Document:

Exhibit 10.1

 

Confidential Treatment Requested. 
Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

 BLACKHAWK BIOFUELS, LLC TOLL
PROCESSING AGREEMENT

 

This Blackhawk Biofuels, LLC Toll Processing Agreement (the
“Agreement”) is made and entered into effective February 1, 2010, by and
between Blackhawk Biofuels, LLC a limited liability company organized and
existing under the laws of the state of Delaware, with offices at 22 South
Chicago Avenue, Freeport, Illinois 61032 (“Blackhawk Biofuels”). and REG
Marketing & Logistics Group, LLC, an Iowa limited liability company
(“REG Marketing”), of 416 S. Bell Avenue, PO Box 888, Ames, Iowa 50010 (each a
“Party,” and collectively the “Parties”).

 

Recitals

 

A.            Blackhawk
Biofuels is in the business of manufacturing and processing biodiesel from
feedstock at its biodiesel processing facility located at Danville, IL (the
“Facility”).

 

B.            REG Marketing
desires to arrange for the purchase and delivery of animal fats and other
feedstocks (as specified by the provisions of Section 7 hereafter, herein
“Feedstocks”) to Blackhawk Biofuels for processing into biodiesel meeting the
specifications set out in Section 8 hereafter (herein “Biodiesel”) and
Crude Glycerin, Fatty Acids and Soapstock (“Co-products”) pursuant to a toll
processing arrangement.  Blackhawk
Biofuels desires that REG Marketing arrange for the delivery of Feedstocks for
processing at the Facility.

 

The Agreement

 

In
consideration of the mutual benefits and obligations herein provided and other
good and valuable consideration, Blackhawk Biofuels and REG Marketing agree as
follows:

 

1.             Offers
to Deliver Feedstocks for Processing.  REG Marketing may offer to deliver Feedstocks
to Blackhawk Biofuels’s Facility at Danville, IL, during the term of this
Agreement.

 

(a)           Orders
within Facility Commitment.  REG Marketing shall order the processing to
be determined weekly of Feedstocks at the Facility (“Facility Commitment”). Any
such order shall set out the type and quantity of Feedstocks, and the
Production Week for which such Feedstocks are intended for processing
(“Order”).  If such Order is timely made,
then unless otherwise agreed by the Parties REG Marketing shall deliver the
Feedstocks to Blackhawk Biofuels in time for production of the Biodiesel,
Blackhawk Biofuels shall process the Feedstocks and test and certify the
Biodiesel as meeting the agreed upon specifications under the applicable Order
during such Production Week, and REG Marketing shall arrange to pick up the
resulting Biodiesel during the two weeks immediately following such Production
Week.  Blackhawk Biofuels agrees to
provide written acknowledgment of all Orders placed by REG Marketing.  For purposes of this Agreement, a “Production
Week” shall mean a calendar week beginning at 8:00 a.m. on Monday and
ending at 7:59 a.m. on the following Monday, with weeks designated for
pick up of Biodiesel measured in similar fashion.

 

1

 

As
an example, for the Production Week commencing January 19, 2009, REG
Marketing would need to have delivered its Order for such Production Week on or
before 5:00 p.m. on Monday, January 5, 2009.  If such Order has been timely delivered to
Blackhawk Biofuels, REG Marketing would then deliver in the Feedstocks required
for such Production Week both before and during the production week.  Blackhawk Biofuels would then have the
Production Week of January 19 through January 26, 2009, to complete
production, test and certify the Biodiesel meets the agreed upon specifications
under the applicable Order.  REG
Marketing would then have from January 26 through 7:59 a.m. on February 9,
2009, to pick up the Biodiesel produced for such Production Week.  REG Marketing shall develop a sample “Order/Nomination”
form to be used by the Parties, which shall be attached as Exhibit A
hereto.

 

Any Feedstocks purchased by Bunge North
America, Inc. (“Bunge”) pursuant to the terms of a Feedstock Purchase and
Sale Agreement dated June 30, 2009 (the “Feedstock Agreement”) by and
between Blackhawk Biofuels, REG Marketing and Bunge shall be included in
determining whether the Facility Commitment has been met.  Any purchase of Feedstocks by Bunge, however,
shall be governed exclusively by the terms of the Feedstock Agreement and such
purchases shall not be subject to the terms of this Agreement.

 

(b)           Offers
in Excess of the Facility Commitment.  REG Marketing may offer to deliver additional
Feedstocks beyond the Facility Commitment, subject to Blackhawk Biofuels’s acceptance.  Any such offer (“Nomination”) shall set out
the type and quantity of Feedstocks, the Production Week for which such
Feedstocks are intended for production, and advise of the time period during
which Blackhawk Biofuels shall be required to communicate Blackhawk Biofuels’s
acceptance back to REG Marketing (“Offer Period”).  The parties agree that such Offer Period will
not expire prior to 12:00 o’clock noon, local time at the Facility, on the
business day following that day during which the Nomination is delivered, and
provided further that (unless waived by Blackhawk Biofuels) a Nomination shall
not propose a Feedstocks delivery schedule with first delivery date less than
seven (7) calendar days after the end of the Offer Period.  If a Nomination is accepted by Blackhawk
Biofuels (as set out hereafter), then (unless otherwise agreed by the Parties)
REG Marketing agrees to deliver the Feedstocks to Blackhawk Biofuels pursuant
to the terms of the Nomination prior to such Production Week to utilize in the
production of the Biodiesel, Blackhawk Biofuels shall during such Production
Week process the Feedstocks and test and certify the Biodiesel as meeting the
agreed upon specifications under the applicable Nomination, and REG Marketing
shall arrange to pick up the resulting Biodiesel during the two weeks
immediately following such Production Week. 
The sample “Order/Nomination” form to be used by the Parties is attached
as Exhibit A hereto.

 

2

 

*** Confidential material redacted and filed separately
with the Commission.

 

2.             Agreement
to Process Orders; Consideration of Nominations.

 

(a)           Orders
within Facility Commitment.
Blackhawk Biofuels agrees to process Feedstocks for all Orders received per
Production Week, such processing to be within the time frame as set out in Section 1(a) above
(unless otherwise agreed by the Parties). 
Blackhawk and REG Marketing agree that any shortfall in biodiesel
production or shipments due in the previous Agreement dated January 1st 2010 may be made up
under this Agreement without penalties.

 

(b)           Nominations
in Excess of Facility Commitment.  In addition, should REG Marketing offer to
deliver Feedstocks in excess of such Facility Commitment, Blackhawk Biofuels
will consider any such Nomination received, and shall have the right (but not
any obligation) to accept Nominations received from REG Marketing by notice
given during the Offer Period.  If
Blackhawk Biofuels gives timely acceptance of a Nomination (pursuant to the
provisions set out in this Agreement, herein an “Acceptance”), then Blackhawk
Biofuels agrees to process Feedstocks received pursuant to the terms of the
Nomination (and such other applicable provisions as set out herein).

 

3.             Manner
of Extending Order, Nominations, Acceptances.  Notwithstanding any provisions of Section 26(a) to
the contrary, the Parties may submit Orders, Nominations and Acceptances by
telephone or email, provided that any Order, Nomination or Acceptance submitted
by telephone must be followed by timely confirmation by email.

 

4.             Toll
Fees and Payment.  Blackhawk Biofuels shall be paid a toll fee
of $ *** for every gallon of Biodiesel at standard temperature and pressure
delivered to REG Marketing, produced at the Facility from the Feedstocks delivered
by REG Marketing for all volumes shipped up to 2,500,000 gallons in a calendar
month. Blackhawk Biofuels shall be paid a toll fee of $ *** for every gallon of
Biodiesel at standard temperature and pressure delivered to REG Marketing,
produced at the Facility from the Feedstocks delivered by REG Marketing for all
volumes shipped in excess of 2,500,000 gallons in a calendar month. Payment
shall be made as follows:

 

(a)           The
toll Fee under the terms of such Orders or Nominations by wired funds to Blackhawk
Biofuels on every Tuesday for Biodiesel delivered to REG Marketing from the
prior Tuesday thru Monday of that week. Delivered to REG Marketing shall mean
Biodiesel meeting specifications loaded per shipping instructions FOB Danville,
IL.

 

5.             Co-Products.  REG Marketing shall also be entitled to
receive at no additional cost, all glycerin and Fatty Acid produced as a result
of the processing of the Feedstocks.

 

6.             Methanol
and Catalyst.  REG
Marketing shall be responsible for the purchase and delivery of methanol and
catalyst to the Facility. The maximum allowed usage of methanol shall be ***
gal of methanol per gallon of biodiesel. The maximum allowed usage of catalyst
shall be *** lbs per gallon of biodiesel. Blackhawk Biofuels will reimburse REG
Marketing for usage of methanol and catalyst above the maximums. The reimbursement will be paid
for overusage at the average price of the chemicals multiplied by the overusage
amount based on the biodiesel produced on a monthly basis.  REG Marketing will invoice Blackhawk Biofuels
within the first week of the following month. 
Payment terms will be 7 days from receipt of invoice from REG 

 

3

 

Marketing.  If the actual positive or negative usage
variance performance is greater than 10% from the values given above, the
parties will use data gathered while producing under steady state conditions
and adjust the maximum allowed usages with approval to not be unreasonably
withheld, conditioned or delayed by either party.  Any changes will be contained in an addendum
to this Agreement.

 

7.             Maximum
Feedstock Usage and Overusage.  In consideration of the Toll Fee and handling
of co-products agreed upon, Blackhawk Biofuels agrees the Maximum Feedstock
Usage(MFU) per Pound of Delivered Biodiesel shall be as defined in Exhibit B
for each Feedstock Type.

 

For feedstocks where a MFU value is
clearly identified and not calculated, the actual overuse, if any, will be
calculated as follows:

 

Overusage based on identified
MCU = A — ( B x MFU)

 

Where  A = Actual pounds of Feedstock delivered from
aggregate BOL’s

 

B = Biodiesel produced from
Feedstock in gallons at standard conditions

 

MCU = defined value for
feedstock type

 

For higher FFA feedstocks or blends of
feedstocks that do not have an identified MFU and require the calculation, a
daily flow proportioned representative composite sample shall be tested and the
resulting %FFA will be used in the calculation. for MFU for the resulting
production volume.  For feedstocks where
a MFU value is calculated and not clearly identified, the actual overuse, if
any, will be calculated as follows:

 

Overusage
for High FFA and Blends based on MCU calculation = C — (B x MFU)

 

Where C = Actual pounds of Feedstock
delivered from aggregate BOL’s

 

B = Biodiesel produced from Feedstock
in gallons at standard conditions

 

MFU = “Exhibit B calculation *1”
using daily flow proportioned

 

representative composite sample

 

The reimbursement will be paid for overusage at the
average price of the feedstock multiplied by the overusage amount based on the
biodiesel produced on a monthly basis. 
REG Marketing will invoice Blackhawk Biofuels within the first week of
the following month.  Payment terms will
be 7 days from receipt of invoice from REG Marketing.  If the actual positive or negative usage
variance performance is greater than 2% from the values given or calculated in Exhibit B,
the parties will use data gathered while producing under steady state
conditions and adjust the 

 

4

 

defined MFU
or formula “*1” with approval to not be unreasonably withheld, conditioned or
delayed by either party.  Any changes
will be contained in an addendum to this Agreement.

 

8.             Feedstocks.  The Feedstocks to
be delivered to the Facility pursuant to this Agreement shall comply with the
specifications set forth on Exhibit B attached hereto or the specific
purchase order, whichever is the more restrictive specification.  For Example, if the tallow specification for
FFA in Exhibit B was <4 and the purchase order defined FFA as less than
<2, then <2 shall be the requirement. 
Prior to accepting deliveries of Feedstocks, Blackhawk Biofuels shall
have the right at its expense to inspect and test the tendered Feedstocks to
determine if it meets the specifications required under this Agreement, and if
any such Feedstocks does not meet the required specifications then Blackhawk
Biofuels shall have the right to reject such Feedstocks and require REG
Marketing, at its cost, to replace the same with Feedstocks that meets the
required specifications.  Should REG
Marketing propose any other type of Feedstocks other than identified on Exhibit B,
the Parties shall agree upon the written specifications and MFU applicable to
such additional feedstock, and approve and attach such specifications and MFU
as an addendum to Exhibit B with approval to not be unreasonably withheld,
conditioned or delayed by either party.

 

9.             Biodiesel.  The Biodiesel to be
produced pursuant to this Agreement shall comply with the specifications set
forth on Exhibit C attached hereto. 
At REG Marketing’s request, two (2) - one (1) litre samples of
the Biodiesel to be delivered to REG Marketing by Blackhawk Biofuels shall be
made available for testing at REG Marketing’s cost, prior to REG Marketing
picking up such Biodiesel.  Should
inspection and testing determine that any Biodiesel does not meet the required
specifications (whether determined before or after such Biodiesel has been
picked up by REG Marketing, and including after delivery to REG Marketing’s
customers), REG Marketing shall have the right to reject such Biodiesel, and
require Blackhawk Biofuels, at its cost, to replace the same with Biodiesel
that meets the required specifications.

 

10.           Term.  The term of this
Agreement shall be until February 28th, 2010 and commence upon its
signature by the Parties.

 

11.           Title.  Except as otherwise
provided herein, title to the Feedstocks delivered by REG Marketing pursuant to
this Agreement and title to the contractual amount of corresponding Biodiesel
and Co-products produced from such Feedstocks shall at all times be and remain
with REG Marketing.  Any Feedstocks
delivered by REG Marketing pursuant to the terms and conditions of the
Feedstock Agreement, however, shall at all times be and remain with Bunge until
such time as title to such Feedstocks passes to REG Marketing pursuant to the
terms of the Feedstock Agreement.

 

12.           Risk
of Loss; Insurance.  Risk of loss to the Feedstocks and the
Biodiesel and Co-Products produced therefrom shall at all times be borne by REG
Marketing, and REG Marketing will maintain such property insurance on the
Feedstocks and the Biodiesel produced therefrom as REG Marketing shall
determine, in its sole discretion.

 

Blackhawk Biofuels and REG
Marketing shall each, at its own cost and expense, obtain and maintain, during
the term of this Agreement, comprehensive general liability insurance, in
minimum amounts of Five Million Dollars ($5,000,000) per occurrence for damage,
injury and/or death to persons, and One Million Dollars ($1,000,000) per
occurrence for damage and/or

 

5

 

injury to property and Worker’s
Compensation Insurance as required by law. 
Such coverage shall be on a date of occurrence form, and be provided by
an insurance company reasonably satisfactory to the other Party.  Blackhawk Biofuels and REG Marketing shall
each provide the other with proof of such insurance coverage prior to any
Feedstocks being delivered, such insurance naming the other Party as an
additional insured, and providing that the coverage represented thereby shall
not be canceled nor modified unless at least thirty (30) days prior written
notice has been given to the additional insured.

 

13.           Inventory
Reports.  Blackhawk Biofuels will provide REG Marketing
with daily reports showing the receipt, usage and inventory of Feedstocks,
methanol and catalyst, and shipments, production and inventory of Biodiesel and
Co-products produced.

 

14.           Production
Costs.  Other than for the cost of the Feedstocks,
methanol, and catalyst purchased and delivered by REG Marketing, Blackhawk
Biofuels shall be responsible for all costs of producing the Biodiesel required
under this Agreement, including without limitation all labor costs and the cost
of utilities, chemicals other than methanol and catalyst and other consumables
used in such production.

 

15.           Testing.  Blackhawk Biofuels
shall be responsible for the cost of testing to fully certify the Biodiesel
meets the specifications identified in the Order or Nomination.  All sampling and testing shall be in
conformance with BQ-9000 rules and regulations.

 

16.           Freight
Costs.  REG Marketing will bear the cost of all
freight charges for the Feedstocks, methanol, and catalyst purchased by REG
Marketing, and Biodiesel and Co-Products to be produced therefrom, pursuant to
this Agreement.

 

17.           Protection
of REG Marketing’s Title.  In order to better evidence REG Marketing’s
ownership of the Feedstocks and the Biodiesel produced therefrom, Blackhawk
Biofuels hereby authorizes REG Marketing on its behalf, at any time and from
time to time to file protective financing statements in any Uniform Commercial
Code jurisdiction, which may include without limitation any initial financing
statements and amendments thereto that (i) describe the Feedstocks, and
the Biodiesel that is the subject of this Agreement, and (ii) contain any
other information required or appropriate to be included pursuant to the
Uniform Commercial Code of the state where filed, including that the organizational
identification number of Blackhawk Biofuels is 20-2760722.  Blackhawk Biofuels agrees to furnish any such
information to REG Marketing promptly upon request.  Blackhawk Biofuels will not purport to
pledge, mortgage or create, or suffer to exist a security interest in the
Feedstocks and the Biodiesel that is produced therefrom, in favor of any third
party, and Blackhawk Biofuels, upon the request of REG Marketing or in response
to any inquiry that may be made, will inform any lender, lessor or other third
party that has or may have a lien or security interest or any other interest in
property of Blackhawk Biofuels that REG Marketing is the owner of the
Feedstocks and the Biodiesel that is the subject of this Agreement.  “Notwithstanding anything to the contrary set
forth herein, Blackhawk Biofuels and REG Marketing acknowledge and agree that
pursuant to the terms of the Feedstock Agreement, Bunge shall have title in the
Feedstocks purchased by Bunge pursuant to the terms of the Feedstock Agreement,
and Bunge shall have the right to file precautionary financing statements and
amendments and/or continuations thereto pursuant to the Uniform Commercial Code
to further evidence and memorialize its absolute ownership interest in the
Feedstocks.”

 

6

 

18.           Product
Segregation.  REG Marketing, on behalf of Blackhawk
Biofuels, shall be allowed to add additional Feedstocks owned by REG Marketing
as needed to meet the quality and yield requirements hereunder, so long as such
additional Feedstocks have cold flow characteristics that are capable of
meeting the cold flow specifications set out on the applicable Order or
Nomination, and the Biodiesel to be produced shall in any event meet the
specifications required hereunder, as modified by the Order or Nomination and
Acceptance applicable.  In such event,
REG Marketing shall off-set any costs for such additional Feedstocks against
the toll fees to be paid by REG Marketing pursuant to Section 4
hereof.  Pursuant to the terms of the
Feedstock Agreement, Blackhawk Biofuels shall allow Bunge to store the
Feedstocks at the Facility; provided, however, such Feedstocks shall be
segregated from any Feedstocks owned by REG Marketing pursuant to the terms of
this Agreement.

 

19.           Failure
to Process.  If for any reason other than REG Marketing’s
failure to deliver Feedstocks, methanol, and catalyst as required under this
Agreement (and other than a matter covered by the force majeure provisions of
this Agreement) Blackhawk Biofuels fails to process the Feedstocks in to the
certified Biodiesel within the time frame contemplated by this Agreement,
Blackhawk Biofuels will pay to REG Marketing the amount determined by first
dividing the number of pounds of Feedstocks delivered to Blackhawk Biofuels by
the Maximum Feedstock Usage per gallon yield under Section 7 and
converting to gallons to determine the gallons of Biodiesel which should have
been processed (“Required Gallons”); second, subtracting the actual gallons of
Biodiesel received by REG Marketing from the Required Gallons to determine the
number of gallons which Blackhawk Biofuels failed to process (“Biodiesel
Shortage”); and third,  multiply the
Biodiesel Shortage by REG Marketing’s average market price per gallon of
Biodiesel delivered by Blackhawk Biofuels to REG Marketing up to such time of
computation (or if none delivered another reasonable method of determining the
market value of Biodiesel FOB Danville as may be agreed by the Parties, or
otherwise determined if the Parties can not so agree).

 

20.           Facility
Shutdowns.  Blackhawk Biofuels agrees to notify REG
Marketing of any scheduled shutdowns a minimum of thirty (30) days in
advance.  In the event there are any
Facility shutdowns due to unscheduled power or mechanical problems which will
affect receiving or shipping schedules or are anticipated to continue for
twenty-four (24) hours or more Blackhawk Biofuels will notify REG Marketing as
soon as possible.

 

21.           Tax
Credits; Blending, Shipping & Loading.  Blackhawk Biofuels will, at the request of
REG Marketing, blend the Biodiesel with petroleum diesel (supplied by Blackhawk
Biofuels at its cost) to create B99.9 biodiesel at no additional charge to REG
Marketing.  Any excise tax or income tax
credit or refund, including any blender’s credit or CCC credit or refund (“Tax
Credits”) relating to the Biodiesel delivered to REG Marketing will be for the
account of REG Marketing, and shall be submitted (as applicable) to the United
States Internal Revenue Service (“IRS”) or other appropriate entity by
Blackhawk Biofuels, unless otherwise requested by REG Marketing Blackhawk
Biofuels will not claim any Tax Credits relating to the Biodiesel delivered to
REG Marketing without the written consent of REG Marketing.

 

7

 

In addition, Blackhawk Biofuels
shall fulfill the requests regarding additives and load temperature as set out
on the “Shipping/Loadout Request” form supplied by REG Marketing and complete
the loadout information for each load of Biodiesel shipped, all as set out on
the attached as Exhibit D hereto.

 

22.           RINs
and Biodiesel Certificates.  Blackhawk Biofuels and REG Marketing shall
cooperate with each other to generate Renewable Identification Numbers (RINs)
for the gallons of Biodiesel produced pursuant to this Agreement, with such
RINs to be the property of REG Marketing. 
Blackhawk Biofuels and REG Marketing shall also cooperate with each
other to issue biodiesel certificates for the Biodiesel produced pursuant to this
Agreement, which certificates shall be suitable for REG Marketing’s use in
collecting the $1.00 per gallon blender’s tax credit.  For purposes of clarity, all gallons for
these purposes shall be calculated on a temperature corrected basis (at 60° F).

 

23.           Force
Majeure.  Neither Party hereto shall be liable for any
delay arising from circumstances beyond its control including acts of God, riot
or civil commotion, industrial dispute, fire, flood, drought, act of
government, terrorist acts, war, or sabotage (except failures or delays
resulting from a lack of a Party’s funds), provided that the Party seeking to
be excused shall make every reasonable effort to minimize the delay resulting
therefrom and shall give prompt written notice of the force majeure event to
the other Party.  The obligations of the
Party giving notice, so far as they are affected by the force majeure event,
will be suspended during, but not longer than, the continuance of the force
majeure event.  The affected Party must
act with commercially reasonable diligence to resume performance and notify the
other Party that the force majeure event no longer affects its ability to
perform under the Agreement.

 

24.           Independent
Contractor.  Blackhawk Biofuels is acting hereunder and
its services are rendered to REG Marketing solely as an independent
contractor.  REG Marketing is not
authorized and shall not contract any obligations in the name of Blackhawk
Biofuels as a result of this Agreement (the Parties understanding that REG
Marketing may have such authority as may arise from other contracts entered in
to by the Parties, and including that Management and Operational Services
Agreement dated August 22, 2006 (“MOSA”)). 
Blackhawk Biofuels accepts full and exclusive liability for the payment
of any and all contributions or taxes for unemployment and workers’
compensation insurance, old age retirement benefits, pensions and annuities now
or hereafter imposed by any federal or state governmental authority which are
measured by wages, salaries or other remuneration paid to persons, and holds harmless
REG Marketing from any such liability. 
Blackhawk Biofuels agrees that in performing its duties contemplated by
this Agreement it shall comply with all applicable federal and state laws,
orders and regulations, and, to its knowledge, represents and warrants that the
Facilities are in compliance with existing environmental laws and regulations
and OSHA standards which may apply to the activities to be performed by
Blackhawk Biofuels hereunder.

 

25.           Confidentiality.

 

(a)           ”Confidential
Information” of Blackhawk Biofuels and REG Marketing includes the terms of this
Agreement, the Feedstocks composition, the biodiesel specifications, all
business information of Blackhawk Biofuels and REG Marketing, including, but
not limited to, their respective pricing, supplier lists, quantities of
supplies purchased, all processing and manufacturing information of

 

8

 

Blackhawk Biofuels and REG Marketing,
all processes and information used in the processing of Feedstocks into
Biodiesel, and all other confidential or proprietary information of Blackhawk
Biofuels and REG Marketing.  All
“Confidential Information” shall remain the sole property of the original owner
of that information.

 

(b)           Blackhawk
Biofuels and REG Marketing agree that (except as necessary for REG Marketing to
meet its obligations under the MOSA) they shall not for any purpose use or
disclose to any third party any Confidential Information not owned by it. Such
confidentiality obligations shall survive the expiration or earlier termination
of this Agreement.

 

26.           Default.  Each Party will be
entitled to all damages (including costs and reasonable attorney fees incurred
in enforcement of such Party’s rights hereunder) and other rights and remedies
available at law or in equity, in addition to any other remedies as may be
provided in this Agreement, upon the default or other failure to perform of the
other Party; provided, however, that before taking action to enforce such
breach or terminating this Agreement the Party claiming default or failure to
perform shall first provide the defaulting Party with written notice detailing
the circumstances of its failure to meet its obligations hereunder and an
opportunity to cure such failure within ten (10) days of such notice.

 

27.           Miscellaneous.

 

(a)           Notices.  Any notice
(including Nominations and Acceptances) required or permitted to be given
pursuant to this Agreement is validly given if in writing and: (i) personally
delivered; (ii) sent by electronic facsimile transmission or other means
of electronic communication capable of producing a printed copy and a
confirmation of delivery; or (iii) sent by prepaid registered mail or
recognized overnight carrier, addressed to the applicable party at its address
indicated below or to such other address as any party may specify by notice in
writing to the other.  Any notice
personally delivered on a business day will be deemed conclusively to have been
effectively given on the date notice was delivered.  Any notice given by facsimile or other means
of electronic communication will be deemed conclusively to have been given on
the date specified on the confirmation of such transmission.  Any notice sent by prepaid registered mail
will be deemed conclusively to have been effectively given when actually
received.  Notices shall be addressed as
follows:

 

	
  If to REG Marketing:

  	
   

  	
  416 S. Bell Avenue, PO Box
  888

  
	
   

  	
   

  	
  Ames, IA 50010

  
	
   

  	
   

  	
  Attn: Gary Haer

  
	
   

  	
   

  	
  Fax: (515) 239-8029

  
	
   

  	
   

  	
   

  
	
  If to Blackhawk Biofuels:

  	
   

  	
  210 West Spring Street

  
	
   

  	
   

  	
  Freeport, Illinois 61032

  
	
   

  	
   

  	
  Attn: Ron Mapes

  
	
   

  	
   

  	
  Fax: (815) 235-4727

  

 

9

 

Any party may change the address to which notices are to be sent to it
by giving written notice of such change of address to the other parties in the
manner herein provided for giving notice. 
Any such notice, demand, request or other communication shall be deemed
given when mailed or delivered as aforesaid.

 

(b)           Cumulative
Remedies.  The rights and remedies provided to Blackhawk
Biofuels and REG Marketing in this Agreement, or otherwise available at law or
in equity, shall be cumulative and may be exercised concurrently or
successively.

 

(c)           Governing
Law/Choice of Forum.  This Agreement shall be deemed made and
entered unto in the State of Iowa and shall be governed and construed under and
in accordance with the laws of the State of Iowa without resort to said state’s
conflict of laws rules.  The U.S.
District Court for the Southern District of Iowa, or if such court lacks
jurisdiction, the Iowa District Court for Story County, Iowa, shall be the
venue and exclusive proper forum in which to adjudicate any case or controversy
arising either, directly or indirectly, under or in connection with this
Agreement.  The Parties further agree
that, in the event of litigation arising out of or in connection with these
matters, they will not contest or challenge the jurisdiction or venue of these
courts.

 

(d)           Amendments.  This Agreement may
not be modified or amended unless a written amendment to this Agreement is
executed by REG Marketing and Blackhawk Biofuels.

 

(e)           Severability.  If any provision of
this Agreement may be construed in two ways, one of which would render the
provision illegal or otherwise voidable and unenforceable and the other of
which would render the provision valid and enforceable, such provision shall
have the meaning which renders it valid and enforceable.  The language of all provisions of this
Agreement shall be construed according to its fair meaning and not strictly
against REG Marketing or Blackhawk Biofuels. 
It is the intention of the Parties that the provisions of this Agreement
be enforced to the fullest extent.  In
the event that any court shall determine that any provision of this Agreement
is unenforceable as written, the Parties agree that the provision shall be
amended so that it is severable and they shall be interpreted and enforced as
if all completely invalid or unenforceable provisions were not contained in
this Agreement.  Partially valid and
enforceable provisions shall be enforced to the extent that they are partially
valid and enforceable.

 

(f)            Captions.  Section captions
are used only for convenience and are in no way to be construed as a part of
this Agreement or as a limitation of the scope of the particular sections to
which they refer.  Words of any gender
used in this Agreement shall include any other gender, and words in the
singular shall include the plural where the context requires.

 

(g)           Assignment.  Neither Party may
assign any of its rights in or delegate any of its duties under this Agreement
without the prior written consent of the other Party.  Notwithstanding the foregoing, a Party
(“Assignor”) may without the need for

 

10

 

*** Confidential material redacted and filed separately
with the Commission.

 

consent from the other Party assign any
or all of its rights, duties and obligations under this Agreement to another
entity, or to such Party’s affiliate or successor (collectively herein
“Assignee”), if such Assignee expressly assumes all obligations not otherwise
remaining with Assignor hereunder, and Assignor nonetheless remains responsible
hereunder.

 

(h)           Interpretation.  This Agreement has
been prepared after extensive negotiation between the Parties hereto, and if
any ambiguity is contained herein, then in resolving such ambiguity, no weight
shall be given in favor of or against either Party solely on account of its
drafting this Agreement.

 

(i)            Entire
Agreement.  Time is of the essence of this
Agreement.  This Agreement together with
the Exhibits referenced herein constitute the entire agreement by and between
the Parties and all prior written and verbal agreements, proposals,
representations and other communications between the Parties regarding this
tolling arrangement are superseded.

 

(j)            Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument, and may be executed and
delivered by facsimile signature or similar means, which shall be considered an
original.

 

(k)           Most
Favored Terms.  Blackhawk Biofuels represents and warrants as
of the date hereof and covenants and agrees from and after the date hereof that
none of the provisions offered to any other person or entity is or will be more
favorable to such person or entity than those offered under this Agreement,
and, if they are or become more favorable to any other person or entity during
the term of this Agreement or any continuation or extension thereof, Blackhawk
Biofuels shall give written notice thereof to REG Marketing, and REG Marketing
shall have the option (which option must be exercised by written notice to
Blackhawk Biofuels with ten (10) business days after notice thereof) to
amend this Agreement to include any such more favorable terms.  If such option is exercised, Blackhawk
Biofuels and REG Marketing shall execute an appropriate written amendment to
this Agreement.

 

(l)            MOSA
Fee.  In view of the fact that this Agreement is to
process Feedstocks owned by REG Marketing for the benefit of REG Marketing, REG
Marketing agrees that Blackhawk Biofuels shall not be required to pay the
variable fee of $ *** /gal under the MOSA for the volume of Biodiesel processed
for and delivered to REG Marketing under this Agreement.  Blackhawk BioFuels shall continue to pay the
Fixed fee of $ *** per month as outlined in the MOSA.

 

11

 

IN WITNESS WHEREOF, Blackhawk
Biofuels and REG Marketing have executed this Agreement as of the date first
shown above.

 

	
  BLACKHAWK BIOFUELS, LLC

  	
   

  	
  REG MARKETING & LOGISTICS GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ RONALD L. MAPES

  	
   

  	
  By:

  	
  /s/ GARY HAER

  
	
  Name

  	
  Ronald L. Mapes

  	
   

  	
  Name:

  	
  Gary Haer

  
	
  Title

  	
  Chair

  	
   

  	
  Title:

  	
  Vice President

  

 

12

 

 

Exhibit A

 

(Form of Order/Nomination)

 

	
   

  	
  ORDER NUMBER

  	
   

  	
  or

  	
  ___________ NOMINATION NUMBER

  

 

	
  For Production Week beginning:

  	
   

  	
          /        /        

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date Sent to Blackhawk BioFuels, LLC:

  	
   

  	
          /        /        

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date Reviewed by Blackhawk BioFuels, LLC:

  	
   

  	
          /        /        

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Blackhawk BioFuels, LLC’s
  Action: (circle)           ACCEPT          or          REJECT

  
	
   

  	
   

  	
   

  
	
  Date Accepted/Rejected by Blackhawk BioFuels, LLC:

  	
   

  	
          /        /        

  	
   

  

 

	
   

  	
   

  	
  o

  	
  REG – 9000 ASTM

  
	
  Product Specification

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
  REG – 9000 EN

  

 

	
   

  	
   

  	
  o

  	
  Cloud      °C

  
	
  Cold Flow Specification

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o

  	
  CFPP       °C

  

 

	
  FEEDSTOCK TYPE

  	
   

  	
  Lbs ORDERED

  	
   

  	
  Contr. Yield

  	
   

  	
  Contr. Gallons

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Date

  	
   

  	
  Date

  
	
  REG Marketing & Logistics Group, LLC.

  	
   

  	
  Blackhawk BioFuels, LLC.

  

 

13

 

 

***
Confidential material redacted and filed separately with the Commission.

 

“Exhibit B”

 

REG Feedstock Specifications

 

	
   

  	
   

  	
   

  	
   

  	
  Free Fatty

  Acid

  (as Oleic)

  	
   

  	
  Moisture

  	
   

  	
  Insoluble

  Impurities

  	
   

  	
  Total MIU

  	
   

  	
  Phosphorus

  	
   

  	
  Color

  (FAC

  Scale)

  	
   

  	
  Maximum

  Feedstock

  Usage per

  Gallon of

  BioDiesel

  (MFU)

  	
   

  
	
   

  	
   

  	
  Analytical

  Method

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  AOCS Ca

  5a-40

  	
   

  	
  AOCS Ca

  2c-25

  	
   

  	
  AOCS Ca

  3a-46

  	
   

  	
  calc

  	
   

  	
  AOCS Ca

  12-55

  	
   

  	
  AOCS Ca

  13a-43

  	
   

  	
   

  	
   

  
	
  Feedstock

  Group

  	
   

  	
  Feedstock

  Type

  	
   

  	
  wt%

  	
   

  	
  wt%

  	
   

  	
  wt%

  	
   

  	
  wt%

  	
   

  	
  ppm

  	
   

  	
   

  	
   

  	
  Lbs/Gal

  	
   

  
	
   

  	
   

  	
  RB Soy

  	
   

  	
  <0.25

  	
   

  	
  <0.3

  	
   

  	
  <0.05

  	
   

  	
  <1.5

  	
   

  	
  <20

  	
   

  	
  Clear &

  bright

  	
   

  	
  7.40

  	
   

  
	
   

  	
   

  	
  Crude

  Degummed

  Soy

  	
   

  	
  <1.0

  	
   

  	
  <0.3

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <200

  	
   

  	
  Typical

  	
   

  	
  7.60

  	
   

  
	
   

  	
   

  	
  Distillers Corn

  Oil

  	
   

  	
  <15

  	
   

  	
  <1.0

  	
   

  	
  <0.5

  	
   

  	
  <2.5

  	
   

  	
  <20

  	
   

  	
  Typical

  	
   

  	
  8.90

  	
   

  
	
   

  	
   

  	
  Edible Tallow

  	
   

  	
  <0.75

  	
   

  	
  <0.2

  	
   

  	
  <0.05

  	
   

  	
  <1.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  7.50

  	
   

  
	
  Animal

  Fats

  	
   

  	
  Tallow

  	
   

  	
  <4

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * 1)

  	
   

  
	
   

  	
   

  	
  Poultry

  Fat/Grease

  	
   

  	
  <8.0

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * 1)

  	
   

  
	
   

  	
   

  	
  Choice White

  Grease

  	
   

  	
  <4

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * 1)

  	
   

  
	
   

  	
   

  	
  Yellow Grease

  & UFO

  	
   

  	
  < 15

  	
   

  	
  <1.0

  	
   

  	
  <0.25

  	
   

  	
  <2.0

  	
   

  	
  <400

  	
   

  	
  Typical

  	
   

  	
  * 1)

  	
   

  

 

* 1) Calculation for Maximum Feedstock Usage using high FFA feedstocks

 

Maximum
Feedstock Usage = (*** x %
FFA) +***

Example: Tested FFA = ***

 

Max Usage = (*** x
***%) + *** = *** lbs/gal of Biodiesel

 

14

 

 

Attachment C

 

REG-9000Ô ASTM

 

Based
off ASTM D6751 Specifications

 

	
  Test Parameter

  	
   

  	
  REG-9000Ô

  Limit

  	
   

  	
  Units

  	
   

  	
  Test Method

  (current revision)

  
	
  Cloud
  point:

  	
   

  	
  Per
  Order

  	
   

  	
  °C

  	
   

  	
  D 2500 Allowable

  variance of +/- 2°C

  
	
  Free
  Glycerin:

  	
   

  	
  < 0.014

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Total
  Glycerin:

  	
   

  	
  < 0.15

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Monoglycerides(1):

  	
   

  	
  < 0.500

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Diglycerides(2):

  	
   

  	
  < 0.200

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Triglycerides(3):

  	
   

  	
  < 0.150

  	
   

  	
  % Mass

  	
   

  	
  D 6584

  
	
  Water &
  Sediment:

  	
   

  	
  < 0.020

  	
   

  	
  %
  Volume

  	
   

  	
  D 2709

  
	
  Acid
  Number:

  	
   

  	
  < 0.40

  	
   

  	
  mg
  KOH/g

  	
   

  	
  D 664

  
	
  Visual
  Inspection:

  	
   

  	
  1, max

  	
   

  	
  Haze

  	
   

  	
  D 4176,
  procedure 2

  
	
  Relative
  Density at 60°F:

  	
   

  	
  0.85 - 0.90

  	
   

  	
  n/a

  	
   

  	
  D1298 (BQ-9000)

  
	
  Oxidation
  Stability (100°C)

  	
   

  	
  3 min
  or per

  Shipping

  Request

  	
   

  	
  hrs

  	
   

  	
  EN 14112

  
	
  Flash
  point (closed cup):

  	
   

  	
  > 93

  	
   

  	
  °C

  	
   

  	
  D 93

  
	
  Alcohol Control

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Option 1: Methanol

  	
   

  	
  < 0.2

  	
   

  	
  %
  Volume

  	
   

  	
  EN 14110

  
	
  Option 2: Flashpoint

  	
   

  	
  > 130

  	
   

  	
  °C

  	
   

  	
  D 93

  
	
  Moisture(4):

  	
   

  	
  < 0.020

  	
   

  	
  %
  Volume

  	
   

  	
  E203

  
	
  Cold
  Soak Filtration:

  	
   

  	
  < 200

  	
   

  	
  seconds

  	
   

  	
  D 6751 Annex

  
	
  Sulfur:

  	
   

  	
  < 10

  	
   

  	
  ppm

  	
   

  	
  D 2622

  
	
  Sodium &
  Potassium Combined:

  	
   

  	
  < 2.0

  	
   

  	
  ppm
  (μg/g)

  	
   

  	
  EN 14538

  
	
  Calcium &
  Magnesium Combined:

  	
   

  	
  < 1.0

  	
   

  	
  ppm
  (μg/g)

  	
   

  	
  EN 14538

  
	
  Phosphorus:

  	
   

  	
  < 0.001

  	
   

  	
  % Mass

  	
   

  	
  D 4951

  
	
  Carbon
  Residue:

  	
   

  	
  < 0.05

  	
   

  	
  % Mass

  	
   

  	
  D 4530

  
	
  Sulfated
  Ash:

  	
   

  	
  < 0.02

  	
   

  	
  % Mass

  	
   

  	
  D 874

  
	
  Kinematic
  Viscosity at 40°C:

  	
   

  	
  3.8 - 5.0

  	
   

  	
  mm2/sec.

  	
   

  	
  D 445

  
	
  Copper
  Corrosion (3 hrs at 50°C):

  	
   

  	
  No. 1

  	
   

  	
  n/a

  	
   

  	
  D 130

  
	
  Distillation
  at 90% Recovered:

  	
   

  	
  360, max

  	
   

  	
  °C

  	
   

  	
  D 1160

  
	
  Cetane
  number:

  	
   

  	
  47, min

  	
   

  	
  n/a

  	
   

  	
  D 613

  

 

  (1),(2),(3),(4),(5)  These are not
ASTM D 6751 nor BQ9000 specification requirements

 

15

 

 

Attachment C-2

 

REG-9000Ô EN

 

Based
off EN 14214 Specifications

 

	
  Test
  Parameter

  	
   

  	
  REG-9000Ô Limit

  	
   

  	
  Units

  	
   

  	
  Method

  
	
  Free
  Glycerin:

  	
   

  	
  0.014

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Total
  Glycerin:

  	
   

  	
  0.150

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Monoglycerides:

  	
   

  	
  0.500

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Diglycerides:

  	
   

  	
  0.200

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Triglycerides:

  	
   

  	
  0.150

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14105

  
	
  Ester
  Content:

  	
   

  	
  > 96.5

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14103

  
	
  Linolenic
  Acid Methyl Ester:

  	
   

  	
  12, max

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14103

  
	
  Polyunsaturate
  Methyl Ester:

  	
   

  	
  1, max

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14103

  
	
  Total
  Contamination:

  	
   

  	
  24, max

  	
   

  	
  mg/kg

  	
   

  	
  EN 12662

  
	
  Acid
  Number:

  	
   

  	
  < 0.40

  	
   

  	
  mg
  KOH/g

  	
   

  	
  EN 14104

  
	
  Cold
  Filter Plugging Point:

  	
   

  	
  Per
  Order

  	
   

  	
  °C

  	
   

  	
  EN 116 Allowable
  variance of

  +/- 2°C

  
	
  Density
  @15°C:

  	
   

  	
  860 - 900

  	
   

  	
  kg/m(3)

  	
   

  	
  EN ISO 3675

  
	
  Oxidative
  Stability:

  	
   

  	
  6 min
  or per

  Shipping

  Request

  	
   

  	
  hrs

  	
   

  	
  EN 14112:2003

  
	
  Flashpoint:

  	
   

  	
  > 170

  	
   

  	
  °C

  	
   

  	
  EN ISO 3679

  
	
  Iodine
  Value:

  	
   

  	
  120 Max

  	
   

  	
  g/100g

  	
   

  	
  EN 14111

  
	
  Methanol
  Content:

  	
   

  	
  0.2, max

  	
   

  	
  % (m/m)

  	
   

  	
  EN 14110

  
	
  Water
  Content:

  	
   

  	
  200, max

  	
   

  	
  mg/kg

  	
   

  	
  EN ISO 12937

  
	
  Sulfur
  Content:

  	
   

  	
  < 10

  	
   

  	
  mg/kg

  	
   

  	
  EN ISO 20846

  
	
  Phosphorus
  Content:

  	
   

  	
  < 10

  	
   

  	
  mg/kg

  	
   

  	
  EN 14107

  
	
  Sodium &
  Potassium Combined:

  	
   

  	
  < 2

  	
   

  	
  mg/kg

  	
   

  	
  EN 14538
  BS2000-547

  
	
  Calcium &
  Magnesium Combined:

  	
   

  	
  < 2.0

  	
   

  	
  mg/kg

  	
   

  	
  EN 14538 BS2000-547

  
	
  Sulfated
  Ash:

  	
   

  	
  < 0.02

  	
   

  	
  % (m/m)

  	
   

  	
  ISO 3987

  
	
  Kinematic
  Viscosity at 40°C:

  	
   

  	
  3.5 - 5.0

  	
   

  	
  mm2/sec.

  	
   

  	
  EN ISO 3104

  
	
  Copper
  Corrosion @ 50°C for 3hrs:

  	
   

  	
  1, max

  	
   

  	
  n/a

  	
   

  	
  EN ISO 2160

  
	
  Cetane
  Number:

  	
   

  	
  51 Min.

  	
   

  	
  n/a

  	
   

  	
  EN ISO 5165

  
	
  Carbon Residue @ 10% distillation remnant:

  	
   

  	
  0.3

  	
   

  	
  %(m/m)

  	
   

  	
  EN ISO 10370

  
	
  Cold
  Soak Filtration:

  	
   

  	
  < 200

  	
   

  	
  seconds

  	
   

  	
  D 6217 Annex

  

 

16

 

 

Exhibit D

Shipping/Loadout Request

 

	
  Today’s Date:

  	
   

  	
          /        /        

  	
   

  
	
  Target Date to Load:

  	
   

  	
          /        /        

  	
   

  

 

Loading Requirements

 

	
  o

  	
   

  	
  Truck

  	
  Trucking Company

  	
   

  
	
  o

  	
   

  	
  REG Railcar

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Product:

  	
   

  
	
  o

  	
   

  	
  B99.9

  	
   

  
	
  o

  	
   

  	
  B100

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Oxidative Additive:             ppm

  	
   

  
	
  o

  	
   

  	
  Minimum Load
  Temperature:                               °F

  	
   

  

 

Blackhawk Fills out Remainder of form:

 

	
  Lot Number:

  	
   

  	
   

  
	
   

  
	
  o Loadout Checklist Complete. Operator initials

  	
   

  	
   

  
	
   

  
	
  Seal Numbers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Railcar ID:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RIN #’s

  	
   

  	
   

  
							

 

	
  Time Scheduled

  	
   

  	
   

  	
   

  	
  *Biodiesel Loaded (gal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Time Arrived

  	
   

  	
   

  	
   

  	
  *Diesel Loaded (gal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Time Loaded

  	
   

  	
   

  	
   

  	
  *Total Gallons(gal)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BOL #

  	
   

  	
   

  	
   

  	
   

  

 

*Gal corrected to 60 degrees Fahrenheit.

 

When completed Scan and e-mail to:  bill.neese@regfuel.com, adam.sander@regfuel.com,
mike.alleman@regfuel.com, dave.simon@regfuel.com, natan.wylke@com ,
Jason.schwenneker@regfuel.com.

 

17Exhibit 4.1

 

EXECUTION COPY

 

 

BPZ RESOURCES, INC.

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

as
Trustee

 

 

INDENTURE

 

 

Dated
as of February 8, 2010

 

 

6.50% CONVERTIBLE SENIOR NOTES DUE 2015

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  I.

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  1.01

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.02

  	
  Other Definitions

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.03

  	
  Incorporation by Reference of Trust Indenture Act

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.04

  	
  Rules of Construction

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  THE SECURITIES

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.01

  	
  Form and Dating

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.02

  	
  Execution and Authentication

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.03

  	
  Registrar, Paying Agent, Bid Solicitation Agent
  and Conversion Agent

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.04

  	
  Paying Agent to Hold Money in Trust

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.05

  	
  Securityholder Lists

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.06

  	
  Transfer and Exchange

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.07

  	
  Replacement Securities

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.08

  	
  Outstanding Securities

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.09

  	
  Securities Held by the Company or an Affiliate

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.10

  	
  Temporary Securities

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.11

  	
  Cancellation

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.12

  	
  Defaulted Interest

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.13

  	
  CUSIP Numbers

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.14

  	
  Deposit of Moneys

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.15

  	
  Book-Entry Provisions for Global Securities

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.16

  	
  Special Transfer Provisions

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.17

  	
  Restrictive Legends

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.18

  	
  Ranking

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  REDEMPTION AND REPURCHASE

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.01

  	
  Right to Redeem; Notices to Trustee

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.02

  	
  Selection of Securities to be Redeemed

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.03

  	
  Notice of Redemption

  	
  23

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.04

  	
  Effect of Notice of Redemption

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.05

  	
  Deposit of Redemption Price

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.06

  	
  Securities Redeemed in Part

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.07

  	
  Repurchase at Option of Holder Upon a Fundamental
  Change

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  COVENANTS

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.01

  	
  Payment of Securities

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.02

  	
  Maintenance of Office or Agency

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.03

  	
  Rule 144A Information and Annual Reports

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.04

  	
  Compliance Certificate

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.05

  	
  Stay, Extension and Usury Laws

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.06

  	
  Corporate Existence

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.07

  	
  Notice of Default

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.08

  	
  Further Instruments and Acts

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.09

  	
  Additional Interest

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  SUCCESSORS

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.01

  	
  When Company May Merge, etc.

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.02

  	
  Successor Substituted

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  DEFAULTS AND REMEDIES

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.01

  	
  Events of Default

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.02

  	
  Acceleration

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.03

  	
  Other Remedies

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.04

  	
  Waiver of Past Defaults

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.05

  	
  Control by Majority

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.06

  	
  Limitation on Suits

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.07

  	
  Rights of Holders to Receive Payment and to
  Convert Securities

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.08

  	
  Collection Suit by Trustee

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.09

  	
  Trustee May File Proofs of Claim

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.10

  	
  Priorities

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.11

  	
  Undertaking for Costs

  	
  41

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  VII.

  	
  TRUSTEE

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.01

  	
  Duties of Trustee

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.02

  	
  Rights of Trustee

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.03

  	
  Individual Rights of Trustee

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.04

  	
  Trustee’s Disclaimer

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.05

  	
  Notice of Defaults

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.06

  	
  Reports by Trustee to Holders

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.07

  	
  Compensation and Indemnity

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.08

  	
  Replacement of Trustee

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.09

  	
  Successor Trustee by Merger, etc.

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.10

  	
  Eligibility; Disqualification

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.11

  	
  Preferential Collection of Claims Against Company

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  DISCHARGE OF INDENTURE

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.01

  	
  Termination of the Obligations of the Company

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.02

  	
  Application of Trust Money

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.03

  	
  Repayment to Company

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.04

  	
  Reinstatement

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  AMENDMENTS

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.01

  	
  Without Consent of Holders

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.02

  	
  With Consent of Holders

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.03

  	
  [Reserved]

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.04

  	
  Revocation and Effect of Consents

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.05

  	
  Notation on or Exchange of Securities

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.06

  	
  Trustee Protected

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.07

  	
  Effect of Supplemental Indentures

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  CONVERSION

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.01

  	
  Conversion Privilege

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.02

  	
  Conversion Procedure and Payment Upon Conversion

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.03

  	
  Cash in lieu of Fractional Shares

  	
  59

  

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.04

  	
  Taxes on Conversion

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.05

  	
  Company to Provide Common Stock

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.06

  	
  Adjustment of Conversion Rate

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.07

  	
  No Adjustment

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.08

  	
  Adjustment to the Conversion Rate On
  February 3, 2011

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.09

  	
  Other Adjustments

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.10

  	
  Adjustments for Tax Purposes

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.11

  	
  Notice of Adjustment

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.12

  	
  Notice of Certain Transactions

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.13

  	
  Effect of Reclassifications, Consolidations,
  Mergers, Binding Share Exchanges or Sales on Conversion Privilege

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.14

  	
  Trustee’s Disclaimer

  	
  73

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.15

  	
  Rights Distributions Pursuant to Shareholders’
  Rights Plans

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.16

  	
  Increased Conversion Rate Applicable to Certain
  Securities Surrendered in Connection With Make- Whole Fundamental Changes

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  CONCERNING THE HOLDERS

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.01

  	
  Action by Holders

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.02

  	
  Proof of Execution by Holders

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.03

  	
  Persons Deemed Absolute Owners

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  HOLDERS’ MEETINGS

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.01

  	
  Purpose of Meetings

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.02

  	
  Call of Meetings by Trustee

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.03

  	
  Call of Meetings by Company or Holders

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.04

  	
  Qualifications for Voting

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.05

  	
  Regulations

  	
  79

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.06

  	
  Voting

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.07

  	
  No Delay of Rights by Meeting

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  MISCELLANEOUS

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.01

  	
  [Reserved]

  	
  80

  

 

iv

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.02

  	
  Notices

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.03

  	
  Communication by Holders with Other Holders

  	
  82

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.04

  	
  Certificate and Opinion as to Conditions Precedent

  	
  82

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.05

  	
  Statements Required in Certificate or Opinion

  	
  82

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.06

  	
  Rules by Trustee and Agents

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.07

  	
  Legal Holidays

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.08

  	
  Duplicate Originals

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.09

  	
  Governing Law

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.10

  	
  No Adverse Interpretation of Other Agreements

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.11

  	
  Successors

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.12

  	
  Separability

  	
  83

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.13

  	
  Table of Contents, Headings, etc.

  	
  84

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.14

  	
  Calculations in Respect of the Securities

  	
  84

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.15

  	
  No Personal Liability of Directors, Officers,
  Employees or Shareholders

  	
  84

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.16

  	
  Force Majeure

  	
  84

  

 

v

 

INDENTURE, dated as of February 8,
2010, between BPZ Resources, Inc., a Texas corporation (the “Company”), and Wells Fargo Bank, National Association, a banking
association organized under the laws of the United States, as trustee (the “Trustee”).

 

Each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the Company’s
6.50% Convertible Senior Notes due 2015 (the “Securities”).

 

I.              DEFINITIONS AND
INCORPORATION BY REFERENCE

 

1.01                     DEFINITIONS.

 

“Additional
Interest” means all amounts, if any, payable pursuant to Sections  4.09(A),
4.09(B) and 6.02(B), as applicable.

 

“Affiliate”  means,
with respect to a specified Person, any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person.  For this purpose, “control” shall mean the
power to direct the management and policies of a Person through the ownership
of securities, by contract or otherwise.

 

“Asset Sale
Make-Whole Fundamental Change”  means a sale, transfer, lease,
conveyance or other disposition of all or substantially all of the consolidated
property or assets of the Company to any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), including any
group acting for the purpose of acquiring, holding, voting or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange
Act.

 

“Bid Solicitation
Agent” means the Person appointed by the Company to solicit bids for
the Trading Price of the Securities in accordance with Section 10.01(B)(ii).

 

“Board of
Directors” means the
Board of Directors of the Company or any committee thereof authorized to act
for it hereunder.

 

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

 

“Capital Stock”  of
any Person means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of such Person and all
warrants or options to acquire such capital stock.

 

“Cash Settlement
Averaging Period”  shall mean, (i) with respect
to any Conversion Date occurring on or after the twenty-second (22nd) Business
Day immediately preceding the Maturity Date, the twenty (20) consecutive
Trading-Day period beginning on, and including, the twenty-second (22nd)
Business Day immediately 

 

1

 

preceding the Maturity Date;
or (ii) in all other cases, the twenty (20) consecutive Trading-Day period
beginning on, and including, the third (3rd) Business Day immediately following
the relevant Conversion Date.

 

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

 

“Common
Equity” of any Person means Capital Stock of such Person that is
generally entitled to (1) vote in the election of directors of such Person
or (2) if such Person is not a corporation, vote or otherwise participate
in the selection of the governing body, partners, managers or others that will
control the management or policies of such Person.

 

“Common Stock”  means
the common stock, no par value per share, of the Company at the date of this
Indenture, subject to Section 10.13.

 

“Common Stock
Change Make-Whole Fundamental Change”  means any
transaction or series of related transactions (other than a Listed Stock
Business Combination), in connection with which (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization, asset sale, lease of assets or otherwise)
all of the Common Stock is exchanged for, converted into, acquired for or
constitutes solely the right to receive other securities, other property,
assets or cash.

 

“Company”  means
the party named as such above until a successor replaces it pursuant to the
applicable provision hereof and thereafter means the successor.  The
foregoing sentence shall likewise apply to any such successor or subsequent
successor.

 

“Company Order”  or
“Company Request”  means
a written request or order signed on behalf of the Company by (i) its
Chairman of the Board, its Chief Executive Officer, its President, its Chief
Operating Officer, its Chief Accounting Officer or any Vice President and (ii) any
such other officer designated in clause (i) of this definition or its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary,
and delivered to the Trustee.

 

“Conversion Date”  with
respect to a Security means the date on which a Holder satisfies all the
requirements for such conversion specified in Section 10.02(A).

 

“Conversion Notice”  means
the “Conversion Notice” attached to the Form of Security attached hereto
as Exhibit A.

 

“Conversion Price”  means,
as of any date of determination, the dollar amount derived by dividing one
thousand dollars ($1,000) by the Conversion Rate in effect on such date.

 

“Conversion Rate”  shall
initially be 148.3856 shares of Common Stock per $1,000 principal amount of
Securities, subject to adjustment as provided in Article X.

 

2

 

“Conversion Value”  means,
as of any Trading Day in the Security Measurement Period, the product of the
Last Reported Sale Price of the Common Stock and the Conversion Rate per $1,000
principal amount of Securities in effect on such Trading Day.

 

“Conversion
Trigger Price”  means, as of any date of
determination, the dollar amount derived by multiplying the Conversion Price in
effect on such date by 130%.

 

“Corporate Trust
Office of the Trustee”  means the principal office of the
Trustee at which at any time its corporate trust business shall be
administered, which office as of the date hereof is located at, 1445 Ross
Avenue, 2nd Floor Dallas, Texas 75201 Attention: Corporate
Trust Services, or such other address as the Trustee may designate from time to
time by notice to the Holders and the Company, or the principal corporate trust
office of any successor Trustee (or such other address as such successor
Trustee may designate from time to time by notice to the Holders and the
Company).

 

“Daily Conversion
Value”  shall mean, for each of the twenty
(20) consecutive Trading Days in the Cash Settlement Averaging Period, one
twentieth (1/20th) of the product of (i) the Conversion Rate in effect on
such Trading Day and (ii) the Volume-Weighted Average Price per share of
Common Stock on such Trading Day.

 

“Daily Settlement
Amount”  for each of the twenty (20)
consecutive Trading Days in the Cash Settlement Averaging Period, shall consist
of (x) cash equal to the lesser of (i) the Specified Cash Amount, divided by twenty (20) (such quotient
being referred to as the “Daily Measurement
Value”  ) and (ii) the Daily
Conversion Value for such Trading Day; and (y) to the extent the Daily
Conversion Value for such Trading Day exceeds the Daily Measurement Value, a
number of shares of Common Stock equal to (i) the difference between the
Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Volume-Weighted
Average Price of the Common Stock on such Trading Day.

 

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

 

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

 

“Ex Date” means (i) when used with
respect to any issuance or distribution, means the first date on which the
shares of Common Stock trade the regular way on the relevant exchange or in the
relevant market from which the Last Reported Sale Price was obtained without
the right to receive such issuance or distribution from the Company or, if
applicable, from the seller of Common Stock on such exchange or market (in the
form of due bills or otherwise) as determined by such exchange or market, (ii) when
used with respect to any subdivision or combination of Common Stock, means the
first date on which the shares of Common Stock trade the regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective and (iii) when used with respect to any
tender offer or exchange offer means the first date on 

 

3

 

which the shares of Common
Stock trade the regular way on such exchange or in such market after the
expiration time of such tender offer or exchange offer (as it may be amended or
extended).  For purposes of determining the Ex Date with respect to
an issuance or distribution under this Indenture, unless it has knowledge to
the contrary, the Company may conclusively assume (and such assumption shall be
binding upon the Holders) that purchases and sales of the relevant security
with respect to which such issuance or distribution is being made will settle
based on the customary settlement cycle for purchases or sales of such
security.

 

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

 

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

 

(1)           any
“person” or “group” within the meaning of Section 13(d) of the
Exchange Act, other than the Company, any Subsidiary of the Company or any
employee benefit plan of the Company or any such Subsidiary, files a Schedule
TO or any other schedule, form or report under the Exchange Act disclosing that
such person or group has become the Beneficial Owner of Common Equity of the
Company representing more than 50% of the ordinary voting power of the Company’s
Common Equity;

 

(2)           consummation
of any share exchange, consolidation or merger of the Company pursuant to which
the Common Stock will be converted into cash, securities or other property or
any sale, lease or other transfer (in one transaction or a series of
transactions) of all or substantially all of the 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 more
than 50% of all classes of the Company’s Common Equity immediately prior to
such transaction own, directly or indirectly, more than 50% of all classes of
Common Equity of the continuing or surviving entity or transferee or parent
thereof immediately after such event shall not be a Fundamental Change; or

 

(3)           the
Company’s Common Stock (or other Common Equity into which the Securities are
then convertible) ceases to be listed on a U.S. national or regional securities
exchange or quoted on an established automated over-the-counter trading market
in the United States for a period of 30 consecutive Scheduled Trading Days,

 

provided, however, that a
Fundamental Change described in clause (2) of the definition above shall
not be deemed to have occurred if at least 90% of the consideration received or
to be received by the holders of the Company’s Common Stock, excluding cash
payments for fractional shares and cash payments in respect of statutory
dissenters’ rights, in connection with the transaction or transactions
constituting the Fundamental Change described in clause (2) consists of
shares of common stock (or depositary receipts or shares evidencing common
stock) traded on a U.S. national or regional securities exchange, or which
shall be so traded when issued or exchanged in connection with such Fundamental
Change as described in clause (2) of the definition above (such securities

 

4

 

being referred to as “Publicly
Traded Securities”) and as a result of such transaction or transactions the
Securities become convertible into such consideration (such
business combination, a “Listed Stock Business Combination”).

 

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

 

“Indenture”  means
this Indenture as amended or supplemented from time to time.

 

“Interest Payment
Date”  means March 1 and September 1
of each year, beginning on September 1, 2010.

 

“Issue Date”  means
February 8, 2010.

 

“Last Reported
Sale Price”  on any date means the per share
price of the Common Stock on such date, determined (i) on the basis of the
closing per share sale price (or if no closing per share 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 such date
on the principal U.S. national or regional securities exchange on which the
shares of Common Stock are listed; or (ii) if the shares of Common Stock
are not listed on a U.S. national or regional securities exchange, as reported
by Pink OTC Markets Inc. or a similar organization; provided , however
, that in the absence of any such report or quotation, the Last Reported Sale
Price shall be the price determined by at least three nationally recognized
independent investment banking firms retained by the Company for such purpose
as most accurately reflecting the per share price that a fully informed buyer,
acting on his own accord, would pay to a fully informed seller, acting on his
own accord in an arms-length transaction, for a share of Common Stock.

 

“Make-Whole Fundamental Change”  means an Asset Sale
Make-Whole Fundamental Change or a Common Stock Change Make-Whole Fundamental
Change.

 

“Market Disruption
Event”  means the occurrence or existence
on any Scheduled Trading Day for shares of Common Stock or the relevant securities
for more than one half-hour period in the aggregate during regular trading
hours of any material suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by the relevant stock exchange or
otherwise) in shares of Common Stock (or the relevant securities) or in any
options, contracts or future contracts relating to shares of Common Stock (or
the relevant securities).

 

“Make-Whole
Payment” means, with respect to each $1,000 in principal amount of
Securities, a payment in shares of Common Stock or a combination of cash and
shares of Common Stock, equal to the remaining scheduled payments of interest
on the Securities to be redeemed from the Redemption Date to March 1, 2015
including any unpaid interest accrued to, but excluding, the Redemption Date,
on any overdue interest that was not paid and any unpaid Additional Interest
that has accrued to, but excluding, the Redemption Date.

 

5

 

“Maturity Date”  means March 1, 2015.

 

“Offering
Memorandum”  means the preliminary Offering
Memorandum of the Company, dated February 3, 2010, relating to
the Securities.

 

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

 

“Officer’s
Certificate”  means a certificate signed by one
Officer of the Company.

 

“Opinion of
Counsel”  means a written opinion from legal
counsel who may be an employee of or counsel for the Company, or other counsel
reasonably acceptable to the Trustee.

 

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

 

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

 

“Purchase Notice”  means
a Purchase Notice in the form set forth in the Securities.

 

“record date”  means,
unless the context requires otherwise, 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 Common Stock (or other applicable security) is exchanged
for or converted into any combination of cash, securities or other property,
the date fixed for determination of shareholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).

 

“Record Date”  for
interest payable in respect of any Security on any Interest Payment Date means February 15 or August 15
(whether or not a Business Day), as the case may be, immediately preceding such
Interest Payment Date.

 

“Redemption Date”
means the date specified for redemption of the Securities in accordance with
the terms of the Securities and Section 3.01(b).

 

“Responsible
Officer”  shall mean, when used 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 

 

6

 

particular subject and who
shall have direct responsibility for the administration of this Indenture.

 

“Restricted
Security”  means a Security that constitutes a
“restricted security” within the meaning of Rule 144(a)(3) under the
Securities Act; provided , however , that the Trustee shall be
entitled to request, and conclusively rely on, an Opinion of Counsel with
respect to whether any Security constitutes a Restricted Security.

 

“Rule 144A”
means Rule 144A under the Securities Act.

 

“Scheduled Trading
Day”  means, with respect to shares of
Common Stock or any other security, a day that is scheduled to be a Trading Day
on the primary United States national securities exchange or market on which
shares of Common Stock or the relevant securities are listed or admitted for
trading. If shares of Common Stock or the relevant securities are not so listed
or admitted for trading, “Scheduled Trading
Day”  shall mean any Business Day.

 

“SEC”  means
the Securities and Exchange Commission.

 

“Securities”  means
the 6.50% Convertible Senior Notes due 2015 issued by the Company pursuant to
this Indenture.

 

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

 

“Securities Agent”  means
any Registrar, Paying Agent, Bid Solicitation Agent, Conversion Agent or
co-Registrar or co-agent.

 

“Significant
Subsidiary”  with respect to any Person means
any “subsidiary”(as defined in Rule 1-02(x) of Regulation S-X under
the Exchange Act) of such Person that constitutes a “significant subsidiary”
within the meaning of Rule 1-02(w) of Regulation S-X under the
Exchange Act.

 

“Subsidiary”  means
(i) a corporation a majority of whose Capital Stock with voting power,
under ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by the Company, by one or more subsidiaries of the Company or
by the Company and one or more of its subsidiaries or (ii) any other
Person (other than a corporation) in which the Company, one or more of its
subsidiaries, or the Company and one or more of its subsidiaries, directly or
indirectly, at the date of determination thereof, own at least a majority
ownership interest.

 

“TIA”  means
the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as amended and
in effect from time to time.

 

“Trading Day”  means,
with respect to shares of Common Stock or any other security, a day during
which (i) trading in shares of Common Stock or such other security
generally occurs, and (ii) a Market Disruption Event has not occurred; provided that if shares of Common Stock or
such other security is not listed for trading or quotation on or 

 

7

 

by any exchange, bureau or
other organization, “Trading Day”  shall
mean any Business Day.

 

“Trading Price”  means,
as of any Trading Day, the average of the secondary market bid quotations
obtained by the Bid Solicitation Agent for $5.0 million principal amount of
Securities at approximately 3:30 p.m., New York City time, on such Trading
Day from three independent nationally recognized securities dealers the Company
selects; provided that if the Bid
Solicitation Agent can reasonably obtain only one such bid, then such single
bid shall be used; and provided, further, that if, on any Trading Day, the
Bid Solicitation Agent cannot reasonably obtain at least one bid for $5.0
million principal amount of the Securities from an independent nationally
recognized securities dealer, then the Trading Price per $1,000 principal
amount of the Securities shall be deemed to be equal to 97% of the Conversion
Value on such Trading Day.

 

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

 

“Volume-Weighted
Average Price”  per share of Common Stock on any
Trading Day means such price as displayed on Bloomberg (or any successor
service) page BPZ.N <equity> AQR in respect of the period from 9:30 a.m.
to 4:00 p.m., New York City time, on such Trading Day, or, if such price
is not available, the market value per share of Common Stock on such Trading
Day as determined by a nationally recognized investment banking firm retained
for this purpose by the Company.

 

“Voting Stock”  of
any Person means the total outstanding voting power of all classes of the
Capital Stock of such Person entitled to vote generally in the election of
directors of such Person.

 

1.02                     OTHER DEFINITIONS.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Additional Interest Notice”

  	
   

  	
  4.09(D)

  
	
  “Applicable Price”

  	
   

  	
  10.16(D)

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Business Day”

  	
   

  	
  13.07

  
	
  “Clause A Distribution”

  	
   

  	
  10.06(c)

  
	
  “Clause B Distribution”

  	
   

  	
  10.06(c)

  
	
  “Clause C Distribution”

  	
   

  	
  10.06(c)

  
	
  “Common Stock Private Placement Legend”

  	
   

  	
  2.17

  

 

8

 

	
  “Conversion Agent”

  	
   

  	
  2.03

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Daily Measurement Value”

  	
   

  	
  1.01

  
	
  “Distributed Property”

  	
   

  	
  10.06(c)

  
	
  “Effective Date”

  	
   

  	
  10.16(A)

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Full Physical Settlement”

  	
   

  	
  10.02(C)

  
	
  “Full Physical Settlement Election”

  	
   

  	
  10.02(C)

  
	
  “Fundamental Change Notice”

  	
   

  	
  3.07(B)

  
	
  “Fundamental Change Repurchase Date”

  	
   

  	
  3.07(A)

  
	
  “Fundamental Change Repurchase Price”

  	
   

  	
  3.07(A)

  
	
  “Fundamental Change Repurchase Right”

  	
   

  	
  3.07(A)

  
	
  “Global Security”

  	
   

  	
  2.01

  
	
  “Legal Holiday”

  	
   

  	
  13.06

  
	
  “Listed Stock Business Combination”

  	
   

  	
  1.01

  
	
  “Make-Whole Applicable Increase”

  	
   

  	
  10.16(B)

  
	
  “Make-Whole Conversion Period”

  	
   

  	
  10.16(A)

  
	
  “Maximum Conversion Rate”

  	
   

  	
  10.16(B)

  
	
  “Merger Event”

  	
   

  	
  10.13

  
	
  “Net Share Settlement”

  	
   

  	
  10.02(B)

  
	
  “Net Share Settlement Election”

  	
   

  	
  10.02(B)

  
	
  “Notice of Default”

  	
   

  	
  6.01

  
	
  “Participants”

  	
   

  	
  2.15(A)

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Physical Securities”

  	
   

  	
  2.01

  

 

9

 

	
  “Reference Property”

  	
   

  	
  10.13

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Repurchase Upon Fundamental Change”

  	
   

  	
  3.07(A)

  
	
  “Resale Restriction Termination Date”

  	
   

  	
  2.17

  
	
  “Security Measurement Period”

  	
   

  	
  10.01(B)(ii)

  
	
  “Security Private Placement Legend”

  	
   

  	
  2.17

  
	
  “Specified Cash Amount”

  	
   

  	
  10.02(A)

  
	
  “Spin-Off”

  	
   

  	
  10.06(c)

  
	
  “Trading Price Condition”

  	
   

  	
  10.01(B)(ii)

  
	
  “Trigger Event”

  	
   

  	
  10.06(c)

  

 

1.03                     INCORPORATION BY
REFERENCE OF TRUST INDENTURE ACT.

 

Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.

 

The following TIA terms used in this Indenture have
the following meanings:

 

“Commission”  means
the SEC;

 

“indenture
securities”  means the Securities;

 

“indenture
security holder”  means a Securityholder or a Holder;

 

“indenture to be
qualified”  means this Indenture;

 

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

 

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

 

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

 

1.04                     RULES OF
CONSTRUCTION.

 

Unless the context otherwise requires:

 

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

 

10

 

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

 

(iii)          “or” is not exclusive;

 

(iv)          “including” means “including without limitation”;

 

(v)           words in the singular include the plural and in the plural
include the singular;

 

(vi)          provisions apply to successive events and transactions;

 

(vii)         the term “interest”  means
any interest payable under the terms of the Securities, including Additional
Interest, if any, payable pursuant to Sections
4.09(A), 4.09(B) and 6.02(B), unless the context otherwise requires;

 

(viii)        the term “principal” means the principal of any Security payable under
the terms of such Securities, unless the context otherwise requires;

 

(ix)           “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 of this Indenture; and

 

(x)            references to currency shall mean the lawful currency of
the United States of America, unless the context requires otherwise.

 

II.            THE SECURITIES

 

2.01                     FORM AND DATING.

 

The Securities and the Trustee’s certificate of
authentication shall be substantially in the form set forth in Exhibit A, which is incorporated in
and forms a part of this Indenture.  The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage; provided that such
notations, legends or endorsements are in a form reasonably acceptable to the
Company.  Each Security shall be dated the date of its
authentication.

 

Securities
offered and sold in reliance on Rule 144A shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in Exhibit A (the “Global Security”), deposited with the Trustee, as custodian for the Depositary,
registered in the name of the Depositary or a nominee thereof, duly executed by
the Company and authenticated by the Trustee as hereinafter provided and
bearing the legends set forth in Exhibits
B-1A and B-2.  The aggregate principal
amount of the Global Security may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary, as hereinafter provided; provided
that except as set forth in Section 2.02,
the aggregate principal amount of the Global Security or Securities shall not
exceed $140,000,000.

 

11

 

Securities
issued in exchange for interests in a Global Security pursuant to Section 2.15 may be issued in the form
of permanent certificated Securities in registered form in substantially the
form set forth in Exhibit A
(the “Physical Securities”) and, if applicable, bearing any
legends required by Section 2.17.

 

2.02                     EXECUTION AND
AUTHENTICATION.

 

One duly authorized Officer shall sign the
Securities for the Company by manual or facsimile signature.

 

A Security’s validity shall not be affected by the
failure of an Officer whose signature is on such Security to hold, at the time
the Security is authenticated, the same office at the Company.

 

A Security shall not be valid until duly
authenticated by the manual or facsimile signature of the
Trustee.  The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.

 

Upon receipt of a Company Order, the Trustee shall
authenticate Securities for original issue in the aggregate principal amount of
$140,000,000.  The aggregate
principal amount of Securities outstanding at any time may not exceed $140,000,000
except as provided in this Section 2.02.

 

The Company may, without the consent of Holders of
the Securities, increase the aggregate principal amount of Securities by
issuing additional Securities in the future on the same terms and conditions,
except for any difference in the issue price and interest accrued prior to the
issue date of the additional Securities; provided
that if such additional Securities have the same CUSIP number as the Securities
initially issued hereunder, such additional Securities (i) constitute part
of the same issue as the Securities initially issued hereunder for U.S. federal
income tax purposes, or (ii) are issued with no more than a de minimis
amount of original issue discount for U.S. federal income tax
purposes.  The Securities initially issued hereunder and any such
additional Securities shall rank equally and ratably and shall be treated as a
single series of debt securities for all purposes under this Indenture.

 

Upon receipt of a Company Order, the Trustee shall
authenticate Securities not bearing the Security Private Placement Legend to be
issued to the transferees when sold pursuant to an effective registration
statement under the Securities Act as set forth in Section 2.16(B).

 

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 authenticating agent.  An
authenticating agent so appointed has the same rights as a Securities Agent to
deal with the Company and its Affiliates.

 

12

 

If a Company Order pursuant to this Section 2.02 has been, or
simultaneously is, delivered, any additional instructions by the Company to the
Trustee with respect to endorsement, delivery or redelivery of a Security
issued in global form shall be in writing but need not comply with Section 13.04 hereof and need not be
accompanied by an Opinion of Counsel.

 

The Securities shall be issuable only in registered
form without interest coupons and only in minimum denominations of $2,000
principal amount and any integral multiples of $1,000.

 

2.03                     REGISTRAR, PAYING
AGENT, BID SOLICITATION AGENT AND CONVERSION AGENT.

 

The Company shall maintain, or shall cause to be
maintained, (i) an office or agency in The Borough of Manhattan, The City
of New York, where Securities may be presented for registration of transfer or
for exchange (“Registrar”), (ii) an office or agency in
The Borough of Manhattan, The City of New York, where Securities may be
presented for payment (“Paying Agent”) and (iii) an office or agency in
the Borough of Manhattan, The City of New York, where Securities may be
presented for conversion (“Conversion Agent”).  The Registrar shall
keep a register of the Securities and of their transfer and
exchange.  The Company may appoint or change one or more
co-Registrars, one or more additional paying agents and one or more additional
conversion agents without notice and may act in any such capacity on its own
behalf.  The term “Registrar”  includes
any co-Registrar; the term “Paying Agent”  includes
any additional paying agent; and the term “Conversion
Agent”  includes any additional conversion
agent.

 

The Company shall enter into
an appropriate agency agreement with any agent not a party to this
Indenture.  Such agency agreement shall implement the provisions of this Indenture
that relate to such agent.  The Company shall notify the Trustee of
the name and address of any agent not a party to this Indenture.  If
the Company fails to maintain a Registrar, Paying Agent, Bid Solicitation Agent
or Conversion Agent, the Trustee shall act as such.

 

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

 

2.04                     PAYING AGENT TO HOLD
MONEY IN TRUST.

 

Each
Paying Agent shall hold in trust for the benefit of the Securityholders or the
Trustee all moneys held by the Paying Agent for the payment of the Securities,
and shall notify the Trustee of any Default by the Company in making any such
payment.  While any such Default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee.  The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee and account for any funds so paid by it.  Upon payment over
to the Trustee, the Paying Agent shall have no further liability for such
money.  If the Company acts as Paying Agent, it shall segregate and
hold as a separate trust fund all money held by it as Paying Agent.

 

13

 

2.05                     SECURITYHOLDER LISTS.

 

The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of Securityholders.  If the Trustee is not the Registrar,
the Company shall furnish, or shall cause to be furnished, to the Trustee
before each Interest Payment Date and at such other times as the Trustee may
request in writing a list, in such form and as of such date as the Trustee may
reasonably require, of the names and addresses of Securityholders appearing in
the security register of the Registrar.

 

2.06                     TRANSFER AND
EXCHANGE.

 

Subject to Sections
2.15 and 2.16 hereof, where Securities are presented
to the Registrar with a request to register their transfer or to exchange them
for an equal principal amount of Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange if its
requirements for such transaction are met.  To permit registrations
of transfer and exchanges, the Trustee shall authenticate Securities at the
Registrar’s request or upon the Trustee’s receipt of a Company Order
therefor.  The Company, the Registrar or the Trustee, as the case may
be, shall not be required to register the transfer of or exchange any Security
for which a Purchase Notice has been delivered, and not withdrawn, in
accordance with this Indenture, except to the unrepurchased portion of
Securities being repurchased in part.

 

No service charge shall be made for any transfer,
exchange or conversion of Securities, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge that
may be imposed in connection with any transfer, exchange or conversion of
Securities, other than exchanges pursuant to Sections 2.10,
3.07, 9.05 or 10.02,
not involving any transfer.

 

2.07                     REPLACEMENT
SECURITIES.

 

If the
Holder of a Security claims that the Security has been mutilated, lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate, at the Holder’s expense, a replacement Security upon surrender to
the Trustee of the mutilated Security, or upon delivery to the Trustee of
evidence of the loss, destruction or theft of the Security satisfactory to the
Trustee and the Company.  In the case of a lost, destroyed or
wrongfully taken Security, if required by the Trustee or the Company, indemnity
(including in the form of a bond) must be provided by the Holder that is
reasonably satisfactory to the Trustee and the Company to indemnify and hold
harmless the Company, the Trustee or any Securities Agent from any loss which
any of them may suffer if such Security is replaced.

 

In
case any such mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security when due.

 

Every
replacement Security is an additional obligation of the Company only as
provided in Section 2.08.

 

14

 

2.08                     OUTSTANDING
SECURITIES.

 

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

 

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

 

If the Paying Agent (other than the Company) holds
on a Fundamental Change Repurchase Date or Maturity Date, money sufficient to
pay the aggregate Fundamental Change Repurchase Price or principal amount (plus
accrued and unpaid interest, if any) as the case may be, with respect to all
Securities to be purchased or paid on such Fundamental Change Repurchase Date
or Maturity Date, as the case may be, in each case, payable as herein provided
on such Fundamental Change Repurchase Date or Maturity Date, then (unless there
shall be a Default in the payment of such aggregate Fundamental Change
Repurchase Price or principal amount, or of such accrued and unpaid interest),
except as otherwise provided herein, on and after such date such Securities
shall be deemed to be no longer outstanding, interest on such Securities shall
cease to accrue, and such Securities shall be deemed paid whether or not such
Securities are delivered to the Paying Agent.  Thereafter, all rights
of the Holders of such Securities shall terminate with respect to such
Securities, other than the right to receive the Fundamental Change Repurchase
Price or principal amount, as the case may be, plus, if applicable, such
accrued and unpaid interest, in accordance with this Indenture.

 

If a Security is converted in accordance with Article X then, from and after the
time of such conversion on the Conversion Date, such Security shall cease to be
outstanding, and interest, if any, shall cease to accrue on such Security
unless there shall be a Default in the payment or delivery of the consideration
payable and/or deliverable hereunder upon such conversion.

 

2.09                     SECURITIES HELD BY
THE COMPANY OR AN AFFILIATE.

 

In determining whether the Holders of the required
aggregate principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or any of its Subsidiaries
or Affiliates shall be considered as though not outstanding, except that, for
the purposes of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which a Responsible
Officer of the Trustee actually knows are so owned shall be so
disregarded.  Securities so owned which have been pledged in good
faith may be considered to be outstanding for purposes of this Section 2.09 if the pledgee
establishes, to the satisfaction of the Trustee, the pledgee’s right so to
concur with respect to such Securities and that the pledgee is not, and is not
acting at the direction or on behalf of, the Company, any other obligor on the
Securities, an Affiliate of the Company or an Affiliate 

 

15

 

of any such other
obligor.  In case of a dispute as to whether the pledgee has
established the foregoing, any decision by the Trustee taken upon the advice of
counsel shall provide full protection to the Trustee.  Upon request
of the Trustee, the Company shall furnish to the Trustee promptly an Officer’s
Certificate listing and identifying all Securities, if any, known by the
Company to be owned or held by or for the account of any of the above described
Persons; and, subject to Section 7.01
and Section 7.02, the Trustee shall be entitled to accept such Officer’s
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Securities not listed therein are outstanding for the purpose of
any such determination.

 

2.10                     TEMPORARY SECURITIES.

 

Until definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall, upon receipt of a Company Order
therefor, authenticate temporary Securities.  Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary
Securities.  Without unreasonable delay, the Company shall prepare
and the Trustee, upon receipt of a Company Order therefor, shall authenticate
definitive Securities in exchange for temporary Securities.  Until so
exchanged, each temporary Security shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities, and such temporary
Security shall be exchangeable for definitive Securities in accordance with the
terms of this Indenture.

 

2.11                     CANCELLATION.

 

The Company at any time may deliver Securities to
the Trustee for cancellation.  The Registrar, Paying Agent and
Conversion Agent shall forward to the Trustee any Securities surrendered to
them for transfer, exchange, payment or  conversion.  The
Trustee shall promptly cancel all Securities surrendered for transfer,
exchange, payment, conversion or cancellation in accordance with its customary
procedures.  The Company may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation or that any
Securityholder has converted pursuant to Article X.  All
cancelled Securities held by the Trustee shall be disposed of in accordance
with its customary procedure for the disposal of cancelled securities, and
certification of such disposal shall be delivered by the Trustee to the Company
from time to time upon written request, unless the Company shall, by a Company Order, direct that
cancelled Securities be returned to it.

 

2.12                     DEFAULTED INTEREST.

 

If and to the extent the Company defaults in a
payment of interest on the Securities, the Company shall pay in cash the
defaulted interest in any lawful manner plus, to the extent not prohibited by
applicable statute or case law, interest on such defaulted interest at the rate
provided in the Securities.  The Company may pay the defaulted
interest (plus interest on such defaulted interest) to the Persons who are
Securityholders on a subsequent special record date.  The Company
shall fix such special record date and payment date.  At least
fifteen (15) calendar days before the special 

 

16

 

record date, the Company
shall mail to Securityholders a notice that states the special record date,
payment date and amount of interest to be paid.  Upon the due payment
in full, interest shall no longer accrue on such defaulted interest pursuant to
this Section 2.12.  The interest rate for such defaulted interest
shall be the interest rate on the Securities at the time of the Company’s
default in a payment of interest on the Securities.

 

2.13                     CUSIP NUMBERS.

 

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

 

2.14                     DEPOSIT OF MONEYS.

 

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

 

If any Interest Payment Date, the Maturity Date or
any Fundamental Change Repurchase Date falls on a date that is not a Business
Day, the payment due on such Interest Payment Date, the Maturity Date or such
Fundamental Change Repurchase Date, as the case may be, shall be postponed
until the next succeeding Business Day, and no interest or other amount shall
accrue as a result of such postponement.

 

2.15                     BOOK-ENTRY PROVISIONS
FOR GLOBAL SECURITIES.

 

(A)          The
Global Securities initially shall (i) be registered in the name of the
Depositary or the nominee of the Depositary, (ii) be delivered to the
Trustee as custodian for the Depositary and (iii) bear legends as set
forth in Section 2.17.

 

Members of, or participants in, the Depositary (“Participants”) shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under the Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the Global Security for all purposes
whatsoever.  Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written 

 

17

 

certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.

 

(B)           Transfers
of Global Securities shall be limited to transfers in whole, but not in part,
to the Depositary, its successors or their respective nominees.  In
addition, one or more Physical Securities shall be transferred to beneficial
owners, as identified by the Depositary, in exchange for their beneficial
interests in Global Securities only if (iv) the Depositary notifies the
Company that the Depositary is unwilling or unable to continue as depositary
for any Global Security, or the Depositary ceases to be a “clearing agency”
registered under Section 17A of the Exchange Act, and, in either case, a
successor Depositary is not appointed by the Company within ninety (90) days of
such notice or cessation or (v) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the beneficial
owner of the relevant Securities to issue Physical Securities.

 

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

 

(D)          Any
Physical Security delivered in exchange for an interest in a Global Security
that bears the Security Private Placement Legend pursuant to Section 2.15(B) shall, except as
otherwise provided by Section 2.16,
bear the Security Private Placement Legend.

 

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

 

(F)           The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on the transfer of any interest in any
Securities imposed under this Indenture or under applicable law (including any
transfers between or among Participants or beneficial owners of interests in
any Global Security and transfers made by Affiliates of the Company) 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.

 

(G)           Neither
the Trustee nor any Securities Agent shall have any responsibility for any
actions taken or not taken by the Depositary.

 

18

 

2.16                     SPECIAL TRANSFER
PROVISIONS.

 

(A)          Restrictions on Transfer
and Exchange of Global Securities. 
Notwithstanding any other provisions of this Indenture, but except as
provided in Section 2.15(B),
a Global 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.

 

(B)           Private Placement Legend.  Upon
the transfer, exchange or replacement of Securities not bearing the Security
Private Placement Legend, the Registrar or co-Registrar shall deliver
Securities that do not bear the Security Private Placement
Legend.  Upon the transfer, exchange or replacement of Securities
bearing the Security Private Placement Legend, the Registrar or co-Registrar
shall deliver only Securities that bear the Security Private Placement Legend
unless (i) the requested transfer is after the Resale Restriction
Termination Date, (ii) there is delivered to the Trustee and the Company (x) an
opinion of counsel reasonably satisfactory to the Company and addressed to the
Company and (y) a certificate of an officer of the Company each to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act or (iii) such Security has been sold pursuant to an effective
registration statement under the Securities Act and the Holder selling such
Securities has delivered to the Registrar or co-Registrar a notice in the form
of Exhibit C
hereto.  Upon any sale or transfer of a beneficial interest in the
Securities in connection with which the Security Private Placement Legend will
be removed in accordance with this Indenture, the Trustee shall increase the
principal amount of the Global Security that does not constitute a Restricted
Security by the principal amount of such sale or transfer and likewise reduce
the principal amount of the Global Security that does constitute a Restricted
Security.

 

(C)           General.  By
its acceptance of any Security or share of Common Stock bearing the Security
Private Placement Legend or the Common Stock Private Placement Legend, each
holder thereof acknowledges the restrictions on transfer of such security set
forth in this Indenture and in the Security Private Placement Legend or Common
Stock Private Placement Legend, as applicable, and agrees that it will transfer
such security only as provided in this Indenture and as permitted by applicable
law.

 

The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.15 or this Section 2.16.  The Company
shall have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time upon the giving of
reasonable written notice to the Registrar.

 

(D)          Transfers of Securities Held by the Company or its
Affiliates.  Any Securities or shares of Common Stock
issued upon the conversion of Securities that are purchased or owned by the
Company or any Affiliate thereof may not be resold by the Company or such
Affiliate unless registered under the Securities Act or resold pursuant to an
exemption from the registration requirements of the Securities Act in a
transaction 

 

19

 

that results in such
Securities or shares of Common Stock, as the case may be, no longer being
Restricted Securities.

 

(E)           Repurchases.   The Company may,
to the extent permitted by law, repurchase the Securities in the open market or
by tender offer at any price or by private agreement without giving prior
notice to Holders.  Securities surrendered to the Trustee for
cancellation may not be reissued or resold and shall be promptly cancelled
pursuant to Section 2.11.

 

2.17                     RESTRICTIVE LEGENDS.

 

Each Global Security and Physical Security that
constitutes a Restricted Security shall bear the legend (the “Security Private Placement Legend”) as set forth in Exhibit B-1A on the face thereof until
the later of (i) the date that is one year after the last date of original
issuance of such Securities, or such other period of time as permitted by Rule 144 under
the Securities Act or any successor provision thereto, and (ii) such later
date, if any, as may be required by applicable law (such date, the “Resale Restriction Termination Date”).  Each
certificate representing shares of Common Stock, if any, issued upon conversion
of any Security, shall, if such shares constitute Restricted Securities, bear
the legend (the “Common Stock Private Placement Legend”)
as set forth in Exhibit B-1B on the face thereof until the Resale
Restriction Termination Date.

 

Each Global Security shall also bear the legend as
set forth in Exhibit B-2.

 

2.18                     RANKING.

 

The indebtedness of the Company arising under or in
connection with this Indenture and every outstanding Security issued under this
Indenture from time to time constitutes and will constitute a senior unsecured obligation
of the Company, ranking equally with other existing and future senior unsecured
indebtedness of the Company and ranking senior to any existing or future
subordinated indebtedness of the Company.

 

III.           REDEMPTION AND
REPURCHASE

 

3.01                     RIGHT
TO REDEEM; NOTICES TO TRUSTEE.

 

(a)           The
Securities are not redeemable by the Company prior to February 3,
2013.  On or after February 3, 2013, the Securities may be redeemed
in whole or in part at the option of the Company if the Last Reported Sale Price of the Company’s Common Stock has been
greater than 175% of the Conversion Price then in effect for at least 20
Trading Days during any 30 consecutive Trading Days, ending within five (5) Trading
Days prior to the day a notice of redemption is mailed.

 

(b)           The
redemption price at which the Securities are redeemable (the “Redemption Price”)
shall be equal to (i) 100% of the principal of Securities to be redeemed,
plus (ii) accrued and unpaid interest (including Additional Interest), if
any, to, but excluding, the date on which the redemption is made (the “Redemption Date”), plus (iii) the Make-Whole Payment; provided, however, that if the Redemption Date is after a 

 

20

 

Regular Record Date and prior to the Interest Payment
Date to which it relates, then the accrued and unpaid interest, if any, to, but
excluding, the Redemption Date, shall be paid on such Interest Payment Date to
the holders of record of such Securities on the applicable Regular Record Date
instead of the holders surrendering such Securities for redemption on the
Redemption Date.  The Trustee shall have no duty to determine or calculate
the Make-Whole Payment, which shall be determined by the Company in accordance
with the provisions of this Indenture, and the Trustee shall not be under any
responsibility to determine the correctness of any such determination and/or
calculation and may conclusively rely on the correctness thereof.

 

(c)           Upon
any redemption in accordance with this Section 3.01,
the Company shall pay the Make-Whole Payment with respect to the Securities
called for redemption to Holders, at its option, in cash, shares of Common
Stock or a combination of cash and shares of Common Stock and shall specify the
type of consideration for the Make-Whole Payment (and, if a combination, will
specify the dollar amount of the Make-Whole Payment to be paid in cash) in the
notice of redemption sent by the Company pursuant to Section 3.03.
If the Company does not specify the type of consideration for the Make-Whole
Payment in such notice of redemption, the Company shall pay the Make-Whole
Payment entirely in cash.

 

The Company may elect to pay the Make-Whole Payment
or any portion thereof, subject to the fulfillment by the Company of the
conditions set forth in Section 3.01(i),
by delivering the number of shares of Common Stock equal to sum of all of the
Daily Make-Whole Amount divided by the Provisional Make-Whole Averaging Period.
For purpose of this Section 3.01(c),
the “Daily Make-Whole Amount” shall mean for each of the twenty (20)
consecutive Trading Days in the Provisional Make-Whole Averaging Period, one
twentieth (1/20th) the amount of the Make-Whole Payment to be settled in shares
of Common Stock divided by the Volume-Weighted
Average Price of the Common Stock on such Trading Day. The “Provisional
Make-Whole Averaging Period” shall mean the twenty (20) consecutive Trading-Day
period beginning on, and including, the third (3rd) Business Day immediately
prior to the redemption pursuant to Section 3.01(b).

 

(d)           The
Company shall pay the Make-Whole Payment on all Securities called for
redemption on or after February 3, 2013 and prior to the Maturity Date,
including any Securities converted into Common Stock pursuant to the terms of
the Indenture after the date of the notice of redemption sent pursuant to Section 3.03 of this Indenture and prior to such
Redemption Date.

 

(e)           The
Company may not redeem any Securities unless all accrued and unpaid interest
(including any Additional Interest) thereon has been or is simultaneously paid
for all semi-annual periods or portions thereof terminating prior to the
Redemption Date.  In addition, the Company may not redeem any Securities
or deliver to any Holder of Securities a notice of redemption pursuant to Section 3.03 at any time when there exists any accrued
and unpaid Defaulted Interest.

 

21

 

(f)                                    Any issuance of shares of Common Stock in
respect of the Make-Whole Payment shall be deemed to have been effected
immediately prior to the close of business on the Redemption Date and the
Person or Persons in whose name or names any stock certificate or stock
certificates representing shares of Common Stock shall be issuable upon such
redemption shall be deemed to have become on the Redemption Date the holder or
holders of record of the shares represented thereby; provided, however, that
any surrender for redemption on a date when the stock transfer books of the
Company shall be closed shall constitute the Person or Persons in whose name or
names the stock certificate or stock certificates representing such shares are
to be issued as the holder or holders of record of the shares represented
thereby for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open. No payment or adjustment shall be
made for dividends or distributions on any Common Stock declared prior to the
Redemption Date.

 

A Holder receiving shares of Common Stock in respect
of the Make-Whole Payment shall not be entitled to any rights as a holder of
Common Stock, including, among other things, the right to vote and receive
dividends and notices of stockholder meetings, until the Close of Business on
the Redemption Date.

 

(g)                                 The Company will not issue a fractional
share of Common Stock upon payment of the Make-Whole Payment.  Instead,
the Company shall pay cash in lieu of fractional shares based on the Last Reported Sale Price of Common
Stock on the Trading Day prior to the applicable Conversion Date.

 

(h)                                 Any issuance and delivery of stock
certificates representing shares of Common Stock on payment of the Make-Whole
Payment shall be made without charge to the Holder of Securities being redeemed
or for any tax or duty in respect of the issuance or delivery of such stock
certificates or the Securities represented thereby; provided, however, that the
Company shall not be required to pay any tax or duty which may be payable in
respect of (i) income of the Holder or (ii) any transfer involved in
the issuance or delivery of stock certificates representing shares of Common
Stock in a name other than that of the Holder of the Securities being redeemed,
and no such issuance or delivery shall be made unless the Persons requesting
such issuance or delivery has paid to the Company the amount of any such tax or
duty or has established, to the satisfaction of the Company, that such tax or
duty has been paid.

 

(i)                                     The Company may, at its option, pay the
Make-Whole Payment payable to Holders pursuant to Section 3.01(b) upon
redemption of the Securities, in shares of Common Stock, if the following
conditions are satisfied:

 

(A)                              The shares of Common Stock to be so
issued:

 

(i)                                     shall not require registration under any
federal securities law before such shares may be freely transferable without
being subject to any transfer restrictions under the Securities Act upon
redemption or if such registration is required, such registration shall be
completed and shall become effective prior to the Redemption Date; and

 

22

 

(ii)                                  shall not require registration with, or
approval of, any governmental authority under any state law or any other
federal law before shares may be validly issued or delivered upon redemption or
if such registration is required or such approval must be obtained, such
registration shall be completed or such approval shall be obtained prior to the
Redemption Date.

 

(B)                                The shares of Common Stock to be listed
upon redemption of Securities hereunder are, or shall have been, approved for
listing on The New York Stock Exchange or any other stock exchange on which the
shares of Common Stock are then listed, in any case, prior to the Redemption
Date.

 

(C)                                All shares of Common Stock which may be
issued upon redemption of Securities shall be newly issued shares or treasury
shares, shall be duly and validly issued and fully paid and nonassessable and
shall be free from preemptive rights and free of any lien or adverse claim.

 

(D)                               If any of the conditions set forth in
clauses (A) through (C) of this Section 3.01(i) are
not satisfied in accordance with the terms thereof, the Make-Whole Payment
shall be paid by the Company only in cash.

 

3.02                                                               SELECTION OF
SECURITIES TO BE REDEEMED.

 

If less than all the Securities are to be redeemed,
the Trustee shall select the Securities to be redeemed pro rata or by lot or by
any other method the Trustee considers fair and appropriate (so long as such
method is not prohibited by the rules of The New York Stock Exchange or
any other stock exchange on which the Securities are then listed, as
applicable).  The Trustee shall make the selection within seven days from
its receipt of the notice from the Company delivered pursuant to Section 3.03 from outstanding Securities not previously
called for redemption.

 

Securities and portions of them the Trustee selects
shall be in principal amounts of $1,000 or integral multiples of $1,000. 
Provisions of this Indenture that apply to Securities called for redemption in
whole also apply to Securities called for redemption in part.  The Trustee
shall notify the Company promptly of the Securities or portions of Securities
to be redeemed.

 

If any Securities selected for partial redemption is
converted in part before termination of the conversion right with respect to
the portion of the Securities so selected, the converted portion of such
Securities shall be deemed (so far as may be) to be the portion selected for
redemption.  Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as outstanding for the
purpose of such selection.

 

3.03                                                               NOTICE OF REDEMPTION.

 

At least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail a notice of redemption by first-class
mail, postage prepaid, to the Trustee, the Securities Agent and each Holder of
Securities to be redeemed.

 

23

 

The notice shall specify the Securities to be
redeemed and shall state:

 

(i)                                     the Redemption Date, including the type
of consideration to be paid for the Make-Whole Payment;

 

(ii)                                  the Redemption Price;

 

(iii)                               the applicable Conversion Rate and any adjustments thereto;

 

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

 

(v)                                 that Securities called for redemption may
be converted at any time before the Close of Business on the Business Day
immediately preceding the Redemption Date; and

 

(vi)                              the procedures a Holder must follow to
exercise rights under Section 3.01.

 

At the Company’s written request delivered at least 30 days prior to
the date such notice is to be given to the Holders (unless a shorter time
period shall be acceptable to the Trustee), the Trustee shall give the notice
of redemption to each Holder of Securities to be redeemed in the Company’s name
and at the Company’s expense. The
Company’s written request shall contain the information required to be
contained in the notice of redemption specified above.

 

3.04                                                               EFFECT OF NOTICE OF
REDEMPTION.

 

Once notice of redemption is given, Securities
called for redemption become due and payable on the Redemption Date and at the
Redemption Price stated in the notice except for Securities that are converted
in accordance with the terms of this Indenture.  Upon surrender to the
Paying Agent, such Securities shall be paid at the Redemption Price stated in
the notice.

 

3.05                                                               DEPOSIT OF REDEMPTION
PRICE.

 

Prior to 12:00 p.m. (New York City time) on or
prior to the Redemption Date, the Company shall deposit with the Trustee or
with the Paying Agent (or, if the Company or a Subsidiary of the Company or an
Affiliate of either of them is acting as the Paying Agent, shall segregate and
hold in trust as provided in Section 2.04)
an amount of money (in immediately available funds if deposited on such Trading
Day) sufficient to pay the aggregate Redemption Price of all the Securities or
portions thereof which are to be redeemed as of the Redemption Date.

 

If the Paying Agent holds money sufficient to pay
the Redemption Price with respect to the Securities to be redeemed on the
Redemption Date in accordance with the terms of this Indenture, then,
immediately on and after the Redemption Date, interest on 

 

24

 

such Securities shall cease
to accrue, whether or not the Securities are delivered to the Paying Agent, and
all other rights of the Holders of such Securities shall terminate, other than
the right to receive the Redemption Price upon delivery of such Securities.

 

3.06                                                               SECURITIES REDEEMED
IN PART.

 

Any Security which is to be redeemed only in part
shall be surrendered at the office of the Paying Agent (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or such Holder’s attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security or Securities,
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not redeemed; provided,
that  the Company shall
not be required to (i) issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days
before any selection for redemption of Securities and ending at the close of
business on the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of Securities to be redeemed or (ii) register
the transfer of or exchange any Securities so selected for redemption, in whole
or in part, except the unredeemed portion of any Securities being redeemed in
part.

 

3.07                                                               REPURCHASE AT OPTION
OF HOLDER UPON A FUNDAMENTAL CHANGE.

 

(A)                              If a Fundamental Change occurs, each
Holder of Securities shall have the right (the “Fundamental Change Repurchase Right”), at such Holder’s
option, to require the Company to repurchase (a “Repurchase Upon Fundamental Change”) all of such Holder’s Securities (or portions thereof that are
integral multiples of $1,000 in principal amount), on a date selected by the
Company (the “Fundamental Change Repurchase
Date”), which shall
be no later than thirty five (35) days after the date the Fundamental Change
Notice is mailed in accordance with Section 3.07(B),
at a price, payable in cash, equal to one hundred percent (100%) of the
principal amount of the Securities (or portions thereof) to be so repurchased,
plus accrued and unpaid interest, if any, to, but excluding, the Fundamental
Change Repurchase Date (the “Fundamental
Change Repurchase Price”),
upon:

 

(i)                                     delivery to the Company (if it is acting
as its own Paying Agent), or to a Paying Agent designated by the Company for
such purpose in the Fundamental Change Notice, no later than the close of
business on the Business Day immediately preceding the Fundamental Change
Repurchase Date, of a Purchase Notice, in the form set forth in the Securities
or any other form of written notice substantially similar thereto, in each
case, duly completed and signed, with appropriate signature guarantee, stating:

 

(a)                                  the certificate number(s) of the
Securities which the Holder will deliver to be repurchased, if such Securities
are Physical Securities;

 

25

 

(b)                                 the principal amount of Securities to be
repurchased, which must be $2,000 or an integral multiple of $1,000; and

 

(c)                                  that such principal amount of Securities
are to be repurchased pursuant to the terms and conditions specified in this Section 3.07; and

 

(ii)                                  delivery to the Company (if it is acting
as its own Paying Agent), or to a Paying Agent designated by the Company for
such purpose in the Fundamental Change Notice, at any time after the delivery
of such Purchase Notice, of such Securities (together with all necessary
endorsements) with respect to which the Fundamental Change Repurchase Right is
being exercised;

 

provider, however,
that if such Fundamental Change Repurchase Date is after a Record Date for the
payment of an installment of interest and on or before the related Interest
Payment Date, then the full amount of accrued and unpaid interest, if any, to,
but excluding, such Interest Payment Date shall be paid on such Interest
Payment Date to the Holder of record of such Securities at the close of
business on such Record Date (without any surrender of such Securities by such
Holder), and the Fundamental Change Repurchase Price shall not include any
accrued but unpaid interest.

 

If such Securities are held in book-entry form
through the Depositary, the delivery of any Purchase Notice, Fundamental Change
Notice or notice of withdrawal pursuant to Section 3.07(B)(x) shall
comply with applicable procedures of the Depositary.

 

Upon such delivery of Securities to the Company (if
it is acting as its own Paying Agent) or such Paying Agent, such Holder shall
be entitled to receive, upon request, from the Company or such Paying Agent, as
the case may be, a nontransferable receipt of deposit evidencing such delivery.

 

Notwithstanding anything herein to the contrary, any
Holder that has delivered the Purchase Notice contemplated by this Section 3.07(A) to the Company
(if it is acting as its own Paying Agent) or to a Paying Agent designated by
the Company for such purpose in the Fundamental Change Notice shall have the
right to withdraw such Purchase Notice by delivery, at any time prior to the
close of business on the Business Day immediately preceding the Fundamental
Change Repurchase Date (or, if there shall be a Default in the payment of the
Fundamental Change Repurchase, at any time during which such Default is
continuing), of a written notice of withdrawal to the Company (if acting as its
own Paying Agent) or the Paying Agent, which notice shall contain the
information specified in Section 3.07(B)(x).

 

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

 

(B)                                Within 20 Business Days after the
occurrence of a Fundamental Change, the Company shall mail, or cause to be
mailed, to all Holders of the Securities at their addresses shown in the
register of the Registrar, and to beneficial owners as required by applicable
law, a notice (the “Fundamental Change Notice”)
of the occurrence of such Fundamental Change and the Fundamental Change
Repurchase Right arising as a 

 

26

 

result
thereof.  The Company shall deliver a copy of the Fundamental Change
Notice to the Trustee and shall publish a notice containing all information
specified in such Fundamental Change Notice in a newspaper of general
circulation in New York, New York or publish such information on the Company’s
website or through such other public medium that the Company may use at that
time.  Each Fundamental Change Notice shall state:

 

(i)                                     the events causing the Fundamental Change;

 

(ii)                                  the date of such Fundamental Change;

 

(iii)                               the Fundamental Change Repurchase Date;

 

(iv)                              the last date on which the Fundamental
Change Repurchase Right may be exercised, which shall be the Business Day
immediately preceding the Fundamental Change Repurchase Date;

 

(v)                                 the Fundamental Change Repurchase Price;

 

(vi)                              the names and addresses of the Paying
Agent and the Conversion Agent;

 

(vii)                           the procedures which a Holder must follow to exercise
the Fundamental Change Repurchase Right;

 

(viii)                        that the Fundamental Change Repurchase Price for any
Security as to which a Purchase Notice has been given and not withdrawn will be
paid as promptly as practicable, but in no event after the later of such
Fundamental Change Repurchase Date and the time of book-entry transfer or
delivery of the Security (together with all necessary endorsements); provided, however,
that if such Fundamental Change Repurchase Date is after a Record Date for the
payment of an installment of interest and on or before the related Interest
Payment Date, then the accrued and unpaid interest, if any, to, but excluding,
such Interest Payment Date will be paid on such Interest Payment Date to the
Holder of record of such Security at the close of business on such Record Date
(without any surrender of such Securities by such Holder) and the Fundamental
Change Repurchase Price shall not include any accrued and unpaid interest;

 

(ix)                                that, except as otherwise provided herein
with respect to a Fundamental Change Repurchase Date that is after a Record
Date for the payment of an installment of interest and on or before the related
Interest Payment Date, on and after such Fundamental Change Repurchase Date
(unless there shall be a Default in the payment of the Fundamental Change
Repurchase Price), interest on Securities subject to Repurchase Upon
Fundamental Change will cease to accrue, and all rights of the Holders of such
Securities shall terminate, other than the right to receive, in accordance
herewith, the Fundamental Change Repurchase Price;

 

(x)                                   that a Holder will be entitled to
withdraw its election in the Purchase Notice prior to the close of business on
the Business Day immediately 

 

27

 

preceding the Fundamental Change Repurchase Date, or
such longer period as may be required by law, by means of a letter or telegram,
telex or facsimile transmission (receipt of which is confirmed and promptly
followed by a letter) setting forth (a) the name of such Holder, (b) a
statement that such Holder is withdrawing its election to have Securities
purchased by the Company on such Fundamental Change Repurchase Date pursuant to
a Repurchase Upon Fundamental Change, (c) the certificate number(s) of
such Securities to be so withdrawn, if such Securities are Physical Securities,
(d) the principal amount of the Securities of such Holder to be so
withdrawn, which amount must be $2,000 or an integral multiple of $1,000 and (e) the
principal amount, if any, of the Securities of such Holder that remain subject
to the Purchase Notice delivered by such Holder in accordance with this Section 3.07, which amount must be
$2,000 or an integral multiple of $1,000; provided,
however, that if there shall be a Default in the payment of the
Fundamental Change Repurchase Price, a Holder shall be entitled to withdraw its
election in the Purchase Notice at any time during which such Default is
continuing;

 

(xi)                                the Conversion Rate and any adjustments
to the Conversion Rate that will result from such Fundamental Change;

 

(xii)                             that Securities with respect to which a Purchase
Notice is given by a Holder may be converted pursuant to Article X only if such Purchase Notice
has been withdrawn in accordance with this Section 3.07;
and

 

(xiii)                          the CUSIP number or numbers, as the case may be, of the
Securities.

 

At the Company’s request, upon prior notice
reasonably acceptable to the Trustee, the Trustee shall mail such Fundamental
Change Notice in the Company’s name and at the Company’s expense; provided, however , that the form and
content of such Fundamental Change Notice shall be prepared by the Company.

 

No failure of the Company to give a Fundamental
Change Notice shall limit any Holder’s right pursuant hereto to exercise a
Fundamental Change Repurchase Right.

 

(C)                                Subject to the provisions of this Section 3.07, the Company shall pay,
or cause to be paid, the Fundamental Change Repurchase Price with respect to
each Security as to which the Fundamental Change Repurchase Right shall have
been exercised to the Holder thereof as promptly as practicable, but in no
event later than the later of the Fundamental Change Repurchase Date and the
time of book-entry transfer or when such Security is surrendered to the Paying
Agent; provided, however , that
if such Fundamental Change Repurchase Date is after a Record Date for the
payment of an installment of interest and on or before the related Interest
Payment Date, then the accrued and unpaid interest, if any, to, but excluding,
such Interest Payment Date will be paid on such Interest Payment Date to the Holder
of record of such Security at the close of business on such Record Date and the
Fundamental Change Repurchase Price shall not include any accrued and unpaid
interest.

 

28

 

(D)                               The Company shall, in accordance with Section 2.14, deposit with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust in accordance with Section 2.04)
money, in funds immediately available on the Fundamental Change Repurchase
Date, sufficient to pay the Fundamental Change Repurchase Price upon Repurchase
Upon Fundamental Change for all of the Securities that are to be repurchased by
the Company on such Fundamental Change Repurchase Date pursuant to a Repurchase
Upon Fundamental Change.  The Paying Agent shall return to the
Company, as soon as practicable, any money not required for that purpose.

 

(E)                                 Once the Fundamental Change Notice and
the Purchase Notice have been duly given in accordance with this Section 3.07, the Securities to be
repurchased pursuant to a Repurchase Upon Fundamental Change shall, on the
Fundamental Change Repurchase Date, become due and payable in accordance
herewith, and, on and after such date (unless there shall be a Default in the
payment of the Fundamental Change Repurchase Price), except as otherwise
provided herein with respect to a Fundamental Change Repurchase Date that is
after a Record Date for the payment of an installment of interest and on or
before the related Interest Payment Date, such Securities shall cease to bear
interest (whether or not book-entry transfer of the Securities has been made or
the Securities have been delivered to the Paying Agent), and all rights of the
relevant Holders of such Securities shall terminate, other than the right to
receive, in accordance herewith, such consideration and any other applicable
rights under those sections set forth in the proviso in Section 8.01.

 

(F)                                 Securities with respect to which a
Purchase Notice has been duly delivered in accordance with this Section 3.07 may be converted pursuant
to Article X only if such
Purchase Notice has been withdrawn in accordance with this Section 3.07.

 

(G)                                If any Security shall not be paid upon
book-entry transfer or surrender thereof for Repurchase Upon Fundamental
Change, the principal of, and accrued and unpaid interest on, such Security
shall, until paid, bear interest, payable in cash, at the rate borne by such
Security on the principal amount of such Security, and such Security shall be
convertible pursuant to Article X
if any Purchase Notice with respect to such Security is withdrawn pursuant to
this Section 3.07.

 

(H)                               Any Security which is to be submitted for
Repurchase Upon Fundamental Change only in part shall be delivered pursuant to
this Section 3.07 (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or its attorney duly authorized in writing,
with a medallion guarantee), and the Company shall promptly execute, and the
Trustee shall promptly authenticate and make available for delivery to the
Holder of such Security without service charge, a new Security or Securities,
of any authorized denomination as requested by such Holder, of the same tenor
and in aggregate principal amount equal to the portion of such Security not
duly submitted for Repurchase Upon Fundamental Change.

 

(I)                                    Notwithstanding anything herein to the
contrary, except in the case of an acceleration resulting from a Default by the
Company in the payment of the 

 

29

 

Fundamental Change
Repurchase Price, there shall be no purchase of any Securities pursuant to this
Section 3.07 on a Fundamental
Change Repurchase Date if, on such date, the principal amount of the Securities
shall have been accelerated in accordance with this Indenture and such
acceleration shall not have been rescinded on or prior to such date in
accordance with this Indenture.  The Paying Agent will promptly
return to the respective Holders thereof any Securities held by it during the
continuance of such an acceleration.

 

(J)                                   In connection with any Repurchase Upon
Fundamental Change, the Company shall, to the extent applicable (i) comply
with all applicable tender offer rules under the Exchange Act, including Rule 13e-4
and Regulation 14E thereunder, and with all other applicable laws; (ii) file
a Schedule TO or any other schedules required under the Exchange Act or any
other applicable laws; and (iii) otherwise comply with all applicable
United States federal and state securities laws in connection with any offer by
the Company to purchase the Securities.

 

IV.                                 COVENANTS

 

4.01                                                               PAYMENT OF
SECURITIES.

 

The Company shall pay all amounts due with respect
to the Securities on the dates and in the manner provided in the Securities and
this Indenture.  All such amounts shall be considered paid on the
date due if the Paying Agent holds (or, if the Company is acting as Paying
Agent, the Company has segregated and holds in trust in accordance with Section 2.04) on that date money
sufficient to pay the amount then due with respect to the Securities (unless
there shall be a Default in the payment of such amounts to the respective
Holder(s)).  The Company will pay, in money of the United States that
at the time of payment is legal tender for payment of public and private debts,
all amounts due in cash with respect to the Securities, which amounts shall be
paid (i) in the case of a Global Security, by wire transfer of immediately
available funds to the account designated by the Depositary or its nominee; (ii) in
the case of a Physical Security by a Holder of more than five million dollars
($5,000,000) in aggregate principal amount of Securities, by wire transfer of
immediately available funds to the account in the United States specified by
such Holder or, if such Holder does not specify an account, by mailing a check
to the address of such Holder set forth in the register of the Registrar; and (iii) in
the case of a Physical Security that is held by a Holder of five million
dollars ($5,000,000) or less in aggregate principal amount of Securities, by
mailing a check to the address of such Holder set forth in the register of the
Registrar.

 

The Company shall pay, in cash, interest on any
overdue amount (including, to the extent permitted by applicable law, overdue
interest) at the rate borne by the Securities.

 

4.02                                                               MAINTENANCE OF OFFICE
OR AGENCY.

 

The Company will maintain, or cause to be
maintained, in The Borough of Manhattan, The City of New York, an office or
agency (which may be an office of the 

 

30

 

Trustee or an Affiliate of
the Trustee, Registrar or co-Registrar) where Securities may be surrendered for
registration of transfer or exchange, payment or conversion.  The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency.  If at any time the
Company shall fail to maintain, or fail to cause to maintain, any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations and surrenders may be made or served at the Corporate Trust
Office of the Trustee.  The Company will maintain, or cause to be maintained,
in the Borough of Manhattan, The City of New York, an office or agency where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served, provided that such office or agency may instead
be at the principal office of the Company located in the United States.

 

The Company may also from time to time designate one
or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York
for such purposes.  The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

 

The Company hereby designates the office of the
Trustee in the Borough of Manhattan, The City of New York located on the Issue
Date at 45 Broadway, 14th Floor, New York, New York 10006, as an agency
of the Company in accordance with Section 2.03.

 

4.03                                                               RULE 144A INFORMATION
AND ANNUAL REPORTS.

 

(A)                              At any time when the Company is not
subject to the reporting requirements of the Exchange Act, the Company shall
promptly provide to the Trustee and shall, upon request, provide to any Holder,
beneficial owner or prospective purchaser of Securities or shares of Common
Stock issued upon conversion of any Securities, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act to
facilitate the resale of such Securities or shares of Common Stock pursuant to Rule 144A.  The
Company shall take such further action as any Holder or beneficial holder of
such Securities or shares of Common Stock may reasonably request in writing to
the extent required from time to time to enable such Holder or beneficial
holder to sell its Securities or shares of Common Stock in accordance with Rule 144A,
as such rule may be amended from time to time.

 

(B)                                The Company shall deliver to the Trustee,
no later than the time such report is required to be filed with the SEC
pursuant to the Exchange Act, a copy of each report the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act
(after giving effect to any grace period provided by Rule 12b-25 under the
Exchange Act), and shall otherwise comply with the requirements of TIA §314(a);
provided, however, that each such
report will be deemed to be so delivered to the Trustee if the Company files
such report with the SEC through the SEC’s EDGAR 

 

31

 

database no later
than the time such report is required to be filed with the SEC pursuant to the
Exchange Act (taking into account any applicable grace periods provided
thereunder).

 

(C)                                Delivery of such reports, information and
documents to the Trustee pursuant to this Section 4.03
is for informational purposes only, and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officer’s Certificates).

 

4.04                                                               COMPLIANCE
CERTIFICATE.

 

The Company shall deliver to the Trustee, within one
hundred and twenty (120) calendar days after the end of each fiscal year
of the Company, a certificate of two (2) or more Officers (one of whom
shall be the Chief Executive Officer, Chief Financial Officer or Chief
Accounting Officer of the Company), which certificate need not constitute an
Officer’s Certificate, complying with TIA Section, 314(a)(4) stating
whether or not the signatories to such Officer’s Certificate have knowledge of
any Default or Event of Default by the Company in performing any of its
obligations under this Indenture or the Securities.  If such
signatories do know of any such Default or Event of Default, then such certificate
shall describe the Default or Event of Default and its status.

 

4.05                                                               STAY, EXTENSION AND
USURY LAWS.

 

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

 

4.06                                                               CORPORATE EXISTENCE.

 

Subject to Article V,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, in accordance with its
organizational documents, and the rights (charter and statutory), licenses and
franchises of the Company; provided,
however, that the Company shall
not be required to preserve any such right, license or franchise if in the
judgment of the Board of Directors such preservation or existence is not
material to the conduct of business of the Company.

 

32

 

4.07                                                               NOTICE OF DEFAULT.

 

Upon the Company becoming
aware of the occurrence of any Default or Event of Default, the Company shall give
prompt written notice of such Default or Event of Default, and any remedial
action proposed to be taken, to the Trustee.

 

4.08                                                               FURTHER INSTRUMENTS
AND ACTS.

 

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

 

4.09                                                               ADDITIONAL INTEREST.

 

(A)                              If, at any time during the six-month
period beginning on, and including, the date which is six months after the last
date of original issuance of the Securities, the Company fails to timely file
any document or report that the Company 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
current reports on Form 8-K), 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 pay Additional Interest on the Securities at
a rate of 0.50% per annum of the principal amount of Securities outstanding for
each day during such period for which the Company’s failure to file has
occurred and is continuing or the Securities are not otherwise freely tradable
by Holders, other than the Company’s Affiliates.

 

(B)                                If, and for so long as, the Security
Private Placement Legend has not been removed from the Securities in accordance
with Section 2.16(B) or Section 2.17, the Securities are
assigned the restricted CUSIP number or the Securities are not otherwise freely
tradable by Holders other than the Company’s Affiliates (without restrictions
pursuant to U.S. securities laws or the terms of this Indenture or the
Securities), as of the 365th day after the last date of original issuance of
the Securities, the Company shall pay Additional Interest on the Securities at
a rate of 0.50% per annum of the principal amount of Securities outstanding for
each day after the 365th day after the last date of original issuance of the
Securities until (i) the Security Private Placement Legend has been
removed in accordance with Section 2.16(B) or
Section 2.17, (ii) the
Securities are assigned an unrestricted CUSIP number and (iii) the
Securities are otherwise freely tradable by Holders other than the Company’s
Affiliates (without restrictions pursuant to U.S. securities law or the terms
of this Indenture or the Securities).

 

(C)                                Additional Interest payable in accordance
with Sections  4.09(A) and 4.09(B) 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 and shall be in addition to, not in lieu of, any
Additional Interest that may accrue under Section 

 

33

 

6.02(B) as the sole remedy relating to the
Company’s failure to comply with Section 4.03(B).

 

(D)                               In the event that the Company is required
to pay Additional Interest to Holders of Securities (whether pursuant to this Section 4.09 or Section 6.02(B)), the Company shall provide written notice (“Additional Interest Notice”) to the Trustee
of its obligation to pay Additional Interest no later than fifteen (15)
calendar days prior to the proposed payment date for the Additional
Interest.  Each Additional Interest Notice shall set forth the amount
of Additional Interest to be paid by the Company on such payment
date.  The Trustee shall not at any time be under any duty or
responsibility to any Holder to determine the amount of Additional Interest, or
with respect to the nature, extent or calculation of the amount of Additional
Interest owed, or with respect to the method employed in such calculation of
the Additional Interest.

 

V.                                     SUCCESSORS

 

5.01                                                               WHEN COMPANY MAY MERGE,
ETC.

 

The Company shall not consolidate with, or merge
with or into, or sell, transfer, lease, convey or otherwise dispose of all or
substantially all of the consolidated property or assets of the Company to
another Person, whether in a single transaction or series of related
transactions, unless (i) the Company is the continuing corporation or such
other Person is a corporation organized and existing under the laws of the
United States of America, any state of the United States of America or the
District of Columbia, and such other Person assumes by supplemental indenture
all the obligations of the Company under the Securities and this Indenture and (ii) immediately
after giving effect to such transaction or series of transactions, no Default
or Event of Default shall exist.

 

For purposes of this Section 5.01, the sale, transfer, lease, conveyance or
disposition of all or substantially all of the properties or assets of one or
more Subsidiaries of the Company to another Person, which properties or assets,
if held by the Company instead of such Subsidiaries, would constitute all or
substantially all of the properties or assets of the Company on a consolidated
basis, shall be deemed to be the sale, transfer, lease, conveyance or
disposition of all or substantially all of the consolidated properties or
assets of the Company to another Person.

 

The Company shall deliver to the Trustee prior to
the consummation of the proposed transaction an Officer’s Certificate to the
foregoing effect and an Opinion of Counsel (which may rely upon such Officer’s
Certificate as to the absence of Defaults and Events of Default) stating that
the proposed transaction and such supplemental indenture will, upon
consummation of the proposed transaction, comply with this Indenture.

 

5.02                                                               SUCCESSOR
SUBSTITUTED.

 

In case of any such consolidation, merger or any
sale, transfer, lease, conveyance or other disposition of all or substantially
all of the consolidated property or assets of the Company and upon the
assumption by the successor Person, by supplemental indenture, 

 

34

 

executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and accrued and unpaid interest on all of the
Securities, the due and punctual payment of the Fundamental Change Repurchase
Price with respect to all Securities repurchased on each Fundamental Change
Repurchase Date, the due and punctual delivery or payment, as the case may be,
of any consideration due upon conversion of the Securities and the due and punctual
performance of all of the covenants and conditions of this Indenture and the
Securities to be performed by the Company, such successor Person shall succeed
to and be substituted for the Company, with the same effect as if it had been
named herein as the party of the first part, except in the case of a lease of
all or substantially all of the Company’s consolidated properties or
assets.  Such successor Person thereupon may cause to be signed, and may
issue either in its own name or in the name of the Company any or all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver,
or cause to be authenticated and delivered, any Securities that previously
shall have been signed and delivered by the Officers of the Company to the
Trustee for authentication, and any Securities that such successor Person
thereafter shall cause to be signed and delivered to the Trustee for that
purpose.  All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof. 
In the event of any such consolidation, merger or any sale, transfer, conveyance
or other disposition (but not in the case of a lease), upon compliance with
this Article V the Person
named as the “Company” in the first paragraph of this Indenture or any
successor that shall thereafter have become such in the manner prescribed in this
Article V may be dissolved,
wound up and liquidated at any time thereafter and, except in the case of a
lease, such Person shall be released from its liabilities as obligor and maker
of the Securities and its obligations under this Indenture shall terminate.

 

In case of any such consolidation, merger or any
sale, transfer, lease, conveyance or other disposition, such changes in
phraseology and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.

 

VI.                                 DEFAULTS AND REMEDIES

 

6.01                                                               EVENTS OF DEFAULT.

 

An “Event of Default”  occurs if:

 

(i)                                     the Company fails to pay the principal or
the Fundamental Change Repurchase Price of any Security when the same becomes
due and payable, whether on the Maturity Date or a Fundamental Change
Repurchase Date, upon acceleration or otherwise, if such failure continues for
a period of ten (10) days;

 

(ii)                                  the Company fails to pay an installment
of interest on any Security when due, if such failure continues for thirty (30)
days after the date when due;

 

35

 

(iii)                               the Company fails to satisfy its conversion
obligations upon exercise of a Holder’s conversion rights pursuant hereto, if
such failure continues for a period of ten (10) days;

 

(iv)                              the Company fails to timely provide
pursuant to Section 3.07(B) a
Fundamental Change Notice, as required by the provisions of this Indenture, or
fails to timely provide any notice pursuant to, and in accordance with, Section 10.01(B)(iii), Section 10.01(B)(iv) or Section 10.16(E);

 

(v)                                 the Company fails to comply with its
obligations under Article V;

 

(vi)                              the Company fails to comply with any
other term, covenant or agreement set forth in the Securities or this Indenture
and such failure continues for the period, and after the notice, specified in
the last paragraph of this Section 6.01;

 

(vii)                           the Company or any of its Subsidiaries defaults in the
payment when due, after the expiration of any applicable grace period, of
principal of, or premium, if any, or interest on, indebtedness for money
borrowed, in the aggregate principal amount then outstanding of twenty-five
million dollars ($25,000,000) or more, or the acceleration of indebtedness of
the Company or any of its Subsidiaries for money borrowed in such aggregate
principal amount or more so that it becomes due and payable before the date on
which it would otherwise become due and payable and such default is not cured
or waived, or such acceleration is not rescinded for the period, and after the
notice, specified in the last paragraph of this Section 6.01;

 

(viii)                        the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that in the aggregate would constitute a Significant
Subsidiary of the Company, pursuant to, or within the meaning of, any
Bankruptcy Law, insolvency law, or other similar law now or hereafter in effect
or otherwise, either:

 

(a)                                  commences a voluntary case,

 

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

 

(c)                                  consents to the appointment of a
Custodian of it or for all or substantially all of its property, or

 

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

 

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

 

(a)                                  is for relief against the Company or any
of its Significant Subsidiaries or any group of Subsidiaries that in the
aggregate would constitute a Significant Subsidiary of the Company in an
involuntary case or proceeding, or adjudicates the Company or any of its
Significant Subsidiaries or any group of 

 

36

 

Subsidiaries that in the aggregate would constitute a
Significant Subsidiary of the Company insolvent or bankrupt,

 

(b)                                 appoints a Custodian of the Company or
any of its Significant Subsidiaries or any group of Subsidiaries that in the
aggregate would constitute a Significant Subsidiary of the Company for all or
substantially all of the consolidated property of the Company or any such
Significant Subsidiary or any group of Subsidiaries that in the aggregate would
constitute a Significant Subsidiary of the Company, as the case may be, or

 

(c)                                  orders the winding up or liquidation of
the Company or any of its Significant Subsidiaries or any group of Subsidiaries
that in the aggregate would constitute a Significant Subsidiary of the Company,

 

and, in the case of each of the foregoing clauses  (a),
(b) and  (c) of this Section 6.01(x), the order or decree remains unstayed and
in effect for at least thirty (30) consecutive days.

 

The term “Bankruptcy
Law”  means Title 11, U.S. Code or any
similar U.S. Federal or State law for the relief of debtors, or any analogous
foreign law applicable to the Company or its Subsidiaries, as the case may
be.  The term “Custodian”  means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

 

A Default under clause
(vi) or (vii) above shall not be an Event of
Default until (I) the Trustee notifies the Company, or the Holders of at
least twenty five percent (25%) in aggregate principal amount of the Securities
then outstanding notify the Company and the Trustee in writing, of the Default
and (II) the Default is not cured within ninety (90) days in the case of clause  (vi),
or within thirty (30) days in the case of clause
(vii), after receipt of such
notice.  Such notice must specify the Default, demand that it be
remedied and state that the notice is a “Notice
of Default.”  If the Holders of at least twenty five percent
(25%) in aggregate principal amount of the outstanding Securities request the
Trustee to give such notice on their behalf, the Trustee shall do
so.  When a Default is cured, it ceases to exist for all purposes
under this Indenture.

 

6.02                                                               ACCELERATION.

 

(A)                              If an Event of Default (excluding an
Event of Default specified in Section 6.01(ix) or
(x) with respect to the
Company, but including an Event of Default specified in Section 6.01(ix) or (x) solely with respect to a
Significant Subsidiary of the Company or any group of Subsidiaries that in the
aggregate would constitute a Significant Subsidiary of the Company) occurs and
is continuing, the Trustee by notice to the Company, or the Holders of at least
twenty five percent (25%) in aggregate principal amount of the Securities then
outstanding by notice to the Company and the Trustee, may declare the
Securities to be immediately due and payable in full.  Upon such
declaration, the principal of, and any accrued and unpaid interest on, all
Securities shall be due and payable immediately.  If an Event of
Default specified in Section 6.01(ix) or
(x) with respect to the
Company (excluding, for purposes of this 

 

37

 

sentence, an Event
of Default specified in Section 6.01(ix) or
(x) solely with respect to a Significant
Subsidiary of the Company or any group of Subsidiaries that in the aggregate
would constitute a Significant Subsidiary of the Company) occurs, the principal
of, and accrued and unpaid interest on, all the Securities shall ipso facto become and be immediately 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 then outstanding by written notice to the Trustee may rescind
or annul an acceleration and its consequences if (A) the rescission would
not conflict with any order or decree, (B) all existing Events of Default,
except the nonpayment of principal or interest that has become due solely
because of the acceleration, have been cured or waived and (C) all amounts
due to the Trustee under Section 7.07
have been paid.

 

(B)                                Notwithstanding the foregoing, the sole
remedy for an Event of Default relating to failure to comply with Section 4.03(B) shall, for the
first 180 days immediately following the occurrence of such an Event of
Default, consist exclusively of the right to receive Additional Interest on the
Securities at a rate per year equal to (i) 0.25% of the outstanding
principal amount of Securities for the first 90 days following the occurrence
of such Event of Default and (ii) 0.50% of the outstanding principal
amount of Securities for the next 90 days after the first 90 days following the
occurrence of such Event of Default, in each case, payable in the same manner
and at the same time as the stated interest payable on the
Securities.  Such Additional Interest shall accrue on all outstanding
Securities from, and including, the date on which such Event of Default first
occurs to, and including, the 180th day thereafter (or such earlier date on which such
Event of Default shall have been cured or waived).  Additional
Interest payable pursuant to this Section 6.02(B) shall
be in addition to, not in lieu of, any Additional Interest payable pursuant to Section 4.09(A) and Section 4.09(B).  In
addition to the accrual of Additional Interest pursuant to this Section 6.02(B), on and after the 181st day immediately following an Event of
Default relating to a failure to comply with Section 4.03(B),
such Additional Interest will cease to accrue and, if such Event of Default has
not been cured or waived prior to such 181st day, the Securities will be subject to acceleration
as provided above.  The provisions of this Section 6.02(B) shall not affect the rights of
Holders in the event of the occurrence of any other Event of Default.

 

6.03                                                               OTHER REMEDIES.

 

Notwithstanding any other provision of this
Indenture, if an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the payment
of amounts due with respect to the Securities or to enforce the performance of
any provision of the Securities or this Indenture.

 

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

 

38

 

6.04                                                               WAIVER OF PAST
DEFAULTS.

 

Subject to Sections
6.07 and 9.02, the Holders of a majority in
aggregate principal amount of the Securities then outstanding may, by notice to
the Trustee, waive any past Default or Event of Default and its consequences,
other than (i) a Default or Event of Default in the payment of the
principal of, or interest on, any Security, or in the payment of the
Fundamental Change Repurchase Price, (ii) a Default or Event of Default
arising from a failure by the Company to convert any Securities in accordance
with this Indenture or (iii) any Default or Event of Default in respect of
any provision of this Indenture or the Securities which, under Section 9.02, cannot be modified or
amended without the consent of the Holder of each outstanding Security
affected.  When a Default or an Event of Default is waived, it is
cured and ceases to exist for all purposes under this Indenture.

 

6.05                                                               CONTROL BY MAJORITY.

 

The Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it.  However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
is unduly prejudicial to the rights of other Holders or would involve the
Trustee in personal liability unless the Trustee is offered indemnity
reasonably satisfactory to it; provided
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.

 

6.06                                                               LIMITATION ON SUITS.

 

Except with respect to any proceeding instituted in
accordance with Section 6.07,
a Securityholder shall not have any right to institute any proceeding under
this Indenture, or for the appointment of a receiver or a trustee, or for any
other remedy under this Indenture unless:

 

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

 

(ii)                                  the Holders of at least twenty five
percent (25%) in aggregate principal amount of the Securities then outstanding
make a written request to the Trustee to pursue the remedy;

 

(iii)                               such Holder or Holders offer and, if requested,
provide to the Trustee indemnity reasonably satisfactory to the Trustee against
any loss, liability or expense to or of the Trustee in connection with pursuing
such remedy; and

 

(iv)                              the Trustee does not comply with the
request within sixty (60) days after receipt of such notice, request and offer
of indemnity, and during such sixty (60) day period, the Holders of a majority
in aggregate principal amount of the Securities then outstanding do not give
the Trustee a direction inconsistent with the request.

 

39

 

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

 

6.07                                                               RIGHTS OF HOLDERS TO
RECEIVE PAYMENT AND TO CONVERT SECURITIES.

 

Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of all amounts (including
any principal, interest or the Fundamental Change Repurchase Price) due with
respect to the Securities, on or after the respective due dates as provided
herein, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Holder.

 

In addition, notwithstanding any other provision of
this Indenture, the right of any Holder to convert the Security in accordance
with this Indenture, or to bring suit for the enforcement of such right, shall
not be impaired or affected without the consent of the Holder.

 

6.08                                                               COLLECTION SUIT BY
TRUSTEE.

 

If an Event of Default specified in Section 6.01  (i) or (ii) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount due with respect to the Securities, including any unpaid
and accrued interest.

 

6.09                                                               TRUSTEE MAY FILE
PROOFS OF CLAIM.

 

The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee, any predecessor Trustee and the Securityholders allowed
in any judicial proceedings relative to the Company or its creditors or
properties.

 

The Trustee may 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 judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07.

 

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

 

40

 

6.10                                                               PRIORITIES.

 

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

 

First:                                                              to the Trustee for amounts due under Section 7.07;

 

Second:                                              to Securityholders for all amounts due
and unpaid on the Securities, without preference or priority of any kind,
according to the amounts due and payable on the Securities; and

 

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

 

The Trustee, upon prior written notice to the
Company, may fix a record date and payment date for any payment by it to
Securityholders pursuant to this Section 6.10.  At
least fifteen (15) days before each such record date, the Trustee shall mail to
each Holder and the Company a written notice that states such record date and
payment date and the amount of such payment.

 

6.11                                                               UNDERTAKING FOR
COSTS.

 

In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit other than the Trustee of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than ten
percent (10%) in aggregate principal amount of the outstanding Securities.

 

VII.                             TRUSTEE

 

7.01                                                               DUTIES OF TRUSTEE.

 

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

 

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

 

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

 

(ii)                                  in the absence of bad faith, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions which by any provision 

 

41

 

hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture (but
need not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).

 

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

 

(i)                                     this paragraph does not limit the effect
of paragraph (B) of this Section 7.01;

 

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

 

(iii)                               the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05;
and

 

(iv)                              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.

 

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

 

(E)                                 The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Company.  Money held in trust by the Trustee shall be
segregated from other funds as directed in writing by the Company or as required
by law and shall be invested by the Trustee pursuant to the written
instructions of the Company reasonably satisfactory to the Trustee.

 

7.02                                                               RIGHTS OF TRUSTEE.

 

(A)                              Subject to Section 7.01, the Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person.  The Trustee need not investigate any fact or
matter stated in the document; if, however, the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled during normal
business hours to examine the relevant books, records and premises of the
Company, personally or by agent or attorney upon reasonable prior notice, 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.

 

(B)                                Before the Trustee acts or refrains from
acting, it may require an Officer’s Certificate and/or an Opinion of
Counsel.  The Trustee shall not be liable for 

 

42

 

any action it
takes or omits to take in good faith in reliance on such Officer’s Certificate
or Opinion of Counsel.

 

(C)                                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 shall be
sufficiently evidenced by a Board Resolution.

 

(D)                               The Trustee may consult with counsel of
its own selection, and the 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.

 

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

 

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

 

(G)                                Except with respect to Section 4.01, the Trustee shall have
no duty to inquire as to the performance of the Company with respect to the
covenants contained in Article IV.  In
addition, the Trustee shall not be deemed to have knowledge of an Event of
Default except (i) any Default or Event of Default occurring pursuant to Sections  6.01(i) or
(ii) or (ii) any Default
or Event of Default of which a Responsible Officer of the Trustee who shall
have direct responsibility for the administration of this Indenture shall have
received written notification or obtained actual knowledge.  Delivery of reports, information and
documents to the Trustee under Article IV
(other than Sections  4.04 and 4.07)
is for informational purposes only and the Trustee’s receipt of the foregoing shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely on Officer’s Certificates).

 

(H)                               Subject to Section 7.01(A), the Trustee shall be under no obligation
to exercise any of the rights or powers vested by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture unless such
Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.

 

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

 

(J)                                   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 

 

43

 

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.

 

7.03                                                               INDIVIDUAL RIGHTS OF
TRUSTEE.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or any of its Affiliates with the same rights the Trustee would have if
it were not Trustee.  Any Securities Agent may do the same with like
rights.  The Trustee, however, must comply with Sections  7.10
and 7.11.

 

7.04                                                               TRUSTEE’S DISCLAIMER.

 

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

 

7.05                                                               NOTICE OF DEFAULTS.

 

If a Default or Event of Default occurs and is
continuing as to which the Trustee has received notice pursuant to the
provisions of this Indenture, or as to which a Responsible Officer of the
Trustee who shall have direct responsibility for the administration of this
Indenture shall have actual knowledge, then the Trustee shall mail to each
Holder a notice of the Default or Event of Default within thirty (30) days
after receipt of such notice or after acquiring such knowledge, as applicable,
unless such Default or Event of Default has been cured or waived; provided, however,
that, except in the case of a Default or Event of Default in payment or
delivery of any amounts due (including principal, interest, the Fundamental
Change Repurchase Price or the consideration due upon conversion) with respect
to any Security, the Trustee may withhold such notice if, and so long as it in
good faith determines that, withholding such notice is in the best interests of
Holders.

 

7.06                                                               REPORTS BY TRUSTEE TO
HOLDERS.

 

Within sixty (60) days after each [March] 1,
beginning with [March] 1, 2010, the Trustee shall mail to each Securityholder
if required by TIA §313(a) a brief report dated as of such [March] 1 that
complies with TIA §313(a).  In such event, the Trustee also shall
comply with TIA §313(b).

 

A copy of each report at the time of its mailing to
Securityholders shall be mailed by first class mail to the Company and filed by
the Trustee with the SEC and each stock exchange, if any, on which the
Securities are listed.  The Company shall promptly notify the Trustee
of the listing or delisting of the Securities on or from any stock exchange.

 

44

 

7.07                                                               COMPENSATION AND
INDEMNITY.

 

The Company shall pay to the Trustee from time to
time such compensation for its services as shall be agreed upon in
writing.  The Trustee’s compensation shall not be limited by any law
on compensation of a trustee of an express trust.  The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it pursuant to, and in accordance with, any provision hereof,
except for any such expenses as shall have been caused by the Trustee’s own
negligence, bad faith or willful misconduct.  Such expenses shall
include the reasonable compensation and out-of-pocket expenses of the Trustee’s
agents and counsel.  The Trustee shall provide the Company with
reasonable notice of any expense not in the ordinary course of business.

 

The Company shall indemnify each of the Trustee,
each predecessor Trustee and their respective agents for, and hold each of them
harmless against, any and all loss, liability, damage, claim or expense
(including the reasonable fees and expenses of counsel and taxes other than
those based upon the income of the Trustee) incurred by it in connection with
the acceptance or administration of this trust and the performance of its
duties hereunder or in connection with enforcing the provisions of this Section 7.07, including the reasonable
costs and expenses of defending itself against any claim (whether asserted by
the Company, any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers and duties
hereunder.  The Company need not pay for any settlement made without
its consent.  The Trustee shall notify the Company promptly of any
claim for which it may seek indemnification, provided, however, the failure of
the Trustee to deliver such notice shall not limit the Company’s obligation to
indemnify the Trustee as provided hereunder.  The Company need not
reimburse any expense or indemnify against any loss or liability incurred by
the Trustee through the Trustee’s own gross negligence, bad faith or willful
misconduct.

 

To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee, except that held in trust to pay amounts due on particular Securities.

 

The indemnity obligations of the Company with
respect to the Trustee provided for in this Section 7.07
shall survive any resignation or removal of the Trustee and the termination and
discharge of this Indenture.

 

When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(ix) or
(x) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

 

7.08                                                               REPLACEMENT OF
TRUSTEE.

 

A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

The Trustee may resign by so notifying the Company
in writing thirty (30) days prior to such resignation.  The Holders
of a majority in aggregate principal amount of the 

 

45

 

Securities then outstanding
may remove the Trustee by so notifying the Trustee and the Company in writing
and may appoint a successor Trustee with the Company’s consent.  The
Company may remove the Trustee if:

 

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

 

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

 

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

 

(iv)                              the Trustee becomes incapable of acting.

 

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

 

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

 

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

 

A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to the
Company.  Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture.  The
successor Trustee shall mail a notice of its succession to
Securityholders.  The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.

 

7.09                                                               SUCCESSOR TRUSTEE BY
MERGER, ETC.

 

If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act shall be
the successor Trustee, if such successor corporation is otherwise eligible (i) hereunder
and (ii) under the TIA.

 

7.10                                                               ELIGIBILITY;
DISQUALIFICATION.

 

There shall at all times be a Trustee hereunder
which (i) is an entity organized and doing business under the laws of the
United States of America or of any state thereof or the District of Columbia, (ii) is
authorized under such laws to exercise corporate trustee power, (iii) is
subject to supervision or examination by federal or state authorities and (iv) has
a combined capital and surplus of at least $50 million as set forth in its most
recent 

 

46

 

published annual report of
condition.  The Trustee shall comply with TIA §310(b).  Nothing
in this Indenture shall prevent the Trustee from filing with the SEC the
application referred to in the penultimate paragraph of TIA §310(b).

 

7.11                                                               PREFERENTIAL
COLLECTION OF CLAIMS AGAINST COMPANY.

 

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

 

VIII.                         DISCHARGE OF
INDENTURE

 

8.01                                                               TERMINATION OF THE
OBLIGATIONS OF THE COMPANY.

 

This Indenture shall cease to be of further effect,
and the Trustee shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, if (i) either (a) all outstanding
Securities (other than Securities replaced pursuant to Section 2.07 hereof) have been
delivered to the Trustee for cancellation or (b) all outstanding
Securities have become due and payable at their scheduled maturity, upon
conversion or upon Repurchase Upon Fundamental Change, and in either case the
Company irrevocably deposits, prior to the applicable due date, with the
Trustee or the Paying Agent (if the Paying Agent is not the Company or any of
its Affiliates) cash or, in the case of conversion, cash and/or shares of
Common Stock, if any, sufficient to pay all amounts due and owing on all
outstanding Securities (other than Securities replaced pursuant to Section 2.07 hereof) on the Maturity
Date, the relevant settlement date of any conversion or the Fundamental Change
Repurchase Date, as the case may be; (ii) the Company pays to the Trustee
all other sums payable hereunder by the Company; (iii) no Default or Event
of Default with respect to the Securities shall exist on the date of such
deposit under clause (i)(b) above;
(iv) such deposit under clause (i)(b) above
shall not result in a breach or violation of, or constitute a Default or Event
of Default under, this Indenture; and (v) the Company has delivered to the
Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with; provided, however,
that Sections  2.02, 2.03,
2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.15, 2.16, 2.17, 3.07,
4.01, 4.02, 4.05, 4.09, 7.07,
7.08,  7.10, 7.11, 13.02, 13.09
and 13.14 and Articles  VIII,
X,  XI and XII shall
survive any discharge of this Indenture until such time as the Securities have
been paid in full and there are no Securities outstanding.

 

8.02                                                               APPLICATION OF TRUST
MONEY.

 

The Trustee shall hold in trust all money deposited
with it pursuant to Section 8.01
and shall apply such deposited money through the Paying Agent and in accordance
with this Indenture to the payment of amounts due on the Securities.

 

47

 

8.03                                                               REPAYMENT TO COMPANY.

 

The Trustee and the Paying Agent shall promptly
notify the Company of, and pay to the Company upon the request of the Company,
any excess money held by them at any time.  The Trustee or the Paying
Agent, as the case may be, shall provide written notice to the Company of any
money that has been held by it and has, for a period of two (2) years,
remained unclaimed for the payment of the principal of, or any accrued and
unpaid interest on, the Securities.  The Trustee and the Paying Agent
shall pay to the Company upon the written request of the Company any money held
by them for the payment of the principal of, or any accrued and unpaid interest
on, the Securities that remains unclaimed for two (2) years; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, shall, at the written direction and expense of the Company, cause to
be published (in no event later than five (5) days after the Company
requests repayment) once in a newspaper of general circulation in the City of
New York or cause to be mailed to each Holder, notice stating that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than thirty (30) days from the date of such publication or mailing, any
unclaimed balance of such money then remaining will be repaid to the
Company.  After payment to the Company, Securityholders entitled to
the money must look to the Company for payment as general creditors, subject to
applicable law, and all liability of the Trustee and the Paying Agent with
respect to such money and payment shall, subject to applicable law, cease.

 

8.04                                                               REINSTATEMENT.

 

If the Trustee or Paying Agent is unable to apply
any money in accordance with Sections
8.01 and 8.02 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Sections  8.01
and 8.02 until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Sections  8.01 and 8.02;
provided, however, that if the Company has made any
payment of amounts due with respect to any Securities because of the
reinstatement of its obligations, then the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
held by the Trustee or Paying Agent.

 

IX.                                AMENDMENTS

 

9.01                                                               WITHOUT CONSENT OF
HOLDERS.

 

The Company, with the consent of the Trustee, may
amend or supplement this Indenture or the Securities without notice to or the
consent of any Securityholder:

 

(i)                                     to comply with Section 5.01 or Section 10.13;

 

(ii)                                  to secure the obligations of the Company
in respect of the Securities;

 

(iii)                               to evidence and provide for the appointment of a
successor Trustee in accordance with Section 7.08;

 

48

 

(iv)                              to comply with the provisions of any
clearing agency, clearing corporation or clearing system, or the requirements
of the Trustee or the Registrar, relating to transfers and exchanges of the
Securities pursuant to this Indenture;

 

(v)                                 to add to the covenants of the Company
described in this Indenture for the benefit of Securityholders or to surrender
any right or power conferred upon the Company; or

 

(vi)                              to make provision with respect to
adjustments to the Conversion Rate as required by this Indenture or to increase
the Conversion Rate in accordance with this Indenture.

 

In addition, the Company
and the Trustee may enter into a supplemental indenture without the consent of
Holders of the Securities to (x) cure any ambiguity, defect, omission or
inconsistency in this Indenture in a manner that does not, individually or in
the aggregate with all other changes, materially and adversely affect the
rights of any Holder in any respect or (y) to conform the Indenture or the
Securities to the description thereof contained in the Offering Memorandum
under the heading “Description of notes,” as supplemented by the related
pricing term sheet.

 

9.02                                                               WITH CONSENT OF
HOLDERS.

 

The
Company may amend or supplement this Indenture or the Securities with the written
consent of the Trustee and the Holders of at least a majority in aggregate
principal amount of the outstanding Securities (including, without limitation,
consents obtained from Holders in connection with a purchase of, or tender or
exchange offer for, Securities).  Subject to Sections 6.04 and 6.07, the Holders of a majority in
aggregate principal amount of the outstanding Securities may, by notice to the
Trustee, waive by consent (including, without limitation, consents obtained
from Holders in connection with a purchase of, or tender or exchange offer for,
Securities) compliance by the Company with any provision of this Indenture or
the Securities without notice to any other
Securityholder.  Notwithstanding the foregoing or anything herein to
the contrary, without the consent of the Holder of each outstanding Security
affected, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04, may not:

 

(i)                                     change the stated maturity of the
principal of, or the payment date of any installment of interest on, any
Security;

 

(ii)                                  reduce the principal amount of, or any
interest on, any Security;

 

(iii)                               change the place, manner or currency of payment of
principal of, or any interest on, any Security;

 

(iv)                              impair the right to institute suit for
the enforcement of any delivery or payment on, or with respect to, or due upon
the conversion of, any Security;

 

49

 

(v)                                 modify, in a manner adverse to Holders,
the provisions with respect to the right of Holders pursuant to Section 3.07 to require the Company to
repurchase Securities upon the occurrence of a Fundamental Change;

 

(vi)                              modify the provisions of Section 2.18 in a manner adverse to
Holders;

 

(vii)                           adversely affect the right of Holders to convert
Securities in accordance with Article X;

 

(viii)                        reduce the percentage in aggregate principal amount of
outstanding Securities whose Holders must consent to a modification to or
amendment of any provision of this Indenture or the Securities;

 

(ix)                                reduce the percentage in aggregate
principal amount of outstanding Securities whose Holders must consent to a
waiver of compliance with any provision of this Indenture or the Securities or
a waiver of any Default or Event of Default; or

 

(x)                                   modify the provisions of this Indenture
with respect to modification and waiver (including waiver of a Default or an
Event of Default), except to increase the percentage required for modification
or waiver or to provide for the consent of each affected Holder.

 

Promptly after an amendment, supplement or waiver
under Section 9.01 or this Section 9.02 becomes effective, the
Company shall mail, or cause to be mailed, to Securityholders a notice briefly
describing such amendment, supplement or waiver.  Any failure of the
Company to mail such notice shall not in any way impair or affect the validity
of such amendment, supplement or waiver.

 

It shall not be necessary for the consent of the
Holders under this Section 9.02
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.

 

9.03                                                               [RESERVED]

 

9.04                                                               REVOCATION AND EFFECT
OF CONSENTS.

 

Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder is a continuing consent by the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder’s Security, even if notation
of the consent is not made on any Security.  However, any such Holder
or subsequent Holder may revoke the consent as to its Security or portion of a
Security if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.

 

After an amendment, supplement or waiver becomes
effective with respect to the Securities, it shall bind every Holder unless
such amendment, supplement or waiver makes a change that requires, pursuant to Section 9.02, the consent of each
Holder 

 

50

 

affected.  In that
case, the amendment, supplement or waiver shall bind each Holder of a Security
who has consented to it and, provided that notice of such amendment, supplement
or waiver is reflected on a Security that evidences the same debt as the
consenting Holder’s Security, every subsequent Holder of a Security or portion
of a Security that evidences the same debt as the consenting Holder’s Security.

 

Nothing in this Section 9.04
shall impair the Company’s rights pursuant Section 9.01
to amend this Indenture or the Securities without the consent of any
Securityholder in the manner set forth in, and permitted by, such Section 9.01.

 

9.05                                                               NOTATION ON OR
EXCHANGE OF SECURITIES.

 

If an amendment, supplement or waiver changes the
terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee.  The Trustee may place an appropriate
notation on the Security as directed and prepared by the Company about the
changed terms and return it to the Holder.  Alternatively, if the
Company so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security that reflects the changed terms.

 

9.06                                                               TRUSTEE PROTECTED.

 

The Trustee shall sign any amendment, supplemental
indenture or waiver authorized pursuant to this Article IX; provided,
however, that the Trustee need
not sign any amendment, supplement or waiver authorized pursuant to this Article IX that adversely affects the
Trustee’s rights, duties, liabilities or immunities.  The Trustee
shall be entitled to receive and conclusively rely upon an Opinion of Counsel
as to legal matters and an Officer’s Certificate as to factual matters that any
supplemental indenture, amendment or waiver is permitted or authorized pursuant
to this Indenture.

 

9.07                                                               EFFECT OF SUPPLEMENTAL
INDENTURES.

 

Upon the due
execution and delivery of any supplemental indenture in accordance with this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes, and, except as set forth in Sections 9.02 and 9.04, every Holder of Securities shall be
bound thereby.

 

X.                                    CONVERSION

 

10.01                                                         CONVERSION PRIVILEGE.

 

(A)                              Subject to the provisions of Section 3.07 and Section 10.02, the Securities shall be
convertible (1) prior to the close of business on the second Business Day
immediately preceding January 3, 2015, upon satisfaction of one or more of
the conditions described in Section 10.01(B) and
(2) at any time from, and including, January 3, 2015 to, and including,
the second Business Day immediately preceding the Maturity Date, irrespective
of the conditions described in Section 10.01(B),
in each case, into cash, shares of Common Stock, or a combination thereof, as
described in Section 10.02,
in accordance with this Article X.

 

51

 

(B)                               (i)     Prior to the
close of business on the second Business Day immediately preceding January 3,
2015, Holders may surrender their Securities for conversion during any fiscal
quarter after the fiscal quarter ending March 31, 2010 (and only during such
fiscal quarter), if the Last Reported Sale Price of the Common Stock for each
of twenty (20) or more Trading Days in a period of thirty (30) consecutive
Trading Days ending on the last Trading Day of the immediately preceding fiscal
quarter exceeds the Conversion Trigger Price in effect on the last Trading Day
of the immediately preceding fiscal quarter (the “Sale Price Condition”).  The
Board of Directors will make appropriate adjustments to the Last Reported Sale
Price, in its good faith determination, to account for any adjustment to the
Conversion Rate that becomes effective, or any event requiring an adjustment to
the Conversion Rate where the Ex Date of the event occurs, during the thirty
(30) consecutive Trading Day period described in the preceding
sentence.  The Company shall determine at the beginning of each
fiscal quarter commencing after March 31, 2010 whether the Securities may
be surrendered for conversion in accordance with this Section 10.01(B)(i) and shall
notify the Conversion Agent and the Trustee within ten (10) Business Days
of the first day of such fiscal quarter if the Securities become convertible in
accordance with this Section 10.01(B)(i).

 

(ii)                                  Prior to January 1, 2015, Holders may
surrender their Securities for conversion during the five (5) consecutive
Business Days immediately after any ten (10) consecutive Business Day
period (the “Security Measurement Period”) in which the Trading Price per
$1,000 principal amount of Securities, as determined following a request by a
Holder of Securities in accordance with the procedures set forth in this Section 10.01(B)(ii), for each Trading
Day in such Security Measurement Period was equal to or less than 97% of the
Conversion Value of the Securities on such Trading Day (the “Trading Price Condition”).  The
Trading Prices shall be determined by the Bid Solicitation Agent pursuant to
this Section 10.01(B)(ii) and
the definition of Trading Price set forth in this Indenture.  The
Company shall provide written notice to the Bid Solicitation Agent of the two
independent nationally recognized securities dealers selected by the Company
pursuant to the definition of Trading Price, along with appropriate contact
information for each. The Bid Solicitation Agent shall have no obligation to
determine the Trading Price of the Securities in accordance with this Section 10.01(B)(ii) unless
requested by the Company, and the Company shall have no obligation to make such
request unless a Holder of Securities then outstanding provides the Company
with reasonable evidence that the Trading Price per $1,000 principal amount of
Securities would be equal to or less than 97% of the Conversion Value of the
Securities.  Promptly after receiving such evidence, the Company
shall instruct the Bid Solicitation Agent to determine the Trading Price of the
Securities beginning on the next Trading Day and on each of successive Trading
Day until the Trading Price Condition is no longer satisfied.  If the
Company does not so instruct the Bid Solicitation Agent to obtain bids when required
pursuant to this Section 10.01(B)(ii),
the Trading Price per $1,000 principal amount of the Securities shall be deemed
to be equal to 97% of the Conversion Value of the Securities on each Trading
Day that the Company fails to do so.  If, at any time after the
Trading Price Condition set forth above has been met, the Trading Price per
$1,000 principal amount of Securities is greater than 97% of the 

 

52

 

Conversion Value, the Company shall so notify the
Holders of the Securities, the Trustee and the Conversion Agent (if other than
the Trustee).

 

(iii)                               If the Company is party to a transaction described in
clause (2) of the definition of Fundamental Change (without giving effect
to the proviso in such clause or the proviso set forth in the definition
thereof relating to Publicly Traded Securities), the Company must notify
Holders of such an event and of their rights under this clause (iii), at least
15 Scheduled Trading Days prior to the anticipated effective date for such
transaction. Once the Company has given such notice, Holders may surrender
Securities for conversion at any time until seven Scheduled Trading Days after
the actual effective date of such transaction or, if later, the related Fundamental
Change Purchase Date.  A Holder may
surrender all or a portion of such Holder’s Securities for conversion, if a
Fundamental Change of the type described in clause (1) or (3) in the
definition thereof occurs. In such event, Holders may surrender Securities for
conversion at any time beginning on the actual Effective Date of such
Fundamental Change until and including the date which is seven Scheduled
Trading Days after the actual effective date of such transaction or, if later,
until the related Fundamental Change Purchase Date.

 

(iv)                              If the Company elects to:

 

(a)                                 distribute to all or substantially all
holders of Common Stock any rights or warrants entitling them, for a period of
not more than forty five (45) days after the record date of such distribution,
to purchase or subscribe for shares of Common Stock at a price per share less
than the average of the Last Reported Sale Prices of the Common Stock over the
ten (10) consecutive Trading Day period ending on the Trading Day
immediately preceding the Ex Date for such distribution; or

 

(b)                                 distribute to all or substantially all
holders of Common Stock the Company’s assets, debt securities or rights to
purchase the Company’s securities, which distribution has a per share value, as
reasonably determined by the Board of Directors, exceeding 15% of the Last
Reported Sale Price of the Common Stock on the Trading Day preceding the date
of announcement of such distribution,

 

then, in each case, the Company shall mail to Holders
and the Trustee written notice at least fifteen (15) Business Days before the
Ex Date for such distribution.  Once the Company has given such
notice, Holders may surrender Securities for conversion at any time until the
earlier of the close of business on the Business Day immediately preceding the
Ex Date and the Company’s announcement that such distribution will not take
place, even if the Securities are not otherwise convertible at such time.

 

(C)                               The initial Conversion Rate shall be
148.3856 shares of Common Stock per $1,000 principal amount of
Securities.  The Conversion Rate shall be subject to adjustment in
accordance with Sections  10.06 through 10.15.

 

(D)                               A Holder may convert a portion of the
principal amount of a Security if such portion is $2,000 principal amount or an
integral multiple of $1,000 principal 

 

53

 

amount.  Provisions
of this Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of such Security.

 

(E)                                If the Securities shall be convertible in
accordance with this Section 10.01,
the Company shall provide written notice to the Trustee, the Conversion Agent
(if other than the Trustee) and Holders, at the addresses appearing on the
Registrar’s books, and the Company shall publicly announce, through a reputable
national newswire service, that the Securities have become convertible,
stating, among other things:

 

(i)                                     the event causing the Securities to
become convertible;

 

(ii)                                  the time during which the Securities
shall be convertible as a result of that event;

 

(iii)                               if that event is a transaction described under Section 10.01(B)(iii) or Section 10.01(B)(iv), the anticipated
effective date of the transaction; and

 

(iv)                              the procedures Holders must follow to
convert their Securities, including the name and address of the Conversion
Agent.

 

The Company shall mail
the notice, and make the public announcement, as soon as practicable, but in no
event later than the open of business on the Business Day immediately following
the date the Securities become convertible as a result of the event.

 

10.02                                                     CONVERSION PROCEDURE
AND PAYMENT UPON                                         CONVERSION.

 

(A)                               To convert a Security, a Holder must (i) complete
and manually sign the Conversion Notice, with appropriate signature guarantee,
or facsimile of the Conversion Notice and deliver the completed Conversion
Notice to the Conversion Agent, (ii) surrender the Security to the
Conversion Agent, (iii) furnish appropriate endorsements and transfer
documents if required by the Registrar or Conversion Agent, (iv) pay the
amount of interest, if any, required by Section 10.02(E) and
(v) pay any tax or duty if required pursuant to Section 10.04.  If a Holder holds a beneficial
interest in a Global Security, to convert such Security, the Holder must comply
with clauses (iv) and (v) above and the Depositary’s procedures for
converting a beneficial interest in a Global Security.

 

Upon conversion of a
Holder’s Security, the Company shall pay or deliver, as the case may be,
through the Conversion Agent, shares of Common Stock (together with cash in
lieu of any fractional share), cash, or a combination thereof (together with
cash in lieu of any fractional share) as set forth in this Section 10.02(A).  The
Company shall inform Holders in writing through the Trustee of its election to
deliver shares of Common Stock (together with cash in lieu of any fractional
share), pay cash or deliver and pay, as the case may be, a combination thereof
(together with cash in lieu of any fractional share) upon conversion of any
Securities (and the Specified Cash Amount, if applicable, as described in the
immediately succeeding paragraph):

 

54

 

(x)                                 in respect of
Securities converted during the period beginning on, and including, the
twenty-second (22nd) Business Day immediately preceding the Maturity Date and
ending on, and including the Business Day immediately preceding the Maturity
Date, no later than the twenty-third (23rd) Business Day immediately preceding
the Maturity Date; and

 

(y)                                 in all other cases,
no later than two Business Days following the applicable Conversion Date.

 

If, in respect of any conversion of Securities, the
Company has not irrevocably elected Net Share Settlement (as described in Section 10.02(B)), and the Company
does not give notice (including notice of the Specified Cash Amount, if
applicable) within the time periods described in the immediately preceding
sentence as to how it intends to settle its conversion obligation with respect
to such Securities, the Company shall satisfy such conversion obligation by
delivering solely shares of Common Stock (other than solely cash in lieu of any
fractional share).

 

If the Company chooses to
satisfy a portion (but not all) of its conversion obligation by paying cash
(other than solely cash in lieu of any fractional share), or if the Company has
irrevocably elected Net Share Settlement as described in Section 10.02(B), the Company shall
notify the converting Holder(s) during the periods set forth in the
immediately preceding paragraph of the amount to be satisfied in cash as a
fixed dollar amount per $1,000 principal amount of Securities (the “Specified Cash Amount”); provided
that if the Company has previously irrevocably elected Net Share Settlement as
described in Section 10.02(B),
the Specified Cash Amount must be at least equal to $2,000.  If,
subsequent to the Company irrevocably electing Net Share Settlement or electing
to satisfy a portion (but not all) of its conversion obligation by paying cash
(other than solely cash in lieu of any fractional share), the Company fails to
timely notify converting Holders of the Specified Cash Amount, the Specified
Cash Amount shall be deemed to be $2,000.

 

The Company shall treat all converting Holders with
the same Conversion Date in the same manner.  Except for any
conversion that occurs on or after the twenty-second (22nd) Business Day
immediately preceding the Maturity Date, the Company shall not, however, have
any obligation to settle conversions occurring on different Conversion Dates in
the same manner.

 

Notwithstanding any other provision of this
Indenture or the Securities, if the Company elects to satisfy its conversion
obligation by paying or delivering, as the case may be, a combination of cash
and shares of Common Stock or if the Company has irrevocably elected Net Share
Settlement as described in Section 10.02(B),
the Company shall not issue more than 19.99% of its outstanding Common Stock
immediately prior to the issuance of the Securities on the relevant execution
date, and the remaining payment for such settlement shall be comprised of cash
(which cash shall be based on the Volume-Weighted Average Price of the Common
Stock on the Trading Day immediately prior to the date on which such shares of
Common Stock would otherwise be required to be delivered).  In
addition, if necessary to comply with the listing standards of The New 

 

55

 

York Stock Exchange,
notwithstanding any provision of this Indenture or the Securities, the Company
shall not elect to deliver solely shares of Common Stock upon conversion of the
Securities without shareholder approval if such shares would represent 20% or
more of its outstanding Common Stock immediately prior to the issuance of the
Securities on the Issue Date.

 

If the Company elects to
settle any conversion of Securities by delivering solely shares of Common Stock
(other than solely cash in lieu of fractional shares) or if the Company has
irrevocably elected Full Physical Settlement as described in Section 10.02(C), such settlement
shall occur within three Business Days of the relevant Conversion
Date.  Except upon conversion in connection with a Common Stock
Change Make-Whole Fundamental Change where the consideration for Common Stock
is comprised entirely of cash as described in Section 10.16(C),
any settlement of a conversion of the Securities made entirely or partially in
cash (other than solely cash in lieu of fractional shares) (including if the
Company has irrevocably elected Net Share settlement as described in Section 10.02(B)) shall occur on the third Business
Day immediately following the final Trading Day of the applicable Cash
Settlement Averaging Period.

 

The amount of cash and
number of Common Stock, as the case may be, due upon conversion of Securities
shall be determined as follows:

 

(1)                                     If the Company elects to satisfy its
entire conversion obligation by delivering shares of Common Stock or if the
Company has irrevocably elected Full Physical Settlement as described in Section 10.02(C), the Company shall
deliver to each converting Holder a number of shares of Common Stock equal to (i) (A) the
aggregate principal amount of Securities to be converted, divided by (B) $1,000 multiplied by (ii) the Conversion
Rate in effect on the relevant Conversion Date ( provided that the Company shall deliver cash in lieu of
fractional shares as described in Section 10.03).

 

(2)                                     If the Company elects to satisfy its
entire conversion obligation by paying cash, the Company shall pay to each
converting Holder, for each $1,000 principal amount of Securities so converted,
cash in an amount equal to the sum of the Daily Conversion Values for each of
the twenty (20) consecutive Trading Days in the relevant Cash Settlement
Averaging Period.

 

(3)                                     Subject to the sixth paragraph of this Section 10.02(A), if the Company
elects to satisfy the conversion obligation by delivering or paying, as the
case may be, a combination of shares of Common Stock and cash, or if the
Company has irrevocably elected Net Share Settlement pursuant to Section 10.02(B), the Company shall
deliver to each converting Holder, for each $1,000 principal amount of
Securities so converted, cash and shares of Common Stock equal to the sum of
the Daily Settlement Amounts for each of the twenty (20) consecutive Trading 

 

56

 

 

Days in the relevant Cash Settlement Averaging Period.

 

The Daily Settlement Amounts (if applicable) and the
Daily Conversion Values (if applicable) shall be determined by the Company promptly
following the last day of the applicable Cash Settlement Averaging
Period.  Promptly after such determination of the Daily Settlement
Amounts or the Daily Conversion Values, as the case may be, and the amount of
cash deliverable in lieu of fractional shares (if any), the Company shall
notify the Trustee and the Conversion Agent of the Daily Settlement Amounts or
the Daily Conversion Values, as the case may be, and the amount of cash
deliverable in lieu of fractional shares (if any).  The Trustee and
the Conversion Agent shall have no responsibility for any such determination.

 

(B)                               Subject to the sixth paragraph of Section 10.02(A), at any time on or
prior to the twenty-third (23rd) Business Day immediately preceding the
Maturity Date, the Company may irrevocably elect to satisfy its conversion
obligation with respect to all Securities converted after the date of such
election by delivering cash up to the aggregate principal amount of Securities
to be converted, and shares of Common Stock, cash or a combination thereof in
respect of the remainder, if any, of the conversion obligation (“Net Share Settlement”).  Such election (a “Net
Share Settlement Election”)
shall be in the Company’s sole discretion and shall not require the consent of
Holders.  Upon making a Net Share Settlement Election, the Company
shall promptly (i) issue a press release and use its reasonable best
efforts to post such information on its website or otherwise publicly disclose
this information or (ii) provide written notice to Holders by mailing such
notice to Holders at their addresses shown in the register of the Registrar, or
if such Securities are held in book-entry form through the Depositary, through
the applicable notice procedures of the Depositary.

 

(C)                               Subject to the sixth paragraph of Section 10.02(A), at any time on or
prior to the twenty-third (23rd) Business Day immediately preceding the
Maturity Date, the Company may irrevocably elect to satisfy its conversion
obligation with respect to all Securities converted after the date of such
election by delivering solely shares of Common Stock (other than solely cash in
lieu of fractional shares) in respect of the conversion obligation (“Full Physical Settlement”).  Such election (a “Full Physical Settlement  Election”) shall be in the Company’s sole discretion and shall not require
the consent of Holders.  Upon making a Full Physical Settlement
Election, the Company shall promptly (iii) issue a press release and use
its reasonable best efforts to post such information on its website or
otherwise publicly disclose this information or (iv) provide written
notice to Holders by mailing such notice to Holders at their addresses shown in
the register of the Registrar, or if such Securities are held in book-entry
form through the Depositary, through the applicable notice procedures of the
Depositary.

 

(D)                               A Holder receiving shares of Common Stock
upon conversion shall not be entitled to any rights as a holder of Common
Stock, including, among other things, the right to vote and receive dividends
and notices of shareholder meetings, until the close of business on the
Conversion Date (if the Company delivers solely shares of Common Stock in
respect of the conversion obligation, other than solely cash in lieu of
fractional 

 

57

 

shares delivered
pursuant to Section 10.03, or
if the Company has irrevocably elected Full Physical Settlement as described in
Section 10.02(C)) or the
close of business on the last Trading Day of the relevant Cash Settlement
Averaging Period (if the Company delivers cash in respect of a portion (but not
all) of the conversion obligation pursuant to Section 10.02(A),
other than solely cash in lieu of any fractional shares delivered pursuant to Section 10.03, or if the Company has
irrevocably elected Net Share Settlement as described in Section 10.02(B)).  On and
after the Conversion Date with respect to a conversion of a Security pursuant
hereto, all rights of the Holder of such Security shall terminate, other than
the right to receive the consideration deliverable upon conversion of such
Security as provided herein.

 

(E)                                Except as provided in the Securities or
in this Article X, no payment
or adjustment will be made for accrued interest on a converted Security or for
dividends on any Common Stock issued on or prior to conversion, and accrued
interest, if any, will be deemed to be paid by the consideration paid to the
Holder upon conversion.  Such accrued interest, if any, shall be
deemed to be paid in full rather than cancelled, extinguished or
forfeited.  Upon conversion of the Securities into a combination of
cash and shares of Common Stock, accrued and unpaid interest (if any) shall be
deemed to be paid first out of the cash paid upon such conversion.  If
any Holder surrenders a Security for conversion after the close of business on
the Record Date for the payment of an installment of interest and prior to the
open of business on the next Interest Payment Date, then, notwithstanding such
conversion, the full amount of interest payable with respect to such Security
on such Interest Payment Date shall be paid on such Interest Payment Date to
the Holder of record of such Security at the close of business on such Record
Date; provided, however, that
such Security, when surrendered for conversion, must be accompanied by payment
in cash to the Conversion Agent on behalf of the Company of the full amount
equal to the interest payable on such Interest Payment Date on the portion so
converted; provided further, however,
that such payment to the Conversion Agent described in the immediately
preceding proviso in respect of a Security surrendered for conversion shall not
be required with respect to a Security that (i) is surrendered for
conversion after the close of business on the Record Date immediately preceding
the Maturity Date or (ii) is surrendered for conversion after the close of
business on a Record Date for the payment of an installment of interest and on
or before the open of business on the related Interest Payment Date, where,
pursuant to Section 3.07, the
Company has specified, with respect to a Fundamental Change, a Fundamental
Change Repurchase Date that is after such Record Date and on or before such
Interest Payment Date; provided further
that, if the Company shall have, prior to the Conversion Date with respect to a
Security, defaulted in a payment of interest on such Security, then in no event
shall the Holder of such Security who surrenders such Security for conversion
be required to pay such defaulted interest or the interest that shall have
accrued on such defaulted interest pursuant to Section 2.12 or otherwise (it being understood that
nothing in this Section 10.02(E) shall
affect the Company’s obligations under Section 2.12).

 

(F)                                 If a Holder converts more than one Security
at the same time, the number of full shares of Common Stock issuable upon such
conversion, if any, shall be based on the total principal amount of all
Securities converted.

 

58

 

(G)                                Upon surrender of a Security that is
converted in part, the Trustee shall authenticate for the Holder a new Security
equal in principal amount to the unconverted portion of the Security
surrendered.

 

(H)                               If the last day on which a Security may
be converted is a Legal Holiday in a place where a Conversion Agent is located,
the Security may be surrendered to that Conversion Agent on the next succeeding
day that is not a Legal Holiday.

 

10.03                                                         CASH IN LIEU OF
FRACTIONAL SHARES.

 

The Company will not issue a fractional share of
Common Stock upon conversion of a Security. Instead, the Company shall pay cash
in lieu of fractional shares based on the Last Reported Sale Price of Common
Stock on the Conversion Date (if the Company delivers solely shares of Common
Stock to satisfy its conversion obligation, other than solely cash in lieu of
fractional shares, or if the Company has irrevocably elected Full Physical
Settlement pursuant to Section 10.02(C))
or the Last Reported Sale Price of Common Stock on the last Trading Day of the
relevant Cash Settlement Averaging Period (if the Company delivers cash to
satisfy a portion, but less than all, of its conversion obligation, other than
solely cash in lieu of any fractional shares, or if the Company has irrevocably
elected Net Share Settlement pursuant to Section 10.02(B)).

 

10.04                                                         TAXES ON CONVERSION.

 

If a Holder converts its Security, the Company shall
pay any documentary, stamp or similar issue or transfer tax or duty due on the
issue, if any, of Common Stock upon the conversion.  However, such
Holder shall pay any such tax or duty which is due because such shares are
issued in a name other than such Holder’s name.  The Conversion Agent
may refuse to deliver a certificate representing the Common Stock to be issued
in a name other than such Holder’s name until the Conversion Agent receives a
sum sufficient to pay any tax or duty which will be due because such shares are
to be issued in a name other than such Holder’s name.

 

10.05                                                         COMPANY TO PROVIDE
COMMON STOCK.

 

The Company shall at all times reserve out of its
authorized but unissued Common Stock or Common Stock held in its treasury
enough shares of Common Stock to permit the conversion, in accordance herewith,
of all of the Securities (assuming, for such purposes, that the Company has
previously elected Full Physical Settlement pursuant to Section 10.02(C)).  The
shares of Common Stock, if any, due upon conversion of a Global Security shall
be delivered by the Company in accordance with the Depositary’s customary
practices.

 

All shares of Common Stock which may be issued upon
conversion of the Securities shall be validly issued, fully paid and
non-assessable and shall be free of preemptive or similar rights and free of
any lien or adverse claim.

 

The Company shall comply with all securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities and shall list such 

 

59

 

shares on each national
securities exchange or automated quotation system on which the shares of Common
Stock are listed.

 

10.06                                                         ADJUSTMENT OF
CONVERSION RATE.

 

The Conversion Rate shall be subject to adjustment
from time to time, without duplication, upon the occurrence of any of the
following events:

 

(A)                              If the Company issues shares of Common
Stock as a dividend or distribution on the shares of Common Stock, or if the
Company effects a share split or share combination, the Conversion Rate shall
be adjusted based on the following formula:

 

 

where

 

CR0                                               =                         the Conversion Rate in effect immediately
prior to the open of business on the Ex Date for such dividend or distribution,
or the open of business on the effective date of such share split or share
combination, as the case may be;

 

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

 

OS0                                               =                         the number of shares of Common Stock outstanding
immediately prior to the open of business on the Ex Date for such dividend or
distribution, or the open of business on the effective date of such share split
or share combination, as the case may be; and

 

OS’                                                =                         the number of shares of Common Stock
outstanding immediately after such dividend or distribution, or such share
split or share combination, as the case may be.

 

Any adjustment made under this Section 10.06(A) shall
become effective immediately after the open of business on the Ex Date for such
dividend or distribution, or immediately after the open of business on the
effective date for such share split or share combination, as the case may
be.  If any dividend or distribution of the type described in this Section 10.06(A) is declared but not so paid or
made, or any share split or combination of the type described in this Section 10.06(A) is announced but the outstanding
shares of 

 

60

 

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

 

(B)                                If the Company distributes to all or
substantially all holders of the Common Stock any rights, options or warrants
entitling them, for a period expiring not more than sixty (60) days immediately
following the record date of such distribution, to purchase or subscribe for
shares of Common Stock, at a price per share less than the average of the Last
Reported Sale Prices of the Common Stock over the ten (10) consecutive
Trading Day period ending on the Trading Day immediately preceding the Ex Date
for such distribution, the Conversion Rate shall be increased based on the
following formula:

 

 

where

 

CR0                                      =                              the Conversion Rate in effect immediately
prior to the open of business on the Ex Date for such distribution; 

 

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

 

OS0                                      =                              the number of shares of Common Stock that
are outstanding immediately prior to the open of business on the Ex Date for
such distribution;

 

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

 

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

 

Any increase made under this Section 10.06(B) shall be made
successively whenever any such rights, options or warrants are distributed and
shall become effective immediately after the open of business on the Ex Date
for such distribution.  The Company shall not issue any such rights,
options, or warrants in respect of Common Stock held in treasury by the
Company.  To the extent that shares of Common Stock are not delivered
after the expiration of such rights, options or warrants, the Conversion Rate 

 

61

 

shall be readjusted to the
Conversion Rate that would then be in effect had the increase with respect to
the distribution of such rights, options or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually
delivered.  If such rights, options or warrants are not so
distributed, the Conversion Rate shall be decreased to be the Conversion Rate
that would then be in effect if such Ex Date for such distribution had not
occurred.

 

In determining whether any rights, options or
warrants entitle the holders to subscribe for or purchase shares of Common
Stock at less than such average of the Last Reported Sale Prices for the ten (10) consecutive
Trading Day period ending on the Trading Day immediately preceding the Ex Date
for such distribution, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights, options or warrants and any amount
payable on exercise or conversion thereof, the value of such consideration, if
other than cash, to be determined by the Board of Directors.  In no
event shall the Conversion Rate be decreased pursuant to this Section 10.06(B).

 

(C)                    If the Company distributes shares of its
Capital Stock, evidences of its indebtedness or other of its assets, securities
or property, but excluding (i) dividends or distributions covered by Sections  10.06(A) and
10.06(B), (ii) dividends or
distributions paid exclusively in cash covered by Section 10.06(D), and (iii) Spin-Offs to which the
provisions set forth in the latter portion of this Section 10.06(C) shall apply (any of such shares of
Capital Stock, indebtedness or other assets, securities or property, the “Distributed Property”), to all or substantially all holders of Common Stock, then, in
each such case the Conversion Rate shall be increased based on the following
formula:

 

 

where

 

CR0                                      =                              the Conversion Rate in effect immediately
prior to the open of business on the Ex Date for such distribution;

 

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

 

SP0                                        =                              the average of the Last Reported Sale
Prices of the Common Stock over the ten (10) consecutive Trading Day
period ending on the Trading Day immediately preceding the Ex Date for such
distribution; and

 

FMV                                =                              the fair market value (as determined by the Board of
Directors) of the shares of Capital Stock, evidences of indebtedness, assets,
securities or property distributable with respect to each outstanding share of
Common Stock as of the open of business on the Ex Date for such 

 

62

 

distribution.

 

If the Board of Directors determines “FMV” for
purposes of this Section 10.06(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 Last Reported Sale Prices of the Common Stock over the ten (10) consecutive
Trading Day period ending on the Trading Day immediately preceding the Ex Date
for such distribution.

 

Notwithstanding the foregoing, if “FMV” (as defined
above) is equal to or greater than the “SP 0” (as defined above), in lieu of the foregoing
increase, each Holder of a Security shall receive, for each $1,000 principal
amount of Securities, at the same time and upon the same terms as the holders
of the Common Stock, the amount and kind of Distributed Property that 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 Ex Date for such
distribution.

 

Any increase made under the portion of this Section 10.06(C) above shall
become effective immediately after the open of business on the Ex Date for such
distribution.  If such distribution is not so paid or made, the
Conversion Rate shall be decreased to be the Conversion Rate that would then be
in effect if such dividend or distribution had not been declared.

 

With respect to an adjustment pursuant to this Section 10.06(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 of the Company, where such
Capital Stock or similar equity interest is listed or quoted (or will be listed
or quoted upon consummation of the Spin-Off) on a U.S. national securities
exchange (a “Spin-Off”), the Conversion Rate in effect
immediately before the close of business on the tenth (10th) Trading Day
immediately following, and including, the Ex Date of the Spin-Off shall be
increased based on the following formula:

 

 

where

 

CR0                                               =                     the Conversion Rate in effect immediately prior to the
close of business on the tenth (10th) Trading Day immediately following, and
including, the Ex Date for the Spin-Off; 

 

CR’                                                =                     the Conversion Rate in effect immediately after the
close of business on the tenth (10th) Trading Day immediately following, and
including, the Ex Date for the Spin-Off; 

 

63

 

FMV0                                    =                     the average of the Last Reported Sale
Prices of the Capital Stock or similar equity interest distributed to holders
of the Common Stock applicable to one share of Common Stock over the first ten (10) consecutive
Trading Day period immediately following, and including, the Ex Date for the
Spin-Off; and

 

MP0                                            =                     the average of the Last Reported Sale Prices of the
Common Stock over the first ten (10) consecutive Trading Day period
immediately following, and including, the Ex Date for the Spin-Off.

 

The increase to the Conversion Rate under the preceding paragraph shall
become effective at the close of business on the tenth (10th) Trading Day
immediately following, and including, the Ex Date for the Spin-Off; provided
that, for purposes of determining the Conversion Rate, in respect of any
conversion during the ten (10) Trading Days immediately following and
including, the Ex Date of any Spin-Off, references in the portion of this Section 10.06(C) related to Spin-Offs to ten (10) consecutive
Trading Days shall be deemed replaced with such lesser number of consecutive
Trading Days as have elapsed between the Ex Date of such Spin-Off and the
Conversion Date for such conversion.  If the Ex Date for the Spin-Off
is less than ten (10) Trading Days prior to, and including, the end of the
Cash Settlement Averaging Period in respect of any conversion, references with
respect to ten (10) Trading Days shall be deemed replaced, for purposes of
calculating the affected daily Conversion Rates in respect of that conversion,
with such lesser number of Trading Days as have elapsed from, and including,
the Ex Date for such Spin-Off to, and including, the last Trading Day of such
Cash
Settlement Averaging Period.

 

Subject in all respects to Section 10.15, rights, options or warrants distributed by
the Company to all holders of its Common Stock entitling the holders thereof to
subscribe for or purchase shares of the Company’s Capital Stock, including
Common Stock (either initially or under certain circumstances), which rights,
options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such Common Stock; (ii) are
not exercisable; and (iii) are also issued in respect of future issuances
of the Common Stock, shall be deemed not to have been distributed for purposes
of this Section 10.06(C) (and
no adjustment to the Conversion Rate under this Section 10.06(C) will be required) until the
occurrence of the earliest Trigger Event, whereupon such rights, options or
warrants shall be deemed to have been distributed and an appropriate adjustment
(if any is required) to the Conversion Rate shall be made under this Section 10.06(C).  If any
such right, option or warrant, including any such existing rights, options or
warrants distributed prior to the date of this Indenture, are subject to
events, upon the occurrence of which such rights, options or warrants become
exercisable to purchase different securities, evidences of indebtedness or
other assets, then the date of the 

 

64

 

occurrence of any and each such event shall be deemed
to be the date of distribution and Ex Date with respect to new rights, options
or warrants with such rights (and a termination or expiration of the existing
rights, options or warrants without exercise by any of the holders
thereof).  In addition, in the event of any distribution (or deemed
distribution) of rights, options or warrants, or any Trigger Event or other
event (of the type described in the preceding sentence) with respect thereto
that was counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Rate under this Section 10.06(C) was
made, (1) in the case of any such rights, options or warrants that shall
all have been redeemed or repurchased without exercise by any holders thereof,
the Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case
may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder or holders of Common Stock
with respect to such rights, options or warrants (assuming such holder had
retained such rights, options or warrants), made to all holders of Common Stock
as of the date of such redemption or repurchase, and (2) in the case of
such rights, options or warrants that shall have expired or been terminated
without exercise by any holders thereof, the Conversion Rate shall be
readjusted as if such rights, options or warrants had not been issued.

 

For purposes of Section 10.06(A),
Section 10.06(B) and this
Section 10.06(C), any
dividend or distribution to which this Section 10.06(C) is
applicable that also includes one or both of:

 

(A)                              a dividend or
distribution of shares of Common Stock to which Section 10.06(A) is applicable (the “Clause A Distribution”); or

 

(B)                                a dividend or
distribution of rights, options or warrants to which Section 10.06(B) is applicable (the “Clause B Distribution”),

 

then (1) such dividend or distribution, other
than the Clause A Distribution and Clause B Distribution, shall be deemed to be
a dividend or distribution to which this Section 10.06(C) is
applicable (the “Clause C Distribution”) and any Conversion Rate adjustment
required by this Section 10.06(C) with
respect to such Clause C Distribution 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 10.06(A) and Section 10.06(B) with respect
thereto shall then be made, except that, if determined by the Board of
Directors (I) the Ex Date of the Clause A Distribution and the Clause B
Distribution shall be deemed to be the Ex 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 the Ex Date for such dividend or distribution, or
the open of business on the effective date of such share split or share
combination, as the case may be” within the meaning of Section 10.06(A) 

 

65

 

or “outstanding immediately prior to the open of
business on the Ex Date for such distribution” within the meaning of Section 10.06(B).

 

In no event shall the Conversion Rate be decreased
pursuant to this Section 10.06(C).

 

(D)                               If any cash dividend or distribution is
made to all or substantially all holders of the Common Stock, the Conversion
Rate shall be increased based on the following formula:

 

 

where

 

CR0                                           =        the Conversion Rate in effect immediately
prior to the open of business on the Ex Date for such dividend or distribution;

 

CR’                                            =        the Conversion Rate in effect immediately
after the open of business on the Ex Date for such dividend or distribution;

 

SP0                                             =        the average of the Last Reported Sale
Prices of the Common Stock over the ten (10) consecutive Trading Day
period immediately preceding the Ex Date for such dividend or distribution; and

 

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

 

Such increase shall
become effective immediately after the open of business on the Ex Date for such
dividend or distribution.  If such dividend or distribution is not so
paid, the Conversion Rate shall be decreased to be the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.

 

Notwithstanding the foregoing, if “C”(as defined
above) is equal to or greater than “SP0”
(as defined above), in lieu of the foregoing increase, each Holder of a
Security shall receive, for each $1,000 principal amount of Securities, at the
same time and upon the same terms as holders of the Common Stock, the amount of
cash such Holder would have received as if such Holder owned a number of shares
of Common Stock equal to the Conversion Rate on the Ex Date for such dividend
or distribution.

 

In no event shall the Conversion Rate be decreased
pursuant to this Section 10.06(D).

 

66

 

(E)                                 If the Company or any of its Subsidiaries
makes a payment in respect of a tender offer or exchange offer for the Common
Stock, if the cash and value of any other consideration included in the payment
per share of Common Stock exceeds the average of the Last Reported Sale Prices of
the Common Stock over the ten (10) consecutive Trading-Day period
commencing on, and including, 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:

 

 

where

 

CR 0                                   =                                  the Conversion Rate in effect immediately
prior to the close of business on the last Trading Day of the ten (10) consecutive
Trading Day period commencing on, and including, the Trading Day next
succeeding the date such tender or exchange offer expires;

 

CR’                                       =                                  the Conversion Rate in effect immediately
after the close of business on the last Trading Day of the ten (10) consecutive
Trading Day period commencing on, 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 of Common Stock 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
(prior to giving effect to such tender offer or exchange offer);

 

OS’                                       =                                  the number of shares of Common Stock outstanding
immediately after the date such tender or exchange offer expires (after giving
effect to such tender offer or exchange offer); and

 

SP’                                         =                                  the average of the Last Reported Sale
Prices of the Common Stock over the ten (10) consecutive Trading Day period
commencing on, and including, the Trading Day next succeeding the date such
tender or exchange offer expires.

 

67

 

The increase to the Conversion Rate under this Section 10.06(E) shall occur at
the close of business on the tenth (10th) Trading Day immediately following,
but excluding, the date such tender or exchange offer expires; provided that, for purposes of determining
the Conversion Rate, in respect of any conversion during the ten (10) Trading
Days immediately following, but excluding, the date that any such tender or
exchange offer expires, references in this Section 10.06(E) to
ten (10) Trading Days shall be deemed replaced with such lesser number of
Trading Days as have elapsed between the date that such tender or exchange
offer expires and the Conversion Date for such conversion.  If the
Trading Day immediately following the date the tender or exchange offer expires
is less than ten (10) Trading Days prior to, and including, the end of the
Cash Settlement Averaging Period in respect of any conversion, references to
ten (10) Trading Days shall be deemed replaced, for purposes of
calculating the affected daily Conversion Rates in respect of such conversion,
with such lesser number of Trading Days as have elapsed from, and including,
the Trading Day immediately following the date such tender or exchange offer
expires to, and including, the last Trading Day of such Cash Settlement
Averaging Period.  In no event shall the Conversion Rate be decreased
pursuant to this Section 10.06(E).

 

(F)                                 Notwithstanding this Section 10.06 or any other provision
of this Indenture or the Securities, if a Conversion Rate adjustment becomes
effective on any Ex Date, and a Holder that has converted its Securities on or
after such Ex Date and on or prior to the related record date would be treated
as the record holder of shares of Common Stock as of the related Conversion
Date as described under Section 10.02
based on an adjusted Conversion Rate for such Ex Date, then, notwithstanding
the Conversion Rate adjustment provisions in this Section 10.06, the Conversion Rate adjustment relating to
such Ex Date shall not be made for such converting Holder. Instead, such Holder
shall be treated as if such Holder were the record owner of the shares of
Common Stock on an unadjusted basis and participate in the related dividend,
distribution or other event giving rise to such adjustment.

 

(G)                                In addition to the foregoing adjustments
in subsections  (A), (B),
(C), (D) and (E) above,
the Company may, from time to time and to the extent permitted by law and the
continued listing requirements of The New York Stock Exchange, increase the
Conversion Rate by any amount for a period of at least twenty (20) Business
Days or any longer period as may be permitted or required by law, if the Board
of Directors has made a determination, which determination shall be conclusive,
that such increase would be in the best interests of the
Company.  Such Conversion Rate increase shall be irrevocable during
such period.  The Company shall give notice to the Trustee and cause
notice of such increase to be mailed to each Holder of Securities at such
Holder’s address as the same appears on the registry books of the Registrar, at
least fifteen (15) days prior to the date on which such increase commences.

 

(H)                               Notwithstanding this Section 10.06 or any other provision
of this Indenture or the Securities, if any Conversion Rate adjustment becomes
effective, or any Ex Date for any issuance, dividend or distribution (relating
to a required Conversion Rate adjustment) occurs, during the period beginning
on, and including, the open of business on a Conversion Date and ending on, and
including, the close of 

 

68

 

business on the
last Trading Day of a related Cash Settlement Averaging Period (if the Company
elects to satisfy the related conversion obligation by paying cash, in whole or
in part, in respect thereof or if the Company has irrevocably elected Net Share
Settlement pursuant to Section 10.02(B)),
the Board of Directors shall make adjustments to the Conversion Rate and the
amount of cash or number of shares of Common Stock issuable upon conversion of
the Securities, as the case may be, as is be necessary or appropriate to effect
the intent of this Section 10.06
and the other provisions of Article X
and to avoid unjust or inequitable results, as determined in good faith by the
Board of Directors.  Any adjustment made pursuant to this Section 10.06 shall apply in lieu of
the adjustment or other term that would otherwise be applicable.

 

(I)                                    All calculations under this Article X shall be made to the nearest
cent or to the nearest 1/1,000th of a share, as the case may be. Adjustments to
the Conversion Rate will be calculated to the nearest 1/1,000th.

 

10.07                                                         NO ADJUSTMENT.

 

Notwithstanding anything herein or in the Securities
to the contrary, in no event shall the Conversion Rate be adjusted:

 

(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;

 

(ii)                                  upon the issuance of any shares of Common
Stock or restricted stock, restricted stock units, non-qualified stock options,
incentive stock options or any other options or rights (including stock
appreciation rights) to purchase shares of Common Stock pursuant to any present
or future employee, director or consultant benefit plan or program of, or
assumed by, the Company or any of its Subsidiaries;

 

(iii)                               upon the issuance of 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)                              or accrued and unpaid interest, if any,
including Additional Interest, if any;

 

(v)                                 upon the repurchase of any shares of
Common Stock pursuant to an open-market share repurchase program or other
buy-back transaction that is not a tender offer or exchange offer of the nature
described in Section 10.06;
or

 

(vi)                              for a change in the par value of shares
of Common Stock.

 

No adjustment in the Conversion Rate pursuant to Section 10.06 shall be required until
cumulative adjustments amount to one percent (1%) or more of the Conversion
Rate as last adjusted (or, if never adjusted, the initial Conversion Rate); provided, however, that any adjustments to
the Conversion Rate which by reason of this paragraph are not 

 

69

 

required to be made shall be
carried forward and taken into account in any subsequent adjustment to the
Conversion Rate; provided further,
that (i) on December 31 of each year and (ii) if the Securities
have been converted pursuant to Section 10.01,
then, in each case, any adjustments to the Conversion Rate that have been, and
at such time remain, deferred pursuant to this Section 10.07 shall be given effect, and such
adjustments, if any, shall no longer be carried forward and taken into account
in any subsequent adjustment to the Conversion Rate.

 

No adjustment to the Conversion Rate need be made
pursuant to Section 10.06 for
a transaction (other than for share splits or share combinations pursuant to Section 10.06(a)) if the Company
provides for each Holder to participate in the transaction, at the same time
that holders of Common Stock participate in such transaction, without
conversion, as if such Holder held a number of shares of Common Stock equal to
a fraction whose numerator is the product of the Conversion Rate in effect on
the Ex Date or effective date, as applicable, of the transaction (without
giving effect to any adjustment pursuant to Section 10.06
on account of such transaction) and the aggregate principal amount of
Securities held by such Holder and whose denominator is one thousand dollars
($1,000).

 

10.08                                                         ADJUSTMENT TO THE
CONVERSION RATE ON FEBRUARY 3, 2011.

 

(a)                                  If the arithmetic average of the daily “Volume
Weighted Average Price” per share of Common Stock for each of the thirty (30)
consecutive Trading Days ending on February 3, 2011 is less than $5.6160
per share, the Conversion Rate shall be increased such that the Conversion
Price as increased would represent the greater of (1) 120% of such
arithmetic average of the daily Volume Weighted Average Price and (2) $5.6160.
This adjustment to the Conversion Rate shall become effective as of the open of
business on February 3, 2011 or, if that date is not a business day, the
next business day. However, the Conversion Price shall not be adjusted as
described above if doing so would result in a Conversion Price that is greater
than the Conversion Price that would have otherwise been in effect on February 3,
2011.

 

(b)                                 Subject to any applicable listing
standards, the Last Reported Sale Price per share of Common Stock and the
Volume-Weighted Average Price shall be adjusted in accordance with the
adjustments to the Conversion Rate described under Section 10.06.
No adjustment to the Floor Price or the Volume-Weighted Average Price shall,
however, be made as a result of adjustments to the Conversion Rate described
under Section 10.06.

 

(c)                                  The Company shall notify the Trustee, and
the Holders in the manner provided in Section 13.02,
of any adjustment in the Conversion Rate under this Section 10.08.

 

70

 

10.09                                                         OTHER ADJUSTMENTS.

 

In the event that, as a result of an adjustment made
pursuant to Section 10.06
hereof, the Holder of any Security thereafter surrendered for conversion shall
become entitled to receive any shares of Capital Stock other than Common Stock,
thereafter the Conversion Rate of such other shares so receivable upon
conversion of any Security shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to Common Stock contained in this Article X.

 

10.10                                                         ADJUSTMENTS FOR TAX
PURPOSES.

 

Except as prohibited by law the Company may (but is
not obligated to) increase the Conversion Rate, in addition to those required
by Section 10.06 hereof, as
it determines to be advisable in order that any stock dividend, subdivision of
shares, distribution of rights to purchase stock or securities or distribution of
securities convertible into or exchangeable for stock made by the Company or to
its shareholders will not be taxable to the recipients thereof or in order to
avoid or diminish any such taxation.

 

10.11                                                         NOTICE OF ADJUSTMENT.

 

Whenever the Conversion Rate is adjusted, the
Company shall promptly mail to Holders at the addresses appearing on the
Registrar’s books a notice of the adjustment and file with the Trustee an
Officer’s Certificate briefly stating the facts requiring the adjustment and
the manner of computing it.  The certificate shall be conclusive
evidence of the correctness of such adjustment.

 

10.12                                                         NOTICE OF CERTAIN
TRANSACTIONS.

 

In the event that:

 

(i)                                     the Company takes any action, or becomes
aware of any event, which would require an adjustment in the Conversion Rate,

 

(ii)                                  the Company takes any action that would
require a supplemental indenture pursuant to Section 10.13,
or

 

(iii)                               there is a dissolution or liquidation of the Company,

 

the Company shall mail to
Holders at the addresses appearing on the Registrar’s books and the Trustee a
written notice stating the proposed record, effective or expiration date, as
the case may be, of any transaction referred to in clause  (i), (ii) or (iii) of this Section 10.12.  The
Company shall mail such notice at least twenty (20) calendar days (or, in the
case of any event that would require an adjustment in the Conversion Rate
pursuant to Section 10.06(B),
10.06(C), 10.06(D) or 10.06(E), thirty (30) Business Days) before such date;
however, failure to mail such notice or any defect therein shall not affect the
validity of any transaction referred to in clause
(i), (ii) or (iii) of
this Section 10.12.

 

71

 

10.13                                                         EFFECT OF
RECLASSIFICATIONS, CONSOLIDATIONS, MERGERS, BINDING SHARE EXCHANGES OR SALES ON
CONVERSION PRIVILEGE.

 

If the Company:

 

(i)                                     reclassifies the Common Stock (other than
a change only in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination of Common
Stock to which Section 10.06
applies);

 

(ii)                                  is a party to a consolidation, merger or
binding share exchange; or

 

(iii)                               sells, transfers, leases, conveys or otherwise
disposes of all or substantially all of the consolidated property or assets of
the Company,

 

in each case pursuant to
which the Common Stock would be converted into or exchanged for, or would
constitute solely the right to receive, cash, securities or other property (any
such event, a “Merger Event”) then, if a Holder converts its
Securities on or after the effective date of any such transaction, subject to
the Company’s right to settle all or a portion of its conversion obligation
with respect to such Securities by paying cash (other than solely cash in lieu
of any fractional share) as set forth in Section 10.02(A) and
the Company’s right to irrevocably elect Net Share Settlement as set forth in Section 10.02(B), the Securities will
be convertible into the same type (and same proportions) of consideration
received by holders of Common Stock in such transaction (“Reference Property”) and, prior to or 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 permitted under Section 9.01(i) providing for
such change in the right to convert the Securities; provided, however, that at and after the effective time of
the Merger Event, (a) the Company shall continue to have the right to
determine the form of consideration to be paid or delivered, as the case may
be, upon conversion of Securities in accordance with Section 10.02 and (b)(1) any amount payable in cash
upon conversion of the Securities in accordance with Section 10.02 shall continue to be payable in cash, (2) any
shares of Common Stock that the Company would have been required to deliver
upon conversion of the Securities in accordance with Section 10.02 shall instead be deliverable in the amount
and type of Reference Property that a holder of that number of shares of Common
Stock would have received in such Merger Event and (3) the Volume-Weighted
Average Price shall be calculated based on the value of a unit of Reference
Property that a holder of one share of Common Stock would have received in such
Merger Event.

 

If the Merger Event
causes the Common Stock to be converted into, or exchanged for, the right to
receive more than a single type of consideration (determined based in part upon
any form of shareholder election), then (x) the Reference Property into which
the Securities will be convertible shall 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 and (y) the unit of
Reference Property for purposes of the immediately preceding paragraph shall
refer to the consideration referred to in clause 

 

72

 

(x) attributable to
one share of Common Stock.  The Company shall notify Holders, the
Trustee and the Conversion Agent (if other than the Trustee) of such weighted
average as soon as practicable after such determination is made.

 

The supplemental indenture referred to in the first
sentence of this Section 10.13
shall provide for adjustments of the Conversion Rate which shall be as nearly
equivalent as may be practicable to the adjustments of the Conversion Rate
provided for in this Article X.  If,
in the case of any such consolidation, merger, binding share exchange, sale,
transfer, lease, conveyance or disposition, the stock or other securities and
property (including cash) receivable thereupon by a holder of Common Stock
includes shares of stock or other securities and property of a Person other
than the successor or purchasing Person, as the case may be, in such
consolidation, merger, binding share exchange, sale, transfer, lease,
conveyance or disposition, then such supplemental indenture shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holders of the Securities as the Board of
Directors in good faith shall reasonably determine necessary by reason of the
foregoing (which determination shall be described in a Board
Resolution).  The provisions of this Section 10.13 shall similarly apply to successive
consolidations, mergers, binding share exchanges, sales, transfers, leases,
conveyances or dispositions.

 

The Company shall not
become a party to any Merger Event unless its terms are consistent with this Section 10.13.

 

None of the foregoing provisions
shall affect the right of a Holder to convert its Securities into cash, shares
of Common Stock or a combination of cash and shares of Common Stock, as
applicable, as set forth in Section 10.01
and Section 10.02 prior to
the effective date of such Merger Event.

 

In the event the Company shall execute a
supplemental indenture pursuant to this Section 10.13,
the Company shall promptly file with the Trustee an Officer’s Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders of the Securities
upon the conversion of their Securities after any such Merger Event and any
adjustment to be made with respect thereto.

 

10.14                                                         TRUSTEE’S DISCLAIMER.

 

The Trustee has no duty to determine when an
adjustment under this Article X
should be made, how it should be made or what such adjustment should be, but
may accept as conclusive evidence of the correctness of any such adjustment,
and shall be protected in relying upon, the Officer’s Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to Section 10.11 hereof.  The
Trustee makes no representation as to the validity or value of any securities
or assets issued upon conversion of Securities, and the Trustee shall not be
responsible for the failure by the Company to comply with any provisions of
this Article X.

 

73

 

The Trustee shall not be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture executed pursuant to Section 10.13,
but may accept as conclusive evidence of the correctness thereof, and shall be
protected in relying upon, the Officer’s Certificate with respect thereto which
the Company is obligated to file with the Trustee pursuant to Section 10.13 hereof.

 

10.15                                                         RIGHTS DISTRIBUTIONS
PURSUANT TO SHAREHOLDERS’ RIGHTS PLANS.

 

Upon conversion of any Security or a portion
thereof, the Company shall make provision such that the Holder thereof shall,
to the extent such Holder is to receive shares of Common Stock upon such
conversion, receive, in addition to, and concurrently with the delivery of,
such shares of Common Stock upon conversion, the rights described in any future
shareholders’ rights plan(s) of the Company then in effect, unless the
rights have separated from the Common Stock prior to the time of conversion, in
which case the Conversion Rate shall be adjusted at the time of separation as
if the Company distributed to all holders of Common Stock, Distributed Property
as described in Section 10.06(C),
subject to readjustment in the event of the expiration, termination or
redemption of such rights.

 

10.16                                                         INCREASED CONVERSION
RATE APPLICABLE TO CERTAIN SECURITIES SURRENDERED IN CONNECTION WITH MAKE-WHOLE
FUNDAMENTAL CHANGES.

 

(A)                              Notwithstanding anything herein to the
contrary, the Conversion Rate applicable to each Security that is surrendered
for conversion, in accordance with this Article X,
at any time during the period (the “Make-Whole
Conversion Period”)
from, and including, the effective date (the “Effective
Date”) of a Make-Whole Fundamental Change (which Effective Date the
Company shall disclose in the written notice and public announcement referred
to in Section 10.16(E)) to,
and including, the date that is thirty (30) Business Days after such Effective
Date (or, if such Make-Whole Fundamental Change also constitutes a Fundamental
Change, the Fundamental Change Repurchase Date corresponding to such
Fundamental Change) shall be increased to an amount equal to the Conversion
Rate that would, but for this Section 10.16,
otherwise apply to such Security pursuant to this Article X, plus
an amount equal to the Make-Whole Applicable Increase.

 

(B)                                As used herein, “Make-Whole Applicable Increase”  shall
mean, with respect to a Make-Whole Fundamental Change, the amount, set forth in
the following table, which corresponds to the Effective Date and the Applicable
Price of such Make-Whole Fundamental Change:

 

	
   

  	
   

  	
  Share Price

  	
   

  
	
  Effective
  Date

  	
   

  	
  $5.62

  	
   

  	
  $7.50

  	
   

  	
  $10.00

  	
   

  	
  $12.50

  	
   

  	
  $15.00

  	
   

  	
  $17.50

  	
   

  	
  $20.00

  	
   

  	
  $22.50

  	
   

  	
  $25.00

  	
   

  	
  $27.50

  	
   

  	
  $30.00

  	
   

  	
  $32.50

  	
   

  	
  $35.00

  	
   

  	
  $37.50

  	
   

  	
  $40.00

  	
   

  	
  $42.50

  	
   

  	
  $45.00

  	
   

  	
  $47.50

  	
   

  
	
  8-Feb-10

  	
   

  	
  29.641

  	
   

  	
  20.088

  	
   

  	
  14.173

  	
   

  	
  11.109

  	
   

  	
  9.194

  	
   

  	
  7.858

  	
   

  	
  6.867

  	
   

  	
  6.099

  	
   

  	
  5.487

  	
   

  	
  4.987

  	
   

  	
  4.57

  	
   

  	
  4.218

  	
   

  	
  3.916

  	
   

  	
  3.655

  	
   

  	
  3.426

  	
   

  	
  3.225

  	
   

  	
  3.046

  	
   

  	
  2.885

  	
   

  
	
  1-Mar-11

  	
   

  	
  29.641

  	
   

  	
  18.714

  	
   

  	
  12.907

  	
   

  	
  10.028

  	
   

  	
  8.27

  	
   

  	
  7.057

  	
   

  	
  6.162

  	
   

  	
  5.471

  	
   

  	
  4.921

  	
   

  	
  4.472

  	
   

  	
  4.098

  	
   

  	
  3.782

  	
   

  	
  3.512

  	
   

  	
  3.277

  	
   

  	
  3.072

  	
   

  	
  2.891

  	
   

  	
  2.731

  	
   

  	
  2.587

  	
   

  
	
  1-Mar-12

  	
   

  	
  29.641

  	
   

  	
  13.865

  	
   

  	
  10.743

  	
   

  	
  8.491

  	
   

  	
  7.005

  	
   

  	
  5.97

  	
   

  	
  5.209

  	
   

  	
  4.623

  	
   

  	
  4.157

  	
   

  	
  3.777

  	
   

  	
  3.462

  	
   

  	
  3.195

  	
   

  	
  2.966

  	
   

  	
  2.768

  	
   

  	
  2.595

  	
   

  	
  2.442

  	
   

  	
  2.306

  	
   

  	
  2.185

  	
   

  
	
  1-Mar-13

  	
   

  	
  29.641

  	
   

  	
  10.844

  	
   

  	
  8.154

  	
   

  	
  6.475

  	
   

  	
  5.355

  	
   

  	
  4.568

  	
   

  	
  3.986

  	
   

  	
  3.538

  	
   

  	
  3.182

  	
   

  	
  2.892

  	
   

  	
  2.65

  	
   

  	
  2.446

  	
   

  	
  2.271

  	
   

  	
  2.119

  	
   

  	
  1.987

  	
   

  	
  1.87

  	
   

  	
  1.766

  	
   

  	
  1.673

  	
   

  
	
  1-Mar-14

  	
   

  	
  29.641

  	
   

  	
  8.016

  	
   

  	
  5.079

  	
   

  	
  3.892

  	
   

  	
  3.207

  	
   

  	
  2.739

  	
   

  	
  2.394

  	
   

  	
  2.127

  	
   

  	
  1.914

  	
   

  	
  1.74

  	
   

  	
  1.595

  	
   

  	
  1.472

  	
   

  	
  1.367

  	
   

  	
  1.276

  	
   

  	
  1.196

  	
   

  	
  1.126

  	
   

  	
  1.063

  	
   

  	
  1.007

  	
   

  
	
  1-Mar-15

  	
   

  	
  29.641

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  

 

74

 

provided, however,
that:

 

(i)                                     if the actual Applicable Price of such
Make-Whole Fundamental Change is between two (2) Applicable Prices listed
in the table above under the column titled “Applicable Price,” or if the actual
Effective Date of such Make-Whole Fundamental Change is between two Effective
Dates listed in the table above in the row immediately below the title “Effective
Date,” then the Make-Whole Applicable Increase for such Make-Whole Fundamental
Change shall be determined by linear interpolation between the Make-Whole
Applicable Increases set forth for such higher and lower Applicable Prices, or
for such earlier and later Effective Dates based on a three hundred and sixty
five (365) day year, as applicable;

 

(ii)                                  if the actual Applicable Price of such
Make-Whole Fundamental Change is greater than $47.50 per share (subject to
adjustment in the same manner as the Applicable Prices pursuant to Section 10.16(B)(iii)), or if the
actual Applicable Price of such Make-Whole Fundamental Change is less than
$5.62 per share (subject to adjustment in the same manner as the Applicable
Prices pursuant to Section 10.16(B)(iii)), then the Make-Whole Applicable
Increase shall be equal to zero (0);

 

(iii)                               if an event occurs that requires, pursuant to this Article X (other than solely pursuant
to this Section 10.16), an
adjustment to the Conversion Rate, then, on the date and at the time such
adjustment is so required to be made, each Applicable Price set forth in the
table above under the column titled “Applicable Price” shall be deemed to be
adjusted so that such Applicable Price, at and after such time, shall be equal
to the product of (a) such Applicable Price as in effect immediately
before such adjustment to such Applicable Price and (b) a fraction whose
numerator is the Conversion Rate in effect immediately before such adjustment
to the Conversion Rate and whose denominator is the Conversion Rate to be in
effect, in accordance with this Article X,
immediately after such adjustment to the Conversion Rate;

 

(iv)                              each Make-Whole Applicable Increase
amount set forth in the table above shall be adjusted in the same manner, for
the same events and at the same time as the Conversion Rate is to be adjusted
pursuant to Section 10.06
through Section 10.15; and

 

(v)                                 in no event shall the Conversion Rate
applicable to any Security be increased pursuant to this Section 10.16 to the extent, but only
to the extent, such increase shall cause the Conversion Rate applicable to such
Security to exceed 178.0627 shares per $1,000 principal amount (the “Maximum Conversion Rate”); provided, however,
that the Maximum Conversion Rate shall be adjusted at the same time and in the
same manner in which, and for the same events for which, the Conversion Rate is
to be adjusted pursuant to this Article X.

 

(C)                                Upon surrender of Securities for conversion
in connection with a Make-Whole Fundamental Change pursuant to Section 10.01(B)(iii), the Company
shall, at its option, satisfy its conversion obligation by delivering or
paying, as the case may be, 

 

75

 

shares of Common
Stock (together with cash in lieu of any fractional share), cash or a
combination of cash and shares of Common Stock (together with cash in lieu of
any fractional share) in accordance with Section 10.02;
provided, however, that if at the effective time of
a Common Stock Change Make-Whole Fundamental Change the consideration for the
Common Stock is comprised entirely of cash, for any conversion of Securities
following the Effective Date of such Common Stock Change Make-Whole Fundamental
Change, the conversion obligation shall be calculated based solely on the
Applicable Price for the transaction and shall be deemed to be an amount equal
to, per $1,000 principal amount of converted Securities, the applicable
Conversion Rate (including any Make-Whole Applicable Increase), multiplied by such Applicable
Price.  In such event, the cash due upon conversion shall be
determined and paid to Holders in cash on the third Business Day following the
Conversion Date.

 

(D)                               As used herein, “Applicable Price”  shall have the
following meaning with respect to a Make-Whole Fundamental Change: (a) if
such Make-Whole Fundamental Change constitutes a Common Stock Change Make-Whole
Fundamental Change and the consideration (excluding cash payments for
fractional shares or pursuant to statutory appraisal rights) for the Common
Stock in such Common Stock Change Make-Whole Fundamental Change consists solely
of cash, then the “Applicable Price” with respect to such Common Stock Change
Make-Whole Fundamental Change shall be equal to the cash amount paid per share
of Common Stock in such Common Stock Change Make-Whole Fundamental Change and (b) in
all other circumstances, the “Applicable Price” with respect to such Make-Whole
Fundamental Change shall be equal to the average of the Last Reported Sale
Prices per share of Common Stock for the five (5) consecutive Trading Days
immediately preceding, but excluding, the Effective Date of such Make-Whole
Fundamental Change, which average shall be appropriately adjusted by the Board of
Directors, in its good faith determination, to account for any adjustment,
pursuant hereto, to the Conversion Rate that shall become effective, or any
event requiring, pursuant hereto, an adjustment to the Conversion Rate where
the Ex Date of such event occurs, at any time during such five (5) consecutive
Trading Days.

 

(E)                                 At least thirty (30) Business Days before
the anticipated Effective Date of each proposed Make-Whole Fundamental Change,
the Company shall mail to each Holder, in accordance with Section 13.02, written notice of, and
shall publicly announce, through a reputable national newswire service, the
anticipated Effective Date of such proposed Make-Whole Fundamental
Change.  Each such notice and announcement shall also state that, in
connection with such Make-Whole Fundamental Change, the Company shall increase,
in accordance herewith, the Conversion Rate applicable to Securities entitled
as provided herein to such increase (along with a description of how such
increase shall be calculated and the time periods during which Securities must
be surrendered in order to be entitled to such increase).  No later
than the third Business Day after the Effective Date of each Make-Whole
Fundamental Change, the Company shall mail, in accordance with Section 13.02, written notice of, and
shall publicly announce, through a reputable national newswire service, such
Effective Date and the Make-Whole Applicable Increase applicable to such
Make-Whole Fundamental Change.

 

76

 

(F)           For
avoidance of doubt, the provisions of this Section 10.16
shall not affect or diminish the Company’s obligations, if any, pursuant to Article III with respect to a
Make-Whole Fundamental Change.

 

(G)           Nothing
in this Section 10.16 shall
prevent an adjustment to the Conversion Rate pursuant to Section 10.06 in respect of a
Make-Whole Fundamental Change.

 

XI.           CONCERNING THE
HOLDERS

 

11.01                   ACTION BY HOLDERS.

 

Whenever
in this Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Securities may take any action (including the
making of any demand or request, the giving of any notice, consent or waiver or
the taking of any other action), the fact that at the time of taking any such
action, the Holders of such specified percentage have joined therein may be
evidenced (i) by any instrument or any number of instruments of similar
tenor executed by Holders in person or by agent or proxy appointed in writing, (ii) by
the record of the Holders voting in favor thereof at any meeting of Holders
duly called and held in accordance with the provisions of Article XII or (iii) by a combination
of such instrument or instruments and any such record of such a meeting of
Holders.  Whenever the Company or the Trustee solicits the taking of
any action by the Holders of the Securities, the Company or the Trustee may
fix, but shall not be required to, in advance of such solicitation, a date as
the record date for determining Holders entitled to take such
action.  The record date if one is selected shall be not more than
fifteen (15) days prior to the date of commencement of solicitation of such
action.

 

11.02                   PROOF OF EXECUTION BY
HOLDERS.

 

Subject
to the provisions of Section 7.01,
Section 7.02 and Section 12.05, proof of the execution
of any instrument by a Holder or its agent or proxy shall be sufficient if made
in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee.  The holding of Securities shall be proved by the security
register of the Registrar or by a certificate of the Registrar.  The
record of any Holders’ meeting shall be proved in the manner provided in Section 12.06.

 

11.03                   PERSONS DEEMED
ABSOLUTE OWNERS.

 

The
Company, the Trustee, any authenticating agent, any Paying Agent, any
Conversion Agent and any Registrar may deem the Person in whose name a Security
shall be registered upon the security register of the Registrar to be, and may
treat it as, the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by any Person other than the Company or any Registrar) for the
purpose of receiving payment of or on account of the principal of and (subject
to Section 2.12 and Section 4.01) accrued and unpaid
interest on such Security, for conversion of such Security and for all other

 

77

 

purposes;
and neither the Company nor the Trustee nor any authenticating agent nor any
Paying Agent nor any Conversion Agent nor any Registrar shall be affected by
any notice to the contrary.  All such payments so made to any Holder
for the time being, or upon its order, shall be valid, and, to the extent of
the sum or sums so paid, effectual to satisfy and discharge the liability for
monies payable upon any such Security.  Notwithstanding anything to
the contrary in this Indenture or the Securities following an Event of Default,
any Holder of a beneficial interest in a Global Security may directly enforce
against the Company, without the consent, solicitation, proxy, authorization or
any other action of the Depositary or any other Person, such Holder’s right to
exchange such beneficial interest for a Physical Security in accordance with
the provisions of this Indenture.

 

XII.         HOLDERS’ MEETINGS.

 

12.01                   PURPOSE OF MEETINGS.

 

A
meeting of Holders may be called at any time and from time to time pursuant to
the provisions of this Article XII
for any of the following purposes:

 

(A)          to
give any notice to the Company or to the Trustee or to give any directions to
the Trustee permitted under this Indenture, or to consent to the waiving of any
Default or Event of Default hereunder and its consequences, or to take any other
action authorized to be taken by Holders pursuant to any of the provisions of Article VI;

 

(B)           to
remove the Trustee and nominate a successor trustee pursuant to the provisions
of Article VII;

 

(C)           to
consent to the execution of an indenture or indentures supplemental hereto
pursuant to the provisions of Section 9.02;
or

 

(D)          to
take any other action authorized to be taken by or on behalf of the Holders of
any specified aggregate principal amount of the Securities under any other
provision of this Indenture or under applicable law.

 

12.02                   CALL OF MEETINGS BY
TRUSTEE.

 

The
Trustee may at any time call a meeting of Holders to take any action specified
in Section 12.01, to be held
at such time and at such place as the Trustee shall
determine.  Notice of every meeting of the Holders, setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting and the establishment of any record date pursuant to Section 11.01, shall be mailed to
Holders of such Securities at their addresses as they shall appear on the
security register of the Registrar.  Such
notice shall also be mailed to the Company.  Such notices shall be
mailed not less than twenty (20) nor more than ninety (90) days prior to the
date fixed for the meeting.

 

Any
meeting of Holders shall be valid without notice if the Holders of all
Securities then outstanding are present in person or by proxy or if notice is
waived before

 

78

 

or
after the meeting by the Holders of all Securities outstanding, and if the
Company and the Trustee are either present by duly authorized representatives
or have, before or after the meeting, waived notice.

 

12.03                   CALL OF MEETINGS BY
COMPANY OR HOLDERS.

 

In
case at any time the Company, pursuant to a Board Resolution, or the Holders of
at least 10% in aggregate principal amount of the Securities then outstanding,
shall have requested the Trustee to call a meeting of Holders, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within twenty (20) days after receipt of such request, then the Company or such
Holders may determine the time and the place for such meeting and may call such
meeting to take any action authorized in Section 12.01,
by mailing notice thereof as provided in Section 12.02.

 

12.04                   QUALIFICATIONS FOR
VOTING.

 

To
be entitled to vote at any meeting of Holders a Person shall (a) be a
Holder of one or more Securities on the record date pertaining to such meeting
or (b) be a Person appointed by an instrument in writing as proxy by a
Holder of one or more Securities on the record date pertaining to such
meeting.  The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.

 

12.05                   REGULATIONS.

 

Notwithstanding
any other provision of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Holders, in regard to
proof of the holding of Securities and of the appointment of proxies, and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall think
fit.

 

The
Trustee shall, by an instrument in writing, appoint a temporary chairman of the
meeting, unless the meeting shall have been called by the Company or by Holders
as provided in Section 12.03,
in which case the Company or the Holders calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman.  A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of
the Holders of a majority in principal amount of the Securities represented at
the meeting and entitled to vote at the meeting.

 

Subject
to the provisions of Section 2.09,
at any meeting of Holders each Holder or proxyholder shall be entitled to one
vote for each $1,000 principal amount of Securities held or represented by such
Holder or proxyholder, as the case may be; provided,
however, that no vote shall be
cast or counted at any meeting in respect of any Security challenged as not
outstanding and ruled by the chairman of the meeting to be not
outstanding.  The chairman of the meeting shall have no right to vote
other than by virtue

 

79

 

of
Securities held by it or instruments in writing as aforesaid duly designating
it as the proxy to vote on behalf of other Holders.  Any meeting of
Holders duly called pursuant to the provisions of Section 12.02 or Section 12.03
may be adjourned from time to time by the Holders of a majority of the
aggregate principal amount of Securities represented at the meeting, whether or
not constituting a quorum, and the meeting may be held as so adjourned without
further notice.

 

12.06                   VOTING.

 

The
vote upon any resolution submitted to any meeting of Holders shall be by
written ballot on which shall be subscribed the signatures of the Holders or of
their representatives by proxy and the outstanding principal amount of the
Securities held or represented by them.  The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports in duplicate
of all votes cast at the meeting.  A record in duplicate of the
proceedings of each meeting of Holders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more Persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in Section 12.02.  The record
shall show the principal amount of the Securities voting in favor of or against
any resolution.  The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee
to be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.

 

Any
record so signed and verified shall be conclusive evidence of the matters therein
stated.

 

12.07                   NO DELAY OF RIGHTS BY
MEETING.

 

Nothing
contained in this Article XII
shall be deemed or construed to authorize or permit, by reason of any call of a
meeting of Holders or any rights expressly or impliedly conferred hereunder to
make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Holders under any of the
provisions of this Indenture or of the Securities.

 

XIII.        MISCELLANEOUS

 

13.01                   [RESERVED]

 

13.02                   NOTICES.

 

Any
notice or communication by the Company or the Trustee to the other shall be
deemed to be duly given if made in writing and delivered:

 

80

 

(i)            by hand (in which case such notice
shall be effective upon delivery);

 

(ii)           by facsimile (in which case such
notice shall be effective upon receipt of confirmation of good transmission
thereof); or

 

(iii)          by overnight delivery by a nationally
recognized courier service (in which case such notice shall be effective on the
Business Day immediately after being deposited with such courier service),

 

in each case to the recipient party’s address or
facsimile number, as applicable, set forth in this Section 13.02.  The Company or the Trustee by
notice to the other may designate additional or different addresses or
facsimile numbers for subsequent notices or communications.

 

Any
notice or communication to a Holder shall be mailed to its address shown on the
register kept by the Registrar.  Failure to mail a notice or communication
to a Holder or any defect in it shall not affect its sufficiency with respect
to other Holders.

 

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

 

If
the Company mails a notice or communication to Holders, it shall mail a copy to
the Trustee and each Securities Agent at the same time.  If the
Trustee or the Securities Agent is required, pursuant to the express terms of
this Indenture or the Securities, to mail a notice or communication to Holders,
the Trustee or the Securities Agent, as the case may be, shall also mail a copy
of such notice or communication to the Company.

 

All
notices or communications shall be in writing.

 

The Company’s address is:

 

BPZ Resources, Inc.

Two Westlake

580 Westlake Park Blvd., Suite 525

Houston, Texas 77079

Attention: Ed Caminos

Facsimile: (281) 556-6377

 

with a copy to:

 

Mark N. Coffin

Seyfarth Shaw LLP

700 Louisiana, Suite 3700

Houston, Texas 77002

Facsimile: (713) 225-2340

 

81

 

The Trustee’s address is:

 

Wells Fargo Bank, National Association

1445 Ross Avenue, Second Floor,

MAC T5303-022, Dallas, Texas 75202,

Attention: Corporate Trust Services

Facsimile: (214) 777-4086

 

13.03                   COMMUNICATION BY
HOLDERS WITH OTHER HOLDERS.

 

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

 

13.04                   CERTIFICATE AND
OPINION AS TO CONDITIONS PRECEDENT.

 

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

 

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

 

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

 

Each
signatory to an Officer’s Certificate or an Opinion of Counsel may (if so
stated) rely, effectively, upon an Opinion of Counsel as to legal matters and
an Officer’s Certificate or certificates of public officials as to factual
matters if such signatory reasonably and in good faith believes in the accuracy of the
document relied upon.

 

13.05                   STATEMENTS REQUIRED
IN CERTIFICATE OR OPINION.

 

Each
Officer’s Certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

 

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

 

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

 

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

 

82

 

(iv)          a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.

 

13.06                   RULES BY TRUSTEE AND
AGENTS.

 

The Registrar, Paying Agent or Conversion Agent may make reasonable rules and
set reasonable requirements for their respective functions.

 

13.07                   LEGAL HOLIDAYS.

 

A
“Legal Holiday” is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the City of New York, in the State of New York, or in the state in which the
Corporate Trust Office is located.  If a payment date is a Legal
Holiday, payment may be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on that payment for the intervening
period.

 

A
“Business Day” is a day other than
a Legal Holiday.

 

13.08                   DUPLICATE ORIGINALS.

 

The
parties may sign any number of copies of this Indenture.  Each signed
copy shall be an original, but all of them together represent the same
agreement.  Delivery of an executed counterpart by facsimile or other
electronic means (PDF, for example) shall be effective as delivery of a
manually executed counterpart thereof.

 

13.09                   GOVERNING LAW.

 

THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW, SHALL GOVERN THIS INDENTURE AND THE SECURITIES AND ANY CLAIM, CONTROVERSY
OR DISPUTE ARISING UNDER, OR RELATING TO, THIS INDENTURE OR THE SECURITIES.

 

13.10                   NO ADVERSE
INTERPRETATION OF OTHER AGREEMENTS.

 

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

 

13.11                   SUCCESSORS.

 

All
agreements of the Company in this Indenture and the Securities shall bind its
successors and assigns.  All agreements of the Trustee in this
Indenture shall bind its successors.

 

13.12                   SEPARABILITY.

 

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

 

83

 

shall
not in any way be affected or impaired thereby and a Holder shall have no claim
therefor against any party hereto.

 

13.13                   TABLE OF CONTENTS,
HEADINGS, ETC.

 

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

 

13.14                   CALCULATIONS IN
RESPECT OF THE SECURITIES.

 

The
Company and its agents shall make all calculations under this Indenture and the
Securities.  These calculations include, but are not limited to,
determinations of the Trading Price of the Securities, whether the Last
Reported Sale Price of Common Stock exceeds the Conversion Trigger Price as
specified in Section 10.01(B)(i),
the Volume-Weighted Average Price, the Daily Conversion Value, the Daily
Settlement Amount and the Last Reported Sale Price of the Common Stock, the
amount of cash and/or number of shares, if any payable or deliverable upon
conversion of the Securities and amounts of interest (including Additional
Interest) payable on the Securities.  The Company and its agents
shall make all of these calculations in good faith, and, absent manifest error,
such calculations shall be final and binding on all Holders.  The
Company shall provide a copy of such calculations to the Trustee as required
hereunder, and, absent such manifest error, the Trustee shall be entitled to
conclusively rely on the accuracy of any such calculation without independent
verification.

 

13.15                   NO PERSONAL LIABILITY
OF DIRECTORS, OFFICERS, EMPLOYEES OR SHAREHOLDERS.

 

None
of the Company’s past, present or future directors, officers, employees or
shareholders, as such, shall have any liability for any of the Company’s
obligations under this Indenture or the Securities or for any claim based on,
or in respect or by reason of, such obligations or their
creation.  By accepting a Security, each holder waives and releases
all such liability.  This waiver and release is part of the
consideration for the issue of the Securities.

 

13.16                   FORCE MAJEURE.

 

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

 

84

 

[Remainder of Page Intentionally Left Blank]

 

 

85

 

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

 

 

	
   

  	
  BPZ RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward G. Caminos

  
	
   

  	
   

  	
  Name: Edward G. Caminos

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick T. Giordano

  
	
   

  	
   

  	
  Name: Patrick T. Giordano

  
	
   

  	
   

  	
  Title:Vice President

  

 

1

 

EXHIBIT A

 

[Face of Security]

 

BPZ
RESOURCES, INC.

 

Certificate No.     

 

[INSERT PRIVATE PLACEMENT
LEGEND (SECURITIES) AND GLOBAL SECURITY LEGEND AS REQUIRED]

 

6.50% Convertible Senior
Notes due 2015 (the “Securities”)

 

CUSIP No. 055639AA6

 

BPZ
Resources, Inc., a Texas corporation (the “Company,” which term includes any successor corporation or
other entity under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to Cede & Co., or its registered
assigns, the principal sum as set forth in the “Schedule of Exchanges of
Interests in the Global Security” attached hereto, which amount, taken together
with the principal amounts of all other outstanding Securities, shall not,
unless permitted by the Indenture, exceed 140,000,000 dollars ($140,000,000) in
aggregate at any time, in accordance with the rules and procedures of the
Depositary, on March 1, 2015, and to
pay interest thereon, as provided on the reverse hereof, until the principal
and any unpaid and accrued interest are paid or duly provided for.

 

Interest
Payment Dates: March 1 and September 1, with the first payment to be
made on September 1, 2010.

 

Record
Dates: February 15 and August 15.

 

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

 

1

 

IN WITNESS WHEREOF, BPZ Resources, Inc. has caused
this instrument to be duly signed.

 

 

	
   

  	
  BPZ RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

Dated: February 8, 2010

 

1

 

	
  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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: February 8, 2010

  	
   

  

 

1

 

[REVERSE OF SECURITY]

 

BPZ
RESOURCES, INC.

 

6.50%  Convertible
Senior Notes due 2015

 

1.             Interest.  BPZ
Resources, Inc., a Texas corporation (the “Company”),
promises to pay interest on the principal amount of this Security at the rate per annum shown above.  The
Company will pay interest, payable semi-annually in arrears, on March 1
and September 1 of each year, with the first payment to be made on September 1,
2010.  Interest on the Securities will accrue on the principal amount
from, and including, the most recent date to which interest has been paid or
provided for or, if no interest has been paid, from, and including, February 8,
2010, in each case to, but excluding, the next Interest Payment Date or
Maturity Date, as the case may be.  Interest will be computed on the
basis of a 360-day year of twelve 30-day months.  The Company shall
pay, in cash, interest on any overdue amount (including, to the extent
permitted by applicable law, overdue interest) at the rate borne by the
Securities.  In certain circumstances, Additional Interest will be
payable in accordance with Section 4.09(A),
Section 4.09(B) and Section 6.02(B) of the Indenture
and any reference to “interest” shall be deemed to include any such Additional
Interest.

 

2.             Maturity.  The
Securities will mature on March 1, 2015.

 

3.             Method
of Payment.  Except as provided in the Indenture (as
defined below), the Company will pay interest on the Securities to the Persons
who are Holders of record of Securities at the close of business on the Record
Date set forth on the face of this Security immediately preceding the
applicable Interest Payment Date.  Holders must surrender Securities
to a Paying Agent to collect the principal amount plus, if applicable, accrued
and unpaid interest, if any, or the Fundamental Change Repurchase Price,
payable as herein provided on the Maturity Date or Fundamental Change
Repurchase Date, as applicable.  The Company will pay, in money of
the United States that at the time of payment is legal tender for payment of
public and private debts, all amounts due in cash with respect to the
Securities, which amounts shall be paid (A) in the case this Security is a
Global Security, by wire transfer of immediately available funds to the account
designated by the Depositary or its nominee; (B) in the case this Security
is a Physical Security held by a Holder of more than five million dollars
($5,000,000) in aggregate principal amount of Securities, by wire transfer of
immediately available funds to the account in the United States specified by
such Holder or, if such Holder does not specify an account, by mailing a check
to the address of such Holder set forth in the register of the Registrar; and (C) in
the case this Security is a Physical Security held by a Holder of five million
dollars ($5,000,000) or less in aggregate principal amount of Securities, by
mailing a check to the address of such Holder set forth in the register of the Registrar.

 

4.             Paying
Agent, Registrar, Conversion Agent.  Initially, Wells
Fargo Bank, National Association (the “Trustee”)
will act as Paying Agent, Registrar, Bid 

 

1

 

Solicitation
Agent and Conversion Agent.  The Company may change any Paying Agent,
Registrar, Bid Solicitation Agent or Conversion Agent without prior notice.

 

5.             Indenture.  The
Company issued the Securities under an Indenture dated as of February 8,
2010 (the “Indenture”) between the
Company and the Trustee.  The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S. Code §§77aaa-77bbbb) (the “TIA”) as amended and in effect from time to
time.  The Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of such terms.  The Securities are general unsecured senior
obligations of the Company limited to $140,000,000 aggregate principal amount,
except as otherwise provided in the Indenture (except for Securities issued in
substitution for destroyed, mutilated, lost or stolen Securities).  Terms used herein without definition and
which are defined in the Indenture have the meanings assigned to them in the
Indenture.  In the event of any inconsistency between the terms of
this Security and the terms of the Indenture, the terms of the Indenture shall
control.

 

6.             Redemption.  The Securities are not redeemable by the
Company prior to February 3, 2013.  On or after February 3,
2013, the Securities may be redeemed in whole or in part at the option of the
Company if the Last Reported Sale Price of the Company’s Common Stock has been
greater than 175% of the Conversion Price then in effect for at least 20
Trading Days during any 30 consecutive Trading Days, ending within five (5) Trading
Days prior to the day a notice of redemption is mailed.  The redemption price at which the Securities
are redeemable (the “Redemption Price”) shall be equal to (i) 100% of the
principal of Securities to be redeemed, plus (ii) accrued and unpaid
interest (including Additional Interest), if any, to, but excluding, the date
on which the redemption is made (the “Redemption
Date”), plus (iii) the Make-Whole Payment; provided, however, that if the Redemption
Date is after a Regular Record Date and prior to the Interest Payment Date to
which it relates, then the accrued and unpaid interest, if any, to, but
excluding, the Redemption Date, shall be paid on such Interest Payment Date to
the holders of record of such Securities on the applicable Regular Record Date
instead of the holders surrendering such Securities for redemption on the
Redemption Date.  The Trustee shall have no duty to determine or calculate
the Make-Whole Payment, which shall be determined by the Company in accordance
with the provisions of this Indenture, and the Trustee shall not be under any
responsibility to determine the correctness of any such determination and/or
calculation and may conclusively rely on the correctness thereof.

 

7.             Repurchase
at Option of Holder Upon a Fundamental Change. Subject to the terms
and conditions of the Indenture, in the event of a Fundamental Change, each
Holder of the Securities shall have the right, at the Holder’s option, to require
the Company to repurchase such Holder’s Securities including any portion
thereof which is $2,000 in principal amount or any integral multiple of $1,000
on a date selected by the Company (the “Fundamental
Change Repurchase Date”), which date is no later than thirty five
(35) days, nor earlier than twenty (20) days, after the date on which notice of
such Fundamental Change is mailed in accordance with the Indenture, at a price
payable in cash equal to one hundred percent (100%) of the principal amount of 

 

2

 

such
Security, plus accrued and unpaid interest to, but excluding, the Fundamental
Change Repurchase Date (the “Fundamental
Change Repurchase Price”); provided,
however, that if such Fundamental
Change Repurchase Date is after a Record Date for the payment of an installment
of interest and on or before the related Interest Payment Date, then the full
amount of accrued and unpaid interest, if any, to, but excluding, such Interest
Payment Date will be paid on such Interest Payment Date to the Holder of record
of such Securities at the close of business on such Record Date (without any
surrender of such Securities by such Holder), and the Fundamental Change
Repurchase Price shall not include any accrued but unpaid interest.

 

8.             Conversion.

 

Upon the occurrence of certain events and during
certain periods, the Securities shall be convertible into cash, shares of
Common Stock, or a combination thereof in accordance with Article X of the
Indenture.  To convert a Security, a Holder must satisfy the
requirements of Section 10.02(A) of
the Indenture.  A Holder may convert a portion of a Security if the
portion is $2,000 principal amount or an integral multiple of $1,000.

 

Notwithstanding anything herein to the contrary, no
Security may be converted after the close of business on the Business Day
immediately preceding the Maturity Date.

 

Upon conversion of a Security, the Holder thereof
shall be entitled to receive the cash, shares of Common Stock, or a combination
thereof, payable upon conversion in accordance with Article X of the Indenture.

 

The initial Conversion Rate is 148.3856 shares of
Common Stock per $1,000 principal amount of Securities (which results in an
effective initial Conversion Price of approximately $6.74 per share) subject to adjustment in the
event of certain circumstances as specified in the Indenture.  The
Company will deliver cash in lieu of any fractional share.

 

The Conversion Rate applicable to each Security that
is surrendered for conversion, in accordance with the Securities and Article X of the Indenture, at any
time during the Make-Whole Conversion Period with respect to a Make-Whole
Fundamental Change shall be increased to an amount equal to the Conversion Rate
that would, but for Section 10.16 of
the Indenture, otherwise apply to such Security pursuant to Article X of the Indenture, plus an
amount equal to the Make-Whole Applicable Increase.

 

9.             Denominations, Transfer, Exchange.  The
Securities are in registered form, without coupons, in
denominations of $2,000 principal amount and integral multiples of
$1,000.  The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture.  The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents.  No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge that
may be imposed in connection with certain transfers or exchanges as set forth
in the Indenture.  The Company or the Trustee, as the case may be, 

 

3

 

shall not be required to
register the transfer of or exchange any Security for which a Purchase Notice
has been delivered, and not withdrawn, in accordance with the Indenture, except
the unrepurchased portion of Securities being repurchased in part.

 

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

 

11.           Merger
or Consolidation.  The Company shall not consolidate with,
or merge with or into, or sell, transfer, lease, convey or otherwise dispose of
all or substantially all of the consolidated property or assets of the Company
to, another Person, whether in a single transaction or series of related
transactions, unless (i) the Company is the continuing corporation or such
other Person is a corporation organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia and such other
Person assumes by supplemental indenture all the obligations of the Company
under the Securities and the Indenture and (ii) immediately after giving
effect to the transaction or series of transactions, no Default or Event of
Default shall exist, as set forth in Article V
of the Indenture.

 

12.           Amendments,
Supplements and Waivers.  Subject to certain exceptions,
the Indenture or the Securities may be amended or supplemented with the consent
of the Holders of at least a majority in aggregate principal amount of the
outstanding Securities, and certain existing Defaults or Events of Default may
be waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding.  In accordance with the
terms of the Indenture, the Company, with the consent of the Trustee, may amend
or supplement this Indenture or the Securities without notice to or the consent
of any Securityholder: (i) to comply with Section 5.01 or Section 10.13
of the Indenture; (ii) to secure the obligations of the Company in respect
of the Securities; (iii) to evidence and provide for the appointment of a
successor Trustee in accordance with Section 7.08
of the Indenture; (iv) to comply with the provisions of any clearing
agency, clearing corporation or clearing system, or the requirements of the
Trustee or the Registrar, relating to transfers and exchanges of the Securities
pursuant to the Indenture; (v) to add to the covenants of the Company
described in the Indenture for the benefit of Securityholders or to surrender
any right or power conferred upon the Company; or (vi) to make provisions
with respect to adjustments to the Conversion Rate as required by the Indenture
or to increase the Conversion Rate in accordance with the
Indenture.  In addition, the Company and the Trustee may enter into a
supplemental indenture without the consent of Holders of the Securities to (i) cure
any ambiguity, defect, omission or inconsistency in the Indenture in a manner
that does not, individually or in the aggregate with all other changes,
adversely affect the rights of any Holder in any respect or (ii) conform
the Indenture or the Securities to the description thereof contained in the
Offering Memorandum under the caption “Description of notes,” as supplemented
by the related pricing term sheet.

 

13.           Defaults
and Remedies.

 

If an Event of Default (excluding an Event of Default
specified in Section 6.01(ix) or
(x) of the Indenture with
respect to the Company (but including an Event of Default specified 

 

4

 

in Section 6.01(ix) or (x) of the Indenture solely with
respect to a Significant Subsidiary of the Company or any group of Subsidiaries
that in the aggregate would constitute a Significant Subsidiary of the
Company)) occurs and is continuing, the Trustee by notice to the Company or the
Holders of at least twenty five percent (25%) in principal amount of the
Securities then outstanding by notice to the Company and the Trustee may
declare the Securities to be due and payable.  Upon such declaration,
the principal of, and any accrued and unpaid interest on, all Securities shall
be due and payable immediately.  If an Event of Default specified in Section 6.01(ix) or (x) of the Indenture with respect to the
Company (excluding, for purposes of this sentence, an Event of Default
specified in Section 6.01(ix) or
(x) of the Indenture solely with
respect to a Significant Subsidiary of the Company or any group of Subsidiaries
that in the aggregate would constitute a Significant Subsidiary of the Company)
occurs, the principal of, and accrued and unpaid interest on, all the
Securities shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.  Subject to certain
exceptions, the Holders of a majority in aggregate principal amount of the
Securities then outstanding by written notice to the Trustee may rescind or
annul an acceleration and its consequences if (A) the rescission would not
conflict with any order or decree, (B) all existing Events of Default,
except the nonpayment of principal or interest that has become due solely
because of the acceleration, have been cured or waived and (C) all amounts
due to the Trustee under Section 7.07
of the Indenture have been paid.

 

If a Default or Event of Default occurs and is
continuing as to which the Trustee has received written notice pursuant to the
provisions of the Indenture, or as to which a Responsible Officer of the
Trustee shall have actual knowledge, the Trustee shall mail to each Holder a
notice of the Default or Event of Default within thirty (30) days after it
occurs unless such Default or Event of Default has been cured or waived.  Except
in the case of a Default or Event of Default in payment or delivery of any
amounts due (including principal, interest, the Fundamental Change Repurchase
Price or the consideration due upon conversion) with respect to any Security,
the Trustee may withhold the notice if, and so long as it in good faith
determines that, withholding the notice is in the best interests of
Holders.  The Company must deliver to the Trustee an annual
compliance certificate.

 

14.           No
Registration Rights.  The Holders are not entitled to
registration rights.

 

15.           Trustee
Dealings with the Company.  The Trustee under the
Indenture, or any banking institution serving as successor Trustee thereunder,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for, the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.

 

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

 

5

 

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

 

THE
COMPANY WILL FURNISH TO ANY HOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE A
COPY OF THE INDENTURE.  REQUESTS MAY BE MADE TO:

 

BPZ Resources, Inc.

Two Westlake

580 Westlake Park Blvd., Suite 525

Houston, Texas 77079

Attention: Ed Caminos

 

6

 

FORM OF
ASSIGNMENT

 

	
  I
  or we assign to

  
	
   

  
	
  PLEASE
  INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

  
	
   

  
	
   

  
	
   

  	
   

  
	
  (please
  print or type name and address)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  the
  within Security and all rights thereunder, and hereby irrevocably constitute
  and appoint

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  Attorney
  to transfer the Security on the books of the Company with full power of
  substitution in the premises.

  
	
   

  
	
   

  
	
   

  
	
  Dated:

  	
  NOTICE:  The
  signature on this assignment must correspond with the name as it appears upon
  the face of the within Security in every particular without alteration or
  enlargement or any change whatsoever and be guaranteed by a guarantor
  institution participating in the Securities Transfer Agents Medallion Program
  or in such other guarantee program acceptable to the Registrar.

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  

 

7

 

In connection with any
transfer of this Security occurring prior to the Resale Restriction Termination
Date, the undersigned confirms that it is making, and it has not utilized any
general solicitation or general advertising in connection with, the transfer:

 

[Check
One]

 

	
  (1)

  	
  o

  	
  to BPZ
  Resources, Inc. or any Subsidiary thereof; or

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  o

  	
  pursuant to a
  registration statement which has become effective under the Securities Act of
  1933, as amended (the “Securities Act”); or

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  o

  	
  to a Qualified
  Institutional Buyer in compliance with Rule 144A under the Securities
  Act; or

  
	
   

  	
   

  	
   

  
	
  (4)

  	
  o

  	
  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.

  

 

Unless one of the items (1) through
(4) is checked, the Registrar will refuse to register any of the
Securities evidenced by this certificate in the name of any person other than
the registered Holder thereof; provided,
however, that if item (4) is
checked, the Company, the transfer agent or the Registrar may require, prior to
registering any such transfer of the Securities, in their sole discretion, such
written legal opinions, certifications and other evidence as the Registrar or
the Company have reasonably requested to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as
amended.  If item (3) is checked, the purchaser must complete
the certification below.

 

If none of the foregoing
items are checked, the Trustee or Registrar shall not be obligated to register
this Security in the name of any person other than the Holder hereof unless and
until the conditions to any such transfer of registration set forth herein and
in the Indenture shall have been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  

 

8

 

TO BE COMPLETED BY
PURCHASER IF (3) ABOVE IS CHECKED

 

The undersigned
represents and warrants that it is purchasing this Security for its own account
or an account with respect to which it exercises sole investment discretion and
that it and any such account is a “qualified institutional buyer” within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A and acknowledges that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:  To
  be executed by an executive officer

  

 

9

 

CONVERSION
NOTICE

 

To convert this Security
in accordance with the Indenture, check the box:  o

 

To convert only part of
this Security, state the principal amount to be converted (must be in multiples
of $1,000):

 

$

 

If you want the stock
certificate representing the Common Stock, if any, issuable upon conversion
made out in another person’s name, fill in the form below:

 

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

 

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

 

	
  Date:

  	
   

  	
   

  	
  Signature(s):

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature(s) guaranteed
  by:

  	
   

  	
   

  
	
   

  	
   

  	
  (All signatures
  must be guaranteed by a guarantor institution participating in the Securities
  Transfer Agents Medallion Program or in such other guarantee program
  acceptable to the Trustee.)

  

 

10

 

PURCHASE
NOTICE

 

Certificate No. of
Security:

 

If you want to
elect to have this Security purchased by the Company pursuant to Section 3.07 of the Indenture, check
the box:

 

If you want to
elect to have only part of this Security purchased by the Company pursuant to Section 3.07 of the Indenture, state
the principal amount to be so purchased by the Company:

 

$

 

(in an
integral multiple of $1,000)

 

	
  Date:

  	
   

  	
   

  	
  Signature(s):  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature(s) guaranteed
  by:

  	
   

  	
  (All
  signatures must be guaranteed by a guarantor institution participating in the
  Securities Transfer Agents Medallion Program or in such other guarantee
  program acceptable to the Trustee.)

  

 

11

 

SCHEDULE A(1)

 

SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY

 

BPZ
Resources, Inc.

 

6.50%
Convertible Senior Notes due 2015

 

The initial
principal amount of this Global Security is               
DOLLARS
($[                  ]).  The
following increases or decreases in this Global Security have been made:

 

	
  Date
  of Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount

  of this Global Security

  	
   

  	
  Amount of increase in

  Principal Amount of

  this Global Security

  	
   

  	
  Principal Amount of

  this Global Security

  following such

  decrease or increase

  	
   

  	
  Signature of

  authorized signatory of

  Trustee or Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1) This is included
for Global Securities.

 

12

 

EXHIBIT
B-1A

 

FORM OF
PRIVATE PLACEMENT LEGEND (SECURITIES)

 

THIS SECURITY AND ANY SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

 

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIRER AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER
THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT ONLY:

 

(A)                                   TO THE BPZ RESOURCES, INC. OR ANY
SUBSIDIARY THEREOF; OR

 

(B)                                     PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT; OR

 

(C)                                     TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR

 

(D)                                    PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (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 CLAUSE (D) ABOVE, THE COMPANY, THE TRUSTEE AND THE
TRANSFER AGENT 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.

 

13

 

EXHIBIT
B-1B

 

FORM OF
PRIVATE PLACEMENT LEGEND (COMMON STOCK)

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

 

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIRER AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER
THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED
BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT ONLY:

 

(A)                                   TO THE BPZ
RESOURCES, INC. OR ANY SUBSIDIARY THEREOF; OR

 

(B)                                     PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT;
OR

 

(C)                                     TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT; OR

 

(D)                                    PURSUANT TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(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 CLAUSE (D) ABOVE, THE COMPANY, THE TRUSTEE AND THE
TRANSFER AGENT 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.

 

14

 

EXHIBIT
B-2

 

FORM OF
LEGEND FOR GLOBAL SECURITY

 

Any Global
Security authenticated and delivered hereunder shall bear a legend (which would
be in addition to any other legends required in the case of a Restricted
Security) in substantially the following form:

 

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 OF A DEPOSITARY OR A
SUCCESSOR DEPOSITARY.  THIS SECURITY IS NOT EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

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

 

TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE
INDENTURE.

 

15

 

EXHIBIT
C

 

Form of
Notice of Transfer Pursuant to Registration Statement

 

BPZ Resources, Inc.

Two Westlake

580 Westlake Park Blvd.,

Suite 525

Houston, Texas 77079

Attention: Ed Caminos

Facsimile: (281) 556-6377

 

Re:                                        BPZ Resources, Inc. (the “Company”) 6.50% Convertible Senior Notes
due 2015 

(the “Securities”)

 

Ladies and Gentlemen:

 

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

 

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

 

	
   

  	
  Very truly yours,  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name)

  

 

16

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