Document:

exv4w1

Exhibit 4.1

STEWART INFORMATION SERVICES CORPORATION,

the Guarantors party hereto

and

Wells Fargo Bank N.A., as Trustee

 

INDENTURE

Dated as of October 15, 2009

 

6.00% Convertible Senior Notes due 2014

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 
	Section 1.01
	 	Definitions	 	 	1	 
	Section 1.02
	 	Other Definitions	 	 	6	 
	Section 1.03
	 	Trust Indenture Act Provisions	 	 	7	 
	Section 1.04
	 	Rules Of Construction	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE 2 THE SECURITIES	 	 	8	 
	Section 2.01
	 	Form and Dating	 	 	8	 
	Section 2.02
	 	Execution and Authentication	 	 	9	 
	Section 2.03
	 	Registrar, Paying Agent and Conversion Agent	 	 	10	 
	Section 2.04
	 	Paying Agent To Hold Money In Trust	 	 	10	 
	Section 2.05
	 	Conversion Agent To Hold Money In Trust	 	 	11	 
	Section 2.06
	 	Lists of Holders of Securities	 	 	11	 
	Section 2.07
	 	Transfer and Exchange	 	 	11	 
	Section 2.08
	 	Replacement Securities	 	 	12	 
	Section 2.09
	 	Outstanding Securities	 	 	12	 
	Section 2.10
	 	Treasury Securities	 	 	13	 
	Section 2.11
	 	Temporary Securities	 	 	13	 
	Section 2.12
	 	Cancellation	 	 	13	 
	Section 2.13
	 	Restrictive Legend; Additional Transfer and Exchange Requirements	 	 	13	 
	Section 2.14
	 	CUSIP Numbers	 	 	17	 
	Section 2.15
	 	Calculations	 	 	17	 
	Section 2.16
	 	Payment of Interest; Interest Rights Preserved	 	 	17	 
	Section 2.17
	 	Computation of Interest	 	 	18	 
	Section 2.18
	 	Automatic Exchange from Restricted Global Security to Unrestricted Global Security	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE 3 REPURCHASE	 	 	19	 
	Section 3.01
	 	Repurchase of Securities at Option of the Holder upon a Fundamental Change	 	 	19	 
	Section 3.02
	 	Effect of Fundamental Change Purchase Notice	 	 	21	 
	Section 3.03
	 	Deposit of Fundamental Change Purchase Price	 	 	22	 
	Section 3.04
	 	Securities Purchased in Part	 	 	22	 
	Section 3.05
	 	Repayment to the Company	 	 	22	 
	Section 3.06
	 	Compliance With Securities Laws Upon Purchase of Securities	 	 	22	 
	Section 3.07
	 	Purchase of Securities In Open Market	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE 4 CONVERSION	 	 	23	 
	Section 4.01
	 	Right to Convert	 	 	23	 

i

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 4.02
	 	Conversion Procedures	 	 	25	 
	Section 4.03
	 	Payments Upon Conversion	 	 	26	 
	Section 4.04
	 	Adjustment of Conversion Rate	 	 	27	 
	Section 4.05
	 	Certain Other Adjustments	 	 	33	 
	Section 4.06
	 	Adjustments Upon Certain Fundamental Changes	 	 	33	 
	Section 4.07
	 	Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale	 	 	34	 
	Section 4.08
	 	Taxes on Shares Issued	 	 	35	 
	Section 4.09
	 	Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental Requirements; Listing of Common Stock	 	 	35	 
	Section 4.10
	 	Responsibility of Trustee	 	 	35	 
	Section 4.11
	 	Notice to Holders Prior to Certain Actions	 	 	36	 
	Section 4.12
	 	Stockholder Rights Plan	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE 5 COVENANTS	 	 	36	 
	Section 5.01
	 	Payment of Securities	 	 	36	 
	Section 5.02
	 	Reports by Company	 	 	37	 
	Section 5.03
	 	Compliance Certificates	 	 	38	 
	Section 5.04
	 	Further Instruments and Acts	 	 	38	 
	Section 5.05
	 	Maintenance of Corporate Existence	 	 	38	 
	Section 5.06
	 	Rule 144A Information Requirement	 	 	38	 
	Section 5.07
	 	Stay, Extension And Usury Laws	 	 	38	 
	Section 5.08
	 	Payment of Additional Interest	 	 	38	 
	Section 5.09
	 	Maintenance of Office or Agency	 	 	39	 
	Section 5.10
	 	Additional Note Guarantees	 	 	39	 
	Section 5.11
	 	Shareholder Approval	 	 	39	 
	 
	 	 	 	 	 	 
	ARTICLE 6 CONSOLIDATION; MERGER; SALE OF ASSETS	 	 	40	 
	Section 6.01
	 	Company May Consolidate, Etc., Only on Certain Terms	 	 	40	 
	Section 6.02
	 	Successor Substituted	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE 7 DEFAULT AND REMEDIES	 	 	40	 
	Section 7.01
	 	Events of Default	 	 	40	 
	Section 7.02
	 	Acceleration; Special Interest	 	 	42	 
	Section 7.03
	 	Collection of Indebtedness and Suits for Enforcement by Trustee	 	 	43	 
	Section 7.04
	 	Trustee May File Proofs of Claim	 	 	44	 
	Section 7.05
	 	Trustee May Enforce Claims Without Possession of Securities	 	 	45	 
	Section 7.06
	 	Application of Money Collected	 	 	45	 
	Section 7.07
	 	Limitation on Suits	 	 	45	 

ii

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 7.08
	 	Unconditional Right of Holders to Receive Payment and to Convert 	 	 	       46	 
	Section 7.09
	 	Restoration of Rights and Remedies	 	 	46	 
	Section 7.10
	 	Rights and Remedies Cumulative	 	 	46	 
	Section 7.11
	 	Delay or Omission Not Waiver	 	 	46	 
	Section 7.12
	 	Control by Holders	 	 	46	 
	Section 7.13
	 	Waiver of Past Defaults	 	 	46	 
	Section 7.14
	 	Undertaking for Costs	 	 	47	 
	Section 7.15
	 	Remedies Subject to Applicable Law	 	 	47	 
	Section 7.16
	 	Additional Interest	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE 8 TRUSTEE	 	 	48	 
	Section 8.01
	 	Duties of Trustee	 	 	48	 
	Section 8.02
	 	Notice of Default	 	 	49	 
	Section 8.03
	 	Certain Rights of Trustee	 	 	49	 
	Section 8.04
	 	Trustee Not Responsible for Recitals, Dispositions of Securities or Application of Proceeds Thereof	 	 	50	 
	Section 8.05
	 	Trustee and Agents May Hold Securities; Collections; etc	 	 	51	 
	Section 8.06
	 	Money Held in Trust	 	 	51	 
	Section 8.07
	 	Compensation and Indemnification of Trustee and Its Prior Claim	 	 	51	 
	Section 8.08
	 	Conflicting Interests	 	 	51	 
	Section 8.09
	 	Trustee Eligibility	 	 	52	 
	Section 8.10
	 	Resignation and Removal; Appointment of Successor Trustee	 	 	52	 
	Section 8.11
	 	Acceptance of Appointment by Successor	 	 	53	 
	Section 8.12
	 	Merger, Conversion, Consolidation or Succession to Business	 	 	53	 
	Section 8.13
	 	Preferential Collection of Claims Against Company	 	 	54	 
	Section 8.14
	 	Reports By Trustee	 	 	54	 
	 
	 	 	 	 	 	 
	ARTICLE 9 SATISFACTION AND DISCHARGE OF INDENTURE	 	 	54	 
	Section 9.01
	 	Satisfaction and Discharge of Indenture	 	 	54	 
	Section 9.02
	 	Application of Trust Money	 	 	55	 
	Section 9.03
	 	Reinstatement	 	 	55	 
	 
	 	 	 	 	 	 
	ARTICLE 10 AMENDMENTS; SUPPLEMENTS AND WAIVERS	 	 	55	 
	Section 10.01
	 	Without Consent of Holders	 	 	55	 
	Section 10.02
	 	With Consent of Holders	 	 	56	 
	Section 10.03
	 	Execution of Supplemental Indentures and Agreements	 	 	57	 
	Section 10.04
	 	Effect of Supplemental Indentures	 	 	57	 
	Section 10.05
	 	Conformity with Trust Indenture Act	 	 	57	 

iii

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 10.06
	 	Reference in Securities to Supplemental Indentures	 	 	58	 
	Section 10.07
	 	Notice of Supplemental Indentures	 	 	58	 
	 
	 	 	 	 	 	 
	ARTICLE 11 NOTE GUARANTEES	 	 	58	 
	Section 11.01
	 	Guarantee	 	 	58	 
	Section 11.02
	 	Limitation on Guarantor Liability	 	 	59	 
	Section 11.03
	 	Execution and Delivery of Note Guarantee	 	 	59	 
	Section 11.04
	 	Guarantors May Consolidate, etc., on Certain Terms	 	 	60	 
	Section 11.05
	 	Releases	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE 12 MISCELLANEOUS	 	 	60	 
	Section 12.01
	 	Conflict with Trust Indenture Act	 	 	60	 
	Section 12.02
	 	Notices	 	 	60	 
	Section 12.03
	 	Disclosure of Names and Addresses of Holders	 	 	61	 
	Section 12.04
	 	Compliance Certificates and Opinions	 	 	62	 
	Section 12.05
	 	Acts of Holders	 	 	62	 
	Section 12.06
	 	Benefits of Indenture	 	 	63	 
	Section 12.07
	 	Legal Holidays	 	 	63	 
	Section 12.08
	 	Governing Law; Waiver of Trial by Jury	 	 	63	 
	Section 12.09
	 	No Adverse Interpretation of Other Agreements	 	 	64	 
	Section 12.10
	 	No Personal Liability of Directors, Officers, Employees and Stockholders	 	 	64	 
	Section 12.11
	 	Successors and Assigns	 	 	64	 
	Section 12.12
	 	Multiple Counterparts	 	 	64	 
	Section 12.13
	 	Separability Clause	 	 	64	 
	Section 12.14
	 	Schedules and Exhibits	 	 	64	 
	Section 12.15
	 	Effect of Headings and Table of Contents	 	 	64	 

	 	 	 	 	 
	EXHIBIT A Form of Security	 	A-1
	—

	 	Assignment Form	 	 
	—

	 	Form of Conversion Notice	 	 
	—

	 	Form of Fundamental Change Purchase Notice	 	 
	—

	 	Form of Certificate to be Delivered upon
Exchange or Registration of Transfer of
Restricted Securities	 	 
	EXHIBIT B Form of Notation of Guarantee	 	B-1
	EXHIBIT C Guarantors	 	C-1
	—

	 	Form of Supplemental Indenture to be Delivered by Subsequent Guarantor
	 	 

iv

 

CROSS-REFERENCE TABLE*

	 	 	 	 	 	 	 
	TIA	 	 	 	Indenture	 
	Section	 	 	 	Section(s)	 
	Section
	 	310(a)(1)	 	 	8.09	 
	 
	 	(a)(2)	 	 	8.09	 
	 
	 	(a)(3)	 	 	N.A.	 
	 
	 	(a)(4)	 	 	N.A.	 
	 
	 	(a)(5)	 	 	8.09	 
	 
	 	(b)	 	 	8.08	 
	 
	 	(c)	 	 	N.A.	 
	Section
	 	311(a)	 	 	8.13	 
	 
	 	(b)	 	 	8.05	 
	 
	 	(c)	 	 	N.A.	 
	Section
	 	312(a)	 	 	2.06	 
	 
	 	(b)	 	 	12.03	 
	 
	 	(c)	 	 	12.03	 
	Section
	 	313(a)	 	 	8.14 	(a)
	 
	 	(b)(1)	 	 	N.A.	 
	 
	 	(b)(2)	 	 	8.14 	(a)
	 
	 	(c)	 	 	8.02, 8.14 	(a)
	 
	 	(d)	 	 	8.14 	(b)
	Section
	 	314(a)	 	 	5.02, 7.02	 
	 
	 	(b)	 	 	N.A.	 
	 
	 	(c)(1)	 	 	12.04	 
	 
	 	(c)(2)	 	 	12.04	 
	 
	 	(c)(3)	 	 	N.A.	 
	 
	 	(d)	 	 	N.A.	 
	 
	 	(e)	 	 	12.04	 
	 
	 	(f)	 	 	N.A.	 
	Section
	 	315(a)	 	 	8.01 	(b)
	 
	 	(b)	 	 	8.02	 
	 
	 	(c)	 	 	8.01 	(a)
	 
	 	(d)	 	 	8.01 	(c)
	 
	 	(d)(2)	 	 	8.01 	(c)
	 
	 	(d)(3)	 	 	8.01 	(c)
	 
	 	(e)	 	 	7.14	 
	Section
	 	316(a) (last sentence)	 	 	2.10	 
	 
	 	(a)(1)	 	 	7.12, 7.13	 
	 
	 	(a)(2)	 	 	N.A.	 
	 
	 	(b)	 	 	7.08	 
	 
	 	(c)	 	 	12.05	(e)
	Section
	 	317(a)	 	 	7.03, 7.04	(a)
	 
	 	(b)	 	 	2.04	 
	Section
	 	318(a)	 	 	12.01	 
	 
	 	(b)	 	 	N.A.	 
	 
	 	(c)	 	 	12.01	 

 

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

	 
	**	 	N.A. means Not Applicable.

v

 

     THIS INDENTURE, dated as of October 15, 2009, is between Stewart Information Services
Corporation, a corporation duly organized under the laws of the State of Delaware (the “Company”),
the Guarantors (as defined) and Wells Fargo Bank N.A., a New York banking corporation, as Trustee
(the “Trustee”).

     In consideration of the purchase of the Securities (as defined herein) by the Holders thereof,
the parties hereto agree as follows for the benefit of one another and for the equal and ratable
benefit of the Holders of the Company’s 6.00% Convertible Senior Notes due 2014.

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

     Section 1.01 Definitions.

     “Additional Interest” means all amounts, if any, payable pursuant to Section 7.16 hereof. All
references herein to interest accrued or payable as of any date shall include any Additional
Interest accrued or payable as of such date.

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

     “Agent” means any Registrar, Paying Agent or Conversion Agent.

     “Applicable Conversion Share Price” means the volume-weighted average price per share of
Common Stock displayed on Bloomberg (or any successor service) page STC<EQUITY>VAP in respect
of the period from 9:30 a.m. New York City time on the Trading Day following receipt by the Company
of a Conversion Notice to 4:00 p.m. New York City time on the fifth (5th) Trading Day
following receipt by the Company of such Conversion Notice, or if such price is not available on
Bloomberg or any successor service, the volume-weighted average price per share of Common Stock
means the average market value per share of Common Stock over the subsequent five (5) Trading Days
following receipt by the Company of a Conversion Notice as determined by a nationally recognized
independent investment banking firm retained by the Company for the purpose of making this
calculation.

     “Applicable Procedures” means, with respect to any conversion, transfer or exchange of
beneficial ownership interests in a Global Security, the rules and procedures of the Depositary, to
the extent applicable to such conversion, transfer or exchange.

     “Bankruptcy Law” means Title 11 of the United States Code entitled “Bankruptcy” or any other
law relating to bankruptcy, insolvency, winding up, liquidation, reorganization or relief of
debtors, whether in effect on the date hereof or hereafter.

     “Board of Directors” means the board of directors of the Company or any duly authorized
committee of such board or any equivalent body in a limited partnership, limited liability company
or other entity serving substantially the same function as a board of directors of a corporation.

     “Board Resolution” means, with respect to any Person, a duly adopted resolution (or other
similar action) of the Board of Directors of such Person.

     “Business Day” means any day other than a Saturday, a Sunday or any other day on which banks
or trust companies in The City of New York are authorized or required by law, or executive order to
be closed.

 

 

     “Capital Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated) the
equity of such Person, but excluding any debt securities convertible into such equity.

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

     “Certificated Security” means a Security that is in substantially the form attached as Exhibit
A but that does not include the legend called for by footnote 1 thereof or the Schedule of
Exchanges of Securities thereof.

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

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

     “Common Stock” means the common stock of the Company, par value $1.00 per share, or any
successor common stock thereto.

     “Company” means the party named as such in the first paragraph of this Indenture until a
successor replaces it pursuant to the applicable provisions of this Indenture, and thereafter
“Company” shall mean such successor Company.

     “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by any one of its Chairman of the Board, its Chief Executive Officer, its President,
its Chief Operating Officer, its Chief Financial Officer or a Vice President (regardless of Vice
Presidential designation), and by any one of its Treasurer, an Assistant Treasurer, any other Vice
President (regardless of Vice Presidential designation), its Secretary or an Assistant Secretary,
and delivered to the Trustee.

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

     “Conversion Price” means, in respect of each Security, as of any date, $1,000, divided by the
Conversion Rate as of such date.

     “Conversion Rate” means, initially,77.6398 shares of Common Stock per $1,000 principal amount
of Securities, subject to adjustment as set forth herein.

     “Corporate Trust Office” means the office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date hereof is located at 201
Main Street, Suite 301, Fort Worth, Texas 76102, Attention: Corporate Trust, or such other address
as the Trustee may designate from time to time by notice to 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 Company).

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

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to time.

2

 

     “Ex-Dividend Date” means the first date upon which a sale of a share of Common Stock does not
automatically transfer the right to receive the relevant distribution with respect to the share of
Common Stock to the buyer of such share of Common Stock.

     “Final Maturity Date” means October 15, 2014.

     “Fundamental Change” will be deemed to have occurred at the time after the Securities are
originally issued if any of the following occurs:

     (1) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than
the Company, its Subsidiaries, and its and their employee benefit plans, has become the direct or
indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s
Common Equity representing more than 50% of the voting power of the Company’s Common Equity;

     (2) consummation of any share exchange, consolidation or merger of the Company or other
transaction or series of transactions pursuant to which the Common Stock will be converted into
cash, securities or other property or any sale, lease or other transfer (other than encumbrance) in
one transaction or a series of transactions of all or substantially all of the consolidated assets
of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the
Company’s Subsidiaries; provided, however, that a transaction where the holders of all classes of
the Company’s Common Equity immediately prior to such transaction that is a share exchange,
consolidation or merger own, directly or indirectly, more than 50% of all classes of Common Equity
of the continuing or surviving corporation or transferee or the parent thereof immediately after
such event shall not be a Fundamental Change;

     (3) the first day on which a majority of the members of the Company’s Board of Directors does
not consist of Continuing Directors;

     (4) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution
of the Company; or

     (5) the Common Stock (or other common stock into which the Securities are then convertible)
ceases to be listed or quoted on a national securities exchange in the United States.

Notwithstanding the foregoing, a Fundamental Change as a result of clause (2) above will not be
deemed to have occurred if 90% of the consideration received or to be received by the holders of
the Common Stock, excluding cash payments for fractional shares, in connection with the transaction
or transactions constituting the Fundamental Change consists of Publicly Traded Securities and as a
result of such transaction or transactions the Securities become convertible into such Publicly
Traded Securities, excluding cash payments for fractional shares.

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

     “Global Security” means a Security in global form that is in substantially the form attached
as Exhibit A and that includes the legend called for in footnote 1 thereof and the Schedule of
Exchanges of Securities thereof and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.

     “Guarantee” means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner including, without
limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements
in respect thereof, of all or any part of any indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or otherwise).

3

 

     “Guarantors” means:

     (1) STC and certain of STC’s wholly-owned domestic subsidiaries set forth on Exhibit
C; and

     (2) any other Subsidiary of the Company that executes a Note Guarantee in accordance with the
provisions of this Indenture, and their respective successors and assigns, in each case, until the
Note Guarantee of such Person has been released in accordance with the provisions of this
Indenture.

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

     “Indenture” means this instrument as originally executed (including all exhibits and schedules
thereto) and as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof, including the
provisions of the TIA that would be automatically deemed to be part of this Indenture by operation
of the TIA assuming this Indenture were qualified under the TIA.

     “Interest Payment Date” means April 15 and October 15 of each year, commencing April 15, 2010.

     “Last Reported Sale Price” of the Common Stock on any date means the closing sale price per
share of Common Stock (or if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and the average ask
prices) on that date as reported in composite transactions for the principal U.S. securities
exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a
U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price”
shall be the last quoted bid price for the Common Stock in the over-the-counter market on the
relevant date as reported by Pink Sheets LLC or a similar organization. If the Common Stock 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 on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for this purpose.

     “Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental
Change (determined after giving effect to any exceptions or exclusions to such definition, but
without regard to the proviso in clause (2) of the definition thereof).

     “Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under this
Indenture and the Securities, executed pursuant to the provisions of this Indenture.

     “Note Trading Price” means, on any date of determination, the average of the secondary market
bid quotations per $1,000 principal amount of Securities obtained by the Trustee for $5,000,000
principal amount of Securities at approximately 3:30 p.m., New York City time, on such date of
determination from two independent nationally recognized securities dealers selected by the
Company; provided, however, if the Trustee can not reasonably obtain at least two such bids but is
able to reasonably obtain one such bid, then such bid obtained by the Trustee shall be used;
provided, further, if the Trustee cannot reasonably obtain at least one such bid or, in the
reasonable judgment of the Company, such bids are not indicative of the secondary market value of
the Securities, then the Note Trading Price per $1,000 principal amount of Securities shall be
deemed to be less than ninety-eight percent (98%) of the product of the Last Reported Sale Price on
such date of determination and the Conversion Rate on such date of determination.

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

     “Officer’s Certificate” means a certificate signed by an Officer of the Company and delivered
to the Trustee; provided, however, that for purposes of Section 5.03, “Officer’s Certificate” means
a certificate signed by the principal executive officer, principal financial officer, principal
operating officer, principal accounting officer or treasurer of the Company.

4

 

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

     “Opinion of Counsel” means a written opinion of counsel, who may be an employee of or counsel
for the Company and which opinion shall be in form and substance reasonably satisfactory to the
Trustee.

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

     “Publicly Traded Securities” means, in respect of a transaction described in clause (2) of the
definition of Fundamental Change, shares of common stock traded on the New York Stock Exchange, the
NASDAQ Stock Market LLC or the NASDAQ Global Select Market (or any or their respective successors)
or which will be so traded when issued or exchanged in connection with a Fundamental Change.

     “Registrar” means initially the Trustee.

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

     “Regular Record Date” means, with respect to the payment of interest on the Securities, the
March 31 (whether or not a Business Day) immediately preceding an Interest Payment Date on April 15
and the September 30 (whether or not a Business Day) immediately preceding an Interest Payment Date
on October 15.

     “Restricted Global Security” means a Global Security that is a Restricted Security.

     “Restricted Security” means a Security required to bear the Restrictive Legend called for in
footnote 2 set forth in the form of Security attached as Exhibit A.

     “Rule 144” means Rule 144 under the Securities Act or any successor to such Rule.

     “Rule 144A” means Rule 144A under the Securities Act or any successor to such Rule.

     “Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal
United States national or regional securities exchange or market on which the Common Stock is
listed or admitted for trading. If the Common Stock is not so listed or admitted for trading,
“Scheduled Trading Day” means a Business Day.

     “SEC” means the U.S. Securities and Exchange Commission.

     “Securities” means up to $65,000,000 aggregate principal amount of 6.00% Convertible Senior
Notes due 2014, or any $1,000 principal amount thereof (each a “Security”), as amended or
supplemented from time to time, that are issued under this Indenture.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.

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

     “Shareholder Approval” means the requisite approval of the shareholders of the Company to
allow for the conversion of the Securities into shares of Common Stock without restriction or
without the payment by the Company of cash.

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     “Significant Subsidiary” means, with respect to any Person, any Subsidiary (or group of
Subsidiaries as to which a specified condition applies) that would be a “significant subsidiary”
under Rule 1-02(w) of Regulation S-X under the Securities Act.

     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 2.16.

     “Stated Maturity” means, with respect to any installment of interest or principal on any
Security, the date on which such payment of interest or principal shall become due and payable.

     “STC” means the Company’s indirect wholly-owned Subsidiary, Stewart Title Company, a Texas
corporation.

     “Subsidiary” means, with respect to any specified Person: (1) any corporation, association or
other business entity of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees of the corporation, association or other business entity is at the
time owned or controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); or (2) any partnership (a) the sole general
partner or the managing general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more Subsidiaries of that Person
(or any combination thereof).

     “TIA” means the Trust Indenture Act of 1939, as amended, and the rules and regulations
thereunder as in effect on the date of this Indenture, except to the extent that the Trust
Indenture Act or any amendment thereto expressly provides for application of the Trust Indenture
Act as in effect on another date.

     “Trading Day” means a day on which (i) trading in the Common Stock generally occurs on the New
York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, on
the principal other United States national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on a United States national or
regional securities exchange, in the principal other market on which the Common Stock is then
traded, and (ii) a Last Reported Sale Price for the Common Stock is available on such securities
exchange or market. If the Common Stock (or other security for which a closing sale price must be
determined) is not so listed or traded, “Trading Day” means a Business Day.

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

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

     “U.S.” means the United States of America.

     “Vice President” when used with respect to the Company or the Trustee, means any vice
president, whether or not designated by a number or a word or words added before or after the title
“vice president.”

     Section 1.02 Other Definitions.

	 	 	 	 	 
	Term	 	Defined in Section
	 
	 	 	 	 
	“Act”

	 	 	12.05	(a)
	“Additional Shares”

	 	 	4.06	(a)
	“Agent Members”

	 	 	2.01	(b)

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	Term	 	Defined in Section
	 
	 	 	 	 
	“Clause A Distribution”

	 	 	4.04	(c)
	“Clause B Distribution”

	 	 	4.04	(c)
	“Clause C Distribution”

	 	 	4.04	(c)
	“Company Notice”

	 	 	3.07	(a)
	“Conversion Agent”

	 	 	2.03	(a)
	“Conversion Date”

	 	 	4.02	(b)
	“Conversion Notice”

	 	 	4.02	(b)
	“DTC”

	 	 	2.01	(a)
	“Defaulted Interest”

	 	 	2.16	 
	“Depositary”

	 	 	2.01	(a)
	“Automatic Exchange”

	 	 	2.18	 
	“Automatic Exchange Notice”

	 	 	2.18	 
	“Effective Date”

	 	 	4.06	(c)
	“Event of Default”

	 	 	7.01	(a)
	“Fundamental Change Company Notice”

	 	 	3.01	(b)
	“Fundamental Change Purchase Date”

	 	 	3.01	(b)
	“Fundamental Change Purchase Notice”

	 	 	3.01	(e)
	“Fundamental Change Purchase Price”

	 	 	3.01	(a)
	“in connection with”

	 	 	4.06	 
	“Initial Maximum Conversion Rate”

	 	 	4.03	(a)
	“Notice of Default”

	 	 	7.01	(b)
	“Outstanding”

	 	 	2.09	(a)
	“Paying Agent”

	 	 	2.03	(a)
	“Primary Registrar”

	 	 	2.03	(a)
	“QIB”

	 	 	2.01	(a)
	“Reference Property”

	 	 	4.07	(a)
	“Registrar”

	 	 	2.03	(a)
	“Resale Restriction Termination Date”

	 	 	2.13	(d)
	“Restricted Common Stock”

	 	 	2.18	 
	“Restrictive Legend”

	 	 	2.13	(a)
	“Restricted Transfer Default”

	 	 	7.16	(a)
	“Restricted Transfer Triggering Date”

	 	 	7.16	(a)
	“Special Interest”

	 	 	7.02	(c)
	“Special Payment Date”

	 	 	2.16	(a)
	“Spin-Off”

	 	 	4.04	(c)
	“Stock Price

	 	 	4.06	(c)
	“Trigger Event”

	 	 	4.04	(c)
	“Unrestricted Common Stock”

	 	 	2.18	 
	“Unrestricted Global Security”

	 	 	2.18	 
	“Valuation Period”

	 	 	4.04	(c)

     Section 1.03 Trust Indenture Act Provisions.

     Whenever this Indenture refers to a provision of the TIA, that provision is incorporated by
reference in and made a part of this Indenture. The following TIA term used in this Indenture has
the following meaning:

     “obligor” on the indenture securities means the Company or any other obligor on the
Securities.

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

     Section 1.04 Rules Of Construction.

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

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

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

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

     (4) the term “merger” includes a statutory share exchange and the term “merged” has a
correlative meaning;

     (5) the masculine gender includes the feminine and the neuter;

     (6) the terms “include”, “including”, and similar terms should be construed as if
followed by the phrase “without limitation”;

     (7) references to agreements and other instruments include subsequent amendments
thereto; and

     (8) all “Article”, “Exhibit” and “Section” references are to Articles, Exhibits and
Sections, respectively, of or to this Indenture unless otherwise specified herein, and the
terms “hereunder,” “herein,” “hereof” and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other subdivision.

ARTICLE 2

THE SECURITIES

     Section 2.01 Form and Dating.

     The Securities and the Trustee’s certificate of authentication shall be substantially in the
respective forms set forth in Exhibit A, which Exhibit is incorporated in and made part of this
Indenture. The Securities may include such letters, numbers or other marks of identification and
such notations, legends, endorsements or changes as the Officer 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 Trustee, the Depositary, 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 national securities exchange or automated quotation system on
which the Securities may be listed or quoted, or to conform to usage, or to indicate any special
limitations or restrictions to which any particular Securities are subject. Each Security shall be
dated the date of its authentication.

     (a) Restricted Global Securities. All of the Securities are initially being offered
and sold to qualified institutional buyers as defined in Rule 144A (collectively, “QIBs” or
individually, each a “QIB”) in reliance on Rule 144A under the Securities Act and shall be
issued initially in the form of one or more Restricted Global Securities, which shall be deposited
on behalf of the purchasers of the securities represented thereby with the Trustee, at its
Corporate Trust Office, as custodian for the depositary, The Depository Trust Company
(“DTC”, and such depositary, or any successor thereto, being hereinafter referred to as the
“Depositary”), and registered in the name of its nominee, Cede & Co. (or any successor
thereto), for the accounts of participants in the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the
Restricted Global Securities may from time to time be increased or decreased by adjustments made on
the records of the Securities Custodian as hereinafter provided, subject in each case to compliance
with the Applicable Procedures.

     (b) Global Securities In General. The Global Security shall represent such of the
outstanding Securities as shall be specified therein and each shall provide that it shall represent
the aggregate principal amount of outstanding Securities from time to time endorsed thereon and
that the aggregate principal amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, purchases or conversions of
such Securities.

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     Members of, or participants in, the Depositary (“Agent Members”) shall have no rights
under this Indenture with respect to any Global Security held on their behalf by the Depositary or
under the Global Security, and the Depositary (including, for this purpose, its nominee) may be
treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner and Holder of such Global Security for all purposes whatsoever.

     Notwithstanding the foregoing, nothing herein shall (1) 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 (2) impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the exercise of the rights of a
Holder of any Security.

     (c) Book Entry Provisions. The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(c), authenticate and deliver initially one or more Global
Securities that (1) shall be registered in the name of the Depositary or its nominee, (2) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary’s instructions and (3)
shall bear legends substantially to the following effect:

     “UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE 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 IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”

     Section 2.02 Execution and Authentication.

     (a) The aggregate principal amount of Securities which may be authenticated and delivered
under this Indenture is limited to $65,000,000 aggregate principal amount, except as provided in
Sections 2.07 and 2.08.

     (b) The Securities shall be executed on behalf of the Company by one of its Officers. The
signatures of any of the Officers on the Securities may be manual or facsimile.

     (c) Securities bearing the manual or facsimile signatures of individuals who were at any time
the proper Officers of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices on the date on which such Securities were authenticated.

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

9

 

     (e) The Trustee shall authenticate and make available for delivery Securities for original
issue in the aggregate principal amount of up to $65,000,000 upon receipt of a Company Order. The
Company Order shall specify the amount of Securities to be authenticated, shall provide that all
such Securities will be represented by a Global Security and shall state the date on which each
original issue of Securities is to be authenticated.

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

     (g) The Securities shall be issuable only in registered form without coupons and only in
denominations of $1,000 principal amount and multiples of $1,000.

     Section 2.03 Registrar, Paying Agent and Conversion Agent.

     (a) The Company shall maintain one or more offices or agencies where Securities may be
presented for registration of transfer or for exchange (each, a “Registrar”), one or more
offices or agencies where Securities may be presented or surrendered for payment (each, a
“Paying Agent”), one or more offices or agencies where Securities may be presented for
conversion (each, a “Conversion Agent”) and one or more offices or agencies where notices
and demands to or upon the Company in respect of the Securities and this Indenture may be served.
The Company will at all times maintain a Paying Agent, Conversion Agent, Registrar and an office or
agency where notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served in the Borough of Manhattan, The City of New York. One of the Registrars
(the “Primary Registrar”) shall keep a register of the Securities and of their transfer and
exchange. At the option of the Company, any payment of cash may be made by check mailed to the
Holders at their addresses set forth in the register of Holders.

     (b) The Company shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture, provided that the Agent may be an Affiliate of the Trustee. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The Company shall notify the
Trustee of the name and address, and any change in the name or address, of any Agent not a party to
this Indenture. If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent, or
agent for service of notices and demands in any place required by this Indenture, or fails to give
the foregoing notice, the Trustee shall act as such. The Company or any Affiliate of the Company
may act as Paying Agent (except for the purposes of Article 9).

     (c) The Company hereby initially designates Wells Fargo Bank N.A. as Paying Agent, Registrar,
Primary Registrar, Securities Custodian and Conversion Agent, and designates the Corporate Trust
Office of the Trustee as the office or agency of the Company for each of the aforesaid purposes and
as the office or agency where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served.

     Section 2.04 Paying Agent To Hold Money In Trust.

     Unless otherwise specified herein, prior to 10:00 a.m., New York City time, on each due date
of the payment of principal of, or interest (including Additional Interest and Special Interest),
if any, on any Securities, the Company shall deposit a sum sufficient to pay such principal or
interest (including Additional Interest and Special Interest), if any, so becoming due. A Paying
Agent shall hold in trust for the benefit of Holders of Securities or the Trustee all money held by
the Paying Agent for the payment of principal of, or interest (including Additional Interest and
Special Interest), if any, on, the Securities, and shall notify the Trustee of any failure by the
Company (or any other obligor on the Securities) to make any such payment. If the Company or an
Affiliate of the Company acts as Paying Agent, it shall, before 10:00 a.m., New York City time, on
each due date of the principal of, or interest (including Additional Interest and Special
Interest), if any, on, any Securities, segregate the money and hold it as a separate trust fund for
the benefit of Holders. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee, and the Trustee may at any time during the continuance of any Default, upon
written request to a Paying Agent, require such Paying Agent to pay forthwith to the Trustee all
sums so held in trust by such Paying Agent. Upon doing so, the Paying Agent (other than the
Company) shall have no further liability for the money so paid to the Trustee.

10

 

     Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or interest (including Additional Interest and Special
Interest), if any, on any Security and remaining unclaimed for two years after such principal or
interest (including Additional Interest and Special Interest), if any, has become due and payable
shall promptly be paid to the Company or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to
make any such repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each Business Day and of
general circulation in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will promptly be repaid to the
Company.

     Section 2.05 Conversion Agent To Hold Money In Trust.

     The Company shall require each Conversion Agent (that is not the Trustee) to agree in writing
that the Conversion Agent will hold in trust for the benefit of Holders or the Trustee all cash and
shares of Common Stock delivered by the Company to the Conversion Agent for the delivery of amounts
due upon conversion, and will notify the Trustee of any default by the Company in making any such
delivery.

     While any such default continues, the Trustee may require a Conversion Agent to deliver all
cash and shares of Common Stock delivered by the Company to it to the Trustee. Upon payment over
to the Trustee, the Conversion Agent (if other than the Company or a Subsidiary) shall have no
further liability in respect of such amounts. If the Company or a Subsidiary acts as Conversion
Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all cash
and shares of Common Stock held by it as Conversion Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Conversion Agent for the
Securities.

     Section 2.06 Lists of Holders of Securities.

     The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders of Securities. The Company shall
furnish or cause the Registrar to furnish to the Trustee (a) semiannually, not more than 10 days
after each Regular Record Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and (b) at such other times as
the Trustee may request in writing, within 30 days after receipt by the Company of any such
request, a list of similar form and content to that in subsection (a) hereof as of a date not more
than 15 days prior to the time such list is furnished; provided, however, that if and so long as
the Trustee shall be the Primary Registrar, no such list need be furnished.

     Section 2.07 Transfer and Exchange.

     (a) Subject to compliance with any applicable additional requirements contained in Section
2.13, when a Security is presented to a Registrar with a request to register a transfer thereof or
to exchange such Security for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met; provided, however, that every Security presented or
surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by an
assignment form and, if applicable, a transfer certificate each substantially in the form included
in Exhibit A, and completed in a manner satisfactory to the Registrar and duly executed by the
Holder thereof or its attorney duly authorized in writing. To permit registration of transfers and
exchanges, upon surrender of any Security for registration of transfer or exchange at an office or
agency maintained pursuant to Section 2.03(a), the Company shall execute and the Trustee shall
authenticate Securities of a like aggregate principal amount at the Registrar’s request. Any
exchange or transfer shall be without charge, except that the Company or the Registrar may require
payment of a sum sufficient to cover any transfer tax or similar governmental charge that may be
imposed in relation thereto; provided that this sentence shall not apply to any exchange pursuant
to Section 2.11, 2.13(a), 4.02(d) or 10.06.

11

 

     (b) Neither the Company, any Registrar nor the Trustee shall be required to register the
transfer of or exchange any Securities or portions thereof in respect of which a Fundamental Change
Purchase Notice has been delivered and not withdrawn by the Holder thereof (except, in the case of
the purchase of a Security in part, the portion thereof not to be purchased).

     (c) All Securities issued upon any transfer or exchange of Securities shall be 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.

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

     (e) Each Holder of a Security agrees to indemnify the Company and the Trustee against any
liability that may result from the registration of transfer, exchange or assignment of such
Holder’s Security in violation of any provision of this Indenture and/or applicable United States
federal or state securities law.

     (f) 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 Security (including any transfers between or
among Agent Members or other beneficial owners of interests in any Global Security) 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 2.08 Replacement Securities.

     (a) If (1) any mutilated Security is surrendered to the Trustee, or (2) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security,
and there is delivered to the Company and the Trustee, such security or indemnity, in each case, as
may be required by them to save each of them harmless from any loss, expense, claim or liability,
then, in the absence of notice to the Company or the Trustee that such Security has been acquired
by a protected purchaser, the Company shall execute and upon a Company Request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a replacement Security of like tenor and principal amount,
bearing a number not contemporaneously outstanding.

     (b) If any such mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, or is about to be purchased by the Company pursuant to Article 3, or converted
pursuant to Article 4, the Company in its discretion may, instead of issuing a new Security, pay,
purchase or convert such Security, as the case may be.

     (c) Upon the issuance of any new Securities under this Section 2.08, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of counsel and the
Trustee) in connection therewith.

     (d) Every new Security issued pursuant to this Section 2.08 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

     (e) The provisions of this Section 2.08 are (to the extent lawful) exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

     Section 2.09 Outstanding Securities.

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     (a) Securities outstanding (“Outstanding”) at any time are all Securities
authenticated by the Trustee, except for those canceled by it, those purchased pursuant to Article
3, those converted pursuant to Article 4, those delivered to the Trustee for cancellation or
surrendered for transfer or exchange and those described in this Section 2.09 as not Outstanding.

     (b) If a Security is replaced pursuant to Section 2.08, such replaced Security ceases to be
Outstanding unless the Company receives proof satisfactory to it that the replaced Security is held
by a protected purchaser.

     (c) If a Paying Agent holds in respect of the Outstanding Securities on a Fundamental Change
Purchase Date or the Final Maturity Date, as the case may be, money sufficient to pay the principal
of and accrued interest (including Additional Interest and Special Interest), if any, on Securities
(or portions thereof) payable on that date, then on and after such Fundamental Change Purchase Date
or the Final Maturity Date, such Securities (or portions thereof, as the case may be) shall cease
to be Outstanding, interest (including Additional Interest and Special Interest), if any, on such
Securities shall cease to accrue and all other rights of the Holder will terminate unless otherwise
specified in this Indenture.

     (d) Subject to the restrictions contained in Section 2.10, a Security does not cease to be
Outstanding because the Company or an Affiliate of the Company holds the Security.

     Section 2.10 Treasury Securities.

     In determining whether the Holders of the required principal amount of Securities have
concurred in any request, demand, authorization, notice, direction, waiver or consent, Securities
owned by the Company or any other obligor on the Securities or by any Affiliate of the Company or
of such other obligor shall be disregarded, except that, for purposes of determining whether the
Trustee shall be protected in relying on any such request, demand, authorization, notice,
direction, waiver or consent, only Securities which a Trust Officer of the Trustee actually knows
are so owned shall be so disregarded.

     Section 2.11 Temporary Securities.

     Until definitive Securities are ready for delivery, the Company may prepare and execute, and,
upon receipt of a Company Order, the Trustee shall authenticate and deliver, temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities but may have
variations that the Company with the consent of the Trustee considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate and deliver definitive Securities in exchange for temporary Securities representing an
equal principal amount of Securities. The temporary Securities will be exchanged for definitive
Securities in accordance with Sections 2.07 and 2.13 hereof. Until so exchanged, temporary
Securities shall have the same rights under this Indenture as the definitive Securities.

     Section 2.12 Cancellation.

     The Company at any time may deliver Securities to the Trustee for cancellation. The
Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange, purchase, payment or conversion. The Trustee and no
one else shall cancel, in accordance with its standard procedures, all Securities surrendered for
transfer, exchange, purchase, payment, conversion or cancellation and shall dispose of the
cancelled Securities in accordance with its customary procedures or deliver the canceled Securities
to the Company upon request. All Securities which are purchased or otherwise acquired by the
Company or any of its Subsidiaries prior to the Final Maturity Date pursuant to Article 3 shall be
delivered to the Trustee for cancellation, and the Company may not hold or resell such Securities
or issue any new Securities to replace any such Securities or any Securities that any Holder has
converted pursuant to Article 4. The Trustee shall maintain a record of all canceled Securities.
The Trustee shall provide the Company a list of all Securities that have been canceled from time to
time as requested by the Company in writing.

     Section 2.13 Restrictive Legend; Additional Transfer and Exchange Requirements.

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     (a) If Securities are issued upon the transfer, exchange or replacement of Securities subject
to restrictions on transfer and bearing the Restrictive Legend called for in footnote 2 set forth
on the form of Securities attached as Exhibit A (collectively, the “Restrictive Legend”),
or if a request is made to remove the Restrictive Legend on a Security, the Securities so issued
shall bear the Restrictive Legend, or the Restrictive Legend shall not be removed, as the case may
be, unless there is delivered to the Company and the Registrar such satisfactory evidence, which
shall include an Opinion of Counsel if requested by the Company or such Registrar, as may be
reasonably required by the Company and the Registrar, that neither the Restrictive Legend nor the
restrictions on transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that such Securities are
not “restricted” within the meaning of Rule 144 under the Securities Act; provided that no such
evidence need be supplied in connection with the sale of such Security pursuant to a registration
statement that is effective under the Securities Act at the time of such sale. Upon (1) provision
of such satisfactory evidence if requested or (2) notification by the Company to the Trustee and
Registrar of the sale of such Security pursuant to a registration statement that is effective under
the Securities Act at the time of such sale, the Trustee, at the written direction of the Company,
shall authenticate and deliver a Security that does not bear the Restrictive Legend. If the
Restrictive Legend is removed from the face of a Security and the Security is subsequently held by
an affiliate of the Company within the meaning of Rule 144 under the Securities Act, the
Restrictive Legend shall be reinstated.

     (b) A Global Security may not be transferred, in whole or in part, to any Person other than
the Depositary or a nominee or any successor thereof, and no such transfer to any such other Person
may be registered; provided that the foregoing shall not prohibit any transfer of a Security that
is issued in exchange for a Global Security but is not itself a Global Security. No transfer of a
Security to any Person shall be effective under this Indenture or the Securities unless and until
such Security has been registered in the name of such Person. Notwithstanding any other provisions
of this Indenture or the Securities, transfers of a Global Security, in whole or in part, shall be
made only in accordance with this Section 2.13.

     (c) Subject to Section 2.13(b) and in compliance with Section 2.13(d), every Security shall be
subject to the restrictions on transfer provided in the Restrictive Legend. Whenever any
Restricted Security other than a Restricted Global Security is presented or surrendered for
registration of transfer or in exchange for a Security registered in a name other than that of the
Holder, such Security must be accompanied by a certificate in substantially the form set forth in
Exhibit A, dated the date of such surrender and signed by the Holder of such Security, as to
compliance with such restrictions on transfer. The Registrar shall not be required to accept for
such registration of transfer or exchange any Security not so accompanied by a properly completed
certificate.

     (d) The restrictions imposed by the Restrictive Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to an effective
registration statement under the Securities Act or transferred in compliance with Rule 144 under
the Securities Act (or any successor provision thereto) or, if earlier, upon the date that is (x)
one year after the last date on which any of the Securities are originally issued 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 (the “Resale
Restriction Termination Date”). Any Security as to which such restrictions on transfer shall
have expired in accordance with their terms or shall have terminated may, upon a surrender of such
Security for exchange to the Registrar in accordance with the provisions of this Section 2.13
(accompanied, in the event that such restrictions on transfer have terminated by reason of a
transfer in compliance with Rule 144 or any successor provision, by, if requested by the Company or
the Registrar, an Opinion of Counsel reasonably acceptable to the Company and the Registrar and
addressed to the Company and the Registrar, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged for a new
Security, of like tenor and aggregate principal amount, which shall not bear the Restrictive
Legend. The Company shall inform the Trustee of the effective date of any registration statement
registering the offer and sale of the Securities under the Securities Act. The Trustee shall not
be liable for any action taken or omitted to be taken by it in good faith in accordance with the
aforementioned Opinion of Counsel.

          As used in Sections 2.13(c) and (d), the term “transfer” encompasses any sale, pledge,
transfer, hypothecation or other disposition of any Security.

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     (e) The provisions below shall apply only to Global Securities or any Securities issued in
exchange for a Global Security:

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

     (2) Notwithstanding any other provisions of this Indenture or the Securities, a Global
Security shall not be exchanged in whole or in part for a Security registered, and no
transfer of a Global Security in whole or in part shall be registered in the name of any
Person other than the Depositary or one or more nominees thereof; provided that a Global
Security may be exchanged for Securities registered in the names of any person designated by
the Depositary in the event that (A) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or such Depositary
has ceased to be a “clearing agency” registered under the Exchange Act, and in either case a
successor Depositary is not appointed by the Company within 60 days after receiving such
notice or becoming aware that the Depositary has ceased to be a “clearing agency” or (B) an
Event of Default has occurred and is continuing with respect to the Securities. Any Global
Security exchanged pursuant to the preceding sentence shall be so exchanged as directed by
the Depositary. Any Security issued in exchange for a Global Security or any portion
thereof shall be a Global Security; provided, however, that any such Security so issued that
is registered in the name of a Person other than the Depositary or a nominee thereof shall
not be a Global Security.

     (3) Securities issued in exchange for a Global Security or any portion thereof that are
not issued as a Global Security shall be issued in definitive, fully registered form,
without interest coupons, shall have a principal amount equal to that of such Global
Security or portion thereof to be so exchanged, shall be registered in such names and be in
such authorized denominations as the Depositary shall designate and shall bear the
applicable legends provided for herein. Any Global Security to be exchanged in whole shall
be surrendered by the Depositary to the Trustee or the Registrar. With regard to any Global
Security to be exchanged in part, either such Global Security shall be so surrendered for
exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with
respect to such Global Security, the principal amount thereof shall be reduced, 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 deliver the Security issuable on such exchange to or upon the order of the
Depositary or an authorized representative thereof.

     (4) Subject to clause (6) of this Section 2.13(e), the registered Holder may grant
proxies and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is entitled to take
under this Indenture or the Securities.

     (5) In the event of the occurrence of any of the events specified in clause (2) of this
Section 2.13(e), the Company will promptly make available to the Trustee a reasonable supply
of Certificated Securities in definitive, fully registered form, without interest coupons.

     (6) Neither 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 Security registered in
the name of the Depositary or any nominee thereof, or under any such Global Security, 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 Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall (i) 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 (ii) 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 Security.

     (7) At such time as all interests in a Global Security have been converted, cancelled
or exchanged for Securities in certificated form, such Global Security shall, upon receipt
thereof, be cancelled

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by the Trustee in accordance with standing procedures and instructions existing between
the Depositary and the Securities Custodian, subject to Section 2.12 of this Indenture. At
any time prior to such cancellation, if any interest in a Global Security is converted,
canceled or exchanged for Securities in certificated form, the principal amount of such
Global Security shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Securities Custodian, be appropriately reduced, and an
endorsement shall be made on such Global Security, by the Trustee or the Securities
Custodian, at the direction of the Trustee, to reflect such reduction.

     (f) Until Resale Restriction Termination Date, any stock certificate representing Common Stock
issued upon conversion of any Security shall bear a legend in substantially the following form,
unless such Common Stock has been sold pursuant to an effective registration statement under the
Securities Act or transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto), or such Common Stock has been issued upon conversion of Securities
that have been transferred pursuant to a registration statement that has been declared effective
under the Securities Act or pursuant to Rule 144 under the Securities Act (or any successor
provision thereto), or unless otherwise agreed by the Company in writing with written notice
thereof to the transfer agent:

THIS SECURITY IS ONE OF A DULY AUTHORIZED ISSUE OF SECURITIES OF STEWART
INFORMATION SERVICES CORPORATION (THE “COMPANY”) DESIGNATED AS “6.00%
CONVERTIBLE SENIOR NOTES DUE 2014” (THE “SECURITIES”). THIS SECURITY AND
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER:

	 	(1)	 	REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A
“QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT
DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
	 
	 	(2)	 	AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER,
RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY
BENEFICIAL INTEREST HEREIN, OR ANY COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY, PRIOR TO THE DATE THAT IS (X) ONE
YEAR AFTER THE LAST DATE ON WHICH ANY OF THE SECURITIES ARE
ORIGINALLY ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY
RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAW, EXCEPT:

	 	(A)	 	TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
	 
	 	(B)	 	PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME
EFFECTIVE UNDER THE SECURITIES ACT, OR
	 
	 	(C)	 	TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT (IF AVAILABLE), OR
	 
	 	(D)	 	PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.

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

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

     Section 2.14 CUSIP Numbers.

     The Company in issuing the Securities may use one or more “CUSIP” numbers (if then generally
in use), and, if so, the Trustee shall use “CUSIP” numbers in a Fundamental Change Purchase Notice
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
Fundamental Change Purchase Notice and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such purchase shall not be affected by any defect in or
omission of such numbers. The Company will notify the Trustee in writing of any change in the
“CUSIP” numbers.

     Section 2.15 Calculations.

     Except as otherwise specifically stated herein or in the Securities, all calculations to be
made in respect of the Securities shall be the obligation of the Company. All calculations made by
the Company or its agent as contemplated pursuant to the terms hereof and of the Securities shall
be made in good faith and be final and binding on the Holders absent manifest error. The Company
shall provide a schedule of calculations to the Trustee upon the Trustee’s request, and the Trustee
shall be entitled to conclusively rely upon the accuracy of the calculations by the Company without
independent verification. The Trustee shall forward calculations made by the Company to any Holder
of Securities upon request.

     Section 2.16 Payment of Interest; Interest Rights Preserved.

     Interest (including Additional Interest and Special Interest), if any, on any Security which
is payable, and is punctually paid or duly provided for, on the Stated Maturity of such interest
(including Additional Interest and Special Interest), if any, shall be paid to the Person in whose
name the Security is registered at the close of business on the Regular Record Date for such
interest payment.

     Any interest (including Additional Interest and Special Interest), if any, on any Security
which is payable, but is not punctually paid or duly provided for, on the Stated Maturity of such
interest (including Additional Interest and Special Interest), if any, and interest on such
defaulted interest at the then applicable interest rate borne by the Securities, to the extent
lawful (such defaulted interest and interest thereon herein collectively called “Defaulted
Interest”), shall forthwith cease to be payable to the Holder on the Regular Record Date;
and such Defaulted Interest may be paid by the Company, at its election in each case, as provided
in Subsection (a) or (b) below:

     (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date (not less than 25 days after such notice) of the proposed payment (the
“Special Payment Date”), and on the date of payment the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such

17

 

Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the Special Payment Date, such money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this subsection provided. Upon receipt of
such notice, the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the date of the Special
Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company in writing of such Special Record
Date. Unless the Company issues a press release to the same effect, in the name and at the expense
of the Company, the Trustee shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at
its address as it appears in the Security Register, not less than 10 days prior to such Special
Record Date or notify in such other manner as the Trustee determines, including in accordance with
any Applicable Procedures. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date and Special Payment Date therefor having been so mailed or otherwise conveyed,
such Defaulted Interest shall be paid to the Persons in whose names the Securities are registered
on such Special Record Date and shall no longer be payable pursuant to the following paragraph (b).

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

     (c) Subject to the foregoing provisions of this Section 2.16, each Security delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest (including Additional Interest and Special Interest), if any,
accrued and unpaid, and to accrue, which were carried by such other Security.

     Section 2.17 Computation of Interest.

     Interest (including Additional Interest and Special Interest) on the Securities shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.

     Section 2.18 Automatic Exchange from Restricted Global Security to Unrestricted Global
Security.

     Beneficial interests in a Restricted Global Security or Common Stock issued upon conversion of
Restricted Securities (“Restricted Common Stock”) shall be automatically exchanged into
beneficial interests in an unrestricted Global Security or stock certificate representing
unrestricted Common Stock, as applicable, that is no longer subject to the restrictions set out in
the Restrictive Legend (the “Unrestricted Global Security” or “Unrestricted Common
Stock”, as applicable), without any action required by or on behalf of the Holders (the
“Automatic Exchange”). In order to effect such exchange, the Company shall at least 15
days but not more than 30 days prior to the Resale Restriction Termination Date, deliver a notice
of Automatic Exchange (an “Automatic Exchange Notice”) to each Holder at such Holder’s
address appearing in the Security Register or register maintained at the registrar for Common
Stock, as applicable, with a copy to the Trustee or transfer agent for Common Stock, as applicable.
The Automatic Exchange Notice shall identify the Securities or Common Stock, as applicable,
subject to the Automatic Exchange and shall state: (1) the date of the Automatic Exchange; (2) the
section of this Indenture pursuant to which the Automatic Exchange shall occur; (3) the “CUSIP”
number of the Restricted Global Security or Restricted Common Stock, as applicable, from which such
Holders’ beneficial interests shall be transferred and (4) the “CUSIP” number of the Unrestricted
Global Security or Unrestricted Common Stock, as applicable, into which such holders’ beneficial
interests shall be transferred. At the Company’s request on no less than 5 days’ prior notice, the
Trustee shall deliver, or, with respect to Common Stock, the Company shall cause the transfer agent
to deliver, in the Company’s name and at its expense, the Automatic Exchange Notice to each holder
at such holder’s address appearing in the Security Register or register maintained at the registrar
for Common Stock, as applicable; provided, however, that the Company shall have delivered to the
Trustee or transfer agent, as applicable, a Company Order and an Officer’s Certificate requesting
that the Trustee or transfer agent, as applicable, give the Automatic Exchange Notice (in the name
and at the expense of the Company) and setting forth the information to be stated in the Automatic
Exchange Notice as provided in the preceding sentence. As a condition to any such exchange
pursuant to this Section 2.18, the Trustee or transfer agent, as applicable, shall be entitled to
receive from the Company, and rely

18

 

conclusively without any liability, upon an Officer’s Certificate and an Opinion of Counsel to
the Company, in form and in substance reasonably satisfactory to the Trustee or transfer agent, as
applicable, to the effect that such transfer of beneficial interests to the Unrestricted Global
Security or Unrestricted Common Stock, as applicable, shall be effected in compliance with the
Securities Act. Upon such exchange of beneficial interests pursuant to this Section 2.18, (i) with
respect to the Securities, the Security Registrar shall reflect on its books and records the date
of such transfer and a decrease and increase, respectively, in the principal amount of the
applicable Restricted Global Security(s) and the Unrestricted Global Security, respectively, equal
to the principal amount of beneficial interests transferred or (ii) with respect to Common Stock,
the registrar for Common Stock shall reflect on its books and records the date of such transfer and
a decrease and increase, respectively, in the number of shares of the applicable Restricted Common
Stock and the Unrestricted Common Stock, respectively, equal to the beneficial interests
transferred. If an Unrestricted Global Security is not then outstanding at the time of the
Automatic Exchange, the Company shall execute and the Trustee shall authenticate and deliver an
Unrestricted Global Security to the Depositary. Following any such transfer pursuant to this
Section 2.18, the relevant Restricted Global Security or Restricted Common Stock, as applicable,
shall be cancelled.

ARTICLE 3

REPURCHASE

     Section 3.01 Repurchase of Securities at Option of the Holder upon a Fundamental
Change.

     (a) In the event a Fundamental Change shall occur at any time when any Securities remain
outstanding, each Holder shall have the right, at such Holder’s option, to require the Company to
purchase for cash any or all of such Holders’ Securities, or any portion of the principal amount
thereof, that is equal to $1,000 or an integral multiple thereof on a date specified by the Company
(the “Fundamental Change Purchase Date”) that is no earlier than the 20th calendar day
following the date of, and no later than the 35th calendar day following the date of, delivery of
the Fundamental Change Company Notice (as defined below) at a purchase price in cash equal to 100%
of the principal amount of the Securities tendered for purchase, plus accrued and unpaid interest
(including Additional Interest and Special Interest), if any, on those Securities to, but
excluding, the Fundamental Change Purchase Date (the “Fundamental Change Purchase Price”),
subject to satisfaction by or on behalf of any Holder of the requirements set forth in Section
3.01(c); provided that if the Fundamental Change Purchase Date is on a date that is after a Regular
Record Date and on or prior to the corresponding Interest Payment Date, the Fundamental Change
Purchase Price shall be 100% of the principal amount of the Securities repurchased but shall not
include accrued and unpaid interest (including Additional Interest and Special Interest), if any.
Instead, the Company shall pay such accrued and unpaid interest (including Additional Interest and
Special Interest), if any, on the Interest Payment Date, to the Holder of record at the close of
business on the corresponding Regular Record Date.

     (b) On or before the 20th calendar day after the occurrence of a Fundamental Change, the
Company shall mail a written notice of the occurrence of the Fundamental Change and of the
resulting purchase right to the Trustee, Paying Agent and to each Holder of record of Securities (a
“Fundamental Change Company Notice”). The Fundamental Change Company Notice shall include
the form of a Fundamental Change Purchase Notice (defined below) to be completed by the Holder and
shall state:

     (1) the events causing such Fundamental Change;

     (2) the date of such Fundamental Change;

     (3) the last date by which the Fundamental Change Purchase Notice must be delivered to
elect the purchase option pursuant to this Section 3.01;

     (4) the Fundamental Change Purchase Date;

     (5) the Fundamental Change Purchase Price;

     (6) the Holder’s right to require the Company to purchase the Securities;

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

     (8) the then effective Conversion Rate and any adjustments to the Conversion Rate
resulting from such Fundamental Change;

     (9) the procedures that the Holder must follow to exercise rights under Article 4 of
this Indenture and that the Securities as to which a Fundamental Change Purchase Notice has
been given may be converted into Common Stock pursuant to Article 4 of this Indenture only
to the extent that the Fundamental Change Purchase Notice has been withdrawn in accordance
with the terms of this Indenture;

     (10) the procedures that the Holder must follow to exercise rights under this Section
3.01;

     (11) the procedures for withdrawing a Fundamental Change Purchase Notice;

     (12) that, unless the Company fails to pay such Fundamental Change Purchase Price,
Securities covered by any Fundamental Change Purchase Notice will cease to be outstanding
and interest, (including Additional Interest and Special Interest), if any, will cease to
accrue on and after the Fundamental Change Purchase Date; and

     (13) the CUSIP number of the Securities.

     At the Company’s written request, the Trustee shall give such Fundamental Change Company
Notice in the Company’s name and at the Company’s expense; provided that, in all cases, the text of
such Fundamental Change Company Notice shall be prepared by the Company. In connection with the
delivery of the Fundamental Change Notice to the Holders, the Company shall publish a notice
containing substantially the same information that is required in the Fundamental Change Company
Notice in a newspaper of general circulation in the City of New York or publish information on a
website of the Company or through such other public medium the Company may use at that time. If
any of the Securities is in the form of a Global Security, then the Company shall modify such
notice to the extent necessary to accord with the Applicable Procedures relating to the purchase of
Global Securities. No failure of the Company to give the Fundamental Change Company Notice and no
defect therein shall limit the purchase rights of the Holders of Securities or affect the validity
of the proceedings for the purchase of the Securities pursuant to this Section 3.01.

     (c) A Holder may exercise its rights specified in Section 3.01(a) upon delivery of a written
notice (which shall be in substantially the form set forth in the form of Security attached as
Exhibit A under the heading “Fundamental Change Purchase Notice” and which may be delivered by
letter, overnight courier, hand delivery, facsimile transmission or in any other written form and,
in the case of Global Securities, may be delivered electronically or by other means in accordance
with the Depositary’s Applicable Procedures) of the exercise of such rights (a “Fundamental
Change Purchase Notice”) to the Paying Agent at any time prior to the close of business on the
Business Day immediately preceding the Fundamental Change Purchase Date, subject to extension to
comply with applicable law.

     (1) The Fundamental Change Purchase Notice shall state: (A) if Certificated Securities
are to be purchased, the certificate numbers of the Securities which the Holder will deliver
to be purchased (or, if the Security is held in global form, any other items required to
comply with the Applicable Procedures), (B) the portion of the principal amount of the
Securities which the Holder will deliver to be purchased, which portion must be a principal
amount of $1,000 or any integral multiple thereof and (C) that such Security shall be
purchased as of the Fundamental Change Purchase Date pursuant to the terms and conditions
specified in the Securities and in this Indenture.

     (2) The delivery of a Security for which a Fundamental Change Purchase Notice has been
timely delivered to any Paying Agent and not validly withdrawn prior to, on or after the
Fundamental Change Purchase Date (together with all necessary endorsements) at the office of
such Paying Agent shall be a condition to the receipt by the Holder of the Fundamental
Change Purchase Price therefor.

20

 

     (3) The Company shall only be obliged to purchase, pursuant to this Section 3.01, a
portion of a Security if the principal amount of such portion is $1,000 or an integral
multiple thereof. Provisions of this Indenture that apply to the purchase of all of a
Security also apply to the purchase of such portion of such Security.

     (4) Notwithstanding anything herein to the contrary, any Holder delivering to a Paying
Agent the Fundamental Change Purchase Notice contemplated by this Section 3.01(c) shall have
the right to withdraw such Fundamental Change Purchase Notice in whole or in a portion
thereof that is a principal amount of $1,000 or in an integral multiple thereof at any time
prior to the close of business on the Business Day prior to the Fundamental Change Purchase
Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with
Section 3.02(b).

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

     (6) Anything herein to the contrary notwithstanding, in the case of Global Securities,
any Fundamental Change Purchase Notice may be delivered or withdrawn and such Securities may
be surrendered or delivered for purchase in accordance with the Applicable Procedures as in
effect from time to time.

     (7) There shall be no repurchase of any Securities pursuant to this Section 3.01 if an
Event of Default (other than a default in the payment of the Fundamental Change Purchase
Price) has occurred prior to, on or after, as the case may, the giving by the Holders of
such Securities of the required Fundamental Change Purchase Notice and such Event of Default
is continuing. The Paying Agent will promptly return to the respective Holders thereof any
Securities (x) with respect to which a Fundamental Change Purchase Notice has been withdrawn
in compliance with this Indenture, or (y) held by it during the continuance of an Event of
Default (other than a default in the payment of the Fundamental Change Purchase Price) in
which case, upon such return, the Fundamental Change Repurchase Notice with respect thereto
shall be deemed to have been withdrawn.

     Section 3.02 Effect of Fundamental Change Purchase Notice.

     (a) Upon receipt by any Paying Agent of a Fundamental Change Purchase Notice, the Holder of
the Security in respect of which such Fundamental Change Purchase Notice was given shall (unless
such Fundamental Change Purchase Notice is withdrawn as specified below) thereafter be entitled to
receive the Fundamental Change Purchase Price with respect to such Security. The Fundamental
Change Purchase Price shall be paid to such Holder promptly following the later of (i) the
Fundamental Change Purchase Date with respect to such Security (provided such Holder has satisfied
the conditions in Section 3.01) and (ii) the time of delivery of such Security to a Paying Agent by
the Holder thereof in the manner required by Section 3.01. A Security in respect of which a
Fundamental Change Purchase Notice has been given by the Holder thereof may not be converted
pursuant to Article 4 hereof on or after the date of the delivery of such Fundamental Change
Purchase Notice, unless either (i) such Fundamental Change Purchase Notice has first been validly
withdrawn in accordance with Section 3.02(b); or (ii) there shall be a default in the payment of
the Fundamental Change Purchase Price, provided, that the conversion right with respect to such
Security shall terminate at the close of business on the date such default is cured and such
Security is purchased in accordance herewith.

     (b) A Fundamental Change Purchase Notice may be withdrawn by any Holder delivering such
Fundamental Change Purchase Notice upon delivery of a written notice of withdrawal (which may be
delivered by mail, overnight courier, hand delivery, facsimile transmission or in any other written
form and, in the case of Global Securities, may be delivered electronically or by other means in
accordance with the Applicable Procedures) to and actually received by Paying Agent at any time
prior to the close of business on the Business Day immediately preceding the Fundamental Change
Purchase Date, specifying:

          (i) if Certificated Securities are to be withdrawn, the certificate numbers of the Securities
in respect of which such notice of withdrawal is being submitted (or, if the Security is held in
global form, any other items required to comply with the Applicable Procedures);

21

 

          (ii) the principal amount of the Securities in respect of which such notice of withdrawal is
being submitted, which principal amount must be $1,000 or an integral multiple thereof; and

          (iii) the principal amount, if any, of the Securities that remains subject to the original
Fundamental Change Purchase Notice and that has been or shall be delivered for purchase by the
Company which principal amount must be $1,000 or an integral multiple thereof.

     The Paying Agent will promptly return to the respective Holders thereof any Certificated
Securities with respect to which a Fundamental Change Purchase Notice has been withdrawn in
compliance with the provisions of this Section 3.02(b).

     Section 3.03 Deposit of Fundamental Change Purchase Price.

     Prior to 10:00 a.m., New York City time, on a Fundamental Change Purchase Date, the Company
shall deposit with the Paying Agent (or if the Company or an Affiliate of the Company is acting as
the Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an amount in cash
(in immediately available funds) sufficient to pay the aggregate Fundamental Change Purchase Price
of all the Securities or portions thereof that are to be purchased on that Fundamental Change
Purchase Date.

     If a Paying Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City
time, on a Fundamental Change Purchase Date, cash sufficient to pay the aggregate Fundamental
Change Purchase Price of all Securities for which a Fundamental Change Purchase Notice has been
delivered and not validly withdrawn in accordance with this Indenture, then, on and after such
Repurchase Date, such Securities shall cease to be outstanding and interest (including Additional
Interest and Special Interest), if any, on such Securities shall cease to accrue, whether or not
such Securities are delivered to the Paying Agent, and the rights of the Holders in respect thereof
shall terminate (other than the right to receive the Fundamental Change Purchase Price upon
delivery of such Securities by their Holders to the Paying Agent).

     Section 3.04 Securities Purchased in Part.

     Any Certificated Security that is to be purchased only in part shall be surrendered at the
office of a Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form reasonably satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and promptly
after a Fundamental Change Purchase Date, the Company shall issue and the Trustee shall, upon
receipt of a Company Order (which the Company agrees to deliver promptly), authenticate and deliver
to the Holder of such Security, without service charge, a new Security or Securities, of such
authorized denomination or denominations as may be requested by such Holder, in aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased by the Company on such Fundamental Change Purchase Date.

     Section 3.05 Repayment to the Company.

     To the extent that the aggregate amount of cash deposited by the Company pursuant to Section
3.03 exceeds the aggregate Fundamental Change Purchase Price of the Securities or portions thereof
that the Company is obligated to purchase on the Fundamental Change Purchase Date, then promptly
after the applicable Fundamental Change Purchase Date, the Paying Agent shall return any such
excess cash to the Company.

     Section 3.06 Compliance With Securities Laws Upon Purchase of Securities.

     When complying with the provisions of Article 3 hereof and subject to any exemptions available
under applicable law, the Company shall:

     (a) comply with the provisions of any tender offer rules under the Exchange Act that may then
be applicable to the Company’s purchase of Securities under Article 3;

22

 

     (b) file a Schedule TO (or any successor or similar schedule, form or report) if required
under the Exchange Act; and

     (c) otherwise comply with all federal and state securities laws so as to permit the rights and
obligations in connection with any purchase pursuant to this Article 3 to be exercised in the time
and in the manner specified herein.

     To the extent that compliance with any such laws, rules and regulations would result in a
conflict with any of the terms hereof, this Indenture is hereby modified to the extent required for
the Company to comply with such laws, rules and regulations.

     Section 3.07 Purchase of Securities In Open Market.

     The Company may purchase Securities in the open market or by tender at any price or pursuant
to private agreements. The Company shall surrender any Security purchased by the Company pursuant
to this Article 3 to the Trustee for cancellation. Any Securities surrendered to the Trustee for
cancellation may not be reissued or resold by the Company and will be canceled promptly in
accordance with Section 2.12.

ARTICLE 4

CONVERSION

     Section 4.01 Right to Convert. (a) Subject to and upon compliance with the provisions
of this Indenture and except as set forth in Section 4.01(b) through Section 4.01(f), each Holder
of Securities shall have the right, at such Holder’s option, to convert the principal amount of any
such Securities, or any portion of such principal amount equal to $1,000 or a multiple of $1,000
thereof, at the Conversion Rate in effect on the Conversion Date for such Securities, at any time
prior to the close of business on the second Scheduled Trading Day immediately preceding the Final
Maturity Date.

     (b) Prior to the close of business on the Business Day immediately preceding the earlier of
(i) receipt of Shareholder Approval or (ii) April 15, 2014, Holders of the Securities shall have
the right, at such Holder’s option, to convert the principal amount of any such Securities, or any
portion of such principal amount equal to $1,000 or a multiple of $1,000 thereof, into the number
of shares of Common Stock and the amount of cash determined in accordance with Section 4.03(a) if
and only if:

     (1) a Holder surrenders any of its Securities for conversion during any calendar
quarter beginning after September 30, 2009, and only during any such calendar quarter, in
which the Last Reported Sale Price for not less than any twenty (20) Trading Days in the
thirty (30) consecutive Trading Days ending on the last Trading Day of the preceding
calendar quarter is more than one hundred-thirty percent (130%) of the Conversion Price in
effect on the applicable Trading Day; or

     (2) a Holder surrenders any of its Securities for conversion during the five (5)
consecutive Trading-Day period following any five (5) consecutive Trading-Day period in
which the Note Trading Price determined following a reasonable request by a Holder of the
Securities was less than ninety-eight percent (98%) of the product of the Last Reported Sale
Price on the applicable Trading Day and the Conversion Rate on the applicable Trading Day;
or

     (3) the shares of Common Stock have ceased to be listed on a United States national or
regional securities exchange for a period of thirty (30) consecutive Trading Days.

     (c) If, prior to the close of business on the Trading Day immediately preceding the earlier of
(i) receipt of Shareholder Approval or (ii) April 15, 2014, the Company elects to distribute to all
holders of shares of Common Stock:

23

 

     (1) rights entitling the holders of shares of Common Stock to purchase, for a period
expiring within forty-five (45) calendar days of the date of the distribution of such
rights, shares of Common Stock at a price per share that is less than the Last Reported Sale
Price on the Trading Day immediately preceding the declaration date of such distribution, or

     (2) assets, debt securities or rights to purchase securities of the Company with a
value per share of Common Stock that exceeds fifteen percent (15%) of the Last Reported Sale
Price on the Trading Day immediately preceding the declaration date of such distribution,

then the Company shall notify the Holders of Securities at least twenty (20) calendar days prior to
the Ex-Dividend Date for such distribution and, following delivery of such notice, a Holder may
surrender any of its Securities for conversion into the number of shares of Common Stock and the
amount of cash determined in accordance with Section 4.03(a) at any time until the earlier of the
close of business on the Business Day prior to the Ex-Dividend Date or an announcement by the
Company that such distribution will not take place. Notwithstanding the foregoing, a Holder of
Securities may not exercise the conversion right set forth in this Section 4.01(c) if a Holder of
Securities will receive the rights, assets, debt securities or rights to purchase securities
described the in clauses (1) and (2) immediately preceding this paragraph in such distribution that
are equal to that which a Holder of Securities would have received had such Holder converted its
Securities into shares of Common Stock immediately prior to such distribution.

     (d) If, prior to the close of business on the Trading Day immediately preceding the earlier of
receipt of Shareholder Approval or April 15, 2014, the Company is party to a consolidation, merger,
binding share exchange or a sale, lease or other transfer of all or substantially all of the
consolidated assets of the Company pursuant to which all of the outstanding shares of Common Stock
would be exchanged for cash, securities or other property that does not otherwise constitute a
Fundamental Change, (i) the Company shall notify Holders of the Securities of such transaction as
promptly as practicable following the date on which the Company publicly announces such transaction
(but in no event less than fifteen (15) Business Days prior to the anticipated effective date of
such transaction), and (ii) a Holder of Securities may surrender any of its Securities for
conversion into the number of shares of Common Stock and the amount of cash determined in
accordance with Section 4.03(a) at any time from and including the date that is fifteen (15)
Business Days prior to the anticipated effective date of the transaction up to and including five
(5) Business Days after the effective date of such transaction.

     (e) If the Company is party to a transaction that constitutes a Fundamental Change prior to
the close of business on the Trading Day immediately preceding the earlier of receipt of
Shareholder Approval or April 15, 2014, (i) the Company shall notify Holders of the Securities of
such transaction as promptly as practicable following the date on which the Company publicly
announces such transaction (but in no event less than five (5) Business Days prior to the
anticipated effective date of such transaction), and (ii) if a Holder of Securities has not
exercised its right to require the Company to repurchase its Securities pursuant to Section 3.01 of
this Indenture, a Holder of Securities may surrender any of its Securities for conversion into the
number of shares of Common Stock and the amount of cash determined in accordance with Section
4.03(a) at any time from and including the effective date of such transaction up to and including
the thirtieth (30th) Business Day following the effective date of the transaction.

     (f) If, prior to the close of business on the Trading Day immediately preceding the earlier of
receipt of Shareholder Approval or April 15, 2014, the Company is party to a consolidation, merger,
binding share exchange or a sale, lease or other transfer of all or substantially all of the
consolidated assets of the Company pursuant to which all of the outstanding shares of Common Stock
would be exchanged for cash, securities or other property, then from and after the effective date
of such transaction any conversion of Securities, including the conversion value deliverable in
connection with such exchange, will be based on the kind and amount of cash, securities or other
property that a Holder of Securities would have received if such Holder had converted its
Securities into shares of Common Stock immediately prior to the effective date of such transaction;
provided, however, if all of outstanding shares of Common Stock would be exchanged in such
transaction for the right to receive more than a single type of consideration based upon any form
of election made by a holder of shares of Common Stock, then the amount of consideration to be
received from and after the effective date of such transaction upon any conversion of the
Securities will be deemed to be the weighted average of the types and amounts of consideration
received by the holders of shares of Common Stock that affirmatively make such an election.

24

 

     (g) Securities may not be converted after the close of business on the second Scheduled
Trading Day immediately preceding the Final Maturity Date. Notwithstanding anything to the
contrary in this Indenture, the Company shall have no obligation to request that the Trustee
determine the Note Trading Price unless a Holder of Securities provides the Company with reasonable
evidence that the Note Trading Price per $1,000 principal amount of the Securities is less than
ninety-eight (98%) of the product of the Last Reported Sale Price on the applicable Trading Day and
the Conversion Rate on the applicable Trading Day. If a Holder of Securities makes such a request,
the Company shall instruct the Trustee to determine the Note Trading Price beginning on the next
Trading Day and on each successive Trading Day until the Note Trading Price is greater than or
equal to ninety-eight (98%) of the product of the Last Reported Sale Price on the applicable
Trading Day and the Conversion Rate on the applicable Trading Day.

     Section 4.02 Conversion Procedures. (a) Each Security shall be convertible at the
office of the Conversion Agent and, if applicable, in accordance with the procedures of the
Depositary.

     (b) In order to exercise the conversion privilege with respect to any interest in a Global
Security, the Holder must complete the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, furnish appropriate endorsements and transfer documents
if required by the Company or the Conversion Agent, and pay the funds, if any, required by Section
4.03(c) and any taxes or duties if required pursuant to Section 4.08, and the Conversion Agent must
be informed of the conversion in accordance with the customary practice of the Depositary. In order
to exercise the conversion privilege with respect to any Certificated Securities, the Holder of any
such Securities to be converted, in whole or in part, shall:

          (i) complete and manually sign the conversion notice provided on the back of the Security (the
“Conversion Notice”) or a facsimile of the Conversion Notice;

          (ii) deliver the Conversion Notice, which is irrevocable, and the Security to the Conversion
Agent;

          (iii) if required, furnish appropriate endorsements and transfer documents,

          (iv) make any payment required under Section 4.03(c); and

          (v) if required, pay all transfer or similar taxes as set forth in Section 4.08.

     The date on which the Holder satisfies all of the applicable requirements set forth above is
the “Conversion Date.” The Conversion Agent will, as promptly as possible, and in any
event within two (2) Business Days of the receipt thereof, provide the Company with notice of any
conversion by a Holder of the Securities.

     (c) Each Conversion Notice shall state the name or names (with address or addresses) in which
any certificate or certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued. All such Securities surrendered for conversion shall, unless the shares
issuable on conversion are to be issued in the same name as the registration of such Securities, be
duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company
duly executed by, the Holder or his duly authorized attorney.

     (d) In case any Securities of a denomination greater than $1,000 shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of the Securities so surrendered, without charge, new Securities in authorized denominations
in an aggregate principal amount equal to the unconverted portion of the surrendered Securities.

Each conversion shall be deemed to have been effected as to any such Securities (or portion
thereof) surrendered for conversion on the relevant Conversion Date. The person in whose name the
certificate or certificates for the number of shares of Common Stock that shall be issuable upon
such conversion shall become the holder of record of such shares of Common Stock as of the close of
business on such Conversion Date. Notwithstanding the foregoing and anything contained in this
Indenture to the contrary, in no event shall a Holder be entitled to the benefit of a Conversion
Rate adjustment pursuant to the provisions of Section 4.04 in respect of Securities surrendered for

25

 

conversion if, by virtue of being deemed the record holder of the shares of Common Stock issuable
upon such conversion pursuant to the foregoing sentence, such Holder participates, as a result of
being such holder of record, in the transaction or event that would otherwise give rise to such
Conversion Rate adjustment to the same extent and in the same manner as holders of shares of Common
Stock generally.

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

     (f) Notwithstanding the foregoing, a Security in respect of which a Holder has delivered a
Fundamental Change Purchase Notice exercising such Holder’s option to require the Company to
purchase such Security may be converted only if such notice of exercise is withdrawn in accordance
with Article 3 hereof prior to the close of business on the Business Day prior to the relevant
Fundamental Change Purchase Date.

     Section 4.03 Payments Upon Conversion. (a) Upon any conversion of Securities prior to
the close of business on the Trading Day immediately preceding the earlier of receipt of
Shareholder Approval or April 15, 2014, the Company shall deliver to the converting Holder a number
of shares equal to (i) the aggregate principal amount of Securities to be converted divided by
$1,000, multiplied by (ii) 56.0871 (“Initial Maximum Conversion Rate”, as adjusted for Conversion
Rate adjustments), and an amount of cash equal to (i) the aggregate principal amount of Securities
to be converted divided by $1,000, multiplied by (ii) the difference between the applicable
conversion rate and Initial Maximum Conversion Rate, multiplied by (iii) the Applicable Conversion
Share Price.

     (b) Upon any conversion of Securities after the earlier of receipt of Shareholder Approval or
April 15, 2014, on the third Business Day immediately following the Conversion Date, the Company
shall deliver to the converting Holder a number of shares of Common Stock equal to (i) the
aggregate principal amount of such Securities to be converted divided by $1,000, multiplied by (ii)
the Conversion Rate in effect as of such Conversion Date, together with any cash payment for any
fractional share of Common Stock as described in this Section 4.03.

     (c) Subject to Section 4.03(c) below, upon conversion, Holders shall not receive any separate
cash payment for accrued and unpaid interest (including Additional Interest and Special Interest),
if any, unless such conversion occurs between a Regular Record Date and the Interest Payment Date
to which it relates.

     (d) Upon the conversion of any Securities, the Holder will not be entitled to receive any
separate cash payment for accrued and unpaid interest (including Additional Interest and Special
Interest), if any, except to the extent specified below. The Company’s delivery to the Holder of
Common Stock together with any cash payment for any fractional share of Common Stock, into which a
Security is convertible will be deemed to satisfy in full the Company’s obligation to pay the
principal amount of the Securities so converted and accrued and unpaid interest (including
Additional Interest and Special Interest), if any, to, but not including, the Conversion Date. As a
result, accrued and unpaid interest (including Additional Interest and Special Interest), if any,
to, but not including, the Conversion Date will be deemed to be paid in full rather than cancelled,
extinguished or forfeited. Notwithstanding the foregoing, if Securities are converted after the
close of business on a Regular Record Date for the payment of interest, Holders of such Securities
at the close of business on such Regular Record Date will receive the interest (including
Additional Interest and Special Interest), if any, payable on such Securities on the corresponding
Interest Payment Date notwithstanding the conversion. Securities surrendered for conversion during
the period from the close of business on any Regular Record Date to the open of business on the
immediately following Interest Payment Date must be accompanied by funds equal to the amount of
interest (including Additional Interest and Special Interest), if any, payable on the Securities so
converted on such following Interest Payment Date; provided that no such payment need be made (i)
for conversions following the Regular Record Date immediately preceding the Final Maturity Date,
(ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record
Date and on or prior to the corresponding Interest Payment Date, or (iii) to the extent of any
overdue interest, if any overdue interest exists at the time of conversion with respect to such
Security.

     (e) The Company shall not issue fractional shares of Common Stock upon conversion of
Securities. If multiple Securities shall be surrendered for conversion at one time by the same
Holder, the number of full shares which shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the

26

 

Securities (or specified portions thereof to the extent permitted hereby) so surrendered. If
any fractional share of Common Stock would be issuable upon the conversion of any Securities, the
Company shall make payment therefor in cash in lieu of fractional shares of Common Stock based on
the Last Reported Sale Price on the relevant Conversion Date.

     Section 4.04 Adjustment of Conversion Rate. The Conversion Rate shall be adjusted
from time to time by the Company if any of the following events occurs, except that the Company
will not make any adjustment to the Conversion Rate if Holders of Securities participate, as a
result of holding the Securities, in any of the transactions described under Section 4.04(a) (but
only with respect to stock dividends or distributions), Section 4.04(b), Section 4.04(c), and
Section 4.04(d), at the same time as holders of the Common Stock participate, without having to
convert their Securities, as if such Holders held a number of shares of Common Stock equal to the
Conversion Rate in effect for such Securities immediately prior to the Record Date for such event.

     (a) If the Company, at any time or from time to time while any of the Securities are
outstanding, exclusively issues shares of its Common Stock as a dividend or distribution on shares
of Common Stock, or if the Company effects a share split or share combination, then the Conversion
Rate will be adjusted based on the following formula:

	 	 	 	 	 	 	 	 	 	 	 
	CR1

	 	=
	 	CR0
	 	x
	 	OS1
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	OS0	 	 

where,

	 	 	 	 	 
	CR0

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

	 	=
	 	the Conversion Rate in effect immediately after
the open of business on such Record Date or such
effective date;
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding
immediately prior to the open of business on such
Record Date or such effective date; and
	 
	 	 	 	 
	OS1

	 	=
	 	the number of shares of Common Stock outstanding
immediately after giving effect to such dividend,
distribution, share split or share combination.

Such adjustment shall become effective immediately after the open of business on the Record Date
for such dividend or distribution or the effective date for such share split or share combination.
If any dividend or distribution of the type described in this Section 4.04(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which would
then be in effect if such dividend or distribution had not been declared.

     (b) If the Company, at any time or from time to time while any of the Securities are
outstanding, issues to all or substantially all holders of the Common Stock any rights or warrants
entitling them for a period of not more than 60 calendar days after the announcement date of such
issuance to subscribe for or purchase shares of the Common Stock at a price per share less than the
average of the Last Reported Sale Prices of Common Stock for the 10 consecutive Trading-Day period
ending on the Trading Day immediately preceding the date of announcement of such issuance, the
Conversion Rate shall be adjusted based on the following formula:

	 	 	 	 	 	 	 	 	 	 	 
	CR1

	 	=
	 	CR0
	 	x
	 	OS0 + X
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	OS0 + Y	 	 

where,

	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to the open of business on the Record
Date for such issuance;

27

 

	 	 	 	 	 
	CR1

	 	=
	 	the Conversion Rate in effect immediately after the open of business on such Record Date;
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding immediately prior to the open of
business on such Record Date;
	 
	 	 	 	 
	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 date of announcement of the issuance of such rights or
warrants.

To the extent such rights or warrants are not exercised prior to their expiration or termination,
the Conversion Rate shall be readjusted to the Conversion Rate which would be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the basis of the
delivery of only the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if the date fixed for the determination of
shareholders entitled to receive such rights or warrants had not been fixed. For the purposes of
this Section 4.04(b), in determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than the average of the Last Reported Sale
Prices of Common Stock for the 10 consecutive Trading Day period ending on the Trading Day
immediately preceding the date of announcement of such issuance, and in determining the aggregate
exercise price payable for 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 the
exercise thereof, with the value of such consideration, if other than cash, as shall be determined
in good faith by the Board of Directors.

     (c) If the Company, at any time or from time to time while the Securities are outstanding,
distributes shares of any class of capital stock of the Company, evidences of its indebtedness,
other assets or property of the Company or rights or warrants to acquire the Company’s capital
stock or other securities to all or substantially all holders of its Common Stock, excluding:

          (i) dividends or distributions and rights or warrants as to which an adjustment was effected
pursuant to Section 4.04(a) or Section 4.04(b);

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

          (iii) Spin-Offs to which the provisions set forth below in this Section 4.04(c) shall apply;

          then the Conversion Rate shall be adjusted based on the following formula:

	 	 	 	 	 	 	 	 	 	 	 
	CR1

	 	=
	 	CR0
	 	x
	 	SP0
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	SP0 - FMV	 	 

where,

	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to the open of business on the Record
Date for such distribution;
	 
	 	 	 	 
	CR1

	 	=
	 	the Conversion Rate in effect immediately after the open of business on such Record Date;
	 
	 	 	 	 
	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 Record Date for
such distribution; and
	 
	 	 	 	 
	FMV

	 	=
	 	the fair market value (as determined by the Board of Directors) of the shares of capital
stock, evidences of indebtedness, assets, property, rights or warrants distributed with
respect to each outstanding share of the Common Stock on the Record Date for such
distribution.

28

 

Such adjustment shall become effective immediately after the open of business on the Record Date
for such distribution. If the Board of Directors determines the “FMV” (as defined above) of any
distribution for purposes of this Section 4.04(c) 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 average of the Last Reported Sale Prices of the Common Stock.
Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than
“SP0” (as defined above), in lieu of the foregoing adjustment, each Holder of Securities
shall receive, at the same time and upon the same terms as holders of the Common Stock, the amount
and kind of securities or assets or property such Holder would have received as if such Holder
owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Record Date
for the distribution of the securities or assets.

     With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment
of a dividend or other distribution on the Common Stock of shares of capital stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other business unit and such
shares of capital stock or similar equity interests are listed for trading on a U.S. national
securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the
following formula:

	 	 	 	 	 	 	 	 	 	 	 
	CR1

	 	=
	 	CR0
	 	x
	 	FMV0 + MP0
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	MP0	 	 

where,

	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to the end of the Valuation Period (as
defined below);
	 
	 	 	 	 
	CR1

	 	=
	 	the Conversion Rate in effect immediately after the end of the Valuation Period;
	 
	 	 	 	 
	FMV0

	 	=
	 	the average of the Last Reported Sale Prices of the capital stock or similar equity
interest distributed to holders of Common Stock applicable to one share of Common
Stock (determined for purposes of the definition of Last Reported Sale Price as if
such capital stock or similar equity interest were the Common Stock) over the first
ten consecutive Trading Day period after, and including, the Record Date of the
Spin-Off (the “Valuation Period”); and
	 
	 	 	 	 
	MP0

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

     The adjustment to the Conversion Rate under the preceding paragraph will occur on the last day
of the Valuation Period; provided that in respect of any conversion during the Valuation Period,
references above to 10 Trading Days shall be deemed replaced with such lesser number of Trading
Days as have elapsed between the Record Date of such Spin-Off and the Conversion Date in
determining the applicable Conversion Rate.

     For the purposes of this Section 4.04(c) (and subject in all respects to Section 4.11), rights
or warrants distributed by the Company to all holders of its Common Stock entitling them to
subscribe for or purchase shares of the Company’s capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified event or events (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 4.04(c), (and no adjustment to
the Conversion Rate under this Section 4.04(c) will be required) until the occurrence of the
earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed
and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this
Section 4.04(c). If any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon the occurrence of
which such rights or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each such event shall be
deemed to be the date of distribution and Record Date 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). In addition, in the event of any distribution or deemed
distribution of rights or warrants, or any Trigger Event or other event (of the type

29

 

described in the preceding sentence) with respect thereto that was counted for purposes of
calculating a distribution amount for which an adjustment to the Conversion Rate under this Section
4.04(c) was made, (1) in the case of any such rights or warrants which shall all have been redeemed
or purchased 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 again be 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 purchase price received by holders of Common Stock with respect to such
rights or warrants (assuming each such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such
rights or warrants which 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 Section 4.04(c) and subsections (a) and (b) of this Section 4.04, any
dividend or distribution to which this Section 4.04(c) applies which also includes one or both of:

	 	(A)	 	a dividend or distribution of shares of Common Stock to which
Section 4.04(a) applies (the “Clause A Distribution”), and
	 
	 	(B)	 	a dividend or distribution of rights or warrants to which
Section 4.04(b) applies (the “Clause B Distribution”),

then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B
Distribution, shall be deemed to be a dividend or distribution to which this Section 4.04(c)
applies (the “Clause C Distribution”) and any Conversion Rate adjustment required by this
Section 4.04(c) with respect thereto shall then be made, and (2) the Clause A Distribution and
Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any
Conversion Rate adjustment required by Section 4.04(a) and Section 4.04(b) with respect thereto
shall then be made, except that, if determined by the Company, (I) the “Record Date” of the Clause
A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C
Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B
Distribution shall be deemed not to be “outstanding immediately prior to the open of business on
such Record Date or such effective date” within the meaning of Section 4.04(a) or “outstanding
immediately prior to the open of business on such Record Date” within the meaning of Section
4.04(b).

     (d) (i) If any annual cash dividend or distribution made to all or substantially all holders
of Common Stock during any annual fiscal period exceeds $0.10 per share of Common Stock, the
Conversion Rate shall be adjusted based on the following formula:

	 	 	 	 	 	 	 	 	 	 	 
	CR1

	 	=
	 	CR0
	 	x
	 	SP0
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	SP0 - C	 	 

where,

	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to
the open of business on the Record Date for such
dividend or distribution;
	 
	 	 	 	 
	CR1

	 	=
	 	the Conversion Rate in effect immediately after
the open of business on the Record Date for such
dividend or distribution;
	 
	 	 	 	 
	SP0

	 	=
	 	the Last Reported Sale Price of the Common Stock
on the Trading Day immediately preceding the
Record Date for such dividend or distribution; and
	 
	 	 	 	 
	C

	 	=
	 	the amount in cash per share the Company
distributes to holders of Common Stock in excess
of $0.10 per share of Common Stock.

In the case of an adjustment pursuant to this Section 4.04(d), such adjustment shall become
effective immediately after the open of business on the Record Date for the relevant dividend or
distribution. If the portion of the cash so

30

 

distributed applicable to one share of the Common Stock is equal to or greater than the Last
Reported Sale Price of a share of Common Stock on the Trading Day immediately preceding the Record
Date for such dividend or distribution, in lieu of the adjustment set forth above, adequate
provision shall be made so that each Holder of Securities shall have the right to receive on the
date on which such cash dividend or distribution 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 of Common Stock equal to the Conversion Rate in effect
immediately prior to the Record Date for such distribution.

     (e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or
exchange offer for 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 per share of
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, the Conversion Rate shall be increased based on the
following formula:

	 	 	 	 	 	 	 	 	 	 	 
	CR1

	 	=
	 	CR0
	 	x
	 	AC + (SP1 x OS1)
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	OS0 x SP1	 	 

where,

	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to
the close of business on the 10th Trading Day
immediately following, and including, the Trading
Day next succeeding the date such tender or
exchange offer expires;
	 
	 	 	 	 
	CR1

	 	=
	 	the Conversion Rate in effect immediately after
the close of business on the 10th Trading Day
immediately following, and including, 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;
	 
	 	 	 	 
	OS0

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

	 	=
	 	the number of shares of Common Stock outstanding
immediately after the date such tender or exchange
offer expires (after giving effect to, for the
avoidance of doubt, the purchase of all shares
accepted for purchase or exchange in such tender
or exchange offer); and
	 
	 	 	 	 
	SP1

	 	=
	 	the average of the Last Reported Sale Prices of
the Common Stock over the 10 consecutive Trading
Day period commencing on the Trading Day next
succeeding the date such tender or exchange offer
expires.

     The adjustment to the Conversion Rate under this Section 4.04(e) shall occur as of the close
of business on the tenth Trading Day from, and including, the Trading Day next succeeding the date
such tender or exchange offer expires; provided that in respect of any conversion within 10 Trading
Days immediately following, and including, the expiration date of any tender or exchange offer,
references with respect to 10 Trading Days shall be deemed replaced with such lesser number of
Trading Days as have elapsed between the expiration date of such tender or exchange offer and the
Conversion Date in determining the applicable Conversion Rate.

     (f) To the extent permitted by law and applicable New York Stock Exchange rules, the Company
from time to time may increase the Conversion Rate by any amount for any period of time of at least
20 Business Days, so long as the increase is irrevocable during the period and the Board of
Directors shall have made a determination that such increase would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion Rate is increased
pursuant to this Section 4.04(f), the Company shall mail to Holders of record of the Securities a
notice of the increase at least 15 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.

31

 

     (g) The Company may (but shall not be required to) increase the Conversion Rate, in addition
to any adjustments pursuant to Section 4.04(a), 4.04(b), 4.04(c), 4.04(d), 4.04(e) or 4.04(f), if
the Board of Directors considers such increase to be advisable to avoid or diminish any income tax
to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or
distribution of shares (or rights to acquire shares) or similar event.

     (h) All calculations under this Article 4 shall be made by the Company and shall be made to
the nearest one ten-thousandth of a share. No adjustment shall be required to be made for the
Company’s issuance of Common Stock or any securities convertible into or exchangeable for shares of
Common Stock or rights to purchase shares of Common Stock or such convertible or exchangeable
securities, other than as provided in this Section 4.04 and in Section 4.11 hereof.

     (i) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent an Officer’s Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such
Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the
Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has
knowledge is still in effect. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the date on which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Rate to each Holder of the Securities. Failure to deliver such notice
shall not affect the legality or validity of any such adjustment.

     (j) For purposes of this Section 4.04, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company so long as the Company
does not pay any dividend or make any distribution on shares of Common Stock held in the treasury
of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock.

     (k) Notwithstanding the foregoing, if the application of the foregoing formulas set forth in
this Section 4.04 would result in a decrease in the Conversion Rate, no adjustment to the
Conversion Rate shall be made (other than as a result of a share combination).

     (l) Notwithstanding anything to the contrary in this Article 4, no adjustment to the
Conversion Rate shall be made:

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

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

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

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

          (v) for accrued and unpaid interest (including Additional Interest and Special Interest), if
any, on the Securities.

     (m) The Company shall not be required to make an adjustment in the Conversion Rate unless the
adjustment would require a change of at least 1% in the Conversion Rate. However, the Company will
carry forward any adjustments that are less than 1% of the Conversion Rate and make such carried
forward adjustment, regardless of whether the aggregate adjustment is less than 1%, upon any
Conversion Date with respect to the Securities.

32

 

     Section 4.05 Certain Other Adjustments. To the extent not otherwise covered by
Section 4.04, whenever a provision of this Indenture requires the calculation of Last Reported Sale
Prices over a span of multiple days, the Board of Directors will make appropriate adjustments to
such Last Reported Sale Prices and the Conversion Rate or the amount due upon conversion to account
for any adjustment to the Conversion Rate that becomes effective, or any event requiring an
adjustment to the Conversion Rate where the Record Date of the event occurs, at any time during the
period from which such Last Reported Sale Prices are to be calculated. Any such adjustment in
accordance with the provisions of this Section 4.05 shall be determined in good faith by the Board
of Directors in order to give effect to the intent of Section 4.04 and the other provisions of this
Article 4 and to avoid unjust or inequitable results.

     Section 4.06 Adjustments Upon Certain Fundamental Changes. (a) If a Make-Whole
Fundamental Change occurs prior to the Final Maturity Date and a Holder elects to convert its
Securities in connection with such Make-Whole Fundamental Change, the Company shall, under certain
circumstances, increase the Conversion Rate for the Securities so surrendered for conversion by a
number of additional shares of Common Stock (the “Additional Shares”) as described below. A
conversion of Securities shall be deemed for these purposes to be “in connection with” such
Make-Whole Fundamental Change if the notice of conversion of the Securities is received by the
Conversion Agent from, and including, the Effective Date of the Make-Whole Fundamental Change up
to, and including, the Business Day immediately prior to the related Fundamental Change Purchase
Date (or, in the case of an event that would have been a Fundamental Change but for the proviso in
clause (2) of the definition thereof, the 35th calendar day immediately following the Effective
Date of such Make-Whole Fundamental Change).

     (b) Upon surrender of Securities for conversion in connection with a Make-Whole Fundamental
Change, the Company shall deliver shares of Common Stock as provided under Section 4.03, calculated
based on the Conversion Rate as adjusted by the Additional Shares; provided, however, that if, at
the effective time of a Make-Whole Fundamental Change, the Reference Property is comprised entirely
of cash, then, for any conversion of Securities following the Effective Date of such Make-Whole
Fundamental Change, the amounts deliverable by the Company shall be calculated based solely on the
“Stock Price” (as defined below) for the Make-Whole Fundamental Change and shall be deemed
to be an amount equal to the Conversion Rate (including any adjustment for Additional Shares)
multiplied by such Stock Price. In such event, the amounts deliverable by the Company shall be
determined and paid to holders in cash on the third Business Day following the Conversion Date.

     (c) The number of Additional Shares, if any, by which the Conversion Rate will be increased
will be determined by reference to the table below, based on the date on which the Make-Whole
Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the
“Stock Price”) paid (or deemed paid) per share of the Common Stock in the Fundamental
Change. If the holders of the Common Stock receive only cash in a Make-Whole Fundamental Change
described in clause (2) of the definition of Fundamental Change, the Stock Price shall be the cash
amount paid per share. Otherwise, the Stock Price shall be the average of the Last Reported Sale
Prices of the Common Stock over the ten Trading-Day period ending on, and including, the Trading
Day immediately preceding the Effective Date of the Make-Whole Fundamental Change.

     The following table sets forth the number of additional shares to be received per $1,000
principal amount of notes for each stock price and effective date set forth below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Price
	Effective Date	 	$10.30	 	$11.88	 	$12.88	 	$13.88	 	$14.88	 	$20.00	 	$30.00	 	$40.00	 	$50.00	 	$60.00	 	$70.00	 	$80.00
	October 15, 2009
	 	 	19.4476	 	 	 	15.2594	 	 	 	13.3239	 	 	 	11.7465	 	 	 	10.4551	 	 	 	6.3501	 	 	 	3.0768	 	 	 	1.6951	 	 	 	0.9661	 	 	 	0.5434	 	 	 	0.2830	 	 	 	0.1226	 
	October 15, 2010
	 	 	19.4476	 	 	 	14.9732	 	 	 	12.9046	 	 	 	11.2494	 	 	 	9.9107	 	 	 	5.8301	 	 	 	2.7801	 	 	 	1.5351	 	 	 	0.8761	 	 	 	0.4918	 	 	 	0.2530	 	 	 	0.1063	 
	October 15, 2011
	 	 	19.4476	 	 	 	14.4934	 	 	 	12.2369	 	 	 	10.4785	 	 	 	9.0774	 	 	 	5.0601	 	 	 	2.3568	 	 	 	1.3076	 	 	 	0.7481	 	 	 	0.4184	 	 	 	0.2115	 	 	 	0.0826	 
	October 15, 2012
	 	 	19.4476	 	 	 	13.6180	 	 	 	11.0879	 	 	 	9.1817	 	 	 	7.7132	 	 	 	3.8901	 	 	 	1.7568	 	 	 	0.9901	 	 	 	0.5741	 	 	 	0.3201	 	 	 	0.1558	 	 	 	0.0526	 
	October 15, 2013
	 	 	19.4476	 	 	 	11.5052	 	 	 	8.6344	 	 	 	6.5952	 	 	 	5.1527	 	 	 	2.1001	 	 	 	0.9568	 	 	 	0.5676	 	 	 	0.3361	 	 	 	0.1868	 	 	 	0.0830	 	 	 	0.0151	 
	October 15, 2014
	 	 	19.4476	 	 	 	6.5353	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 

     The exact Stock Prices and Effective Dates may not be set forth in the table above, in which
case:

          (i) If the 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

33

 

interpolation between the number of Additional Shares set forth for the higher and lower Stock
Prices and the earlier and later Effective Dates, as applicable, based on a 365-day year.

          (ii) If the Stock Price is greater than $80.00 per share (subject to adjustment in the same
manner as the Stock Prices set forth in the column headings of the table in Schedule A pursuant to
subsection (d) below), no Additional Shares shall be added to the Conversion Rate.

          (iii) If the Stock Price is less than $10.30 per share (subject to adjustments in the same
manner as the Stock Prices set forth in the column headings of the table in Schedule A pursuant to
subsection (d) below), no Additional Shares shall be added to the Conversion Rate.

     Notwithstanding the foregoing, in no event shall the Conversion Rate exceed 97.0874 shares of
Common Stock per $1,000 principal amount of Securities, subject to adjustments in the same manner
as the Conversion Rate as set forth in Section 4.04.

     (d) The Stock Prices set forth in the column headings of the table above shall be adjusted as
of any date on which the Conversion Rate of the Securities is otherwise adjusted. The adjusted
Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such
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 set forth in such table shall be adjusted in
the same manner as the Conversion Rate as set forth in Section 4.04.

     (e) The Company shall notify the Holders of Securities of the Effective Date of any Make-Whole
Fundamental Change and issue a press release announcing such Effective Date no later than five
Business Days after such Effective Date.

     Section 4.07 Effect of Recapitalization, Reclassification, Consolidation, Merger or
Sale.

     (a) If any of the following events occur:

          (i) any recapitalization or reclassification of, or change of, the Common Stock (other than
changes resulting from a subdivision or combination);

          (ii) a consolidation, merger or combination involving the Company; or

          (iii) a sale, lease or other transfer to a third party of all or substantially all of the
consolidated assets of the Company and its Subsidiaries; or

          (iv) any statutory share exchange;

in each case as a result of which the Common Stock would be converted into, or exchanged for, or
would be reclassified or changed into, stock, other securities, other property or assets (including
cash or any combination thereof) (any such event, a “Merger Event”), then at the effective
time of such Merger Event, the Company or the successor or purchasing Person, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental indenture) providing that
at and after the effective time of such Merger Event, the right to convert a Security will be
changed into a right to convert such Security as set forth in this Indenture into the kind and
amount of shares of stock, other securities or other property or assets (including cash or any
combination thereof) that a holder of a number of shares of Common Stock equal to the Conversation
Rate prior to such Merger Event would have owned or been entitled to receive (the “Reference
Property”) upon such Merger Event.

     If, as a result of the Merger Event, each share of Common Stock is converted into the right to
receive more than a single type of consideration (determined based in part upon any form of
stockholder election), then the Reference Property into which the Securities will be convertible
will be deemed to be the weighted average of the
types and amounts of consideration received by the holders of Common Stock that affirmatively
make such an election.

34

 

     The Company shall not become a party to any such Merger Event unless its terms are consistent
with this Section 4.07. 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 4 in the
judgment of the Board of Directors or the board of directors of the successor Person. If, in the
case of any such recapitalization, reclassification, change, consolidation, merger, combination,
sale, lease, other transfer or statutory share exchange, the Reference Property receivable
thereupon by a holder of Common Stock includes shares of stock, securities or other property or
assets (including cash or any combination thereof) of a Person other than the successor or
purchasing Person, as the case may be, in such recapitalization, reclassification, change,
consolidation, merger, combination, sale, lease, other transfer or statutory share exchange, then
such supplemental indenture shall also be executed by such other Person.

     (b) The Company shall cause notice of the execution of such supplemental indenture to be
mailed to each Holder, at the address of such Holder as it appears on the register of the
Securities maintained by the Registrar, within 20 days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of such supplemental indenture. The above
provisions of this Section 4.07 shall similarly apply to successive reclassifications, changes,
consolidations, mergers, combinations, sales and conveyances. If this Section 4.07 applies to any
Merger Event, Section 4.04 shall not apply.

     Section 4.08 Taxes on Shares Issued. The Company will pay any documentary, stamp or
similar issue or transfer tax due on the issue or delivery of shares of Common Stock on conversion
of Securities pursuant hereto; provided, however, that if such documentary, stamp or similar issue
or transfer tax is due because the Holder of such Securities has requested that shares of Common
Stock be issued in a name other than that of the Holder of the Securities converted, then such
taxes will be paid by the Holder, and the Company shall not be required to issue or deliver any
stock certificate evidencing such shares unless and until the Holder shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the Company that such tax
has been paid.

     Section 4.09 Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental
Requirements; Listing of Common Stock. The Company shall reserve, out of its authorized but
unissued shares or shares held in treasury, sufficient shares of Common Stock to satisfy conversion
of the Securities from time to time as such Securities are presented for conversion (assuming that,
at the time of the computation of such number of shares or securities, all such Securities would be
converted by a single Holder).

     The Company covenants that all shares of Common Stock that may be issued upon conversion of
Securities shall be newly issued shares or treasury shares, shall be duly authorized, validly
issued, fully paid and non-assessable and shall be free from preemptive rights and free from any
tax, lien or charge (other than those created by the Holder).

     The Company shall cause any shares of Common Stock to be issued upon conversion of Securities
to be designated for quotation or listing, subject to notice of issuance, on each national
securities exchange or over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.

     Section 4.10 Responsibility of Trustee. The Trustee and any Conversion Agent shall
not at any time be under any duty or responsibility to any Holder of Securities to determine or
calculate the Conversion Rate, to determine whether any facts exist which may require any
adjustment of the Conversion Rate, or to confirm the accuracy of any such adjustment when made or
the appropriateness of the method employed, or herein or in any supplemental indenture provided to
be employed, in making the same. The Trustee and any other Conversion Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any shares of Common
Stock or of any other securities or property that may at any time be issued or delivered upon the
conversion of any Securities; and the Trustee and the Conversion Agent make no representations with
respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure
of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or
other securities or property or cash upon the surrender of any Securities for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of the Company
contained in this Article 4. The rights, privileges, protections, immunities and benefits given to
the

35

 

Trustee, including without limitation its right to be compensated, reimbursed, and
indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, including its capacity as Conversion Agent.

     Section 4.11 Notice to Holders Prior to Certain Actions. In case:

     (a) the Company shall declare a dividend (or any other distribution) on its Common Stock that
would require an adjustment in the Conversion Rate pursuant to Section 4.04; or

     (b) the Company shall authorize the granting to the holders of all or substantially all of its
Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other
rights or warrants that would require an adjustment in the Conversion Rate pursuant to Section 4.04
or Section 4.12 hereof; or

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

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

then, in each case (unless notice of such event is otherwise required pursuant to another provision
of this Indenture), the Company shall cause to be filed with the Trustee and the Conversion Agent
and to be mailed to each Holder of Securities at such Holder’s address appearing on a list of
Holders of Securities, which the Company shall provide to the Trustee, as promptly as practicable
but in any event at least 10 days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such dividend (or any
other distribution) or rights or warrants, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend, distribution or rights or
warrants are to be determined, or (y) the date on which such reclassification, reorganization,
consolidation, merger, sale, lease, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall
not affect the legality or validity of such dividend (or any other distribution), reclassification,
reorganization, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

     Section 4.12 Stockholder Rights Plan. Each share of Common Stock issued upon
conversion of Securities pursuant to this Article 4 shall be entitled to receive the appropriate
number of rights, if any, 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
stockholder rights plan adopted by the Company, as the same may be amended from time to time.
Notwithstanding the foregoing, if prior to any conversion 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 had
distributed to all holders of the Common Stock, shares of the Company’s capital stock, evidences of
indebtedness, assets, property, rights or warrants as described in Section 4.04(c) above, subject
to readjustment in the event of the expiration, termination or redemption of such rights.

ARTICLE 5

COVENANTS

     Section 5.01 Payment of Securities.

     (a) The Company shall duly and punctually pay the principal of and interest (including
Additional Interest and Special Interest, if any) on the Securities in accordance with the terms of
the Securities and this

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Indenture, and will duly comply with all the other terms, agreements and conditions contained
in, or made in this Indenture for the benefit of, the Holders.

     (b) A payment of principal or interest (including Additional Interest and Special Interest, if
any) shall be considered paid on the date it is due if the Paying Agent (other than the Company)
(or if the Company is the Paying Agent, the segregated account or separate trust fund maintained by
the Company pursuant to Section 2.04) holds by 10:00 a.m., New York City time, on that date money,
deposited by or on behalf of the Company sufficient to make the payment. Accrued and unpaid
interest (including Additional Interest and Special Interest) on any Security that is payable
(whether or not punctually paid or duly provided for) on any Interest Payment Date shall be paid to
the Person in whose name that Security is registered at the close of business on the Regular Record
Date for such interest at the office or agency of the Company maintained for such purpose. The
Company shall, to the fullest extent permitted by law, pay interest in immediately available funds
on overdue principal and interest at the annual rate borne by the Securities, which interest shall
accrue from the date such overdue amount was originally due to the day preceding the date payment
of such amount, including interest thereon, has been made or duly provided for. All such interest
shall be payable on demand.

     (c) Payment of the principal of and interest (including Additional Interest and Special
Interest), if any, on the Securities shall be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York (which shall
initially be the Corporate Trust Office of the Trustee) in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest (including
Additional Interest and Special Interest) on any Certificated Securities having an aggregate
principal amount of $5,000,000 or less may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Register; provided further that a Holder of a
Certificated Security having an aggregate principal amount of more than $5,000,000 will be paid by
wire transfer in immediately available funds at the election of such Holder if such Holder has
provided wire transfer instructions to the Trustee at least 10 Business Days prior to the payment
date. Any wire transfer instructions received by the Trustee will remain in effect until revoked
by the Holder. In the case of a permanent Global Security, interest (including Additional Interest
and Special Interest), if any, payable on any applicable payment date will be paid to the
Depositary, with respect to that portion of such permanent Global Security held for its account by
Cede & Co. for the purpose of permitting such party to credit the interest received by it in
respect of such permanent Global Security to the accounts of the beneficial owners thereof.

     Section 5.02 Reports by Company.

     (a) The Company shall deliver to the Trustee copies of all annual reports, quarterly reports
and other documents that it is required to file with the SEC pursuant to Sections 13 or 15(d) of
the Exchange Act, within 15 days after such reports and other documents are required to be filed
with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act).
In the event the Company at any time is no longer subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, the Company shall file with the Trustee all reports, if any, as
may be required by the provisions of TIA Section 314(a).

     (b) The Company intends to file the reports referred to in Section 5.02(a) hereof with
the SEC in electronic form pursuant to Regulation S-T of the SEC using the SEC’s Electronic Data
Gathering, Analysis and Retrieval (“EDGAR”) system. The Company shall notify the Trustee in the
manner prescribed herein of each such filing. The Trustee will be directed to access the EDGAR
system for purposes of retrieving the reports so filed. Compliance with the foregoing shall
constitute delivery by the Company of such reports to the Trustee in compliance with the provisions
of Section 5.02(a) hereof. The Trustee shall have no duty to search for or obtain any
electronic or other filings that the Company makes with the SEC, regardless of whether such filings
are periodic, supplemental or otherwise.

     (c) Delivery of such reports 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 compliance by
the Company with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officer’s Certificates).

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     Section 5.03 Compliance Certificates.

     The Company and each Guarantor shall deliver to the Trustee, within one hundred twenty (120)
days after the end of each fiscal year of the Company (beginning with the fiscal year ending
December 31, 2009), an Officer’s Certificate as to the signer’s knowledge of the Company’s
compliance with all conditions and covenants on its part contained in this Indenture and stating
whether or not the signer knows of any Default or Event of Default. If such signer knows of such a
Default or Event of Default, the Officer’s Certificate shall describe the Default or Event of
Default and the efforts to remedy the same. For the purposes of this Section 5.03, compliance
shall be determined without regard to any grace period or requirement of notice provided pursuant
to the terms of this Indenture. Such certificates need not comply with Section 12.04 of this
Indenture.

     Section 5.04 Further Instruments and Acts.

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

     Section 5.05 Maintenance of Corporate Existence.

     Subject to Article 6, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence.

     Section 5.06 Rule 144A Information Requirement.

     Prior to the Resale Restriction Termination Date, the Company and each Guarantor agree that
they shall, during any period in which it is not subject to Section 13 or 15(d) under the Exchange
Act, upon the request of any Holder or beneficial holder of the Securities, make available to such
Holder or beneficial holder of Securities or any Common Stock issued upon conversion thereof which
continue to be Restricted Securities in connection with any sale thereof and any prospective
purchaser of Securities or such Common Stock designated by such Holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act and it will take such
further action as any Holder or beneficial holder of such Securities or such Common Stock may
reasonably request, all to the extent required from time to time to enable such Holder or
beneficial holder to sell its Securities or Common Stock without registration under the Securities
Act within the limitation of the exemption provided by Rule 144A, as such Rule may be amended from
time to time.

     Section 5.07 Stay, Extension And Usury Laws.

     The Company and each of the Guarantors covenant (to the extent that they may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law or other law which would prohibit or
forgive the Company or any Guarantor from paying all or any portion of the principal of or accrued
but unpaid interest (including Additional Interest and Special Interest (or both), if any) 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 and each of
the Guarantors (to the extent it may lawfully do so) hereby expressly waive all benefit or
advantage of any such law and covenants that it will not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

     Section 5.08 Payment of Additional Interest.

     If Additional Interest or Special Interest (or both) is payable by the Company pursuant to the
terms of the Securities and this Indenture, the Company shall deliver to the Trustee an Officer’s
Certificate to that effect stating (i) the amount of such Additional Interest and/or Special
Interest that is payable, (ii) the reason why such Additional Interest and/or Special Interest is
payable and (iii) the date on which such Additional Interest and/or Special Interest is payable.
Unless and until a Trust Officer of the Trustee receives such a certificate, the Trustee may assume
without inquiry that no such Additional Interest or Special Interest is payable. If the Company
has paid Additional

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Interest and/or Special Interest directly to the Persons entitled to such Additional Interest
and/or Special Interest, the Company shall deliver to the Trustee a certificate setting forth the
particulars of such payment.

     Section 5.09 Maintenance of Office or Agency.

     The Company shall maintain an office or agency where Securities may be presented or
surrendered for payment. The Company also will maintain an office or agency where Securities may
be surrendered for registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The office of the
Trustee, at its Corporate Trust Office, will be such office or agency of the Company, unless the
Company shall designate and maintain some other office or agency for one or more of such purposes.
The Company will give prompt written notice to the Trustee of the location and any change in the
location of any such offices or agencies. If at any time the Company shall fail to maintain any
such required offices or agencies or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the office of the
Trustee and the Company hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.

     The Company may from time to time designate one or more other offices or agencies (in or
outside of The City of New York) where the Securities may be presented or surrendered for any or
all such purposes, and may from time to time rescind such designation. The Company will give
prompt written notice to the Trustee of any such designation or rescission and any change in the
location of any such office or agency.

     Section 5.10 Additional Note Guarantees.

     If the Company or any Guarantor acquires or creates another Subsidiary after the date of this
Indenture and that newly acquired or created Subsidiary is a domestic wholly-owned Subsidiary of
STC not created solely for the purpose of acting as a qualified intermediary, and effecting
tax-deferred property exchanges within the meaning of Treasury Regulations promulgated under
Internal Revenue Code Section 1031, and is not prohibited by law or regulation from providing a
Guarantee, such Subsidiary will become a Guarantor and execute a Note Guarantee pursuant to a
supplemental indenture in form and substance satisfactory to the Trustee and deliver an Opinion of
Counsel to the Trustee within 10 business days of the date on which it was acquired or created to
the effect that such supplemental indenture has been duly authorized, executed and delivered by
that Subsidiary and constitutes a valid and binding agreement of that Subsidiary enforceable in
accordance with its terms (subject to customary exceptions). The form of such Note Guarantee is
attached as Exhibit B hereto.

     Section 5.11 Shareholder Approval.

     By not later than the regularly scheduled annual meeting of the shareholders of the Company
next to occur following the date hereof, the Company shall seek approval of the shareholders of the
Company to allow for the conversion in full of the Securities solely into shares of Common Stock.
The Company’s board of directors shall recommend to the Company’s shareholders that such
shareholders vote in favor of such proposal. In connection with such meeting of the shareholders
of the Company, the Company shall (i) prepare and file with the SEC a preliminary proxy statement,
and (ii) use its commercially reasonable efforts to respond to any comments of the SEC or its staff
with respect to such proxy statement and to cause a definitive proxy statement related to such
shareholders’ meeting of the Company to be mailed to the Company’s shareholders after clearance
thereof by the SEC. If at any time prior to such shareholders’ meeting there shall occur any event
that is required to be set forth in an amendment or supplement to the proxy statement, the Company
shall as promptly as practicable prepare and mail to its shareholders such an amendment or
supplement. The Company agrees promptly to correct any information used in the proxy statement if
and to the extent that such information shall have become false or misleading in any material
respect, and the Company shall as promptly as practicable prepare and mail to its shareholders an
amendment or supplement to correct such information to the extent required by applicable laws and
regulations. If the foregoing proposal to the shareholders of the Company is not approved at the
first meeting of the shareholders following the date hereof (or if such first meeting is adjourned
before the vote of the Company’s shareholders is taken with respect to such proposal), then, until
the earlier of April 15, 2014 and the conversion of all outstanding Securities, the Company will
continue to be subject to the obligations set forth in this Section 5.11 and shall use commercially
reasonable efforts to obtain such approval at each subsequent regularly scheduled annual or special
meeting of the shareholders of the Company.

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ARTICLE 6

CONSOLIDATION; MERGER; SALE OF ASSETS

     Section 6.01 Company May Consolidate, Etc., Only on Certain Terms.

     (a) The Company shall not consolidate with or merge with or into any other Person and the
Company shall not sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the Company’s assets to any Person in a single transaction or series of
related transactions, unless:

     (1) the person formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases all or substantially all of
the properties and assets of the Company, shall be a corporation organized and validly
existing under the laws of the United States of America or any State thereof or the District
of Columbia, and shall expressly assume by a supplemental indenture, the due and punctual
payment of the principal of, and interest on, including Additional Interest and Special
Interest, if any, on all the Securities and the performance and observance of every covenant
of this Indenture to be performed or observed on the part of the Company;

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

     (3) the Company shall have, at or prior to the effective date of such consolidation or
merger or sale, conveyance, assignment, transfer, lease or other disposition, delivered to
the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such
consolidation, or merger or sale, conveyance, assignment, transfer, lease or other
disposition complies with this Article 6.01 and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture complies with this Article,
and that all conditions precedent herein provided for relating to such transaction have been
complied with.

     Section 6.02 Successor Substituted.

     Upon any consolidation of the Company with, or merger of the Company into, any other Person or
any sale, conveyance, assignment, transfer, lease or other disposition of all or substantially all
of the Company’s assets in accordance with Section 6.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale, conveyance, assignment,
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 Person had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.

ARTICLE 7

DEFAULT AND REMEDIES

     Section 7.01 Events of Default.

     (a) An “Event of Default” wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and 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):

     (1) a default in the payment of the principal amount or Fundamental Change Purchase
Price with respect to any Security when such payment becomes due and payable; or

40

 

     (2) a default for 30 days in the payment of any interest (including Additional Interest
and Special Interest, if any) on the Securities; or

     (3) a failure by the Company to comply with its obligation to convert the Securities in
accordance with the Indenture upon exercise of any Holder’s conversion rights;

     (4) failure by the Company to provide a Fundamental Change Company Notice within the
time required to provide such notice as set forth in Section 3.01(b) hereof; or

     (5) failure to purchase all or any part of the Securities in accordance with Section
3.01 hereof;

     (6) failure to perform or observe any other covenant or agreement in this Indenture
with respect to the Securities (other than a covenant or agreement in respect of which the
Company’s non-compliance would otherwise be an event of default) and such default or breach
continues for a period of 60 consecutive days after written notice to the Company by the
Trustee or to the Company and the Trustee by the Holder of 25% or more in aggregate
principal amount of the Securities then Outstanding;

     (7) an event of default as defined in any mortgage, indenture or instrument under which
there may be issued, or by which there may be secured or evidenced, any indebtedness of the
Company or any of its Subsidiaries for money borrowed in excess of $20 million, whether such
indebtedness now exists or shall hereafter be created, shall happen and shall result in such
indebtedness becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable, and such acceleration shall not be rescinded or annulled,
or such indebtedness shall not have been discharged, within a period of 10 days after there
shall have been given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Securities then Outstanding, a written
notice specifying such event of default and requiring that such acceleration be rescinded or
annulled or such indebtedness to be discharged;

     (8) a final judgment for the payment of $20 million or more (excluding any amounts
covered by insurance) rendered against the Company or any Significant Subsidiary of the
Company, which judgment is not discharged or stayed within 60 days after (i) the date on
which the right to appeal or petition for review thereof has expired if no such appeal or
review has commenced, or (ii) the date on which all rights to appeal or petition for review
have been extinguished;

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

     (A) commences a voluntary insolvency proceeding;

     (B) consents to the entry of an order for relief against it in an involuntary
insolvency proceeding or consents to its dissolution or winding-up;

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

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

or takes any comparable action under any foreign laws relating to insolvency; provided, however,
that the liquidation of any Subsidiary into another Subsidiary, other than as part of a credit
reorganization, shall not constitute an Event of Default under this Section 7.01(a)(9);

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

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     (A) is for relief against the Company or any Significant Subsidiary of the
Company in an involuntary insolvency proceeding;

     (B) appoints a custodian of the Company or any Significant Subsidiary of the
Company for any substantial part of their property;

     (C) orders the winding-up, liquidation or dissolution of the Company or any
Significant Subsidiary of the Company;

     (D) orders the presentation of any plan or arrangement, compromise or
reorganization of the Company or any Significant Subsidiary of the Company; or

     (E) grants any similar relief under any foreign laws;

and in each such case the order or decree remains unstayed and in effect for 90 days; or

     (11) except as permitted by this Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its Note Guarantee.

     (b) Notwithstanding Section 7.01(a) no Event of Default under clauses (6) and (7) of Section
7.01(a) shall occur until the Trustee notifies the Company in writing, or the Holders of at least
25% in aggregate principal amount of the Securities then Outstanding notify the Company and the
Trustee in writing, of the Default (a “Notice of Default”), and the Company does not cure
the Default within the time specified in clauses (6) and (7) of Section 7.01(a), or obtain a
waiver, after receipt of such notice. A notice given pursuant to this Section 7.01 shall be given
by registered or certified mail, must specify the Default, demand that it be remedied and state
that the notice is a Notice of Default. When any Default under this Section 7.01 is cured, it
ceases.

     (c) The Company will deliver to the Trustee, within 30 days after becoming aware of the
occurrence of a Default or Event of Default, written notice thereof.

     Section 7.02 Acceleration; Special Interest.

     If an Event of Default (other than an Event of Default specified in clause (9) or (10) of
Section 7.01(a)) shall occur and be continuing with respect to this Indenture, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Securities then Outstanding may,
and the Trustee at the request of such Holders shall, declare all unpaid principal of and accrued
interest (including Additional Interest and Special Interest), if any, on all Securities through
the date of such declaration to be due and payable, by a notice in writing to the Company (and to
the Trustee if given by the Holders of the Securities). Upon any such declaration, such principal
and interest (including Additional Interest and Special Interest), if any, shall become due and
payable immediately. If an Event of Default specified in clause (9) or (10) of Section 7.01(a)
occurs and is continuing, then all the Securities shall ipso facto become and be due and payable
immediately in an amount equal to the principal amount of the Securities, together with accrued and
unpaid interest (including Additional Interest and Special Interest), if any, to the date the
Securities become due and payable, without any declaration or other act on the part of the Trustee
or any Holder. Thereupon, the Trustee may, at its discretion, proceed to protect and enforce the
rights of the Holders of the Securities by appropriate judicial proceedings.

     After a declaration of acceleration with respect to the Securities, but before a judgment or
decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in aggregate principal amount of the Securities Outstanding, by
written notice to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:

     (a) the Company has paid or deposited with the Trustee a sum sufficient to pay

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     (1) all sums paid or advanced by the Trustee under this Indenture and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel,

     (2) all overdue interest (including Additional Interest and Special Interest), if any,
on all Outstanding Securities,

     (3) the principal of any Outstanding Securities which have become due otherwise than by
such declaration of acceleration and interest (including Additional Interest and Special
Interest) thereon at the rate borne by the Securities, and

     (4) to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Securities;

     (b) the rescission would not conflict with any judgment or decree of a court of competent
jurisdiction; and

     (c) all Defaults or Events of Default, other than the non-payment of principal of and interest
on the Securities which 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.

     Notwithstanding the foregoing, except as provided in Section 7.16, to the extent elected by
the Company, the sole remedy for an Event of Default relating to the failure by the Company to
comply with the provisions of Section 5.02 of this Indenture and for any failure to comply with
Section 314(a)(1) of the Trust Indenture Act shall, for the first 365 days after the occurrence of
such an Event of Default, consist exclusively of the right to receive special interest
(“Special Interest”) on the Securities at an annual rate equal to 0.50% of the principal
amount of the Securities. Such Special Interest shall be paid semi-annually in arrears, with the
first semi-annual payment due on the first Interest Payment Date following the date on which such
Special Interest began to accrue on the Securities. Special Interest shall accrue on all
Outstanding Securities from and including the date on which an Event of Default relating to a
failure to comply with the provisions of Section 5.02 or failure to comply with Section 314(a)(1)
of the Trust Indenture Act shall first occur to but not including the 180th day thereafter (or such
earlier date on which such Event of Default shall have been cured or waived by Holders of a
majority in principal amount of the Outstanding Securities). On such 365th day (or earlier, if the
Event of Default relating to the failure to comply with Section 5.02 and failure to comply with
Section 314(a)(1) of the Trust Indenture Act is cured or waived prior to such 180th day), such
Special Interest shall cease to accrue and, if the Event of Default relating to the failure to
comply with Section 5.02 and failure to comply with Section 314(a)(1) of the Trust Indenture Act
shall not have been cured or waived prior to such 365th day, the Securities shall be subject to
acceleration as provided in this Section 7.02. The provisions of this paragraph shall not affect
the rights of Holders in the event of the occurrence of any other Event of Default. In the event
the Company shall not elect to pay Special Interest upon an Event of Default resulting from the
failure of the Company to comply with the provisions of Section 5.02 and for any failure by it to
comply with Section 314(a)(1) of the Trust Indenture Act, the Securities shall be subject to
acceleration as provided above in this Section 7.02.

     If the Company shall elect to pay Special Interest in connection with an Event of Default
relating to its failure to comply with the requirements of Section 5.02 and for any failure by it
to comply with Section 314(a)(1) of the Trust Indenture Act, (1) the Company shall notify all
Holders and the Trustee and Paying Agent of such election on or before the close of business on the
Business Day immediately preceding the day on which such Event of Default shall first occur, and
(2) all references herein to interest accrued or payable as of any date shall include any Special
Interest accrued or payable as of such date as provided in this Section 7.02.

     Section 7.03 Collection of Indebtedness and Suits for Enforcement by Trustee.

     The Company covenants that if:

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

     (b) default is made in the payment of the principal of any Security at the Stated Maturity
thereof,

the Company will, 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 for principal and interest
(including Special Interest, if any), with interest upon the overdue principal and, to the extent
that payment of such interest shall be legally enforceable, upon overdue installments of interest,
at the rate borne by the Securities; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

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

     If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders under this Indenture by such
appropriate private or judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper
remedy, subject however to Section 7.12. No recovery of any such judgment upon any property of the
Company shall affect or impair any rights, powers or remedies of the Trustee or the Holders.

     Section 7.04 Trustee May File Proofs of Claim.

     In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,

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

     (b) to collect and receive any moneys or other property payable or deliverable on any such
claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 8.07.

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

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     Section 7.05 Trustee May Enforce Claims Without Possession of Securities.

     All rights of action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name and as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.

     Section 7.06 Application of Money Collected.

     Any money collected by the Trustee pursuant to this Article 7 or otherwise on behalf of the
Holders or the Trustee pursuant to this Article 7 or through any proceeding or any arrangement or
restructuring in anticipation or in lieu of any proceeding contemplated by this Article 7 and any
money or other property distributable in respect of the Company’s obligations under this Indenture
after an Event of Default shall be applied, subject to applicable law, in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such money on account of
principal or interest, 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 (or any predecessor trustee) under
Section 8.07;

     SECOND: To the payment of the amounts then due and unpaid upon the Securities for principal
and interest (including Additional Interest and Special Interest, if any), 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 for principal and interest
(including Additional Interest and Special Interest, if any); and

     THIRD: The balance, if any, to the Person or Persons entitled thereto, including the Company,
provided that all sums due and owing to the Holders and the Trustee have been paid in full as
required by this Indenture.

     Section 7.07 Limitation on Suits.

     Subject to Section 7.08, no Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Securities, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless

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

     (b) the Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities shall have made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as trustee hereunder;

     (c) such Holder or Holders have offered to the Trustee security or indemnity satisfactory to
the Trustee against any loss, liability or expense (including fees and expenses of its counsel) to
be incurred in compliance with such request;

     (d) the Trustee has failed to institute the proceeding and has not received direction
inconsistent with the original request from the Holders of a majority in principal amount of the
Outstanding Securities within 60 days after the original request;

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 of, any provision of this Indenture or any Security 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 or any
Security, except in the manner provided in this Indenture and for the equal and ratable benefit of
all the Holders.

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     Section 7.08 Unconditional Right of Holders to Receive Payment and to Convert.

     Notwithstanding any other provision of this Indenture, the right of any Holder of a Security
to receive payment of the principal amount, accrued and unpaid interest, if any, Fundamental Change
Purchase Price, Additional Interest, if any, or Special Interest, if any, in respect of the
Securities held by such Holder, on or after the respective due dates expressed in the Securities
and this Indenture (whether upon repurchase or otherwise), and to convert such Security in
accordance with Article 4, and to bring suit for the enforcement of any such payment on or after
such respective due dates or for the right to convert in accordance with Article 4, is absolute and
unconditional and shall not be impaired or affected without the consent of the 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 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 the
Company, any other obligor on the Securities, the Trustee and the Holders shall, subject to any
determination in such proceeding, 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.

     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, or otherwise, 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 7 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 not less than a majority in aggregate principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, provided that:

     (a) such direction shall not be in conflict with any rule of law or with this Indenture,
expose the Trustee to personal liability or expenses for which the Trustee has not received
adequate indemnity as determined by it in good faith or be unduly prejudicial to Holders not
joining therein; and

     (b) subject to the provisions of Section 315 of the TIA, the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.

     Section 7.13 Waiver of Past Defaults.

     Subject to Section 7.08, the Holders of a majority in aggregate principal amount of the
Securities then Outstanding by notice to the Trustee may waive an existing Default or Event of
Default and its consequences, except an uncured Default or Event of Default in the payment of the
principal of or any accrued but unpaid interest (including Additional Interest and Special
Interest) on any Security, an uncured failure by the Company to convert any Securities into Common
Stock and cash, as applicable, or any Default or Event of Default in respect of any

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provision of this Indenture or the Securities which, under Section 10.02, cannot be modified
or amended without the consent of the Holder of each Security affected. When a Default or Event of
Default is waived, it is cured and ceases to exist.

     Section 7.14 Undertaking for Costs.

     All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party
litigant, but the provisions of this Section shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10%
in principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or interest (including Additional Interest and
Special Interest, if any) on, any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of purchase pursuant to Article 3 hereof, on the Specified
Repurchase Date or the Fundamental Change Purchase Date, as the case may be).

     Section 7.15 Remedies Subject to Applicable Law.

     All rights, remedies and powers provided by this Article 7 may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law in the premises, and all
the provisions of this Indenture are intended to be subject to all applicable mandatory provisions
of law which may be controlling in the premises and to be limited to the extent necessary so that
they will not render this Indenture invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law.

     Section 7.16 Additional Interest

     (a) If:

	 	(i)	 	at any time during the six-month period beginning on, and
including, the date which is six months after the last date on which any
Securities are originally issued under this Indenture, (A) the Company fails to
timely file any document or report that it is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after
giving effect to all applicable grace periods thereunder and other than reports
on Form 8-K), or (B) the Securities are not otherwise freely tradable by
Holders who are not Affiliates of the Company (as a result of restrictions
pursuant to U.S. securities law or the terms of this Indenture or the
Securities), or
	 
	 	(ii)	 	as of the date that is one year after the last date on which
any Securities are originally issued under this Indenture, the Restrictive
Legend on the Securities has not been removed or the Securities are not
otherwise freely tradable by Holders who are not Affiliates of the Company
(without restrictions pursuant to U.S. securities law or the terms of this
Indenture or the Securities) (each such event referred to in clauses (i) and
(ii), a “Restricted Transfer Default”),

and the Company has not cured any such Restricted Transfer Default by the date that is 14 calendar
days following the occurrence of such Restricted Transfer Default (such date, the “Restricted
Transfer Triggering Date”), then the Company will be required to pay Additional Interest in
cash on the Securities. Additional Interest on the Securities will accrue with respect to the
first 90-day period (or portion thereof) following the Restricted Transfer Triggering Date for each
day that a Restricted Transfer Default is continuing at a rate equal to 0.25% per annum of the
principal amount of Securities, which rate will increase by an additional 0.25% per annum of the
principal amount of the Securities for each subsequent 90-day period (or portion thereof) while a
Restricted Transfer Default is continuing until all Restricted Transfer Defaults have been cured,
up to a maximum of 0.50% of the principal amount of the

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Securities. Following the cure of all Restricted Transfer Defaults, the accrual of Additional
Interest arising from Restricted Transfer Defaults will cease.

     (b) Additional Interest payable in accordance with Sections 7.16(a) shall be payable in
arrears on each Interest Payment Date for the Securities following accrual in the same manner as
regular interest on the Securities.

     (c) Notwithstanding the foregoing, if the Restrictive Legend on the Securities has not been
removed pursuant to Section 2.18 or the Securities are not otherwise freely tradable by Holders
other than the Company’s Affiliates (as a result of restrictions pursuant to U.S. securities law or
the terms of this Indenture or the Securities), the Company shall have the right to designate an
effective shelf registration statement for the resale by the Holders of the Securities or holders
of any shares of Common Stock issuable upon conversion of the Securities. Additional Interest
shall not accrue for each day on which such registration statement remains effective and usable by
Holders for the resale of the Securities or any shares of Common Stock. Any such registration
shall be effected on terms customary for convertible securities generally offered in reliance upon
Rule 144A under the Securities Act.

     (d) During the period of one year after the last date on which any of the Securities are
originally issued, the Company will not, and will not permit any of its “affiliates” (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities that have been reacquired by
any of them.

ARTICLE 8

TRUSTEE

     Section 8.01 Duties of Trustee.

     (a) In case 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 own affairs;

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

     (1) the Trustee undertakes to perform those duties and only those duties as are
specifically set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and

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

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

     (1) this clause (c) does not limit the effect of clauses (b) or (d) of this Section
8.01;

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

     (3) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction of the Holders of a majority in principal
amount of Outstanding Securities 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;

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

     (e) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to clauses (a), (b), (c), (d) and (f) of this Section
8.01; and

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

     (g) Notwithstanding anything to the contrary in this Indenture, the Trustee shall have no
obligation to determine the Note Trading Price unless the Company requests such determination.

     Section 8.02 Notice of Default.

     Within 90 days after the occurrence of any Default known to the Trustee, the Trustee shall
transmit by mail to all Holders and any other Persons entitled to receive reports pursuant to
Section 313(c) of the TIA, as their names and addresses appear in the Security Register, notice of
such Default hereunder known to the Trustee, unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in the payment of the principal of or
interest on any Security, the Trustee shall be protected in withholding such notice if and so long
as a trust committee of Trust Officers of the Trustee in good faith determines that the withholding
of such notice is in the interest of the Holders.

     Section 8.03 Certain Rights of Trustee.

     Subject to the provisions of Section 8.01 hereof:

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

     (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced
by a Company Request or Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;

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

     (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 or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;

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

     (f) 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, approval, appraisal, bond, debenture, note, coupon, security 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 deem fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records and

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premises of the Company, personally or by agent or attorney at the sole cost of the Company
and shall incur no liability or additional liability of any kind by reason of such inquiry or
investigation;

     (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 with
due care by it hereunder;

     (h) the Trustee shall not be charged with knowledge of any Default or Event of Default with
respect to the Securities unless either (i) a Trust Officer of the Trustee shall have actual
knowledge of such Default or Event of Default or (ii) written notice of such Default or Event of
Default shall have been given to the Trustee at its Corporate Trust Office by the Issuer or by any
Holder of Securities;

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

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

     (k) the permissive rights of the Trustee enumerated herein shall not be construed as duties of
the Trustee;

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

     (m) the Trustee may employ or retain such counsel, accountants, appraisers or other experts or
advisers as it may reasonably require for the purpose of determining and discharging its rights and
duties hereunder and shall not be responsible for any misconduct or negligence on the part of any
of them selected by the Trustee using due care;

     (n) the Trustee shall not be required to give any note, bond or surety in respect of the
execution of the trusts and powers under this Indenture;

     (o) the Trustee shall not be responsible or liable for any failure or delay in the performance
of its obligations under this Indenture arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without limitation, acts of God,
earthquakes, fire, flood, terrorism, wars and other military disturbances, sabotage, epidemics,
riots, interruptions, losses or malfunctions of utilities, computers (hardware or software) or
communications services, labor disputes, acts of civil or military authorities and governmental
action; and

     (p) 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.

     Section 8.04 Trustee Not Responsible for Recitals, Dispositions of Securities or
Application of Proceeds Thereof.

     The recitals contained herein and in the Securities, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.

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     Section 8.05 Trustee and Agents May Hold Securities; Collections; etc.

     The Trustee, any Paying Agent, Registrar, Conversion Agent or any other agent of the Company,
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 the Trustee, Paying Agent, Registrar, Conversion Agent or
such other agent and, subject to TIA Sections 310 and 311, may otherwise deal with the Company and
receive, collect, hold and retain collections from the Company with the same rights it would have
if it were not the Trustee, Paying Agent, Registrar, Conversion Agent or such other agent.

     Section 8.06 Money Held in Trust.

     All moneys received by the Trustee shall, until used or applied as herein provided, be held in
trust for the purposes for which they were received, but need not be segregated from other funds
except to the extent required by mandatory provisions of law.

     Section 8.07 Compensation and Indemnification of Trustee and Its Prior Claim.

     The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as the parties shall agree in writing from time to time for
all services rendered by it hereunder (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust) and the Company covenants and
agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf of 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 agents and other persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from its negligence, bad
faith or willful misconduct. The Company also covenants and agrees to indemnify the Trustee and
each predecessor Trustee for, and to hold it harmless against, any claim, loss, liability, tax,
assessment or other governmental charge (other than taxes applicable to the Trustee’s compensation
hereunder) or expense incurred without gross negligence or willful misconduct on its part, arising
out of or in connection with the acceptance or administration of this Indenture or the trusts
hereunder and its duties hereunder, including enforcement of this Section 8.07 and also including
any liability which the Trustee may incur as a result of failure to withhold, pay or report any
tax, assessment or other governmental charge, and the costs and expenses of defending itself
against or investigating any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The obligations of the Company under this Section 8.07 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for reasonable expenses, disbursements and advances shall
constitute an additional obligation hereunder and, together with the lien referred in the next
sentence, shall survive the satisfaction and discharge, and termination for any reason, of this
Indenture and the resignation or removal of the Trustee and each predecessor Trustee. To secure
the Company’s obligations in this Section 8.07, the Trustee shall have a lien prior to the
Securities on all money and property held or collected by the Trustee, other than money or property
held in trust for the payment of principal of or interest on particular Securities.

     “Trustee” for purposes of this Section shall include any predecessor Trustee; provided,
however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not
affect the rights of any other Trustee hereunder.

     Without prejudice to its other rights hereunder, when the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 7.01(a)(6) or Section
7.01(a)(7), the expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.

     Section 8.08 Conflicting Interests.

     The Trustee shall comply with the provisions of Section 310(b) of the TIA provided,
however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA
any indenture or indentures under which other

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securities or certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA §310(b)(1) are met.

     Section 8.09 Trustee Eligibility.

     There shall at all times be a Trustee hereunder which shall be eligible to act as trustee
under TIA Section 310(a) and which shall have a combined capital and surplus of at least
$50,000,000, to the extent there is an institution eligible and willing to serve. If the Trustee
does not have a Corporate Trust Office in The City of New York, the Trustee may appoint an agent in
The City of New York reasonably acceptable to the Company to conduct any activities which the
Trustee may be required under this Indenture to conduct in The City of New York. If such Trustee
publishes reports of condition at least annually, pursuant to law or to the requirements of
federal, state, territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section 8.09, the combined capital and surplus of such corporation 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 8.09, the Trustee shall resign immediately in the manner and with the
effect hereinafter specified in this Article 8.

     Section 8.10 Resignation and Removal; Appointment of Successor Trustee.

     (a) No resignation or removal of the Trustee and no appointment of a successor trustee
pursuant to this Article 8 shall become effective until the acceptance of appointment by the
successor trustee under Section 8.11.

     (b) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign by
giving written notice thereof to the Company. Such resignation shall take effect upon the
appointment of a successor Trustee and the acceptance of such appointment by such successor
Trustee. If the instrument of acceptance by a successor Trustee required by Section 8.11 shall not
have been delivered to the Trustee within 30 days after the giving of such notice of resignation or
of any removal of the Trustee as hereinafter provided, the resigning or removed Trustee may at the
Company’s expense petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities.

     (c) The Trustee may be removed at any time for any cause or for no cause by an Act of the
Holders of not less than a majority in aggregate principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.

     (d) If at any time:

     (1) the Trustee shall fail to comply with the provisions of TIA Section 310(b) after
written request therefor by the Company or by any Holder who has been a bona fide Holder of
a Security for at least six months,

     (2) the Trustee shall cease to be eligible under Section 8.09 and shall fail to resign
after written request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or

     (3) 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 case, (i) the Company may remove the Trustee, or (ii) subject to Section 7.14, the
Holder of any Security who has been a bona fide Holder of a Security for at least six 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. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.

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     (e) If the Trustee shall be removed or become incapable of acting, or if a vacancy shall occur
in the office of Trustee for any cause, the Company shall promptly appoint a successor trustee and
shall comply with the applicable requirements of Section 8.11. If, within 60 days after such
removal or incapability, or the occurrence of such vacancy, the Company has not appointed a
successor Trustee, a successor trustee shall be appointed by the Act of the Holders of a majority
in principal amount of the Outstanding Securities delivered to the Company and the retiring
Trustee. Such successor trustee so appointed shall forthwith upon its acceptance of such
appointment become the successor trustee. If no successor trustee shall have been so appointed by
the Company or the Holders of the Securities and accepted appointment in the manner hereinafter
provided, the Trustee or the Holder of any Security who has been a bona fide Holder for at least
six months may, subject to Section 7.14, on behalf of himself and all others similarly situated,
petition at the expense of the Company any court of competent jurisdiction for the appointment of a
successor trustee.

     (f) The Company shall give notice of each resignation and each removal of the Trustee and each
appointment of a successor trustee by mailing written notice of such event by first-class mail,
postage prepaid, to the Holders of Securities as their names and addresses appear in the register
of the Registrar. Each notice shall include the name of the successor trustee and the address of
its Corporate Trust Office or agent hereunder.

     Section 8.11 Acceptance of Appointment by Successor.

     (a) Every successor trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee as if originally named as Trustee hereunder; but,
nevertheless, on the written request of the Company or the successor trustee, upon payment of its
charges pursuant to Section 8.07 then unpaid, such retiring Trustee shall pay over to the successor
trustee all moneys at the time held by it hereunder, subject nevertheless to its lien provided for
in Section 8.07, and shall execute and deliver an instrument transferring to such successor trustee
all such rights, powers, trusts and duties. Upon request of any such successor trustee, the
Company shall execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.

     (b) No successor trustee with respect to the Securities shall accept appointment as provided
in this Section 8.11 unless at the time of such acceptance such successor trustee shall be eligible
to act as trustee under the provisions of TIA Section 310(a) and this Article 8 and shall have a
combined capital and surplus of at least $50,000,000 and have a Corporate Trust Office or an agent
selected in accordance with Section 8.09.

     (c) Upon acceptance of appointment by any successor trustee as provided in this Section 8.11,
the Company shall give notice thereof to the Holders of the Securities, by mailing such notice to
such Holders at their addresses as they shall appear on the Security Register. If the acceptance
of appointment is substantially contemporaneous with the appointment, then the notice called for by
the preceding sentence may be combined with the notice called for by Section 8.10. If the Company
fails to give such notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be given at the expense of the Company.

     Section 8.12 Merger, Conversion, Consolidation or Succession to Business.

     Any Person into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate
trust business of the Trustee (including the trust created by this Indenture) shall be the
successor of the Trustee hereunder, provided that such Person shall be eligible under TIA Section
310(a) and this Article 8 and shall have a combined capital and surplus of at least $50,000,000 and
have a Corporate Trust Office or an agent selected in accordance with Section 8.09, without the
execution or filing of any paper or any further act on the part of any of the parties hereto.

     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 and deliver
such Securities so authenticated; and, in case at

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that time any of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the
name of the successor trustee; and in all such cases such certificate shall have the full force
which it is anywhere in the Securities or in this Indenture provided that the certificate of the
Trustee shall have; provided that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or consolidation.

     Section 8.13 Preferential Collection of Claims Against Company.

     If and when the Trustee shall be or become a creditor of the Company (or other obligor under
the Securities), the Trustee shall be subject to the provisions of the TIA regarding the collection
of claims against the Company (or any such other obligor). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

     Section 8.14 Reports By Trustee.

     (a) Within 60 days after May 15 of each year commencing with the first May 15 after the
issuance of Securities, the Trustee, if so required under the TIA, shall transmit by mail to all
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief report dated as of
such May 15 in accordance with and with respect to the matters required by TIA Section 313(a). The
Trustee shall also transmit by mail to all Holders, in the manner and to the extent provided in TIA
Section 313(c), a brief report in accordance with and with respect to the matters required by TIA
Section 313(b)(2).

     (b) A copy of each report transmitted to Holders pursuant to this Section 8.14 shall, at the
time of such transmission, be mailed to the Company and filed with each national securities
exchange, if any, upon which the Securities are listed and also with the SEC. The Company will
notify the Trustee promptly if the Securities are listed on any national securities exchange and of
any delisting thereof.

ARTICLE 9

SATISFACTION AND DISCHARGE OF INDENTURE

     Section 9.01 Satisfaction and Discharge of Indenture.

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

     (1) all Securities theretofore authenticated and delivered (other than (i) Securities
which have been destroyed, lost or stolen and which have been replaced or paid as provided
in Section 2.08 and (ii) Securities for whose payment money has theretofore been deposited
in trust and thereafter repaid to the Company as provided in Section 2.04) have been
delivered to the Trustee for cancellation; or

     (2) all such Securities not theretofore delivered to the Trustee for cancellation have
become due and payable, whether on the Final Maturity Date or a Fundamental Change Purchase
Date, upon conversion or otherwise,

     provided, that

     (i) the Company has deposited with the Trustee, a Paying Agent (other than the
Company or any of its Affiliates) or a Conversion Agent, if applicable, immediately
available funds and/or shares of Common Stock, if applicable, in trust for the
purpose of and in an amount sufficient to pay and discharge all indebtedness and
obligations related to such Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest (including

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Additional Interest and Special Interest, if any) to the date of such deposit
and/or for the payment of amounts due upon conversion;

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

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

     (b) Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company with respect to the Trustee under Section 8.07 and, if money shall have been deposited with
the Trustee pursuant to clause (2) of Section 9.01(a), the provisions of Sections 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 2.13 and 5.01 and this Article 9 shall survive until the Securities have been
paid in full.

     Section 9.02 Application of Trust Money.

     Subject to the provisions of the last paragraph of Section 2.04, all United States dollars
deposited with the Trustee pursuant to Section 9.01 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent as the Trustee may determine, to the Persons entitled thereto,
of the principal of and interest (including the Company acting as its own Paying Agent) on, the
Securities for whose payment such United States dollars have been deposited with the Trustee.

     Section 9.03 Reinstatement.

     If the Trustee, any Paying Agent or any Conversion Agent is unable to apply any money in
accordance with Section 9.02 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section 9.01 until such time
as the Trustee, such Paying Agent or such Conversion Agent is permitted to apply all such money in
accordance with Section 9.02; provided, however, that if the Company has made any payment of the
principal of or interest (including Additional Interest and special Interest, if any) on any
Securities because of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive any such payment from the money held by the
Trustee, such Paying Agent or such Conversion Agent.

ARTICLE 10

AMENDMENTS; SUPPLEMENTS AND WAIVERS

     Section 10.01 Without Consent of Holders.

     (a) The Company, the Guarantors and the Trustee may amend or supplement this Indenture, the
Note Guarantees or the Securities without notice to or consent of any Holder of a Security for the
purpose of:

     (1) evidencing the succession of another corporation to the Company and the assumption
by that successor corporation of the Company’s or a Guarantor’s obligations under this
Indenture and the Securities and the Note Guarantees;

     (2) adding to the covenants of the Company or add any rights for the benefit of the
Holders or surrendering any right or power conferred upon the Company;

     (3) securing the obligations of the Company or adding guarantees in respect of the
Securities;

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     (4) evidencing and providing for the acceptance of the appointment of a successor
trustee in accordance with Article 8;

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

     (6) providing for conversion rights of Holders if any reclassification or change of
Common Stock or any consolidation, merger or sale of all or substantially all of the
Company’s property and assets occurs or otherwise complying with the provisions of this
Indenture in the event of a merger, consolidation or transfer of assets (including the
provisions of Section 4.10 and Article 6);

     (7) to allow any Guarantor to execute a supplemental indenture and/or Note Guarantee
with respect to the Securities;

     (8) establishing the forms or terms of the Securities or the Note Guarantees;

     (9) curing any ambiguity, omission, defect or inconsistency in the Indenture,
correcting or supplementing any provision in the Indenture, or making any other provisions
with respect to matters or questions arising under the Indenture, so long as the interests
of Holders of Securities are not adversely affected in any material respect under this
Indenture;

     (10) to conform the provisions of the Indenture or the Securities to the corresponding
description of the Securities contained in the applicable offering memorandum; or

     (11) making any change that will not adversely affect the rights of the Holders in any
material respect.

     Section 10.02 With Consent of Holders.

     (a) The Company and the Trustee may amend or supplement this Indenture, the Note Guarantees
and the Securities with the consent of the Holders of at least a majority in aggregate principal
amount of the Outstanding Securities. However, without the written consent of each Holder
affected, an amendment or supplement may not:

     (1) change the Stated Maturity of any payment of principal of or any installment of
interest on any Security (including the payment of Additional Interest or Special Interest,
if any);

     (2) reduce the principal amount of Securities or alter the manner or rate of accrual of
interest (including Additional Interest or Special Interest) on the Securities;

     (3) reduce the Fundamental Change Purchase Price payable with respect to any of the
Securities;

     (4) change the Company’s obligation to repurchase any Security upon a Fundamental
Change in a manner adverse to such Holder;

     (5) change any place of payment where, or the currency in which, any principal or
interest (including Additional Interest or Special Interest) in respect of any Security is
payable;

     (6) make any change that adversely affects the conversation rights of any Holder of
Securities;

     (7) impair the right of any Holder of a Security to receive payment of principal and
interest (including any Additional Interest or Special Interest) on such Holders’ Securities
when due;

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

     (9) reduce the percentage in principal amount of the Securities, the consent of whose
Holders is required to amend or supplement this Indenture, the Note Guarantees or the
Securities, or the consent of whose Holders is required for any waiver of compliance with
various provisions of this Indenture, the Note Guarantees or the Securities or various
defaults thereunder and their consequences provided for in the Indenture;

     (10) modify any of the foregoing provisions described in clause (9) above except to
increase any such percentage or to provide that other provisions of this Indenture or the
Securities cannot be modified or waived without the consent of the Holder of each
outstanding Security affected thereby; or

     (11) release any Guarantor from any of its obligations under its Note Guarantee or this
Indenture, except in accordance with the terms hereof.

     (b) Without limiting the provisions of Section 10.02(a) hereof, the Holders of a majority in
aggregate principal amount of the Securities then outstanding may, on behalf of all the Holders of
all Securities, (i) waive compliance by the Company with the restrictive provisions of this
Indenture, and (ii) waive any past Default or Event of Default under this Indenture and its
consequences, except an uncured failure to pay any amounts due or to deliver amounts due upon
conversion, with respect to the Securities, or in respect of any provision which under this
Indenture cannot be modified or amended without the consent of the Holder of each outstanding
Security affected.

     (c) Upon delivery to the Trustee of a Company Request, and upon the filing with the Trustee of
evidence of the consent of Holders as aforesaid, if required, the Trustee shall, subject to Section
10.03, join with the Company in the execution of such supplemental indenture.

     (d) It shall not be necessary for any Act of Holders under this Section 10.02 to approve the
particular form of any proposed supplemental indenture but it shall be sufficient if such Act shall
approve the substance thereof.

     Section 10.03 Execution of Supplemental Indentures and Agreements.

     In executing, or accepting the additional trusts created by, any supplemental indenture,
agreement, instrument or waiver permitted by this Article 10 or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, in addition to the
documents required by Section 12.04, and (subject to Section 8.01 and Section 8.03(a) hereof) shall
be fully protected in relying upon, an Opinion of Counsel and an Officer’s Certificate each stating
that the execution of such supplemental indenture, agreement or instrument, or acceptance of any
such additional trust, is authorized or permitted by this Indenture. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture, agreement or instrument, or accept
any such additional trusts, which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.

     Section 10.04 Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article 10, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.

     Section 10.05 Conformity with Trust Indenture Act.

     Every supplemental indenture executed pursuant to this Article 10 shall conform to the
requirements of the TIA as then in effect.

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     Section 10.06 Reference in Securities to Supplemental Indentures.

     Securities authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 10 may, and shall if required by the Trustee, 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 Board of Directors, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

     Section 10.07 Notice of Supplemental Indentures.

     Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of Section 10.02, the Company shall give notice thereof to the Holders
of each Outstanding Security affected, in the manner provided for in Section 12.02, setting forth
in general terms the substance of such supplemental indenture. Any failure of the Company to mail
such notice, or any defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

ARTICLE 11

NOTE GUARANTEES

     Section 11.01 Guarantee.

     (a) Subject to this Article 11, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Securities or the obligations of the Company hereunder or thereunder, that:

     (1) the principal of, Additional Interest and Special Interest, if any, and interest
on, the Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of and interest
on the Securities, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof; and

     (2) in case of any extension of time of payment or renewal of any Securities or any of
such other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.

     Failing payment when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a Guarantee of payment and not a Guarantee of
collection.

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

     (c) If any Holder or the Trustee is required by any court or otherwise to return to the
Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in
relation to either the Company or

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the Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to
the extent theretofore discharged, will be reinstated in full force and effect.

     (d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation
to the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand:

     (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in
Article 7 hereof for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and

     (2) in the event of any declaration of acceleration of such obligations as provided in
Article 7 hereof, such obligations (whether or not due and payable) will forthwith become
due and payable by the Guarantors for the purpose of this Note Guarantee.

     The Guarantors will have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

     Section 11.02 Limitation on Guarantor Liability.

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

     Section 11.03 Execution and Delivery of Note Guarantee.

     To evidence its Note Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees
that a notation of such Note Guarantee substantially in the form attached as Exhibit B hereto will
be endorsed by an Officer of such Guarantor on each Security authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its
Officers.

     Each Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 hereof will
remain in full force and effect notwithstanding any failure to endorse on each Security a notation
of such Note Guarantee.

     If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds
that office at the time the Trustee authenticates the Security on which a Note Guarantee is
endorsed, the Note Guarantee will be valid nevertheless.

     The delivery of any Security by the Trustee, after the authentication thereof hereunder, will
constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the
Guarantors.

     In the event that the Company or any Guarantor acquires or creates another Subsidiary after
the date of this Indenture, if required by Section 5.10 hereof, the Company will cause such
Subsidiary to comply with the provisions of Section 5.10 hereof and this Article 11, to the extent
applicable.

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     Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.

     A Guarantor may not sell or otherwise dispose of all or substantially all of their assets
(other than assets determined to be held by such Guarantor as a qualified intermediary on behalf of
third-party taxpayers pursuant to Internal Revenue Code Section 1031) to, or amalgamate or
consolidate with or merge with or into (whether or not such Guarantor is the surviving Person)
another Person, other than the Company, unless:

     (1) immediately after giving effect to that transaction, no Default or Event of Default
exists; and

     (2) the Person acquiring the assets in any such sale or disposition or the Person
formed by or surviving any such amalgamation, consolidation or merger assumes all the
obligations of such Guarantor under this Indenture and a Note Guarantee pursuant to a
supplemental indenture reasonably satisfactory to the Trustee.

     In case of any such consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee endorsed upon the Securities and the due and punctual
performance of all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to
be signed any or all of the Note Guarantees to be endorsed upon all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee.
All the Note Guarantees so issued will in all respects have the same legal rank and benefit under
this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Note Guarantees had been issued at the date of the
execution hereof.

     Section 11.05 Releases.

     Upon satisfaction and discharge of this Indenture in accordance with Article 9 hereof, each
Guarantor will be released and relieved of any obligations under its Note Guarantee.

     Any Guarantor, not released from its obligations under its Note Guarantee as provided in
Section 11.04 or this Section 11.05, will remain liable for the full amount of principal of and
interest and Additional Interest and Special Interest, if any, on the Securities and for the other
obligations of any Guarantor under this Indenture as provided in this Article 11.

ARTICLE 12

MISCELLANEOUS

     Section 12.01 Conflict with Trust Indenture Act.

     If any provision hereof limits, qualifies or conflicts with any provision of the TIA or
another provision which is required or deemed to be included in this Indenture by any of the
provisions of the TIA, the provision or requirement of the TIA shall control. If any provision of
this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded,
as the case may be.

     Section 12.02 Notices.

     Any demand, authorization notice, request, consent or communication shall be given in writing
and mailed by first-class mail, postage prepaid, or delivered by recognized overnight courier
addressed as follows or transmitted by facsimile transmission (confirmed by delivery in person or
mail by first-class mail, postage prepaid, or by guaranteed overnight courier) to the following
facsimile numbers:

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     If to the Company and/or any Guarantor, to:

Stewart Information Services Corporation

1980 Post Oak Boulevard

Houston, Texas 77056

Attention: Chief Financial Officer

Facsimile No.: (713) 629-2330

     or at any other address previously furnished in writing to the Trustee by the Company, with
a copy to:

Locke Lord Bissell & Liddell LLP

2400 JP Morgan Chase Tower

600 Travis

Houston, Texas 77002

Attention: David Taylor

Facsimile No.: (713) 223-3717

     if to the Trustee, to:

Wells Fargo Bank, National Association

201 Main Street, Suite 301

MAC T5441-030

Fort Worth, Texas 76102

Attention: Corporate Trust

Facsimile No: (817) 885-8650

or at any other address previously furnished in writing to the Holders or the Company or any other
obligor on the Securities by the Trustee.

     Such notices or communications shall be effective only when actually received.

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

     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, or delivered by recognized overnight courier, to each Holder affected
by such event, at its address as it appears in the register kept by the Primary Registrar, not
later than the latest date, and not earlier than the earliest date, prescribed for the giving of
such notice or by any other manner deemed acceptable to the Trustee. 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. Any notice when mailed to a Holder in the aforesaid manner shall be conclusively deemed
to have been received by such Holder whether or not actually received by such Holder. 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.

     In case by reason of the suspension of regular mail service or by reason of any other cause,
it shall be impracticable to mail notice of any event as required by any provision of this
Indenture, then any method of giving such notice as shall be reasonably satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.

     If the Company mails any notice to a Holder of a Security, it shall mail a copy to the Trustee
and each Registrar, Paying Agent and Conversion Agent.

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     Section 12.03 Disclosure of Names and Addresses of Holders.

     Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities, and the Trustee shall comply with TIA Section
312(b). The Company, the Trustee, the Registrar and any other Person shall have the protection of
TIA 312(c). Further, every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee or any agent of either of them
shall be held accountable by reason of the disclosure of any information as to the names and
addresses of the Holders in accordance with TIA Section 312, regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under TIA Section 312.

     Section 12.04 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 and as may be requested by the Trustee, the Company shall furnish to
the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with, and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that, in the case of any such application or request as to which the
furnishing of such certificates or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional certificate or opinion
need be furnished.

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

     (1) a statement that the Person signing such certificate or opinion has read and
understands such covenant or condition and the definitions herein relating thereto;

     (2) 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;

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

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

     Section 12.05 Acts of Holders.

     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “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 conclusive in
favor of the Trustee and the Company, if made in the manner provided in this Section 12.05.

     (b) The ownership of Securities shall be proved by the register maintained by the Primary
Registrar.

     (c) Any request, demand, authorization, direction, notice, consent, waiver or other Act by the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, suffered or omitted to be done

62

 

by the Trustee, any Paying Agent or Conversion Agent, or the Company or any other obligor of
the Securities in reliance thereon, whether or not notation of such action is made upon such
Security.

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

     (e) If the Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to
a Board Resolution, fix in advance a record date for the determination of such Holders entitled to
give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding TIA Section 316(c), any such record
date shall be the record date specified in or pursuant to such Board Resolution, which shall be a
date not more than 30 days prior to the first solicitation of Holders generally in connection
therewith and no later than the date such first solicitation is completed.

     (f) If such a record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be Holders for purposes of
determining whether Holders of the requisite proportion of Securities then Outstanding have
authorized or agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for this purpose the Securities then Outstanding shall be
computed as of such record date; provided that no such request, demand, authorization, direction,
notice, consent, waiver or other Act by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture not later than six
months after such record date.

     (g) For purposes of this Indenture, any action by the Holders which may be taken in writing
may be taken by electronic means or as otherwise reasonably acceptable to the Trustee.

     Section 12.06 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 successors hereunder, any Paying Agent and the Holders)
any benefit or any legal or equitable right, remedy or claim under this Indenture.

     Section 12.07 Legal Holidays.

     In any case where any Interest Payment Date, Fundamental Change Purchase Date or Final
Maturity Date of any Security shall not be a Business Day, then (notwithstanding any other
provision of this Indenture or of the Securities) payment of interest or principal need not be made
on such date, but may be made on the next succeeding Business Day with the same force and effect as
if made on such Interest Payment Date, Fundamental Change Purchase Date or Final Maturity Date, and
no interest shall accrue with respect to such payment for the period from and after such Interest
Payment Date, Fundamental Change Purchase Date or Final Maturity Date, as the case may be, to the
next succeeding Business Day.

     Section 12.08 Governing Law; Waiver of Trial by Jury.

     THIS INDENTURE, THE SECURITIES AND THE NOTE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     EACH PARTY HERETO, AND EACH HOLDER OF A SECURITY BY ITS ACCEPTANCE THEREOF, HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY

63

 

RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE.

     Section 12.09 No Adverse Interpretation of Other Agreements.

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

     Section 12.10 No Personal Liability of Directors, Officers, Employees and
Stockholders.

     No director, officer, employee, stockholder, incorporator or agent of the Company or any
Guarantor will have any liability for any obligations of the Company or any Guarantor under the
Securities, the Note Guarantees, the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Securities by accepting a
Security waives and releases all such liability.

     Section 12.11 Successors and Assigns.

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

     Section 12.12 Multiple Counterparts.

     The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall
be deemed an original, but all of them together represent the same agreement.

     Section 12.13 Separability Clause.

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

     Section 12.14 Schedules and Exhibits.

     All schedules and exhibits attached hereto are by this reference made a part hereof with the
same effect as if herein set forth in full.

     Section 12.15 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.

[SIGNATURE PAGES FOLLOW]

64

 

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

	 	 	 	 	 
	 	STEWART INFORMATION

SERVICES CORPORATION

 	 
	 	By:  	/s/ Malcolm S. Morris
 	 
	 	 	Name:  	Malcolm S. Morris 	 
	 	 	Title:  	Co-Chief Executive Officer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	WELLS FARGO BANK NATIONAL 

ASSOCIATION,

as Trustee

 	 
	 	By:  	/s/ John C. Stohlmann
 	 
	 	 	Name:  	John C. Stohlmann 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 
	 	STEWART TITLE COMPANY

 	 
	 	By:  	/s/ Stewart Morris, Jr.
 	 
	 	 	Name:  	Stewart Morris, Jr. 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	STEWART TITLE SERVICES OF NORTHWEST 

INDIANA, LLC

 	 
	 	By:  	STEWART TITLE COMPANY,
 	 
	 	 	its Managing Member 	 
	 	 	 
	 	By:  	                             /s/ Stewart Morris, Jr.
 	 
	 	 	Name:  	Stewart Morris, Jr. 	 
	 	 	Title:  	President and Chief Executive
Officer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	API PROPERTIES CORPORATION;

API PROPERTIES NEVADA, INC.;

ASSET PRESERVATION, INC.;

ELECTRONIC CLOSING SERVICES, INC.;

FULGHUM, INC.;

GESS MANAGEMENT, L.L.C.;

GRACY TITLE COMPANY, L.C.;

GRANITE PROPERTIES INCORPORATED;

HANNAFORD ABSTRACT & TITLE COMPANY, INC.;

HOME RETENTION SERVICES, INC.;

JERSEY — STEWART TITLE AGENCY, LLC;

MCPHERSON COUNTY ABSTRACT & TITLE COMPANY, INC.;

OKLAHOMA LAND TITLE SERVICES, LLC;

PARKED PROPERTES NY, INC.;

PARKED PROPERTIES WA, INC.;

PROFESSIONAL REAL ESTATE TAX SERVICE OF 

NORTH TEXAS, L.L.C.;

PROFESSIONAL REAL ESTATE TAX SERVICE, L.L.C.;

RED RIVER TITLE SERVICES, INC.;

SLJ HOLDINGS, LLC;

STEWART ABSTRACT & TITLE OF OKLAHOMA, AN
OKLAHOMA CORPORATION;

STEWART DEFAULT SERVICES;

STEWART LENDER SERVICES, INC.;

STEWART MANAGEMENT SERVICES, INC.;

STEWART NATIONAL TITLE, LLC;

STEWART PROPERTIES OF TAMPA, INC.;

STEWART SOLUTIONS, LLC;

STEWART TITLE OF CALIFORNIA, INC.;

STEWART TITLE OF LOUISIANA, INC.;

STEWART TITLE OF MARTIN COUNTY, INC.;

STEWART TITLE OF MONTANA, INC.;

STEWART TITLE OF NEVADA HOLDINGS, INC.; and

STEWART TITLE OF WISCONSIN, INC.

 	 
	 	By:  	/s/ Steven I. Soffer
 	 
	 	 	Name:  	Steven I. Soffer 	 
	 	 	Title:  	Vice President or Manager of each of the
above-named entities
 	 
	 
	 	GESS REAL ESTATE INVESTMENTS, L.P.

 	 
	 	By:  	GESS MANAGEMENT, L.L.C.,
 	 
	 	 	its general partner
 	 
	 	 	 	 
	 	By:  	                                                  /s/ Steven I. Soffer
 	 
	 	 	Name:  	Steven I. Soffer 	 
	 	 	Title:  	Vice President 	 

 

 

	 	 	 	 	 
	 	SIFS, LLC

 	 
	 	By:  	STEWART SOLUTIONS, LLC,
 	 
	 	 	its sole member 	 
	 	 	 
	 	By:  	                                                      /s/ Steven I. Soffer
 	 
	 	 	Name:  	Steven I. Soffer 	 
	 	 	Title:  	Vice President
 	 
	 
	 	QUANTUM LEAP REALTY TECHNOLOGIES,

INC.

 	 
	 	By:  	/s/ Patrick L. Vaden
 	 
	 	 	Name:  	Patrick L. Vaden 	 
	 	 	Title:  	President
 	 
	 
	 	STEWART FINANCIAL SERVICES, INC.

 	 
	 	By:  	/s/ Larry Davis
 	 
	 	 	Name:  	Larry Davis 	 
	 	 	Title:  	President 	 
	 

 

 

EXHIBIT A

FORM OF FACE OF SECURITY

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE 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 IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

THIS SECURITY IS ONE OF A DULY AUTHORIZED ISSUE OF SECURITIES DESIGNATED AS “6.00% CONVERTIBLE
SENIOR NOTES DUE 2014” (THE “SECURITIES”) ISSUED BY STEWART INFORMATION SERVICES CORPORATION (THE
“COMPANY”). THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY
HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

	(1)	 	REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL
BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
	 
	(2)	 	AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE
TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, OR ANY COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY, PRIOR TO THE DATE THAT IS (X) ONE YEAR AFTER THE LAST DATE ON
WHICH ANY OF THE SECURITIES ARE ORIGINALLY ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

	 	(A)	 	TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
	 
	 	(B)	 	PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT, OR
	 
	 	(C)	 	TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT (IF AVAILABLE), OR

 

 

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

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

Stewart Information Services Corporation

6.00% Convertible Senior Notes due 2014

			
	 	 	 
	No. R-
	 	CUSIP. 860372 AA9

     Stewart Information Services Corporation, a Delaware corporation, promises to pay to Cede &
Co. or registered assigns the principal sum as set forth in the “Schedule of Exchanges of
Securities” attached hereto, which shall not exceed SIXTY FIVE MILLION DOLLARS ($65,000,000) on
October 15, 2014.

     This Security shall bear interest as specified on the other side of this Security. This
Security is convertible as specified on the other side of this Security.

     Additional provisions of this Security are set forth on the other side of this Security.

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

	 	 	 	 	 
	 	STEWART INFORMATION

SERVICES CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Malcolm S. Morris 	 
	 	 	Title:  	Co-Chief Executive Officer 	 
	 

Dated: October 15, 2009

Trustee’s Certificate of Authentication:

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

	 	 	 	 	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

 	 
	By:  	 	 
	 	Authorized Signatory 	 
	 	 	 	 

 

 

	 	 	 	 	 

FORM OF REVERSE SIDE OF SECURITY

Stewart Information Services Corporation

6.00% Convertible Senior Notes due 2014

     1. Interest

     Stewart Information Services Corporation, a Delaware corporation (the “Company”, which term
shall include any successor company under the Indenture hereinafter referred to), promises to pay
interest on the principal amount of this Security at the rate of 6.00% per annum. The Company
shall pay interest semiannually, in arrears, on April 15 and October 15 of each year (each an
“Interest Payment Date”), commencing on April 15, 2010. Interest payable on any Interest Payment
Date shall include interest accrued from and including the immediately preceding Interest Payment
Date (or if none, from and including October 15, 2009) to but excluding the relevant Interest
Payment Date. Cash interest will be computed on the basis of a 360-day year comprised of twelve
30-day months. Any payment required to be made on a day that is not a Business Day shall be made
on the next succeeding Business Day with the same force and effect as if made on such day and
without any interest in respect of the delay. The Company shall, to the fullest extent permitted
by law, pay interest in immediately available funds on overdue principal and interest at the then
applicable interest rate borne by this Security, which interest shall accrue from the date such
overdue amount was originally due to the day preceding the date payment of such amount, including
interest thereon, has been made or duly provided for.

     Any reference herein to interest accrued or payable as of any date shall include any
Additional Interest that may be payable in accordance with the provision of Section 7.16 of the
Indenture and any Special Interest that may be payable in accordance with the provisions of Section
7.02 of the Indenture.

     2. Method of Payment

     The Company shall pay interest on this Security (except defaulted interest) to the Person who
is the Holder of this Security at the close of business on March 31 or September 30, as the case
may be (each, a “Regular Record Date”) next preceding the related Interest Payment Date. The
Holder must surrender this Security to a Paying Agent to collect payment of principal. The Company
will pay principal and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts.

     3. Paying Agent, Registrar and Conversion Agent

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

     4. Indenture

     This Security is one of a duly authorized issue of Securities of the Company designated as its
6.00% Convertible Senior Notes due 2014 (the “Securities”), issued under an Indenture, dated as of
October 15, 2009 (together with any supplemental indentures thereto, the “Indenture”), among the
Company and the Guarantors named therein and the Trustee. The terms of this Security include those
stated in the Indenture and those required by or made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of the Indenture.
This Security is subject to all such terms, and the Holder of this Security is referred to the
Indenture and the TIA for a statement of them. The Securities are limited to $65,000,000 aggregate
principal amount. The Indenture does not limit other debt of the Company, secured or unsecured.

     Capitalized terms not otherwise defined herein have the meaning ascribed to such terms in the
Indenture.

 

 

     5. Purchase of Securities at Option of Holder Upon a Fundamental Change

     Upon a Fundamental Change, at the option of the Holder and subject to the terms and conditions
of the Indenture, the Company shall become obligated to purchase for cash all or any part specified
by the Holder (so long as the principal amount of such part is $1,000 or an integral multiple of
$1,000) of the Securities held by such Holder on the date specified by the Company in accordance
with the provisions of Article 3 of the Indenture.

     6. Conversion

     Subject to and upon compliance with the provisions of the Indenture, the Holder may surrender
for conversion all or any portion of this Security that is in an integral multiple of $1,000. Upon
conversion, the Holder shall be entitled to receive the consideration specified in the Indenture.
No fractional share of Common Stock shall be issued upon conversion of a Security. Instead, the
Company shall pay a cash adjustment as provided in the Indenture. The initial Conversion Rate of
the Securities shall be 77.6398 shares of Common Stock per $1,000 principal amount of Securities,
subject to adjustment in accordance with the provisions of Article 4 of the Indenture. If a Holder
converts all or any portion of this Security in connection with the occurrence of certain
Fundamental Change transactions, the Conversion Rate shall be increased in the manner and to the
extent described in Section 4.06 of the Indenture.

     Securities surrendered for conversion (in whole or in part) during the period from the close
of business on any Regular Record Date to the opening of business on the next succeeding Interest
Payment Date shall be accompanied by payment by the Holders of such Securities in funds to the
Conversion Agent acceptable to the Company of an amount equal to the interest payable on such
corresponding Interest Payment Date; provided that no such payment need be made: (1) in connection
with a conversion following the Regular Record Date preceding the Final Maturity Date; (2) if the
Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on
or prior to the corresponding Interest Payment Date; or (3) to the extent of any overdue interest,
if any overdue interest exists at the time of conversion with respect to such Security.

     A Security in respect of which a Holder has submitted a Fundamental Change Purchase Notice may
be converted only if such Holder validly withdraws such Fundamental Change Purchase Notice in
accordance with the terms of the Indenture.

     7. Denominations, Transfer, Exchange

     The Securities are in registered form, without coupons, in denominations of $1,000 principal
amount and integral multiples of $1,000 principal amount. A Holder may register the transfer of or
exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to pay any taxes or
other governmental charges that may be imposed in relation thereto by law or permitted by the
Indenture.

     8. Persons Deemed Owners

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

     9. Unclaimed Money

     If money for the payment of principal or interest remains unclaimed for two years, the Trustee
and any Paying Agent will pay the money back to the Company, subject to the provisions of the
Indenture. After that, Holders entitled to money must look to the Company for payment as general
creditors.

     10. Amendment, Supplement and Waiver

     Subject to certain exceptions, the Indenture or the Securities or the Note Guarantees may be
amended or supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the Securities then Outstanding, and an existing Default or Event of Default
and its consequence or compliance with any provision

 

 

of the Indenture, the Securities or the Note Guarantees may be waived subject to certain
exceptions with the consent of the Holders of a majority in aggregate principal amount of the
Securities then Outstanding. Without the consent of or notice to any Holder, the Company and the
Trustee may amend or supplement the Indenture, the Securities or the Note Guarantees to, among
other things, (x) cure any ambiguity, omission, mistake, defect or inconsistency or (y) make any
other change that does not adversely affect the interests of the Holders in any material respect.

     11. Successor Entity

     When a successor Person assumes all the obligations of its predecessor under the Securities
and the Indenture in accordance with the terms and conditions of the Indenture, the predecessor
Person (except in certain circumstances specified in the Indenture) shall be released from those
obligations.

     12. Defaults and Remedies

     An Event of Default shall occur upon the occurrence of any of the events specified in Section
7.01(a) of the Indenture. Subject to the provisions of the penultimate paragraph of Section
7.02(c) of the Indenture, if an Event of Default shall occur and be continuing with respect to the
Securities (other than an Event of Default specified in clause (9) or (10) of Section 7.01(a) of
the Indenture), the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Securities then Outstanding may, and the Trustee at the request of such Holders shall, declare
all unpaid principal of and accrued interest (including Additional Interest and Special Interest),
if any, on all Securities to be due and payable, by a notice in writing to the Company (and to the
Trustee if given by the Holders of the Securities). Upon any such declaration, such principal and
interest (including Additional Interest and Special Interest), if any, shall become due and payable
immediately. If an Event of Default specified in clauses (9) or (10) of Section 7.01(a) of the
Indenture occurs and is continuing, then all the Securities shall ipso facto become and be due and
payable immediately in an amount equal to the principal amount of the Securities, together with
accrued and unpaid interest (including Additional Interest and Special Interest), if any, to the
date the Securities become due and payable, without any declaration or other act on the part of the
Trustee or any Holder.

     The Holders of a majority in aggregate principal amount of the Securities Outstanding, by
written notice to the Company and the Trustee, may rescind and annul an acceleration and its
consequences if: (a) the Company has paid or deposited with the Trustee a sum sufficient to pay
(1) all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, (2) all overdue
interest on all Securities then Outstanding, (3) the principal of any Securities then Outstanding
which have become due otherwise than by such declaration of acceleration and interest thereon at
the rate borne by the Securities, and (4) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities; (b) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction; and (c) all Defaults and
Events of Default, other than the non-payment of principal of and interest on the Securities which
have become due solely by such declaration of acceleration, have been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent thereon.

     Holders may not enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in aggregate principal amount of
the Securities then Outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may, in accordance with the provisions of the Indenture, withhold from Holders notice of
any continuing Default (except a Default in payment of principal or interest or to deliver amounts
owing upon conversion) if and so long as it determines that withholding notice is in their
interests. The Company is required to file periodic certificates with the Trustee as to the
Company’s compliance with the Indenture and knowledge or status of any Default.

     13. Trustee Dealings with the Company

     Wells Fargo Bank, National Association, the initial Trustee under the Indenture, or any of its
Affiliates, in its individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may otherwise deal with the
Company or an Affiliate of the Company, as if it were not the Trustee.

 

 

     14. No Recourse Against Others

     No director, officer, employee, stockholder, incorporator or agent of the Company or any of
the Guarantors, as such, will have any liability for any obligations of the Company or the
Guarantors under the Securities, the Note Guarantees or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of the Securities by
accepting a Security waives and releases all such liability.

     15. Authentication

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

     16. Abbreviations and Definitions

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

     All terms defined in the Indenture and used in this Security but not specifically defined
herein are defined in the Indenture and are used herein as so defined.

     17. Indenture to Control; Governing Law

     In the case of any conflict between the provisions of this Security and the Indenture, the
provisions of the Indenture shall control. This Security and the Indenture shall be governed by,
and construed in accordance with, the laws of the State of New York.

     The Company will furnish to any Holder, upon written request and without charge, a copy of the
Indenture. Requests may be made to: Stewart Information Services Corporation, 1980 Post Oak
Boulevard, Houston, Texas 77056, Attention: Corporate Secretary, Facsimile No. (713) 629-2330.

 

 

SCHEDULE OF EXCHANGES OF SECURITIES

     The initial principal amount of this Global Security is            ($     ) The following
exchanges, purchases or conversions of a part of this Global Security have been made:

	 	 	 	 	 	 	 
	 	 	 	 	Notation Stating and	 	 
	 	 	Authorized Signatory of	 	Explaining Change in Principal	 	Principal Amount of this
	Date	 	Securities Custodian	 	Amount Recorded	 	Global Security
	 

	 	 
	 	 
	 	 

 

 

ASSIGNMENT FORM

          To assign this Security, fill in the form below:

I, or, we assign and transfer this Security to:

 

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

 

 

 

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

and irrevocably appoint:

 

agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Your Signature:
	 
	Date:  	 

	 	 	 	 

	 

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

 

			
	* Signature guaranteed by:

	 	 	 	 	 
	 	 	 
	By:  	
 	 	 
	 	 	 	 
	 	 	 	 
	 

 

			
	*	 	The signature must be guaranteed by an institution which is a member of one of the following
recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program
(STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange
Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

 

FORM OF CONVERSION NOTICE

          To convert this Security into Common Stock of the Company, check the box: o

To convert only part of this Security, state the principal amount to be converted (must be $1,000
or a integral multiple of $1,000): $           .

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

 

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

 

 

 

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

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Your Signature:
	 
	Date:

	 	 

	 	 	 	 

	 

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

 

	
	* Signature guaranteed by:

	 	 	 	 	 
	 	 	 
	By:  	
 	 	 
	 	 	 	 
	 	 	 	 

 

			
	*	 	The signature must be guaranteed by an institution which is a member of one of the following
recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program
(STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange
Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

 

FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

          To: [Name of Paying Agent]

The undersigned registered owner of this Security hereby acknowledges receipt of a notice from
Stewart Information Services Corporation (the “Company”) pursuant to Section 3.01 of that certain
Indenture (the “Indenture”), dated as of October 15, 2009, between the Company and Wells Fargo
Bank, National Association, and requests and instructs the Company to purchase the entire principal
amount of this Security, or the portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Security and the Indenture at the Fundamental
Change Purchase Price, together with accrued and unpaid interest (including Additional Interest and
Special Interest, if any), to, but not including, the Fundamental Change Purchase Date, to the
registered Holder hereof.

	 	 	 	 	 	 	 
	Date:

	 	 

	 	 	 	 

	 

	 	 	 	 	 	Signature (s)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signatures must be
guaranteed by a qualified
guarantor institution with
membership in an approved
signature guarantee program
pursuant to Rule 17Ad-15
under the Securities
Exchange Act of 1934.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Signature Guaranty

Principal amount to be redeemed (in an
integral Multiple of
 $1,000, if less than
all):

 

Certificate number (if applicable):

 

NOTICE: The signature to the foregoing election must correspond to the name as written upon the
face of this Security in every particular, without any alteration or change whatsoever.

A-1

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION

OF TRANSFER OF RESTRICTED SECURITIES

			
	Re:	 	6.00% Convertible Senior Notes due 2014 (the “Securities”) of Stewart Information Services
Corporation

This certificate relates to $                  principal amount of Securities owned in (check applicable box) o
book-entry or o definitive form by                  (the “Transferor”).

     The Transferor has requested a Registrar or the Trustee to exchange or register the transfer
of such Securities.

     In connection with such request and in respect of each such Security, the Transferor does
hereby certify that the Transferor is familiar with transfer restrictions relating to the
Securities as provided in Section 2.13 of the Indenture, dated as of October 15, 2009, among
Stewart Information Services Corporation, and Wells Fargo Bank, National Association as trustee
(the “Indenture”), and the transfer of such Security is being made pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the “Securities Act”) (check
applicable box), or the transfer or exchange, as the case may be, of such Security does not require
registration under the Securities Act because (check applicable box):

	o	 	 Such Security is being transferred pursuant to an effective registration statement under the Securities Act.
	 
	o	 	 Such Security is being acquired for the Transferor’s own account, without transfer.
	 
	o	 	Such Security is being transferred to the Company or a Subsidiary (as defined in the Indenture) of the Company.
	 
	o	 	Such Security is being transferred to a person the Transferor reasonably believes is a “qualified institutional buyer” (as
defined in Rule 144A or any successor provision thereto (“Rule 144A”) under the Securities Act) that is purchasing for its
own account or for the account of a “qualified institutional buyer”, in each case to whom notice has been given that the
transfer is being made in reliance on such Rule 144A, and in each case in reliance on Rule 144A.
	 
	o	 	 Such Security is being transferred pursuant to and in compliance with an exemption from the registration requirements under
the Securities Act in accordance with Rule 144 (or any successor thereto) (“Rule 144”) under the Securities Act.
	 
	o	 	 Such Security is being transferred pursuant to and in compliance with an exemption from the registration requirements of
the Securities Act (other than an exemption referred to above) and as a result of which such Security will, upon such
transfer, cease to be a “restricted security” within the meaning of Rule 144 under the Securities Act.

          The Transferor acknowledges and agrees that, if the transferee will hold any such Securities
in the form of beneficial interests in a Global Security which is a “restricted security” within
the meaning of Rule 144 under the Securities Act, then such transfer can only be made pursuant to
Rule 144A under the Securities Act and such transferee must be a “qualified institutional buyer”
(as defined in Rule 144A).

	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	 

		 	 	 	 	 	(Insert Name of Transferor)

A-2

 

EXHIBIT B

FORM OF NOTATION OF GUARANTEE

     For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture dated as of October 15, 2009 (the
“Indenture’”) among Stewart Information Services Corporation, (the “Company”), the Guarantors party
thereto and Wells Fargo Bank, N.A., as trustee (the “Trustee”), (a) the due and punctual payment of
the principal of, Additional Interest and Special Interest, if any, and interest on, the
Securities, whether at maturity, by acceleration, redemption or otherwise, the due and punctual
payment of interest on the overdue principal of and interest on the Securities, if any, if lawful,
and the due and punctual performance of all other obligations of the Company to the Holders and the
Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time
of payment or renewal of any Securities or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the
Guarantors to the Holders of Securities and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article 11 of the Indenture and reference is hereby made to
the Indenture for the precise terms of the Note Guarantee. Each Holder of a Security, by accepting
the same, agrees to and shall be bound by such provisions. Capitalized terms used but not defined
herein have the meanings given to them in the Indenture.

[Signature Pages Follow]

B-1

 

EXHIBIT C

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

     SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                     , 200    , among                      (the “Guaranteeing
Subsidiary”), a subsidiary of Stewart Information Services Corporation (or its permitted
successor), a Delaware corporation (the “Company”), the other Guarantors (as defined in the
Indenture referred to herein) and Wells Fargo Bank, N.A., as trustee under the Indenture referred
to below (the “Trustee”).

WITNESSETH

     WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the
“Indenture”), dated as of October 15, 2009 providing for the issuance of 6.00% Convertible Senior
Securities due 2014 (the “Securities”);

     WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary
shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the
Securities and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”);
and

     WHEREAS, pursuant to Section 10.03 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the
Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the
Securities as follows:

     1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings
assigned to them in the Indenture.

     2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an
unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee
and in the Indenture including but not limited to Article 11 thereof.

     4. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee,
incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any
liability for any obligations of the Company or any Guaranteeing Subsidiary under the Securities,
any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of the Securities
waives and releases all such liability. The waiver and release are part of the consideration for
issuance of the Securities. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against public policy.

     5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.

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

     7. EFFECT OF HEADINGS. The section headings herein are for convenience only and shall not
affect the construction hereof.

     8. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the
recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and
the Company.

C-1

 

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

Dated:               , 20     

	 	 	 	 	 
	 	[GUARANTEEING SUBSIDIARY]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Stewart Information Services Corporation

 	 
	 	By:  	
 	 
	 	 	Name: 	 
	 
	 	[EXISTING GUARANTORS]

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	WELLS FARGO BANK, N.A.,

as Trustee

 	 
	 	By:  	
 	 
	 	 	Authorized Signatory 	 
	 

C-2EX-10.2 ADVISORY AGREEMENT

EXHIBIT 10.2

ADVISORY AGREEMENT

AMONG

STEADFAST SECURE INCOME REIT, INC.,

STEADFAST SECURE INCOME REIT OPERATING PARTNERSHIP, L.P.,

AND

STEADFAST SECURE INCOME ADVISOR, LLC

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. Definitions
	 	 	1	 
	2. Appointment
	 	 	7	 
	3. Duties of the Advisor
	 	 	7	 
	4. Authority of Advisor
	 	 	10	 
	5. Bank Accounts
	 	 	11	 
	6. Records; Access
	 	 	11	 
	7. Limitations on Activities
	 	 	11	 
	8. Relationship with Director
	 	 	12	 
	9. Fees
	 	 	12	 
	10. Expenses
	 	 	13	 
	11. Reimbursement to the Advisor
	 	 	15	 
	12. Other Services
	 	 	15	 
	13. Voting Agreement
	 	 	15	 
	14. Business Combinations
	 	 	15	 
	15. Other Activities of the Advisor
	 	 	16	 
	16. The Steadfast Name
	 	 	17	 
	17. Term of Agreement
	 	 	17	 
	18. Termination by the Parties
	 	 	17	 
	19. Payments to and Duties of Advisor Upon Termination
	 	 	17	 
	20. Assignment to an Affiliate
	 	 	18	 
	21. Indemnification by the Company and the Operating Partnership
	 	 	18	 
	22. Advancement of Legal Expenses
	 	 	19	 
	23. Indemnification by Advisor
	 	 	19	 
	24. Advances by Advisor
	 	 	19	 
	25. Publicity
	 	 	20	 
	26. Non-Solicitation
	 	 	20	 
	27. Notices
	 	 	20	 
	28. Modification
	 	 	21	 
	29. Severability
	 	 	21	 
	30. Construction
	 	 	21	 
	31. Entire Agreement
	 	 	21	 
	32. Indulgences, Not Waivers
	 	 	21	 
	33. Gender
	 	 	21	 
	34. Titles Not to Affect Interpretation
	 	 	21	 
	35. Execution in Counterparts
	 	 	21	 

 

 

ADVISORY AGREEMENT

     THIS ADVISORY AGREEMENT (this “Agreement”),
dated as of the 28th day of September,
2009, is entered into by and among Steadfast Secure Income REIT, Inc., a Maryland corporation (the
“Company”), Steadfast Secure Income REIT Operating Partnership, L.P., a Delaware limited
partnership (the “Operating Partnership”), and Steadfast Secure Income Advisor, LLC, a
Delaware limited liability company (the “Advisor”). Capitalized terms used herein shall
have the meanings ascribed to them in Section 1 below.

W I T N E S S E T H

     WHEREAS, the Company intends to qualify as a REIT and to invest its funds in investments
permitted by the terms of Sections 856 through 860 of the Code;

     WHEREAS, the Company is the general partner of the Operating Partnership, and the Company
intends to conduct all of its business and make all or substantially all Investments through the
Operating Partnership;

     WHEREAS, the Company and the Operating Partnership desire to avail themselves of the
knowledge, experience, sources of information, advice, assistance and certain facilities available
to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set
forth, on behalf of, and subject to the supervision of the Company’s board of directors, all as
provided herein; and

     WHEREAS, the Advisor is willing to undertake to render such services on the terms and
conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

     1. DEFINITIONS. As used in this Agreement, the following terms have the meanings specified
below:

     Acquisition Expenses means any and all expenses, excluding Acquisition Fees, incurred
by the Company, the Operating Partnership, the Advisor, or any of their Affiliates in connection
with the selection, evaluation, acquisition, origination or development of any Investments, whether
or not acquired or originated, as applicable, including, without limitation, legal fees and
expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on
properties or other investments not acquired, accounting fees and expenses, title insurance
premiums, and the costs of performing due diligence.

     Acquisition Fee means the fees payable to the Advisor pursuant to Section 9(a) plus
all other fees and commissions, excluding Acquisition Expenses, paid by any Person to any Person in
connection with making or investing in any Investment or the purchase development or construction
of any Real Estate Asset by the Company. Included in the computation of such fees or commissions
shall be any real estate commission, origination fee, selection fee, development fee, construction
fee, nonrecurring management fee, loan fees or points or any fee of a similar nature, however
designated. Excluded shall be development fees and construction fees paid to Persons not
Affiliated with the Advisor in connection with the actual development and construction of a Real
Estate Asset.

     Adjusted Funds From Operations means the Company’s funds from operations, or FFO (as
defined by the National Association of Real Estate Investment Trusts), plus (1) any Acquisition
Expenses and Acquisition Fees expensed by the Company that are related to any Investment acquired
or expected to

 

 

be acquired by the Company and (2) any non-operating, non-cash charges incurred by the
Company, such as impairments of real property or loans, any other than temporary impairments of
marketable securities, or other similar charges.

     Advisor means Steadfast Secure Income Advisor, LLC, a Delaware limited liability
company, any successor advisor to the Company, the Operating Partnership or any Person to which
Steadfast Secure Income Advisor, LLC or any successor advisor subcontracts substantially all of its
functions. Notwithstanding the foregoing, a Person hired or retained by Steadfast Secure Income
Advisor, LLC to perform property management and related services for the Company or the Operating
Partnership that is not hired or retained to perform substantially all of the functions of
Steadfast Secure Income Advisor, LLC with respect to the Company or the Operating Partnership as a
whole shall not be deemed to be an Advisor.

     Advances shall have the meaning set forth in Section 24.

     Advance Period shall have the meaning set forth in Section 24.

     Affiliate or Affiliated means, with respect to any Person, (i) any Person directly or
indirectly owning, controlling or holding, with the power to vote, ten percent (10%) or more of the
outstanding voting securities of such other Person; (ii) any Person ten percent (10%) or more of
whose outstanding voting securities are directly or indirectly owned, controlled or held, with the
power to vote, by such other Person; (iii) any Person directly or indirectly controlling,
controlled by or under common control with such other Person; (iv) any executive officer, director,
trustee or general partner of such other Person; and (v) any legal entity for which such Person
acts as an executive officer, director, trustee or general partner of such other Person. An entity
shall not be deemed to control or be under common control with a program sponsored by the sponsor
of the Company unless (A) the entity owns 10% or more of the voting equity interests of such
program or (B) a majority of the Board (or equivalent governing body) of such program is composed
of Affiliates of the entity or general partner.

     Articles of Incorporation means the Amended and Restated Articles of Incorporation of
the Company, as amended or restated from time to time.

     Average Invested Assets means, for a specified period, the average of the aggregate
book value of the assets of the Company invested, directly or indirectly, in Investments before
deducting depreciation, bad debts or other non-cash reserves, computed by taking the average of
such values at the end of each month during such period.

     Board means the board of directors of the Company, as of any particular time.

     Bylaws means the bylaws of the Company, as amended from time to time.

     Cause means with respect to the termination of this Agreement, fraud, criminal
conduct, willful misconduct, gross negligence or negligent breach of a fiduciary duty by the
Advisor, or a material breach of this Agreement by the Advisor.

     Code means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in
effect from time to time, as the same may be amended, and any successor provision thereto, as
interpreted by any applicable regulations as in effect from time to time.

     Company means Steadfast Secure Income REIT, Inc., a Maryland corporation.

- 2 -

 

     Competitive Real Estate Commission means a real estate or brokerage commission for the
purchase or sale of property that is reasonable, customary and competitive in light of the size,
type, and location of the property.

     Contract Sales Price means the total consideration received by the Company for the
sale of an Investment.

     Cost of Investments means the sum of (i) with respect to acquisition or origination of
an Investment to be wholly owned, directly or indirectly, by the Company, the amount actually paid
or allocated to fund the acquisition, origination, development, construction or improvement of the
Investment, inclusive of expenses associated with the making of such Investment and the amount of
any debt associated with, or used to fund the investment in, such Investment and (ii) with respect
to the acquisition or origination of an Investment through any Joint Venture, the portion of the
amount actually paid or allocated to fund the acquisition, origination, development, construction
or improvement of the Investment, inclusive of expenses associated with the making of such
Investment, plus the amount of any debt associated with, or used to fund the investment in, such
Investment that is attributable to the Company’s investment in such Joint Venture.

     Dealer
Manager means Steadfast Capital Markets Group, LLC (or any successor thereto) or
such other Person or entity selected by the Board to act as the dealer manager for a Public
Offering or Private Placement.

     Dealer Manager Fee means 3.5% of Gross Proceeds from the sale of Shares in a Public
Offering or Private Placement, payable to the Dealer Manager for serving as the dealer manager of
such Public Offering or Private Placement.

     Director means a member of the Board.

     Disposition Fee means the fees payable to the Advisor pursuant to Section 9(c).

     Distributions mean any distributions of money or other property by the Company to
Stockholders, including distributions that may constitute a return of capital for federal income
tax purposes.

     Effective Date means the date of this Agreement.

     Excess Amount shall have the meaning set forth in Section 11.

     Expense Year shall have the meaning set forth in Section 11.

     FINRA means the Financial Industry Regulatory Authority, Inc.

     GAAP means generally accepted accounting principles as in effect in the United States
of America from time to time.

     Good Reason means either (i) any failure to obtain a satisfactory agreement from any
successor to the Company or the Operating Partnership to assume and agree to perform the Company’s
or the Operating Partnership’s obligations under this Agreement or (ii) any material breach of this
Agreement of any nature whatsoever by the Company or the Operating Partnership.

     Gross Proceeds means the aggregate purchase price of all Shares sold for the account
of the Company through all Public Offerings and Private Placements, without deduction for Sales
Commissions, Dealer Manager Fees or Organization and Offering Expenses. For the purpose of
computing Gross Proceeds, the purchase price of any Share for which reduced Sales Commissions or
Dealer Manager Fees

- 3 -

 

are paid to the Dealer Manager or a Participating Dealer (where net proceeds to the Company
are not reduced) shall be deemed to be the full amount of the offering price per Share pursuant to
the Prospectus or private placement memorandum for such Public Offering or Private Placement
without reduction.

     Indemnitee shall have the meaning set forth in Section 21.

     Independent Director shall have the meaning set forth in the Articles of
Incorporation.

     Initial Private Placement means the private offering of Shares pursuant to the
Memorandum.

     Initial Public Offering means the initial public offering of Shares registered
pursuant to the Registration Statement.

     Investments means any investments by the Company or the Operating Partnership in Real
Estate Assets, Real Estate-Related Assets or other investments in which the Company or the
Operating Partnership may acquire an interest, either directly or indirectly, including through an
ownership interest in a Joint Venture, pursuant to its Articles of Incorporation, Bylaws and the
investment objectives and policies adopted by the Board from time to time, other than short-term
investments acquired for the purpose of cash management.

     Investment Management Fee means the fees payable to the Advisor pursuant to Section
9(d).

     Joint Venture means the joint venture, limited liability company, partnership or other
entity pursuant to which the Company is a co-venturer or partner with respect to the ownership of
any Investments.

     Listing means the listing of the Shares on a national securities exchange. Upon such
Listing, the Shares shall be deemed “Listed.”

     Loans means any indebtedness or obligations in respect of borrowed money or evidenced
by bonds, notes, debentures, deeds of trust, letters of credit or similar instruments, including
mortgages and mezzanine loans.

     Memorandum means the confidential private placement memorandum relating to the offer
and sale of up to $94,000,000 in Shares by the Company in an unregistered private offering pursuant
to the applicable exemption from registration under Section 4(2) of the Securities Act and Rule 506
of Regulation D promulgated by the SEC under the Securities Act.

     NASAA REIT Guidelines means the Statement of Policy Regarding Real Estate Investment
Trusts published by the North American Securities Administrators Association as in effect on the
Effective Date.

     Net Income means for any period, the Company’s total revenues applicable to such
period, less the total expenses applicable to such period other than additions to reserves for
depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of
the Company’s assets.

     Offering Stage Termination Date means the first date upon which the Company is no
longer offering equity securities that are not listed on a national securities exchange, whether
through the Initial Private Placement, Initial Public Offering or follow-on Public Offerings,
provided that the Company has not filed a registration statement for a follow-on Public Offering as
of such date (for purposes of this definition, the Company does not consider “follow-on Public
Offerings” to include Public Offerings on behalf of selling Stockholders or Public Offerings
related to a distribution reinvestment plan, employee benefit plan or the redemption of interests
in the Operating Partnership).

- 4 -

 

     Operating Expenses means all costs and expenses incurred by the Company, as determined
under GAAP, that in any way are related to the operation of the Company or its business, including
fees paid to the Advisor, but excluding (i) the expenses of raising capital such as Organization
and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration,
and other fees, printing and other such expenses and taxes incurred in connection with the
issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments,
(iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves,
(v) incentive fees paid in compliance with the NASAA REIT Guidelines, (vi) Acquisition Fees and
Acquisition Expenses and (vii) other fees and expenses connected with the acquisition, disposition,
management and ownership of real estate interests, mortgages or other property (including the costs
of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of
property). The definition of “Operating Expenses” set forth above is intended to encompass only
those expenses which are required to be treated as Total Operating Expenses under the NASAA REIT
Guidelines. As a result, and notwithstanding the definition set forth above, any expense of the
Company which is not part of Total Operating Expenses under the NASAA REIT Guidelines shall not be
treated as part of Operating Expenses for purposes hereof.

     Operating Partnership shall mean Steadfast Secure Income REIT Operating Partnership,
L.P., a Delaware limited partnership.

     Operating Partnership Agreement means the Amended and Restated Operating Partnership
Agreement by and among the Company, the Operating Partnership and the Advisor, as amended or
restated from time to time.

     Organization and Offering Expenses means any and all costs and expenses incurred by or
on behalf of the Company in connection with the formation of the Company, the qualification and
registration of a Public Offering or a Private Placement, and the marketing and distribution of
Shares, including, without limitation, total underwriting and brokerage discounts and commissions
(including fees of the underwriters’ attorneys), expenses for printing, engraving, amending and
supplementing registration statements and prospectuses, mailing and distributing costs, salaries of
employees while engaged in sales activity, telephone and other telecommunications costs, all
advertising and marketing expenses, information technology costs, charges of transfer agents,
registrars, trustees, escrow holders, depositories and experts and fees, expenses and taxes related
to the filing, registration and qualification of the sale of the Shares under federal and state
laws, including taxes and fees and accountants’ and attorneys’ fees.

     Participating Dealers means broker-dealers who are members of FINRA or that are exempt
from broker-dealer registration, and who, in either case, have executed participating dealer or
other agreements with the Dealer Manager to sell Shares in a Public Offering or Private Placement.

     Person means an individual, corporation, partnership, trust, joint venture, limited
liability company or other entity.

     Private Placement means an unregistered sale of Shares pursuant to an applicable
exemption from the registration requirements of the Securities Act and state securities laws.

     Property Manager means an entity that has been retained to perform and carry out
property-management services at one or more of the Real Estate Assets, excluding Persons retained
or hired to perform facility management or other services or tasks at a particular Real Estate
Asset, the costs for which are passed through to and ultimately paid by the tenant at such Real
Estate Asset.

     Prospectus means a “Prospectus” under Section 2(10) of the Securities Act, including a
preliminary Prospectus, an offering circular as described in Rule 253 of the General Rules and

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Regulations under the Securities Act or, in the case of an intrastate offering, any document
by whatever name known, utilized for the purpose of offering and selling securities to the public.

     Public Offering means a public offering of Shares pursuant to a Prospectus.

     Real Estate Assets means any investment by the Company or the Operating Partnership in
unimproved and improved Real Property (including, without limitation, fee or leasehold interests,
options and leases) either directly or through a Joint Venture.

     Real Estate-Related Assets means any investments by the Company or the Operating
Partnership in, or origination of, mortgage loans and other types of real estate-related debt
financing, including, without limitation, mezzanine loans, bridge loans, convertible mortgages,
construction mortgage loans, loans on leasehold interests and participations in such loans, as well
as real estate debt securities and equity securities of other real estate companies and REITs.

     Real Property means real property owned from time to time by the Company or the
Operating Partnership, either directly or through joint venture arrangements or other partnerships,
which consists of (i) land only, (ii) land, including the buildings located thereon, (iii)
buildings only or (iv) such investments the Board and the Advisor mutually designate as Real
Property to the extent such investments could be classified as Real Property.

     Registration Statement means the registration statement filed by the Company with the
SEC on Form S-11 (Reg. No. 333-160748), as amended from time to time, in connection with the
Initial Public Offering.

     REIT means a “real estate investment trust” under Sections 856 through 860 of the
Code.

     Sale or Sales means any transaction or series of transactions whereby: (i) the Company
or the Operating Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Investment
or portion thereof, including the lease of any Real Property consisting of a building only, and
including any event with respect to any Real Property which gives rise to a significant amount of
insurance proceeds or condemnation awards; (ii) the Company or the Operating Partnership directly
or indirectly (except as described in other subsections of this definition) sells, grants,
transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of
the Company or the Operating Partnership in any Joint Venture in which it is a co-venturer or
partner; (iii) any Joint Venture directly or indirectly (except as described in other subsections
of this definition) in which the Company or the Operating Partnership as a co-venturer or partner
sells, grants, transfers, conveys, or relinquishes its ownership of any Investment or portion
thereof, including any event with respect to any Real Property which gives rise to a significant
amount of insurance proceeds or similar awards; (iv) the Company or the Operating Partnership
directly or indirectly (except as described in other subsections of this definition) sells, grants,
conveys or relinquishes its interest in any Real Estate-Related Assets or portion thereof
(including with respect to any Real Estate-Related Investment, all payments thereunder or in
satisfaction thereof other than regularly scheduled interest payments) and any event which gives
rise to a significant amount of insurance proceeds or similar awards; (v) the Company or the
Operating Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other asset not
previously described in this definition or any portion thereof; or (v) any other transaction or
series of transactions that the Board deems to be a Sale.

     Sales Commissions means 6.5% of Gross Proceeds from the sale of Shares in the Initial
Public Offering or Initial Private Placement payable to the Dealer Manager and reallowable to
Participating

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Dealers with respect to Shares sold by them (in each case excluding the proceeds received by
the Company pursuant to the Company’s distribution reinvestment plan).

     SEC means the Securities and Exchange Commission.

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

     Shares mean the shares of the Company’s common stock, par value $0.01 per share.

     Special Committee has the meaning as provided in Section 14.

     Sponsor means Steadfast REIT Investments, LLC, a Delaware limited liability company.

     Stockholders means the registered holders of the Shares.

     Termination Date means the date of termination of this Agreement.

     2%/25% Guidelines has the meaning set forth in Section 11(d).

     2. APPOINTMENT. The Company and the Operating Partnership hereby appoint the Advisor to serve
as their advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby
accepts such appointment.

     3. DUTIES OF THE ADVISOR. The Advisor is responsible for managing, operating, directing and
supervising the operations and administration of the Company and its Investments. The Advisor
undertakes to present to the Company and the Operating Partnership potential investment
opportunities, to make investment decisions on behalf of the Company subject to the limitations in
the Articles of Incorporation and the direction and oversight of the Board, and to provide the
Company with a continuing and suitable investment program consistent with the investment objectives
and policies of the Company as determined and adopted from time to time by the Board. In
performance of this undertaking, subject to the supervision of the Board and consistent with the
provisions of the Articles of Incorporation and Bylaws of the Company and the Operating Partnership
Agreement, the Advisor shall perform the duties described in this Section 3.

          (a) Offering Services. The Advisor shall manage and supervise, in connection with any
Public Offering or Private Placement:

               (i) the development of the Initial Private Placement, the Initial Public Offering and any
subsequent Public Offering or Private Placement approved by the Board, including the determination
of the specific terms of the securities to be offered by the Company, preparation of all offering
and related documents, and obtaining all required regulatory approvals of such documents;

               (ii) along with the Dealer Manager, the approval of the Participating Dealers and negotiation
of the related selling agreements;

               (iii) along with the Dealer Manager, the coordination of the due diligence process relating to
Participating Dealers and their review of the Memorandum, the Registration Statement and other
Public Offering and Private Placement documents;

               (iv) along with the Dealer Manager, the preparation of all marketing materials contemplated to
be used by the Dealer Manager or others relating to any Public Offering or Private Placement;

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               (v) along with the Dealer Manager, the negotiation and coordination with the transfer agent
for the receipt, collection, processing and acceptance of subscription agreements, commissions, and
other administrative support functions;

               (vi) along with the Dealer Manager, the creation and implementation of various technology and
electronic communications related to any Public Offering or Private Placement; and

               (vii) all other services related to any Public Offering or Private Placement, other than
services that (a) are to be performed by the Dealer Manager, (b) the Company elects to perform
directly or (c) would require the Advisor to register as a broker-dealer with the SEC, FINRA or any
state.

          (b) Acquisition Services. The Advisor shall:

               (i) subject to Section 4 hereof and the investment objectives and policies of the Company:
(a) locate, analyze and select potential Investments; (b) structure and negotiate the terms and
conditions of transactions pursuant to which the Investments will be made; and (c) acquire
Investments on behalf of the Company;

               (ii) oversee the due diligence process related to prospective Investments;

               (iii) prepare reports regarding prospective Investments which include recommendations and
supporting documentation necessary for the Board to evaluate the prospective Investments;

               (iv) obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate
in the judgment of the Advisor, concerning the value of prospective Investments; and

               (v) negotiate and execute approved Investments and other transactions.

          (c) Investment Management Services. The Advisor shall:

               (i) serve as the Company’s investment and financial advisor and obtain certain market research
and economic and statistical data in connection with the Investments and investment objectives and
policies;

               (ii) investigate, select, and, on behalf of the Company, engage and conduct business with such
Persons as the Advisor deems necessary to the proper performance of its obligations hereunder,
including, but not limited to, consultants, accountants, lenders, technical advisors, attorneys,
brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for
collection, insurers, insurance agents, developers, construction companies, Property Managers and
any and all Persons acting in any other capacity deemed by the Advisor necessary or desirable for
the performance of any of the foregoing services;

               (iii) monitor applicable markets and obtain reports where appropriate in the judgment of the
Advisor, concerning the value of the Investments;

               (iv) monitor and evaluate the performance of the Investments, provide daily investment
management services to the Company and perform and supervise the various investment management and
operational functions related to the Investments;

               (v) formulate and oversee the implementation of strategies for the administration, promotion,
management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and
disposition of Investments on an overall portfolio basis;

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               (vi) oversee the performance by the Property Managers of their duties, including collection and
proper deposits of rental payments and payment of Real Estate Asset expenses and maintenance;

               (vii) conduct periodic on-site property visits to some or all (as the Advisor deems reasonably
necessary) of the Real Estate Assets to inspect the physical condition of the Real Estate Assets
and to evaluate the performance of the Property Managers;

               (viii) review, analyze and comment upon the operating budgets, capital budgets and leasing plans
prepared and submitted by each Property Manager and aggregate these property budgets into the
Company’s overall budget;

               (ix) coordinate and manage relationships between the Company and any Joint Venture partners;
and

               (x) provide financial and operational planning services and investment portfolio management
functions, including, without limitation, the planning and implementation of establishing the
Company’s net asset value and obtaining appraisals and valuations with respect to Investments.

          (d) Accounting and Other Administrative Services. The Advisor shall:

               (i) manage and perform the various administrative functions necessary for the management of
the day-to-day operations of the Company;

               (ii) from time-to-time, or at any time reasonably requested by the Board, make reports to the
Board on the Advisor’s performance of services to the Company under this Agreement;

               (iii) coordinate with the Company’s independent accountants and auditors to prepare and
deliver to the Board’s audit committee an annual report covering the Advisor’s compliance with
certain material aspects of this Agreement;

               (iv) provide or arrange for administrative services and items, legal and other services,
office space, office furnishings, personnel and other overhead items necessary and incidental to
the Company’s business and operations;

               (v) maintain accounting data and any other information concerning the activities of the
Company as shall be needed to prepare and file all periodic financial reports and returns required
to be filed with the SEC and any other regulatory agency, including annual financial statements;

               (vi) maintain all books and records of the Company;

               (vii) oversee tax and compliance services and risk management services and coordinate with
third parties engaged by the Company, including independent accountants and other consultants, on
related tax matters;

               (viii) supervise the performance of such ministerial and administrative functions as may be
necessary in connection with the daily operations of the Company;

               (ix) provide the Company with all necessary cash management services;

               (x) manage and coordinate with the transfer agent the Distribution process and payments to
Stockholders;

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               (xi) at any time reasonably requested by the Board, consult with the Board and assist in
evaluating and obtaining adequate property insurance coverage based upon risk management
determinations;

               (xii) provide the officers of the Company and the Board with timely updates related to the
overall regulatory environment affecting the Company, as well as managing compliance with such
matters;

               (xiii) consult with the Board relating to the corporate governance structure and the policies
and procedures related thereto; and

               (xiv) oversee all reporting, record keeping, internal controls and similar matters in a manner
to allow the Company to comply with applicable law including the Sarbanes-Oxley Act of 2002.

          (e) Stockholder Services. The Advisor shall:

               (i) along with the Dealer Manager, manage communications with Stockholders, including
answering phone calls, preparing and sending written and electronic reports and other
communications; and

               (ii) along with the Dealer Manager, establish technology infrastructure to assist in providing
Stockholder support and service.

          (f) Financing Services. The Advisor shall:

               (i) identify and evaluate potential financing and refinancing sources, engaging a third-party
broker if necessary;

               (ii) negotiate terms, arrange and execute financing agreements;

               (iii) manage relationships between the Company and its lenders; and

               (iv) monitor and oversee the service of the Company’s debt facilities and other financings.

          (g) Disposition Services. The Advisor shall:

               (i) consult with the Board and provide assistance with the evaluation and approval of
potential Investment dispositions, sales or other liquidity events; and

               (ii) structure and negotiate the terms and conditions of transactions pursuant to which
Investments may be sold.

     4. AUTHORITY OF ADVISOR.

          (a) Pursuant to the terms of this Agreement (including the restrictions included in this
Section 4 and in Section 7), and subject to the continuing and exclusive authority of the Board
over the management of the Company, the Board hereby delegates to the Advisor the authority to
perform the services described in Section 3. The Advisor shall have the power to delegate all or
any part of its rights and powers to perform the services described in Section 3 to such officers,
employees, Affiliates, agents and representatives of the Advisor or the Company as it may deem
appropriate. Any authority delegated by the Advisor to any other Person shall be subject to the
limitations on the rights and powers of the Advisor specifically set forth in this Agreement or the
Articles of Incorporation.

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          (b) Notwithstanding the foregoing, the Advisor may not take any action on behalf of the
Company without the prior approval of the Board or duly authorized committees thereof if the
Articles of Incorporation or Maryland General Corporation Law require the prior approval of the
Board. The Advisor will deliver to the Board all documents required by the Board to evaluate a
proposed investment (and any financing related to such proposed investment).

          (c) If a transaction requires approval by the Independent Directors, the Advisor will deliver
to the Independent Directors all documents and other information required by them to properly
evaluate the proposed transaction.

          (d) The prior approval of a majority of the Independent Directors not otherwise interested in
the transaction and a majority of the Board not otherwise interested in the transaction will be
required for each transaction to which the Advisor or its Affiliates is a party.

          (e) The Board may, at any time upon the giving of written notice to the Advisor, modify or
revoke the authority or approvals set forth in Section 3 and this Section 4; provided, however,
that such modification or revocation shall be effective upon receipt of such notification by the
Advisor and shall not be applicable to investment transactions to which the Advisor has committed
the Company or the Operating Partnership prior to the date of receipt by the Advisor of such
notification.

     5. BANK ACCOUNTS. The Advisor shall establish and maintain one or more bank accounts in its
own name for the account of the Company or the Operating Partnership or in the name of the Company
and the Operating Partnership and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company or the Operating
Partnership, under such terms and conditions as the Board may approve, provided that no funds shall
be commingled with the funds of the Advisor; and the Advisor shall from time to time render
accountings of such collections and payments to the Board and to the auditors of the Company.

     6. RECORDS; ACCESS. The Advisor, in the conduct of its responsibilities to the Company, shall
maintain adequate and separate books and records for the Company’s operations in accordance with
GAAP, which shall be supported by sufficient documentation to ascertain that such books and records
are properly and accurately recorded. Such books and records shall be the property of the Company
and shall be available for inspection by the Board and by counsel, auditors and other authorized
agents of the Company, at any time or from time to time during normal business hours. Such books
and records shall include all information necessary to calculate and audit the fees or
reimbursements paid under this Agreement. The Advisor shall utilize procedures to attempt to ensure
such control over accounting and financial transactions as is reasonably required to protect the
Company’s assets from theft, error or fraudulent activity. All financial statements that the
Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP,
except for special financial reports that by their nature require a deviation from GAAP. The
Advisor shall liaise with the Company’s officers and independent auditors and shall provide such
officers and auditors with the reports and such other information that the Company requests.

     7. LIMITATIONS ON ACTIVITIES. Notwithstanding any provision in this Agreement to the
contrary, the Advisor shall not take any action that, in its sole judgment made in good faith,
would (a) adversely affect the ability of the Company to qualify or continue to qualify as a REIT
under the Code unless the Board has determined that the Company will not seek or maintain REIT
qualification for the Company, (b) subject the Company to regulation under the Investment Company
Act of 1940, as amended, (c) violate any law, rule, regulation or statement of policy of any
governmental body or agency having jurisdiction over the Company, its Shares or its other
securities, (d) require the Advisor to register as a broker-dealer with the SEC, FINRA
or any state, or (e) violate the Articles of Incorporation or Bylaws. In the event that an
action would violate any of (a) through (e) of the preceding sentence but

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such action has been ordered by the Board, the Advisor shall notify the Board of the Advisor’s
judgment of the potential impact of such action and shall refrain from taking such action until it
receives further clarification or instructions from the Board. In such event, the Advisor shall
have no liability for acting in accordance with the specific instructions of the Board so given.
Notwithstanding the foregoing, the Advisor, its managers, officers, employees and members, and the
partners, directors, officers, managers, members and stockholders of the Advisor’s Affiliates shall
not be liable to the Company or to the Directors or Stockholders for any act or omission by the
Advisor, its directors, officers, employees, or members, and the partners, directors, officers,
managers, members or stockholders of the Advisor’s Affiliates taken or omitted to be taken in the
performance of their duties under this Agreement except as provided in Section 21 of this
Agreement.

     8. RELATIONSHIP WITH DIRECTORS. Subject to Section 7 of this Agreement and to restrictions
advisable with respect to the qualification of the Company as a REIT, directors, officers and
employees of the Advisor or an Affiliate of the Advisor may serve as a Director and as officers of
the Company, except that no director, officer or employee of the Advisor or its Affiliates who also
is a Director or officer of the Company shall receive any compensation from the Company for serving
as a Director or officer other than reasonable reimbursement for travel and related expenses
incurred in attending meetings of the Board and no such Director shall be deemed an Independent
Director for purposes of satisfying the Director independence requirement set forth in the Articles
of Incorporation.

     9. FEES.

          (a) Acquisition Fees. The Advisor shall receive an Acquisition Fee payable by the
Company as compensation for services rendered in connection with the investigation, selection and
acquisition (by purchase, investment or exchange) of Investments as
set forth in Section 5(b) hereof. The total Acquisition Fees
payable to the Advisor or its Affiliates shall equal 2.0% of the Cost of Investment. The
Acquisition Fee will be inclusive of the Acquisition Expenses associated with such Investment, plus
the amount of any debt associated with, or used to fund the investment in, such Investment.
Notwithstanding anything herein to the contrary, the payment of Acquisition Fees by the Company
shall be subject to the limitations on acquisition fees contained in (and defined in) the Articles
of Incorporation. The Advisor shall submit an invoice to the Company following the closing of each
Investment, accompanied by a computation of the Acquisition Fee. Generally the Acquisition Fee
shall be paid to the Advisor at the closing of the transaction upon receipt of the invoice by the
Company; provided, however, that such Acquisition Fee shall be paid to an Affiliate of the Advisor
that is registered as a FINRA member broker-dealer if applicable laws or regulations prohibit such
payment to be made to a Person that is not a FINRA member broker-dealer. In addition, payment of
the Acquisition Fee may be deferred, in whole or in part, as to any transaction in the sole
discretion of the Advisor. Any such deferred Acquisition Fees shall be paid to the Advisor without
interest at such subsequent date as the Advisor shall request.

          (b) Limitation on Total Acquisition Fees, Origination Fees and Acquisition Expenses.
Pursuant to the NASAA REIT Guidelines, the total of all Acquisition Fees and Acquisition Expenses
payable in connection with any Investment shall not exceed 6.0% of the “contract purchase price,”
as defined in the Articles of Incorporation, of the Investment acquired.

          (c) Disposition Fee. In connection with a Sale of an Investment in which the Advisor
or any Affiliate of the Advisor provides a substantial amount of services as determined by the
Independent Directors, the Company shall pay to the Advisor or its Affiliate a Disposition Fee
equal to 1.5% of the Contract Sales Price of the Investment sold. Any Disposition Fee payable
under this Section 9(c) may be paid in addition to real estate commissions paid to non-Affiliates,
provided that the total real estate commissions (including such Disposition Fee) paid to all
Persons by the Company for the Sale of
each Real Estate Asset shall not exceed 6.0% of the Contract Sales Price. Substantial
assistance in connection with a Sale may include the preparation of an investment package (for
example, a package

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including a new investment analysis, rent rolls, Argus projections, tenant information regarding
credit, a property title report, an environmental report, a structural report and exhibits) or
other such substantial services performed in connection with a Sale. The Advisor shall submit an
invoice to the Company following the closing or closings of each disposition, accompanied by a
computation of the Disposition Fee. Generally, the Disposition Fee shall be paid to the Advisor at
the closing of the transaction upon receipt of the invoice by the Company. However, payments of
the Disposition Fee may be deferred, in whole or in part, as to any transaction in the sole
discretion of the Advisor. Any such deferred Disposition Fees shall be paid to the Advisor without
interest at such subsequent date as the Advisor shall request; provided, however, that such
Disposition Fee shall be paid to an Affiliate of the Advisor that is registered as a FINRA member
broker-dealer if applicable laws or regulations prohibit such payment to be made to a Person that
is not a FINRA member broker-dealer.

          (d) Investment Management Fee. The Advisor shall receive the Investment Management
Fee as compensation for services rendered in connection with the management of the Company’s
assets as set forth in Section 5(c) hereof. The Investment Management Fee shall be equal to an annual fee of 0.80%, payable monthly,
of the Cost of Investments. The Advisor shall submit a monthly invoice to the Company, accompanied
by a computation of the Investment Management Fee for the applicable period. Generally, the
Investment Management Fee payable to the Advisor shall be paid on the last day of such month, or
the first business day following the last day of such month. However, payments of the Investment
Management Fee may be deferred, in whole or in part, as to any transaction in the sole discretion
of the Advisor. Any such deferred Investment Management Fee shall be paid to the Advisor without
interest at such subsequent date as the Advisor shall request.

          (e) Exclusion of Certain Transactions. In the event the Company or the Operating
Partnership shall propose to enter into any transaction in which the Advisor, any Affiliate of the
Advisor or any of the Advisor’s directors or officers has a direct or indirect interest, then such
transaction shall be approved by a majority of the members of the Board not otherwise interested in
such transaction, including a majority of the Independent Directors.

          (f) Changes to Fee Structure. In the event of Listing, the Company and the Advisor
shall negotiate in good faith to establish a fee structure appropriate for a perpetual-life entity.

     10. EXPENSES. In addition to the compensation paid to the Advisor pursuant to Section 9
hereof, the Company or the Operating Partnership shall pay directly or reimburse the Advisor for
all of the expenses paid or incurred by the Advisor or its Affiliates in connection with the
services it provides to the Company and the Operating Partnership pursuant to this Agreement,
including, but not limited to:

          (a) Organization and Offering Expenses; provided, however, that (i) the Company shall not
reimburse the Advisor to the extent such reimbursement would cause the total amount of Organization
and Offering Expenses attributable to the Initial Public Offering paid by the Company and the
Operating Partnership to exceed 15.0% of the Gross Proceeds from the Initial Public Offering raised
as of the date of the reimbursement; (ii) within 60 days after the end of the month in which a
Public Offering terminates, the Advisor shall reimburse the Company to the extent the Company
incurred Organization and Offering Expenses attributable to such Public Offering exceeding 15.0% of
the Gross Proceeds raised in the completed Public Offering; and (iii) the Company shall not
reimburse the Advisor for any Organization and Offering Expenses that the Independent Directors
determine are not fair and commercially reasonable to the Company;

          (b) Acquisition Fees and Acquisition Expenses incurred in connection with the selection and
acquisition of Investments (including the reimbursement of any acquisition expenses
incurred by the Advisor and payable to third parties that are not Affiliates of the Company)
subject to the aggregate 6.0% cap on Acquisition Fees and Acquisition Expenses set forth in Section
9(b);

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          (c) the actual out-of-pocket cost of goods and services used by the Company and obtained from
entities not Affiliated with the Advisor;

          (d) interest and other costs for borrowed money, including discounts, points and other similar
fees;

          (e) taxes and assessments on income of the Company or Investments, taxes as an expense of
doing business and any other taxes otherwise imposed on the Company and its business, assets or
income;

          (f) out-of-pocket costs associated with insurance obtained in connection with the business of
the Company or by its officers or the Board;

          (g) expenses of managing, improving, developing and operating Real Estate Assets owned by the
Company, as well as expenses of other transactions relating to an Investment, including but not
limited to prepayments, maturities, workouts and other settlements of Loans and other Investments;

          (h) all out-of-pocket expenses in connection with payments to the Directors for attending
meetings of the Board and Stockholders;

          (i) expenses associated with a Listing, if applicable;

          (j) expenses connected with payments of Distributions;

          (k) expenses of organizing, redomesticating converting, modifying, merging, liquidating,
dissolving or terminating the Company or any subsidiary thereof or amending or revising the
Articles of Incorporation or governing documents of any subsidiary;

          (l) expenses of providing services for and maintaining communications with Stockholders,
including the cost of preparation, printing, and mailing annual reports and other Stockholder
reports, proxy statements and other reports required by governmental entities;

          (m) personnel and related employment costs incurred by the Advisor or its Affiliates in
performing the services described in Section 3 hereof, including but not limited to reasonable
salaries and wages, benefits and overhead of all employees directly involved in the performance of
such services, provided that no reimbursement shall be made for costs of such employees of the
Advisor or its Affiliates to the extent that such employees perform services for which the Advisor
receives Acquisition Fees, Investment Management Fees or Disposition Fees and, provided further,
that no reimbursement shall be made for the employee costs paid by the
Advisor to the executive officers of the Company;

          (n) audit, accounting and legal fees, and other fees for professional services relating to the
operations of the Company and all such fees incurred at the request, or on behalf of, the Board or
any other committee of the Board;

          (o) out-of-pocket costs for the Company to comply with all applicable laws, regulations and
ordinances, including without limitation, the Sarbanes-Oxley Act of 2002, as amended; and

          (p) all other out-of-pocket costs incurred by the Advisor in performing its duties hereunder.

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     11. TIMING OF ADDITIONAL LIMITATIONS ON REIMBURSEMENTS TO THE ADVISOR.

          (a) Expenses incurred by the Advisor on behalf of the Company and the Operating Partnership
and payable pursuant to Section 10 shall be reimbursed no less than monthly to the Advisor.

          (b) The Advisor shall prepare a statement documenting the expenses of the Company and the
Operating Partnership during each quarter, and shall deliver such statement to the Company and the
Operating Partnership within 45 days after the end of each quarter.

          (c) Notwithstanding anything else in this Section 11 to the contrary, the expenses enumerated
in Section 10 shall not become reimbursable to the Advisor unless and until the later to occur of
(i) the Company raising $2 million in offering proceeds, and (ii) the commencement of the Initial
Public Offering.

          (d) Commencing upon the fourth fiscal quarter after the Effective Date, the Company shall not
reimburse the Advisor at the end of any fiscal quarter in which Operating Expenses for the four
consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess
Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25%
Guidelines”) for such year. Any Excess Amount paid to the Advisor during a fiscal quarter
shall be repaid to the Company or, at the option of the Company, subtracted from the Operating
Expenses reimbursed during the subsequent fiscal quarter. If there is an Excess Amount in any
Expense Year and the Independent Directors determine that such excess was justified based on
unusual and nonrecurring factors which they deem sufficient, then the Excess Amount may be carried
over and included in Operating Expenses in subsequent Expense Years and reimbursed to the Advisor
in one or more of such years, provided that there shall be sent to the Stockholders a written
disclosure of such fact, together with an explanation of the factors the Independent Directors
considered in determining that such excess expenses were justified. Such determination shall be
reflected in the minutes of the meetings of the Board. All figures used in the foregoing
computation shall be determined in accordance with GAAP applied on a consistent basis.

     12. OTHER SERVICES. In the event that (a) the Board requests that the Advisor or any manager,
officer or employee thereof render services for the Company other than as set forth in this
Agreement or (b) there are changes to the regulatory environment in which the Advisor or Company
operates that would increase significantly the level of services performed such that the costs and
expenses borne by the Advisor for which the Advisor is not entitled to separate reimbursement for
personnel and related employment direct costs and overhead under Section 10 of this Agreement would
increase significantly, such services shall be separately compensated at such rates and in such
amounts as are agreed by the Advisor and the Independent Directors, subject to the limitations
contained in the Articles of Incorporation, and shall not be deemed to be services pursuant to the
terms of this Agreement.

     13. VOTING AGREEMENT. The Advisor agrees that, with respect to any Shares now or hereinafter
owned by it, it will not vote or consent on matters submitted to the Stockholders of the Company
regarding (i) the removal of the Advisor or any of its Affiliates as the Advisor or (ii) any
transaction between the Company and the Advisor or any of its Affiliates. This voting restriction
shall survive until such time that the Advisor or any of its Affiliates is no longer serving as the
Company’s external advisor.

     14. BUSINESS COMBINATIONS.

          (a) The Company may consider becoming a self-administered REIT once the Company’s assets and
income are, in the view of the Board, of sufficient size such that internalizing the
management functions performed by the Advisor is in the best interests of the Company and the

- 15 -

 

Stockholders.
If the Board should make this determination in the future, the Board shall form a special committee
(the “Special Committee”) comprised entirely of Independent Directors to consider a
possible business combination with the Advisor. The Board shall, subject to applicable law,
delegate all of its decision-making power and authority to the Special Committee with respect to
matters relating to a possible business combination with the Advisor. The Special Committee also
shall be authorized to retain its own financial advisors and legal counsel to, among other things,
negotiate with representatives of the Advisor regarding a possible business combination with the
Advisor.

          (b) Before the Company may complete any business combination with the Advisor in accordance
with this Section 14, the following conditions shall be satisfied:

               (i) the Special Committee formed in accordance with Section 14(a) hereof receives an opinion
from a qualified investment banking firm, separate and distinct from any firm retained by the
Advisor, which provides an analysis of the assets to be acquired by the Company in the business
combination, and concludes that the consideration to be paid by the Company in the business
combination is fair to the Stockholders from a financial point of view;

               (ii) the Board determines that such business combination is advisable and in the best
interests of the Company and the Stockholders; and

               (iii) such business combination is approved by the Stockholders entitled to vote thereon in
accordance with the Company’s Articles of Incorporation and Bylaws.

     15. OTHER ACTIVITIES OF THE ADVISOR.

          (a) Nothing herein contained shall prevent the Advisor or any of its Affiliates from engaging
in or earning fees from other activities, including, without limitation, the rendering of advice to
other Persons (including other REITs) and the management of other programs advised, sponsored or
organized by the Advisor or its Affiliates; nor shall this Agreement limit or restrict the right of
any director, officer, manager, member, partner, employee or stockholder of the Advisor or its
Affiliates to engage in or earn fees from any other business or to render services of any kind to
any other Person and earn fees for rendering such services; provided, however, that the Advisor
must devote sufficient resources to the Company’s business to discharge its obligations to the
Company under this Agreement. The Advisor may, with respect to any investment in which the Company
is a participant, also render advice and service to each and every other participant therein, and
earn fees for rendering such advice and service. Specifically, it is contemplated that the Company
may enter into joint ventures or other similar co-investment arrangements with certain Persons, and
pursuant to the agreements governing such joint ventures or arrangements, the Advisor may be
engaged to provide advice and service to such Persons, in which case the Advisor will earn fees for
rendering such advice and service.

          (b) The Advisor shall, and shall cause its Affiliates and their respective employees, officers
and agents to, devote to the Company such time as shall be reasonably necessary to conduct the
business and affairs of the Company in a manner consistent with the terms of this Agreement. The
Company acknowledges that the Advisor and its Affiliates and their respective employees, officers
and agents may also engage in activities unrelated to the Company and may provide services to
Persons other than the Company and its Affiliates.

          (c) The Advisor shall be required to use commercially reasonable efforts to present continuing
and suitable investment opportunities to the Company that are consistent with the investment
policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor
shall be obligated generally to present any particular investment opportunity to the Company even if
the opportunity is of character that, if presented to the Company, could be taken by the Company.
In the

- 16 -

 

event an investment opportunity is located, the allocation procedure set forth under the caption
“Conflicts of Interest—Conflict Resolution Procedures—Allocation of Investment Opportunities” in
the Memorandum and Registration Statement shall govern the allocation of the opportunity among the
Company and Affiliates of the Advisor. The Advisor shall be required to notify the Board at least
annually of Investments that have been purchased by other entities managed by the Advisor or its
Affiliates for determination by the Board that the Advisor is fairly presenting investment
opportunities to the Company.

     16. THE STEADFAST NAME. The Advisor and its Affiliates have a proprietary interest in the
name “Steadfast.” The Advisor hereby grants to the Company a non-transferable, non-assignable,
non-exclusive, royalty-free right and license to use the name “Steadfast” during the term of this
Agreement. Accordingly, and in recognition of this right, if at any time the Company ceases to
retain the Advisor or one of its Affiliates to perform substantial advisory services for the
Company, the Company will, promptly after receipt of written request from the Advisor, cease to
conduct business under or use the name “Steadfast” or any derivative thereof and the Company shall
change its name and the names of any of its subsidiaries to a name that does not contain the name
“Steadfast” or any other word or words that might, in the reasonable discretion of the Advisor, be
susceptible of indication of some form of relationship between the Company and the Advisor or any
of its Affiliates. At such time, the Company will also make any changes to any trademarks,
servicemarks or other marks necessary to remove any references to the word “Steadfast.” Consistent
with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates
has in the past and may in the future organize, sponsor or otherwise permit to exist other
investment vehicles (including vehicles for investment in real estate) and financial and service
organizations having “Steadfast” as a part of their name, all without the need for any consent (and
without the right to object thereto) by the Company.

     17. TERM OF AGREEMENT. This Agreement shall have an initial term of one year from the
Effective Date and may be renewed for an unlimited number of successive one-year terms upon mutual
consent of the parties. The Company (acting through the Independent Directors) will evaluate the
performance of the Advisor annually before renewing this Agreement, and each such renewal shall be
for a term of no more than one year. Any such renewal must be approved by the Independent
Directors.

     18. TERMINATION BY THE PARTIES. This Agreement may be terminated:

          (a) immediately by the Company or the Operating Partnership for Cause or upon the bankruptcy
of the Advisor;

          (b) upon 60 days written notice without Cause and without penalty by a majority of the
Independent Directors of the Company; or

          (c) upon 60 days written notice with Good Reason by the Advisor.

The provisions of Sections 16 and 19 through 35 of this Agreement survive termination of this
Agreement.

     19. PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.

          (a) After the Termination Date, the Advisor shall not be entitled to compensation for further
services hereunder except it shall be entitled to receive from the Company or the Operating
Partnership within 30 days after the effective date of such termination all unpaid reimbursements
of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this
Agreement, subject to the 2%/25% Guidelines to the extent applicable.

          (b) The Advisor shall promptly upon termination:

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               (i) pay over to the Company and the Operating Partnership all money collected and held for the
account of the Company and the Operating Partnership pursuant to this Agreement, after deducting
any accrued compensation and reimbursement for its expenses to which it is then entitled;

               (ii) deliver to the Board a full accounting, including a statement showing all payments
collected by it and a statement of all money held by it, covering the period following the date of
the last accounting furnished to the Board;

               (iii) deliver to the Board all assets, including all Investments, and documents of the Company
and the Operating Partnership then in the custody of the Advisor; and

               (iv) reasonably cooperate with the Company and the Operating Partnership to provide an orderly
management transition.

     20. ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by the Advisor to an Affiliate
only with the prior written approval of a majority of the Directors (including a majority of the
Independent Directors). The Advisor may assign any rights to receive fees or other payments under
this Agreement to any Person without obtaining the approval of the Directors. This Agreement shall
not be assigned by the Company or the Operating Partnership without the consent of the Advisor,
except in the case of an assignment by the Company or the Operating Partnership to a corporation,
limited partnership or other organization which is a successor to all of the assets, rights and
obligations of the Company or the Operating Partnership, in which case such successor organization
shall be bound hereunder and by the terms of said assignment in the same manner as the Company and
the Operating Partnership are bound by this Agreement.

     21. INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP. The Company and the
Operating Partnership shall indemnify and hold harmless the Advisor and its Affiliates, including
their respective officers, directors, equity holders, partners and employees (the
“Indemnitees,” and each an “Indemnitee”), from all liability, claims, damages or
losses arising in the performance of their duties hereunder, and related expenses, including
reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related
expenses are not fully reimbursed by insurance, and to the extent that such indemnification would
not be inconsistent with the laws of the State of Maryland, the Articles of Incorporation or the
provisions of Section II.G of the NASAA REIT Guidelines. Any indemnification of the Advisor may be
made only out of the net assets of the Company and not from Stockholders. Notwithstanding the
foregoing, the Company and the Operating Partnership shall not provide for indemnification of an
Indemnitee for any loss or liability suffered by such Indemnitee, nor shall they provide that an
Indemnitee be held harmless for any loss or liability suffered by the Company and the Operating
Partnership, unless all of the following conditions are met:

          (a) the Indemnitee has determined, in good faith, that the course of conduct that caused the
loss or liability was in the best interest of the Company and the Operating Partnership;

          (b) the Indemnitee was acting on behalf of, or performing services for, the Company or the
Operating Partnership;

          (c) such liability or loss was not the result of negligence or misconduct by the Indemnitee;
and

          (d) such indemnification or agreement to hold harmless is recoverable only out of the
Company’s net assets and not from the Stockholders.

- 18 -

 

     Notwithstanding the foregoing, an Indemnitee shall not be indemnified by the Company and the
Operating Partnership for any losses, liabilities or expenses arising from or out of an alleged
violation of federal or state securities laws by such Indemnitee unless one or more of the
following conditions are met:

          (a) there has been a successful adjudication on the merits of each count involving alleged
securities law violations as to the Indemnitee;

          (b) such claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the Indemnitee; or

          (c) a court of competent jurisdiction approves a settlement of the claims against the
Indemnitee and finds that indemnification of the settlement and the related costs should be made,
and the court considering the request for indemnification has been advised of the position of the
SEC and of the published position of any state securities regulatory authority in which securities
of the Company or the Operating Partnership were offered or sold as to indemnification for
violation of securities laws.

     22. ADVANCEMENT OF LEGAL EXPENSES. The Company or the Operating Partnership shall pay or
reimburse reasonable legal expenses and other costs incurred by an Indemnitee as a result of any
legal action for which indemnification is being sought in advance of the final disposition of a
proceeding only if all of the following conditions are satisfied:

          (a) the legal action relates to acts or omissions with respect to the performance of duties or
services on behalf of the Company or the Operating Partnership;

          (b) the legal action is initiated by a third party who is not a Stockholder or the legal
action is initiated by a Stockholder acting in such Stockholder’s capacity as such and a court of
competent jurisdiction specifically approves such advancement; and

          (c) the Indemnitee undertakes to repay the advanced funds to the Company or the Operating
Partnership, together with the applicable legal rate of interest thereon, if it is ultimately
determined that such Indemnitee is found not to be entitled to indemnification.

     23. INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and hold harmless the Company and
the Operating Partnership from contract or other liability, claims, damages, taxes or losses and
related expenses including attorneys’ fees, to the extent that such liability, claims, damages,
taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by
reason of the Advisor’s bad faith, fraud, willful misfeasance, intentional misconduct, gross
negligence or reckless disregard of its duties; provided, however, that the Advisor shall not be
held responsible for any action of the Board in following or declining to follow any advice or
recommendation given by the Advisor.

     24. ADVANCES BY ADVISOR. Notwithstanding anything contained in this Agreement to the
contrary, the Advisor hereby agrees to advance funds (“Advances”) to the Company during the
period beginning on the Effective Date and ending on the Offering Stage Termination Date (the
“Advance Period”) as set forth in this Section 24. If, during any calendar quarter during the
Advance Period, the Distributions paid exceed the Company’s Adjusted Funds From Operations, the
Advisor will advance to the Company funds equal to the amount by which the Distributions paid for
such quarter exceed the Company’s Adjusted Funds From Operations for such quarter, up to an amount
equal to a 7.0% cumulative non-compounded annual return on Stockholders’ invested capital, prorated for such
quarter. The Company is only obligated to reimburse the Advisor for Advances if and to the extent
that the Company’s cumulative Adjusted Funds From Operations for the period from the Effective Date
through the date of such reimbursement exceed the lesser of (1) the cumulative amount of any
Distributions paid to the Stockholders as of the date of such reimbursement or (2) an amount that
is equal to a 7.0%

- 19 -

 

cumulative, non-compounded, annual return on Stockholders’ invested capital for
the period from the commencement of the Initial Public Offering through the date of such
reimbursement. The Advisor understands and agrees that no interest will accrue on Advances being
made by the Advisor. The Advisor’s commitment to advance funds to the Company pursuant to this
Agreement is limited to an aggregate amount of $5 million and will terminate immediately in the
event that the Advisor or an Affiliate of the Sponsor no longer serves as the Company’s advisor.

     25. PUBLICITY. The Advisor shall not, and shall cause its Affiliates and their officers,
managers, employees and members to not, make any public statements or disclosure regarding this
Agreement, the duties contemplated hereunder or the business of the Company and the Operating
Partnership without obtaining the prior written consent of the officers of the Company as to the
form and content of such disclosure, except to the extent that such disclosure is required by law,
in which case the Advisor will give the Company sufficient prior written notice thereof to seek
judicial intervention. Except as authorized in advance by the Board, only the officers of the
Company shall be permitted to make public statements or disclosure on behalf of the Company.

     26. NON-SOLICITATION. During the period commencing on the Effective Date and ending one year
following the Termination Date, the Company shall not, without the Advisor’s prior written consent,
directly or indirectly (a) solicit or encourage any person to leave the employment or other service
of the Advisor or its Affiliates; or (b) hire on behalf of the Company or any other person or
entity, any person who has left its employment within the one year period following the termination
of that person’s employment the Advisor or its Affiliates. During the period commencing on the
date hereof through and ending one year following the Termination Date, the Company will not,
whether for its own account or for the account of any other Person, intentionally interfere with
the relationship of the Advisor or its Affiliates with, or endeavor to entice away from the Advisor
or its Affiliates, any person who during the term of the Agreement is, or during the preceding
one-year period, was a tenant, co-investor, co-developer, joint venturer or other customer of the
Advisor or its Affiliates.

     27. NOTICES. Any notice, report or other communication required or permitted to be given
hereunder shall be in writing unless some other method of giving such notice, report or other
communication is required by the Articles of Incorporation, the Bylaws, or accepted by the party to
whom it is given, and shall be given by being delivered by hand, by courier or overnight carrier or
by registered or certified mail to the addresses set forth herein:

	 	 	 
	   To the Directors and to the Company:	 	Steadfast Secure Income REIT, Inc.

4343 Von Karman Avenue, Suite 300

Newport Beach, California 92660

Telephone: (949) 852-0700

Attention: Chief Executive Officer
	 
	 	 
	   To the Operating Partnership:	 	Steadfast Secure Income REIT Operating Partnership, L.P. 

c/o Steadfast Secure Income REIT, Inc.

4343 Von Karman Avenue, Suite 300

Newport Beach, California 92660

Telephone: (949) 852-0700

Attention: Secretary
	 
	 	 
	   To the Advisor:	 	Steadfast Secure Income Advisor, LLC 

4343 Von Karman Avenue, Suite 300

Newport Beach, California 92660

Telephone: (949) 852-0700

Attention: Chief Executive Officer

- 20 -

 

     If delivered by hand or by courier, the date on which the notice, report or other
communication is delivered shall be the date on which such delivery is made and if delivered by
overnight carrier, the date on which the notice, report or other communication is received shall be
the date on which such delivery is made. Any party may at any time give notice in writing to the
other parties of a change in its address for the purposes of this Section 27.

     28. MODIFICATION. This Agreement shall not be changed, modified, terminated, or discharged,
in whole or in part, except by an instrument in writing signed by the parties hereto, or their
respective successors or assignees.

     29. SEVERABILITY. The provisions of this Agreement are independent of and severable from each
other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the
fact that for any reason any other or others of them may be invalid or unenforceable in whole or in
part.

     30. CONSTRUCTION. The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware.

     31. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof. This Agreement may not be modified or amended other than by an agreement in
writing.

     32. INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

     33. GENDER. Words used herein regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context requires.

     34. TITLES NOT TO AFFECT INTERPRETATION. The titles of Sections and Subsections contained in
this Agreement are for convenience only, and they neither form a part of this Agreement nor are
they to be used in the construction or interpretation hereof.

     35. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected hereon as the signatories.

- 21 -

 

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

	 	 	 	 	 
	 	STEADFAST SECURE INCOME REIT, INC.

 	 
	 	By:  	/s/ Rodney F. Emery	 
	 	Name:  	Rodney F. Emery	 
	 	Title:  	Chief Executive Officer	 
	 
	 
	 	STEADFAST SECURE INCOME REIT OPERATING PARTNERSHIP, L.P.

 	 
	 	By:  	Steadfast Secure Income REIT, Inc., 	 
	 	 	its General Partner	 
	 
	 	By:  	/s/ Rodney F. Emery	 
	 	Name:  	Rodney F. Emery	 
	 	Title:  	Chief Executive Officer	 
	 
	 	STEADFAST SECURE INCOME ADVISOR, LLC

 	 
	 	By:  	/s/ Dinesh Davar	 
	 	Name:  	Dinesh Davar	 
	 	Title:  	Chief Financial Officer

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