Document:

`Exhibit
4.2

 

NEW PLAN
EXCEL REALTY TRUST, INC.

 

OFFICERS’ CERTIFICATE
PURSUANT TO

SECTIONS 301 AND 303 OF
THE INDENTURE

 

Pursuant
to Sections 301 and 303 of the Indenture, dated as of February 3, 1999
(the “Indenture”), by and among
New Plan Excel Realty Trust, Inc., a Maryland corporation (the “Company”), New Plan Realty Trust and U.S.
Bank Trust National Association (as successor to State Street Bank and Trust
Company), as trustee (the “Trustee”),
John B. Roche and Steven F. Siegel, officers of the Company, do hereby certify
that:

Article I.
Authorization.  The establishment of a series of
Securities of the Company has been approved and authorized in accordance with
the provisions of the Indenture. The form of the Convertible Notes (as defined
below) attached hereto as Exhibit A
has been approved and authorized in accordance with the provisions of the
Indenture.

 

Article II.
Compliance with Conditions Precedent.  All covenants and conditions precedent
provided for in the Indenture relating to the establishment of a series of
Securities have been complied with.

 

Article III.
Definitions.  Capitalized terms used herein and not
defined herein have the meanings ascribed to such terms in the Indenture.  The following terms have the meanings set
forth below:

 

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

 

“Book-Entry Notes”
has the meaning provided in Section 4.03 hereof.

 

“Business Day”
means any day, with respect to any Convertible Note, other than a Saturday, a
Sunday or a day on which banking institutions in The City of New York are
authorized or required by law, regulation or executive order to close.

 

“Cash Settlement
Averaging Period” has the meaning provided in Section 4.12(d)(i)(1)
hereof.

 

“Common Stock”
means Common Stock, as defined in the Company’s Articles of Incorporation.

 

“Company”
has the meaning provided in the preamble hereof and any successor thereto.

 

“Company Notice”
has the meaning provided in Section 4.11(b) hereof.

 

“Company Notice
Date” has the meaning provided in Section 4.11(b) hereof.

 

“Continuing
Director” means a director who either was a member of the Company’s
Board of Directors on May 14, 2003 or who becomes a member of the Company’s
Board of Directors subsequent to that date and whose appointment or election or
nomination for election by the Company’s stockholders is duly approved by a
majority of the continuing directors on the Board of Directors of the Company
at the time of such approval, either by a specific vote or by approval of the
proxy statement issued by the Company on behalf of the Board of Directors in
which such individual is named as nominee for director.

 

“Conversion Agent”
means the office or agency designated by the Company where Convertible Notes
may be presented for conversion.

 

“Conversion Date”
has the meaning provided in Section 4.12(d) hereof.

 

“Conversion Price”
means $1,000 divided by the Conversion Rate.

 

“Conversion Rate”
has the meaning provided in Section 4.12(b) hereof.

 

 

 

 

“Convertible Notes”
has the meaning provided in Section 4.01 hereof.

 

“Definitive Notes”
has the meaning provided in Section 4.03 hereof.

 

“Depositary”
has the meaning provided in Section 4.03 hereof.

 

“Distributed Assets
or Securities” has the meaning provided in
Section 4.12(h)(iii) hereof.

 

“Event of Default”
has the meaning provided in Section 4.13 hereof.

 

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

 

“Fair Market Value”
means the amount which a willing buyer would pay a willing seller in an
arm’s-length transaction.

 

“Final Maturity”
or “Final Maturity Date” means
June 1, 2023.

 

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

 

(i)  a “person”
or “group” within the meaning of Section 13(d) of the Exchange Act other
than the Company, its subsidiaries or its or their employee benefit plans,
files a Schedule TO or any schedule, form or report under the Exchange Act
disclosing that such person or group has become the direct or indirect ultimate
“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of
the Company’s common equity representing more than 50% of the voting power of
the Company’s common equity entitled to vote generally in the election of
directors;

 

(ii)  consummation
of any share exchange, consolidation or merger of the Company or any sale,
lease or other transfer in one transaction or a series of transactions of all
or substantially all of the consolidated assets of the Company and its
subsidiaries, taken as a whole, to any person other than the Company or one or
more of its subsidiaries pursuant to which the Common Stock will be converted
into cash, securities or other property; provided,
however, that a transaction where the holders of the Company’s
common equity immediately prior to such transaction have directly or
indirectly, more than 50% of the aggregate voting power of all classes of
common equity of the continuing or surviving corporation or transferee entitled
to vote generally in the election of directors immediately after such event
shall not be a Fundamental Change; or

 

(iii)  Continuing
Directors cease to constitute at least a majority of the Company’s Board of
Directors;

 

provided, that, a Fundamental Change will not be
deemed to have occurred in respect of any of the foregoing, if either:

 

(i)  the Last Reported Sale Price of the Common
Stock for any five Trading Days within the 10 consecutive Trading Days ending
immediately before the later of the Fundamental Change or the public
announcement thereof, equals or exceeds 105% of the Conversion Price of the
Convertible Notes immediately before the Fundamental Change or the public
announcement thereof, or

 

(ii)  at least
90% of the consideration, excluding cash payments for fractional shares, in the
transaction or transactions constituting the Fundamental Change consists of shares
of capital stock traded on a national securities exchange or quoted on the
Nasdaq National Market or which will be so traded or quoted when issued or
exchanged in connection with a Fundamental Change (these securities being
referred to as “publicly traded securities”) and as a result of this
transaction or transactions the Convertible Notes become convertible into such
publicly traded securities, excluding cash payments for fractional shares.

 

For purposes of the above
paragraph the term capital stock of any person means any and all shares
(including ordinary shares or American Depositary Shares), interests,
participations, or other equivalents however designated of corporate stock or
other equity participations, including partnership interests, whether general
or 

 

 

2

 

limited, of such person and any rights (other than
debt securities convertible or exchangeable into an equity interest), warrants
or options to acquire an equity interest in such person.

 

“Fundamental Change
Purchase Date” has the meaning provided in Section 4.09 hereof.

 

“Fundamental Change
Purchase Notice” has the meaning provided in Section 4.09(b)
hereof.

 

“Fundamental Change
Purchase Price” has the meaning provided in Section 4.09 hereof.

 

“Global Notes”
or “Global Securities” has the
meaning provided in Section 4.03 hereof.

 

“Indenture”
has the meaning provided in the preamble hereof.

 

“Interest Payment
Date” has the meaning provided in Section 4.06 hereof.

 

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

 

“Market Price”
means the average of the Last Reported Sale Prices of the Common Stock for the
20 Trading Day period ending on the third Business Day prior to the applicable
Purchase Date, Fundamental Change Purchase Date or date of determination (if
the third Business Day prior to the applicable Purchase Date, Fundamental
Change Purchase Date or date of determination is a Trading Day, or if not, then
on the last Trading Day prior to such third Business Day), appropriately
adjusted to take into account the occurrence, during the period commencing on
the first of such Trading Days during such 20 Trading Day period and ending on
such Purchase Date, Fundamental Change Purchase Date or date of determination,
of any event requiring an adjustment of the applicable Conversion Rate under
this Officers’ Certificate.

 

“Principal,”
“Principal Amount” or “principal”
of a debt security, including the Convertible Notes, means the principal of the
security.

 

“Purchase Date”
has the meaning provided in Section 4.10(a) hereof.

 

“Purchase Notice”
has the meaning provided in Section 4.10(a)(i) hereof.

 

“Purchase Price”
has the meaning provided in Section 4.10(a) hereof.

 

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

 

“Redemption Date”
has the meaning provided in Section 4.08(a) hereof.

 

“Redemption Price”
has the meaning provided in Section 4.08(a) hereof.

 

“Regular Record
Date” has the meaning provided in Section 4.06 hereof.

 

 

3

 

“Trading Day”
means a day during which trading in securities generally occurs on the New York
Stock Exchange or, if the Company’s Common Stock is not listed on the New York
Stock Exchange, on the principal other national or regional securities exchange
on which the Company’s Common Stock is then listed or, if the Company’s Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if
the Company’s Common Stock is not quoted on the National Association of
Securities Dealers Automated Quotation System, on the principal other market on
which the Company’s Common Stock is then traded.

 

“Trustee”
has the meaning provided in the preamble hereof.

 

Article IV.
Terms.  The terms of the series of Securities
established pursuant to this Officers’ Certificate shall be as follows:

 

Section 4.01 Title. 
The title of the series of Securities is the “3.75% Convertible Senior
Notes due 2023” (the “Convertible Notes”).

 

Section 4.02
Aggregate Principal Amount.  The initial
aggregate principal amount of the Convertible Notes that may be authenticated
and delivered pursuant to the Indenture (except for Convertible Notes
authenticated and delivered upon registration or transfer of, or in exchange
for, or in lieu of, other Convertible Notes pursuant to Section 304, 305, 306,
906, 1107 or 1305) of the Indenture may not exceed $115,000,000.  The Convertible Notes will only be issued in
denominations of $1,000 Principal Amount and integral multiples of $1,000
Principal Amount.

 

Section 4.03
Registered Securities in Book-Entry Form.  The
Convertible Notes will be issued in book-entry form (“Book-Entry Notes”) and represented by one
or more global notes (the “Global Notes”
or “Global Securities”) in fully
registered form, without coupons. The initial depositary with respect to the
Global Notes will be The Depository Trust Company, as depositary for the
accounts of its participants (the “Depositary”).
So long as the Depositary for a Global Note, or its nominee, is the registered
owner of the Global Note, the Depositary or its nominee, as the case may be,
will be considered the sole owner or holder of the Convertible Notes in
book-entry form represented by such Global Note for all purposes under the
Indenture. Book-Entry Notes will not be exchangeable for Convertible Notes in
definitive form (“Definitive Notes”)
except as provided in Section 305 of the Indenture.

 

Section 4.04 Persons
to Whom Interest Payable.  Interest will be payable to
the Person in whose name a Convertible Note is registered at the close of
business (whether or not a Business Day) on the Regular Record Date with respect
to such Convertible Note, except for interest payable on a Convertible Note
redeemed after a Regular Record Date and prior to the next succeeding Interest
Payment Date (as to which interest will be paid, together with the principal
amount so surrendered, to the Person who surrenders such Convertible Note, or
portion thereof, for redemption).

 

Section 4.05 Stated
Maturity.  The principal amount of the Convertible
Notes will be payable on June 1, 2023 unless the Convertible Notes are
earlier repaid or converted in accordance with the Indenture and this Officers’
Certificate.

 

Section 4.06 Rate of
Interest; Interest Payment Dates; Regular Record Dates; Accrual of Interest. 
The Convertible Notes will bear interest at the rate of 3.75% per annum.
Interest on the Convertible Notes will be payable semiannually in arrears on
June 1 and December 1 of each year, commencing on December 1, 2003
(each, an “Interest Payment Date”).
The Regular Record Date shall be May 15 or November 15, as the case may be
(whether or not a Business Day) immediately preceding the related Interest
Payment Date (the “Regular Record Date”).  The Convertible Notes will bear interest
from May 19, 2003 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for until the principal thereof is paid
or made available for payment. Interest payments shall be the amount of
interest accrued from and including the most recent Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including May 19, 2003 if no interest has been paid or duly provided for with
respect to such Convertible Note), to but excluding the next succeeding
Interest Payment Date.  Interest on the
Convertible Notes shall be computed on the basis of a 360-day year composed of
twelve 30-day months.

 

4

 

Section 4.07 Place
of Payment; Registration of Transfer and Exchange; Notices to Company. 
Payment of the principal and interest on the Convertible Notes will be
made at the office or agency of the Company maintained for that purpose,
initially designated to be the Corporate Trust Office of the Trustee, initially
located at 100 Wall Street, 16th Floor, Corporate Trust Department,
New York, New York 10005, or at such other offices or agencies as the Company
may designate, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of
the Company payment of interest (other than interest payable at redemption) may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the register of Securities; and provided, further, that any Holder of the
Convertible Notes (if such Holder holds $10,000,000 or more in aggregate
principal amount of the Convertible Notes) shall be entitled to receive
payments of interest on the Convertible Notes by wire transfer of immediately
available funds, if appropriate wire transfer instructions have been received
in writing by the Trustee not less than 15 days prior to the applicable
payment date. Payments of principal and any interest on Convertible Notes in
book-entry form represented by a Global Security or Securities will be made by
the Company through the Trustee to the Depositary or its nominee, as the case
may be, as the holder of the Global Security or Securities representing such
Convertible Notes in book-entry form.

 

The Definitive Notes may be presented for exchange and
registration of transfer at the office or agency of the Company maintained for
that purpose, initially designated to be the Corporate Trust Office of the
Trustee in New York, New York, or at such additional offices or agencies as the
Company may designate.  Ownership of
beneficial interests in Convertible Notes in book-entry form represented by a
Global Security or Securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
and its participants. Owners of beneficial interests in Convertible Notes in
book-entry form represented by a Global Security or Securities will not be
considered the owners or holders of such Convertible Notes under the Indenture.

 

In the event of any redemption of fewer than all of
the outstanding Convertible Notes, the Registrar need not register the transfer
of or exchange any Convertible Notes selected for redemption (except, in the
case of a Convertible Note to be redeemed in part, the portion of the
Convertible Note not to be redeemed) or issue, register the transfer of or
exchange any Convertible Notes during a period of 15 days before the
mailing of the redemption notice. In addition, the Registrar need not register
the transfer of or exchange any Convertible Notes in respect of which a
Purchase Notice or Fundamental Change Purchase Notice has been given and not
withdrawn (except, in the case of a Convertible Note to be purchased in part,
the portion of the Convertible Note not to be purchased).

 

Notices and demands to or upon the Company in respect
of the Convertible Notes and the Indenture may be sent to New Plan Excel Realty
Trust, Inc., 1120 Avenue of the Americas, Suite 1200, New York, New York  10036, Attention: Legal Department.

 

Anything herein to the contrary notwithstanding, in
the case of Global Notes, notices may be delivered or withdrawn and other
actions taken, and such Convertible Notes may be surrendered for transfer,
exchange, redemption or conversion in accordance with the Applicable Procedures
as in effect from time to time.

 

Section 4.08
Redemption.  Except as otherwise set forth below, the
Company may redeem the Convertible Notes in accordance with the terms of
Article Eleven of the Indenture.

 

(a)  On or after June 9, 2008, the Company
may, at its option, redeem the Convertible Notes in whole, or in part, at any
time at the redemption prices (each, a “Redemption
Price”) (expressed as percentages of the Principal Amount of the
Convertible Notes to be redeemed) set forth below plus any accrued and unpaid
interest to but excluding the redemption date (the “Redemption Date”), if redeemed during the twelve-month
period beginning on June 9 of the years indicated below:

 

	
  Year

  	
   

  	
   

  	
  Percentage
  of Principal Amount

  	
   

  
	
  2008

  	
   

  	
  101.07

  	
  %

  
	
  2009

  	
   

  	
  100.54

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.00

  	
  %

  

 

 

5

 

(b)  The Company shall notify the Trustee,
Paying Agent, and each Holder by mail of the Redemption Date, Principal Amount
of and any other information necessary to identify the Securities of such
series to be redeemed and the Redemption Price not less than 30 nor more than
60 days before the Redemption Date. If fewer than all outstanding
Convertible Notes are to be redeemed, the Trustee will select the Convertible
Notes to be redeemed (in principal amounts of $1,000 or integral multiples
thereof) by lot, or on a pro rata basis or by another method the Trustee
considers fair and appropriate.

 

(c)  If any Convertible Notes selected for
partial redemption are thereafter surrendered for conversion in part before
termination of the conversion right with respect to the portion of the
Convertible Notes so selected, the converted portion of such Convertible Notes
shall be deemed (so far as may be), solely for purposes of determining the
aggregate Principal Amount of Convertible Notes to be redeemed by the Company,
to be the portion selected for redemption. Convertible Notes which have been
converted during a selection of Convertible Notes to be redeemed may be treated
by the Trustee as outstanding for the purpose of such selection.  Nothing in this Section 4.08(c) shall
affect the right of any Holder to convert any Convertible Notes before the
termination of the conversion right with respect thereto.

 

(d)  In addition to those matters set forth
in Section 1104 of the Indenture, a notice of redemption sent to the
Holders of Convertible Notes shall state:

 

(i)  the name of the paying agent and conversion
agent;

 

(ii)  the then
current Conversion Rate;

 

(iii)  that the
Convertible Notes called for redemption may be converted at any time prior to
the close of business on the second Business Day immediately preceding the
Redemption Date; and

 

(iv)  that
Holders who wish to convert Convertible Notes must comply with the procedures
in Section 4.12 of this Officers’ Certificate and paragraph 8 of the
Convertible Notes.

 

Section 4.09
Purchase at the Option of the Holder Upon a Fundamental Change.    If a Fundamental
Change shall occur at any time prior to June 1, 2010, each Holder shall have
the right, at such Holder’s option, to require the Company to purchase any or
all of such Holder’s Convertible Notes on the date that is no later than 35
Business Days after the date of the Company Notice of the occurrence of such
Fundamental Change (subject to extension to comply with applicable law, as
provided in Section 4.11(g)) (the “Fundamental
Change Purchase Date”). The Convertible Notes shall be repurchased
in integral multiples of $1,000 of the Principal Amount. The Company shall
purchase such Convertible Notes at a price (the “Fundamental Change Purchase Price”) equal to the Principal
Amount plus accrued and unpaid interest to but excluding the Fundamental Change
Purchase Date.  No Convertible Notes may
be repurchased at the option of the Holders due to a Fundamental Change if
there has occurred and is continuing an Event of Default (other than an Event
of Default that is cured by the payment of the Fundamental Change Purchase
Price of all such Convertible Notes). The Fundamental Change Purchase Price may
be paid in cash, with shares of Common Stock or with a combination of cash and
Common Stock, as set forth in Section 4.11(a) below.

 

(a)  Notice of Fundamental Change. The Company,
or at its request (which must be received by the Paying Agent at least three
Business Days (or such lesser period as agreed to by the Paying Agent) prior to
the date the Paying Agent is requested to give such notice as described below),
the Paying Agent in the name of and at the expense of the Company, shall mail
to all Holders and the Trustee and the Paying Agent a Company Notice of the
occurrence of a Fundamental Change and of the purchase right arising as a
result thereof, including the information required by Section 4.11(b)
hereof, on or before the 30th day after the occurrence of such Fundamental
Change.

 

(b)  Exercise of Fundamental Change Option. For
a Convertible Note to be so purchased at the option of the Holder, the Paying
Agent must receive such Convertible Note duly endorsed for transfer, together
with a written notice of purchase (a “Fundamental
Change Purchase Notice”) and the form entitled “Form of Fundamental
Change Purchase Notice” on the reverse thereof duly completed, on or before the
35th day after the date of the Company Notice of the occurrence of such
Fundamental Change, subject to extension to comply with applicable law. The
Fundamental Change Purchase Notice shall state:

 

 

6

 

(i)    if
certificated, the certificate numbers of the Convertible Notes that the Holder
shall deliver to be purchased;

 

(ii)  the
portion of the Principal Amount of the Convertible Notes that the Holder shall
deliver to be purchased, which portion must be $1,000 in Principal Amount or an
integral multiple thereof; and

 

(iii)  that
such Convertible Notes shall be purchased as of the Fundamental Change Purchase
Date pursuant to the terms and conditions specified in paragraph 6 of the
Convertible Notes and the Indenture.

 

(c)  Fundamental Change Option Procedures. The
Company shall purchase from a Holder, pursuant to this Section 4.09(c),
Convertible Notes if the Principal Amount of such Convertible Notes is $1,000
or a multiple of $1,000 if so requested by such Holder.

 

Any purchase by the
Company contemplated pursuant to the provisions of this Section 4.09(c)
shall be consummated by the delivery of the Fundamental Change Purchase Price
to be received by the Holder promptly following the later of the Fundamental
Change Purchase Date or the time of book-entry transfer or delivery of the
Convertible Notes.

 

Notwithstanding anything
herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by Section 4.09(b) shall
have the right at any time prior to the close of business on the Business Day
prior to the Fundamental Change Purchase Date to withdraw such Fundamental
Change Purchase Notice (in whole or in part) by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 4.11(d).

 

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

 

On or before
10:00 a.m. (New York City time) on the Fundamental Change Purchase Date,
the Company shall deposit with the Paying Agent (or if the Company or an
Affiliate of the Company is acting as the Paying Agent, shall segregate and
hold in trust) the consideration sufficient to pay the aggregate Fundamental
Change Purchase Price of the Convertible Notes to be purchased pursuant to this
Section 4.09.  Payment by the
Paying Agent of the Fundamental Change Purchase Price for such Convertible
Notes shall be made promptly following the later of the Fundamental Change
Purchase Date or the time of book-entry transfer or delivery of such
Convertible Notes.  If the Paying Agent
holds, in accordance with the terms of the Indenture, the consideration
sufficient to pay the Fundamental Change Purchase Price of such Convertible
Notes on the Business Day following the Fundamental Change Purchase Date, then,
on and after such date, such Convertible Notes shall cease to be outstanding
and interest on such Convertible Notes shall cease to accrue, whether or not
book-entry transfer of such Convertible Notes is made or such Convertible Notes
are delivered to the Paying Agent, and all other rights of the Holder shall
terminate (other than the right to receive the Fundamental Change Purchase
Price upon delivery or transfer of the Convertible Notes).  Nothing herein shall preclude any
withholding tax required by law.

 

The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Holders or the Trustee all
consideration held by the Paying Agent for the payment of the Fundamental Change
Purchase Price and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or an Affiliate of the Company acts as
Paying Agent, it shall segregate any consideration held by it as Paying Agent
and hold it as a separate trust fund. 
The Company at any time may require a Paying Agent to deliver all
consideration held by it to the Trustee and to account for any consideration
disbursed by the Paying Agent.  Upon
doing so, the Paying Agent shall have no further liability for the
consideration delivered to the Trustee.

 

All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Convertible Notes for redemption shall be determined by the Company, whose
determination shall be final and binding.

 

Notwithstanding anything herein to the contrary, the
Company’s obligations pursuant to this Section 4.09 shall be satisfied if a
third party makes an offer to repurchase outstanding Convertible Notes after a
Fundamental Change in the manner and at the times and otherwise in compliance
in all material respects with the requirements of 

 

 

7

 

this Section 4.09 and purchases all Convertible Notes properly tendered
and not withdrawn pursuant to the requirements of this Section 4.09.

 

Section 4.10. Purchase of
Convertible Notes at the Option of the Holder.

 

(a)  On each of
June 1, 2010, June 1, 2013 and June 1, 2018 (each, a “Purchase Date”), a Holder shall have the
option to require the Company to purchase any outstanding Convertible Notes for
a price (the “Purchase Price”)
equal to 100% of the principal amount of the Convertible Notes to be purchased
plus any accrued and unpaid interest to but excluding the applicable Purchase
Date, upon:

 

(i)    delivery
to the Paying Agent by the Holder of a written notice of purchase (a “Purchase Notice”) at any time from the
opening of business on the date that is 20 Business Days prior to a Purchase
Date until the close of business on the fifth Business Day prior to such
Purchase Date, stating:

 

(1)  if
certificated, the certificate numbers of the Convertible Notes which the Holder
will deliver to be purchased;

 

(2)  the
portion of the Principal Amount of the Convertible Notes which the Holder will
deliver to be purchased, which portion must be $1,000 in Principal Amount or an
integral multiple thereof; and

 

(3)  that such
Convertible Notes shall be purchased as of the Purchase Date pursuant to the
terms and conditions specified in paragraph 6 of the Convertible Notes and
the Indenture; and

 

(ii)  delivery
or book-entry transfer of such Convertible Notes to the Paying Agent prior to,
on or after the Purchase Date (together with all necessary endorsements) at the
offices of the Paying Agent, such delivery or transfer being a condition to
receipt by the Holder of the Purchase Price therefor; provided, however,
that such Purchase Price shall be so paid pursuant to this Section 4.10
only if the Convertible Notes so delivered or transferred to the Paying Agent
shall conform in all respects to the description thereof in the related
Purchase Notice. The Purchase Price may be paid in cash, with shares of Common
Stock or with a combination of cash and Common Stock, as set forth in Section
4.11 below.

 

(b)  The
Company shall purchase from a Holder, pursuant to this Section 4.10,
Convertible Notes if the Principal Amount of such Convertible Notes is $1,000
or a multiple of $1,000 if so requested by such Holder.

 

(c)  Any
purchase by the Company contemplated pursuant to the provisions of this
Section 4.10 shall be consummated by the delivery of the Purchase Price to
be received by the Holder promptly following the later of the Purchase Date or
the time of book-entry transfer or delivery of the Convertible Notes.

 

(d)  Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the
Purchase Notice contemplated by this Section 4.10 shall have the right at
any time prior to the close of business on the Business Day prior to the
Purchase Date to withdraw such Purchase Notice (in whole or in part) by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 4.11(d).

 

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

 

(f)    On
or before 10:00 a.m. (New York City time) on the Purchase Date, the
Company shall deposit with the Paying Agent (or if the Company or an Affiliate
of the Company is acting as the Paying Agent, shall segregate and hold in
trust) the consideration sufficient to pay the aggregate Purchase Price of the
Convertible Notes to be purchased pursuant to this Section 4.10. Payment
by the Paying Agent of the Purchase Price for such Convertible Notes shall be
made promptly following the later of the Purchase Date or the time of
book-entry transfer or delivery of such Convertible Notes. If the Paying Agent
holds, in accordance with the terms of the Indenture, consideration sufficient
to pay the Purchase Price of such Convertible Notes on the Business Day
following the Purchase Date, then, on and after such date, such Convertible
Notes shall cease to be outstanding and interest on such Convertible Notes
shall cease to accrue, whether or not book-entry transfer of such Convertible
Notes is made or such Convertible Notes are delivered to the Paying Agent, and
all other rights of the Holder shall terminate (other than the right to receive
the Purchase Price upon delivery or transfer of the Convertible Notes).

 

 

8

 

(g)  The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all consideration held by the Paying Agent for the payment of the
Purchase Price and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or an Affiliate of the Company acts as
Paying Agent, it shall segregate the consideration held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time may require a
Paying Agent to deliver all consideration held by it to the Trustee and to
account for any consideration disbursed by the Paying Agent. Upon doing so, the
Paying Agent shall have no further liability for the consideration delivered to
the Trustee.

 

Section 4.11 Further
Conditions and Procedures for Purchase at the Option of the Holder Upon a
Fundamental Change and Purchase of Convertible Notes at the Option of the
Holder.

 

(a) Company’s Right
to Elect Manner of Payment of Purchase Price.

 

(i) The Company may elect with respect to any Purchase
Date or Fundamental Change Purchase Date to pay the Purchase Price or
Fundamental Change Purchase Price in respect of the Convertible Notes to be
purchased pursuant to Section 4.09 or Section 4.10 as of such Purchase Date or
Fundamental Change Purchase Date, in cash or Common Stock, or in any
combination of cash and Common Stock, subject to the conditions set forth in
this Section 4. The Company shall designate, in the Company Notice delivered
pursuant to Section 4.11(b), whether the Company shall purchase the Convertible
Notes for cash or Common Stock, or, if a combination thereof, the percentages
of the Purchase Price or Fundamental Change Purchase Price of Convertible Notes
in respect of which it shall pay in cash and/or Common Stock; provided that the
Company shall pay cash for fractional interests in Common Stock. For purposes
of determining the existence of potential fractional interests, all Convertible
Notes subject to purchase by the Company held by a Holder shall be considered
together (no matter how many separate certificates are to be presented). Each
Holder whose Convertible Notes are purchased pursuant to this Section 4.11
shall receive the same percentage of cash and/or Common Stock in payment of the
Purchase Price or Fundamental Change Purchase Price for such Convertible Notes,
except as provided in Section 4.11(a)(iii) with regard to the payment of cash
in lieu of fractional interests in Common Stock. Once the Company has given its
Company Notice to Holders, the Company may not change its election with respect
to the consideration (or components or percentages of components thereof) to be
paid except pursuant to Section 4.11(a)(iii).

 

At least three Business Days before the Company Notice
Date, the Company shall deliver an Officers’ Certificate to the Trustee
specifying:

 

(1) the manner of payment selected by the Company;

 

(2) the information required by Section 4.11(b);

 

(3) if the Company elects to pay the Purchase Price or
Fundamental Change Purchase Price, or a specified percentage thereof, in Common
Stock, that the conditions to such manner of payment set forth in Section
4.11(a)(iii) have been or shall be complied with; and

 

(4) whether the Company desires the Trustee to give
the Company Notice required by Section 4.11(b).

 

(ii) Purchase with cash. At the option of the Company,
the Purchase Price or Fundamental Change Purchase Price of Convertible Notes in
respect of which a Purchase Notice or Fundamental Change Purchase Notice
pursuant to Section 4.09 or Section 4.10 has been given, or a specified
percentage thereof, may be paid by the Company with cash equal to the aggregate
Purchase Price or Fundamental Change Purchase Price, or such specified
percentage thereof, as the case may be, of such Convertible Notes.

 

(iii) Payment by Issuance of Common Stock. At the
option of the Company, the Purchase Price of Convertible Notes in respect of
which a Purchase Notice or Fundamental Change Purchase Notice has been given,
or a specified percentage thereof, may be paid by the Company by the issuance
of a number of shares of Common Stock equal to the quotient obtained by
dividing (x) the amount of cash to which the Holders would have been entitled
had the Company elected to pay all or such specified percentage, as the case
may be, of the Purchase Price 

 

 

9

 

or Fundamental Change Purchase Price of such Convertible Notes in cash
by (y) the Market Price, subject to the next succeeding paragraph.

 

The Company shall not issue a fractional share of
Common Stock in payment of the Purchase Price or Fundamental Change Purchase
Price. Instead the Company shall pay cash for the current market value of the
fractional share. The current market value of a fraction of a share shall be
determined by multiplying the Market Price by such fraction and rounding the
product to the nearest whole cent. It is understood that if a Holder elects to
have more than one Convertible Note purchased, the number of shares of Common
Stock shall be based on the aggregate amount of Convertible Notes to be
purchased.

 

The Company’s right to exercise its election to
purchase all or any portion of the Convertible Notes pursuant to Section 4.09
or Section 4.10 through the issuance of shares of Common Stock shall be
conditioned upon:

 

(1) the Company having given timely written notice in
accordance with Section 4.11(b) of its election to purchase all or a specified
percentage of the Convertible Notes with Common Stock as provided herein;

 

(2) the Common Stock (including the shares being
issued in respect of the payment of the specified percentage of the Purchase
Price or Fundamental Change Purchase Price) being listed on a national
securities exchange or traded on the Nasdaq National Market on the Purchase
Date or the Fundamental Change Purchase Date; and

 

(3) the receipt by the Trustee of an Officers’
Certificate stating that (A) the terms of the issuance of the Common Stock are
in conformity with the Indenture and (B) the shares of Common Stock to be
issued by the Company in payment of the specified percentage of the Purchase
Price or Fundamental Change Purchase Price in respect of Convertible Notes have
been duly authorized and, when issued and delivered pursuant to the terms of
the Indenture in payment of the specified percentage of the Purchase Price or
Fundamental Change Purchase Price in respect of Convertible Notes, shall be
validly issued, fully paid and nonassessable, and that conditions (1) and (2)
above have been satisfied.

 

Such Officers’ Certificate shall also set forth the
number of shares of Common Stock to be issued for each $1,000 principal amount
of Convertible Notes and the Last Reported Sale Price of a share of Common
Stock on each Trading Day during the period during which the Market Price is
calculated. The Company may elect to pay the Purchase Price or Fundamental
Change Purchase Price (or any portion thereof) in Common Stock only if the
information necessary to calculate the Market Price is reported in a daily
newspaper of national circulation. If any of the conditions set forth in this
Section 4.11(a)(iii) are not satisfied with respect to a Holder or Holders on
or prior to the Purchase Date or Fundamental Change Purchase Date and the
Company elected to purchase the Convertible Notes to be purchased as of such
Purchase Date or Fundamental Change Purchase Date pursuant to Section 4.10 or
Section 4.09 through the issuance of shares of Common Stock, the Company shall
pay the entire Purchase Price or Fundamental Change Purchase Price in respect
of such Convertible Notes of such Holder or Holders in cash.

 

(b)  Notice of Purchase Date or Fundamental Change.
The Company shall send notices (each, a “Company
Notice”) to the Holders (and to beneficial owners as required by
applicable law) at their addresses shown in the Convertible Note register
maintained by the Registrar, and delivered to the Trustee and Paying Agent, not
less than 20 Business Days prior to each Purchase Date, or on or before the 30th
day after the occurrence of the Fundamental Change, as the case may be (each
such date of delivery, a “Company Notice
Date”).  Each Company Notice
shall include a form of Purchase Notice or Fundamental Change Purchase Notice
to be completed by a Holder and shall state:

 

(i)  the
applicable Purchase Price or Fundamental Change Purchase Price, excluding
accrued and unpaid interest, the Conversion Rate at the time of such notice
(and any adjustments to the Conversion Rate) and, to 

 

10

 

the extent known at the time of such notice, the
amount of interest, if any, that will be payable with respect to the
Convertible Notes on the applicable Purchase Date or Fundamental Change
Purchase Date;

 

(ii)  if the notice
relates to a Fundamental Change, the events causing the Fundamental Change and
the date of the Fundamental Change;

 

(iii)  whether the Company will pay the purchase
price in cash or Common Stock or any combination thereof, specifying the
percentages of each;

 

(iv)  if the Company elects to pay in Common
Stock, the method of calculating the market price of the Common Stock;

 

(v)  the
Purchase Date or Fundamental Change Purchase Date;

 

(vi)  the last
date on which a Holder may exercise their purchase right;

 

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

 

(viii)  that
Convertible Notes must be surrendered to the Paying Agent to collect payment of
the Purchase Price or Fundamental Change Purchase Price;

 

(ix) that
Convertible Notes as to which a Purchase Notice or Fundamental Change Purchase
Notice has been given may be converted only if the applicable Purchase Notice
or Fundamental Change Purchase Notice has been withdrawn by the Holder in
accordance with the terms of this Officers’ Certificate;

 

(x)  that the Purchase Price or Fundamental
Change Purchase Price for any Convertible Notes as to which a Purchase Notice
or a Fundamental Change Purchase Notice, as applicable, has been given and not
withdrawn shall be paid by the Paying Agent promptly following the later of the
Purchase Date or Fundamental Change Purchase Date, as applicable, or the time
of book-entry transfer or delivery of such Convertible Notes;

 

(xi)  the
procedures the Holder must follow under Sections 4.09 or 4.10, as applicable,
and Section 4.11;

 

(xii)  briefly,
the conversion rights of the Convertible Notes;

 

(xiii)  that,
unless the Company defaults in making payment of such Purchase Price or
Fundamental Change Purchase Price on Convertible Notes covered by any Purchase
Notice or Fundamental Change Purchase Notice, as applicable, interest will
cease to accrue on and after the Purchase Date or Fundamental Change Purchase
Date, as applicable;

 

(xiv) the CUSIP or
ISIN number of the Convertible Notes; and

 

(xv)  the procedures for withdrawing a Purchase
Notice or Fundamental Change Purchase Notice.

 

Simultaneously with
providing such Company Notice, the Company will publish a notice containing the
information in such Company Notice in a newspaper of general circulation in The
City of New York or publish such information on its then existing website or
through such other public medium as it may use at the time.

 

(c)  Effect
of Purchase Notice or Fundamental Change Purchase Notice. Upon
receipt by the Company of the Purchase Notice or Fundamental Change Purchase
Notice specified in Section 4.09 or Section 4.10, as applicable, the
Holder of the Convertible Notes in respect of which such Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, was given shall (unless
such Purchase Notice or Fundamental Change Purchase Notice is 

 

 

11

 

withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price or Fundamental Change Purchase
Price with respect to such Convertible Notes. Such Purchase Price or
Fundamental Change Purchase Price shall be paid by the Paying Agent to such
Holder promptly following the later of (x) the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, with respect to such
Convertible Notes (provided the conditions in Section 4.09(b) or
Section 4.10(a), as applicable, have been satisfied) and (y) the time
of delivery or book-entry transfer of such Convertible Notes to the Paying
Agent by the Holder thereof in the manner required by Section 4.09(b) or
Section 4.10(a), as applicable. Convertible Notes in respect of which a
Purchase Notice or Fundamental Change Purchase Notice, as the case may be, has
been given by the Holder thereof may not be converted for shares of Common
Stock on or after the date of the delivery of such Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, unless such Purchase
Notice or Fundamental Change Purchase Notice, as the case may be, has first
been validly withdrawn or deemed to have been validly withdrawn as specified in
the following two paragraphs.

 

(d)  Withdrawal
of a Purchase Notice or Fundamental Change Purchase Notice. A
Purchase Notice or Fundamental Change Purchase Notice, as the case may be, may
be withdrawn by means of a written notice of withdrawal delivered to the office
of the Paying Agent at any time prior to 5:00 p.m. New York City time on
the Business Day prior to the Purchase Date or the Fundamental Change Purchase
Date, as the case may be, to which it relates specifying:

 

(i)  if
certificated, the certificate number of the Convertible Notes in respect of
which such notice of withdrawal is being submitted;

 

(ii)  the Principal Amount of the
Convertible Notes with respect to which such notice of withdrawal is being
submitted; and

 

(iii)  the Principal Amount, if any, of such
Convertible Notes which remains subject to the original Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, and which has been or
shall be delivered for purchase by the Company.

 

(e)  Effect
of Event of Default. There shall be no purchase of any Convertible
Notes pursuant to Section 4.09 or Section 4.10 if an Event of Default
has occurred and is continuing (other than a default that is cured by the
payment of the Purchase Price or Fundamental Change Purchase Price, as the case
may be). The Paying Agent shall promptly return to the respective Holders
thereof any Convertible Notes (x) with respect to which a Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, has been withdrawn in
compliance with this Officers’ Certificate, or (y) held by it during the
continuance of an Event of Default (other than a default that is cured by the
payment of the Purchase Price or Fundamental Change Purchase Price, as the case
may be) in which case, upon such return, the Purchase Notice or Fundamental
Change Purchase Notice with respect thereto shall be deemed to have been
withdrawn.

 

(f)  Convertible
Notes Purchased in Part. Any Convertible Notes that are to be
purchased 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 or the
Authenticating Agent shall authenticate and deliver to the Holder of such
Convertible Notes, without service charge, a new Convertible Note or
Convertible Notes, of any authorized denomination as requested by such Holder
in aggregate Principal Amount equal to, and in exchange for, the portion of the
Principal Amount of the Convertible Notes so surrendered which is not purchased
or redeemed.

 

(g)  Covenant to Comply with Securities Laws Upon Purchase
of Convertible Notes. In connection with any offer to purchase
Convertible Notes under Sections 4.09 or 4.11 hereof, the Company shall, to the
extent applicable, (a) comply with Rules 13e-4 and 14e-1 (and any
successor provisions thereto) under the Exchange Act, if applicable;
(b) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act, if applicable; and (c) otherwise comply
with all applicable federal and state securities laws so as to permit the
rights and obligations under Sections 4.09 or 4.11 to be exercised in the time
and in the manner specified in Sections 4.09 or 4.11.

 

 

12

 

(h)  Repayment
to the Company. The Trustee and the Paying Agent shall return to the
Company any cash or property that remains unclaimed as provided in
paragraph 12 of the Convertible Notes, together with interest that the
Trustee or Paying Agent, as the case may be, has agreed to pay, if any, held by
them for the payment of a Purchase Price or Fundamental Change Purchase Price,
as the case may be; provided, however, that to the extent that the
aggregate amount of cash deposited by the Company pursuant to
Section 4.09(c) or 4.10(f), as applicable, exceeds the aggregate Purchase
Price or Fundamental Change Purchase Price, as the case may be, of the
Convertible Notes or portions thereof which the Company is obligated to
purchase as of the Purchase Date or Fundamental Change Purchase Date, as the
case may be, then promptly on and after the Business Day following the Purchase
Date or Fundamental Change Purchase Date, as the case may be, the Trustee or
the Paying Agent, as the case may be, shall return any such excess to the
Company together with interest that the Trustee or Paying Agent, as the case
may be, has agreed to pay, if any.

 

 

Section 4.12
Conversion of Convertible Notes.

 

(a)  Right
to Convert. A Holder may convert its Convertible Notes for Common
Stock at any time during the periods and upon satisfaction of at least one of
the conditions specified in paragraph 8 of the Convertible Notes.  Notwithstanding any other provision of the
Convertible Notes or this Officers’ Certificate, all Holders’ rights with
respect to conversion of the Convertible Notes and the Company’s obligation to
deliver shares of Common Stock upon such conversion (the “Conversion Obligation”), are subject, in
their entirety, to the Company’s right, in its sole and absolute discretion, to
elect to satisfy such Conversion Obligation in any manner permitted pursuant to
Section 4.12(d).

 

(b)  The
Initial Conversion Rate. “The
Initial Conversion Rate” is 40 shares of Common Stock issuable upon
conversion of a Convertible Note per $1,000 Principal Amount (such rate as in
effect from time to time, the “Conversion
Rate”), subject to adjustment as herein set forth.

 

A Holder may convert a portion of the Principal Amount
of Convertible Notes if the portion is $1,000 or a multiple of $1,000.

 

(c)  Conversion
Procedures. To convert Convertible Notes, the requirements set forth
in this Section 4.12(c) and in paragraph 8 of the Convertible Notes
must be satisfied.

 

To convert the Convertible Notes, a Holder must
(1) complete and manually sign the conversion notice on the back of the
Convertible Notes (or complete and manually sign a facsimile of such notice)
and deliver such notice to the Conversion Agent at the office maintained by the
Conversion Agent for such purpose, (2) with respect to Definitive Notes,
surrender the Notes to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Conversion Agent, the
Company or the Trustee, (4) pay any transfer or similar tax, if required
and (5) pay funds equal to the interest payable on the next Interest Payment
Date, if required.

 

                Holders
of Convertible Notes at the close of business on a Regular Record Date will
receive payment of interest payable on the corresponding Interest Payment Date
notwithstanding the conversion of such Convertible Notes at any time after the
close of business on such Regular Record Date. 
However, Convertible Notes surrendered for conversion during the period
from the close of business on any Regular Record Date to the opening of
business on the corresponding Interest Payment Date (except for Convertible
Notes in respect of which a Redemption Date has been declared that falls within
this period or on such Interest Payment Date) must be accompanied by payment of
an amount equal to the interest that the Holder is to receive on the
Convertible Notes. Except as described above, no payment or adjustment will be
made for accrued interest on converted Convertible Notes.

 

The Person in whose name the certificate for such
shares of Common Stock is registered shall be treated as a stockholder of
record on and after the Conversion Date; provided,
however, that no surrender of
Convertible Notes 

 

 

13

 

on any date when the stock transfer books of the Company shall be
closed shall be effective to constitute the Person or Persons entitled to
receive the shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the Person or Persons entitled to receive such
shares of Common Stock as the record holder or holders thereof for all purposes
at the close of business on the next succeeding day on which such stock
transfer books are open; such conversion shall be at the Conversion Rate in
effect on the date that such Convertible Notes shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of Convertible Notes, such Person shall no longer be a Holder
of such Convertible Notes.

 

No payment or adjustment shall be made for dividends
on or other distributions with respect to any Common Stock except as provided
in paragraph 4.12(h) or as otherwise provided in the Indenture or this
Certificate.

 

If a Holder converts more than one Convertible Note at
the same time, the number of shares of Common Stock issuable upon the
conversion shall be based on the total Principal Amount of the Convertible
Notes converted.

 

Upon surrender of a Convertible Note that is converted
in part, the Company shall execute, and the Trustee or the Authenticating Agent
shall authenticate and deliver to the Holder, a new Convertible Note in an
authorized denomination equal in Principal Amount to the unconverted portion of
the Convertible Note surrendered.

 

If the last day on which Convertible Notes may be
converted is a legal holiday in a place where a Conversion Agent is located,
the Convertible Notes may be surrendered to that Conversion Agent on the next
succeeding day that it is not a legal holiday.

 

A Holder of Convertible Notes is not entitled to any
rights of a holder of Common Stock until such Holder has converted its
Convertible Notes to Common Stock, and only to the extent such Convertible
Notes are deemed to have been converted into Common Stock pursuant to this
Section 4.12.

 

(d) Payment Of Cash In Lieu Of Common Stock.
 
(i)  If a Holder elects to convert all or any portion of a Convertible Note into shares of Common Stock as set forth in Section 4.12(a) and the Company receives such Holder’s conversion notice (“Notice of Conversion”) on or prior to the day that is 20 days prior to the Final Maturity Date, or with respect to Convertible Notes called for redemption pursuant to Section 4.08, the applicable Redemption Date (the “Final Notice Date”), the following procedures will apply:
 
(1)  if the Company elects to satisfy all or any portion of its Conversion Obligation in cash,  the Company will notify such Holder through the Trustee of the dollar amount to be satisfied in cash (which must be expressed either as 100% of the Conversion Obligation or as a fixed dollar amount) at any time on or before the date that is two Business Days following the Company’s receipt of the Notice of Conversion (such period, the “Cash Settlement Notice Period”). If the Company elects to pay cash for any portion of the shares otherwise issuable to the Holder upon conversion, the Holder may retract the Notice of Conversion at any time during the two Business Days following the final day of the Cash Settlement Notice Period (the “Conversion Retraction Period”).  No such retraction can be made (and a Notice of Conversion shall be irrevocable) if the Company does not elect to deliver cash in lieu of shares of Common Stock (other than cash in lieu of fractional shares).  Upon the expiration of a Conversion Retraction Period, a Notice of Conversion shall be irrevocable.  If the Notice of Conversion has not been retracted, then settlement (in cash and/or in shares) will occur on the Business Day following the final day of the 20 Trading Day period beginning on the day after the final day of the Conversion Retraction Period (the “Cash Settlement Averaging Period”).  In the case of a settlement entirely in shares of Common Stock, the “Conversion Date” shall mean the date on which the Holder satisfies all of the requirements set forth in the second paragraph of Section 4.12(c).  In all other cases, the “Conversion Date” shall mean the next Business Day following the expiration of the Conversion Retraction Period.
 
(2)  With respect to any Notice of Conversion received by the Company prior to the Final Notice Date, the “Conversion Settlement Distribution” for any Convertible Note subject to such Notice of Conversion shall consist of cash, Common Stock or a combination thereof, as selected by the Company as set forth below:
 
 
 
14

 
(A) if the Company elects to satisfy the entire Conversion Obligation in shares of Common Stock, the Conversion Settlement Distribution shall be a number of shares equal to (x) the aggregate original Principal Amount of the Convertible Notes to be converted divided by 1,000, multiplied by (y) the Conversion Rate;
 
(B) if the Company elects to satisfy the entire Conversion Obligation in cash, the Conversion Settlement Distribution shall be cash in an amount equal to the product of:
 
(x) a number equal to the product of (I) the aggregate principal amount of Convertible Notes to be converted divided by 1,000 multiplied by (II) the Conversion Rate, and
 
(y) the average Last Reported Sale Price of the Common Stock during the Cash Settlement Averaging Period; and
 
(C) if the Company elects to satisfy a fixed portion (other than 100%) of the Conversion Obligation in cash, the Conversion Settlement Distribution shall consist of the specified cash amount (“Cash Amount”) and a number of shares equal to the greater of (x) zero and (y) the excess, if any, of the number of shares calculated as set forth in clause (i)(2)(A) above over the number of shares equal to the sum, for each day of the Cash Settlement Averaging Period, of (I) 5% of the Cash Amount, divided by (II) the Last Reported Sale Price of the Common Stock on such day.
 
(ii) At any time on or before any Final Notice Date, the Company will notify the Trustee whether it intends to satisfy all or any portion of the Conversion Obligation with respect to conversions of Convertible Notes for which the Company receives a Notice of Conversion after such Final Notice Date in cash and the dollar amount to be satisfied in cash (which must be expressed either as 100% or as a fixed dollar amount).  In such case, the applicable Conversion Settlement Distribution will be computed in the same manner as set forth in clause (i) above except that the Cash Settlement Averaging Period shall be the 20 Trading Days beginning on the first Trading Day following the Company’s receipt of the Notice of Conversion.  Notices of Conversion received by the Company after the Final Notice Date are irrevocable.

 

(e)  Cash
Payments in Lieu of Fractional Shares. The Company shall not issue a
fractional share of Common Stock upon conversion of Convertible Notes. Instead
the Company shall deliver cash for the current market value of the fractional
share.  The current market value of a
fractional share shall be determined to the nearest 1/10,000th of a share by
multiplying the Last Reported Sale Price of a full share of Common Stock on the
Trading Day immediately preceding the Conversion Date by the fractional amount
and rounding the product to the nearest whole cent.

 

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

 

(g)  Covenants
of the Company. The Company shall, prior to issuance of any
Convertible Notes hereunder, and from time to time as may be necessary, reserve
out of its authorized but unissued Common Stock a sufficient number of shares
of Common Stock to permit the conversion of the Convertible Notes.

 

All shares of Common Stock delivered upon conversion
of the Convertible Notes, if any, 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.

 

The Company shall endeavor promptly to comply with all
federal and state securities laws regulating the order and delivery of shares
of Common Stock upon the conversion of Convertible Notes, if any, and shall
cause to 

 

 

15

 

have listed or quoted all such shares of Common Stock on each United
States national securities exchange or over-the-counter or other domestic
market on which the Common Stock is then listed or quoted.

 

(h)  Adjustments
to Conversion Rate.  The
applicable Conversion Rate shall be adjusted from time to time by the Company
as follows:

 

(i)  In case
the Company shall (a) pay a dividend, or make a distribution, exclusively
in shares of its Common Stock or other capital stock, on its Common Stock;
(b) subdivide its outstanding Common Stock into a greater number of
shares; (c) combine its outstanding Common Stock into a smaller number of
shares; or (d) reclassify its Common Stock, the Conversion Rate in effect
immediately prior to the effective date for the adjustment pursuant to this
Section 4.12(h)(i), as described below, shall be adjusted so that the
Holder of any Convertible Notes thereafter surrendered for conversion shall be
entitled to receive the number of shares of any class of the Company’s capital
stock which such Holder would have owned or have been entitled to receive after
the happening of any of the events described above had such Convertible Notes been
converted immediately prior to the applicable Record Date in the case of a
transaction described in clause (a) above or the effective date in the
case of any other of the foregoing transactions. If any dividend or
distribution of the type described in clause (a) above is not so paid or
made, the Conversion Rate shall again be adjusted to the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.
An adjustment made pursuant to this Section 4.12(h)(i) shall become
effective immediately after the applicable Record Date in the case of a
dividend and shall become effective immediately after the applicable effective
date in the case of subdivision, combination or reclassification of the
Company’s Common Stock.

 

(ii)  In case the Company shall issue rights
or warrants to all holders of its Common Stock entitling them (for a period
expiring within 60 days after the date of issuance of such rights or
warrants) to subscribe for or purchase Common Stock at a price per share less
than the Market Price per share of Common Stock on the Record Date fixed for
determination of stockholders entitled to receive such rights or warrants, the
Conversion Rate in effect immediately after such Record Date shall be adjusted
so that the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to such Record Date by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding on such Record Date plus the number of additional shares of Common
Stock offered for subscription or purchase, and of which the denominator shall
be the number of shares of Common Stock outstanding on such Record Date plus
the number of shares which the aggregate offering price of the total number of
shares so offered would purchase at such Market Price. Such adjustment shall be
made successively whenever any such rights or warrants are issued, and shall
become effective immediately after the opening of business on the day following
the Record Date for the determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not delivered
after the expiration of such rights or warrants, the Conversion Rate shall be
readjusted to the Conversion Rate which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be in effect
if such Record Date for the determination of stockholders entitled to receive
such rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common
Stock at less than such Market Price, and in determining the aggregate offering
price of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.

 

(iii)  In case the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock (excluding
any distribution in connection with the liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary) any evidences of its
indebtedness or assets or rights or warrants to subscribe for or purchase any
of its securities (excluding those referred to in
Section 4.12(h)(ii) hereof, regular dividends paid exclusively in
cash and those referred to in Section 4.12(h)(i) hereof) (any of the foregoing
hereinafter in this Section 4.12(h)(iii) called the “Distributed Assets or Securities”) in an
aggregate amount per share of Common Stock that, combined together with the
aggregate amount of any other such distributions of Distributed Assets or
Securities to all holders of Common Stock made within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 4.12(h)(iii) has been made,
exceeds 15% of the Market Price of the Common Stock on the Trading Day
immediately preceding the declaration of such distribution, then the Conversion
Rate shall be adjusted so that the same shall equal the Conversion Rate
determined 

 

 

16

 

by multiplying the Conversion Rate in effect immediately prior to the
close of business on the Record Date mentioned below by a fraction, (x) the
numerator of which shall be the Market Price per share of the Common Stock on
such Record Date, and (y) the denominator of which shall be the Market Price
per share of the Common Stock on such Record Date less the Fair Market Value on
such Record Date (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a certificate filed with the Trustee and
the Paying Agent) of the Distributed Assets or Securities so distributed applicable
to one share of Common Stock. Such adjustment shall become effective
immediately after the Record Date for the determination of stockholders
entitled to receive such distribution.Notwithstanding the foregoing, if
(a) the Fair Market Value of the portion of the Distributed Assets or
Securities so distributed applicable to one share of Common Stock is equal to
or greater than the Market Price of the Common Stock on the Record Date or
(b) the Market Price of the Common Stock on the Record Date is greater than
the Fair Market Value of such Distributed Assets or Securities by less than
$1.00, then, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon conversion, in
addition to the shares of Common Stock, the kind and amount of assets, debt
securities, or rights, warrants or options comprising such dividend or
distribution the Holder would have received had such Holder converted such
Convertible Notes immediately prior to such Record Date.  In the event that such distribution is not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate that would then be in effect if such distribution had not been declared.

 

(iv)  In case
the Company shall increase the regular common dividend distribution payable on
Common Stock above $0.4125 on a quarterly basis (appropriately adjusted for
stock dividends on or subdivisions or combinations of the Common Stock), the
Conversion Rate will be adjusted so that it shall equal the rate determined by
dividing the Conversion Rate on the Record Date for such dividend distribution
by a fraction, (i) the numerator of which shall be the Market Price of a share
of Common Stock on the Record Date less the amount of cash in excess of $0.4125
(appropriately adjusted for stock dividends on or subdivisions or combinations
of the Common Stock) on a quarterly basis so distributed during the quarter
applicable to one share of Common Stock, and (ii) the denominator of which
shall be such Market Price, such adjustment to be effective immediately prior
to the opening of business on the day following the Record Date for such
dividend distribution.  In the event
that such dividend or distribution is not so paid or made, the applicable
Conversion Rate shall again be adjusted to be the applicable Conversion Rate
that would then be in effect if such dividend or distribution had not been
declared.

 

(v)  Notwithstanding the foregoing
provisions of Section 4.12(h), no adjustment shall be made thereunder, nor
shall an adjustment be made to the ability of a Holder of a Note to convert,
for any distribution described therein if the Holder, as a Holder,  will otherwise participate in the
distribution without conversion of such Holder’s Convertible Notes.

 

(vi)  No adjustment pursuant to the
applicable Conversion Rate or a Holder’s ability to convert pursuant to this
Section 4.12(h) shall be made in connection with the issuance of rights,
the distribution of separate certificates representing rights or the exercise,
redemption, termination or invalidation of rights pursuant to any stockholder
rights plan implemented by the Company which provides that, upon conversion of
the Convertible Notes, the Holders shall receive, in addition to the Common
Stock issuable upon such conversion, the rights issued under such stockholder
rights plan (notwithstanding the occurrence of an event causing such rights to
separate from the Common Stock at or prior to the time of conversion).

 

(vii)  For purposes of this
Section 4.12(h), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock. The Company shall not pay any dividend
or make any distribution on shares of Common Stock held in the treasury of the
Company.

 

(i)  Miscellaneous
Provisions Relating to Conversion.

 

(i)  Calculation Methodology. No adjustment in
the Conversion Price need be made unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Price then in effect provided that any adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. Except as stated in Section 4.12(h),
the Conversion Rate will not be adjusted for the issuance of Common Stock or
any securities convertible into or exchangeable for Common Stock or carrying
the right to purchase any of the foregoing. Any adjustments that are made shall
be carried forward and taken into account in any 

 

 

17

 

subsequent adjustment. All calculations under Sections 4.11, 4.12(h)
and this Section 4.12(i) shall be made to the nearest cent or to the nearest
1/10,000th of a share, as the case may be.

 

(ii)  When
No Adjustment Required. No adjustment to the Conversion Price need
be made:

 

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

 

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

 

(3)  upon the issuance of any shares of
Common Stock pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security not described in (2) above and
outstanding as of the date the Convertible Notes were first issued;

 

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

 

(5)  for accrued and unpaid interest.

 

To the extent the Convertible Notes become convertible
into cash, assets, property or securities (other than capital stock of the
Company), no adjustment shall be made thereafter as to the cash, assets,
property or such securities. Interest shall not accrue on such cash.

 

(iii)  Notice
of Adjustment. Whenever the Conversion Rate is adjusted, the Company
shall promptly mail to Holders a notice of the adjustment. The Company shall
file with the Trustee and the Conversion Agent such notice. The certificate
shall, absent manifest error, be conclusive evidence that the adjustment is
correct. Neither the Trustee nor any Conversion Agent shall be under any duty
or responsibility with respect to any such certificate except to exhibit the
same to any Holder desiring inspection thereof.

 

(iv)  Voluntary
Increase. The Company may make such increases in the Conversion
Rate, in addition to those required by Section 4.12(h), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. To the extent permitted by
applicable law, the Company may from time to time increase the Conversion Rate
by any amount for any period of time if the period is at least 20 days,
the increase is irrevocable during the period and the Board of Directors shall
have made a determination that such increase would be in the best interests of
the Company, which determination shall be conclusive. Whenever the Conversion
Rate is so increased, the Company shall mail to Holders and file with the
Trustee and the Conversion Agent a notice of such increase. Neither the Trustee
nor any Conversion Agent shall be under any duty or responsibility with respect
to any such notice except to exhibit the same to any Holder desiring inspection
thereof. The Company shall mail the notice at least 15 days before the
date the increased Conversion Rate takes affect. The notice shall state the
increased Conversion Rate and the period it shall be in effect.

 

(v)  Notice to Holders Prior to Certain
Actions. In case:

 

(1)  the Company shall declare a dividend
(or any other distribution) on its Common Stock that would require an
adjustment in the Conversion Rate pursuant to Section 4.12(h);

 

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

 

(3)  of any reclassification or
reorganization of the Common Stock of the Company (other than a subdivision or
combination of its outstanding Common Stock, or a change in par value, or from
par value to 

 

 

18

 

no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any shareholders of the Company is required, or of the sale or transfer of
all or substantially all of the assets of the Company; or

 

(4)  of the voluntary or involuntary
dissolution, liquidation or winding-up of the Company,

 

the Company shall cause to be filed with the Trustee
and to be mailed to each Holder at its address appearing on the Convertible
Note register, as promptly as possible but in any event at least 15 days
prior to the applicable date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, or rights or warrants are to be
determined or (y) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up.

 

(vi)  Effect
of Reclassification, Consolidation, Merger, Binding Share Exchange or Sale.
If any of the following events occur, namely (a) any reclassification or
change of outstanding shares of Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination); (b) any consolidation, merger or
binding share exchange of the Company with another corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock; or (c) any sale or conveyance of all or substantially
all of the assets of the Company to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the conversion rate will not be adjusted. If any of the
events described in the preceding sentence occur, the Company or the
continuing, successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture or otherwise amend the terms
of the Convertible Notes, to provide that each Convertible Note shall be
convertible into the kind and amount of shares of stock, other securities or
property or assets (including cash) that the Holder of the Convertible Note
would have received upon such reclassification, change, consolidation, merger,
binding share exchange, sale or conveyance if such Holder had converted such
Convertible Note into the number of shares of Common Stock issuable upon
conversion of such Convertible Note immediately prior to such reclassification,
change, consolidation, merger, combination, binding share exchange, sale or
conveyance.  Such supplemental indenture
or other amendment to the Convertible Notes shall provide for adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 4.12(i)(vi).

 

The Company shall cause notice of the execution of
such supplemental indenture or amendment of the Convertible Notes to be mailed
to each Holder, at its address appearing on the Convertible Note register,
within 20 days after execution thereof. Failure to deliver such notice
shall not affect the legality or validity of such supplemental indenture.

 

The above provisions of this Section shall similarly
apply to successive reclassifications, changes, consolidations, mergers,
combinations, binding share exchanges, sales and conveyances.

 

If this Section 4.12(i) applies to any event or
occurrence, Section 4.12(h) shall not apply.

 

(vii) Responsibility
of Trustee. The Trustee and any other Conversion Agent shall not at
any time be under any duty or responsibility to any Holder to either calculate
the Conversion Rate or determine whether any facts exist which may require any
adjustment of the Conversion Rate, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed,
in making the same and shall be protected in relying upon an Officers’
Certificate with respect to the same. The Trustee and any other Conversion
Agent shall not be accountable with respect to the validity or value (or the
kind or amount) of any shares of Common Stock, or of any securities or 

 

 

19

 

property, which may at any time be issued or delivered upon the
conversion of any Convertible Notes and the Trustee and any other Conversion
Agent make no representations with respect thereto. Subject to the provisions
of Article 6 of the Indenture, neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Convertible Notes for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants
of the Company contained in this Section 4.12. Without limiting the
generality of the foregoing, neither the Trustee nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 4.12(i)(vi) relating
either to the kind or amount of shares of stock or securities or property
(including cash) receivable by Holders upon the conversion of their Convertible
Notes after any event referred to in such Section 4.12(i)(vi) or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article 6 of the Indenture, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, the
Officers’ Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.

 

(viii)  Simultaneous Adjustments. In the event
that Section 4.12(h) requires adjustments to the Conversion Rate under
more than one of Sections 4.12(h)(i), (ii), (iii) or (iv), and the Record Dates
for the distributions giving rise to such adjustments shall occur on the same
date, then such adjustments shall be made by applying, first, the provisions of
Section 4.12(h)(iv), second, the provisions of Section 4.12(h)(iii),
third, the provisions of Section 4.12(h)(i), and fourth, the provisions of
Section 4.12(h)(ii).

 

(ix)  Successive
Adjustments. After an adjustment to the Conversion Rate under
Section 4.12(h), any subsequent event requiring an adjustment under
Section 4.12(h) shall cause an adjustment to the Conversion Rate as so
adjusted.

 

(x)  General
Considerations. Whenever successive adjustments to the Conversion
Rate are called for pursuant to Sections 4.12(h) or 4.12(i), such adjustments
shall be made to the Market Price as may be necessary or appropriate to
effectuate the intent of 4.12(h) or 4.12(i) and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.

 

Section 4.13 Events
of Default.

 

In addition to those matters set forth in
Section 501 of the Indenture, an “Event
of Default” with respect to the Convertible Notes shall occur if:

 

                (i)  The
Company defaults in its obligation to repurchase Convertible Notes upon the
occurrence of a Fundamental Change or the exercise by a Holder of its option to
require the Company to repurchase such Holder’s Convertible Notes; and

 

                (ii)  The
Company defaults in its obligation to redeem the Convertible Notes after
exercising its redemption option pursuant to Section 4.08.

 

Section 4.14 Covenants. 
The covenants contained in Section 1004 of the Indenture are hereby
deleted for purposes of the Convertible Notes.

 

Section 4.15
Amendments; Waiver.  In addition to those matters set forth in
Section 902 of the Indenture (including the terms and conditions of the
Convertible Notes set forth herein), with respect to the Convertible Notes, no
amendment or supplemental indenture shall without the consent of the Holder of
each Convertible Note affected thereby:

 

(a)  reduce the Redemption Price, Purchase
Price or Fundamental Change Purchase Price of the Convertible Notes; or

 

 

20

 

(b)  make any change that adversely affects
the Holders’ right to convert the Convertible Notes.

 

In addition, with respect to the Convertible Notes, to
the extent set forth in Section 513 of the Indenture, the holders of at
least a majority in aggregate Principal Amount of the outstanding Convertible
Notes may waive an existing Default other than:

 

(a)  any Default by the Company in any
payment of the Redemption Price, Purchase Price or Fundamental Change Purchase
Price with respect to any Convertible Notes, or

 

(b)  any Default which constitutes a failure
to convert any Convertible Note in accordance with its terms, this Officers’
Certificate and the Indenture.

 

Section 4.16
Register of Securities; Paying Agent; Conversion Agent. 
Initially, the Trustee shall act as Paying Agent, Conversion Agent and
Security Registrar. The Company may appoint and change any Paying Agent,
Conversion Agent, Security Registrar or co-registrar or approve a change in the
office through which any Paying Agent acts without notice, other than notice to
the Trustee. The Company or any of its Subsidiaries or any of their Affiliates
may act as Paying Agent, Conversion Agent, Security Registrar or co-registrar.

 

Section 4.17
Calculations in Respect of the Convertible Notes.  The Company
will be responsible for making all calculations called for under the
Convertible Notes. These calculations include, but are not limited to,
determination of the Market Price, accrued interest payable on the Convertible
Notes and Conversion Price of the Convertible Notes. The Company will make
these calculations in good faith and, absent manifest error, these calculations
will be final and binding on the Holders. The Company will provide to each of
the Trustee and the Conversion Agent a schedule of its calculations and each of
the Trustee and the Conversion Agent is entitled to rely upon the accuracy of
such calculations without independent verification. The Trustee will forward
the Company’s calculations to any Holder upon the request of such Holder.

 

Section 4.18 Form. 
The Convertible Notes will be in substantially the form set forth in Exhibit A hereto, and may have such
other terms as are provided therein.

 

Section 4.19
Miscellaneous.

 

(a)  The
Company will not pay Additional Amounts as contemplated by Section 1011 of the
Indenture on the Convertible Notes to any Holder who is not a United States
person (including any modification to the definition of such term) in respect
of any tax, assessment or governmental charge.

 

(b)  The
Convertible Notes will not be guaranteed.

 

(c)  Holders of
Convertible Notes are subject to the ownership restrictions contained in the
Articles of Incorporation of the Company. 
For this purpose, a Holder of Convertible Notes will be treated as
owning the shares of Common Stock into which the Convertibles Notes could be
converted.

 

(d)  The
Convertible Notes shall have such other terms and conditions as are set forth
in the form of global certificate representing the Convertible Notes and,
except as otherwise expressly set forth herein or in the certificate
representing the Convertible Notes, shall be subject to the provisions of the
Indenture.

 

(e)  All shares
of Common Stock delivered upon conversion or purchase of the Convertible Notes
shall be newly issued shares or treasury shares, shall be fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim.  The Company shall cause
to have listed or quoted all such shares of Common Stock on each United States
national securities exchange or over-the-counter or other domestic market on which
the Common Stock is then listed or quoted.

 

* * *

 

 

21

 

All capitalized terms used in this Officers’
Certificate and not defined herein shall have the meanings set forth in the
Indenture.

 

Each of the undersigned, for himself, states that he has
read and is familiar with the provisions of Article Three of the Indenture
relating to the establishment of a series of Securities thereunder and the
establishment of forms of Securities representing a series of Securities
thereunder and, in each case, the definitions therein relating thereto; that he
is generally familiar with the other provisions of the Indenture and with the
affairs of the Company and its acts and proceedings and that the statements and
opinions made by him in this Certificate are based upon such familiarity; and
that he has made such examination or investigation as is necessary to enable
him to determine whether or not the covenants and conditions referred to above
have been complied with; and in his opinion, such covenants and conditions have
been complied with.

 

[Remainder of page
intentionally left blank]

 

 

22

 

IN WITNESS WHEREOF, the
undersigned have hereunto signed their names as of this 19th day of May, 2003.

	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  John B. Roche

  
	
   

  	
  Chief Financial Officer
  and Executive Vice President

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Steven F. Siegel

  
	
   

  	
  Executive Vice President and Secretary

  

 

 

23

Exhibit
A

 

UNLESS THIS NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), 55 WATER STREET, NEW YORK, NEW YORK, TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

                THIS NOTE IS A GLOBAL NOTE
WITHIN THE MEANING SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF DTC OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR ANOTHER NOMINEE OF
DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR DEPOSITORY OR ITS NOMINEE.

 

 

NEW PLAN EXCEL
REALTY TRUST, INC.

 

3.75% Convertible
Senior Note due 2023

 

	
  No. 1

  	
   

  	
  Principal Amount: 
  $100,000,000

  
	
   

  	
   

  	
  CUSIP: 648053 AB 2

  

 

New Plan Excel Realty Trust, Inc., a corporation duly organized and
existing under the laws of the State of Maryland (herein referred to as the
“Company”), for value received, hereby promises to pay to Cede & Co.,
or registered assigns, the principal sum of $100,000,000, on June 1, 2023.

 

This Note shall bear interest as specified on the other side of this
Note.  This Note is convertible and is
subject to redemption at the option of the Company and to purchase by the
Company at the option of the Holder as specified on the other side of this
Note.

 

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

 

Unless the certificate of authentication hereon has been executed by
the Trustee or its duly appointed authenticating agent by manual signature,
this Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

 

	
  Dated:  May
  19, 2003

  	
   

  	
   

  
	
   

  	
  NEW PLAN EXCEL REALTY TRUST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Steven F. Siegel

  	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
   

  	
   

  

 

 

 

 

 

A-1

 

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

U.S. BANK TRUST
NATIONAL ASSOCIATION, as Trustee

By:

 

	
   

  	
   

  

Authorized
Signatory

 

 

 

A-2

 

[REVERSE SIDE OF
GLOBAL SECURITY]

 

NEW PLAN EXCEL REALTY
TRUST, INC.

3.75% CONVERTIBLE SENIOR NOTES DUE 2023

 

This Note is one of a
duly authorized issue of 3.75% Convertible Senior Notes due 2023 (the “Notes”) of New Plan Excel Realty Trust,
Inc., a Maryland corporation (including any successor corporation under the Indenture
hereinafter referred to, the “Company”),
issued pursuant to an Indenture, dated as of February 3, 1999 (the “Base Indenture”), between the Company and
U.S. Bank Trust National Association, a national banking association and
successor to State Street Bank and Trust, as Trustee (which term includes any
successor trustee under the Indenture), as supplemented by an Officers’
Certificate dated as of May 19, 2003 issued pursuant to Sections 301 and
303 of the Base Indenture setting forth the terms of the Notes (the “Officers’ Certificate,” and together with
the Base Indenture, the “Indenture”).  Reference is hereby made to the Indenture
and all indentures supplemental thereto for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes and of the terms upon which the Notes
are, and are to be, authenticated and delivered.  Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. 
The Notes are senior unsecured obligations of the Company limited to
$115,000,000 aggregate Principal.

 

                1.
INTEREST. This Note shall bear interest at a rate of 3.75% per year on the
Principal hereof, from May 19, 2003 or from the most recent Interest Payment
Date (as defined below) to which payment has been paid or duly provided for,
payable semiannually in arrears on June 1 and December 1 of each year,
beginning December 1, 2003 (each an “Interest
Payment Date”) to the persons in whose names the Notes are
registered at the close of business on May 15 and November 15 (each a “Regular Record Date”) (whether or not a
Business Day), as the case may be, immediately preceding such Interest Payment
Date. Interest on the Notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months.

 

If the Principal hereof
or any portion of such Principal is not paid when due (whether upon
acceleration, upon the date set for payment of the Redemption Price pursuant to
paragraph 4 hereof, upon the date set for payment of a Purchase Price or
Fundamental Change Purchase Price pursuant to paragraph 6 hereof or upon
the Final Maturity of this Note) or if interest due hereon or any portion of
such interest is not paid when due in accordance with this paragraph or
paragraph 9 hereof, then in each such case the overdue amount shall bear
interest at the rate of 3.75% per annum, compounded semiannually (to the extent
that the payment of such interest shall be legally enforceable), which interest
shall accrue from the date such overdue amount was due to the date payment of
such amount, including interest thereon, has been made or duly provided
for.  All such interest shall be payable
on demand.

 

2. METHOD OF
PAYMENT.  Subject to the terms and
conditions of the Indenture, the Company shall make payments in respect of the
Notes to the Persons who are registered Holders of Notes at the close of
business on the Business Day preceding the Redemption Date or Final Maturity,
as the case may be, or at the close of business on a Purchase Date or
Fundamental Change Purchase Date, as the case may be.  Holders must surrender Notes to a Paying Agent to collect such
payments in respect of the Notes.  The
Company shall pay, at the office of the Paying Agent, Common Stock and/or cash
amounts, as applicable, in money of the United States that at the time of
payment is legal tender for payment of public and private debts.  However, the Company may make such cash
payments by check payable in such money mailed to the Holder’s registered
address or, with respect to Global Securities, by wire transfer.

 

3. PAYING AGENT, CONVERSION AGENT AND SECURITY
REGISTRAR.  Initially, U.S. Bank Trust
National Association, a national banking association (the “Trustee”), shall act as Paying Agent,
Conversion Agent and Security Registrar. 
The Company may appoint and change any Paying Agent, Conversion Agent,
Security Registrar or co-registrar or approve a change in the office through
which any Paying Agent acts without notice, other than notice to the
Trustee.  The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Security Registrar or co-registrar.

 

4. REDEMPTION AT THE OPTION OF THE COMPANY.  No sinking fund is provided for the
Notes.  Prior to June 9, 2008, the Notes
will not be redeemable.  The Notes are
redeemable at any time on or after June 9, 2008 in whole, or in part, at the
redemption prices (each, a “Redemption Price”)
(expressed as percentages of 

 

 

A-3

 

Principal Amount) set forth below, plus any accrued and unpaid interest
to but excluding the Redemption Date, if redeemed during the twelve-month
period beginning on June 9 of the years indicated below:

 

	
  Year

  	
   

  	
   

  	
  Percentage
  of Principal Amount

  	
   

  
	
  2008

  	
   

  	
  101.07

  	
  %

  
	
  2009

  	
   

  	
  100.54

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.00

  	
  %

  

 

5. NOTICE OF REDEMPTION
AT THE OPTION OF THE COMPANY.  Notice of
redemption at the option of the Company shall be mailed at least 30 days
but not more than 60 days before the Redemption Date to the Trustee, the
Paying Agent and each Holder of Notes to be redeemed at the Holder’s registered
address.  If money sufficient to pay the
Redemption Price of all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the
Redemption Date, on and after the Redemption Date interest shall cease to
accrue on such Notes or portions thereof. 
Notes in denominations larger than $1,000 Principal Amount may be
redeemed in part but only in integral multiples of $1,000 Principal Amount.

 

6. PURCHASE BY THE
COMPANY AT THE OPTION OF THE HOLDER; PURCHASE AT THE OPTION OF THE HOLDER UPON
A FUNDAMENTAL CHANGE.

 

(a)  Subject to
the terms and conditions of the Indenture, a Holder shall have the option to
require the Company to purchase the Notes held by such Holder on June 1, 2010,
June 1, 2013 and June 1, 2018 (each, a “Purchase
Date”) at a purchase price (the “Purchase
Price”) equal to the Principal Amount of the Notes to be purchased
plus any accrued and unpaid interest to such Purchase Date, upon delivery to
the Paying Agent of a Purchase Notice containing the information set forth in
the Indenture, from the opening of business on the date that is 20 Business
Days prior to such Purchase Date until the close of business on the fifth
Business Day prior to such Purchase Date and upon delivery of the Notes to the
Paying Agent by the Holder as set forth in the Indenture.  The Company will pay the Purchase Price in
cash, Common Stock or a combination thereof as set forth in the Indenture.

 

Notes in denominations
larger than $1,000 Principal Amount may be purchased in part, but only in
integral multiples of $1,000 Principal Amount.

 

(b)  If a
Fundamental Change shall occur at any time prior to June 1, 2010, each Holder
shall have the right, at such Holder’s option and subject to the terms and
conditions of the Indenture, to require the Company to purchase any or all of
such Holder’s Notes or any portion of the Principal Amount thereof that is
equal to $1,000 or an integral multiple of $1,000 no later than the day that is
35 Business Days after the date of the Company Notice of the occurrence of the
Fundamental Change (subject to extension to comply with applicable law) for a
Fundamental Change Purchase Price equal to the Principal Amount of Notes
purchased plus accrued and unpaid interest to the Fundamental Change Purchase
Date, which Fundamental Change Purchase Price shall be paid by the Company in
cash, Common Stock or a combination thereof in accordance with the Indenture.

 

(c)  Holders
have the right to withdraw any Purchase Notice or Fundamental Change Purchase
Notice, as the case may be, by delivery to the Paying Agent of a written notice
of withdrawal in accordance with the provisions of the Indenture.

 

(d)  If consideration
sufficient to pay a Fundamental Change Purchase Price or Purchase Price, as the
case may be, of all Notes or portions thereof to be purchased as of the
Purchase Date or the Fundamental Change Purchase Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Fundamental Change Purchase Date, as the case may be, interest shall
cease to accrue on such Notes (or portions thereof) on and after such date, and
the Holder thereof shall have no other rights as such (other than the right to
receive the Purchase Price or Fundamental Change Purchase Price, as the case
may be, upon surrender of such Note).

 

7. RANKING.  The Notes are unsecured senior obligations
of the Company and shall rank pari passu
in right of payment with all other senior unsecured indebtedness of the Company
from time to time outstanding.  The
Notes are not guaranteed.

 

 

 

A-4

 

8. CONVERSION.  Subject to the procedures set forth in the
Indenture, a Holder may convert Notes into Common Stock of the Company (or, at
the option of the Company, cash or a combination of cash and shares of Common
Stock in accordance with the terms of the Indenture) on or before the close of
business on June 1, 2023 during the periods and upon satisfaction of at least
one of the conditions set forth below:

 

(a)  in any
calendar quarter (and only during such calendar quarter) if the Last Reported
Sale Price for the Common Stock for at least 20 Trading Days during the period
of 30 consecutive Trading Days ending on the last Trading Day of the previous
calendar quarter equals or exceeds 120% of the Conversion Price on such last
Trading Day;

 

(b)  in the
event that the Company calls the Notes for redemption, at any time prior to the
close of business on the second Business Day immediately preceding the
Redemption Date; or

 

(c)  in the
event that the Company becomes a party to a consolidation, merger or binding
share exchange pursuant to which the Common Stock would be converted into cash
or property (other than securities), at any time from and after the date which
is 15 days prior to the anticipated effective date for the transaction
until 15 days after the actual effective date of such transaction.

 

In addition, the Notes
will be convertible in accordance with this paragraph if the Company elects to
(i) distribute to all holders of Common Stock assets, debt securities or
rights to purchase securities of the Company, which distribution has a per
share value as determined by the Company’s Board of Directors exceeding 15% of
the Last Reported Sale Price of the Common Stock on the Trading Day immediately
preceding the declaration date for such distribution or (ii) distribute to
all holders of Common Stock rights entitling them to purchase, for a period
expiring within 60 days after the date of such distribution, shares of
Common Stock at less than the Last Reported Sale Price on the Trading Day
immediately preceding the declaration date of such distribution. In the case of
the foregoing clauses (i) and (ii), the Company must notify the Holders at
least 20 Business Days immediately prior to the ex-dividend date for such
distribution. Once the Company has given such notice, Holders may surrender
their Notes for conversion at any time thereafter until the earlier of the
close of business on the Business Day prior to the ex-dividend date or the
Company’s announcement that such distribution will not take place.
Notwithstanding the foregoing, a Holder may not exercise the foregoing right to
convert if the Holder, in its capacity as a Holder, may participate in the
distribution without converting his Notes. 
The ex-dividend date is the first date upon which a sale of the Common
Stock does not automatically transfer the right to receive the relevant
dividend from the seller of the Common Stock to its buyer.

 

If the Company engages in
certain reclassifications of Common Stock or is a party to a consolidation,
merger, binding share exchange or transfer of all or substantially all of the
Company’s assets pursuant to which the Common Stock is converted into cash,
securities or other property, then at the effective time of the transaction,
the right to convert a Note will be changed into the right to convert a Note
into the kind and amount of cash, securities or other property that the Holder
would have received if the Holder had converted its Notes immediately prior to
the transaction and received Common Stock. If the Company engages in any
transaction described in the preceding sentence, the Conversion Rate will not
be adjusted.

 

Notes in respect of which
a Holder has delivered a notice of exercise of an option to require the Company
to purchase such Notes pursuant to paragraph 6 hereof may be converted
only if the notice of exercise is withdrawn in accordance with the terms of the
Indenture.

 

The initial Conversion
Rate is 40 shares of Common Stock per $1,000 Principal Amount, subject to
adjustment in certain events described in the Indenture.  The Company shall deliver cash or a check in
lieu of any fractional share of Common Stock. 
The cash payment for fractional shares will be based on the Last
Reported Sale Price of the Common Stock on the Trading Day immediately prior to
the Conversion Date.

 

 

A-5

 

Holders of Notes at the
close of business on a Regular Record Date will receive payment of interest
payable on the corresponding Interest Payment Date notwithstanding the
conversion of such Notes at any time after the close of business on such
Regular Record Date.  Notes surrendered
for conversion during the period from the close of business on any Regular
Record Date to the opening of business on the corresponding Interest Payment
Date, except for Notes to be redeemed within this period or on the
corresponding Interest Payment Date, must be accompanied by payment of an
amount equal to the interest that the Holder is to receive on the Notes. Except
as described above, no payment or adjustment will be made for accrued interest
on converted Notes.

 

To convert the Notes a
Holder must (1) complete and manually sign the conversion notice on the
back of the Notes (or complete and manually sign a facsimile of such notice)
and deliver such notice to the Conversion Agent at the office maintained by the
Conversion Agent for such purpose, (2) surrender the Notes to the
Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee,
(4) pay any transfer or similar tax, if required and (5) pay funds equal
to the interest payable on the next Interest Payment Date, if required.

 

A Holder may convert a
portion of the Notes only if the Principal Amount of such portion is $1,000 or
a multiple of $1,000. No payment or adjustment shall be made for dividends on
the Common Stock except as provided in the Indenture.

 

Holders of Notes are
subject to the ownership restrictions contained in the Articles of
Incorporation of the Company.  For this
purpose, a Holder of Notes will be treated as owning the shares of Common Stock
into which the Notes could be converted.

 

9. DEFAULTED
INTEREST.  Except as otherwise specified
with respect to the Notes, any Defaulted Interest on any Note shall forthwith
cease to be payable to the registered Holder thereof on the relevant Regular
Record Date or accrual date, as the case may be, by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company as provided for
in Section 307 of the Base Indenture.

 

10. DENOMINATIONS;
TRANSFER; EXCHANGE.  The Notes are in
registered form, without coupons, in denominations of $1,000 Principal Amount
and multiples of $1,000.  A Holder may
transfer or convert Notes in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. In the
event of any redemption of fewer than all of the outstanding Notes, the
Registrar need not register the transfer of or exchange any Notes selected for
redemption (except, in the case of a Note to be redeemed in part, the portion
of the Note not to be redeemed) or issue, register the transfer of or exchange
any Notes for a period of 15 days before the mailing of the redemption
notice.  In addition, the Registrar need
not register the transfer of or exchange any Notes in respect of which a
Purchase Notice or Fundamental Change Purchase Notice has been given and not
withdrawn (except, in the case of a Note to be purchased in part, the portion
of the Note not to be purchased).

 

11. PERSONS DEEMED
OWNERS.  The registered Holder of this
Note may be treated as the owner of this Note for all purposes.

 

12. UNCLAIMED MONEY OR
PROPERTY.  The Trustee and the Paying
Agent shall return to the Company upon written request any money or property
held by them for the payment of any amount with respect to the Notes that
remains unclaimed for two years, provided,
however, that the Trustee or such Paying Agent, before being
required to make any such return, shall at the expense of the Company cause to
be published once in a newspaper of general circulation in The City of New York
notice that such money or property remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed money or property then remaining shall be
returned to the Company.  After return
to the Company, Holders entitled to the money or property must look to the
Company for payment as general creditors unless an applicable abandoned
property law designates another Person.

 

13. AMENDMENT;
WAIVER.  Subject to certain exceptions
set forth in the Indenture, (i) the Indenture or the Notes may be amended
with the written consent of the Holders of at least a majority in aggregate
Principal Amount of the Notes at the time outstanding and (ii) certain
defaults or noncompliance with certain provisions may be waived with the
written consent of the Holders of a majority in aggregate Principal Amount of
the Notes at the 

 

 

A-6

 

time outstanding. 
The Indenture or the Notes may be amended without the consent of any
Holders under circumstances set forth in Section 901 of the Base
Indenture.

 

14. DEFAULTS AND REMEDIES.  If an Event of Default occurs and is continuing, the Trustee, or
the Holders of at least 25% in aggregate Principal Amount of the Notes at the
time outstanding, may declare the Principal Amount and any accrued and unpaid
interest, of all the Notes to be due and payable in the manner and with the
effect provided in the Indenture. 
Certain events of bankruptcy or insolvency are Events of Default which
shall result in the Notes being declared due and payable immediately upon the
occurrence of such Events of Default.

 

Events of Default in
respect of the Notes are set forth in Section 4.13 of the Officers’
Certificate and Section 501 of the Base Indenture.  Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. 
The Trustee may refuse to enforce the Indenture or the Notes unless it
receives satisfactory indemnity or security. Subject to certain limitations,
conditions and exceptions, Holders of a majority in aggregate Principal Amount
of the Notes at the time outstanding may direct the Trustee in its exercise of
any trust or power, including the annulment of a declaration of
acceleration.  The Trustee may withhold
from Holders notice of any continuing default (except a default in payment on
any Notes) if it determines that withholding notice is in their interests.

 

15. CONSOLIDATION,
MERGER, AND SALE OF ASSETS.  In the
event of a consolidation, merger, or sale of assets to convey, transfer or
lease all or substantially all of the Company’s property or assets as described
in Section 801 of the Base Indenture, the successor corporation to the
Company shall succeed to and be substituted for the Company, and may exercise
the Company’s rights and powers under this Indenture, and thereafter, except in
the case of a lease, the Company shall be relieved of all obligations and
covenants under the Indenture and the Notes.

 

16. TRUSTEE AND AGENT
DEALINGS WITH THE COMPANY.  The Trustee,
Paying Agent, Conversion Agent and Registrar under the Indenture, each in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with and may collect obligations owed to it by the Company
or its Affiliates and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee, Paying Agent,
Conversion Agent or Registrar.

 

17. CALCULATIONS IN
RESPECT OF THE NOTES.  The Company will
be responsible for making all calculations called for under the Notes.  These calculations include, but are not limited
to, determination of the Market Price, accrued interest payable on the Notes
and Conversion Price of the Notes.  The
Company will make these calculations in good faith and, absent manifest error,
these calculations will be final and binding on the Holders.  The Company will provide to each of the
Trustee and the Conversion Agent a schedule of its calculations and each of the
Trustee and the Conversion Agent is entitled to rely upon the accuracy of such
calculations without independent verification. 
The Trustee will forward the Company’s calculations to any Holder upon
the request of such Holder.

 

18. NO RECOURSE AGAINST
OTHERS.  A past, present or future
director, officer, employee or controlling person, as such, of the Company or
any subsidiary of the Company or any stockholder as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of the
consideration for the issue of the Notes.

 

19. AUTHENTICATION.  This Note shall not be valid until an
authorized officer of the Trustee or authenticating agent manually signs the Trustee’s
Certificate of Authentication on the other side of this Note.

 

20. GOVERNING LAW.  The Indenture and this Note shall be
governed by and construed in accordance with the laws of the State of New York
without regard to the conflicts of law rules of said state.

 

 

 

A-7

 

FORM OF CONVERSION NOTICE

 

To: New Plan Excel Realty Trust, Inc.

 

The undersigned
registered holder of this Note hereby exercises the option to convert this
Note, or portion hereof (which is $1,000 Principal Amount or an integral
multiple thereof) designated below, for shares of Common Stock of New Plan
Excel Realty Trust, Inc. (or, if the Company elects in accordance with Section
4.12(d) of the Officers’ Certificate, cash) in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares, if any,
issuable and deliverable upon such conversion, together with any check for cash
deliverable upon such conversion, and any Notes representing any unconverted
principal amount hereof, be issued and delivered to the registered holder
hereof unless a different name has been indicated below.  If shares or any portion of this Note not
converted are to be issued in the name of a Person other than the undersigned,
the undersigned shall pay all transfer taxes payable with respect thereto.

 

This notice shall be deemed to be an irrevocable exercise of the option
to convert this Note, unless the Company elects to pay cash for any portion of
the shares otherwise issuable to the undersigned, in which case the undersigned
may retract this notice in accordance with Section 4.12 of the Officers’
Certificate. 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
  Signature(s) must be guaranteed by a commercial bank
  or trust company or a member firm of a major stock exchange if shares of
  Common Stock are to be issued, or Notes to be delivered, other than to or in
  the name of the registered holder.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature Guarantee

  
	
  Fill in for registration of shares if to be
  delivered, and Notes if to be issued other than to and in the name of
  registered holder:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  	
   

  	
  Principal Amount to be converted (if less than all):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $      ,000

  
	
  (Street Address)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Social Security or Other Taxpayer Number

  
	
  (City, state and zip code)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Please print name and address

  	
   

  	
   

  	
   

  	
   

  

 

 

A-8

 

FORM OF FUNDAMENTAL
CHANGE PURCHASE NOTICE

 

To:  New Plan Excel Realty
Trust, Inc.

 

The undersigned
registered holder of this Note hereby acknowledges receipt of a notice from New
Plan Excel Realty Trust, Inc. (the “Company”)
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repurchase this Note, or the portion
hereof (which is $1,000 Principal Amount or a integral multiple thereof)
designated below, in accordance with the terms of the Indenture referred to in
this Note and directs that payment for this Note or the portion thereof and any
Notes representing any unrepurchased principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below.  If any portion of this
Note not repurchased is to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto. 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Principal Amount to be purchased (if less than all):
  $      ,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Social Security or Other Tapayer Number

  
	
  Fill in for registration of Notes (or shares of
  Common Stock) if to be issued other than to and in the name of registered
  holder:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Street Address)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (City, state and zip code)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Please print name and address

  	
   

  	
   

  	
   

  	
   

  

 

 

A-9

FORM OF PURCHASE
NOTICE

 

To:  New Plan Excel Realty
Trust, Inc.

 

The undersigned
registered holder of this Note hereby acknowledges receipt of a notice from New
Plan Excel Realty Trust, Inc. (the “Company”)
as to the holder’s option to require the Company to repurchase this Note and
requests and instructs the Company to repurchase this Note, or the portion
hereof (which is $1,000 Principal Amount or a integral multiple thereof)
designated below, in accordance with the terms of the Indenture referred to in
this Note and directs that payment for this Note or the portion thereof and any
Notes representing any unrepurchased principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below.  If any portion of this
Note not repurchased is to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto. 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Principal Amount to be purchased (if less than all):
  $      ,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Social Security or Other Taxpayer Number

  
	
  Fill in for registration of Notes (or shares of
  Common Stock) if to be issued other than to and in the name of registered
  holder:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Street Address)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (City, state and zip code)

  	
   

  	
   

  	
   

  	
   

  
	
  Please print name and address

  	
   

  	
   

  	
   

  	
   

  

 

 

A-10

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto 

	
   

  	
   

  	
   

  
	
  Please Insert Social Security or Other Identifying
  Number of Assignee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  (Please Print or Typewrite Name and Address,
  Including Postal Zip Code of Assignee)

  
	
   

  
	
   

  
	
  the within Note and all rights thereunder and hereby
  irrevocably constitutes and appoints

  
	
   

  
	
   

  	
  Attorney to transfer said Note on the books of the
  Company, with full power of substitution in the premises.

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NOTICE:

  	
  The signature to this assignment must correspond
  with the name as it appears upon the face of the within Note in every
  particular, without alteration or enlargement or any change whatever.

  

 

 

 

 

A-11Exhibit 10.6

                                    AGREEMENT
                                    ---------

     AGREEMENT made this April 11, 2003 (the "Effective Date"), by and between
SurgiLight, Inc., a Delaware corporation with its executive offices at 12001
Science Drive, Suite140, Orlando, Florida ("SurgiLight"), and GEM Global Yield
Fund Limited, a West Indies corporation, with offices at c/o Loughran & Co., 38
Hertford Street, London, England W1Y 7TG ("GEM").

     WHEREAS, SurgiLight issued and sold to GEM its 3% Convertible Debentures,
in the principal amount of Three Million Dollars ($3,000,000) due November 8,
2003 (the "Debenture"), pursuant to that certain Convertible Debenture Purchase
Agreement between SurgiLight and GEM, dated as of June 30, 2000 (the "Debenture
Purchase Agreement"); and

     WHEREAS, SurgiLight and GEM desire that the Debenture be exchanged for the
Note (as defined below) in accordance with the terms and conditions hereinafter
set forth.

     NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

     1. Note. The parties agree that the outstanding balance due under the
Debenture is Two Million Dollars ($2,000,000) and hereby agree that
simultaneously with the execution and delivery of this Agreement, SurgiLight
shall execute and deliver to GEM the convertible promissory note in the
aggregate principal amount of Two Million Dollars ($2,000,000) attached hereto
as Exhibit A (the "Note") in exchange for the Debenture. The Note replaces and
supercedes the Debenture and Debenture Purchase Agreement in all respects, and
all obligations and rights of the parties under the Debenture and Debenture
Purchase Agreement are hereby terminated and of no further force or effect.

     2. Conversion. Pursuant to the terms and conditions set forth herein and in
the Note, the total amount of principal due under the Note is convertible into
an aggregate of 21,500,000 shares of SurgiLight's common stock (the "Common
Stock"), subject to adjustment, from time to time, for stock dividends, stock
splits, reverse stock splits, reclassifications, or recapitalizations, at the
conversion price of $0.093 per share (the "Conversion Price") (the "Total
Conversion Shares").

     3. Conversion Procedure.

        (a) On the Effective Date, GEM shall convert at the Conversion Price
such amount of the Note so it shall receive such number of shares of the Total
Conversion Shares as shall equal nineteen and nine-tenths percent (19.9%) of the
total issued and outstanding shares of the Common Stock on the Effective Date
(the "Initial Shares").

<PAGE>

        (b) The outstanding balance due under the Note immediately subsequent to
the conversion under Section 3(a) (the "Remaining Balance") shall automatically
be converted into the remaining Total Conversion Shares (the "Remaining Shares")
immediately upon the effectiveness of an amendment to SurgiLight's Certificate
of Incorporation to increase the number of authorized shares of the Common Stock
sufficient for the full conversion of the Note (the "Certificate of Amendment").
SurgiLight shall use its best efforts to promptly obtain shareholder approval
for the Certificate of Amendment and immediately thereupon file the Certificate
of Amendment with the Secretary of State of the state of Florida. Failure of the
Certificate of Amendment to be effective by July 31, 2003 shall constitute a
default under the Note, whereupon the Remaining Balance shall bear interest
payable in cash and upon demand at the rate of eight percent (8%) per annum from
the date of default until the effective date of the Certificate of Amendment and
full conversion of the Note.

         4. SurgiLight's Call Option. For a period of three (3) years from the
Effective Date, SurgiLight shall have the option (the "SurgiLight Option") to
purchase from GEM, at a price of $0.50 per share, an aggregate of such number of
shares of the Common Stock as shall equal ten percent (10%) of the Total
Conversion Shares (the "Option Shares"), in whole or in part; provided, however,
that the SurgiLight Option may only be exercised if the Option Shares are to be
used by SurgiLight solely for employees and management set forth in Section 5
hereof. SurgiLight shall exercise the SurgiLight Option by delivering to GEM at
least ten (10) business days before SurgiLight desires to exercise the
SurgiLight Option (the "Exercise Date") (a) a duly executed and completed Notice
of Exercise of Option in the form annexed hereto as Exhibit B, which notice
shall specify the number of Option Shares that SurgiLight desires to purchase
and the Exercise Date; and (b) payment in full, of the aggregate purchase price
for the Option Shares being purchased by wire transfer of immediately available
funds pursuant to GEM's wire transfer instructions. On the Exercise Date, if GEM
shall have received the notice and cash payment as set forth in(a) and (b) of
the immediately preceding sentence, GEM shall deliver, and transfer to
SurgiLight one or more certificates representing the exercised Option Shares.

     5. SurgiLight's Employee/Management Option Grants and Assignments.

          (a)SurgiLight agrees to make available for issuance to its employees
     pursuant to an employee stock option plan an aggregate of 2,150,000 shares
     of the Common Stock, as adjusted for any stock dividend, stock split,
     reverse stock split, reclassification, or recapitalization.

          (b) SurgiLight shall have the right to assign and transfer to certain
     employees and management all or any part of the SurgiLight Option without
     prior notice to GEM.

     6. Board of Directors' Nominee. So long as GEM holds at least nineteen and
nine-tenths percent (19.9%) of the Common Stock, at each annual meeting of
shareholders' of SurgiLight, commencing with SurgiLight's July 2003 Annual

                                       2

<PAGE>

Meeting of Shareholders', GEM shall have the right to designate one, and only
one, nominee for election to SurgiLight's Board of Directors, which designee
shall be included in all proxy materials distributed by SurgiLight in connection
with any such annual meeting of shareholders. Surgilight hereby agrees that the
Voting Trust Committee of SurgiLight (the "Trustee") shall vote all of the
shares subject to the Voting Trust Agreement among Dr. J.T. Lin and certain of
his family members and the Trustee, dated June 6, 2001 and amended and restated
as of February 8, 2002, and as may be amended or superseded, in favor of the
election of all board nominees designated by GEM.

     7. Rights of First Refusal. Except as otherwise provided in this Section 7,
SurgiLight hereby grants to GEM a right of first refusal to participate on a
pro-rata-basis in any and all additional issuances of SurgiLight's capital
stock, ("Right of First Refusal"). SurgiLight shall notify GEM in writing
immediately upon its intent to issue additional shares of its capital stock (the
"SurgiLight Notice") and GEM shall be entitled to exercise the Right of First
Refusal by notifying SurgiLight in writing of such election within ten (10)
business days of its receipt of the SurgiLight Notice. The Right of First
Refusal shall not apply with respect to any stock issuance to SurgiLight's
employees or lenders or pursuant to a merger, acquisition or a stock split or
any existing obligations of SurgiLight where stock is issued at a value equal to
or above $0.093 per share.

     8. Registration Rights. (a) (i) SurgiLight shall use its best efforts to
promptly register the Initial Shares and the Remaining Shares for resale under
the Securities Act of 1933, as amended (the "Securities Act"), on an appropriate
form of registration statement (the "Registration Statement") to be filed with
the Securities and Exchange Commission and in compliance with any and all state
securities laws so that such registration shall become effective (A) within six
(6) months from the Effective Date with respect to the Initial Shares (the
"Initial Shares Effectiveness Date") and (B) within six (6) months from July
31,2003 with respect to the Remaining Shares (the "Remaining Shares
Effectiveness Date").

     (ii) SurgiLight shall keep any such Registration Statement continuously
effective under the Securities Act until the earlier of (A) the date on which
all of the Initial Shares and the Remaining Shares covered by such Registration
Statement, as applicable, have been sold, (B) two (2) years from the Initial
Shares Effectiveness Date or the Remaining Shares Effectiveness Date, as
applicable, or (iii) the date on which all of the Initial Shares and the
Remaining Shares, as applicable, may be sold without restriction pursuant to
Rule 144 of the Securities Act; provided, however, that this sub clause (iii)
shall not apply to any shares transferred by GEM to any transferee who is not
permitted to "tack on" to GEM's holding period of the Initial Shares or
Remaining Shares, as the case may be, for Rule 144 purposes. All costs and
expenses of registration and to keep the Registration Statement continuously
effective as provided herein shall be borne by SurgiLight.

        (b) If any portion of the Initial Shares has not been registered by the
Initial Shares Effectiveness Date, then SurgiLight, as a penalty, shall issue to
GEM the following number of additional shares of the Common Stock with respect
to the shares not so registered: (i) for the first eight (8) months delinquent,

                                       3

<PAGE>

one half of one percent (0.5%) of the number of Initial Shares not registered,
(ii) for the next succeeding eight (8) months delinquent, one percent (1%) of
the number of Initial Shares not registered, and (iii) for the next succeeding
eight (8) months delinquent, one and one half percent (1.5%) of the number of
Initial Shares not registered. Thereafter, SurgiLight shall have no obligation
to issue any more additional shares of the Common Stock under this Section 8
(b).

        (c) If any portion of the Remaining Shares has not been registered by
the Remaining Shares Effectiveness Date, then SurgiLight, as a penalty, shall
issue to GEM the following number of additional shares of the Common Stock with
respect to the shares not so registered: (i) for the first eight (8) months
delinquent, one half of one percent (0.5%) of the number of Remaining Shares not
registered, (ii) for the next succeeding eight (8) months delinquent, one
percent (1%) of the number of Remaining Shares not registered, and (iii) for the
next succeeding eight (8) months delinquent, one and one half percent (1.5%) of
the number of Remaining Shares not registered. Thereafter, SurgiLight shall have
no obligation to issue any more additional shares of the Common Stock under this
Section 8 (c).

     9. Voting Rights. Notwithstanding anything else in this Agreement to the
contrary or the actual number of shares of Common Stock held of record by GEM,
GEM shall not be entitled to have voting rights, and shall abstain from voting,
with respect to more than nineteen and nine-tenths percent (19.9%) of the total
outstanding shares of the Common Stock entitled to vote (the "Voting Cap");
provided, however, that the Voting Cap shall not apply: (a) to GEM's voting on
the Certificate of Amendment; (b) if GEM has voted in favor of the Certificate
of Amendment and SurgiLight has not obtained the shareholder votes necessary to
approve the Certificate of Amendment by July 31, 2003; (c) with respect to the
Initial shares, if SurgiLight fails to register the Initial Shares by the
Initial Shares Effectiveness Date, but only with respect to the shares not so
registered and during the period not registered; (d) with respect to the
Remaining Shares, if SurgiLight fails to register the Remaining Shares by the
Remaining Shares Effectiveness Date, but only with respect to the shares not so
registered and during the period not registered; and (e) to voting in connection
with a sale of all or substantially all of the assets of SurgiLight; and (f)
with respect to any election of GEM's board nominee, as set forth in Section 6
above. The Voting Cap shall be reinstated (i) with respect to subsection (b)
above, at such time that SurgiLight's shareholders have approved the Certificate
of Amendment; (ii) with respect to subsection (c) above, upon registration of
the Initial Shares and (iii) with respect to subsection (d) above, upon
registration of the Remaining Shares.

     10. Lock-Up. GEM acknowledges and agrees that it shall not, on any single
day, sell, sell short, lend, assign or otherwise transfer or dispose of that
number of shares of the Common Stock in excess of the greater of (i) ten percent
(10%) of that current trading days's trading volume, or (ii) seven and one half
percent (7.5%) of the average trading volume for the prior fifteen (15) trading
days.

     In order for SurgiLight to verify GEM's compliance with the limitations set
forth in this Paragraph 10, GEM shall deposit all Initial Shares and Remaining
Shares into an account or accounts with one or more market makers designated by
SurgiLight, which market makers will provide daily written reports to
SurgiLight's Board of Directors of all sales by GEM of Common Stock.

                                       4

<PAGE>

     11. SurgiLight's Representations and Warranties. SurgiLight hereby
represents and warrants to GEM as follows:

         (a) SurgiLight is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Florida and in all jurisdictions
in which it conducts business and has all necessary corporate powers to own its
properties and carry on its business as now owned and operated by it.

         (b) SurgiLight has the right, power, legal capacity, and authority to
enter into and perform its obligations under this Agreement, and this Agreement
constitutes, and each document or instrument to be executed by SurgiLight
pursuant to the terms hereof upon its execution and delivery will have been duly
authorized, executed and delivered and will constitute, the valid and legally
binding obligation of SurgiLight enforceable in accordance with its terms.

         (c) GEM and its counsel, accountants, and other representatives have
had full access to all publicly available records and documents of or relating
to SurgiLight that they have asked to review

     12. GEM's Representations and Warranties. GEM hereby represents and
warrants to SurgiLight as follows:

                    (a) GEM is a corporation duly organized, validly existing,
                    and in good standing in all jurisdictions in which it
                    conducts business and has all necessary corporate powers to
                    own its properties and carry on its business as now owned
                    and operated by it.

                    (b) GEM has the right, power, legal capacity, and authority
                    to enter into and perform its obligations under this
                    Agreement, and this Agreement constitutes, and each document
                    or instrument to be executed by GEM pursuant to the terms
                    hereof upon its execution and delivery will have been duly
                    authorized, executed and delivered and will constitute, the
                    valid and legally binding obligation of GEM enforceable in
                    accordance with its terms.

     13. Events of Default. The following shall constitute events of default
under the Note and any extensions, renewals, or modifications thereof:

                    (a) the making of an assignment by SurgiLight for the
                    benefit of its creditors; or

                                       5

<PAGE>

                    (b) the commencement of proceedings in bankruptcy for
                    reorganization of SurgiLight or for the adjustment of any of
                    its debts under the United States Bankruptcy Code or under
                    any law, whether state or federal, now or hereafter existing
                    for the relief of SurgiLight, which proceedings have not
                    been terminated on or before ninety (90) days from
                    commencement;

     or

                    (c) failure of the Certificate of Amendment to have become
                    effective by July 31, 2003, subject to cure as set forth in
                    Paragraph 3(b) above.

     14. Rights upon Default. Upon an event of default which has not been cured
within the applicable cure period, if any, the following provisions shall
control:

                    (a) If the uncured default is pursuant to subparagraphs
                    13(a) or (b), then, effective upon notice from GEM to
                    SurgiLight, the entire unpaid principal balance of the Note
                    and all accrued and unpaid interest thereon, at the Default
                    Rate, shall, at the option of GEM, be due and payable, and
                    GEM may immediately enforce any and all of its rights and
                    remedies under the Note and this Agreement and under
                    applicable law.

                    (b) If the uncured default is pursuant to subparagraph
                    13(c), then all accrued and unpaid interest on the unpaid
                    principal balance of the Note, at the Default Rate, shall be
                    due and payable until such time that the Certificate of
                    Amendment shall have become effective

                    Failure of GEM to exercise either of these options shall not
                    constitute a continuing waiver or a waiver of the right to
                    exercise the same in the event of any subsequent default.

     15. Transfer Taxes. SurgiLight shall be liable for any stamp, transfer,
documentary, sales, use, registration, intangible or other such taxes and fees,
including any penalties and interest, arising from issuance of the Note.

     16. Miscellaneous Provisions.

                    (a) Section Headings. The subject headings of the Sections
                    and paragraphs of this Agreement are included for purposes
                    of convenience only and shall not affect the construction or
                    interpretation of any of its provisions.

                                       6

<PAGE>

                    (b) Entire Agreement; Amendments. This Agreement contains
                    the entire agreement of the parties relating to the subject
                    matter hereof. No amendment or modification of this
                    Agreement shall be valid unless made in writing and signed
                    by each of the parties hereto.

                    (c) Waivers. No provision of this Agreement may be waived
                    except in a written instrument signed by the party against
                    whom enforcement of any such waiver is sought. No waiver of
                    any default with respect to any provision, condition or
                    requirement of this Agreement shall be deemed to be a
                    continuing waiver in the future or a waiver of any other
                    provision, condition or requirement hereof, nor shall any
                    delay or omission of either party to exercise any right
                    hereunder in any manner impair the exercise of any such
                    right accruing to it thereafter.

                    (d) Counterparts. This Agreement may be executed
                    simultaneously in one or more counterparts, each of which
                    shall be deemed an original, but all of which, together,
                    shall constitute one and the same instrument. Signatures by
                    facsimile transmission shall be acceptable as original
                    signatures.

                    (e) Successors and Assigns. This Agreement shall be binding
                    on, and shall inure to the benefit of, the parties to it and
                    their respective heirs, legal representatives, successors,
                    and permitted assigns. This Agreement and any of the rights,
                    interests or obligations, jointly and not severally,
                    hereunder may not be assigned by GEM without the prior
                    written consent of SurgiLight, which consent will not be
                    unreasonably withheld. This Agreement and any of the rights,
                    interests or obligations hereunder may not be assigned by
                    SurgiLight without the prior written consent of GEM, which
                    consent shall not be unreasonably withheld; provided,
                    however, that SurgiLight may freely assign all or any part
                    of its rights to the SurgiLight Option as set forth in
                    Section 5 above without prior notice to or consent of GEM or
                    any assignee or successor of GEM.

                    (f) Invalid Provision. If any part of this Agreement is
                    contrary to, prohibited by, or deemed invalid under any
                    applicable law or regulation, such provision shall be
                    inapplicable and deemed omitted to the extent so contrary,
                    prohibited or invalid, but the remainder hereof shall not be
                    invalidated thereby and shall be given full force and effect
                    so far as possible.

                    (g) Nature and Survival of Representations and Obligations.
                    All representations, warranties, covenants, and agreements
                    of the parties contained in this Agreement, or in any

                                       7

<PAGE>

                    exhibit, instrument, certificate, or other writing provided
                    for in it, shall survive for the applicable period of
                    limitations for contract claims in the State of New York.

                    (h) Notices. All notices, requests, demands, and other
                    communications under this Agreement shall be in writing and
                    shall be deemed to have been duly given on receipt and must
                    be delivered either by hand delivery or
                    nationally-recognized express courier to the party to whom
                    notice is to be given, addressed as follows:

If to SurgiLight:   Colette Cozean, Chairwoman
                    SurgiLight, Inc.
                    12001 Science Drive, Suite140
                    Orlando, Florida
                    Phone: (407) 482-4555
                    Fax: (949-) 855-2470
                     E-mail: ccozean@home.com

                    And

                    Timothy J. Shea, Chief Operating Officer
                    SurgiLight, Inc.
                    12001 Science Drive, Suite140
                    Orlando, Florida
                    Phone: (407) 482-4555
                    Fax: (407) 482-0505
                    E-mail: surgilight19@aol.com

With copies to:     The Business Law Group, or its successors and/or assigns
                    455 S. Orange Ave., Suite 500______________________________
                    Orlando, FL 32801______________________________
                    Attn.: J. Bennett Grocock
                    Phone: 407.422.0300________________________
                    Fax: (407) 425-0032
                    E-mail: BEN.GROCOCK@BISLAWGROUP.COM

If to GEM:          GEM Global Yield Fund Limited
                    c/o Loughran & Co.
                    38 Hertford Street
                    London, England W1Y 7TG
                    Attn.: Mr. Pierce Loughran
                    Phone: 44.207.355.2051
                    Fax:  44.207.355.4975
                    E-mail: ploughran@loughranandco.com

                                       8

<PAGE>

With copies to:     Kaplan Gottbetter & Levenson, LLP,
                    or its successors and/or assigns
                    630 Third Avenue
                    New York, New York 10017
                    Attn.: Adam S. Gottbetter, Esq.
                    Phone: (212) 983-6900
                    Fax: (212) 983-9210
                    E-mail: asg@kgllaw.com
                            --------------

                    And

                    Mr. Edward Tobin Gem Group 712 Fifth Ave, 7th Floor
                    New York, NY 10023 Phone: (212)582-3400 Fax: (212)
                    265-4035 Email: etobin@gemny.com

     Any party may change its address by giving notice in the manner set forth
above.

                    (i) Attorneys' Fees. If any legal action or other proceeding
                    is brought for the enforcement of this Agreement, or because
                    of a dispute, breach, default, or misrepresentation in
                    connection with any provisions of this Agreement, then the
                    successful or prevailing party or parties shall be entitled
                    to recover reasonable attorney's fees and other costs
                    incurred in that action or proceeding, in addition to any
                    other relief to which it or they may be entitled.

                    (j) Fees. The Company shall be responsible for paying upon
                    execution of this Agreement and shall pay to Kaplan
                    Gottbetter & Levenson, L.L.P. ("KGL") or its successors
                    and/or assigns, $2,500 for document review for this
                    Agreement. These fees are in addition to $5,000 already owed
                    by the Company to KGL.

                    (k) Applicable Law, Binding Effect, and Venue. The parties
                    hereto acknowledge that the transactions contemplated by
                    this Agreement bear a reasonable relation to the state of
                    New York. This Agreement shall be governed by, and construed
                    and interpreted in accordance with, the internal laws of the
                    state of New York without regard to such state's principles
                    of conflicts of laws. The parties irrevocably and
                    unconditionally agree that the exclusive place of
                    jurisdiction for any action, suit or proceeding ("Actions")
                    relating to this Agreement shall be in the state and/or
                    federal courts situate in the county and state of New York.

                                       9

<PAGE>

                    Each party irrevocably and unconditionally waives any
                    objection it may have to the venue of any Action brought in
                    such courts or to the convenience of the forum. Final
                    judgment in any such Action shall be conclusive and may be
                    enforced in other jurisdictions by suit on the judgment, a
                    certified or true copy of which shall be conclusive evidence
                    of the fact and the amount of any indebtedness or liability
                    of any party therein described.

                                      * * *

                                       10

<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.

                                            GEM GLOBAL YIELD FUND LIMITED

                                            By:
                                                -------------------------------
                                            Name:
                                                  -----------------------------
                                            Title:
                                                   ----------------------------

                                            SURGILIGHT, INC.

                                            By:
                                                -------------------------------
                                            Name:
                                                  -----------------------------
                                            Title:
                                                   ----------------------------

                                       11

<PAGE>

                                    EXHIBIT A

                           CONVERTIBLE PROMISSORY NOTE

$2,000,000                                                        April 11, 2003

     FOR VALUE RECEIVED, SurgiLight, Inc., a Florida corporation ("Maker"),
hereby promises to pay to the order of GEM Global Yield Fund Limited, a West
Indies corporation ("Holder"), the sum of Two Million and no/100 U. S. Dollars
($2,000,000.00), without interest except as set forth in Section 3 below, in
accordance with the terms of this Note. Payment on this Note shall be in such
name(s) and at such place as Holder or any subsequent holder hereof shall have
designated to the SurgiLight in writing. By acceptance of this Note, Holder
agrees that it will promptly deliver and surrender this Note to the Maker upon
full payment, therefore.

This Note is issued pursuant to the Agreement, dated April 11, 2003 by and
between Maker and Holder (the "Agreement"), to which Agreement reference is
hereby made for a statement of the rights of Holder and the duties and
obligations of Maker in relation thereto; but neither this reference to the
Agreement nor any provisions thereof shall affect or impair the absolute and
unconditional obligation of Maker to pay the principal of this Note, subject to
applicable conversion events.

1. Conversion. The aggregate principal amount and interest due under this Note
is convertible into shares of the Maker's common stock under the specific terms
and conditions set forth in the Agreement.

2. Interest. The Note will not accrue any interest except as set forth in
Section 3 below.

3. Default Interest. Upon the Maker's default as set forth in Section 3 (b) of
the Agreement and until such default is cured, this Note shall accrue and bear
interest payable in cash and on demand at the rate of eight percent (8%) per
annum.

4. Unsecured Debt. This Note represents an unsecured debt obligation of Maker.
Holder does not have any priority or secured claim against any of the assets of
Maker with respect to the principal amount of this Note or any interest that may
be accrued thereon.

5. Governing Law. This Note may not be modified orally, and shall be governed,
construed and interpreted under the internal laws of the State of New York
without reference to principles of conflicts or choice of law.

6. Notice. Presentment, protest, notice, notice of protest, and notice of
dishonor are hereby waived by Maker.

7. Replacement. Upon receipt of evidence reasonably satisfactory to Maker of the
loss, theft, destruction or mutilation of this Note and, if requested in the
case of such loss, theft or destruction, upon delivery of such indemnity as may

                                       12

<PAGE>

be reasonably required by Maker or, in the case of any such mutilation, upon
surrender and cancellation of such Note, Maker will issue a new Note, of like
tenor, in lieu of such lost, stolen or destroyed Note.

8. Exchange. This Note is in exchange for the 3% Convertible Debentures due
November 8, 2003 issued pursuant to that certain Convertible Debenture Purchase
Agreement between Maker and Holder dated as of June 30, 2000.

9. Indemnification. Maker hereby agrees to indemnify the holder of this Note
against and hold it harmless from any costs and expenses, including, without
limitation, reasonable attorneys' fees, disbursements and court costs, incurred
by the holder of this note in connection with the enforcement of the terms
hereof.

10. No Waiver. No delay on the part of any holder hereof in exercising any power
or rights hereunder shall operate as a waiver of any power or rights.

Witness                                     SURGILIGHT, INC.

Name:_______________                        By:________________

Title: ________________

                                       13

<PAGE>

                                    EXHIBIT B

                               NOTICE OF EXERCISE
                               ------------------

     Pursuant to Section 4 of the Agreement dated March ___, 2003 between the
undersigned and GEM Global Yield Fund Limited, the undersigned hereby elects to
purchase ____________ shares of the common stock of SurgiLight, Inc. for an
aggregate purchase price of $__________ and tenders herewith payment therefore.

     Pleased deliver a certificate or certificates representing said shares to
the address below.

Date of Exercise:____________               SurgiLight, Inc.

                                            By: ______________________________

                                            Name: ____________________________

                                            Title: ___________________________

                                            Address:  ________________________

                                            ----------------------------------

                                            ----------------------------------

                                       2

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