty, levy, impost, assessment or other
governmental charge of whatever nature imposed or levied by or on behalf of any
jurisdiction from or through which payment is made or in which the payor is
organized, resident or engaged in business for tax purposes; and

      

      (ii)   
no transfer taxes, stamp taxes, or taxes on income (including capital gains)
will be payable by a Holder of Securities under the laws of any jurisdiction
where the Successor Company is or becomes organized, resident or engaged in
business for tax purposes in respect of the acquisition, ownership or
disposition of the Securities, including the receipt of interest or principal
thereon, provided that such Holder does not use or hold, and is not deemed to
use or hold the Securities in carrying on a business in the jurisdiction where
the Successor Company is or becomes organized, resident or engaged in business
for tax purposes, provided
that the Holder will not be deemed to use or hold the Securities in
carrying on a business in such jurisdiction solely as a result of the Holder’s
ownership of the Securities.

      

      Section 8.03. Effectiveness of Consolidation,
Merger or Transfer.

      

      (a)   
Upon satisfaction of all applicable conditions in Section 8.01 and Section 8.02,
all such obligations of the Company or such other predecessor corporation shall
be terminated.

      

      (b)   
The Successor Company formed by such consolidation or into which the Company is
merged or the Successor Company to which such conveyance, transfer, lease or
other disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a conveyance, transfer or lease of all or
substantially all the Company’s assets (in which case the Company will not be
discharged from the obligation to pay the principal amount of the Securities and
interest, including any Additional Interest) and except for obligations, if any,
that the Company may have under a supplemental indenture, the Company shall be
discharged from all obligations and covenants under this

       

      
        
          
          

        

        
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      Indenture
and the Securities. Subject to Section 12.04, the Company, the Trustee and the
Successor Company shall enter into a supplemental indenture to evidence the
succession and substitution of such Successor Company and such discharge and
release of the Company.

      

      ARTICLE
9

      THE TRUSTEE

      

      Section 9.01. Duties and Responsibilities of
Trustee.

      

      (a)   
The Trustee, prior to the occurrence of an Event of Default and after the curing
of all Events of Default which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture against
the Trustee. If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.

      

      (b)   
No provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:

      

      (i)   
prior to the occurrence of an Event of Default and after the curing or waiving
of all Events of Default which may have occurred:

      

      (A)   
the duties and obligations of the Trustee shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically set forth
in this Indenture and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and

      

      (B)   
in the absence of bad faith and willful misconduct on the part of the Trustee,
the Trustee may conclusively rely as to the truth and accuracy of the statements
and the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture (but need not confirm
or

      

      
        
          
          

        

        
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      investigate,
and shall not be responsible for, the accuracy of any mathematical calculations
or other facts stated therein);

      

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

      

      (iii)   
the Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the written direction of the
Holders of not less than a majority in principal amount of the Securities at the
time Outstanding in accordance with Section 1.05 relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture;

      

      (iv)   
whether or not therein provided, every provision of this Indenture relating to
the conduct or affecting the liability of, or affording protection to, the
Trustee shall be subject to the provisions of this Section 9.01;

      

      (v)   
the Trustee shall not be liable in respect of any payment (as to the correctness
of amount, entitlement to receive or any other matters relating to payment) or
notice effected by the Company or any other Paying Agent or any records
maintained by the Security Registrar with respect to the Securities;
and

      

      (vi)   
if any party fails to deliver a notice relating to an event the fact of which,
pursuant to this Indenture, requires notice to be sent to the Trustee, the
Trustee may conclusively rely on its failure to receive such notice as reason to
act as if no such event occurred.

      

      (c)   
None of the provisions contained in this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.

      

      Section 9.02. Notice of
Defaults.

      

      (a)   
If a Default occurs and is continuing and is actually known to a Responsible
Officer of the Trustee, the Trustee shall give the Holders notice of thereof
within 90 days after it occurs, unless such Default has been cured or
waived.

       

      
        
          
          

        

        
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      (b)   
Notwithstanding Section 9.02(a), the Trustee shall be protected in withholding
notice of a Default, except in the case of any Default in the payment of
principal amount or interest on any of the Securities or Fundamental Change
Repurchase Price, if and so long as the Board of Directors or a committee of
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of
Securities.

      

      Section
9.03.
Reliance on Documents, Opinions, Etc. Except as otherwise provided in
Section 9.01:

      

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

      

      (b)   
any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an Officers’ Certificate (unless other evidence in
respect thereof be herein specifically prescribed), and any resolution of the
Board of Directors may be evidenced to the Trustee by a copy thereof certified
by the Secretary or an Assistant Secretary of the Company;

      

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

      

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

      

      (e)   
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 or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney (at the reasonable expense of the Company and
the Trustee shall incur no liability of any kind by reason of such inquiry or
investigation);

       

      
        
          
          

        

        
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      (f)   
the Trustee shall be under no obligation to review, ascertain or confirm the
Company’s compliance with, or breach of, any representation, warranty or
covenant made in this Indenture;

      

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

      

      (h)   
the Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture;

      

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

      

      (j)   
the Trustee shall not be deemed to have notice of any Default or Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and the Indenture;

      

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

      

      (l)   
the Trustee may request that the Company deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture;

      

      (m)   
the Trustee shall not be required to give any bond or surety in respect of
performance of its powers and duties under this Indenture; and

      

      (n)   
the permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as duties.

      

      Section
9.04. No
Responsibility for Recitals, Etc. The recitals contained herein and in
the Securities (except in the Trustee’s certificate of authentication) shall be
taken as the statements of the Company, and the Trustee or any authenticating
agent assumes no responsibility for the correctness of the same. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee or any authenticating agent shall
not

       

      
        
          
          

        

        
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      be
accountable for the use or application by the Company of any Securities or the
proceeds of any Securities authenticated and delivered by the Trustee or any
authenticating agent in conformity with the provisions of this
Indenture.

      

      Section 9.05. Trustee, Security Registrar and
Agents May Own Securities.

      

      The
Trustee, any Paying Agent, any Conversion Agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not Trustee, Paying Agent,
Conversion Agent or Security Registrar.

      

      Section
9.06.
Monies To Be Held in Trust. Subject to the provisions of Section 11.04,
all monies and properties received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall have no
liability for interest on any money received by it hereunder except as may be
agreed in writing from time to time by the Company and the Trustee.

      

      Section 9.07. Compensation and Expenses of
Trustee.

      

      (a)   
The Company shall pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as mutually agreed to from
time to time in writing between the Company and the Trustee, and the Company
will pay or reimburse the Trustee upon its request for all reasonable
out-of-pocket expenses, disbursements and advances reasonably incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its gross negligence, willful
misconduct or bad faith.

      

      (b)   
The Company shall indemnify the Trustee or any predecessor Trustee (and all
officers, directors and employees of the Trustee or any predecessor Trustee), in
any capacity under this Indenture and its agents and any authenticating agent
for, and to hold each of them harmless against, any and all loss, damage,
liability, claim or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee) incurred without
negligence, willful misconduct or bad faith on the part of the Trustee or such
officer(s), director(s), employee(s) and agent(s) or authenticating agent, as
the case may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim of liability in the
premises.

      

      
        
          
          

        

        
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      (c)   
The obligations of the Company under this Section 9.07 to compensate or
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the Holders of particular
Securities. The obligation of the Company under this Section 9.07 shall survive
the satisfaction and discharge of this Indenture and the resignation or removal
of the Trustee.

      

      (d)   
When the Trustee and its agents and any authenticating agent incur expenses or
render services after an Event of Default specified in Section 7.01(i) or
Section 7.01(j) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

      

      Section
9.08.
Officers’ Certificate as Evidence. Except as otherwise provided in
Section 9.01, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or willful misconduct on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers’
Certificate delivered to the Trustee.

      

      Section
9.09.
Conflicting Interests of Trustee. If the Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.

      

      Section
9.10.
Eligibility of Trustee. There shall at all times be a Trustee hereunder
which shall be a Person that is eligible pursuant to the Trust Indenture Act to
act as such and has a combined capital and surplus of at least $50,000,000 (or
if such Person is a member of a bank holding company system, its bank holding
company shall have a combined capital and surplus of at least $50,000,000). If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of any supervising or examining authority, then for the
purposes of this Section 9.10 the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 9.10, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.

      

      Section 9.11. Resignation or Removal of
Trustee.

       

      
        
          
          

        

        
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      (a)   
The Trustee may at any time resign by giving written notice of such resignation
to the Company and to the Holders of Securities. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment 60 days after the mailing of such notice of
resignation to the Holders:

      

      (i)   
the resigning Trustee may, upon ten business days’ notice to the Company and the
Holders, appoint a successor identified in such notice or may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor trustee; or

      

      (ii)   
any Holder who has been a bona fide Holder of a Security or Securities for at
least 6 months may, subject to the provisions of Section 7.14, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee.

      

      (b)   
In case at any time any of the following shall occur:

      

      (i)   
the Trustee shall fail to comply with Section 9.09 within 90 days after written
request therefor by the Company or by any Holder who has been a bona fide Holder
of a Security or Securities for at least 6 months; or

      

      (ii)   
the Trustee shall cease to be eligible in accordance with the provisions of
Section 9.10 and shall fail to resign after written request therefor by the
Company or by any such Holder; or

      

      (iii)   
the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;

      

      then, in
any such case, the Company may remove the Trustee and appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 7.14, any Holder who has been a bona fide Holder of a Security or
Securities for at least 6 months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee; provided,
however, that if no successor Trustee shall have been appointed and have
accepted appointment 60 

       

      
        
          
          

        

        
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      days after
either the Company or the Holders has removed the Trustee, the Trustee so
removed may petition at the Company’s expense any court of competent
jurisdiction for an appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.

      

      (c)   
The Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding may at any time remove the Trustee and nominate a successor
trustee which shall be deemed appointed as successor trustee unless, within ten
days after notice to the Company of such nomination, the Company objects
thereto, in which case the Trustee so removed or any Holder, or if such Trustee
so removed or any Holder fails to act, the Company, upon the terms and
conditions and otherwise as in Section 9.11(a) provided, may petition any court
of competent jurisdiction for an appointment of a successor
trustee.

      

      (d)   
Any resignation or removal of the Trustee and appointment of a successor trustee
pursuant to any of the provisions of this Section 9.11 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
9.12.

      

      Section 9.12. Acceptance by Successor
Trustee.

      

      (a)   
Any successor trustee appointed as provided in Section 9.11 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as trustee herein; but, nevertheless, on
the written request of the Company or of the successor trustee, the trustee
ceasing to act shall, upon payment of any amount then due it pursuant to the
provisions of Section 9.07, execute and deliver an instrument transferring to
such successor trustee all the rights and powers of the trustee so ceasing to
act. Upon request of any such successor trustee, the Company shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers. Any trustee
ceasing to act shall, nevertheless, retain a lien upon all property and funds
held or collected by such trustee as such, except for funds held in trust for
the benefit of Holders of particular Securities, to secure any amounts then due
it pursuant to the provisions of Section 9.07.

      

      (b)   
No successor trustee shall accept appointment as provided in this Section 9.12
unless, at the time of such acceptance, such successor trustee shall
be

       

      
        
          
          

        

        
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      qualified
under the provisions of Section 9.09 and be eligible under the provisions of
Section 9.10.

      

      (c)   
Upon acceptance of appointment by a successor trustee as provided in this
Section 9.12, the Company (or the former trustee, at the written direction of
the Company) shall mail or cause to be mailed notice of the succession of such
trustee hereunder to the Holders of Securities at their addresses as they shall
appear on the Security Register. If the Company fails to mail such notice within
ten days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the
Company.

      

      Section 9.13. Succession by Merger,
Etc.

      

      (a)   
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee (including any trust created by this Indenture), shall be the successor
to the Trustee hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided
that in the case of any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, such corporation shall be qualified
under the provisions of Section 9.09 and eligible under the provisions of
Section 9.10.

      

      (b)   
In case at the time such successor to the Trustee shall succeed to the trusts
created by this Indenture, any of the Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Securities so authenticated; and
in case at that time any of the Securities shall not have been authenticated,
any successor to the Trustee or any authenticating agent appointed by such
successor trustee may authenticate such Securities in the name of the successor
trustee; and in all such cases such certificates shall have the full force that
is provided in the Securities or in this Indenture; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.

      

      Section
9.14.
Preferential Collection of Claims. If and when the Trustee shall be or
become a creditor of the Company (or any other obligor upon the Securities), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of the claims against the Company (or any such other
obligor).

       

      
        
          
          

        

        
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      Section 9.15. Trustee’s Application for
Instructions from the Company. Any
application by the Trustee for written instructions from the Company (other than
with regard to any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the Holders of the Securities under this
Indenture) may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or
omitted.

      

      ARTICLE
10

      HOLDERS’ LISTS AND REPORTS BY TRUSTEE

      

      Section 10.01. Company To Furnish Names and
Addresses of Holders. Upon
request from the Trustee in writing, the Company shall furnish or cause to be
furnished to the Trustee, within 30 days after the receipt by the Company of any
such request, a list of the names and addresses of the Holders as of a date not
more than 15 days prior to the time such list is furnished, in such form as the
Trustee may reasonably require; provided
that no such list need be furnished so long as the Trustee is acting as Security
Registrar.

      

      Section 10.02. Preservation of Information;
Communications to Holders.

      

      (a)   
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list furnished
to the Trustee as provided in Section 10.01 and the names and addresses of
Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 10.01 upon
receipt of a new list so furnished.

      

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

      

      (c)   
Every Holder, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any agent of either of them
shall be held accountable by reason of any disclosure of

       

      
        
          
          

        

        
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      information
as to names and addresses of Holders made pursuant to the Trust Indenture
Act.

      

      Section 10.03. Reports by
Company.

      

      (a)   
The Company shall file with the Trustee any information, documents or reports
that the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act within 15 days after the same are required to be
filed with the Commission (giving effect to any grace period provided by Rule
12b-25 under the Exchange Act). To the extent any such information, documents
and reports are filed by the Company with the Commission electronically via the
Commission’s Electronic Data Gathering and Retrieval System (or any successor
system), such information, documents and reports shall be deemed filed with the
Trustee as at such time they are filed by the Company
electronically.

      

      (b)   
Delivery of such reports, information and documents to the Trustee is for
informational purposes only, and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to conclusively rely exclusively on an Officers’ Certificate). It is
expressly understood that materials transmitted electronically by the Company to
the Trustee shall be deemed filed with the Trustee for purposes of this Section
10.03.

      

      ARTICLE
11

      SATISFACTION AND DISCHARGE

      

      Section 11.01. Discharge of
Indenture.

      

      (a)   
Subject to Section 11.01(b), this Indenture shall cease to be of further effect
if at any time:

      

      (i)   
the Company shall have delivered to the Trustee for cancellation all Securities
theretofore authenticated (other than any Securities that have been destroyed,
lost or stolen and in lieu of or in substitution for which other Securities
shall have been authenticated and delivered) and not theretofore canceled;
or

      

      (ii)   
all the Securities not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable (whether at the Stated Maturity
Date, or on any Fundamental Change Repurchase Date or upon conversion or
otherwise) and the Company shall deposit

       

      
        
          
          

        

        
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      with the
Trustee, in trust, cash funds and shares of Common Stock, as applicable,
sufficient to pay all amounts due on all of such Securities (other than any
Securities that shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Securities shall have been authenticated
and delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and interest due, accompanied, except in the
event the Securities are due and payable solely in cash upon a Fundamental
Change Repurchase Date, by a verification report as to the sufficiency of the
deposited amount from an independent certified accountant or other financial
professional reasonably satisfactory to the Trustee,

      

      provided,
in each case, that the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company.

      

      (b)   
Notwithstanding Section 11.01(a), the following rights, obligations and
immunities shall survive any satisfaction or discharge of this indenture under
this Section 11.01:

      

      (i)   
remaining rights of substitution and exchange of Securities;

      

      (ii)   
rights hereunder of Holders to receive payments of principal of and interest on,
the Securities, the Fundamental Change Repurchase Price, the Redemption Price or
the Conversion Obligation, as the case may be, and the other rights, duties and
obligations of Holders, as beneficiaries hereof with respect to the amounts, if
any, so deposited with the Trustee; and

      

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

      

      (c)   
If this Indenture is satisfied and discharged pursuant to Section 11.01(a), the
Trustee, on written demand of the Company accompanied by an Officers’
Certificate and an Opinion of Counsel as required by Section 1.03 and at the
cost and expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture.

      

      Section
11.02.
Deposited Monies To Be Held in Trust by Trustee. Subject to Section
11.04, all monies deposited with the Trustee pursuant to Section 11.01 shall be
held in trust for the sole benefit of the Holders, and such monies shall be
applied by the Trustee to the payment, either directly or through any paying
agent (including the Company if acting as its own paying agent), to the Holders
of the particular Securities for the payment of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest.

       

      
        
          
          

        

        
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      Section
11.03. Paying
Agent To Repay Monies Held. Upon the satisfaction and discharge of this
Indenture, all monies then held by any paying agent of the Securities (other
than the Trustee) shall, upon written request of the Company, be repaid to it or
paid to the Trustee, and thereupon such paying agent shall be released from all
further liability with respect to such monies.

      

      Section
11.04. Return
of Unclaimed Monies. Subject to the requirements of applicable law, any
monies deposited with or paid to the Trustee for payment of the principal of or
interest on Securities and not applied but remaining unclaimed by the Holders of
Securities for two years after the date upon which the principal of or interest
on such Securities, as the case may be, shall have become due and payable, shall
be repaid to the Company by the Trustee on demand and all liability of the
Trustee shall thereupon cease with respect to such monies; and the Holder of any
of the Securities shall thereafter look only to the Company for any payment that
such Holder may be entitled to collect unless an applicable abandoned property
law designates another Person.

      

      Section
11.05. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in accordance
with Section 11.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01 until such time as the Trustee or the paying agent is permitted to
apply all such money in accordance with Section 11.02; provided,
however, that if the Company makes any payment of interest on or principal of
any Security following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.

      

      ARTICLE
12

      MODIFICATIONS AND AMENDMENTS

      

      Section 12.01. Consent Requirements for
Modifications and Amendments.

      

      Except as
provided in Section 12.02 and Section 12.03, this Indenture or the Securities
may be amended with the consent of the Holders of at least a majority principal
amount of the Outstanding Securities, including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Securities, and, subject to certain exceptions as set forth in this
Indenture, any past Default or compliance with any provisions may be waived with
the consent of the Holders of a majority principal amount of the Outstanding
Securities, including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Securities.

       

      
        
          
          

        

        
          88

          
            

          

        

        
          
          

        

      

      

      Section 12.02. Amendments Without Consent Of
Holders.

      

      The
Company and the Trustee may modify or amend this Indenture or the Securities
without the consent of any Holder to:

      

      (i)   
cure any manifest error or defect;

      

      (ii)   
cure any ambiguity, omission or inconsistency; provided
that the rights of the Holders are not adversely affected in any material
respect;

      

      (iii)   
provide for the assumption by a Successor Company of the Company’s obligations
under this Indenture;

      

      (iv)   
add guarantees with respect to the Securities;

      

      (v)   
secure the Securities;

      

      (vi)   
add to the Company’s covenants for the benefit of the Holders or surrender any
right or power conferred upon the Company;

      

      (vii)   
provide for the conversion of the Securities into cash and Reference Property in
accordance with the terms of this Indenture;

      

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

      

      (ix)   
make any change that does not adversely affect the rights of any Holder in any
material respect; provided
that any amendment to conform the terms of this Indenture or the Securities to
the section entitled “Description of Notes” as set forth in the final offering
memorandum related to the Securities dated May 21, 2008 shall be deemed not to
be adverse to any Holder.

      

      Section 12.03. Amendments Requiring Consent of
Holders.

      

      Without
the written consent or the affirmative vote of each Holder of Outstanding
Securities affected thereby, an amendment, supplement or waiver under this
Section 12.03 may not:

      

      (i)   
reduce the amount of Securities whose Holders must consent to an
amendment;

      

      
        
          
          

        

        
          89

          
            

          

        

        
          
          

        

         

      

      (ii)   
reduce the rate, or extend the stated time for payment, of interest on any
Security;

      

      (iii)   
reduce the principal, or extend the Stated Maturity Date, of any
Security;

      

      (iv)   
make any change that adversely affects the conversion rights of any
Securities;

      

      (v)   
reduce the Fundamental Change Repurchase Price of any Security or amend or
modify in any manner adverse to the Holders the Company’s obligation to make
such payments, whether through an amendment or waiver of provisions in the
covenants, definitions or otherwise;

      

      (vi)   
change the place or currency of payment of principal or interest in respect of
any Security;

      

      (vii)   
impair the right of any Holder to receive payment of principal of and interest
on such Holder’s Securities on or after the due dates therefore, or to institute
suit for the enforcement of any payment on or with respect to such Holder’s
Securities;

      

      (viii)   
modify the redemption provisions of the Securities in any manner adverse to the
Holders;

      

      (ix)   
adversely affect the ranking of the Securities as the Company’s senior unsecured
indebtedness; or

      

      (x)   
make any change in the amendment provisions which require each Holder’s consent
or in the waiver provisions.

      

      (b)   
It shall not be necessary for any Act of Holders under this Section 12.03 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

      

      Section 12.04. Execution of Supplemental
Indentures.

      

      In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article 12 or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be provided with, and
(subject to Section 9.01) shall be fully protected and indemnified by the
Company in relying upon, in addition to the documents required by Section 1.03,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. Subject to the preceding sentence,
the Trustee shall sign such supplemental indenture if the same does not
adversely

      

      
        
          
          

        

        
          90

          
            

          

        

        
          
          

        

      

      

      affect the
Trustee’s own rights, duties or immunities under this Indenture or otherwise or
adversely affect the rights, duties or immunities of the Holders under this
Indenture or otherwise. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that adversely affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.

      

      Section 12.05. Effect of Supplemental
Indentures.

      

      Upon the
execution of any supplemental indenture under this Article 12, this Indenture
shall be modified in accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes, and every Holder theretofore or
thereafter authenticated and delivered hereunder shall be bound
thereby.

      

      Section 12.06. Reference in Securities to
Supplemental Indentures.

      

      Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 12 shall bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.

      

      Section 12.07.
Notice to Holders of
Supplemental Indentures.

      

      The
Company shall cause notice of the execution of any supplemental indenture to be
mailed promptly to each Holder, at such Holder’s address appearing on the
Security Register, briefly describing such supplemental indenture. Failure to
deliver such notice, or any defect in such notes, shall not affect the legality
or validity of such supplemental indenture.

      

      ARTICLE
13

      MISCELLANEOUS

      

      Section 13.01. Rules by Trustee, Paying Agent and
Security Registrar. The
Trustee may make reasonable rules for action by, or a meeting of, Holders. The
Security Registrar and the Paying Agent may make reasonable rules for their
functions.

      

      Section
13.02.
Successors. All agreements of the Company in this Indenture and the
Securities shall bind their respective successors. All agreements of the Trustee
in this Indenture shall bind its successors.

       

      
        
          
          

        

        
          91

          
            

          

        

        
          
          

        

      

       

      Section
13.03.
Multiple Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement. One signed copy is enough to prove this
Indenture.

      

      Section
13.04. Calculations.
Except as otherwise provided herein, the Company will be responsible for
making all calculations called for under the Indenture and the Securities. The
Company will make all such calculations in good faith and, absent manifest
error, its calculations will be final and binding on Holders. The Company will
provide a schedule of its calculations to each of the Trustee and the Conversion
Agent, and each of the Trustee and the Conversion Agent is entitled to rely
conclusively upon the accuracy of the Company’s calculations without independent
verification. The Trustee will deliver a copy of such schedule to any Holder
upon the request of such Holder.

      

      Section
13.05.
Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE SECURITIES OR THE TRANSACTION CONTEMPLATED
THEREBY.

      

      Section
13.06.
Force Majeure. In no event shall the Trustee be responsible or liable for
any failure or delay in the performance of its obligations hereunder arising out
of or caused by, directly or indirectly, forces beyond its control, including,
without limitation, strikes, work stoppages, accidents, acts of war or
terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software or hardware) services; it being understood
that the Trustee shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.

      

      [Remainder
of the page intentionally left blank]

      

       

      
        
          
          

        

        
          92

          
            

          

        

        
          
          

        

      

      

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

      

       

      

      
        	 	PATRIOT
      COAL CORPORATION	 
	 	 	 	 
	 	By:	
                /s/ Mark N. Schroeder

              	 
	 	Name:   
      	
                 Mark
      N. Schroeder

              	 
	 	Title:
      	
                Senior
      Vice President and Chief

              	 
	 	 	
                Financial
      Officer

              	 
	 	 	 	 
	 	 	 	 
	 	U.S.
      BANK NATIONAL ASSOCIATION,	 
	 	as
      Trustee	 
	 	 	 	 
	 	 	 	 
	 	By:
      	
                /s/
      Richard Prokosch

              	 
	 	Name:
      	
                Richard
      Prokosch

              	 
	 	Title:
      	
                Vice
      President

              	 

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
 

    SCHEDULE
A

    Make-Whole
Table

     

    The
following table sets forth the number of Additional Shares to be added to the
Conversion Rate, per $1,000 principal amount of Securities, pursuant to Section
5.03 of this Indenture:

     

    

    
      	 
      	 	
              
                Effective
      Date

              

            
	
              
                Stock
      Price

              

            	 	
              
                May
      28 , 2008

              

            	 	
              
                May
      31, 2009

              

            	 	
              
                May
      31, 2010

              

            	 	
              
                May
      31, 2011

              

            	 	
              
                May
      31, 2012

              

            	 	
              
                May
      31, 2013

              

            
	
              $96.67

            	 	
              2.9555

            	 	
              2.9555

            	 	
              2.9555

            	 	
              2.9555

            	 	
              2.9555

            	 	
              2.9555

            
	
              $110.00

            	 	
              2.5206

            	 	
              2.3903

            	 	
              2.2333

            	 	
              2.1207

            	 	
              2.0359

            	 	
              1.7020

            
	
              $125.00

            	 	
              1.9887

            	 	
              1.8297

            	 	
              1.6223

            	 	
              1.4104

            	 	
              1.3180

            	 	
              0.6111

            
	
              $140.00

            	 	
              1.6021

            	 	
              1.4284

            	 	
              1.1924

            	 	
              0.8854

            	 	
              0.8170

            	 	
              0.0000

            
	
              $155.00

            	 	
              1.3136

            	 	
              1.1343

            	 	
              0.8853

            	 	
              0.4921

            	 	
              0.4593

            	 	
              0.0000

            
	
              $170.00

            	 	
              1.0934

            	 	
              0.9144

            	 	
              0.6637

            	 	
              0.2061

            	 	
              0.2040

            	 	
              0.0000

            
	
              $185.00

            	 	
              0.9221

            	 	
              0.7474

            	 	
              0.5024

            	 	
              0.0000

            	 	
              0.0000

            	 	
              0.0000

            
	
              $200.00

            	 	
              0.7869

            	 	
              0.6186

            	 	
              0.3842

            	 	
              0.0000

            	 	
              0.0000

            	 	
              0.0000

            
	
              $225.00

            	 	
              0.6178

            	 	
              0.4629

            	 	
              0.2516

            	 	
              0.0000

            	 	
              0.0000

            	 	
              0.0000

            
	
              $250.00

            	 	
              0.4969

            	 	
              0.3564

            	 	
              0.1704

            	 	
              0.0000

            	 	
              0.0000

            	 	
              0.0000

            
	
              $300.00

            	 	
              0.3409

            	 	
              0.2277

            	 	
              0.0874

            	 	
              0.0000

            	 	
              0.0000

            	 	
              0.0000

            
	
              $350.00

            	 	
              0.2487

            	 	
              0.1578

            	 	
              0.0525

            	 	
              0.0000

            	 	
              0.0000

            	 	
              0.0000

            
	
              $400.00

            	 	
              0.1899

            	 	
              0.1167

            	 	
              0.0363

            	 	
              0.0000

            	 	
              0.0000

            	 	
              0.0000

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
A

     

    [FACE OF
SECURITY]

     

    [GLOBAL
SECURITY LEGEND]

     

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

     

    THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY
REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.]

     

    [RESTRICTED
SECURITY LEGEND]

     

    [THIS
SECURITY (OR ITS PREDECESSOR) AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION
OR REDEMPTION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS SET FORTH
BELOW. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:

     

    
      	
              (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) (“QIB”) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT
      TO EACH SUCH ACCOUNT;

            

    

     

    
      	
              (2)

            	
              AGREES
      THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE
      DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS THE LATER OF (X)
      ONE YEAR AFTER THE 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 PATRIOT COAL CORPORATION
    (THE

            

    

     

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

       

       

      
        “COMPANY”)
OR ANY OF ITS SUBSIDIARIES OR AFFILIATES, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT, (C) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES
IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (D) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER, IF AVAILABLE, OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (IN WHICH CASE THE COMPANY MAY REQUIRE SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY REASONABLY BE
REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT) AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION;
AND

         

      

    

    
      	
              (3)

            	
              AGREES
      THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
      HEREIN IS TRANSFERRED A NOTICE AS TO THE ABOVE
    RESTRICTIONS.

            

    

     

    THE COMMON
STOCK ISSUABLE UPON CONVERSION OR REDEMPTION OF THE SECURITIES, IF ANY, IS
SUBJECT TO CERTAIN RESTRICTIONS ON OWNERSHIP AND TRANSFER. THE COMPANY WILL
FURNISH A FULL STATEMENT ABOUT THE RESTRICTIONS ON TRANSFERABILITY AND OWNERSHIP
OF THE COMMON STOCK TO ANY HOLDER ON REQUEST AND WITHOUT CHARGE. SUCH REQUEST
MAY BE MADE TO THE COMPANY’S CORPORATE SECRETARY AT ITS PRINCIPAL
OFFICE.]

     

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

       

    

    PATRIOT
COAL CORPORATION

     

    3.25%
Convertible Senior Note due 2013

     

    
      
        	
                No.
      [      ]

              	 
      	
                $[                ]

              
	 	 	 
	 
      	
                CUSIP
      No.:

              	
                 
      [                ]

              
	 
      	
                ISIN
      Number:

              	
                 
      [                ]

              

      

       

    

    Patriot
Coal Corporation, a Delaware corporation, promises to pay to [Cede & Co., or
its registered assigns]1,
the principal sum of
$[                ],
[as revised by the Schedule of Increases or Decreases in Global Security
attached hereto,]2
on May 31, 2013.

     

    
      
        	
                Interest
      Payment Dates:

              	
                May
      31 and November 30.

              
	 	 
	
                Interest
      Record Dates:

              	
                May
      15 and November 15.

              

      

    

     

    Reference
is made to the further provisions of this Security set forth on the reverse
hereof, including, without limitation, provisions giving the Holder of this
Security the right to convert this Security into cash and, if applicable, Common
Stock, on the terms and subject to the limitations referred to on the reverse
hereof and as more fully specified in the Indenture.  Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.

     

    This
Security shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the
Indenture.

     

    

    

      
        

      

    

    
      1 Use
bracketed language for a Global Security.

       

    

    
      2 Use
bracketed language for a Global Security.

       

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

         

      

    

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

     

     

    
      	
              PATRIOT
      COAL CORPORATION

            
	 	 	 	 
	 	 	 	 
	
              By:

            	 
      	 	 
	 	
              Name:

            	 	 
	 	
              Title:

            	 	 

    

    

     

    TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

    

    U.S. BANK
NATIONAL ASSOCIATION, as Trustee, certifies

    that this
Security is one of the Securities described in

    the
within-named Indenture.

     

    
       

      
        	
                
                  Dated:
      

                

              	 
      	 
	 	 	 
	 	 	 
	 	 	 
	
                By:

              	 	 
	 	
                Authorized
      Signatory

              	 

      

       

       

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

    

     

    
      [REVERSE
OF SECURITY]

       

       

    

    PATRIOT
COAL CORPORATION

     

    3.25%
Convertible Senior Note due 2013

     

    1.            
Interest

     

    PATRIOT
COAL CORPORATION, a Delaware corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
“Company”), promises to
pay interest on the principal amount of this Security at the rate of 3.25% per
annum.

     

    The
Company will pay interest semiannually on May 31 and November 30 of each year
commencing on November 30, 2008.  Interest on the Security will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from May 28, 2008.  Interest will be computed on the basis
of a 360-day year of twelve 30-day months.

     

    If a
payment date is not a Business Day, payment will be made on the next succeeding
Business Day, and no additional interest will accrue in respect of such payment
by virtue of the payment being made on such later date.

     

    The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at the rate of interest then in effect; and it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent
lawful.

     

    2.            
Paying Agent, Registrar and
Conversion Agent

     

    Initially,
U.S. Bank National Association, a Minneapolis banking corporation (the “Trustee”), will act as Paying
Agent, Security Registrar and Conversion Agent.  The Company may
appoint and change any Paying Agent, Security Registrar or co-registrar or
Conversion Agent without notice.  The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Security Registrar or co-registrar, or Conversion Agent.

     

    3.            
Indenture

     

    The
Company issued the Securities under an Indenture dated as of May 28, 2008 (the
“Indenture”), between
the Company and the Trustee.  Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the
Indenture.  The Securities are subject to all such terms, and Holders
are referred to the Indenture for a statement of those terms.

     

    This
Security is one of the Securities referred to in the Indenture issued in an
initial aggregate principal amount of $200,000,000.  Additional
Securities may be issued in accordance with the Indenture.  The
Indenture also imposes limitations on the ability of the Company to consolidate
or merge with or into any other Person or convey, transfer or lease all or
substantially all of the property of the Company.

     

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

       

    

    4.            
Conversion

     

    Upon the
occurrence of certain events specified in the Indenture and in compliance with
the provisions of the Indenture, at any time prior to 5:00 p.m., New York City
time, on the Business Day immediately preceding the Stated Maturity Date of this
Security, the Holder hereof has the right, at its option, to convert each $1,000
principal amount of this Security into cash or a combination of cash and Common
Stock, determined as set forth in the Indenture, based on an initial Conversion
Rate of 7.3889 shares of Common Stock per $1,000 principal amount of Securities,
as the same may be adjusted pursuant to the terms of the Indenture.

     

    5.            
Denominations, Transfer,
Exchange

     

    The
Securities are in registered form without coupons in denominations of $1,000 and
whole multiples of $1,000.  A Holder may transfer or exchange
Securities in accordance with the Indenture.  Upon any transfer or
exchange, the Security Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes required by law or permitted by the Indenture.

     

    6.            
Persons Deemed
Owners

     

    The
registered Holder of this Security may be treated as the owner of it for all
purposes.

     

    7.            
Defaults and
Remedies

     

    If an
Event of Default (other than an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company or relating to the
failure to file certain reports subject to the provisions of the Indenture)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Outstanding Securities may declare the principal of and
accrued but unpaid interest on all the Securities 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 Securities will become immediately due and payable
without any declaration or other act on the part of the Trustee or any
Holder.

     

    Notwithstanding
the foregoing, at the election of the Company, the sole remedy for an Event of
Default relating to a failure to file certain reports with the Commission and
the Trustee shall, for the first 365 calendar days after such Event of Default,
consist exclusively of the right to receive an Default Additional Interest at an
annual rate of 0.25% per annum on the principal amount of Restricted Securities
then Outstanding for each day of such 365-day period during which such Event of
Default continues.

     

    8.         
   No Recourse
Against Others

     

    A
director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By accepting a Security, each Holder
waives and releases all such liability.  The waiver and release are
part of the consideration for the issue of the Securities.

     

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

       

    

    9.       
     Authentication

     

    This
Security shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the
other side of this Security.

     

    10.           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 rights of survivorship and not as tenants in common), CUST
(=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

     

    11.           GOVERNING LAW

     

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

     

    12.           CUSIP and ISIN
Numbers

     

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

     

    The
Company will furnish to any Holder of Securities upon written request and
without charge to the Holder a copy of the Indenture which has in it the text of
this Security.

     

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

       

    

    SCHEDULE
OF INCREASES AND DECREASES IN GLOBAL SECURITY3

     

    The
following increases or decreases in this Global Security have been
made:

     

    
      	
              Date
      of

              Exchange

            	 	
              Amount
      of decrease in

              principal
      amount of this

              Global
      Security

            	 	
              Amount
      of increase in

              principal
      amount of this

              Global
      Security

            	 	
              Principal
      amount of this

              Global
      Security

              following
      such decrease

              or
      increase

            	 	
              Signature
      of

              authorized

              signatory
      of

              Trustee
      or

              Custodian

            
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

    

     

     

      
        

      

    

    
      3 For
Global Securities only.

       

       

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

         

      

    

    [FORM OF
CONVERSION NOTICE]

     

    To:  PATRIOT
COAL CORPORATION

     

    The
undersigned registered owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion thereof (which is $1,000 or a
multiple thereof) below designated, into, cash and shares of Common Stock of
Patriot Coal Corporation, if any, in accordance with the terms of the Indenture
referred to in this Security, and directs that the check in payment for cash and
the shares, if any, issuable and deliverable upon such conversion, deliverable
upon conversion or for fractional shares and any Securities 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 Security 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 Security.

     

    
      
        	
                
                  Dated:
      

                

              	 
      	 

      

       

      
        
          	 
      	 
	 	 
	 
      	 
	
                  Signature(s)

                	 
	 	 
	
                  Signature(s)
      must be guaranteed by an “eligible guarantor institution” meeting the
      requirements of the Security 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 Security Registrar in addition to, or in substitution
      for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
      amended.

                	 
	 	 
	 	 
	
                  Signature
      Guarantee

                	 

        

      

       

       

      
        
          
          

        

        
          A-9

          
            

          

        

        
          
          

        

         

      

    

    Fill in
the registration of shares of Common Stock, if any, if to be issued, and
Securities, if any, to be delivered, and the person to whom cash, if any, and
payment for fractional shares, if any, is to be made, if, 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, must be $1,000 or whole multiples
  thereof):

            
	 	 
	
              $_____________________________

            	 
	 	 
	 	 
	 	 
	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 Securities in every particular without alteration or
enlargement or any change whatever.

     

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

       

    

    [FORM OF
FUNDAMENTAL CHANGE REPURCHASE NOTICE]

     

    To:
PATRIOT COAL CORPORATION

     

    The
undersigned registered owner of this Security hereby acknowledges receipt of a
notice from Patriot Coal Corporation (the “Company”) as to the occurrence
of a Fundamental Change with respect to the Company and specifying the
Fundamental Change Repurchase Date and requests and instructs the Company to
repay to the registered holder hereof in accordance with the applicable
provisions of the Indenture referred to in this Security (1) the entire
principal amount of this Security, or the portion thereof (that is $1,000
principal amount or an integral multiple thereof) below designated, and (2) if
such Fundamental Change Repurchase Date does not fall during the period after a
Record Date and on or prior to the corresponding Interest Payment Date, accrued
and unpaid interest thereon to, but excluding, such Fundamental Change
Repurchase Date.

     

    In the
case of Physical Securities, the certificate numbers of the Securities to be
repurchased are as set forth below:

     

    
      	
              
                Dated:
      

              

            	 
      

    

    
      	 
      	 
	
              Signature(s)

            	 
	 	 
	 	 
	 	 
	 	 
	
              Social
      Security or Other Taxpayer Identification Number

            	 
	 	 
	
              
                principal
      amount to be repaid (if less than all): 

                $______,000

              

            	 
	 	 
	
              
                NOTICE:  The
      signature on the Fundamental Change Repurchase Notice must correspond with
      the name as written upon the face of the Security in every particular
      without alteration or enlargement or any change
      whatever.

              

            	 

    

    
 

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

    

    [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 Security, and hereby irrevocably constitutes and
appoints ________ _____________ attorney to transfer the said Security on the
books of the Company, with full power of substitution in the
premises.

     

    In
connection with any transfer of Securities bearing a legend setting out
restrictions on the offer, sale, pledge or other transfer of such Securities,
the undersigned confirms that such Securities are being
transferred:

     

    
      
        	
                

              	To
      Patriot Coal Corporation or any subsidiary or affiliate thereof;
    or

      

       

    

    
      	
              

            	
              Pursuant
      to a registration statement which has been declared effective under the
      Securities Act of 1933, as amended (the “Securities Act”), and
      which continues to be effective at the time of transfer;
  or

            

    

     

    
      	
              

            	
              If
      the Securities are eligible for resale pursuant to Rule 144A under the
      Securities Act, to a “qualified institutional buyer” in compliance with
      Rule 144A under the Securities Act, that purchases for its own account or
      for the account of a “qualified institutional buyer” to whom notice is
      given that the transfer is being made in reliance on Rule 144A under the
      Securities Act; or

            

    

     

    
      	
              

            	
              Pursuant
      to an exemption from registration under Rule 144 under the Securities Act;
      or

            

    

     

    
      	
              

            	
              Pursuant
      to another available exemption from the registration requirements of the
      Securities Act, subject to the Company’s and the Trustee’s right prior to
      any such offer, sale or transfer to require the delivery of an opinion of
      counsel, certification and/or other information satisfactory to each of
      them.

            

    

     

    Unless one of the boxes is checked, the
Securities Registrar will refuse to register any of the Securities evidenced by
this certificate in the name of any person other than the registered Holder
thereof.

     

     

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

    

     

    
      	
              
                Dated:
      

              

            	 
      	 

    

    
      	 	 
	 
      	 
	 	 
	
              Signature(s)

            	 
	 	 
	 	 
	 	 
	
              
                Signature(s)
      must be guaranteed by
      an institution which is a member of one of the following recognized
      signature Guarantee Programs:

              

            	 
	 	 
	
              
                
                  (i)
      The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
      Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange
      Medallion Program (SEMP) or (iv) another guarantee program acceptable to
      the Trustee.

                

              

            	 
	 	 
	 	 
	 
      	 
	 	 
	 
      	 
	
              Signature
      Guarantee

            	 

    

    

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
B

     

    [FORM OF
RESTRICTIVE LEGEND FOR COMMON STOCK ISSUED UPON CONVERSION OR
REDEMPTION]

     

    [THIS
COMMON STOCK CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

     

    
      	
              (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) (“QIB”) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT
      TO EACH SUCH ACCOUNT;

            

    

     

    
      	
              (2)

            	
              AGREES
      THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS COMMON STOCK
      CERTIFICATE PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE
      ORIGINAL ISSUE DATE OF THE PREDECESSOR SECURITY HERETO 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 PATRIOT COAL CORPORATION (THE
      “COMPANY”) OR ANY OF ITS SUBSIDIARIES OR AFFILIATES, (B) TO A PERSON WHO
      THE TRANSFEROR REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT
      OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
      RULE 144A, (C) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (D)
      PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
      PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, OR ANY OTHER AVAILABLE
      EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (IN
      WHICH CASE THE COMPANY MAY REQUIRE SUCH CERTIFICATIONS, LEGAL OPINIONS OR
      OTHER INFORMATION AS MAY REASONABLY BE REQUIRED TO CONFIRM THAT SUCH
      TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
      NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT) AND,
      IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
      STATE OF THE

            

    

     

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

       

       

      
        UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION; AND

         

      

    

    
      	
              (3)

            	
              AGREES
      THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS COMMON STOCK CERTIFICATE
      OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE AS TO THE ABOVE
      RESTRICTIONS.]

            

    

     

     

    B-2exv10w1

Exhibit
10.1

Third Amended and Restated

Basic Energy Services, Inc.

2003 Incentive Plan

(effective May 12, 2008)

SECTION 1. Purpose of the Plan.

     The Third Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan (the “Plan”) is
intended to promote the interests of Basic Energy Services, Inc. (formerly named BES Holding Co.),
a Delaware corporation (the “Company”), by encouraging officers, employees, directors and
consultants of the Company and its Affiliates to acquire or increase their equity interest in the
Company and to provide a means whereby they may develop a sense of proprietorship and personal
involvement in the development and financial success of the Company, and to encourage them to
remain with and devote their best efforts to the business of the Company thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated to enhance the
ability of the Company and its Affiliates to attract and retain the services of individuals who are
essential for the growth and profitability of the Company.

     Effective as of the effective date of the Plan as set forth in Section 10 hereunder, all
outstanding stock options and other Awards granted under the Plan (including Awards previously
assumed by the Company under predecessor plans) prior to this amendment and restatement, are
assumed and continued hereunder. All outstanding Awards that are assumed and continued under this
Plan, as amended and restated, shall remain subject to their individual Award Agreements for each
such outstanding Award.

SECTION 2. Definitions.

     As used in the Plan, the following terms shall have the meanings set forth below:

     “Affiliate” shall mean (i) any entity in which the Company, directly or indirectly, owns 50%
or more of the combined voting power, as determined by the Committee, (ii) any “parent corporation”
of the Company (as defined in Section 424(e) of the Code) and (iii) any “subsidiary corporation” of
any such parent (as defined in Section 424(f) of the Code) thereof.

     “Award” shall mean any Option, Restricted Stock, Performance Award, Phantom Shares, Bonus
Shares, Other Stock-Based Award or Cash Award.

     “Award Agreement” shall mean any written or electronic agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be executed or acknowledged
by a Participant.

     “Board” shall mean the Board of Directors of the Company.

     “Bonus Shares” shall mean an award of Shares granted pursuant to Section 6(d) of the Plan.

 

 

     “Cash Award” shall mean an award payable in cash granted pursuant to Section 6(f) of the Plan.

     “Change in Control” shall mean the occurrence of any one of the following:

     (a) the consummation of any transaction (including without limitation, any merger,
consolidation, tender offer, or exchange offer) the result of which is that any individual or
“person” (as such term is used in Sections 13(d)(3) and 14(d)(2), of the Securities Exchange Act of
1934 (the “Exchange Act”)), other than (i) Southwest Royalties Holdings, Inc. and its “affiliates”
(as such term is defined in Rule 144 under the Exchange Act), (ii) Credit Suisse First Boston
Corporation and its “affiliates” (as such term is defined in Rule 144 under the Exchange Act),
(iii) the Company or any Affiliates controlled by the Company, (iv) any employee benefit plan of
the Company or any of its Affiliates or (v) an underwriter temporarily holding securities pursuant
to an offering of such securities, becomes the “beneficial owner” (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of securities of the Company
representing 40% or more of the combined voting power of the Company’s then-outstanding securities;

     (b) the individuals who, as of the effective date of the Plan, constitute the Board (the
“Incumbent Board”), cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of either (i) an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act), or an actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board, or (ii) a plan or agreement to replace a majority of the
members of the Board then comprising the Incumbent Board;

     (c) the sale, lease, transfer, conveyance or other disposition (including by merger or
consolidation) in one or a series of related transactions, of all or substantially all of the
assets of the Company to an unrelated person; or

     (d) the adoption of a plan relating to the liquidation or dissolution of the Company.

     Solely with respect to any Award that is subject to Section 409A of the Code, this definition
is intended to comply with the definition of change in control under Section 409A of the Code as in
effect commencing January 1, 2005 and, to the extent that the above definition does not so comply,
such definition shall be void and of no effect and, to the extent required to ensure that this
definition complies with the requirements of Section 409A of the Code, the definition of such term
set forth in regulations or other regulatory guidance issued under Section 409A of the Code by the
appropriate governmental authority is hereby incorporated by reference into and shall form part of
this Plan as fully as if set forth herein verbatim and the Plan shall be operated in accordance
with the above definition of Change in Control as modified to the extent necessary to ensure that
the above definition complies with the definition prescribed in such

2

 

regulations or other regulatory guidance insofar as the definition relates to any Award that
is subject to Section 409A of the Code.

     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the
rules and regulations thereunder.

     “Committee” shall mean the committee appointed by the Board to administer the Plan or, if
none, the Board.

     “Company” shall mean the corporation described in Section 1 of the Plan.

     “Consultant” shall mean any individual, other than a Director or an Employee, who renders
consulting or advisory services to the Company or an Affiliate for a fee.

     “Covered Person” shall mean any of the Chief Executive Officer of the Company and the four (4)
highest paid officers of the Company other than the Chief Executive Officer as described in Section
162(m)(3) of the Code.

     “Director” shall mean a “non-employee director” of the Company, as defined in Rule 16b-3.

     “Employee” shall mean any employee of the Company or an Affiliate.

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

     “Fair Market Value” shall mean, with respect to Shares, the fair market value determined in
good faith by the Committee, which may be conclusively deemed by the Committee to be the closing
sales price (or, if applicable, the highest reported bid price) of a Share on the applicable date
(or if there is no trading in the Shares on such date, on the next preceding date on which there
was trading) as reported in The Wall Street Journal (or other reporting service approved by the
Committee). If the Shares are not publicly traded at the time a determination of its fair market
value is required to be made hereunder, the determination of fair market value shall be made in
good faith by the Committee.

     “Option” shall mean an option granted under Section 6(a) of the Plan. Options granted under
the Plan may constitute “incentive stock options” for purposes of Section 422 of the Code or
nonqualified stock options that are not intended to satisfy the requirements of Section 422 of the
Code.

     “Other Stock-Based Award” shall mean an award granted pursuant to Section 6(g) of the Plan
that is not otherwise specifically provided for, the value of which is based in whole or in part
upon the value of a Share.

     “Participant” shall mean any Director, Employee or Consultant granted an Award under the Plan.

     “Performance Award” shall mean any right granted under Section 6(c) of the Plan.

3

 

     “Performance Objectives” means the objectives, if any, established by the Committee that are
to be achieved with respect to an Award granted under this Plan, which may be described in terms of
Company-wide objectives, in terms of objectives that are related to performance of a division,
subsidiary, department or function within the Company or a subsidiary in which the Participant
receiving the Award is employed or in individual or other terms, and which will relate to the
period of time determined by the Committee. The Performance Objectives intended to qualify under
Section 162(m) of the Code shall be with respect to one or more of the following: (i) net earnings;
(ii) operating income; (iii) earnings before interest and taxes (“EBIT”); (iv) earnings before
interest, taxes, depreciation, and amortization expenses (“EBITDA”); (v) earnings before taxes and
unusual or nonrecurring items; (vi) net income before interest, income and franchise taxes,
depreciation and amortization expenses, and any unusual or non-recurring non-cash expenses or
income (“Company EBITDA”); (vii) revenue; (viii) return on investment; (ix) return on equity;
(x) return on total capital; (xi) return on assets; (xii) total stockholder return; (xiii) return
on capital employed in the business; (xiv) stock price performance; (xv) earnings per share growth;
and (xvi) cash flows. Which objectives to use with respect to an Award, the weighting of the
objectives if more than one is used, and whether the objective is to be measured against a
Company-established budget or target, an index or a peer group of companies, shall be determined by
the Committee in its discretion at the time of grant of the Award. A Performance Objective need
not be based on an increase or a positive result under a particular business criterion and may
include, for example, maintaining the status quo or limiting economic losses.

     “Person” shall mean individual, corporation, partnership, association, joint-stock company,
trust, unincorporated organization, government or political subdivision thereof or other entity.

     “Phantom Shares” shall mean an Award of the right to receive Shares issued at the end of a
Restricted Period (an amount of cash equal to a specified number of Shares, or a combination
thereof) which is granted pursuant to Section 6(e) of the Plan.

     “Plan” shall mean the plan described in Section 1 of the Plan and set forth in this document,
as amended from time to time.

     “Restricted Period” shall mean the period established by the Committee with respect to an
Award during which the Award either remains subject to forfeiture or is not exercisable by the
Participant.

     “Restricted Stock” shall mean any Share, prior to the lapse of restrictions thereon, granted
under Sections 6(b) of the Plan.

     “Rule 16b-3” shall mean Rule 16b-3 promulgated by the SEC under the Exchange Act, or any
successor rule or regulation thereto as in effect from time to time.

     “SEC” shall mean the Securities and Exchange Commission, or any successor thereto.

     “Shares” or “Common Shares” or “Common Stock” shall mean the common stock of the Company, $.01
par value, and such other securities or property as may become the subject of Awards under the
Plan.

4

 

     “Termination for Cause” shall mean, unless eliminated or otherwise defined by the Committee in
a Participant’s Award, the occurrence of any of the following events:

     (i) the commission by Participant of a material act of willful misconduct including,
but not limited to, the willful violation of any material law, rule, regulation or cease and
desist order applicable to Participant or the Company (other than a law, rule or regulation
relating to a minor traffic violation or similar offense), or an act which constitutes a
breach of a fiduciary duty owed to the Company by Participant involving personal profit;

     (ii) the commission by Participant of an act of dishonesty relating to the performance
of Participant’s duties, habitual unexcused absence from work, willful failure to perform
duties in any material respect (other than any such failure resulting from Participant’s
incapacity due to physical or mental illness or disability), or gross negligence in the
performance of duties resulting in material damage or injury to the Company, its reputation
or goodwill (provided, however, that in the event of Participant’s willful failure to
perform duties in any material respect, Participant shall be provided with written notice of
such event and shall be provided with a reasonable opportunity, and in no event more than 30
days, to cure such failure to perform his duties); or

     (iii) any felony conviction of Participant or any conviction involving dishonesty,
fraud or breach of trust (other than for a minor traffic violation or similar offense),
whether or not in the line of duty.

     “Termination for Good Reason” shall mean, unless eliminated or otherwise defined by the
Committee in a Participant’s Award, any nonconsentual (i) material reduction in the Participant’s
authority, duties or responsibilities; (ii) reduction in the Participant’s compensation by more
than 20 percent from the compensation (excluding Awards pursuant to this Plan or other stock-based
compensation) paid by the Company during the completed fiscal year prior to the Change of Control;
or (iii) change caused by the Company in the Participant’s office location of more than 35 miles
from its location on the date of the Change in Control; provided, however, that the Participant
terminates his employment with the Company and its Affiliates hereunder within 120 days following
the date on which the Participant has actual notice of the event that gives rise to the Termination
for Good Reason.

SECTION 3. Administration.

     (a) General. The Plan shall be administered by the Committee. Should any class of
Common Stock be registered under Section 12(g) of the Exchange Act, the Committee shall be composed
of not less than two (2) members of the Board, each of whom shall meet the definition of
“nonemployee director” for purposes of Rule 16b-3 promulgated by the SEC under the Exchange Act and
an “outside director” under Section 162(m) of the Code. A majority of the Committee shall
constitute a quorum, and the acts of a majority of the members of the Committee who are present at
any meeting thereof at which a quorum is present, or the acts unanimously approved by the members
of the Committee in writing, shall be the acts of the Committee.

5

 

     (b) Committee Authority. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to: (i) designate Participants; (ii) determine the
type or types of Awards to be granted to a Participant; (iii) determine the number of Shares to be
covered by, or with respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled or exercised in cash,
Shares, other securities, other Awards or other property, or canceled, forfeited, or suspended and
the method or methods by which Awards may be settled, exercised, canceled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property, and other amounts payable with respect to an Award shall
be deferred either automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement relating to an Award made
under the Plan; (viii) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the Plan; and (ix) make
any other determination and take any other action that the Committee deems necessary or desirable
for the administration of the Plan; provided, however, the Committee shall not take any action
otherwise authorized under this Section 3(b) to the extent that (i) such action would cause (A) the
application of Section 162(m) or 409A of the Code to the Award or (B) create adverse tax
consequences under Section 162(m) or 409A of the Code should either or both of those Code sections
apply to the Award or (ii) materially reduce the benefit to the Participant without the consent of
the Participant. No member of the Committee shall vote or act upon any matter relating solely to
himself and grants of Awards to members of the Committee must be ratified by the Board. Unless
otherwise expressly provided in the Plan, all designations, determinations, interpretations, and
other decisions under or with respect to the Plan or any Award shall be within the sole discretion
of the Committee, may be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Affiliate, any Participant, any holder or beneficiary of any
Award, any stockholder and any Employee. No member of the Board or Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any Award granted
hereunder and the members of the Board and Committee shall be entitled to indemnification and
reimbursement by the Company and its Affiliates in respect of any claim, loss, damage or expense
(including legal fees) arising therefrom to the full extent permitted by law.

SECTION 4. Shares Available for Awards.

     (a) Shares Available. Subject to adjustment as provided in Section 4(c), the
aggregate number of Shares with respect to which Awards may be granted under the Plan shall be up
to 1,000,000 Shares. Except for withholding of Shares for payment of taxes or exercise price, if
any Award is exercised, paid, forfeited, terminated or canceled without the delivery of Shares,
then the Shares covered by such Award, to the extent of such payment, exercise, forfeiture,
termination or cancellation, shall again be Shares with respect to which Awards may be granted.
Awards will not reduce the number of Shares that may be issued pursuant to the Plan if the
settlement of the Award will not require the issuance of Shares, as, for example, an Other
Stock-Based Award that can be satisfied only by the payment of cash.

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     (b) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an
Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares and
shall be fully paid and nonassessable.

     (c) Adjustments. In the event that the Committee determines that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such that an adjustment
is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of
Shares (or other securities or property) with respect to which Awards may be granted, (ii) the
maximum number and type of Shares (or other securities or property) with respect to which Awards
may be granted to any single individual during any calendar year, (iii) the number and type of
Shares (or other securities or property) subject to outstanding Awards, and (iv) the grant or
exercise price with respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award.

SECTION 5. Eligibility.

     Any Employee, Director or Consultant shall be eligible to be designated a Participant and
receive an Award under the Plan.

SECTION 6. Awards.

     (a) Options. Subject to the provisions of the Plan, the Committee shall have the
authority to determine the Participants to whom Options shall be granted, the number of Shares to
be covered by each Option, the purchase price therefor and the conditions and limitations
applicable to the exercise of the Option, including the following terms and conditions and such
additional terms and conditions, as the Committee shall determine, that are not inconsistent with
the provisions of the Plan.

     (i) Exercise Price. The purchase price per Share purchasable under an Option
shall be determined by the Committee at the time the Option is granted, but shall not be
less than the Fair Market Value per Share on such grant date.

     (ii) Time and Method of Exercise. The Committee shall determine the time or
times at which an Option may be exercised in whole or in part (which may include the
achievement of one or more Performance Objectives), and the method or methods by which, and
the form or forms, in which payment of the exercise price with respect thereto may be made
or deemed to have been made (which may include, without limitation, cash, check acceptable
to the Company, Shares held for the period required to avoid a charge to the Company’s
reported financial earnings and owned free and clear of any liens, claims, encumbrances or
security interests, outstanding Awards, a “cashless-broker” exercise (through procedures
approved by the Committee and the Company),

7

 

other securities or other property, notes approved by the Committee, or any combination
thereof, having a Fair Market Value on the exercise date equal to the relevant exercise
price); provided, however, in order to exercise an Option, the Person or Persons entitled to
exercise the Option shall deliver to the Company payment in full for the Shares being
purchased and, unless other arrangements have been made with, or procedures have been
established and approved by, the Committee, any required withholding taxes.

     (iii) Incentive Stock Options. The terms of any Option granted under the Plan
intended to be an incentive stock option shall comply in all respects with the provisions of
Section 422 of the Code, or any successor provision, and any regulations promulgated
thereunder. Incentive stock options may be granted only to employees of the Company and its
parent corporation and subsidiary corporations, within the meaning of Section 424 of the
Code while each such entity is a “Corporation” described in Section 7701(a)(3) of the Code
and Treas. Reg. Section 1.421-1(i)(1). To the extent the aggregate Fair Market Value of the
Shares (determined as of the date of grant) of an Option to the extent exercisable for the
first time during any calendar year (under all plans of the Company and its parent and
subsidiary corporations) exceeds $100,000, such Option Shares in excess of $100,000 shall be
nonqualified stock options. No Option that is an incentive stock option shall be
exercisable after the expiration of 10 years from its date of grant. Notwithstanding
anything herein to the contrary, in no event shall any person owning stock possessing more
than 10% of the total combined voting power of the Company and its Affiliates be granted an
incentive stock option hereunder unless (1) the Option exercise price shall be at least 110%
of the Fair Market Value of the Shares subject to such Option at the time the Option is
granted and (2) the term during which such Option is exercisable does not exceed five years
from its date of grant.

     (iv) Limits. Subject to adjustment as provided in Section 4(c), the maximum
number of Options that may be granted to any Participant during any calendar year shall not
exceed 100,000 Shares.

     (b) Restricted Stock. Subject to the provisions of the Plan, the Committee shall have
the authority to determine the Participants to whom Restricted Stock shall be granted, the number
of Shares of Restricted Stock to be granted to each such Participant, the duration of the
Restricted Period during which, and the conditions, including Performance Objectives, if any, under
which if not achieved, the Restricted Stock may be forfeited to the Company, and the other terms
and conditions of such Awards.

     (i) Dividends. Dividends paid on Restricted Stock may be paid directly to the
Participant, may be subject to risk of forfeiture and/or transfer restrictions during any
period established by the Committee or sequestered and held in a bookkeeping cash account
(with or without interest) or reinvested on an immediate or deferred basis in additional
shares of Common Stock, which account or shares may be subject to the same restrictions as
the underlying Award or such other restrictions, all as determined by the Committee in its
discretion.

     (ii) Registration. Any Restricted Stock may be evidenced in such manner as the
Committee shall deem appropriate, including, without limitation, book-entry

8

 

registration or issuance of a stock certificate or certificates. In the event any
stock certificate is issued in respect of Restricted Stock granted under the Plan, such
certificate shall be registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock.

     (iii) Forfeiture and Restrictions Lapse. Except as otherwise determined by the
Committee or the terms of the Award that granted the Restricted Stock, upon termination of a
Participant’s employment (as determined under criteria established by the Committee) for any
reason during the applicable Restricted Period, all Restricted Stock shall be forfeited by
the Participant and reacquired by the Company. Unrestricted Shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the holder of Restricted
Stock promptly after the applicable restrictions have lapsed or otherwise been satisfied.

     (iv) Transfer Restrictions. During the Restricted Period, Restricted Stock
will be subject to the limitations on transfer as provided in Section 6(h)(i).

     (v) Limits. Subject to adjustment as provided in Section 4(c), the maximum
number of Shares of Restricted Stock that may be granted to any Participant during any
calendar year shall not exceed 100,000 Shares.

     (c) Performance Awards. The Committee shall have the authority to determine the
Participants who shall receive a Performance Award, which shall be denominated as a cash amount
(e.g., $100 per award unit) at the time of grant and confer on the Participant the right to receive
payment of such Award, in whole or in part, upon the achievement of such Performance Objectives
during such performance periods as the Committee shall establish with respect to the Award.

     (i) Terms and Conditions. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the Performance Objectives to be achieved
during any performance period, the length of any performance period, the amount of any
Performance Award and the amount of any payment or transfer to be made pursuant to any
Performance Award. In the case of any Performance Award granted to a Covered Employee in
any calendar year in which any class of Common Stock is registered under Section 12(g) of
the Exchange Act, performance goals shall be designed to be objective and shall otherwise
meet the requirements of Section 162(m) of the Code and regulations issued thereunder
(including Treasury Regulation Section 1.162-27 and any successor regulation thereto),
including the requirement that the level or levels of performance targeted by the Committee
are such that the achievement of performance goals is “substantially uncertain” at the time
of grant. In addition, achievement of performance goals in respect of Performance Awards
shall be measured over a performance period of not less than six (6) months and not more
than ten (10) years, as specified by the Committee. Performance goals in the case of any
Performance Award granted to a Covered Person in any year in which any class of Common Stock
is registered under Section 12(g) of the Exchange Act shall be established not later than
ninety (90) days after the beginning of any performance period applicable to such
Performance Award, or at such other date as may be required or permitted for

9

 

“performance-based compensation” under Section 162(m) of the Code. Subject to Section
8, the Committee shall not exercise discretion to increase any amount payable in respect of
a Performance Award which is intended to comply with Section 162(m) of the Code.

     (ii) Payment of Performance Awards. Performance Awards, to the extent earned
and vested, shall be paid (in cash and/or in Shares, in the sole discretion of the
Committee) in a lump sum following the close of the performance period. Except as may
otherwise be required under Section 409A of the Code, cash payments or tendered stock
certificates described in the immediately preceding sentence shall be made by the later of
(i) the date that is 21/2 months after the end of the Participant’s first taxable year in
which the Performance Award is earned and payable under the Plan and (ii) the date that is
21/2 months after the end of the Company’s first taxable year in which the Performance Award
is earned and payable under the Plan, and such payment shall not be subject to any election
by the Participant to defer the payment to a later period. To the extent that the final
settlement of a vested Award is to be made in Shares, the amount payable under a Performance
Award shall be divided by the FMV Per Share of Common Stock on the determination date and a
stock certificate evidencing the resulting shares of Common Stock (to the nearest full
share) shall be delivered to the Participant, or his personal representative, and the value
of any fractional shares will be paid in cash. The Company will also retain the right under
any of its deferred compensation plans to make additional contributions related to these
Awards into a deferred compensation plan, which Award will not vest until retirement or
certain conditions of termination as provided by that plan.

     (iii) Limits. The maximum value of Performance Awards that may be granted to
any Participant during any calendar year shall not exceed $500,000.

     (d) Bonus Shares. The Committee shall have the authority, in its discretion, to grant
Bonus Shares to Participants. Each Bonus Share shall constitute a transfer of an unrestricted
Share to the Participant, without other payment therefor, as additional compensation for the
Participant’s services to the Company. Bonus Shares shall be in lieu of a cash bonus that
otherwise would be granted.

     (e) Phantom Shares. The Committee shall have the authority to grant Awards of Phantom
Shares to Participants upon such terms and conditions as the Committee may determine.

     (i) Terms and Conditions. Each Phantom Share Award shall constitute an
agreement by the Company to issue or transfer a specified number of Shares or pay an amount
of cash equal to a specified number of Shares, or a combination thereof to the Participant
in the future, subject to the fulfillment during the Restricted Period of such conditions,
including Performance Objectives, if any, as the Committee may specify at the date of grant.
Payment shall be made in a lump sum no later than 2-1/2 months after the end of the
Restricted Period. During the Restricted Period, the Participant shall not have any right
to transfer any rights under the subject Award, shall not have any rights of ownership in
the Phantom Shares and shall not have any right to vote such shares.

10

 

     (ii) Dividends. Any Phantom Share award may provide that an amount equal to
any or all dividends or other distributions paid on Shares during the Restricted Period be
credited in a cash bookkeeping account (without interest) or that equivalent additional
Phantom Shares be awarded, which account or shares may be subject to the same restrictions
as the underlying Award or such other restrictions as the Committee may determine.

     (iii) Limits. Subject to adjustment as provided in Section 4(c), the maximum
number of Phantom Shares that may be granted to any Participant during any calendar year
shall not exceed 100,000.

     (iv) Additional Limitations. Notwithstanding any other provision of this
Section 6(e) to the contrary, any such Phantom Shares Award granted under the Plan shall
contain terms that (i) are designed to avoid application of Section 409A of the Code to the
Award or (ii) are designed to avoid adverse tax consequences under Section 409A of the Code
should that Code section apply to the Award.

     (f) Cash Awards. The Committee shall have the authority to determine the Participants
to whom Cash Awards shall be granted, the amount, whether the Cash Awards may be voluntarily or
shall be involuntarily deferred in a Company deferred compensation plan, and the terms or
conditions, if any, as additional compensation or as deferred compensation for the Participant’s
services to the Company or its Affiliates. If granted, a Cash Award shall be granted
(simultaneously or subsequently) in tandem with another Award and shall entitle a Participant to
receive a specified amount of cash from the Company upon such other Award becoming taxable to the
Participant, which cash amount may be based on a formula relating to the anticipated taxable income
associated with such other Award and the payment of the Cash Award; provided, however, a Cash Award
shall not be granted in tandem or in combination with any other Award if that would (i) cause
application of Section 409A of the Code to either Award or (ii) result in adverse tax consequences
under Section 409A of the Code should that Code section apply to either Award.

     (g) Other Stock-Based Awards. The Committee may also grant to Participants an Other
Stock-Based Award, which shall consist of a right which is an Award denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to, Shares as is
deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of
the Plan, including the Performance Objectives, if any, applicable to such Award, the Committee
shall determine the terms and conditions of any such Other Stock-Based Award. Notwithstanding any
other provision of the Plan to the contrary, any Other Stock-Based Award shall contain terms that
(i) are designed to avoid application of Section 409A of the Code or (ii) are designed to avoid
adverse tax consequences under Section 409A should that Code section apply to such Award. Payment
shall be made in a lump sum no later than 2-1/2 months after the date such other Stock-Based Award
becomes vested. Subject to adjustment as provided in Section 4(c) insofar as that provision
relates to Shares, the maximum number of Shares or value for which Other Stock-Based Awards may be
granted to any Participant during any calendar year shall not exceed 100,000 Shares, if the Award
is in Shares, or $500,000, if the Award is in dollars.

11

 

     (h) General.

     (i) Limits on Transfer of Awards.

	 	A.	 	Except as provided in (C) below, each Award,
and each right under any Award, shall be exercisable only by the
Participant during the Participant’s lifetime, or by the person to whom
the Participant’s rights shall pass by will or the laws of descent and
distribution.
	 
	 	B.	 	Except as provided in (C) below, no Award and
no right under any such Award may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Participant
otherwise than by will or by the laws of descent and distribution (or,
in the case of Restricted Stock, to the Company). Any such attempted
or purported assignment, alienation, pledge, attachment, sale, transfer
or encumbrance shall be void, ineffective and unenforceable against the
Company or any Affiliate, and shall give no right to the purported
transferee, and shall at the sole discretion of the Committee result in
the forfeiture of the Award with respect to the Award involved in such
attempted or perpetual transfer or encumbrance.
	 
	 	C.	 	Notwithstanding anything in the Plan to the
contrary, to the extent specifically provided by the Committee with
respect to a grant, (1) a nonqualified stock option may be transferred
to immediate family members or related family trusts, or similar
entities on such terms and conditions as the Committee may establish,
and (2) an Award other than an Incentive Stock Option may be
transferred pursuant to a qualified domestic relations order described
in Section 414(p) of the Code.

     (ii) Term of Awards. Subject to the terms of the Plan, the term of each Award
shall be for such period as may be determined by the Committee; provided, that in no event
shall the term of any Award exceed a period of 10 years from the date of its grant.

     (iii) Share Certificates. All certificates for Shares or other securities of
the Company delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations, and other requirements of the SEC, any
stock exchange upon which such Shares or other securities are then listed, and any
applicable federal or state laws, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.

     (iv) Consideration for Grants. Awards may be granted for no cash consideration
or for such consideration as the Committee determines including, without limitation, such
minimal cash consideration as may be required by applicable law.

12

 

     (v) Delivery of Shares or other Securities upon Payment by Participant of
Consideration. No Shares or other securities shall be delivered pursuant to any Award
until payment in full of any amount required to be paid pursuant to the Plan or the
applicable Award Agreement is received by the Company (including Shares being withheld in
accordance with Section 8(b) or any applicable Award agreement).

     (vi) Section 409A Considerations. Notwithstanding any other provision of the
Plan to the contrary, any Award granted after December 31, 2004 shall contain terms that
(i) are designed to avoid application of Section 409A of the Code to the Award or (ii) are
designed to avoid adverse tax consequences under Section 409A of the Code should that Code
Section apply to the Award. Dividend payments under any Award (which are paid directly to
any Participant and which are otherwise subject to Section 409A) shall be made monthly (if
any) as of the last business day of each month, which payment date is intended to be a fixed
time or schedule under Treasury Regulation 1.409A-3(a)(4).

     (vii) 409A Specified Employee. If the Participant is a “specified employee,” as
defined in 409A and the applicable regulations, except to the extent permitted under Section
409A of the Code, no payment of any Award that is subject to Section 409A of the Code (after
taking into account all applicable exceptions to Section 409A of the Code, including but not
limited to the exceptions for short-term deferrals and for “separation pay only upon an
involuntary separation from service”) shall be made under the Plan on account of the
Participant’s “separation from service,” as defined in Section 409A of the Code, with the
Company until the later of the date prescribed for payment in the Award and the first day of
the seventh calendar month that begins after the date of the Participant’s separation from
service (or, if earlier, the date of death of the Participant). Any such amounts shall be
aggregated and paid in a lump sum.

SECTION 7. Amendment and Termination.

     Except to the extent prohibited by applicable law and unless otherwise expressly provided in
an Award Agreement or in the Plan:

     (a) Amendments to the Plan. Except as required by applicable law or the rules of the
principal securities exchange or market on which the shares are traded and subject to Section 7(b)
below, the Board or the Committee may amend, alter, suspend, discontinue, or terminate the Plan
without the consent of any stockholder, Participant, other holder or beneficiary of an Award, or
other Person.

     (b) Amendments to Awards. Subject to (d) below, the Committee may waive any conditions
or rights under, amend any terms of, or alter any Award theretofore granted, provided no change,
other than pursuant to Section 7(c), in any Award shall reduce the benefit to Participant without
the consent of such Participant. In no event shall the Committee, if not the Board, take action
without the approval of the Board that constitutes a “repricing” of an Option for financial
accounting purposes, and any Board-approved repricing shall be inoperative and ineffective unless
and until approved by the stockholders.

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     (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. Subject to (d) below, the Committee is hereby authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in Section 4(c) of the
Plan) affecting the Company, any Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan;
provided, that any such election would not (i) cause the application of Section 409A of the Code to
the Award or (ii) create adverse tax consequences under Section 409A of the Code should Section
409A apply to the Award.

     (d) Section 162(m). The Committee, in its sole discretion and without the consent of
the Participant, in addition to adjustments that may be made pursuant to Section 7(c) above, may
amend (i) any stock-based Award to reflect (1) a change in corporate capitalization, such as a
stock split or dividend, (2) a corporate transaction, such as a corporate merger, a corporate
consolidation, any corporate separation (including a spinoff or other distribution of stock or
property by a corporation), any corporate reorganization (whether or not such reorganization comes
within the definition of such term in Section 368 of the Code), (3) any partial or complete
corporate liquidation, or (4) a change in accounting rules required by the Financial Accounting
Standards Board and (ii) any Award that is not intended to meet the requirements of the performance
based compensation exception to Section 162(m) of the Code, to reflect a significant event that the
Committee, in its sole discretion, believes to be appropriate to reflect the original intent in the
grant of the Award. With respect to an Award that is subject to Section 162(m) of the Code,
subject to Section 8, the Committee (i) shall not take any action that would disqualify such Award
as performance based compensation and (ii) must first certify that the Performance Objectives, if
applicable, have been achieved before the Award may be paid.

SECTION 8. Change in Control.

     (a) Awards Granted on or Prior to March 1, 2005. Notwithstanding any other
provision of this Plan to the contrary, in the event of a Change in Control of the Company all
outstanding Awards granted on or prior to March 1, 2005 shall automatically become fully vested
immediately prior to such Change in Control (or such earlier time as set by the Committee), all
restrictions, if any, with respect to such Awards shall lapse, and all performance criteria, if
any, with respect to such Awards shall be deemed to have been met in full (at the highest level).

     (b) Awards Granted After March 1, 2005. With respect to Awards granted after March 1,
2005, notwithstanding any other provision of this Plan to the contrary, in the event that a
Participant’s employment with the Company (or a successor) and all of its Affiliates terminates
within 2 years after a Change in Control of the Company and (i) such termination of employment was
initiated by the Company (or a successor) other than for a Termination for Cause or (ii) such
termination of employment was initiated by a Participant after determining in the Participant’s
good faith reasonable judgment that the termination is a Termination for Good Reason, all such
Awards of each affected Participant shall become fully vested immediately as of such employment
termination date, all restrictions, if any, with respect to such Awards shall lapse, and

14

 

all performance criteria, if any, with respect to such Awards shall be deemed to have been met
in full (at the highest or maximum level). Unless the Company survives as an independent publicly
traded company, all Options outstanding at the time of the events that give rise to each affected
Participant’s right to Change in Control benefits hereunder shall terminate and the Optionee shall
be paid, with respect to each Option, an amount in cash equal to the excess of the Fair Market
Value of a Share over the Option’s exercise price (if the Option exercise price exceeds the Fair
Market Value of a Share on such date, the Optionee shall be paid an amount in cash equal to the
lesser of $1.00 or the Black-Scholes value of the cancelled Option as determined in good faith by
the Board), unless and except to the extent provision is made in writing in connection with such
Change in Control event or transaction for the continuation of the Plan and/or the assumption of
the Options theretofore granted, or for the substitution for such Options of new options covering
the stock of a successor entity, or the parent or subsidiary thereof, with appropriate adjustments
as to the number and kinds of shares and exercise prices, in which event the Plan and Options
theretofore granted shall continue as fully vested and immediately exercisable Options in the
manner and under the terms so provided.

SECTION 9. General Provisions.

     (a) No Rights to Awards. No Director, Employee, Consultant or other Person shall have
any claim to be granted any Award. There is no obligation for uniformity of treatment of
Participants or holders or beneficiaries of Awards, and the terms and conditions of Awards need not
be the same with respect to each recipient.

     (b) Withholding. The Company or any Affiliate is authorized to withhold from any
Award, from any payment due or transfer made under any Award or under the Plan or from any
compensation or other amount owing to a Participant the amount (in cash, Shares, other securities,
Shares that would otherwise be issued pursuant to such Award, other Awards or other property) of
any applicable taxes payable at the minimum statutory rate in respect of an Award, its exercise,
the lapse of restrictions thereon, or any payment or transfer under an Award or under the Plan and
to take such other action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes at the minimum statutory rate. In addition, the
Committee may provide, in an Award Agreement, that the Participant shall have the right to direct
the Company to satisfy the Company’s actual tax withholding obligation through the “constructive”
tender of already-owned Shares or the withholding of Shares otherwise to be acquired upon the
exercise or payment of such Award.

     (c) No Right to Employment. The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or any Affiliate. Further, the
Company or an Affiliate may at any time dismiss a Participant from employment or other service
relationship at any time, free from any liability or any claim under the Plan, unless otherwise
expressly provided in the Plan or in any Award Agreement.

     (d) Governing Law. The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan shall be governed by and construed in accordance with the laws
of the State of Delaware and applicable federal law.

15

 

     (e) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award,
or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee, materially altering
the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction,
Person or Award and the remainder of the Plan and any such Award shall remain in full force and
effect.

     (f) Other Laws. The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines that the issuance of
transfer or such Shares or such other consideration might violate any applicable law or regulation
or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment
tendered to the Company by a Participant, other holder or beneficiary in connection with the
exercise of such Award shall be promptly refunded to the relevant Participant, holder or
beneficiary.

     (g) Unfunded Plan. Neither the Plan nor the Award shall create or be construed to
create a trust or separate fund or funds. Neither the Plan nor any Award shall establish any kind
of a fiduciary relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from the Company or any
Affiliate pursuant to an Award, such right shall be no greater than the right of any general
unsecured creditor of the Company or any Affiliate.

     (h) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant
to the Plan or any Award, and the Committee shall determine whether cash, other securities, or
other property shall be paid or transferred in lieu of any fractional Shares or whether such
fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

     (i) Substitute Awards. Awards may be granted from time to time in substitution for
similar awards held by employees or directors of other corporations who become Employees or
Directors of the Company or its Affiliates as the result of a merger or consolidation of such
director or employee’s employing corporation with the Company or any Affiliate, or the acquisition
by the Company or any Affiliate of the assets of such director or employee’s employing corporation,
or the acquisition by the Company or any Affiliate of the stock of such director or employee’s
employing corporation. The terms and conditions of substitute Awards granted shall comport with
the terms and conditions set forth in the Plan.

     (j) Shareholder Agreements. The Committee may condition the grant, exercise or
payment of any Award upon such person entering into a stockholders’ agreement or repurchase
agreement in such form as approved from time to time by the Board.

     (k) Gender, Tense and Headings. Whenever the context requires, words of the masculine
gender used herein shall include the feminine and neuter and words used in the singular shall
include the plural. Headings are given to the Sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.

16

 

     (l) No Guarantee of Tax Consequences. None of the Board, the Company nor the
Committee makes any commitment or guarantee that any federal, state or local tax treatment will
apply or be available to any person participating or eligible to participate hereunder.

     (m) Section 162(m) Special Transition Rule. Should any class of Common Stock be
registered under Section 12(g) of the Exchange Act, the Plan is intended to qualify for the
transition relief provided under Treasury Regulation §1.162-27(f). Accordingly, all compensation
realized by Participants in connection with Awards granted under the Plan within the reliance
period described therein is intended to be exempt from the limitation on tax deductibility under
Section 162(m) of the Code. For purposes of the Plan, the reliance period will expire on the
earlier of (i) the expiration of the Plan, (ii) a “material modification” of the Plan (within the
meaning of Treasury Regulation §1.162-27(h)(1)(iii)), (iii) the issuance of all Common Stock that
has been allocated under the Plan, or (iv) the first meeting of stockholders of the Company at
which directors are to be elected that occurs after the close of the third calendar year following
the calendar year in which the Common Stock is first registered under Section 12(g) of the Exchange
Act.

SECTION 10. Effective Date of the Plan.

     The Plan, as hereby amended and restated, shall be effective on the date it is approved and
adopted by the Board, including with respect to all Awards granted on or after March 1, 2005,
except as otherwise provided in the Plan.

SECTION 11. Term of the Plan.

     No Award shall be granted under the Plan after the 10th anniversary of the earlier of the date
this Plan is adopted by the Board or the date the Plan is approved by the stockholders of the
Company. However, unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted prior to such termination, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive
any conditions or rights under such Award, shall extend beyond such termination date.

17

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