Document:

exv4w1

 

Exhibit 4.1

NII HOLDINGS, INC.

as Issuer,

and

WILMINGTON TRUST COMPANY,

as Trustee

INDENTURE

Dated as of

September 16, 2003

3 1/2% Convertible Notes due 2033

 

 

NII Holdings, Inc.

  Reconciliation and tie between Trust Indenture Act of 1939,
  as amended,

  and Indenture, dated as of September 16, 2003
  

  	 	 	 	 	 	 	 
	 
	 
	 
	 	 	Trust Indenture Act Section	 	 	Indenture Section
	

	§	 310(a)(1)	 	

        	 7.09

          
	

          

	 	 	(a)(2)	 	

        	 7.09

          
	

          

	 	 	(a)(3)	 	

        	
          Not Applicable   

	 	 	(a)(4)	 	

        	
          Not Applicable   

	 	 	(b)	 	

        	 7.08

          
	

          

	 	 	 	 	

        	 7.10

          
	

          

	 	 	 	 	

        	 15.03

          
	

          

	§	 311(a)	 	

        	 7.13

          
	

          

	 	 	(b)	 	

        	 7.13

          
	

          

	§	

         312(a)
	 	

        	 5.01

          
	

          

	 	 	 	 	

        	 5.02

          
	(a)

          

	 	 	(b)	 	

        	 5.02

          
	(b)

          

	 	 	(c)	 	

        	 5.02

          
	(c)

          

	§	 	 313(a)	 	

        	 5.03

          
	(a)

          

	 	 	(b)	 	

        	 5.03

          
	(a)

          

	 	 	(c)	 	

        	 5.03

          
	(a)

          

	 	 	(d)	 	

        	 5.03

          
	(b)

          

	 	 	 	 	

        	 5.04

          
	

          

	§	314(a)	 	

        	 15.03

          
	

          

	 	 	(a)(4)	 	

        	 4.10

          
	

          

	 	 	(b)	 	

        	
          Not Applicable   

	 	 	(c)(1)	 	

        	 15.05

          
	

          

	 	 	(c)(2)	 	

        	 15.05

          
	

          

	 	 	(c)(3)	 	

        	
          Not Applicable   

	 	 	(d)	 	

        	
          Not Applicable   

	 	 	(e)	 	

        	 15.05

          
	

          

	§	315(a)	 	

        	 7.01

          
	

          

	 	 	(b)	 	

        	 7.02

          
	

          

	 	 	 	 	

        	 15.03

          
	

          

	 	 	(c)	 	

        	 7.01

          
	

          

	 	 	(d)	 	

        	 7.01

          
	

          

	 	 	(e)	 	

        	 6.08

          
	

          

	§	 316(a)	 	

        	 6.07

          
	

          

	 	 	(a)(1)(A)	 	

        	 6.07

          
	

          

	 	 	(a)(1)(B)	 	

        	 6.07

          
	

          

	 	 	(a)(2)	 	

        	
          Not Applicable  

	 	 	(b)	 	

        	 6.04

          
	

          

	§	 317(a)(1)	 	

        	 6.02

          
	

          

	 	 	(a)(2)	 	

        	 6.02

          
	

          

	 	 	(b)	 	

        	 4.04

          
	

          

	§	 318(a)	 	

        	 15.07

          
	

          

__________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

 

 

TABLE OF CONTENTS

  	 	 	 	 
	 	 	   
        Page
	 	 ARTICLE
          I
	 	 
	 	 Definitions
	 	 
	 	 	 	 
	Section 1.01.	 Definitions	 	 1

	 	 	 	

	 	 ARTICLE
          II
	 	 

	 	 Issue,
          Description, Execution, Registration and Exchange of Notes
	 	 

	 	 	 	

	Section 2.01.	 Designation, Amount and
        Issue of Notes 	 	8

	Section 2.02.	 Form of Notes 	 	9

	Section 2.03.	 Date and Denomination
        of Notes; Payments of Interest 	 	10

	Section 2.04.	 Execution and Authentication
        of Notes 	 	11

	Section 2.05.	 Exchange and Registration
        of Transfer of Notes; Restrictions on Transfer 	 	12

	Section 2.06.	 Mutilated, Destroyed,
        Lost or Stolen Notes 	 	17

	Section 2.07.	 Temporary Notes 	 	18

	Section 2.08.	 Cancellation of Notes
        	 	18

	Section 2.09.	 CUSIP Numbers 	 	19

	 	 	 	

	 	 ARTICLE
          III
	 	 

	 	 Redemption
          and Repurchase of Notes
	 	 

	 	 	 	

	Section 3.01.	 Redemption of Notes at
        the Option of the Company 	 	19

	Section 3.02.	 Notice of Optional Redemption;
        Selection of Notes 	 	19

	Section 3.03.	 Payment of Notes Called
        for Redemption by the Company 	 	21

	Section 3.04.	 Conversion Arrangement
        on Call for Redemption 	 	22

	Section 3.05.	 Redemption at Option of
        Holders upon a Designated Event 	 	22

	Section 3.06.	 Repurchase of Notes by
        the Company at Option of the Holder 	 	24

	Section 3.07.	 Procedures for the Repurchase
        of Notes 	 	25

	Section 3.08.	 Effect of Repurchase Notice
        	 	26

	Section 3.09.	 Deposit of Purchase Price
        	 	27

	Section 3.10.	 Notes Repurchased in Part
        	 	27

	Section 3.11.	 Repayment to the Company
        	 	27

  	 	 	 	 
	 	 ARTICLE
          IV
	 	 
	 	 Particular
          Covenants of the Company
	 	 

	 	 	 	

	Section 4.01.	 Payment of Principal,
        Premium and Interest 	 	27

	Section 4.02.	 Maintenance of Office
        or Agency 	 	28

	Section 4.03.	 Appointments to Fill Vacancies
        in Trustee’s Office 	 	28

	Section 4.04.	 Provisions as to Paying
        Agent 	 	28

	Section 4.05.	 Existence 	 	29

	Section 4.06.	 Maintenance of Properties
        	 	29

	Section 4.07.	 Payment of Taxes and Other
        Claims 	 	30

ii

 

  	 	 	 	 
	Section 4.08.	 Rule 144A Information
        Requirement 	 	30 
	Section 4.09.	 Stay, Extension and Usury
        Laws 	 	30 
	Section 4.10.	 Compliance Certificate;
        Notice of Default 	 	31 
	Section 4.11.	 Maintenance of Insurance
        	 	31

        
	Section 4.12.	 Liquidated Damages Notice
        	 	31 
	 	 	 	 
	 	 ARTICLE
          V
	 	 
	 	 Noteholders’
          Lists and Reports by the Company and the Trustee
	 	 
	 	 	 	 
	Section 5.01.	 Company to Furnish Trustee
        Names and Addresses of Noteholders 	 	31 
	Section 5.02.	 Preservation and Disclosure
        of Lists 	 	32

        
	Section 5.03.	 Reports by Trustee 	 	32 
	Section 5.04.	 Reports by Company 	 	32 
	 	 ARTICLE
          VI
	 	 
	 	 Remedies
          of the Trustee and Noteholders on an Event of Default
	 	 
	 	 	 	 
	Section 6.01.	 Events of Default; Acceleration
        	 	33

        
	Section 6.02.	 Payments of Notes on Default;
        Suit Therefor 	 	35 
	Section 6.03.	 Application of Monies
        Collected by Trustee 	 	36

        
	Section 6.04.	 Proceedings by Noteholder
        	 	37

        
	Section 6.05.	 Proceedings by Trustee
        	 	38 
	Section 6.06.	 Remedies Cumulative and
        Continuing 	 	38

        
	Section 6.07.	 Direction of Proceedings
        and Waiver of Defaults by Majority of Noteholders 	 	38 
	Section 6.08.	 Undertaking to Pay Costs
        	 	39 

  	 	 	 	 
	 	 ARTICLE
          VII
	 	 
	 	 The Trustee
	 	 
	 	 	 	 
	Section 7.01.	 Certain Duties and Responsibilities
        	 	39

	Section 7.02.	 Notice of Defaults 	 	39

	Section 7.03.	 Certain Rights of the
        Trustee 	 	40

	Section 7.04.	 Not Responsible for Statements
        or Issuance of Notes 	 	41

	Section 7.05.	 May Hold Notes 	 	41

	Section 7.06.	 Monies to be Held in Trust
        	 	41

	Section 7.07.	 Compensation and Reimbursement
        	 	41

	Section 7.08.	 Disqualification; Conflicting
        Interests 	 	42

	Section 7.09.	 Corporate Trustee Required;
        Eligibility 	 	42

	Section 7.10.	 Resignation and Removal
        of Trustee; Appointment of Successor 	 	42

	Section 7.11.	 Acceptance of Appointment
        of Successor 	 	44

	Section 7.12.	 Merger, Conversion, Consolidation
        or Succession to Business 	 	44

	Section 7.13.	 Preferential Collection
        of Claims Against Company 	 	44

	 	 	 	 
	 	 ARTICLE
          VIII
	 	 

	 	 The Noteholders
	 	 

	 	 	 	 
	Section 8.01.	 Action by Noteholders
        	 	45

	Section 8.02.	 Proof of Execution by
        Noteholders 	 	45

iii

 

  	 	 	 	 
	Section 8.03.	 Who Are Deemed Absolute Owners	

        	 45 
	Section 8.04.	 Company-Owned Notes Disregarded	

        	 45 
	Section 8.05.	 Revocation of Consents, Future Holders
        Bound	

        	 46 
	 	 	 	 
	
	ARTICLE IX
	 	 
	
	Meetings of Noteholders
	 	 
	 	 	 	 
	Section 9.01.	 Purpose of Meetings	

        	 46 
	Section 9.02.	 Call of Meetings by Trustee	

        	 47 
	Section 9.03.	 Call of Meetings by Company or Noteholders	

        	 47 
	Section 9.04.	 Qualifications for Voting	

        	 47 
	Section 9.05.	 Regulations	

        	 47 
	Section 9.06. 	Voting	

        	 48 
	Section 9.07.	 No Delay of Rights by Meeting	

        	 48 

  	 	 	 	

	 	 ARTICLE
          X
	 	 

	 	 Supplemental
          Indentures
	 	 

	 	 	 	

	Section 10.01.	 Supplemental Indentures
        Without Consent of Noteholders 	 	49

	Section 10.02.	 Supplemental Indenture
        with Consent of Noteholders 	 	50

	Section 10.03.	 Effect of Supplemental
        Indenture 	 	51

	Section 10.04.	 Notation on Notes 	 	51

	Section 10.05.	 Evidence of Compliance
        of Supplemental Indenture to Be Furnished to Trustee 	 	51

	 	 	 	

	 	 ARTICLE
          XI
	 	 

	 	 Merger,
          Consolidation, Etc.
	 	 

	 	 	 	

	Section 11.01.	 Mergers, Consolidations
        and Certain Transfers, Leases and Acquisitions of Assets 	 	 51

	Section 11.02.	 Successor to Be Substituted
        	 	 52

	Section 11.03.	 Opinion of Counsel to
        Be Given Trustee 	 	 52

	 	 	 	

	 	 ARTICLE
          XII
	 	 

	 	 Satisfaction
          and Discharge of Indenture
	 	 

	 	 	 	

	Section 12.01. 	Discharge of Indenture	 	52

	Section 12.02. 	Deposited Monies to Be
        Held in Trust by Trustee 	 	53

	Section 12.03. 	Paying Agent to Repay Monies
        Held	 	53

	Section 12.04. 	Return of Unclaimed Monies
        	 	53

	Section 12.05.	Reinstatement	 	54

	 	 	 	

	 	 ARTICLE
          XIII
	 	 

	 	 Immunity
          of Incorporators, Stockholders, Officers and Directors
	 	 

	 	 	 	

	Section 13.01.	 Indenture and Notes Solely
        Corporate Obligations 	 	 54

	 	 	 	

	 	 ARTICLE
          XIV
	 	 

	 	 Conversion
          of Notes
	 	 

iv

 

  	 	 	 	 
	Section 14.01.	 Right to Convert 	

        	54 
	Section 14.02.	 Conversion Procedures
        	

        	57 
	Section 14.03.	 Cash Payments in Lieu
        of Fractional Shares 	

        	58 
	Section 14.04.	 Conversion Rate 	

        	58 
	Section 14.05.	 Adjustment of Conversion
        Rate 	

        	58 
	Section 14.06.	 Effect of Reclassification,
        Consolidation, Merger or Sale 	

        	67 
	Section 14.07.	 Taxes on Shares Issued
        	

        	68 
	Section 14.08.	 Reservation of Shares,
        Shares to Be Fully Paid; Compliance with	 	68
	 	 Governmental Requirements;
        Listing of Common Stock 	 	 
	Section 14.09.	 Responsibility of Trustee
        	

        	69

        
	Section 14.10.	 Notice to Holders Prior
        to Certain Actions 	

        	69 
	Section 14.11.	 Rights Issued in Respect
        of Common Stock Issued upon Conversion 	

        	70 

 

  	 	 	 	 
	 	 ARTICLE
          XV
	 	 
	 	 Miscellaneous
          Provisions
	 	 
	 	 	 	

	Section 15.01.	 Provisions Binding on
        Company’s Successors 	 	70

	Section 15.02.	 Official Acts by Successor
        Corporation 	 	70

	Section 15.03.	 Addresses for Notices,
        Etc. 	 	71

	Section 15.04.	 Governing Law 	 	71

	Section 15.05.	 Evidence of Compliance
        with Conditions Precedent, Certificates to Trustee 	 	71

	Section 15.06.	 Legal Holidays 	 	71

	Section 15.07.	 Trust Indenture Act 	 	72

	Section 15.08.	 No Security Interest Created
        	 	72

	Section 15.09.	 Benefits of Indenture
        	 	72

	Section 15.10.	 Table of Contents, Headings,
        Etc. 	 	72

	Section 15.11.	 Authenticating Agent 	 	72

	Section 15.12.	 Execution in Counterparts
        	 	73

	Section 15.13.	 Severability 	 	73

	 	 	 	 
	Exhibit A	 Form of Note 	 	A-1

v

 

INDENTURE

               INDENTURE dated as of September 16, 2003 between NII Holdings, Inc., a
Delaware corporation (hereinafter called the “Company”), and Wilmington Trust
Company, a Delaware banking corporation, as trustee hereunder (hereinafter
called the “Trustee”).

WITNESSETH:

               WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 3 1/2% Convertible Notes due 2033 (hereinafter
called the “Notes”), in an aggregate principal amount not to exceed
$150,000,000 on the date hereof, and, to provide the terms and conditions upon
which the Notes are to be authenticated, issued and delivered, the Company has
duly authorized the execution and delivery of this Indenture;

               WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect redemption upon a
designated event, a form of purchase notice, and a form of conversion notice to
be borne by the Notes are to be substantially in the forms hereinafter provided
for;

               WHEREAS, all acts and things necessary to duly authorize the issuance of
the Common Stock issuable upon the conversion of the Notes, and to duly reserve
for issuance the number of shares of Common Stock issuable upon such
conversion, have been done and performed; and

               WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute this Indenture a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.

               NOW, THEREFORE, THIS INDENTURE WITNESSETH:

               That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration
of the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:

ARTICLE I

Definitions

               Section 1.01. Definitions. The terms defined in this Section 1.01.
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein

 

 

otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the Trust Indenture Act and
in the Securities Act as in force at the date of the execution of this
Indenture. The words “herein”, “hereof”, “hereunder” and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision. The terms defined in this Article include the
plural as well as the singular.

               “Accepted Purchased Shares” has the meaning specified in Section
14.05(e)(B).

               “Additional
  Notes” has the meaning specified in Section 2.01. 

               “Adjustment
  Event” has the meaning specified in Section 14.05(j). 

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

               “Agent
  Members” has the meaning specified in Section 2.05(b). 

               “Average
  Market Price” has the meaning specified in Section 14.05(f). 

               “Board
  of Directors” means the Board of Directors of the Company or a committee
  of such Board of Directors duly authorized to act for it hereunder. 

               “Business
  Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which
  is not a day on which the banking institutions in The City of New York or the
  city in which the Corporate Trust Office is located are authorized or obligated
  by law or executive order to close or be closed. 

               “Closing
  Sale Price” means, as of any date, the closing sale price per share
  of Common Stock (or, if no closing sale price is reported, the average of the
  closing bid and ask prices or, if more than one in either case, the average
  of the average closing bid and the average closing ask prices) on such date
  as reported in composite transactions for the New York Stock Exchange or such
  other principal United States securities exchange on which shares of Common
  Stock may be traded or, if the shares of Common Stock are not listed on a United
  States national or regional securities exchange, as reported by the Nasdaq National
  Market System or by the National Quotation Bureau Incorporated. In the absence
  of such quotations, the Company shall be entitled to determine the Closing Sale
  Price on the basis of such quotations as it considers appropriate. Closing Sale
  Price shall be determined without reference to extended or after hours trading.
  

               “Commission”
  means the Securities and Exchange Commission, as from time to time constituted,
  created under the Exchange Act, or, if at any time after the execution of this
  Indenture such Commission is not existing and performing the duties now assigned
  to it under the Trust Indenture Act, then the body performing such duties at
  such time. 

2

 

               “Common Stock” means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the
provisions of Section 14.06, however, shares issuable on conversion of Notes
shall include only shares of the class designated as common stock of the
Company at the date of this Indenture, including any Rights attached thereto,
(namely, the Common Stock, par value $0.001) or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

               “Company”
  means the corporation named as the “Company” in the first paragraph
  of this Indenture, and, subject to the provisions of Article 11 and Section 14.06,
  shall include its successors and assigns. 

               “Company
  Repurchase Notice” has the meaning specified in Section 3.07(c).
  

               “Company
  Repurchase Notice Date” has the meaning specified in Section 3.07(b).
  

               “Conversion
  Agent” means the Trustee or any other Person appointed by the Company
  to accept Notes presented for conversion. 

               “Conversion
  Date” has the meaning specified in Section 14.02. 

               “Conversion
  Notice” has the meaning specified in Section 14.02. 

               “Conversion
  Price” as of any date will equal $1,000 divided by the Conversion Rate
  as of such date. 

               ”Conversion Rate” has the meaning specified in Section 14.04.

               “Corporate
  Trust Office” or other similar term, means the designated office of
  the Trustee, in the Borough of Manhattan, The City of New York, at which its
  corporate trust business as it relates to this Indenture shall be principally
  administered at any particular time, which office is at the date hereof located
  at 520 Madison Avenue, 33rd Floor, New York, New York 10022. 

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

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

3

 

               “Defaulted Interest” has the meaning specified in Section 2.03.

               “Depositary”
  means the clearing agency registered under the Exchange Act that is designated
  to act as the Depositary for the Global Notes. The Depository Trust Company
  shall be the initial Depositary, until a successor shall have been appointed
  and become such pursuant to the applicable provisions of this Indenture, and
  thereafter, “Depositary” shall mean or include such successor. 

               A
  “Designated Event” will be deemed to have occurred upon
  a Fundamental Change or a Termination of Trading. 

               “Designated
  Event Expiration Time” has the meaning specified in Section 3.05(b).
  

               “Designated
  Event Notice” has the meaning specified in Section 3.05(b). 

               “Designated
  Event Redemption Date” has the meaning specified in Section 3.05(a).
  

               “Determination
  Date” has the meaning specified in Section 14.05(j). 

               “Distribution”
  has the meaning specified in Section 14.05(d). 

               “Event
  of Default” means any event specified in Section 6.01(a) as an
  Event of Default. 

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

               “Ex-Dividend
  Time” has the meaning specified in Section 14.01(b). 

               “Expiration
  Time” has the meaning specified in Section 14.05(e)(A). 

               “Fair
  Market Value” has the meaning specified in Section 14.05(f). 

               “Fundamental
  Change” means the occurrence of any transaction or event (whether by
  means of an exchange offer, liquidation, tender offer, consolidation, merger,
  binding share exchange, combination, reclassification, recapitalization or otherwise)
  in connection with which all or substantially all of the Common Stock shall
  be exchanged for, converted into, acquired for or constitute solely the right
  to receive consideration which is not all or substantially all common stock
  that is (or, upon consummation of or immediately following such transaction
  or event, which will be) listed on a United States national securities exchange
  or approved (or, upon consummation of or immediately following such transaction
  or event, which will be approved) for quotation on the Nasdaq National Market
  or any similar United States system of automated dissemination of quotations
  of securities prices. 

               “GAAP”
  means United States generally accepted accounting principles. 

4

 

               “Global Note” has the meaning specified in Section 2.02.

               “Indenture”
  means this instrument as originally executed or, if amended or supplemented
  as herein provided, as so amended or supplemented. 

               “Initial
  Purchasers” means Morgan Stanley & Co. Incorporated, Banc of America
  Securities LLC, Credit Suisse First Boston LLC and UBS Securities LLC. 

               “interest”
  means, when used with reference to the Notes, any interest payable under
  the terms of the Notes and Liquidated Damages, if any, payable under the terms
  of the Registration Rights Agreement. 

               “Liquidated
  Damages” has the meaning specified for “Liquidated Damages Amount”
  in Section 2(e) of the Registration Rights Agreement. 

               “Liquidated
  Damages Notice” has the meaning specified in Section 4.12. 

               “Note”
  or “Notes” has the meaning specified in the recitals hereof,
  and includes both Original Notes and Additional Notes. 

               “Note
  register” has the meaning specified in Section 2.05(a). 

               “Note
  registrar” has the meaning specified in Section 2.05(a). 

               “Noteholder”
  or “holder” as applied to any Note, or other similar terms
  (but excluding the term “beneficial holder”), means any Person in
  whose name at the time a particular Note is registered on the Note registrar’s
  books. 

               “nonelecting
  share” has the meaning specified in Section 14.06. 

               “Offer
  Expiration Time” has the meaning specified in Section 14.05(e)(B).
  

               “Officers’
  Certificate” of the Company means a certificate signed by the Chairman
  of the Board of Directors, a Vice Chairman of the Board of Directors, the Chief
  Executive Officer, the President or a Vice President or the Chief Financial
  Officer, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
  Secretary of the Company, as the case may be, and delivered to the Trustee.
  One of the officers signing an Officers’ Certificate given pursuant to
  Section 4.10 shall be the principal executive, financial or accounting
  officer of the Company or the chief operating officer of the Company. Unless
  the context otherwise requires, each reference herein to an “Officers’
  Certificate” shall mean an Officers’ Certificate of the Company. References
  herein, or in any Note, to any officer of a Person that is a partnership shall
  mean such officer of the partnership or, if none, of a general partner of the
  partnership authorized thereby to act on its behalf. 

               “Opinion
  of Counsel” means an opinion in writing signed by legal counsel, who
  may be an employee of or counsel to the Company, or other counsel reasonably
  acceptable to the Trustee. 

5

 

               “Optional Redemption” has the meaning specified in Section 3.01.

               “Original
  Notes” has the meaning specified in Section 2.01. 

               “outstanding”,
  when used with reference to Notes and subject to the provisions of Section 8.04,
  means, as of any particular time, all Notes authenticated and delivered by the
  Trustee under this Indenture, except: 

     (a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;

     (b) Notes, or portions thereof, (i) for the redemption of which
monies in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or (ii)
which shall have been otherwise discharged in accordance with Article 12;

     (c) Notes in lieu of which, or in substitution for which, other
Notes shall have been authenticated and delivered pursuant to the terms
of Section 2.06; and

     (d) Notes converted into Common Stock pursuant to Article 14 and
Notes deemed not outstanding pursuant to Article 3.

               “Person”
  means any individual, partnership, joint venture, firm, corporation, limited
  liability company, association, trust or other enterprise or any government
  or political subdivision or any agency, department or instrumentality thereof.
  

               “Portal
  Market” means the Private Offerings, Resales and Trading through Automated
  Linkages system operated by the National Association of Securities Dealers,
  Inc. or any successor thereto. 

               “Predecessor
  Note” of any particular Note means every previous Note evidencing all
  or a portion of the same debt as that evidenced by such particular Note, and,
  for the purposes of this definition, any Note authenticated and delivered under
  Section 2.06 in lieu of a lost, destroyed or stolen Note shall be deemed
  to evidence the same debt as the lost, destroyed or stolen Note that it replaces.
  

               “premium”
  means any premium payable under the terms of the Notes. 

               “Purchased
  Shares” has the meaning specified in Section 14.05(e)(A). 

               “record
  date” has the meaning specified in Section 2.03 with respect to
  any interest payment date, and for any other purpose means the record date established
  by the Company for a specified purpose. 

               “Record
  Date” has the meaning specified in Section 14.05(f). 

6

 

               “Registration Rights Agreement” means the Registration Rights Agreement,
dated as of September 16, 2003, between the Company and the Initial Purchasers,
as amended from time to time in accordance with its terms.

               “Repurchase
  Date” has the meaning specified in Section 3.06. 

               “Repurchase
  Notice” has the meaning specified in Section 3.06. 

               “Responsible
  Officer” means any vice president, any assistant vice president, any
  assistant secretary, any assistant treasurer, any trust officer or assistant
  trust officer, the controller or any assistant controller or any other officer
  of the Trustee customarily performing functions similar to those performed by
  any of the above designated officers and also means, with respect to a particular
  corporate trust matter, any other officer to whom such matter is referred because
  of his or her knowledge of and familiarity with the particular subject. 

               “Restricted
  Securities” has the meaning specified in Section 2.05(c). 

               “Rights”
  has the meaning specified in Section 14.11. 

               “Rights
  Agreement” has the meaning specified in Section 14.11. 

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

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

               “Senior
  Secured Discount Notes” means the 13% Senior Secured Discount Notes
  Due 2009 issued pursuant to the Indenture, dated as of November 12, 2002,
  among NII Holdings (Cayman), Ltd., the Guarantors signatory thereto and Wilmington
  Trust Company, as trustee. 

               “Spinoff
  Valuation Period” has the meaning specified in Section 14.05(d).
  

               “Subsidiary”
  of any Person means (i) any corporation more than 50% of whose stock of
  any class or classes having by the terms of such stock ordinary voting power
  to elect a majority of the directors of such corporation (irrespective of whether
  or not at the time stock of any class or classes of such corporation shall have
  or might have voting power by reason of the happening of any contingency) is
  at the time owned by such Person and/or by one or more Subsidiaries of such
  Person or by such Person and one or more Subsidiaries of such Person and (ii) any
  partnership, association, limited liability company, joint venture or other
  entity in which such Person and/or one or more Subsidiaries of such Person or
  such Person and one or more Subsidiaries of such Person has more than a 50%
  equity interest at the time. 

               A “Termination of Trading” will be deemed to have occurred if the Common
Stock (or other common stock into which the Notes are then convertible) is
neither listed for trading on a United States national securities exchange nor
approved for trading on the Nasdaq National Market.

7

 

               “Trading Day” means (x) if the applicable security is quoted on the Nasdaq
National Market, a day on which trades may be made thereon or (y) if the
applicable security is listed or admitted for trading on the New York Stock
Exchange or such other national securities exchange, a day on which the New
York Stock Exchange or another national securities exchange is open for
business or (z) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by
law or executive order to close.

               “Trading
  Price” means, on any date, the average of the secondary market bid
  quotations for the Notes obtained by the Trustee for $10,000,000 principal amount
  of Notes at approximately 3:30 p.m., New York City time, on such date from three
  independent nationally recognized securities dealers selected by the Company;
  provided that if at least three such bids cannot reasonably be obtained
  by the Trustee, but two bids are obtained, then the average of the two bids
  shall be used, and if only one such bid can reasonably be obtained by the Trustee,
  one bid shall be used; and provided further that if the Trustee cannot
  reasonably obtain at least one bid for $10,000,000 principal amount of Notes
  from a nationally recognized securities dealer, then the Trading Price per $1,000
  principal amount of Notes shall be deemed to be less than 98% of the product
  of the Closing Sale Price and the Conversion Rate. 

               “Trigger
  Event” has the meaning specified in Section 14.05(d). 

               “Trust
  Indenture Act” means the Trust Indenture Act of 1939, as amended, as
  it was in force at the date of this Indenture; provided that if the Trust
  Indenture Act of 1939 is amended after the date hereof, the term “Trust
  Indenture Act” shall mean, to the extent required by such amendment, the
  Trust Indenture Act of 1939 as so amended. 

               “Trustee”
  means Wilmington Trust Company, a Delaware banking corporation, and its successors
  and any corporation resulting from or surviving any consolidation or merger
  to which it or its successors may be a party and any successor trustee at the
  time serving as successor trustee hereunder. 

ARTICLE II

Issue, Description, Execution, Registration and Exchange of Notes

               Section 2.01.
  Designation, Amount and Issue of Notes. The Notes shall be designated as
  “3 1/2% Convertible Notes Due 2033”. The Notes shall be senior obligations
  of the Company and shall rank pari passu with the obligations of the
  Company under the Senior Secured Discount Notes. The aggregate principal amount
  of Notes that may be authenticated and delivered under this Indenture is unlimited.
  Notes not to exceed the aggregate principal amount of $150,000,000 upon the
  execution of this Indenture may be executed by the Company and delivered to
  the Trustee for authentication, and the Trustee shall thereupon authenticate
  and deliver said Notes to or upon the written order of the Company, signed by
  (a) its Chairman of the Board of Directors, Vice Chairman of the Board
  of Directors, Chief Executive Officer, President, Chief Financial Officer or
  any Vice President and (b) its Treasurer or any Assistant Treasurer, or
  its Secretary or any Assistant Secretary, without any further action by the
  Company hereunder. In addition, subject to the provisions of Section 15.05,
  an unlimited aggregate principal amount 

8

 

of additional Notes (the “Additional Notes”) may be executed after the
date of this Indenture by the Company and delivered to the Trustee for
authentication, and the Trustee shall, upon receipt of an Officers’ Certificate
specifying the amount of Notes to be authenticated and the date on which such
Notes are to be authenticated and certifying that all conditions precedent to
the issuance of the Additional Notes contained herein have been complied with
and that no default or Event of Default would occur as a result of the issuance
of such Additional Notes, authenticate and deliver said Additional Notes to or
upon the written order of the Company, signed as set forth in the preceding
sentence; provided that Additional Notes may be issued under this Indenture
only if such Additional Notes and the Original Notes constitute one series for
United States Federal income tax purposes. The Original Notes and the
Additional Notes, if any, shall constitute one series for all purposes under
this Indenture, including, without limitation, amendments, waivers and
redemptions.

               Section 2.02. Form of Notes. The Notes and the Trustee’s certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A. The terms and provisions contained in the form of Note
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.

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

               So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, or otherwise contemplated by
Section 2.05(b), all of the Notes will be represented by one or more Notes in
global form registered in the name of the Depositary or the nominee of the
Depositary (a “Global Note”). The transfer and exchange of beneficial
interests in any such Global Note shall be effected through the Depositary in
accordance with this Indenture and the applicable procedures of the Depositary.
Except as provided in Section 2.05(b), beneficial owners of a Global Note
shall not be entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered holders of such Global Note.

               Any Global Note shall represent such of the outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect redemptions, repurchases, conversions,
transfers or exchanges permitted hereby. Any endorsement of a

9

 

Global Note to reflect the amount of any increase or decrease in the
amount of outstanding Notes represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Note shall be made to the holder of such Global Note.

               Section 2.03. Date and Denomination of Notes; Payments of Interest.
Subject to Section 2.02, the Notes shall be issuable in registered form without
coupons in denominations of $1,000 principal amount and multiples thereof.
Each Note shall be dated the date of its authentication and shall bear interest
from the date specified on the face of the form of Note attached as Exhibit A
hereto. Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.

               The Person in whose name any Note (or its Predecessor Note) is registered
on the Note register at the close of business on any record date with respect
to any interest payment date shall be entitled to receive the interest payable
on such interest payment date, except that the interest payable upon redemption
or repurchase will be payable to the Person to whom principal is payable
pursuant to such redemption or repurchase (unless the redemption date or the
Repurchase Date, as the case may be, is an interest payment date, in which case
the semi-annual payment of interest becoming due on such date shall be payable
to the holders of such Notes registered as such on the applicable record date).
Interest shall be payable at the office of the Company maintained by the
Company for such purposes in the Borough of Manhattan, The City of New York,
which shall initially be the Corporate Trust Office of the Trustee and may, as
the Company shall specify to the paying agent in writing by each record date,
be paid either (i) by check mailed to the address of the Person entitled
thereto as it appears in the Note register (provided that any holder of Notes
with an aggregate principal amount in excess of $2,000,000 shall, at the
written election of such holder (such election to be made prior to the relevant
record date and to contain appropriate wire transfer information), be paid by
wire transfer in immediately available funds) or (ii) by transfer to an account
maintained by such Person located in the United States; provided that payments
to the Depositary will be made by wire transfer of immediately available funds
to the account of the Depositary or its nominee. The term “record date” with
respect to any interest payment date shall mean the March 1 or September 1
preceding the applicable March 15 or September 15 interest payment date,
respectively.

               Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any March 1 or September 1 (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Noteholder on the
relevant record date by virtue of his having been such Noteholder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:

     (1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a special record date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall provide an Officers’ Certificate to
the Trustee specifying the amount of Defaulted Interest proposed to be
paid on each Note and the date of the proposed payment (which shall be
not less than twenty-five (25) days after the receipt by the Trustee of
such notice, unless the

10

 

Trustee shall consent to an earlier date), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on
or prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less than
ten (10) days prior to the date of the proposed payment, and not less
than ten (10) days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the special record date therefor to be mailed, first-class postage
prepaid, to each holder at his address as it appears in the Note
register, not less than ten (10) days prior to such special record date.
Notice of the proposed payment of such Defaulted Interest and the special
record date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on such
special record date and shall no longer be payable pursuant to the
following clause (2) of this Section 2.03.

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

               Section 2.04. Execution and Authentication of Notes. The Notes shall be
signed in the name and on behalf of the Company by the manual or facsimile
signature of its Chairman of the Board of Directors, Vice Chairman of the Board
of Directors, Chief Executive Officer, President, Chief Financial Officer or
any Vice President and attested by its Treasurer or any Assistant Treasurer, or
its Secretary or any Assistant Secretary. The signature of any of these
officers on the Notes may be manual or facsimile. Only such Notes as shall
bear thereon a certificate of authentication substantially in the form set
forth on the form of Note attached as Exhibit A hereto, manually executed by
the Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 15.11), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.

               In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons
as, at the actual date of the execution of such Note, shall be the proper
officers of the

11

 

Company, although at the date of the execution of this Indenture any such
person was not such an officer.

               Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions
on Transfer. (a) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 4.02 being
herein sometimes collectively referred to as the “Note register”) in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes. The Note
register shall be in written form or in any form capable of being converted
into written form within a reasonably prompt period of time. The Trustee is
hereby appointed “Note registrar” for the purpose of registering Notes and
transfers of Notes as herein provided. The Company may appoint one or more
co-registrars in accordance with Section 4.02.

               Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.

               Notes may be exchanged for other Notes of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 4.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.

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

               All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Note registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or
the Note registrar, as the case may be, and the Notes shall be duly executed by
the Noteholder thereof or his attorney duly authorized in writing.

               No service charge shall be made to any holder for any registration of
transfer or exchange of Notes, but either the Company, the Trustee or both may
require payment by the holder of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes.

               Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed, (b) any
Notes or portions thereof called for redemption pursuant to Section 3.02, (c)
any Notes or portions thereof surrendered for conversion pursuant

12

 

to Article 14, (d) any Notes or portions thereof tendered for redemption
(and not withdrawn) pursuant to Section 3.05 or (e) any Notes or portions
thereof tendered for repurchase (and not withdrawn) pursuant to Section 3.06.

                (b) The following provisions shall apply only to Global Notes:

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

     (ii) Notwithstanding any other provision in this Indenture, no
Global Note may be exchanged in whole or in part for Notes registered,
and no transfer of a Global Note in whole or in part may be registered,
in the name of any Person other than the Depositary or a nominee thereof
unless (A) the Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Note or
(ii) has ceased to be a clearing agency registered under the Exchange Act
and a successor Depositary is not appointed by the Company within 90
days, (B) an Event of Default has occurred and is continuing and the
maturity of the Notes shall have been accelerated in accordance with the
terms of the Notes and any holder shall have requested in writing the
issuance of definitive certificated securities, or (C) the Company, in
its sole discretion, notifies the Trustee in writing that it no longer
wishes to have all the Notes represented by Global Notes. Any Global
Note exchanged pursuant to clause (A) or (B) above shall be so exchanged
in whole and not in part and any Global Note exchanged pursuant to clause
(C) above may be exchanged in whole or from time to time in part as
directed by the Company. Any Note issued in exchange for a Global Note
or any portion thereof shall be a Global Note; provided that any such
Note so issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Note.

     (iii) Notes issued in exchange for a Global Note or any portion
thereof pursuant to clause (ii) above and which is not a Global Note
shall be issued in definitive, fully registered form, without interest
coupons, shall have an aggregate principal amount equal to that of such
Global Note or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary
shall designate and shall bear any legends required hereunder. Any
Global Note to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Note registrar. With regard to any Global
Note to be exchanged in part, either such Global Note shall be so
surrendered for exchange or, if the Trustee is acting as Custodian for
the Depositary or its nominee with respect to such Global Note, the
principal amount thereof shall be reduced, by an amount equal to the
portion thereof to be so exchanged, by means of an appropriate adjustment
made on the records of the Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate and make available for
delivery the Note issuable on such exchange to or upon the written order
of the Depositary or an authorized representative thereof.

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     (iv) In the event of the occurrence of any of the events specified
in clause (ii) above, the Company will promptly make available to the
Trustee a reasonable supply of certificated Notes in definitive, fully
registered form, without interest coupons.

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

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

                (c) Every Note that bears or is required under this Section 2.05(c) to
bear the legend set forth in this Section 2.05(c) (together with any Common
Stock issued upon conversion of the Notes and required to bear the legend set
forth in Section 2.05(d), collectively, the “Restricted Securities”) shall be
subject to the restrictions on transfer set forth in this Section 2.05(c)
(including those set forth in the legend below) unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such Noteholder’s acceptance thereof, agrees
to be bound by all such restrictions on transfer. As used in Sections 2.05(c)
and 2.05(d), the term “transfer” encompasses any sale, pledge, loan, transfer,
assignment, conveyance or other disposition whatsoever of any Restricted
Security or any interest therein.

               Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(d),
if applicable) shall bear a legend in substantially the following form, unless
such Note has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer), or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:

14

 

THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS NOTE EXCEPT (A) TO NII
HOLDINGS, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(D) ABOVE), IT WILL
FURNISH TO WILMINGTON TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (2)(D)
ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(k) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTION.

               Any Note (or security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to conditions for removal of the foregoing legend set forth therein
have been satisfied may, upon surrender of such Note for exchange to the Note
registrar in accordance with the provisions of this Section 2.05, be exchanged
for a new Note or Notes, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this Section 2.05(c). If the
Restricted Security surrendered for exchange is represented by a Global Note
bearing the legend set forth in this Section 2.05(c), the principal amount of
the legended Global Note shall be

15

 

reduced by the appropriate principal amount and the principal amount of a
Global Note without the legend set forth in this Section 2.05(c) shall be
increased by an equal principal amount. If a Global Note without the legend
set forth in this Section 2.05(c) is not then outstanding, the Company shall
execute and the Trustee shall authenticate and deliver an unlegended Global
Note to the Depositary.

               (d) Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
stock certificate representing Common Stock issued upon conversion of any Note
shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:

THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE
HOLDER HEREOF AGREES THAT, UNTIL THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED HEREBY,
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON
STOCK EVIDENCED HEREBY EXCEPT (A) TO NII HOLDINGS, INC. OR TO ANY
SUBSIDIARY THEREOF, (B) TO A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH
RULE 144A, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME
OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE (1)(D) ABOVE), IT WILL FURNISH TO
EQUISERVE TRUST COMPANY, N.A., AS TRANSFER AGENT (OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(D) ABOVE)
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND
WILL BE REMOVED

16

 

UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE (1)(D) ABOVE OR UPON ANY TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

               Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).

               (e) Any Note or Common Stock issued upon the conversion of a Note that,
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), is purchased
or owned by the Company or any Affiliate thereof may not be resold by the
Company or such Affiliate unless registered under the Securities Act or resold
pursuant to an exemption from the registration requirements of the Securities
Act in a transaction which results in such Notes or Common Stock, as the case
may be, no longer being “restricted securities” (as defined under Rule 144
under the Securities Act).

               Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case,
the applicant for a substituted Note shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any
loss, liability, cost or expense caused by or connected with such substitution,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.

               Following receipt by the Trustee or such authenticating agent, as the case
may be, of satisfactory security or indemnity and evidence, as described in the
preceding paragraph, the Trustee or such authenticating agent may authenticate
any such substituted Note and make available for delivery such Note. Upon the
issuance of any substituted Note, either the Company, the Trustee or both may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Note which has matured
or is about to mature or has been called for redemption or has been tendered
for redemption upon a Designated Event (and not withdrawn) or has been
surrendered for repurchase on a Repurchase Date (and not withdrawn) or is to be
converted into Common Stock shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Note, pay or authorize
the

17

 

payment of or convert or authorize the conversion of the same (without
surrender thereof except in the case of a mutilated Note), as the case may be,
if the applicant for such payment or conversion shall furnish to the Company,
to the Trustee and, if applicable, to such authenticating agent such security
or indemnity as may be required by them to save each of them harmless for any
loss, liability, cost or expense caused by or in connection with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, the Trustee and, if applicable, any paying
agent or Conversion Agent evidence to their satisfaction of the destruction,
loss or theft of such Note and of the ownership thereof.

               Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations
set forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall
be held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion or
redemption or repurchase of mutilated, destroyed, lost or stolen Notes and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment or conversion or redemption or repurchase of negotiable
instruments or other securities without their surrender.

               Section 2.07. Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in
the form of the Notes in certificated form, but with such omissions, insertions
and variations as may be appropriate for temporary Notes, all as may be
determined by the Company. Every such temporary Note shall be executed by the
Company and authenticated by the Trustee or such authenticating agent upon the
same conditions and in substantially the same manner, and with the same effect,
as the Notes in certificated form. Without unreasonable delay, the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form and thereupon any or all temporary Notes may be surrendered
in exchange therefor, at each office or agency maintained by the Company
pursuant to Section 4.02 and the Trustee or such authenticating agent shall
authenticate and make available for delivery in exchange for such temporary
Notes an equal aggregate principal amount of Notes in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Notes in certificated form authenticated and delivered hereunder.

               Section 2.08. Cancellation of Notes. If the Company shall acquire any of
the Notes, such acquisition shall not operate as a redemption, repurchase or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation. All Notes surrendered for
the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any paying
agent or any Note registrar or any Conversion Agent, be surrendered to the
Trustee and

18

 

promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Notes shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee
shall dispose of such canceled Notes in accordance with its customary
procedures. Any Notes surrendered by the Company to the Trustee for
cancellation shall be accompanied by an Officers’ Certificate requesting the
Trustee to effect such cancellation.

               Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use
“CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use
“CUSIP” numbers in notices of redemption as a convenience to Noteholders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Notes or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the “CUSIP” numbers.

ARTICLE III

Redemption and Repurchase of Notes

               Section 3.01. Redemption of Notes at the Option of the Company. Except as
otherwise provided in Section 3.05, the Company may not redeem any Notes prior
to September 20, 2008. At any time on or after September 20, 2008, the Notes
may be redeemed at the option of the Company (an “Optional Redemption”), in
whole or in part, upon notice as set forth in Section 3.02, at the following
prices expressed as a percentage of the principal amount of the Notes to be
redeemed, together with accrued and unpaid interest, if any, to, but excluding
the date fixed for redemption:

  	 	 	 	 
	Redemption Period	 	Price

	 	 	 
	Beginning on September 20, 2008 and
        ending on September 14, 2009	 	 101.000

        	%

        
	Beginning on September 15, 2009 and
        ending on September 14, 2010	 	 100.500

        	%

        
	Beginning on September 15, 2010 and
        thereafter	 	 100.000

        	%

        

               Section 3.02. Notice of Optional Redemption; Selection of Notes. In case
the Company shall desire to exercise the right to redeem all or, as the case
may be, any part of the Notes pursuant to Section 3.01, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the redemption date to each holder of Notes so to be redeemed as
a whole or in part at its last address as the same appears on the Note
register; provided that if the Company shall give such notice, it shall give
substantially concurrent written notice of the redemption date to the Trustee.
Such mailing shall be by first class mail. The notice, if mailed in the manner
herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the holder of any Note
designated for

19

 

redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note. Concurrently with the
mailing of any such notice of redemption, the Company shall issue a press
release announcing such redemption, the form and content of which press release
shall be determined by the Company in its sole discretion. The failure to
issue any such press release or any defect therein shall not affect the
validity of the redemption notice or any of the proceedings for the redemption
of any Note called for redemption.

               Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or
on the portion thereof to be redeemed will cease to accrue. Such notice shall
also state the current Conversion Rate and the date on which the right to
convert such Notes or portions thereof into Common Stock will expire. If fewer
than all the Notes are to be redeemed, the notice of redemption shall identify
the Notes to be redeemed (including CUSIP numbers, if any). In case any Note
is to be redeemed in part only, the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall state that, on
and after the redemption date, upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion thereof will be issued.

               On or prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.02, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as the
paying agent, set aside, segregate and hold in trust as provided in Section
4.04) an amount of money in immediately available funds sufficient to redeem on
the redemption date all the Notes (or portions thereof) so called for
redemption (other than those theretofore surrendered for conversion into Common
Stock) at the appropriate redemption price, together with accrued interest to,
but excluding, the redemption date; provided that if such payment is made on
the redemption date it must be received by the Trustee or paying agent, as the
case may be, by 10:00 a.m. New York City time on such date. The Company shall
be entitled to retain any interest, yield or gain on amounts deposited with the
Trustee or any paying agent pursuant to this Section 3.02 in excess of amounts
required hereunder to pay the redemption price and accrued interest to, but
excluding, the redemption date. If any Note called for redemption is converted
pursuant hereto prior to such redemption date, any money deposited with the
Trustee or any paying agent or so segregated and held in trust for the
redemption of such Note shall be paid to the Company upon its written request,
or, if then held by the Company, shall be discharged from such trust. Whenever
any Notes are to be redeemed pursuant to Section 3.01, the Company will give
the Trustee written notice in the form of an Officers’ Certificate not fewer
than forty-five (45) days (or such shorter period of time as may be acceptable
to the Trustee) prior to the redemption date as to the aggregate principal
amount of Notes to be redeemed.

               If less than all of the outstanding Notes are to be redeemed, the Trustee
shall select the Notes or portions thereof of the Global Note or the Notes in
certificated form to be redeemed (in principal amounts of $1,000 or multiples
thereof) by lot, on a pro rata basis or by another method the Trustee deems
fair and appropriate. If any Note selected for partial redemption is submitted
for conversion in part after such selection, the portion of such Note

20

 

submitted for conversion shall be deemed (so far as may be possible) to be
the portion to be selected for redemption. The Notes (or portions thereof) so
selected shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is submitted for conversion in part before
the mailing of the notice of redemption.

               Upon any redemption of less than all of the outstanding Notes, the Company
and the Trustee may (but need not), solely for purposes of determining the pro
rata allocation among such Notes as are unconverted and outstanding at the time
of redemption, treat as outstanding any Notes surrendered for conversion during
the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as outstanding any Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Note converted in part during such period.

               Section 3.03. Payment of Notes Called for Redemption by the Company. If
notice of redemption has been given as provided in Section 3.02, the Notes or
portion of Notes with respect to which such notice has been given shall, unless
converted into Common Stock pursuant to the terms hereof, become due and
payable on the date fixed for redemption and at the place or places stated in
such notice at the applicable redemption price, together with interest accrued
to (but excluding) the redemption date, and on and after said date (unless the
Company shall default in the payment of such Notes at the redemption price,
together with interest accrued to said date) interest on the Notes or portion
of Notes so called for redemption shall cease to accrue and, after the close of
business on the Business Day immediately preceding the redemption date, such
Notes shall cease to be convertible into Common Stock and, except as provided
in Sections 7.06 and 12.04, to be entitled to any benefit or security under
this Indenture, and the holders thereof shall have no right in respect of such
Notes except the right to receive the redemption price thereof and unpaid
interest to (but excluding) the redemption date. On presentation and surrender
of such Notes at a place of payment in said notice specified, the said Notes or
the specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to, but
excluding, the redemption date; provided that if the applicable redemption date
is an interest payment date, the interest payable on such interest payment date
shall be payable to the holders of record of such Notes on the applicable
record date instead of the holders surrendering such Notes for redemption on
such date.

               Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion
of the Notes so presented.

               Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of redemption during the continuance of a default in payment of
interest or premium, if any, on the Notes. If any Note called for redemption
shall not be so paid upon surrender thereof for redemption, the principal and
premium, if any, shall, until paid or duly provided for, bear interest from the
redemption date at a rate equal to 1% per annum plus the rate borne by the Note
(without duplication of the 1% increase provided for under Section 6.02) and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, and interest shall have been paid or duly provided for.

21

 

               Section 3.04. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more
investment banks or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Noteholders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to, but excluding, the date fixed for redemption, of such
Notes. Notwithstanding anything to the contrary contained in this Article 3,
the obligation of the Company to pay the redemption price of such Notes,
together with interest accrued to, but excluding, the date fixed for
redemption, shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, a
copy of which will be filed with the Trustee prior to the date fixed for
redemption, any Notes not duly surrendered for conversion by the holders
thereof may, at the option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in Article 14) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Notes shall be extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold
and dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Notes. Without the
Trustee’s prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Notes shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in this Indenture.

               Section 3.05. Redemption at Option of Holders upon a Designated Event.
(a) If there shall occur a Designated Event at any time prior to maturity of
the Notes, then each Noteholder shall have the right, at such holder’s option,
to require the Company to redeem all of such holder’s Notes, or any portion
thereof that is a multiple of $1,000 principal amount, on the date (the
“Designated Event Redemption Date”) that is thirty (30) days after the date of
the Designated Event Notice (as defined in Section 3.05(b)) of such Designated
Event (or, if such 30th day is not a Business Day, the next succeeding Business
Day) at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to, but excluding, the Designated Event
Redemption Date; provided that if such Designated Event Redemption Date is an
interest payment date, then the interest payable on such interest payment date
shall be paid to the holders of record of the Notes on the applicable record
date instead of the holders surrendering the Notes for redemption on such date.

               Upon presentation of any Note redeemed in part only, the Company shall
execute and, upon the Company’s written direction to the Trustee, the Trustee
shall authenticate and make available for delivery to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations,
in aggregate principal amount equal to the unredeemed portion of the Note
presented.

               (b) On or before the tenth day after the occurrence of a Designated Event,
the Company or at its written request (which must be received by the Trustee at
least five (5) Business Days prior to the date the Trustee is requested to give
notice as described below, unless the Trustee shall agree in writing to a
shorter period), the Trustee, in the name of and at the expense of the Company,
shall mail or cause to be mailed to all holders of record on the date of

22

 

the Designated Event a notice (the “Designated Event Notice”) of the
occurrence of such Designated Event and of the redemption right at the option
of the holders arising as a result thereof. Such notice shall be mailed in the
manner and with the effect set forth in the first paragraph of Section 3.02
(without regard for the time limits set forth therein). If the Company shall
give such notice, the Company shall also deliver a copy of the Designated Event
Notice to the Trustee at such time as it is mailed to Noteholders.
Concurrently with the mailing of any Designated Event Notice, the Company shall
issue a press release announcing such Designated Event referred to in the
Designated Event Notice, the form and content of which press release shall be
determined by the Company in its sole discretion. The failure to issue any
such press release or any defect therein shall not affect the validity of the
Designated Event Notice or any proceedings for the redemption of any Note which
any Noteholder may elect to have the Company redeem as provided in this Section
3.05.

               Each Designated Event Notice shall specify the circumstances constituting
the Designated Event, the Designated Event Redemption Date, the price at which
the Company shall be obligated to redeem Notes, that the holder must exercise
the redemption right on or prior to the close of business on the Designated
Event Redemption Date (the “Designated Event Expiration Time”), that the holder
shall have the right to withdraw any Notes surrendered prior to the Designated
Event Expiration Time, a description of the procedure which a Noteholder must
follow to exercise such redemption right and to withdraw any surrendered Notes,
the place or places where the holder is to surrender such holder’s Notes, the
amount of interest accrued on each Note to (but excluding) the Designated Event
Redemption Date and the CUSIP number or numbers of the Notes (if then generally
in use).

               No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders’ redemption rights or affect the validity
of the proceedings for the redemption of the Notes pursuant to this Section
3.05.

               (c) For a Note, other than a Global Note, to be so redeemed at the option
of the holder, the Company must receive at the office or agency of the Company
maintained for that purpose pursuant to Section 4.02, such Note with the form
entitled “Option to Elect Repayment Upon A Designated Event” on the reverse
thereof duly completed and signed, together with such Notes duly endorsed for
transfer, on or before the Designated Event Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for redemption shall be determined by the Company, whose determination
shall be final and binding absent manifest error.

               (d) On or prior to the Designated Event Redemption Date, the Company will
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as the paying agent, set aside, segregate and hold in trust as
provided in Section 4.04) an amount of money sufficient to redeem on the
Designated Event Redemption Date all the Notes to be redeemed on such date at
the appropriate redemption price, together with accrued interest to, but
excluding, the Designated Event Redemption Date; provided that if such payment
is made on the Designated Event Redemption Date it must be received by the
Trustee or paying agent, as the case may be, by 10:00 a.m. New York City time,
on such date. Payment for Notes surrendered for redemption (and not withdrawn)
prior to the Designated Event Expiration Time will be made promptly (but in no
event more than five (5) Business Days) following the Designated Event

23

 

Redemption Date by mailing checks for the amount payable to the holders of
such Notes entitled thereto as they shall appear in the Note register.

               (e) In the case of a reclassification, change, consolidation, merger,
combination, binding share exchange, sale or conveyance to which Section 14.06
applies, in which the Common Stock of the Company is changed or exchanged as a
result into the right to receive stock, securities or other property or assets
(including cash), which includes shares of Common Stock of the Company or
shares of common stock of another Person that are, or upon issuance will be,
traded on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United
States and such shares constitute at the time such change or exchange becomes
effective in excess of 50% of the aggregate fair market value of such stock,
securities or other property or assets (including cash) (as determined by the
Company, which determination shall be conclusive and binding), then the Person
formed by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Notes to cause the
Company to repurchase the Notes following a Designated Event, including without
limitation the applicable provisions of this Section 3.05 and the definitions
of Common Stock and Designated Event, as appropriate, as determined in good
faith by the Company (which determination shall be conclusive and binding), to
make such provisions apply to such other Person if different from the Company
and the common stock issued by such Person (in lieu of the Company and the
Common Stock of the Company).

               (f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable
in connection with the redemption rights of the holders of Notes in the event
of a Designated Event.

               Section 3.06. Repurchase of Notes by the Company at Option of the Holder.
Notes shall be purchased by the Company pursuant to the terms of the Notes at
the option of the holder on September 15, 2010, September 15, 2013, September
15, 2018, September 15, 2023 and September 15, 2028 (each, a “Repurchase
Date”), at a purchase price of 100% of the principal amount, plus any accrued
and unpaid interest, in each case, to, but excluding, such Repurchase Date,
subject to the provisions of Section 3.07. Repurchases of Notes under this
Section 3.06 shall be made, at the option of the holder thereof, upon:

     (a) delivery to the Trustee (or other paying agent appointed by the
Company) by a holder of a duly completed and signed Repurchase Notice (a
“Repurchase Notice”) in the form set forth on the reverse of the Note
during the period beginning at any time from the opening of business on
the date that is 20 Business Days prior to the applicable Repurchase Date
until the close of business on such Repurchase Date; and

     (b) delivery or book-entry transfer of the Notes to the Trustee (or
other paying agent appointed by the Company) at any time after delivery
of the applicable Repurchase Notice (together with all necessary
endorsements) at the Corporate Trust Office (or the office of another
paying agent appointed by the Company), such delivery being a

24

 

condition to receipt by the holder of the purchase price therefor;
provided that such purchase price shall be so paid pursuant to this
Section 3.06 only if the Note so delivered to the Trustee (or other
paying agent appointed by the Company) shall conform in all respects to
the description thereof in the related Repurchase Notice.

               The Company shall purchase from the holder thereof, pursuant to this
Section 3.06, a portion of a Note, if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Note also apply to the purchase of such
portion of such Note.

               Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.06 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Note.

               Notwithstanding anything herein to the contrary, any holder delivering to
the Trustee (or other paying agent appointed by the Company) the Repurchase
Notice contemplated by this Section 3.06 shall have the right to withdraw such
Repurchase Notice at any time prior to the close of business on the Repurchase
Date by delivery of a written notice of withdrawal to the Trustee (or other
paying agent appointed by the Company) in accordance with Section 3.08.

               The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof.

               Section 3.07. Procedures for the Repurchase of Notes. (a) At least five
Business Days before each Company Repurchase Notice Date, the Company shall
deliver an Officers’ Certificate to the Trustee specifying:

     (i) the information required by Section 3.07(c) in the Company
Repurchase Notice, and

     (ii) whether the Company desires the Trustee to give the
Company Repurchase Notice required by Section 3.07(c).

               (b) The Company Repurchase Notice, as provided in Section 3.07(c), shall
be sent to holders not less than 20 Business Days prior to such Repurchase Date
(the “Company Repurchase Notice Date”).

               (c) In connection with any repurchase of Notes under Section 3.06, the
Company shall, no less than 20 Business Days prior to each Repurchase Date,
give notice to holders (with a copy provided substantially concurrently to the
Trustee) setting forth information specified in this Section 3.07(c) (the
“Company Repurchase Notice”).

                Each Company Repurchase Notice shall:

     (1) state the repurchase price and the Repurchase Date to which the
Company Repurchase Notice relates;

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     (2) include a form of Repurchase Notice;

     (3) state the name and address of the Trustee (or other paying agent
or Conversion Agent appointed by the Company);

     (4) state that Notes must be surrendered to the Trustee (or other
paying agent appointed by the Company) to collect the purchase price;

     (5) if the Notes are then convertible, state that Notes as to which
a Repurchase Notice has been given may be converted only if the
Repurchase Notice is withdrawn in accordance with the terms of this
Indenture; and

     (6) state the CUSIP number of the Notes.

Company Repurchase Notices may be given by the Company or, at the Company’s
request, the Trustee shall give such Company Repurchase Notice in the Company’s
name and at the Company’s expense.

               (d) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable
in connection with the repurchase rights of the holders of Notes.

               Section 3.08. Effect of Repurchase Notice. Upon receipt by the Trustee
(or other paying agent appointed by the Company) of the Repurchase Notice
specified in Section 3.06, the holder of the Note in respect of which such
Repurchase Notice was given shall (unless such Repurchase Notice is validly
withdrawn) thereafter be entitled to receive solely the purchase price with
respect to such Note. Such purchase price shall be paid to such holder,
subject to receipt of funds and/or Notes by the Trustee at its Corporate Trust
Office (or the office of another paying agent appointed by the Company),
promptly following the later of (x) the Repurchase Date with respect to such
Note (provided the holder has satisfied the conditions in Section 3.06) and (y)
the time of delivery of such Note to the Trustee (or other paying agent
appointed by the Company) by the holder thereof in the manner required by
Section 3.06. Notes in respect of which a Repurchase Notice has been given by
the holder thereof may not be converted pursuant to Article 14 hereof on or
after the date of the delivery of such Repurchase Notice unless such Repurchase
Notice has first been validly withdrawn.

               A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the Trustee at its Corporate Trust Office (or the
office of another paying agent appointed by the Company) in accordance with the
Repurchase Notice at any time prior to the close of business on the Repurchase
Date, specifying:

               (a) the certificate number, if any, of the Note in respect of which
such notice of withdrawal is being submitted, or the appropriate
Depositary information if the Note in respect of which such notice of
withdrawal is being submitted is represented by a Global Note,

               (b) the principal amount of the Note with respect to which such
notice of withdrawal is being submitted, and

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     (c) the principal amount, if any, of such Note which remains subject
to the original Repurchase Notice and which has been or will be delivered
for purchase by the Company.

               Section 3.09. Deposit of Purchase Price. (a) Prior to 10:00 a.m. (New
York City Time) on the Business Day following the Repurchase Date, the Company
shall deposit with the Trustee (or other paying agent appointed by the Company;
or, if the Company is acting as the paying agent, shall segregate and hold in
trust as provided in Section 4.04) an amount of cash (in immediately available
funds if deposited on such Business Day) sufficient to pay the aggregate
purchase price of all the Notes or portions thereof that are to be purchased as
of the Repurchase Date.

               (b) If the Trustee or other paying agent appointed by the Company, or the
Company or a subsidiary or affiliate of either of them if such entity is acting
as the paying agent, holds cash sufficient to pay the aggregate purchase price
of all the Notes, or portions thereof that are to purchased as of the
Repurchase Date, on or after the Repurchase Date (i) the Notes will cease to be
outstanding, (ii) interest on the Notes will cease to accrue, and (iii) all
other rights of the holders of such Notes will terminate, whether or not
book-entry transfer of the Notes has been made or the Notes have been delivered
to the Trustee or other paying agent, other than the right to receive the
purchase price upon delivery of the Notes.

               Section 3.10. Notes Repurchased in Part. Upon presentation of any Note
repurchased only in part, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Note or Notes, of any authorized denomination, in
aggregate principal amount equal to the unrepurchased portion of the Notes
presented.

               Section 3.11. Repayment to the Company. Subject to the requirements of
applicable law and this Indenture, the Trustee (or other paying agent appointed
by the Company) shall return to the Company any cash that remains unclaimed for
two years after any Repurchase Date, together with interest, if any, thereon,
held by it for the payment of the purchase price for the Notes or portions
thereof that are to be purchased as of such Repurchase Date; provided that to
the extent that the aggregate amount of cash deposited by the Company pursuant
to Section 3.09 exceeds the aggregate purchase price of the Notes or portions
thereof which the Company is obligated to purchase as of the Repurchase Date
then, unless otherwise agreed in writing with the Company, promptly after the
Business Day following the Repurchase Date, the Trustee shall return any such
excess to the Company together with interest, if any, thereon.

ARTICLE IV

Particular Covenants of the Company

               Section 4.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price upon
redemption or the purchase price upon repurchase, in each case pursuant to
Article 3), and interest, on each of the Notes at the places, at the respective
times and in the manner provided herein and in the Notes.

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               Section 4.02. Maintenance of Office or Agency. The Company will maintain
an office or agency in the Borough of Manhattan, The City of New York, where
the Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion, redemption or repurchase and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee or at the address of the Trustee’s designee, in either case, as agent
of the Company.

               The Company may also from time to time designate co-registrars and one or
more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.

               The Company hereby initially designates the Trustee as paying agent, Note
registrar, Custodian and Conversion Agent and the Corporate Trust Office shall
be considered as one such office or agency of the Company for each of the
aforesaid purposes. The Company agrees to enter into an agency agreement in
customary form with any successor paying agent, Note registrar, Custodian or
Conversion Agent that is not a party to this Indenture.

               So long as the Trustee is the Note registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 7.10(b) and the third
paragraph of Section 7.11. If co-registrars have been appointed in accordance
with this Section, the Trustee shall mail such notices only to the Company and
the holders of Notes it can identify from its records.

               Section 4.03. Appointments to Fill Vacancies in Trustee’s Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so
that there shall at all times be a Trustee hereunder.

               Section 4.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 4.04:

     (1) that it will hold all sums held by it as such agent for the
payment of the principal of, or premium, if any, or interest on, the
Notes (whether such sums have been paid to it by the Company or by any
other obligor on the Notes) in trust for the benefit of the holders of
the Notes;

     (2) that it will give the Trustee written notice of any failure by
the Company (or by any other obligor on the Notes) to make any payment of
the principal of, or premium, if any, or interest on, the Notes when the
same shall be due and payable; and

28

 

     (3) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it will forthwith pay to the Trustee all
sums so held in trust.

               The Company shall, on or before each due date of the principal of, or
premium if any, or interest on, the Notes, deposit with the paying agent a sum
(in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless
such paying agent is the Trustee) the Company will promptly notify the Trustee
in writing of any failure to take such action; provided that if such deposit is
made on the due date, such deposit shall be received by the paying agent by
10:00 a.m. New York City time, on such date.

               (b) If the Company shall act as the paying agent, it will, on or before
each due date of the principal of, or premium, if any, or interest on, the
Notes, set aside, segregate and hold in trust for the benefit of the holders of
the Notes a sum sufficient to pay such principal, premium, if any, or interest
so becoming due, will account for any funds disbursed by it and will promptly
notify the Trustee of any failure to take such action and of any failure by the
Company (or any other obligor under the Notes) to make any payment of the
principal of, or premium, if any, or interest on, the Notes when the same shall
become due and payable.

               (c) Anything in this Section 4.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by the Company or any paying agent
hereunder as required by this Section 4.04, such sums to be held by the Trustee
upon the trusts herein contained and upon such payment by the Company or any
paying agent to the Trustee, the Company or such paying agent shall be released
from all further liability with respect to such sums.

               (d) Anything in this Section 4.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.04 is subject to
Sections 12.03 and 12.04.

               The Trustee shall not be responsible for the actions of any other paying
agents (including the Company if acting as the paying agent) and shall have no
control of any funds held by such other paying agents.

               Section 4.05. Existence. Subject to Article 11, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.

               Section 4.06. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of, or disposing of,
any of such properties if such discontinuance or

29

 

disposal is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Noteholders.

               Section 4.07. Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Subsidiaries or upon the income, profits
or property of the Company or any of its Subsidiaries, (ii) all claims for
labor, materials and supplies which, if unpaid, might by law become a lien or
charge upon the property of the Company or any of its Subsidiaries and (iii)
all stamp taxes and other duties, if any, which may be imposed by the United
States or any political subdivision thereof or therein in connection with the
issuance, transfer, exchange, conversion, redemption or repurchase of any Notes
or with respect to this Indenture; provided that, in the case of clauses (i)
and (ii), the Company shall not be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith and for which
adequate reserves have been established in accordance with generally accepted
accounting principles and which if unpaid would reasonably not be expected to
result in a material adverse effect on the business, results of operations, or
financial condition of the Company and its Subsidiaries, taken as a whole.

               Section 4.08. Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not
subject to Section 13 or 15(d) under the Exchange Act, provide to the Trustee
and make available to any holder or beneficial holder of Notes or any Common
Stock issued upon conversion thereof which continue to be Restricted Securities
in connection with any sale thereof and any prospective purchaser of Notes or
such Common Stock designated by such holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act upon
the request of any holder or beneficial holder of the Notes or such Common
Stock and it will take such further action as any holder or beneficial holder
of such Notes or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial holder to sell
its Notes or Common Stock without registration under the Securities Act within
the limitation of the exemption provided by Rule 144A, as such Rule may be
amended from time to time. Upon the request of any holder or any beneficial
holder of the Notes or such Common Stock, the Company will deliver to such
holder a written statement as to whether it has complied with such
requirements. Delivery of such information to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers’ Certificates).

               Section 4.09. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, or
premium, if any, or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this

30

 

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

               Section 4.10. Compliance Certificate; Notice of Default. The Company
shall deliver to the Trustee, within one hundred twenty (120) days after the
end of each fiscal year of the Company, an Officers’ Certificate stating
whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.

               The Company will deliver to the Trustee, as soon as possible after the
Company becomes aware of any Event of Default or an event which, with notice or
the lapse of time or both, would constitute an Event of Default, an Officers’
Certificate setting forth the details of such default or Event of Default and
the action that the Company has taken, is taking or proposes to take with
respect thereto.

               Any notice required to be given under this Section 4.10 shall be delivered
to a Responsible Officer of the Trustee at its Corporate Trust Office.

               Section 4.11. Maintenance of Insurance. The Company shall keep at all
times all of their properties which are of an insurable nature insured against
loss or damage, and to maintain liability insurance, with insurers believed by
the Company to be responsible to the extent that property of similar character
is usually so insured, or liability insurance usually is so maintained, by
corporations similarly situated and owning like properties in accordance with
good business practice.

               Section 4.12. Liquidated Damages Notice. In the event that the Company is
required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide an Officers’
Certificate (“Liquidated Damages Notice”) to the Trustee notifying the Trustee
of its obligation to pay Liquidated Damages no later than fifteen (15) days
prior to the proposed payment date for the Liquidated Damages, and the
Liquidated Damages Notice shall set forth the amount of Liquidated Damages to
be paid by the Company on such payment date. The Trustee shall not at any time
be under any duty or responsibility to any holder of Notes to determine the
Liquidated Damages, or with respect to the nature, extent or calculation of the
amount of Liquidated Damages when made, or with respect to the method employed
in such calculation of the Liquidated Damages.

ARTICLE V

NOTEHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

               Section 5.01. Company to Furnish Trustee Names and Addresses of
Noteholders. The Company covenants and agrees that it will furnish or cause to
be furnished to the Trustee, semiannually, not more than fifteen (15) days
after each March 1 and September 1 in each year beginning with March 1, 2004,
and at such other times as the Trustee may request in

31

 

writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses
of the registered holders of Notes as of a date not more than fifteen (15) days
(or such other date as the Trustee may reasonably request in order to so
provide any such notices) prior to the time such information is furnished,
except that no such list need be furnished by the Company to the Trustee so
long as the Trustee is acting as the sole Note registrar.

               Section 5.02. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Notes contained in
the most recent list furnished to it as provided in Section 5.01 or maintained
by the Trustee in its capacity as Note registrar or co-registrar in respect of
the Notes, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.

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

               (c) Every Noteholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.

               Section 5.03. Reports by Trustee. (a) Within sixty (60) days after
December 30 of each year commencing with the year 2003, the Trustee shall
transmit to holders of Notes such reports dated as of December 30 of the year
in respect of which such reports are made concerning the Trustee and its
actions under this Indenture as shall be required, if any, pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

               (b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the
Company. The Company will promptly notify the Trustee in writing when the
Notes are listed on any stock exchange or automated quotation system or
delisted therefrom.

               Section 5.04. Reports by Company. The Company shall file with the Trustee
and transmit to holders of the Notes, such information, documents and other
reports as it is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act within 15 days after the same is so required to be
filed with the Commission. Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

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ARTICLE VI

REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

               Section 6.01. Events of Default; Acceleration. In case one or more of the
following Events of Default (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:

     (a) default in the payment of any installment of interest or
Liquidated Damages with respect to any of the Notes as and when the same
shall become due and payable, and continuance of such default for a
period of thirty (30) days; or

     (b) default in the payment of the principal of or premium, if any,
or any of the Notes as and when the same shall become due and payable
either at maturity or in connection with any redemption or repurchase, in
each case pursuant to Article 3, by acceleration or otherwise; or

     (c) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in
the Notes or in this Indenture (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this Section
6.01 specifically dealt with) continued for a period of sixty (60) days
after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee, or the Company and a Responsible Officer of the Trustee by the
holders of at least twenty-five percent (25%) in aggregate principal
amount of the Notes at the time outstanding determined in accordance with
Section 8.04; or

     (d) a default or defaults under the terms of any bond(s),
debenture(s), note(s) or other evidence(s) of, or under any mortgage(s),
indenture(s), agreement(s) or instrument(s) under which there may be
issued or by which there may be secured or evidenced, any indebtedness of
the Company or any of its Subsidiaries with a principal amount then
outstanding, individually or in the aggregate, of at least $10,000,000,
whether such indebtedness now exists or is hereafter incurred, which
default or defaults (i) shall have resulted in such indebtedness becoming
or being declared due and payable prior to the date on which it would
otherwise have become due and payable or (ii) shall constitute the
failure to pay such indebtedness at the final stated maturity thereof
(after expiration of any applicable grace period) and such default shall
not have been rescinded or such indebtedness shall not have been
discharged within 10 days; or

     (e) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal
or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of

33

 

the Company or of any substantial part of the property of the
Company, or ordering the winding up or liquidation of the affairs of the
Company, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of 60
consecutive days; or

     (f) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Company to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
the Company or the filing by the Company of a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by the Company to the filing of such a petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of the property of the Company, or the
making by the Company of an assignment for the benefit of creditors, or
the admission by the Company in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action;

then, and in each and every such case (other than an Event of Default specified
in 6.01(e) or 6.01(f) that occurs with respect to the Company), unless the
principal of all of the Notes shall have already become due and payable, either
the Trustee or the holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Notes then outstanding hereunder determined
in accordance with Section 8.04, by notice in writing to the Company (and to
the Trustee if given by Noteholders) specifying the respective Event of Default
and stating that it is a “notice of acceleration”, may declare the principal of
and premium, if any, on all the Notes and the interest accrued and Liquidated
Damages, if any, thereon to be due and payable immediately, and upon receipt of
such notice the same shall become and shall be immediately due and payable. If
an Event of Default specified in 6.01(e) or 6.01(f) involving the Company
occurs, the principal of all the Notes and the interest accrued and Liquidated
Damages, if any, thereon shall be immediately and automatically due and payable
without necessity of further action. This provision, however, is subject to
the conditions that if, at any time after the principal of the Notes shall have
been so declared due and payable, and before any judgment or decree for the
payment of the monies due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all Notes and the
principal of, and premium, if any, and Liquidated Damages, if any, on, any and
all Notes which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest (to the extent that payment of
such interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate borne by the Notes plus 1%, to the date of such
payment or deposit) and amounts due to the Trustee pursuant to Section 7.07,
and if any and all defaults under this Indenture, other than the nonpayment of
principal of, and premium, if any, Liquidated Damages, if any, and accrued
interest on, Notes which shall have become due by acceleration, shall have been
cured or waived pursuant to Section 6.07, then and in every such case the
holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive

34

 

all defaults or Events of Default and rescind and annul such declaration and
its consequences; but no such waiver or rescission and annulment shall extend
to or shall affect any subsequent default or Event of Default, or shall impair
any right consequent thereon. In accordance with Section 4.10, the Company
shall notify in writing a Responsible Officer of the Trustee, promptly upon
becoming aware thereof, of any Event of Default or any event which, with notice
or the lapse of time or both, would constitute an Event of Default.

               In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.

               Section 6.02. Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of thirty
(30) days, or (b) in case default shall be made in the payment of the principal
of or premium, if any, on any of the Notes as and when the same shall have
become due and payable, whether at maturity of the Notes or in connection with
any redemption or repurchase, by or under this Indenture or otherwise, then,
upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Notes, the whole amount that then shall have
become due and payable on all such Notes for principal, premium, if any, or
interest, as the case may be, with interest upon the overdue principal and
premium, if any, and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes, plus 1% and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable compensation to the Trustee, its agents, attorneys and
counsel, and all other amounts due the Trustee under Section 7.07. Until such
demand by the Trustee, the Company may pay the principal of, and premium, if
any, and interest on, the Notes to the registered holders, whether or not the
Notes are overdue.

               In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

               In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under Title 11
of the United States Code, or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator
or similar official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such other
obligor, or in the case of any other judicial proceedings relative to the
Company or such

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other obligor upon the Notes, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 6.02, shall be
entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee, its agents and its counsel and of the Noteholders allowed in such
judicial proceedings relative to the Company or any other obligor on the Notes,
its or their creditors, or its or their property, and to collect and receive
any monies or other property payable or deliverable on any such claims, and to
distribute the same after the deduction of any amounts due the Trustee under
Section 7.07, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Noteholders to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution.

               All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.

               In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Notes, and it shall not be necessary to make any holders of the
Notes parties to any such proceedings.

               Section 6.03. Application of Monies Collected by Trustee. Any monies or
other compensation collected by the Trustee pursuant to this Article 6 shall be
applied in the order following, at the date or dates fixed by the Trustee for
the distribution of such monies or other compensation, upon presentation of the
several Notes, and stamping thereon the payment, if only partially paid, and
upon surrender thereof, if fully paid:

     FIRST: To the payment of all amounts due the Trustee under
Section 7.07;

     SECOND: In case the principal of the outstanding Notes shall
not have become due and be unpaid, to the payment of interest on
the Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Notes plus 1%,
such payments to be made ratably to the Persons entitled thereto;

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     THIRD: In case the principal of the outstanding Notes shall
have become due, by declaration or otherwise, and be unpaid to the
payment of the whole amount then owing and unpaid upon the Notes
for principal and premium, if any, and interest, with interest on
the overdue principal and premium, if any, and (to the extent that
such interest has been collected by the Trustee) upon overdue
installments of interest at the rate borne by the Notes plus 1% to
the Persons entitled thereto, and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid
upon the Notes, then to the payment of such principal, premium, if
any, and interest without preference or priority of principal and
premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other
installment of interest, or of any Note over any other Note,
ratably to the aggregate of such principal and premium, if any, and
accrued and unpaid interest; and

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

               Section 6.04. Proceedings by Noteholder. No holder of any Note shall have
any right by virtue of or by reference to any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Notes then outstanding shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for sixty
(60) days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 6.07; it being understood and
intended, and being expressly covenanted by the taker and holder of every Note
with every other taker and holder and the Trustee, that no one or more holders
of Notes shall have any right in any manner whatever by virtue of or by
reference to any provision of this Indenture to affect, disturb or prejudice
the rights of any other holder of Notes, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Notes (except as otherwise
provided herein). For the protection and enforcement of this Section 6.04,
each and every Noteholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.

               Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of, and premium, if any (including the redemption or repurchase price
upon redemption or repurchase pursuant to Article 3), and accrued interest on,
such Note, on or after the respective due dates expressed in such Note or in
the case of a redemption or repurchase, on the redemption date or Repurchase
Date, as the case may be, or to institute suit for the enforcement of any such
payment on or after

37

 

such respective dates against the Company shall not be impaired or
affected without the consent of such holder.

               Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in its own behalf and for its own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.

               Section 6.05. Proceedings by Trustee. In case of an Event of Default, the
Trustee may, in its discretion, but shall not be required to, proceed to
protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as are necessary to protect and enforce any of
such rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

               Section 6.06. Remedies Cumulative and Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 6 to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be a waiver of
any such default or any acquiescence therein, and, subject to the provisions of
Section 6.04, every power and remedy given by this Article 6 or by law to the
Trustee or to the Noteholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the Noteholders.

               Section 6.07. Direction of Proceedings and Waiver of Defaults by Majority
of Noteholders. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 8.04 shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided that (a) such direction shall not be
in conflict with any rule of law or with this Indenture, (b) the Trustee may
take any other action which is not inconsistent with such direction and (c) the
Trustee may decline to take any action that the Trustee determines in its
reasonable discretion would benefit some Noteholder to the detriment of other
Noteholders or of the Trustee. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 8.04 may, on behalf of the holders of all of the Notes, waive any
past or existing default or Event of Default hereunder and its consequences
except (i) a past or existing default in the payment of interest or premium, if
any, on, or the principal of, the Notes (including in connection with an offer
to purchase); provided however that holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration in accordance with Section 6.01, (ii) a failure by the Company to
convert any Notes into Common Stock, (iii) a

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default in the payment of the redemption price pursuant to Article 3, (iv)
a default in the payment of the purchase price pursuant to Article 3 or (v) a
default in respect of a covenant or provisions hereof which under Article 10
cannot be modified or amended without the consent of the holders of each or all
Notes then outstanding or affected thereby. Upon any such waiver, the Company,
the Trustee and the holders of the Notes shall be restored to their former
positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
cured or waived as permitted by this Section 6.07, said default or Event of
Default shall for all purposes of the Notes and this Indenture be deemed to
have been cured and to be not continuing for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.

               Section 6.08. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 6.08 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group
of Noteholders, holding in the aggregate more than 10% in principal amount of
the Notes at the time outstanding determined in accordance with Section 8.04,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of, or premium, if any, or interest on, any Note on or after
the due date expressed in such Note or to any suit for the enforcement of the
right to convert any Note in accordance with the provisions of Article 14.

ARTICLE VII

THE TRUSTEE

               Section 7.01. Certain Duties and Responsibilities. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act
(as if such Act applied). Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section 7.01.

               Section 7.02. Notice of Defaults. Subject to the provisions of Section
7.03(i), the Trustee shall give the Noteholders notice of any default hereunder
known to the Trustee as and to the extent provided by the Trust Indenture Act
(as if such Act applied); provided, however, that except in the case of default
in the payment of the principal of, or premium, if any, or interest on, any of
the Notes, the Trustee shall be protected in withholding such notice if and

39

 

so long as a trust committee of directors and/or Responsible Officers of
the Trustee in good faith determines that the withholding of such notice is in
the interests of the Noteholders.

               Section 7.03. Certain Rights of the Trustee. Subject to the provisions of
Section 7.01:

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

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

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

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

     (e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses (including reasonable attorney’s fees and expenses) and
liabilities which might be incurred by it in compliance with such request
or direction; any permissive right or power available to the Trustee
under this Indenture shall not be construed to be a mandatory duty or
obligation;

     (f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may, but shall not be
required to, make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney;

40

 

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

     (h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith, in reliance on an Officers’
Certificate or otherwise, and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture or for any action it takes or omits to take in accordance with
the direction of the holders of a majority in principal amount of the
outstanding Notes; in no event shall the Trustee be liable to any person
for special, indirect, consequential or punitive damages or any damages
for lost profits;

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

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

               Section 7.04. Not Responsible for Statements or Issuance of Notes. The
statements contained herein and in the Notes, except in the Trustee’s
certificate of authentication, shall be taken as the statements of the Company
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture
and the Notes. The Trustee shall not be accountable for the use or application
by the Company of any Notes or the proceeds thereof.

               Section 7.05. May Hold Notes. The Trustee, any authentication agent, any
paying agent, any Conversion Agent, any Note registrar or any other agent of
the Company or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Notes, and, subject to Sections 7.08 and 7.13, may
otherwise deal with the Company and any other obligor upon the Notes with the
same rights it would have if it were not Trustee, authentication agent, paying
agent, Conversion Agent or Note registrar.

               Section 7.06. Monies to be Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.

               Section 7.07. Compensation and Reimbursement. The Company agrees (1) to
pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Company and the Trustee for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);

41

 

(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or willful misconduct; and
(3) to indemnify each of the Trustee and any predecessor Trustee for, and to
hold it harmless against, any and all loss, liability, damage, claim or
expense, including taxes (other than taxes based on the income of the Trustee)
incurred without negligence or willful misconduct on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses, including reasonable attorney’s fees and expenses, of
defending itself against any claim (whether asserted by the Company, a
Noteholder or any other Person) or liability, or of complying with any process
served upon it or any of its officers, in connection with the exercise or
performance of any of its powers or duties hereunder. The Company shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel.

               The Trustee shall have a lien prior to the Notes as to all property and
funds held by it hereunder for any amount owing it or any predecessor Trustee
pursuant to this Section 7.07, except with respect to funds held in trust for
the benefit of the holders of particular Notes.

               When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 6.01(e) or 6.01(f), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.

               Section 7.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of,
this Indenture.

               Section 7.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be a Person that is eligible pursuant
to the Trust Indenture Act to act as such and has a combined capital and
surplus of at least $150,000,000 and has its Corporate Trust Office located in
the Borough of Manhattan, The City of New York. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section 7.09, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.09, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article 7.

               Section 7.10. Resignation and Removal of Trustee; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article 7 shall become effective until the
acceptance of appointment by the successor Trustee under Section 7.11.

42

 

               (b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

               (c) The Trustee may be removed at any time by act of the holders of a
majority in principal amount of the outstanding Notes, delivered to the Trustee
and the Company. If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of removal, the Trustee being removed may petition any court of
competent jurisdiction for the appointment of a successor.

               (d) If at any time:

     (i) the Trustee shall fail to comply with Section 7.08 after written
request therefor by the Company or by any Noteholder who has been a bona
fide holder of a Note for at least six months, or

     (ii) the Trustee shall cease to be eligible under Section 7.09 and
shall fail to resign after written request therefor by the Company or by
any such Noteholder, or

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

then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 6.08, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee.

               (e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a resolution of the Board of Directors, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by act of the holders of a majority in principal amount of the
outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the holders and accepted appointment in the manner
hereinafter provided, any Noteholder who has been a bona fide holder of a Note
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.

               (f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all holders in the
manner provided in

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Section 15.03. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.

               (g) Notwithstanding replacement of the Trustee pursuant to this Section
7.10, the Company’s obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.

               Section 7.11. Acceptance of Appointment of Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on written request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

               No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article 7.

               Upon acceptance of appointment by a successor Trustee as provided in this
Section 7.11, the Company (or the former Trustee, at the written direction of
the Company) shall mail or cause to be mailed notice of the succession of such
Trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register, which notice shall include the address of the
Corporate Trust Office of such successor Trustee. If the Company fails to mail
such notice within ten (10) days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed
at the expense of the Company.

               Section 7.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as
if such successor Trustee had itself authenticated such Notes.

               Section 7.13. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company or any other
obligor upon the Notes, the Trustee shall be subject to the provisions of the
Trust Indenture Act (as if such Act applied) regarding the collection of the
claims against the Company or any such other obligor.

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ARTICLE VIII

THE NOTEHOLDERS

               Section 8.01. Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Noteholders in person or by agent or proxy appointed in writing, or (b) by the
record of the holders of Notes voting in favor thereof at any meeting of
Noteholders duly called and held in accordance with the provisions of Article
9, or (c) by a combination of such instrument or instruments and any such
record of such a meeting of Noteholders. Whenever the Company or the Trustee
solicits the taking of any action by the holders of the Notes, the Company or
the Trustee may fix in advance of such solicitation, a date as the record date
for determining holders entitled to take such action. The record date shall be
not more than fifteen (15) days prior to the date of commencement of initial
solicitation of such action without giving effect to any extension or amendment
of such action or solicitation.

               Section 8.02. Proof of Execution by Noteholders. Subject to the
provisions of Sections 7.03 and 9.05, proof of the execution of any instrument
by a Noteholder or its agent or proxy shall be sufficient if made in accordance
with such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee. The holding of
Notes shall be proved by the registry of such Notes or by a certificate of the
Note registrar.

               The record of any Noteholders’ meeting shall be proved in the manner
provided in Section 9.06.

               Section 8.03. Who Are Deemed Absolute Owners. The Company, the Trustee,
any authenticating agent, any paying agent, any Conversion Agent and any Note
registrar may deem the Person in whose name such Note shall be registered upon
the Note register to be, and may treat it as, the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing thereon made by any Person other than the Company or
any Note registrar) for the purpose of receiving payment of or on account of
the principal of, and premium, if any, and interest on, such Note, for
conversion of such Note and for all other purposes; and neither the Company nor
the Trustee nor any authenticating agent, any paying agent nor any Conversion
Agent nor any Note registrar shall be affected by any notice to the contrary.
All such payments so made to any holder for the time being, or upon his order,
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for monies payable upon any such Note.

               Section 8.04. Company-Owned Notes Disregarded. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination;
provided that for the purposes of determining whether the Trustee shall be
protected in relying

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on any such direction, consent, waiver or other action, only Notes which a
Responsible Officer knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section 8.04 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee’s right to vote such Notes and that the
pledgee is not the Company, any other obligor on the Notes or any Affiliate of
the Company or any such other obligor. In the case of a dispute as to such
right, any good faith decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officers’ Certificate listing
and identifying all Notes, if any, known by the Company to be owned or held by
or for the account of any of the above described Persons, and, subject to
Section 7.03, the Trustee shall be entitled to accept such Officers’
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Notes not listed therein are outstanding for the purpose of any
such determination.

               Section 8.05. Revocation of Consents, Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note
shall be a continuing action and conclusive and binding upon such holder and
upon all future holders and owners of such Note and of any Notes issued in
exchange or substitution therefor, irrespective of whether any notation in
regard thereto is made upon such Note or any Note issued in exchange or
substitution therefor. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every holder.

ARTICLE IX

MEETINGS OF NOTEHOLDERS

               Section 9.01. Purpose of Meetings. A meeting of Noteholders may be called
at any time and from time to time pursuant to the provisions of this Article 9
for any of the following purposes:

     (1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and
its consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article 6;

     (2) to remove the Trustee and nominate a successor Trustee pursuant
to the provisions of Article 7;

     (3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.02; or

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

               Section 9.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 9.01, to
be held at such time and at such place as the Trustee shall determine. Notice
of every meeting of the Noteholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 8.01,
shall be mailed to holders of Notes at their addresses as they shall appear on
the Note register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90)
days prior to the date fixed for the meeting.

               Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.

               Section 9.03. Call of Meetings by Company or Noteholders. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least twenty-five (25%) in aggregate principal amount of the
Notes then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
9.01, by mailing notice thereof as provided in Section 9.02.

               Section 9.04. Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

               Section 9.05. Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.

               The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 9.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and

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a permanent secretary of the meeting shall be elected by vote of the
holders of a majority in principal amount of the Notes represented at the
meeting and entitled to vote at the meeting except that any meeting called by
the Company shall be chaired by a representative of the Company and any meeting
called by the Trustee may, at the Trustee’s election, be chaired by the
Trustee.

               Subject to the provisions of Section 8.04, at any meeting each Noteholder
or proxyholder shall be entitled to one vote for each $1,000 principal amount
of Notes held or represented by him. If any vote cast or counted or proposed
to be cast or counted is challenged on the ground that such Note is not
outstanding, or does not comply with the provisions of Section 9.04, the
chairman of the meeting shall determine whether the holder of such Note is
authorized to act. The chairman of the meeting shall have no right to vote
other than by virtue of Notes held by him or instruments in writing as
aforesaid duly designating him as the proxy to vote on behalf of other
Noteholders. Any meeting of Noteholders duly called pursuant to the provisions
of Section 9.02 or 10.02 may be adjourned from time to time by the holders of a
majority of the aggregate principal amount of Notes represented at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.

               Section 9.06. Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall be representatives of the Trustee, and who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was mailed as provided in Section 9.02.
The record shall show the principal amount of the Notes voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee
to be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.

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

               Section 9.07. No Delay of Rights by Meeting. Nothing contained in this
Article 9 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any
right or rights conferred upon or reserved to the Trustee or to the Noteholders
under any of the provisions of this Indenture or of the Notes.

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ARTICLE X

SUPPLEMENTAL INDENTURES

               Section 10.01. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:

               (a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Notes; or

               (b) to add to the covenants of the Company for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the
Company; or

               (c) to evidence or provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or

               (d) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture, which shall not be inconsistent with the provisions
of this Indenture; or

               (e) to add to, change or eliminate any of the provisions of this
Indenture to permit or facilitate the issuance of Global Notes and
matters related thereto, provided that such action pursuant to this
clause (e) shall not adversely affect the interests of the Holders in any
material respect; or

               (f) make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 14.06 and the
redemption obligations of the Company pursuant to the requirements of
Section 3.05(e);

               (g) to provide for the issuance of Additional Notes in accordance
with the provisions of this Indenture; or

               (h) to modify or amend any of the provisions of this Indenture to
permit the qualification of this Indenture under the Trust Indenture Act.

               Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not
be obligated to, but may in its discretion, enter into any supplemental
indenture that affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise.

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               Any supplemental indenture authorized by the provisions of this Section
10.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 10.02.

               Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

               Section 10.02. Supplemental Indenture with Consent of Noteholders. With
the consent (evidenced as provided in Article 8) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; provided that no such supplemental
indenture shall (i) extend the fixed maturity of any Note or reduce the rate or
extend the time of payment of interest thereon or reduce the principal amount
thereof or premium, if any, thereon or reduce any amount payable on redemption
or repurchase thereof or impair the right of any Noteholder to institute suit
for the payment thereof or make the principal thereof or interest or premium,
if any, thereon payable in any coin or currency or payable at any place other
than that provided in this Indenture or the Notes, or change the obligation of
the Company to redeem any Note on a redemption date in a manner adverse to the
holders of Notes or change the obligation of the Company to redeem any Note
upon the happening of a Designated Event in a manner adverse to the holders of
Notes or change the obligation of the Company to repurchase any Note on a
Repurchase Date in a manner adverse to the holders of Notes or reduce the
Conversion Rate, otherwise than in accordance with the terms of this Indenture,
or impair the right to convert the Notes into Common Stock subject to the terms
set forth herein, including Section 14.06 or reduce the quorum or the voting
requirements under the Indenture, or modify any of the provisions of this
Section 10.02 or Section 6.07, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the holder of each Note so affected, or change
any obligation of the Company to maintain an office or agency in the places and
for the purposes set forth in Section 4.01, in each case, without the consent
of the holder of each Note so affected or (ii) reduce the aforesaid percentage
of Notes, the holders of which are required to consent to any such supplemental
indenture or to waive any past Event of Default, without the consent of the
holders of all Notes affected thereby.

               Subject to Section 10.05, upon the written request of the Company,
accompanied by a copy of the resolutions of the Board of Directors certified by
its Secretary or Assistant Secretary authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of Noteholders as aforesaid, the Trustee shall join with the Company in
the execution of such supplemental indenture unless such supplemental indenture
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.

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               It shall not be necessary for the consent of the Noteholders under this
Section 10.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

               Section 10.03. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article 10, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Notes shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

               Section 10.04. Notation on Notes. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article 10 may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Notes so modified as to conform, in the opinion of the
Trustee and the Company, to any modification of this Indenture contained in any
such supplemental indenture may, at the Company’s expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 15.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.

               Section 10.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee may request an Officers’ Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article 10.

ARTICLE XI

MERGER, CONSOLIDATION, ETC.

               Section 11.01. Mergers, Consolidations and Certain Transfers, Leases and
Acquisitions of Assets. The Company shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:

     (a) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
corporation, shall be organized and validly existing under the laws of
the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of, and premium,
if any, and interest on, all the Notes and the performance or observance
of every covenant and

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obligation of this Indenture, the Notes and the Registration Rights
Agreement on the part of the Company to be performed or observed; and

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

               Section 11.02. Successor to Be Substituted. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 11.01, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Notes.

               Section 11.03. Opinion of Counsel to Be Given Trustee. The Trustee shall
receive an Officers’ Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article 11.

ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE

Section 12.01. Discharge of Indenture. When:

(a)     either:

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

          (ii) all the Notes not theretofore canceled or delivered to
the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption or repurchase of
all of the Notes (other than any Notes that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated
and delivered) not theretofore canceled or delivered to the Trustee
for cancellation, including principal, premium, if any, and
interest due or to become due to such date of maturity or
redemption date or Repurchase Date, as the case may be, accompanied
by a verification report, as to the sufficiency of the

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deposited amount, from an independent certified accountant or
other financial professional satisfactory to the Trustee, and

     (b) the Company shall pay or cause to be paid all other sums payable
hereunder by the Company, as the case may be, and

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

then this Indenture shall cease to be of further effect (except that in the
case of clause (a)(ii) above, Articles 2, 3, 12 and 14 and Sections 4.01, 4.02,
7.01 and 7.03 through 7.12 shall survive until no Note remains outstanding).
The rights, obligations and immunities of the Trustee hereunder shall survive
any discharge pursuant to this Section 12.01, and Section 7.07 shall survive
the termination of this Indenture. The Trustee, on written demand of the
Company accompanied by the aforementioned Officers’ Certificate and an Opinion
of Counsel shall, at the cost and expense of the Company, execute proper
instruments acknowledging the satisfaction and discharge of this Indenture; the
Company, however, hereby agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Notes.

               Section 12.02. Deposited Monies to Be Held in Trust by Trustee. Subject
to Section 12.04, all monies deposited with the Trustee pursuant to Section
12.01, shall be held in trust for the sole benefit of the Noteholders, and such
monies shall be applied by the Trustee to the payment, either directly or
through any paying agent (including the Company if acting as the paying agent),
to the holders of the particular Notes for the payment or redemption of which
such monies have been deposited with the Trustee, of all sums due and to become
due thereon for principal, premium, if any, and interest.

               Section 12.03. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of
the Notes (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall
be released from all further liability with respect to such monies.

               Section 12.04. Return of Unclaimed Monies. Subject to the requirements of
applicable law and this Indenture, any monies deposited with or paid to the
Trustee for payment of the principal of, or premium, if any, or interest on,
Notes and not applied but remaining unclaimed by the holders of Notes for two
years after the date upon which the principal of, or premium, if any, or
interest on, such Notes, as the case may be, shall have become due and payable,
shall be repaid to the Company by the Trustee on demand and all liability of
the Trustee shall thereupon cease with respect to such monies; and the holder
of any of the Notes shall thereafter look only to the Company for any payment
that such holder may be entitled to collect unless an applicable abandoned
property law designates another Person.

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               Section 12.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 12.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company’s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 12.01 until such time as the Trustee or the
paying agent is permitted to apply all such money in accordance with Section
12.02; provided that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.

ARTICLE XIII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

     
Section 13.01. Indenture and Notes Solely Corporate Obligations. No
recourse for the payment of the principal of, or premium, if any, or interest
on, any Note, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Notes.

ARTICLE XIV

CONVERSION OF NOTES

               Section 14.01. Right to Convert. (a) Subject to and upon compliance with
the provisions of this Indenture, the holder of any Note shall have the right,
at such holder’s option, to convert the principal amount of the Note, or any
portion of such principal amount which is a multiple of $1,000, into fully paid
and non-assessable shares of Common Stock (as such shares shall then be
constituted) at the Conversion Rate in effect at such time, by surrender of the
Note so to be converted in whole or in part, together with any required funds
under the circumstances described in this Section 14.01, in the manner provided
in Section 14.02. The Notes shall be convertible only upon the occurrence of
one of the following events:

     (i) during any fiscal quarter commencing after December 31, 2003, if
the Closing Sale Price exceeds 110% of the Conversion Price for at least
20 Trading Days in the 30 consecutive Trading Day period ending on the
last Trading Day of the immediately preceding fiscal quarter (it being
understood for purposes of this Section 14.01(a)(i) that the Conversion
Price in effect at the close of business on each of the 30 consecutive
Trading Days should be used and such calculation shall give effect to any
event referred to in Section 14.05 or 14.06 occurring during such 30
Trading Day period);

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     (ii) during each of the five Business Day period immediately after
any five consecutive Trading Day period in which the Trading Price per
$1,000 principal amount of the Notes for each day of such five Trading
Day period was less than 98% of the product of the Closing Sale Price on
the applicable date and the Conversion Rate; provided, however, the Notes
shall not be convertible pursuant to this Section 14.01(a)(ii) after
September 15, 2028 if on any Trading Day during such five Trading Day
period the Closing Sale Price was between 100% and 110% of the then
current Conversion Price (it being understood for purposes of this
Section 14.01(a)(ii) that the Conversion Rate in effect at the close of
business on each of the five consecutive Trading Days should be used and
such calculation shall give effect to any event referred to in Section
14.05 or 14.06 occurring during such five Trading Day period);

     (iii) if such Note has been called for redemption, at any time on or
after the date the notice of redemption has been given until the close of
business on the Business Day immediately preceding the redemption date;
or

     (iv) as provided in Section (b) of this Section 14.01.

               Upon receipt by the Conversion Agent of a demand for conversion from a
Noteholder pursuant to clause (i) of this Section, the Conversion Agent shall
inform the Company of such request and the Company shall thereupon furnish to
the Conversion Agent an Officer’s Certificate stating whether the Notes are
then convertible pursuant to clause (i) of this Section and setting forth in
reasonable detail the Company’s basis for such determination. Upon receipt of
such Officer’s Certificate, if the Company has determined that the Notes are
then convertible in accordance with clause (i) of this Section, the Conversion
Agent shall, based solely on its review of the information contained in such
Officer’s Certificate, confirm or refute the Company’s determination. If the
Conversion Agent shall confirm that the Notes are then convertible pursuant to
clause (i) of this Section, then the Conversion Agent shall promptly deliver
written notice thereof to the Company (and, if the Conversion Agent is other
than the Trustee, to the Trustee). In any event, the Company shall be
obligated at all times to determine whether the Notes shall be convertible as a
result of the occurrence of an event specified in clause (i) of this Section.
Whenever the Notes shall become convertible pursuant to this Section 14.01, the
Company or, at the Company’s request, the Trustee in the name and at the
expense of the Company, shall notify the holders of the event triggering such
convertibility in the manner provided in Section 15.03, and the Company shall
also publicly announce such information and publish it on the Company’s web
site. Any notice so given shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.

               The Trustee (or other Conversion Agent appointed by the Company) shall
have no obligation to determine the Trading Price under clause (ii) of this
Section 14.01 unless the Company has requested such a determination; and the
Company shall have no obligation to make such request unless a holder provides
it with reasonable evidence that the Trading Price per $1,000 principal amount
of Notes would be less than 98% of the product of the Closing Sale Price and
the Conversion Rate. If such evidence is provided, the Company shall request
that the Trustee (or other Conversion Agent) determine the Trading Price of the
Notes beginning on the next Trading Day and on each successive Trading Day
until the Trading Price per $1,000

55

 

principal amount of Notes is greater than or equal to 98% of the product
of the Closing Sale Price and the Conversion Rate.

     (b) In addition, if:

     (i) (A) the Company distributes to all holders of its Common Stock
rights or warrants entitling them (for a period expiring within 45 days
of the record date for the determination of the stockholders entitled to
receive such distribution) to subscribe for or purchase shares of Common
Stock, at a price per share less than the average of the Closing Sale
Price for the ten Trading Days immediately preceding, but not including,
the date such distribution is first publicly announced by the Company, or

     (B) the Company distributes to all holders of its Common Stock,
assets (including cash), debt securities or rights to purchase its
securities, where the Fair Market Value of such distribution per share of
Common Stock exceeds 5% of the Closing Sale Price on the Trading Day
immediately preceding the date such distribution is first publicly
announced by the Company,

then, in either case, the Notes may be surrendered for conversion at any
time on and after the date that the Company gives notice to the holders
of such distribution, which shall be not less than 20 days prior to the
Ex-Dividend Time for such distribution, until the earlier of the close of
business on the Business Day immediately preceding, but not including,
the Ex-Dividend Time or the date the Company publicly announces that such
distribution will not take place; provided that no adjustment to the
Conversion Rate or the ability of a holder of a Note to convert will be
made if the holder will otherwise participate in such distribution
without conversion; or

     (ii) the Company consolidates with, or merges with or into, another
Person or is a party to a binding share exchange or conveys, transfers,
sells, leases or otherwise disposes of all or substantially all of its
properties and assets, in each case, pursuant to which the Common Stock
would be converted into cash, securities or other property, then the
Notes may be surrendered for conversion at any time from and after the
date fifteen (15) days prior to the anticipated effective date of the
transaction and ending on and including the date fifteen (15) days after
the consummation of the transaction. The Board of Directors shall
determine the anticipated effective date of the transaction, and such
determination shall be conclusive and binding on the holders and shall be
publicly announced by the Company and posted on its web site not later
than two Business Day prior to such 15th day.

               “Ex-Dividend Time” means, with respect to any distribution on shares of
Common Stock, the first date on which the Common Stock trades, regular way, on
the principal securities market on which the Common Stock are then traded
without the right to receive such distribution.

               (c) A Note in respect of which a holder is electing to exercise its option
to require redemption upon a Designated Event pursuant to Section 3.05(a) or
repurchase pursuant to Section 3.06 may be converted only if such holder
withdraws its election in accordance with

56

 

Section 3.05(b) or Section 3.08, respectively. A holder of Notes is not
entitled to any rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article 14.

               Section 14.02. Conversion Procedures. To convert a Note, a holder must
(a) complete and manually sign the Conversion Notice or a facsimile of the
Conversion Notice (a “Conversion Notice”) in the form set forth on the reverse
of the Note and deliver such notice to the Conversion Agent, (b) surrender the
Note to the Conversion Agent, (c) furnish appropriate endorsements and transfer
documents if required by the Registrar or the Conversion Agent, (d) pay any
transfer or similar tax, if required and (e) if required, pay funds equal to
the interest payable on the next interest payment date. The date, within the
time periods set forth in Section 14.01, on which the holder satisfies all of
those requirements is the “Conversion Date.” Except as provided in Section
14.05(j), the Company shall deliver to the holder through the Conversion Agent,
no later than the third Business Day following the Conversion Date, a
certificate for the number of whole shares of Common Stock issuable upon the
conversion and, if applicable, cash in lieu of any fractional shares pursuant
to Section 14.03.

               In the case of a Global Note, the Conversion Notice shall be completed by
a Depositary participant on behalf of the beneficial holder. Conversion
Notices may be delivered and such Notes may be surrendered for conversion in
accordance with the applicable procedures of the Depositary as in effect from
time to time. In order to cause a Depositary participant to complete a
Conversion Notice, a beneficial holder must complete, or cause to be completed,
the appropriate instruction form for conversion pursuant to the Depositary’s
book-entry conversion program. The Person in whose name the Common Stock
certificate is registered shall be deemed to be a shareholder of record at the
close of business on the applicable Conversion Date; provided, however, that if
any such date is a date when the stock transfer books of the Company are
closed, such Person shall be deemed a shareholder of record as of the next date
on which the stock transfer books of the Company are open.

               No payment or adjustment shall be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article 14. On conversion of a Note, except for conversion during the period
from the close of business on any record date immediately preceding any
interest payment date to the close of business on the Business Day immediately
preceding such interest payment date, in which case the holder on such record
date shall receive the interest payable on such interest payment date, that
portion of accrued and unpaid interest on the converted Note attributable to
the period from the most recent interest payment date (or, if no interest
payment date has occurred, from the date of original issuance of the Notes)
through the Conversion Date shall not be cancelled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the holder thereof through
delivery of the Common Stock (together with the cash payment, if any, in lieu
of fractional shares) in exchange for the Note being converted pursuant to the
provisions hereof, and the Fair Market Value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as issued, to the extent thereof, first in exchange for accrued and
unpaid interest accrued through the Conversion Date and the balance, if any, of
such Fair Market Value of such Common Stock (and any such cash payment) shall
be treated as issued in exchange for the principal amount of the Note being
converted pursuant to the provisions hereof.

57

 

               If a holder converts more than one Note at the same time, the number of
shares of Common Stock issuable upon the conversion shall be based on the
aggregate principal amount of Notes converted.

               Upon surrender of a Note that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the holder, a new
Note equal in principal amount to the principal amount of the unconverted
portion of the Note surrendered.

               Notes or portions thereof surrendered for conversion during the period
from the close of business on any record date immediately preceding any
interest payment date to the close of business on the Business Day immediately
preceding such interest payment date shall be accompanied by payment to the
Company or its order, in immediately available funds or other funds acceptable
to the Company, of an amount equal to the interest payable on such interest
payment date with respect to the principal amount of Notes or portions thereof
being surrendered for conversion; provided that no such payment need be made if
(1) the Company has specified a redemption date that occurs during the period
from the close of business on a record date to the close of business on the
Business Day immediately preceding the interest payment date to which such
record date relates, (2) the Company has specified a Designated Event
Redemption Date during such period or (3) any overdue interest exists on the
Conversion Date with respect to the Notes converted, but only to the extent of
overdue interest.

               Section 14.03. Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip certificates representing fractional shares
shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the Company shall
make an adjustment and payment therefor in cash at the current market price
thereof to the holder of Notes. For purposes of this Section 14.03, the
“current market price” of a share of Common Stock shall be the Closing Sale
Price on the last Business Day immediately preceding the day on which the Notes
(or specified portions thereof) are deemed to have been converted.

               Section 14.04. Conversion Rate. Each $1,000 principal amount of the Notes
shall be convertible into the number of shares of Common Stock specified in the
form of Note (herein called the “Conversion Rate”) attached as Exhibit A
hereto, subject to adjustment as provided in this Article 14.

               Section 14.05. Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:

     (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect at the opening of business on the date following the date fixed
for the determination of stockholders entitled to receive such dividend
or other distribution by a fraction,

58

 

          (i) the numerator of which shall be the sum of the number of
shares of Common Stock outstanding at the close of business on the
date fixed for the determination of stockholders entitled to
receive such dividend or other distribution plus the total number
of shares of Common Stock constituting such dividend or other
distribution; and

          (ii) the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed
for such determination,

such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. If
any dividend or distribution of the type described in this Section
14.05(a) is declared but 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.

     (b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a
period expiring within forty-five (45) days after the date fixed for
determination of stockholders entitled to receive such rights or
warrants) to subscribe for or purchase shares of Common Stock at a price
per share less than the Average Market Price on the date such issuance is
first publicly announced by the Company, the Conversion Rate shall be
increased so that the same shall equal the rate determined by multiplying
the Conversion Rate in effect immediately prior to the date fixed for
determination of stockholders entitled to receive such rights or warrants
by a fraction,

          (i) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed
for determination of stockholders entitled to receive such rights
or warrants plus the total number of additional shares of Common
Stock offered for subscription or purchase, and

          (ii) the denominator of which shall be the sum of the number
of shares of Common Stock outstanding at the close of business on
the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the number of shares that the
aggregate offering price of the total number of shares so offered
would purchase at such Average Market Price.

     Such adjustment shall be successively made whenever any such rights
or warrants are issued, and shall become effective immediately after the
opening of business on the day following the date fixed for 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 that would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually delivered.
If such rights or warrants are not so issued, the Conversion Rate shall
again be adjusted to be the Conversion Rate that would then be in effect
if such issuance had not been so declared or made. In determining
whether any

59

 

rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Average 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 and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than cash,
to be determined by the Board of Directors.

     (c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased,
and conversely, in case outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the Conversion
Rate in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.

     (d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock
of the Company or evidences of its indebtedness or assets (including cash
and securities, but excluding any rights or warrants referred to in
Section 14.05(b), and excluding any dividend or distribution referred to
in Section 14.05(a) (any of the foregoing hereinafter in this Section
14.05(d)) called the “Distribution”)), then, in each such case (unless
the Company elects to reserve such Distribution for distribution to the
Noteholders upon the conversion of the Notes so that any such holder
converting Notes will receive upon such conversion, in addition to the
shares of Common Stock to which such holder is entitled, the amount and
kind of such Distribution which such holder would have received if such
holder had converted its Notes into Common Stock immediately prior to the
Record Date), the Conversion Rate shall be increased so that the same
shall be equal to the rate determined by multiplying the Conversion Rate
in effect at the close of business on the Record Date with respect to
such distribution by a fraction,

          (i) the numerator of which shall be the Average Market Price
on such Record Date, and

          (ii) the denominator of which shall be the Average Market
Price on such Record Date less (A) in the case of Distributions
other than cash, the Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record
Date of the portion of such Distributions applicable to one share
of Common Stock and (B) in the case of Distributions of cash, the
amount of such Distributions applicable to one share of Common
Stock,

such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that if the then
Fair Market Value (as so determined) of the portion of the Distribution
so distributed applicable to one share of

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Common Stock is equal to or greater than the Average Market Price on the
Record Date, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Noteholder shall have the right to receive
upon conversion the amount of Distribution such holder would have
received had such holder converted each Note on the Record Date. A holder
who converts a Note pursuant to Section 14.01(b) shall not be entitled to
any adjustment to the Conversion Rate with respect to such Note so
converted. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that
would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the Fair Market Value of
any distribution for purposes of this Section 14.05(d) by reference to
the actual or when issued trading market for any securities, it must in
doing so consider the prices in such market over the same period used in
computing the Average Market Price on the applicable Record Date.
Notwithstanding the foregoing, if the Distribution distributed by the
Company to all holders of its Common Stock consists of capital stock of,
or similar equity interests in, a Subsidiary or other business unit, the
Conversion Rate shall be increased so that the same shall be equal to the
rate determined by multiplying the Conversion Rate in effect on the
Record Date with respect to such distribution by a fraction:

          (i) the numerator of which shall be the sum of (x) the average
Closing Sale Price over the ten consecutive Trading Day period (the
“Spinoff Valuation Period”) commencing on and including the fifth
Trading Day after the date on which “ex-dividend trading” commences
on the Common Stock on the Nasdaq National Market System or such
other national or regional exchange or market on which the Common
Stock is then listed or quoted and (y) the average Fair Market
Value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of
Directors) over the Spinoff Valuation Period of the portion of the
Distribution so distributed applicable to one share of Common
Stock; and

          (ii) the denominator of which shall be the average Closing
Sale Price over the Spinoff Valuation Period,

such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that the Company
may in lieu of the foregoing adjustment make adequate provision so that
each Noteholder shall have the right to receive upon conversion the
amount of Distribution such holder would have received had such holder
converted each Note on the Record Date with respect to such distribution.

     Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company’s capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable;
and (iii) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this Section
14.05 (and no adjustment to the Conversion Rate under this Section 14.05
will be required) until the occurrence of the earliest Trigger

61

 

Event, whereupon such rights and warrants shall be deemed to have
been distributed and an appropriate adjustment (if any is required) to
the Conversion Rate shall be made under this Section 14.05(d). If any
such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events,
upon the occurrence of which such rights or warrants become exercisable
to purchase different securities, evidences of indebtedness or other
assets, then the date of the occurrence of any and each such event shall
be deemed to be the date of distribution and record date with respect to
new rights or warrants with such rights (and a termination or expiration
of the existing rights or warrants without exercise by any of the holders
thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto
that was counted for purposes of calculating a distribution amount for
which an adjustment to the Conversion Rate under this Section 14.05 was
made, (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of
Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of
Common Stock as of the date of such redemption or repurchase, and (2) in
the case of such rights or warrants that shall have expired or been
terminated without exercise by any holders thereof, the Conversion Rate
shall be readjusted as if such rights and warrants had not been issued.

     No adjustment of the Conversion Rate shall be made pursuant to this
Section 14.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or
warrants are actually distributed, or reserved by the Company for
distribution to holders of Notes upon conversion by such holders of Notes
to Common Stock.

     For purposes of this Section 14.05(d) and Section 14.05(a) and (b),
any dividend or distribution to which this Section 14.05(d) is applicable
that also includes shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock (or both), shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets or shares of capital stock other than such shares of
Common Stock or rights or warrants (and any Conversion Rate adjustment
required by this Section 14.05(d) with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend
or distribution of such shares of Common Stock or such rights or warrants
(and any further Conversion Rate adjustment required by Sections 14.05(a)
and (b) with respect to such dividend or distribution shall then be
made), except

          (A) the Record Date of such dividend or distribution shall be
substituted as “the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution”, “the date fixed for the determination of
stockholders entitled to receive such rights or warrants” and “the
date fixed for such determination” within the meaning of Section
14.05(a) and (b) and

62

 

          (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed “outstanding at the close of
business on the date fixed for such determination” within the
meaning of Section 14.05(a).

     (e) (A) In case a tender or exchange offer made by the Company or
any Subsidiary for all or any portion of the Common Stock (excluding any
transactions solely involving odd lots of shares of Common Stock) shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per
share of Common Stock having a Fair Market Value (as determined by the
Board of Directors, whose determination shall be conclusive and described
in a resolution of the Board of Directors) that as of the last time (the
“Expiration Time”) tenders or exchanges may be made pursuant to such
tender or exchange offer (as it may be amended) exceeds the Closing Sale
Price on the Trading Day next succeeding the Expiration Time, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior
to the Expiration Time by a fraction,

          (i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted
up to any such maximum, being referred to as the “Purchased
Shares”) and (y) the product of the number of shares of Common
Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Closing Sale Price on the Trading Day next succeeding
the Expiration Time, and

          (ii) the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged
shares (including Purchased Shares)) at the Expiration Time
multiplied by the Closing Sale Price on the Trading Day next
succeeding the Expiration Time,

such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is
obligated to purchase shares pursuant to any such tender or exchange
offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate that
would then be in effect if such tender or exchange offer had not been
made.

     (B) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount that increases the
offeror’s ownership of Common Stock to more than 25% of the Common Stock
outstanding and shall involve the payment by such Person of consideration
per share of Common Stock having a Fair Market Value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) that as of the last
time (the “Offer Expiration Time”) tenders or exchanges may be made
pursuant to such tender or exchange offer (as it shall have been amended)
exceeds the Closing Sale Price

63

 

of a share of Common Stock on the Trading Day next succeeding the
Offer Expiration Time, and in which, as of the Offer Expiration Time, the
Board of Directors is not recommending rejection of the offer, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior
to the Offer Expiration Time by a fraction,

          (i) the numerator of which shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate
consideration payable to the stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not
withdrawn as of the Offer Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the
“Accepted Purchased Shares”) and (y) the product of the number of
shares of Common Stock outstanding (less any Accepted Purchased
Shares) at the Offer Expiration Time and the Closing Sale Price on
the Trading Day next succeeding the Offer Expiration Time, and

          (ii) the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged
shares (including Accepted Purchased Shares)) at the Offer
Expiration Time multiplied by the Closing Sale Price on the Trading
Day next succeeding the Offer Expiration Time,

such adjustment to become effective immediately prior to the opening of
business on the day following the Offer Expiration Time. If such Person
is obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate that
would then be in effect if such tender or exchange offer had not been
made. Notwithstanding the foregoing, the adjustment described in this
Section 14.05(e)(B) shall not be made if, as of the Offer Expiration
Time, the offering documents with respect to such offer disclose a plan
or intention to cause the Company to engage in any transaction described
in Article 11 or a binding share exchange.

     (f) For purposes of this Section 14.05, the following terms shall
have the meaning indicated:

          (1) “Average Market Price”, as of any date of determination,
shall mean the average of the daily Closing Sale Prices for the ten
consecutive Trading Days immediately preceding (A) in the case of a
determination pursuant to Section 14.05(b), the date such issuance
or distribution is publicly announced and (B) otherwise, the
earlier of such date of determination and the day before the “ex”
date with respect to the issuance, distribution, subdivision or
combination requiring such computation immediately prior to the
date in question. For purpose of this paragraph, the term “ex”
date, (1) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades, regular way,
on the relevant exchange or in the relevant market from which the
Closing Sale Price was obtained without the right to receive such
issuance or

64

 

distribution, and (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades, regular way, on such
exchange or in such market after the time at which such subdivision
or combination becomes effective.

          If another issuance, distribution, subdivision or combination
to which Section 14.05 applies occurs during the period applicable
for calculating “Average Market Price” pursuant to the definition
in the preceding paragraph, “Average Market Price” shall be
calculated for such period in a manner determined by the Board of
Directors to reflect the impact of such issuance, distribution,
subdivision or combination on the Closing Sale Price during such
period.

          (2) “Fair Market Value” shall mean the amount that a willing
buyer would pay a willing seller in an arm’s-length transaction.

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

     (g) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 14.05(a), (b), (c), (d) or (e) as
the Board of Directors considers to be advisable to avoid or diminish any
income tax to any 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 from time to
time may increase the Conversion Rate by any amount for any period of
time if the period is at least twenty (20) days, the increase is
irrevocable during the period and the Board of Directors shall have made
a determination that such increase would be in the best interests of the
Company, which determination shall be conclusive. Whenever the
Conversion Rate is increased pursuant to the preceding sentence, the
Company shall mail to holders of record of the Notes a notice of the
increase at least fifteen (15) days prior to the date the increased
Conversion Rate takes effect, and such notice shall state the increased
Conversion Rate and the period during which it will be in effect.

     (h) No adjustment in the Conversion Rate shall be required unless
such adjustment would require an increase or decrease of at least one
percent (1%) in such rate; provided that any adjustments that by reason
of this Section 14.05(h) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article 14 shall be made by the Company and

65

 

shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be. No adjustment need
be made for rights to purchase Common Stock pursuant to a Company plan
for reinvestment of dividends or interest or for any issuance of Common
Stock or convertible or exchangeable securities or rights to purchase
Common Stock or convertible or exchangeable securities.

     (i) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent
other than the Trustee an Officers’ Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief statement
of the facts requiring such adjustment. Unless and until a Responsible
Officer of the Trustee shall have received such Officers’ Certificate,
the Trustee shall not be deemed to have knowledge of any adjustment of
the Conversion Rate and may assume that the last Conversion Rate of which
it has knowledge is still in effect. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Rate setting forth the adjusted Conversion Rate and the date
on which each adjustment becomes effective and shall mail such notice of
such adjustment of the Conversion Rate to the holder of each Note at his
last address appearing on the Note register provided for in Section 2.05
of this Indenture, within twenty (20) days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity
of any such adjustment.

     (j) In any case in which this Section 14.05 provides that an
adjustment shall become effective immediately after (1) a record date or
Record Date for an event (including without limitation, any event
described in Section 14.05(d)), (2) the date fixed for the determination
of stockholders entitled to receive a dividend or distribution pursuant
to Section 14.05(a), (3) a date fixed for the determination of
stockholders entitled to receive rights or warrants pursuant to Section
14.05(b), or (4) the Expiration Time for any tender or exchange offer
pursuant to Section 14.05(e), (each a “Determination Date”), the Company
may elect to defer until the occurrence of the applicable Adjustment
Event (as hereinafter defined) (x) issuing to the holder of any Note
converted after such Determination Date and before the occurrence of such
Adjustment Event, the additional shares of Common Stock or other
securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and
(y) paying to such holder any amount in cash in lieu of any fraction
pursuant to Section 14.03. For purposes of this Section 14.05(j), the
term “Adjustment Event” shall mean:

          (i) in any case referred to in clause (1) hereof, the
occurrence of such event,

          (ii) in any case referred to in clause (2) hereof, the date
any such dividend or distribution is paid or made,

          (iii) in any case referred to in clause (3) hereof, the date
of expiration of such rights or warrants, and

66

 

          (iv) in any case referred to in clause (4) hereof, the date a
sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.

     (k) For purposes of this Section 14.05, 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 will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.

               Section 14.06. Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 14.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, (iii) the Company is a party to a binding share exchange, or (iv)
any sale or conveyance of all or substantially all of the properties and assets
of the Company to any other Person as a result of which holders of Common Stock
shall be entitled to receive stock, other securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing Person, as the case may be,
shall execute with the Trustee a supplemental indenture providing that each
Note shall be convertible into the kind and amount of shares of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, binding share
exchange, sale or conveyance by a holder of a number of shares of Common Stock
issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock are available to convert
all such Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, binding share exchange, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election,
if any, as to the kind or amount of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, binding share exchange, sale or conveyance
(provided that, if the kind or amount of stock, other securities or other
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, binding share exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised (“nonelecting share”),
then for the purposes of this Section 14.06 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, binding share
exchange, sale or conveyance for each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality of the non-electing
shares). Such supplemental indenture shall provide for adjustments, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 14.

               The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.05 of this Indenture, within twenty
(20) days after execution thereof. Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.

67

 

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

               Interest will not accrue on any cash into which the Notes are convertible.

               If this Section 14.06 applies to any event or occurrence, Section 14.05
shall not apply.

               Section 14.07. Taxes on Shares Issued. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any documentary, stamp or similar issue or transfer tax in respect of the
issue thereof. The Company shall not, however, be required to pay any such tax
which may be payable in respect of any transfer involved in the issue and
delivery of stock in any name other than that of the holder of any Note
converted, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the Person or Persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

               Section 14.08. Reservation of Shares, Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock. The Company shall
provide, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock to provide for
the conversion of the Notes from time to time as such Notes are presented for
conversion.

               Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Rate.

               The Company covenants that all shares of Common Stock which may be issued
upon conversion of Notes will upon issue be fully paid and non-assessable by
the Company and free from all taxes, liens and charges with respect to the
issue by the Company thereof.

               The Company covenants that, if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the Commission (or any successor thereto),
endeavor to secure such registration or approval, as the case may be.

               The Company further covenants that, if at any time the Common Stock shall
be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Note;
provided that if the rules of such exchange or automated quotation system
permit the

68

 

Company to defer the listing of such Common Stock until the first
conversion of the Notes into Common Stock in accordance with the provisions of
this Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.

               Section 14.09. Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Rate or 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. 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
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other Conversion Agent make no
representations with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article 14. 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 14.06 relating either
to the kind or amount of shares of stock or securities or property (including
cash) receivable by Noteholders upon the conversion of their Notes after any
event referred to in such Section 14.06 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 7.01, 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.

               Section 14.10. Notice to Holders Prior to Certain Actions. In case:

     (a) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Conversion
Rate pursuant to Section 15.05; or

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

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

69

 

     (d) 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 of Notes at his address appearing on the Note register provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, 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 are to be determined, or (y)
the date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or
occur, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, authorization, grant, reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

               Section 14.11. Rights Issued in Respect of Common Stock Issued upon
Conversion. Each share of Common Stock issued upon conversion of Notes
pursuant to this Article 14 shall be entitled to receive the appropriate number
of common stock or preferred stock purchase rights, as the case may be (the
“Rights”), if any, that shares of Common Stock are entitled to receive and the
certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company, as the same may be amended
from time to time (in each case, a “Rights Agreement”). Provided that such
Rights Agreement requires that each share of Common Stock issued upon
conversion of Notes at any time prior to the distribution of separate
certificates representing the Rights be entitled to receive such Rights, then,
notwithstanding anything else to the contrary in this Article 14 there shall
not be any adjustment to the conversion privilege or Conversion Rate as a
result of the issuance of Rights, but an adjustment to the Conversion Rate
shall be made with respect to Notes then outstanding pursuant to Section
14.05(d) (to the extent required thereby) upon the separation of the Rights
from the Common Stock.

ARTICLE XV

MISCELLANEOUS PROVISIONS

               Section 15.01. Provisions Binding on Company’s Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.

               Section 15.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of
the Company.

70

 

               Section 15.03. Addresses for Notices, Etc. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post
office letter box addressed (until another address is filed by the Company with
the Trustee) to NII Holdings, Inc., 10700 Parkridge Boulevard, Suite 600,
Reston, Virginia 20191, Attention: General Counsel. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited, postage prepaid, by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office.

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

               Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.

               Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.

               Section 15.04. Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York without reference to its principles of conflict of laws.

               Section 15.05. Evidence of Compliance with Conditions Precedent,
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers’ Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with.

               Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include: (1) a statement that the person making
such certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

               Section 15.06. Legal Holidays. In any case in which the date of maturity
of interest on or principal of the Notes or the redemption date or Repurchase
Date of any Note will not be a Business Day, then payment of such interest on
or principal of the Notes need not be

71

 

made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the date of maturity or the
redemption date or Repurchase Date, and no interest shall accrue for the period
from and after such date.

               Section 15.07. Trust Indenture Act. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Notes issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; provided further that this Section 15.07 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the
time such qualification is in fact required under the terms of the Trust
Indenture Act. If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in an indenture
qualified under the Trust Indenture Act, such required provision shall control.

               Section 15.08. No Security Interest Created. Nothing in this Indenture or
in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction in which property of the
Company or its subsidiaries is located.

               Section 15.09. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, Conversion Agent, any Note
registrar and their successors hereunder and the holders of Notes any benefit
or any legal or equitable right, remedy or claim under this Indenture.

               Section 15.10. Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a
part hereof, and shall in no way modify or restrict any of the terms or
provisions hereof.

               Section 15.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection
with the original issuance thereof and transfers and exchanges of Notes
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as
fully to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Notes. For all purposes of this Indenture, the authentication and
delivery of Notes by the authenticating agent shall be deemed to be
authentication and delivery of such Notes “by the Trustee” and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent
shall be deemed to satisfy any requirement hereunder or in the Notes for the
Trustee’s certificate of authentication. Such authenticating agent shall at
all times be a Person eligible to serve as trustee hereunder pursuant to
Section 7.09.

72

 

               Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 15.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

               Any authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or
itself assume the duties and obligations of the former authenticating agent
under this Indenture and, upon such appointment of a successor authenticating
agent, if made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment
of a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.

               The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in
writing between the Company and the authenticating agent.

               The provisions of Sections 7.03, 7.04, 7.05, 8.03 and this Section 15.11
shall be applicable to any authenticating agent.

               Section 15.12. Execution in Counterparts. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

               Section 15.13. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

               Wilmington Trust Company hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.

73

 

               IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

	 	NII HOLDINGS, INC., as Issuer

	 	 

	 	By:	/s/ Robert J. Gilker
	 	 	

	 	 	 Name:

      Title:  

	 	 

	 	WILMINGTON TRUST COMPANY, as

   Trustee

	 	 

	 	By:	/s/ Michael W. Diaz
	 	 	

	 	 	 Name: Michael W. Diaz

      Title: Authorized Signer 

74

 

EXHIBIT A

[Include only for Global Notes:]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
“DEPOSITARY”, WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE
CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), 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.]

[Include only for Notes that are Restricted Securities]

[THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE EXCEPT (A) TO NII HOLDINGS, INC. OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3)
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(D) ABOVE),
IT WILL FURNISH TO WILMINGTON TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON
THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (2)(D) ABOVE OR
UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION). THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING RESTRICTION.]

A-1

 

NII HOLDINGS, INC.

3 1/2% CONVERTIBLE SENIOR NOTE DUE 2033

CUSIP: [__________]

	 	 	 
	No.	 	
$__________

               NII HOLDINGS, INC., a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the “Company”, which
term includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to
_______________
or its registered assigns, [the principal sum of
________________ DOLLARS] [the principal sum set forth on Schedule I
hereto]1 on September 15, 2033 at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest, semiannually on March 15 and September 15 of each year, commencing
March 15, 2004, on said principal sum at said office or agency, in like coin or
currency, at the rate per annum of 3 1/2%, from the March 15 or September 15,
as the case may be, next preceding the date of this Note to which interest has
been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of
this Note, or unless no interest has been paid or duly provided for on the
Notes, in which case from September 16, 2003 until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if the
date hereof is after any March 1 or September 1, as the case may be, and before
the following March 15 or September 15, this Note shall bear interest from such
March 15 or September 15; provided that if the Company shall default in the
payment of interest due on such March 15 or September 15, then this Note shall
bear interest from the next preceding March 15 or September 15 to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on such Note, from September 16, 2003. Except as otherwise
provided in the Indenture, the interest payable on the Note pursuant to the
Indenture on any March 15 or September 15 will be paid to the Person entitled
thereto as it appears in the Note register at the close of business on the
record date, which shall be the March 1 or September 1 (whether or not a
Business Day) next preceding such March 15 or September 15, as provided in the
Indenture; provided that any such interest not punctually paid or duly provided
for shall be payable as provided in the Indenture. Interest may, at the
option of the Company, be paid either (i) by check mailed to the registered
address of such Person (provided that the holder of Notes with an aggregate
principal amount in excess of $2,000,000 shall, at the written election (timely
made and containing appropriate wire transfer information) of such holder, be
paid by wire transfer of immediately available funds) or (ii) by transfer to an
account maintained by such Person located in the United States; provided that
payments to the Depositary will be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.

	

	1 For Global Notes only.

A-2

 

               The Company promises to pay interest on overdue principal and premium, if
any, (to the extent that payment of such interest is enforceable under
applicable law) at the rate of 4 1/2%, per annum.

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

               This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York without reference to its
principles of conflict of laws.

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

A-3

 

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

	 	NII HOLDINGS, INC.

	 	By:                                             

     Attest:

     By:                                             

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

WILMINGTON TRUST COMPANY, as Trustee

By:                                             

Authorized Officer

Dated:

A-4

 

FORM OF REVERSE OF NOTE

NII HOLDINGS, INC.

3 1/2% CONVERTIBLE SENIOR NOTE DUE 2033

               This Note is one of a duly authorized issue of Notes of the Company,
designated as its 3
1/2% Convertible Notes Due 2033 (herein called the
“Notes”), limited in aggregate principal amount to $150,000,000, issued and to
be issued under and pursuant to an Indenture dated as of September 16, 2003
(herein called the “Indenture”), between the Company and Wilmington Trust
Company, as trustee (herein called the “Trustee”), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Notes.

               In case an Event of Default shall have occurred and be continuing, the
principal of, and premium, if any, and accrued interest on, all Notes may be
declared by either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding, and upon said declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

               The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of at least a majority in aggregate principal
amount of the Notes at the time outstanding, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in
any manner the rights of the holders of the Notes; provided that no such
supplemental indenture shall (i) change the fixed maturity of any Note, or
reduce the rate or change the time of payment of interest thereon, or reduce
the principal amount thereof or premium, if any, thereon or reduce any amount
payable on redemption or repurchase thereof, or impair the right of any
Noteholder to institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any coin or currency
or payable at any place other than that provided in the Indenture or the Notes,
or change the obligation of the Company to redeem any Note on a redemption date
in a manner adverse to the holders of Notes, or change the obligation of the
Company to redeem any Note upon the happening of a Designated Event in a manner
adverse to the holders of Notes, or change the obligation of the Company to
repurchase any Note on a Repurchase Date in a manner adverse to the holders of
Notes, or reduce the Conversion Rate otherwise than in accordance with the
terms of the Indenture or otherwise impair the right to convert the Notes into
Common Stock subject to the terms set forth herein, including Section 14.06,
thereof or reduce the quorum or the voting requirements under the Indenture, or
modify any of the provisions of Section 10.02 or Section 6.07, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the holder
of each Note so affected, or change any obligation of the Company to maintain
an office or agency in the places and for the purposes set forth in Section
4.01 thereof, in each case, without the consent of the holder of each Note so
affected, or (ii) reduce the aforesaid percentage of Notes, the holders of
which are required to consent to any such supplemental indenture or to waive
any past Event of Default, without the consent of the holders of each Notes
affected thereby. Subject to the

A-5

 

provisions of the Indenture, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
holders of all of the Notes waive any past default or Event of Default under
the Indenture and its consequences except a default in the payment of interest,
or any premium on or the principal of, any of the Notes, or a failure by the
Company to convert any Notes into Common Stock of the Company, or a default in
the payment of the redemption price, or a default in the payment of the
repurchase price on a Repurchase Date, or a default in respect of a covenant or
provisions of the Indenture which under Article 10 of the Indenture cannot be
modified or amended without the consent of the holders of each or all Notes
then outstanding or affected thereby. Any such consent or waiver by the holder
of this Note (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes.

               No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and any premium and
interest on, this Note at the place, at the respective times, at the rate and
in the coin or currency herein prescribed.

               Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.

               The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without
payment of any service charge but with payment of a sum sufficient to cover any
tax, assessment or other governmental charge that may be imposed in connection
with any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.

               At any time on or after September 20, 2008, the Notes may be redeemed at
the option of the Company, in whole or in part, upon mailing a notice of such
redemption not less than 30 days but not more than 60 days before the
redemption date to the holders of Notes at their last registered addresses, all
as provided in the Indenture, at the following prices expressed as a percentage
of the principal amount of the Notes to be redeemed, together with accrued and
unpaid interest, if any, to, but excluding the date fixed for redemption;
provided that if the redemption date is on a March 15 or September 15, then the
interest payable on such date shall be paid to the holder of record on the
preceding March 1 or September 1, respectively:

	 	 	 	 	 
	Redemption Period	 	Price
	 
	 	 	 	 
	Beginning on September 20, 2008 and ending on September 14, 2009
	 	 	101.000	%
	 
	 	 	 	 
	Beginning on September 15, 2009 and ending on September 14, 2010
	 	 	100.500	%
	 
	 	 	 	 
	Beginning on September 15, 2010 and thereafter
	 	 	100.000	%

A-6

 

               The Company may not give notice of any redemption of the Notes if a
default in the payment of interest or premium, if any, on the Notes has
occurred and is continuing.

               The Notes are not subject to redemption through the operation of any
sinking fund.

               If a Designated Event occurs at any time prior to maturity of the Notes,
this Note will be redeemable on a Designated Event Redemption Date, 30 days
after notice thereof, at the option of the holder of this Note at a redemption
price equal to 100% of the principal amount thereof, together with accrued
interest to (but excluding) the redemption date; provided that if such
Designated Event Redemption Date is a March 15 or September 15, the interest
payable on such date shall be paid to the holder of record of this Note on the
preceding March 1 or September 1, respectively. The Notes will be redeemable
in multiples of $1,000 principal amount. The Company shall mail to all holders
of record of the Notes a notice of the occurrence of a Designated Event and of
the redemption right arising as a result thereof on or before the 10th day
after the occurrence of such Designated Event. For a Note to be so redeemed at
the option of the holder, the Company must receive at the office or agency of
the Company maintained for that purpose in accordance with the terms of the
Indenture, such Note with the form entitled “Option to Elect Repayment Upon a
Designated Event” on the reverse thereof duly completed, together with such
Note, duly endorsed for transfer, on or before the 30th day after the date of
such notice of a Designated Event (or if such 30th day is not a Business Day,
the immediately succeeding Business Day).

               Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the holder, all or any portion
of the Notes held by such holder on September 15, 2010, September 15, 2013,
September 15, 2018, September 15, 2023 and September 15, 2028, in whole
multiples of $1,000 at a purchase price of 100% of the principal amount, plus
any accrued and unpaid interest, on such Note up to the Repurchase Date. To
exercise such right, a holder shall deliver to the Company such Note with the
form entitled “Repurchase Notice” on the reverse thereof duly completed,
together with the Note, duly endorsed for transfer, at any time from the
opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on the Repurchase Date, and shall
deliver the Notes to the Trustee (or other paying agent appointed by the
Company) as set forth in the Indenture.

               Holders have the right to withdraw any Repurchase Notice by delivering to
the Trustee (or other paying agent appointed by the Company) a written notice
of withdrawal up to the close of business on the Repurchase Date, all as
provided in the Indenture.

               If cash sufficient to pay the purchase price of all Notes or portions
thereof to be purchased as of the Repurchase Date is deposited with the Trustee
(or other paying agent appointed by the Company), on the Business Day following
the Repurchase Date, interest will cease to accrue on such Notes (or portions
thereof) immediately after such Repurchase Date, and the holder thereof shall
have no other rights as such other than the right to receive the purchase price
upon surrender of such Note.

A-7

 

               Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, the holder hereof has the right, at its option, to
convert each $1,000 principal amount of the Notes into 12.5000 shares of the
Company’s Common Stock, subject to adjustment as provided in the Indenture. A
Note in respect of which a holder is exercising its right to require redemption
upon a Designated Event or repurchase on a Repurchase Date may be converted
only if such holder withdraws its election to exercise either such right in
accordance with the terms of the Indenture. The Conversion Rate for the Notes
on any Conversion Date shall be determined as set forth in the Indenture. The
Company shall deliver cash or a check in lieu of any fractional share of Common
Stock.

               The Company shall deliver to the holder through the Conversion Agent, no
later than the third Business Day following the Conversion Date, a certificate
for the number of whole shares of Common Stock issuable upon the conversion
and, if applicable, cash in lieu of any fractional shares.

               A holder may convert a portion of a Note if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. No payment or adjustment
shall be made for dividends on the Common Stock except as provided in the
Indenture. On conversion of a Note, except for conversion during the period
from the close of business on any record date immediately preceding any
interest payment date to the close of business on the Business Day immediately
preceding such interest payment date, in which case the holder on such record
date shall receive the interest payable on such interest payment date, that
portion of accrued and unpaid interest on the converted Note attributable to
the period from the most recent interest payment date (or, if no interest
payment date has occurred, from the date of original issuance of the Notes)
through the Conversion Date shall not be cancelled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the holder thereof through
delivery of the Common Stock (together with the cash payment, if any, in lieu
of fractional shares), or cash in lieu thereof, in exchange for the Note being
converted pursuant to the provisions hereof.

               Notes or portions thereof surrendered for conversion during the period
from the close of business on any record date immediately preceding any
interest payment date to the close of business on the Business Day immediately
preceding such interest payment date shall be accompanied by payment to the
Company or its order, in immediately available funds or other funds acceptable
to the Company, of an amount equal to the interest payable on such interest
payment date with respect to the principal amount of Notes or portions thereof
being surrendered for conversion; provided that no such payment need be made if
(1) the Company has specified a Redemption Date that occurs during the period
from the close of business on a record date to the close of business on the
Business Day immediately preceding the interest payment date to which such
record date relates, (2) the Company has specified a Designated Event
Redemption Date during such period or (3) only to the extent of overdue
interest, any overdue interest exists on the Conversion Date with respect to
the Notes converted.

               No fractional shares will be issued upon conversion; in lieu thereof, an
amount will be paid in cash based upon the current market price of the Common
Stock as provided in Section 14.03 of the Indenture.

A-8

 

               To convert a Note, a holder must (a) complete and manually sign the
conversion notice set forth below or a facsimile thereof and deliver such
notice to a Conversion Agent, (b) surrender the Note to the Conversion Agent,
(c) furnish appropriate endorsements and transfer documents (including any
certification that may be required under applicable law) if required by the
Conversion Agent, (d) pay any transfer or similar tax, if required and (e) if
required pay funds equal to the interest payable on the next interest payment
date.

               The Conversion Rate will be adjusted as set forth in Article 14 of the
Indenture.

               Any Notes called for redemption, unless surrendered for conversion by the
holders thereof on or before the close of business on the Business Day
preceding the redemption date, may be deemed to be redeemed from the holders of
such Notes for an amount equal to the applicable redemption price, together
with accrued but unpaid interest to, but excluding, the date fixed for
redemption, by one or more investment banks or other purchasers who may agree
with the Company (i) to purchase such Notes from the holders thereof and
convert them into shares of the Company’s Common Stock and (ii) to make payment
for such Notes as aforesaid to the Trustee in trust for the holders.

               Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in
exchange thereof, subject to the limitations provided in the Indenture, without
charge except for any tax, assessment or other governmental charge imposed in
connection therewith.

               The Company, the Trustee, any authenticating agent, any paying agent, any
Conversion Agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Company or any Note registrar) for the
purpose of receiving payment hereof, or on account hereof, for the conversion
hereof and for all other purposes, and neither the Company nor the Trustee nor
any other authenticating agent nor any paying agent nor other Conversion Agent
nor any Note registrar shall be affected by any notice to the contrary. All
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable on this Note.

               No recourse for the payment of the principal of, or any premium or
interest on, this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer or director or
subsidiary, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by acceptance hereof and as part of the consideration for the
issue hereof, expressly waived and released.

               Terms used in this Note and defined in the Indenture are used herein as
therein defined.

A-9

 

ABBREVIATIONS

               The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations.

	 	 	 	 	 
	TEN COM -	 	
as tenants in common
	 	UNIF GIFT MIN ACT -      Custodian      
	TEN ENT -	 	
as tenant by the entireties
	 	(Cust)    (Minor)
	JT TEN -	 	
as joint tenants with right of survivorship
	 	under Uniform Gifts to Minors Act
	 	 	
and not as tenants in common	 	__________________________
	 	 	

	 	            
        (State)
	 	 	 	 	

Additional abbreviations may also be used though not in the above list.

A-10

 

CONVERSION NOTICE

TO:          NII HOLDINGS, INC.
                 WILMINGTON
TRUST COMPANY

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

Dated:                               

	 	                                                            

Name of Holder or underlying

participant of Depository

	 	                                                            

	 	                                                            

	 	Signature(s)

	 	Signature(s) must be guaranteed by an

“eligible guarantor institution” meeting

the requirements of the Note registrar,

which requirements include membership or

participation in the Security Transfer

Agent Medallion Program (“STAMP”) or such

other “signature guarantee program” as may

be determined by the Note registrar in

addition to, or in substitution for, STAMP,

all in accordance with the Securities

Exchange Act of 1934, as amended.

	 	                                                            

Signature Guarantee

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

                                                            

(Name)

A-11

 

                                                            

(Street Address)

                                                            

(City, State and Zip Code)

                                                            

Please print name and address

Principal amount to be converted

(if less than all):

$

                                                            

Social Security or Other Taxpayer

Identification Number:

                                                            

A-12

 

OPTION TO ELECT REPAYMENT

UPON A DESIGNATED EVENT

TO:            NII HOLDINGS, INC.

                  WILMINGTON
TRUST COMPANY

               The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from NII Holdings, Inc. (the “Company”) as to
the occurrence of a Designated Event with respect to the Company and requests
and instructs the Company to redeem the entire principal amount of this Note,
or the portion thereof (which is $1,000 or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note at the price of 100% of such entire principal amount or portion thereof,
together with accrued interest to, but excluding, the Designated Event
Redemption Date, to the registered holder hereof. Capitalized terms used
herein but not defined shall have the meanings ascribed to such terms in the
Indenture.

Dated:                               

	 	                                                            

	 	                                                            

Signature(s)

	 	NOTICE: The above signatures of the

holder(s) hereof must correspond with the

name as written upon the face of the Note in

every particular without alteration or

enlargement or any change whatever.

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

                                                            

	 	                                                            

Social Security or Other Taxpayer

Identification Number

A-13

 

REPURCHASE NOTICE

TO:            NII HOLDINGS, INC.

                  WILMINGTON
TRUST COMPANY

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

               Dated:

               Signature(s):

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

               Note Certificate Number (if applicable):

               Principal amount to be repurchased (if less than all):

               Social Security or Other Taxpayer Identification Number:

A-14

 

ASSIGNMENT

               
For value received ____________________________  hereby sell(s) assign(s)
and transfer(s) unto _______________________________________ (Please insert social
security or other Taxpayer Identification Number of assignee) the within Note,
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.

               In connection with any transfer of the Note prior to the expiration of the
holding period applicable to sales thereof under Rule 144(k) under the
Securities Act of 1933, as amended (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the Securities Act of 1933, as amended), the undersigned confirms that
such Note is being transferred:

	•
	 	To NII Holdings, Inc. or a subsidiary thereof; or

	•
	 	To a “qualified institutional buyer” in compliance with Rule
144A under the Securities Act of 1933, as amended; or

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

	•
	 	Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and which
continues to be effective at the time of transfer;

and unless the Note has been transferred to NII Holdings, Inc. or a subsidiary
thereof, the undersigned confirms that such Note is not being transferred to an
“affiliate” of the Company as defined in Rule 144 under the Securities Act of
1933, as amended.

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

Dated:                               

	 	                                                            

	 	                                                            

Signature(s)

	 	Signature(s) must be guaranteed by an

“eligible guarantor institution” meeting the

requirements of the Note registrar, which

requirements include membership or

participation in the Security Transfer Agent

Medallion Program (“STAMP”) or such other

“signature guarantee program” as may be

determined by the Note registrar in addition to,
 or in substitution

A-15

 

	 	 for, STAMP, all in accordance

with the Securities Exchange Act of 1934, as

amended.

	 	                                                            

Signature Guarantee

NOTICE: The signature on the Conversion Notice, the Option to Elect Redemption
Upon a Designated Event, the Repurchase Notice or the Assignment must
correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever.

A-16

 

Schedule I

[Include Schedule I only for a Global Note]

NII HOLDINGS, INC.

3 1/2% Convertible Note Due 2033

No.         

	 	 	 	 	 	 	 
	 	 	 	 	Notation Explaining	 	Authorized Signature
	 	 	 	 	Principal Amount	 	of Trustee or
	Date	 	Principal Amount	 	Recorded	 	Custodian
	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

	
	 	
	 	
	 	

     

A-17exv4w2

 

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

between

NII HOLDINGS, INC.

as Issuer,

and

MORGAN STANLEY & CO. INCORPORATED

and

BANC OF AMERICA SECURITIES LLC

and

CREDIT SUISSE FIRST BOSTON LLC

and

UBS SECURITIES LLC

as Initial Purchasers

 

 

 

Dated as of September 16, 2003

 

 

               REGISTRATION RIGHTS AGREEMENT dated as of September 16, 2003 among NII
Holdings, Inc., a Delaware corporation (the “Company”), and Morgan Stanley &
Co. Incorporated, Banc of America Securities LLC, Credit Suisse First Boston
LLC and UBS Securities LLC (collectively, the “Initial Purchasers”) pursuant to
the Purchase Agreement dated September 10, 2003 (the “Purchase Agreement”),
between the Company and the Initial Purchasers. In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution of
this Agreement is a condition to the closing under the Purchase Agreement.

               The Company agrees with the Initial Purchasers, (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
“Holder” and together the “Holders”), as follows:

               SECTION 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

               “Amendment Effectiveness Deadline Date” has the meaning set forth in
Section 2(d) hereof.

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

               “Common Stock” means the shares of common stock, par value $.001 per
share, of the Company and any other shares of common stock as may constitute
“Common Stock” for purposes of the Indenture, including the Underlying Common
Stock.

               “Company” has the meaning set forth in the preamble hereof.

               “Conversion Price” has the meaning assigned such term in the Indenture.

               “Damages Accrual Period” has the meaning set forth in Section 2(e) hereof.

               “Damages Payment Date” means each March 15 and September 15.

               “Deferral Notice” has the meaning set forth in Section 3(h) hereof.

               “Deferral Period” has the meaning set forth in Section 3(h) hereof.

               “Effectiveness Deadline Date” has the meaning set forth in Section 2(a)
hereof.

               “Effectiveness Period” means the period commencing on the date hereof and
ending on the date that all Registrable Securities have ceased to be
Registrable Securities.

               “Event” has the meaning set forth in Section 2(e) hereof.

2

 

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

               “Filing Deadline Date” has the meaning set forth in Section 2(a) hereof.

               “Holder” has the meaning set forth in the second paragraph of this
Agreement.

               “Indenture” means the Indenture, dated as of September 16, 2003, between
the Company and Wilmington Trust Company, as trustee, pursuant to which the
Notes are being issued.

               “Initial Purchasers” has the meaning set forth in the preamble hereof.

               “Initial Shelf Registration Statement” has the meaning set forth in
Section 2(a) hereof.

               “Issue Date” means September 16, 2003.

               “Liquidated Damages Amount” has the meaning set forth in Section 2(e)
hereof.

               “Material Event” has the meaning set forth in Section 3(h) hereof.

               “Notes” means the 31/2% Convertible Senior Notes Due 2033 of the Company
to be purchased pursuant to the Purchase Agreement.

               “Notice and Questionnaire” means a written notice delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated September 10, 2003 relating to the Notes.

               “Notice Holder” means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

               “Purchase Agreement” has the meaning set forth in the preamble hereof.

               “Prospectus” means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

               “Record Holder” means, with respect to any Damages Payment Date relating
to any Notes or Underlying Common Stock as to which any Liquidated Damages
Amount has accrued, the registered holder of such Note or Underlying Common
Stock on the March 1 immediately preceding a Damages Payment Date occurring on
a March 15, and on the September 1 immediately preceding a Damages Payment Date
occurring on a September 15.

3

 

               “Registrable Securities” means the Notes until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all times
subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock
dividend, split or similar event until, in the case of any such security, (A)
the earliest of (i) its effective registration under the Securities Act and
resale in accordance with the Registration Statement covering it, (ii)
expiration of the holding period that would be applicable thereto, under Rule
144(k) or (iii) its sale to the public pursuant to Rule 144 (or any similar
provision then in force, but not Rule 144A) under the Securities Act, and (B)
as a result of the event or circumstance described in any of the foregoing
clauses (i) through (iii), the legend with respect to transfer restrictions
required under the Indenture is removed or removable in accordance with the
terms of the Indenture or such legend, as the case may be. Throughout this
Agreement, for purposes of determining the holders of a majority of Registrable
Securities, Registrable Securities shall be the shares of Underlying Common
Stock and Holders of Notes shall be deemed to be the Holders of the number of
shares of Underlying Common Stock into which such Notes are or would be
convertible as of the date the consent is requested.

               “Registration Statement” means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

               “Rule 144” means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

               “Rule 144A” means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

               “SEC” means the Securities and Exchange Commission.

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

               “Shelf Registration Statement” has the meaning set forth in Section 2(a)
hereof.

               “Special Counsel” means Shearman & Sterling LLP or one such other
successor counsel as shall be specified by the Holders of a majority of all
Registrable Securities, but which may, with the written consent of the Initial
Purchasers (which shall not be unreasonably withheld), be another nationally
recognized law firm experienced in securities law matters designated by the
Company, the reasonable fees and expenses of which will be paid by the Company
pursuant to Section 5 hereof.

               “Subsequent Shelf Registration Statement” has the meaning set forth in
Section 2(b) hereof.

               “Trustee” means Wilmington Trust Company, the trustee under the Indenture.

4

 

               “Underlying Common Stock” means the Common Stock into which the Notes are
convertible or issued upon any such conversion.

               SECTION 2. Shelf Registration. (a) The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the “Filing Deadline Date”) ninety (90) days after the Issue
Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (a “Shelf
Registration Statement”) registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the “Initial Shelf Registration
Statement”). The Initial Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in accordance with the methods of distribution
elected by the Holders and set forth in the Initial Shelf Registration
Statement. The Company shall use its reasonable best efforts to cause the
Initial Shelf Registration Statement to be declared effective under the
Securities Act as promptly as is practicable but in any event by the date (the
“Effectiveness Deadline Date”) that is one hundred eighty (180) days after the
Issue Date, and, except as otherwise provided herein, to keep the Initial Shelf
Registration Statement (or any Subsequent Shelf Registration Statement)
continuously effective under the Securities Act until the expiration of the
Effectiveness Period. At the time the Initial Shelf Registration Statement is
declared effective, each Holder that became a Notice Holder on or prior to the
date ten (10) Business Days prior to such time of effectiveness shall be named
as a selling securityholder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with
applicable law. None of the Company’s security holders (other than the Holders
of Registrable Securities) shall have the right to include any of the Company’s
securities in the Shelf Registration Statement, except as may be described in
the Offering Memorandum of the Company dated September 10, 2003.

               (b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within thirty (30) days of
such cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement (a
“Subsequent Shelf Registration Statement”) covering all of the securities that
as of the date of such filing are Registrable Securities. If a Subsequent
Shelf Registration Statement is filed, the Company shall use its reasonable
best efforts to cause the Subsequent Shelf Registration Statement to become
effective as promptly as is practicable after such filing and to keep such
Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the expiration of the Effectiveness Period.

               (c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement or as otherwise required by
the Securities Act or as necessary to name a Notice Holder as a selling
securityholder pursuant to Section 2(d) below.

5

 

               (d) Each Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus,
it will do so only in accordance with this Section 2(d) and Section 3(h).
Following the date that the Initial Shelf Registration Statement is declared
effective, each Holder wishing to sell Registrable Securities pursuant to a
Shelf Registration Statement and related Prospectus agrees to deliver a Notice
and Questionnaire to the Company at least three (3) Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration
Statement. Each Holder who elects to sell Registrable Securities pursuant to a
Shelf Registration Statement agrees, by submitting a Notice and Questionnaire
to the Company, it will be bound by the terms and conditions of the Notice and
Questionnaire and this Agreement. From and after the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered pursuant to
Section 9(c) hereof, and in any event upon the later of (x) five (5) Business
Days after such date or (y) five (5) Business Days after the expiration of any
Deferral Period that is in effect when the Notice and Questionnaire is
delivered or that is put into effect within five (5) Business Days of such
delivery date:

                    (i) if required by applicable law, file with the SEC a
post-effective amendment to the Shelf Registration Statement or prepare
and, if required by applicable law, file a supplement to the related
Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that the
Holder delivering such Notice and Questionnaire is named as a selling
securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment
to the Shelf Registration Statement, use its reasonable best efforts to
cause such post-effective amendment to be declared effective under the
Securities Act as promptly as is practicable, but in any event by the
date (the “Amendment Effectiveness Deadline Date”) that is sixty (60)
days after the date such post-effective amendment is required by this
clause to be filed; and

                    (ii) provide such Holder copies of any documents filed pursuant to
Section 2(d)(i);

provided, that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire. The Company shall notify such Holder as promptly as practicable
after the effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section 2(d)(i). Notwithstanding anything
contained herein to the contrary, (i) the Company shall be under no obligation
to name any Holder that is not a Notice Holder as a selling securityholder in
any Registration Statement or related Prospectus and (ii) the Amendment
Effectiveness Deadline Date shall be extended by up to five (5) Business Days
from the expiration of a Deferral Period (and the Company shall incur no
obligation to pay Liquidated Damages during such extension or during such
Deferral Period) if such Deferral Period shall be in effect on the Amendment
Effectiveness Deadline Date.

               (e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if, other than as permitted hereunder:

6

 

                    (i) the Initial Shelf Registration Statement has not been filed on
or prior to the Filing Deadline Date;

                    (ii) the Initial Shelf Registration Statement has not been declared
effective under the Securities Act on or prior to the Effectiveness
Deadline Date;

                    (iii) the Company has failed to perform its obligations set forth in
Section 2(d)(i) within the time period required therein;

                    (iv) any post-effective amendment to a Shelf Registration Statement
filed pursuant to Section 2(d)(i) has not become effective under the
Securities Act on or prior to the Amendment Effectiveness Deadline Date;
or

                    (v) the aggregate duration of Deferral Periods in any period exceeds
the number of days permitted in respect of such periods pursuant to

Section 3(h) hereof.

Each event described in any of the foregoing clauses (i) through (v) is
individually referred to herein as an “Event.” For purposes of this Agreement,
each Event set forth above shall begin and end on the dates set forth in the
table set forth below:

  	 	 	 	 	 
	Type of	 	 	 	 
	Event by	 	
Beginning
	 	Ending
	Clause	 	
Date
	 	Date
	 	 	 	 	 

  	
	 	 	 	 
	(i)
	 	 Filing Deadline Date 	 	the date the Initial
	 
	 	 	 	Shelf Registration
	 
	 	 	 	Statement is filed
	 
	 	 	 	 
	(ii)
	 	 Effectiveness Deadline Date
        	 	the date the Initial
	 
	 	 	 	Shelf Registration
	 
	 	 	 	Statement becomes
	 
	 	 	 	effective under the
	 
	 	 	 	Securities Act
	 
	 	 	 	 
	(iii)
	 	 the date by which the Company
        is  required to perform its  obligations under Section 2(d)	 	the date the Company performs its obligations
set forth in Section 2(d)
	 
	 	 	 	 
	(iv)
	 	 the Amendment Effectiveness
        	 	the date the applicable
	 
	 	 Deadline Date 	 	post-effective amendment
	 
	 	 	 	to a Shelf Registration
	 
	 	 	 	Statement becomes
	 
	 	 	 	effective under the
	 
	 	 	 	Securities Act
	 
	 	 	 	 
	(v)
	 	 the date on which the aggregate
        duration of Deferral 	 	termination of the Deferral
        Period that caused the limit
	 
	 	  	 	 

7

 

	 	 	 	 	 
	Type of	 	 	 	 
	Event by	 	
Beginning
	 	Ending
	Clause	 	
Date
	 	Date

  	
	 	 	 	 
	 
	 	 Periods in any period exceeds
        the number of days permitted by Section 3(h)	 	on the aggregate duration of
        Deferral Periods to be exceeded
	 
	 	  	 	  

For purposes of this Agreement, Events shall begin on the dates set forth in
the table above and shall continue until the ending dates set forth in the
table above.

               Commencing on (and including) any date that an Event has begun and ending
on (but excluding) the next date on which there are no Events that have
occurred and are continuing (a “Damages Accrual Period”), the Company shall
pay, as liquidated damages and not as a penalty, to Record Holders of
Registrable Securities an amount (the “Liquidated Damages Amount”) accruing,
for each day in the Damages Accrual Period, (i) in respect of any Note that is
a Registrable Security, at a rate per annum equal to 0.5% of the principal
amount of such Note and (ii) in respect of each share of Underlying Common
Stock that is a Registrable Security, at a rate per annum equal to 0.5% of the
Conversion Price on such date, as the case may be; provided that in the case of
a Damages Accrual Period that is in effect solely as a result of an Event of
the type described in clause (iii) or (iv) of the preceding paragraph, such
Liquidated Damages Amount shall be paid only to the Holders (as set forth in
the succeeding paragraph) that have delivered Notices and Questionnaires that
caused the Company to incur the obligations set forth in Section 2(d) the
non-performance of which is the basis of such Event. In calculating the
Liquidated Damages Amount on any date on which no Notes are outstanding, the
Conversion Price, and thus the Liquidated Damages Amount, payable with respect
to shares of Common Stock which are Registrable Securities shall be calculated
as if the Notes were still outstanding. Notwithstanding the foregoing, no
Liquidated Damages Amount shall accrue as to any Registrable Security from and
after the earlier of (x) the date such security is no longer a Registrable
Security and (y) expiration of the Effectiveness Period. The rate of accrual
of the Liquidated Damages Amount with respect to any period shall not exceed
the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events.

               The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the Damage Accrual Period (and on the Damages Payment Date next
succeeding the end of the Damages Accrual Period if the Damage Accrual Period
does not end on a Damages Payment Date) to the Record Holders of the
Registrable Securities entitled thereto; provided that any
Liquidated Damages Amount accrued with respect to any Note or portion
thereof redeemed by the Company on a redemption date or converted into
Underlying Common Stock on a conversion date prior to the Damages Payment Date,
shall, in any such event, be paid instead to the Holder who submitted such Note
or portion thereof for redemption or conversion on the applicable redemption
date or conversion date, as the case may be, on such date (or promptly
following the conversion date, in the case of conversion); provided further
that, in the case of an Event of the type described in clause (iii) or (iv) of
the first paragraph of this Section 2(e), such Liquidated Damages Amount shall
be paid only to the Holders entitled thereto pursuant to such first paragraph
by check mailed to the address set forth in the Notice and Questionnaire
delivered by

8

 

such Holder. The Trustee shall be entitled, on behalf of registered holders of Notes or Underlying Common Stock, to seek any available
remedy for the enforcement of this Agreement, including for the payment of such
Liquidated Damages Amount. Notwithstanding the foregoing, the parties agree
that the sole damages payable for a violation of the terms of this Agreement
with respect to which liquidated damages are expressly provided shall be such
liquidated damages. Nothing shall preclude any Holder from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement in accordance with applicable law.

               All of the Company’s obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 9(k)).

               The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

               SECTION 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, during the Effectiveness
Period, the Company shall:

          (a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders
thereof in accordance with the intended method or methods of distribution
thereof, and use its reasonable best efforts to cause each such
Registration Statement to become effective and remain effective as
provided herein; provided that before filing any Registration Statement
or Prospectus or any amendments or supplements thereto with the SEC (but
excluding reports filed with the SEC under the Exchange Act), furnish to
Morgan Stanley & Co. Incorporated, on behalf of itself and the other
Initial Purchasers, and the Special Counsel, if any, copies of all such
documents proposed to be filed at least three (3) Business Days prior to
the filing of such Registration Statement or amendment thereto or
Prospectus or supplement thereto.

          (b) Subject to Section 3(h), prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement
as may be necessary to keep such Registration Statement continuously
effective for the applicable period specified in Section 2(a); cause the
related Prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 (or
any similar provisions then in force) under the Securities Act; and use
its reasonable best efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement during the
Effectiveness Period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration
Statement as so amended or such Prospectus as so supplemented.

9

 

          (c) As promptly as practicable give notice to the Notice Holders,
Morgan Stanley & Co. Incorporated, on behalf of itself and the other
Initial Purchasers, and the Special Counsel, if any (i) when any
Prospectus, prospectus supplement, Registration Statement or
post-effective amendment to a Registration Statement has been filed with
the SEC and, with respect to a Registration Statement or any
post-effective amendment, when the same has been declared effective, (ii)
of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other
federal or state governmental authority for amendments or supplements to
any Registration Statement or related Prospectus or for additional
information relating to the Shelf Registration Statement, (iii) of the
issuance by the SEC or any other federal or state governmental authority
of any stop order suspending the effectiveness of any Registration
Statement or the initiation or threatening of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of, but not the nature of or details
concerning, a Material Event and (vi) of the determination by the Company
that a post-effective amendment to a Registration Statement will be filed
with the SEC, which notice may, at the discretion of the Company (or as
required pursuant to Section 3(h)), state that it constitutes a Deferral
Notice, in which event the provisions of Section 3(h) shall apply.

          (d) Use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in either case
at the earliest possible moment, and provide immediate notice to each
Notice Holder and Morgan Stanley & Co. Incorporated, on behalf of itself
and the other Initial Purchasers, of the withdrawal of any such order.

          (e) As promptly as practicable furnish to each Notice Holder, the
Special Counsel, if any, and the Initial Purchasers, upon request and
without charge, at least one (1) conformed copy of the Registration
Statement and any amendment thereto, including exhibits and, if
requested, all documents incorporated or deemed to be incorporated
therein by reference.

          (f) Deliver to each Notice Holder, the Special Counsel, if any, and
the Initial Purchasers, in connection with any sale of Registrable
Securities pursuant to a Registration Statement, without charge, as many
copies of the Prospectus relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement
thereto as such persons may reasonably request; and the Company hereby
consents (except during such periods that a Deferral Notice is
outstanding and has not been revoked) to the use of such Prospectus or
each amendment or supplement thereto by each Notice Holder in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto in the manner set forth
therein.

10

 

          (g) Prior to any public offering of the Registrable Securities
pursuant to a Registration Statement, use its reasonable best efforts to
register or qualify or cooperate with the Notice Holders and the Special
Counsel, if any, in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any Notice Holder
reasonably requests in writing (which request may be included in the
Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to the Registration Statement, use its
reasonable best efforts to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness Period in
connection with such Notice Holder’s offer and sale of Registrable
Securities pursuant to such registration or qualification (or exemption
therefrom) and do any and all other acts or things reasonably necessary
or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant
Registration Statement and the related Prospectus; provided that the
Company will not be required to (i) qualify as a foreign corporation or
as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Agreement or (ii) take any
action that would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.

          (h) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of any Registration Statement or the initiation of
proceedings with respect to any Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the
existence of any fact (a “Material Event”) as a result of which any
Registration Statement shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or any
Prospectus shall contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the reasonable discretion
of the Company, makes it appropriate to suspend the availability of any
Registration Statement and the related Prospectus:

                    (i) in the case of clause (B) above, subject to the next
sentence, as promptly as practicable prepare and file, if necessary
pursuant to applicable law, a
post-
effective amendment to such Registration Statement or a
supplement to the related Prospectus or any document incorporated
therein by reference or file any other required document that would
be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and such Prospectus does not
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, as thereafter delivered
to the purchasers of the Registrable Securities being sold
thereunder, and, in the case of a post-

11

 

effective amendment to a
Registration Statement, subject to the next sentence, use its
reasonable best efforts to cause it to be declared effective as
promptly as is practicable, and

                    (ii) give notice to the Notice Holders and the Special
Counsel, if any, that the availability of the Shelf Registration
Statement is suspended (a “Deferral Notice”) and, upon receipt of
any Deferral Notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to the Registration Statement until
such Notice Holder’s receipt of copies of the supplemented or
amended Prospectus provided for in clause (i) above, or until it is
advised in writing by the Company that the Prospectus may be used,
and has received copies of any additional or supplemental filings
that are incorporated or deemed incorporated by reference in such
Prospectus.

The Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as
is practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable thereafter, and
(z) in the case of clause (C) above, as soon as, in the reasonable discretion
of the Company, such suspension is no longer appropriate. The Company shall be
entitled to exercise its right under this Section 3(h) to suspend the
availability of any Registration Statement or any Prospectus, without incurring
or accruing any obligation to pay liquidated damages pursuant to Section 2(e)
(the “Deferral Period”); provided that the aggregate duration of any Deferral
Periods shall not exceed 30 days in any three month period (or 60 days in any
three month period in the event of a Material Event pursuant to which the
Company has delivered a second notice as required below) or 90 days in any
twelve (12) month period; provided that in the case of a Material Event
relating to an acquisition or a probable acquisition or financing,
recapitalization, business combination or other similar transaction, the
Company may, without incurring any obligation to pay liquidated damages
pursuant to Section 2(e), deliver to Notice Holders a second notice to the
effect set forth above, which shall have the effect of extending the Deferral
Period by up to an additional 30 days, or such shorter period of time as is
specified in such second notice.

          (i) If reasonably requested in writing in connection with a
disposition of Registrable Securities pursuant to a Registration
Statement, make reasonably available for inspection during normal
business hours by a representative for the Notice Holders of
such Registrable Securities, any broker-dealers, underwriters,
attorneys and accountants retained by such Notice Holders, and any
attorneys or other agents retained by a broker-dealer or underwriter
engaged by such Notice Holders, all relevant financial and other records
and pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the appropriate officers, directors and employees
of the Company and its subsidiaries to make reasonably available for
inspection during normal business hours on reasonable notice all relevant
information reasonably requested by such representative for the Notice
Holders, or any such broker-dealers, underwriters, attorneys or
accountants in connection with such disposition, in each case as is
customary for similar “due diligence” examinations; provided that such
persons shall first agree in writing with the Company that any
information that is reasonably designated by the

12

 

Company as confidential
at the time of delivery of such information shall be kept confidential by
such persons and shall be used solely for the purposes of exercising
rights under this Agreement, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information
is required by law (including any disclosure requirements pursuant to
federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus referred to in this Agreement),
(iii) such information becomes generally available to the public other
than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from
a source other than the Company and such source is not bound by a
confidentiality agreement; and provided further that the foregoing
inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of all the Notice Holders and the
other parties entitled thereto by Special Counsel, if any, or another
representative selected by a majority of Registrable Securities being
sold by such Holders pursuant to such Registration Statement. Any person
legally compelled or required by administrative or court order or by a
regulatory authority to disclose any such confidential information made
available for inspection shall provide the Company with prompt prior
written notice of such requirement so that the Company may seek a
protective order or other appropriate remedy.

          (j) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements (which
need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) for a 12-month period commencing on the first
day of the first fiscal quarter of the Company commencing after the
effective date of a Registration Statement, which statements shall be
made available no later than 45 days after the end of the 12-month period
or 90 days if the 12-month period coincides with the fiscal year of the
Company.

          (k) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities sold or to be sold pursuant to a Registration Statement, which
certificates shall not bear any restrictive legends, and cause such
Registrable Securities to be in such denominations as are permitted by
the Indenture and registered in such names as such Notice Holder may
request in writing at least two (2) Business Days prior to any sale of
such Registrable Securities.

          (l) Provide a CUSIP number for all Registrable Securities covered by
each Registration Statement not later than the effective date of such
Registration Statement and, if requested, provide the Trustee and the
transfer agent for the Common Stock with printed certificates for the
Registrable Securities that are in a form eligible for deposit with The
Depository Trust Company.

          (m) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.

          (n) In the case of a Registration Statement involving an
underwritten offering, the Company shall enter into such customary
agreements (including, if requested, an

13

 

underwriting agreement in reasonably customary form) and take all such other action, if any, as
Holders of a majority of the Registrable Securities being sold or any
managing underwriters reasonably shall request in order to facilitate any
disposition of Notes and Underlying Common Stock pursuant to such
Registration Statement, including, without limitation, (i) using its
reasonable best efforts to cause its counsel to deliver an opinion or
opinions in reasonably customary form, (ii) using its reasonable best
efforts to cause its officers to execute and deliver all customary
documents and certificates and (iii) using its reasonable best efforts to
cause its independent public accountants to provide a comfort letter or
letters in reasonably customary form.

          (o) Upon (i) the filing of the Initial Shelf Registration Statement
and (ii) the effectiveness of the Initial Shelf Registration Statement,
announce the same, in each case by release to Reuters Economic Services
and Bloomberg Business News.

               SECTION 4. Holder’s Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder shall be entitled to sell any of
such Registrable Securities pursuant to a Registration Statement or to receive
a Prospectus relating thereto unless such Holder has furnished the Company with
a Notice and Questionnaire as required pursuant to Section 2(d) hereof
(including the information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. Each Notice
Holder agrees promptly to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Notice Holder not misleading and any other information regarding such
Notice Holder and the distribution of such Registrable Securities as the
Company may from time to time reasonably request. Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of
distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not as of the time
of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating
to or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.

               SECTION 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any
Registration Statement is declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to
be made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel,
if any, in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as Notice Holders of a majority
of the Registrable Securities being sold pursuant to a Registration Statement
may designate)), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with The Depository Trust Company), (iii) duplication expenses
relating to copies of any Registration Statement or Prospectus delivered to any
Holders hereunder, (iv) fees and disbursements of counsel for the Company in
connection with any

14

 

Registration Statement, (v) reasonable fees and
disbursements of the Trustee and its counsel and of the registrar and transfer
agent for the Common Stock and (vi) any Securities Act liability insurance
obtained by the Company in its sole discretion. In addition, the Company shall
pay the internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing by the Company of the Registrable Securities on any
securities exchange on which similar securities of the Company are then listed
and the fees and expenses of any person, including special experts, retained by
the Company. Notwithstanding the provisions of this Section 5, each seller of
Registrable Securities shall pay selling expenses, including any underwriting
discount and commissions, all registration expenses to the extent required by
applicable law and, except as otherwise provided herein, fees and expenses of
counsel to such seller.

               SECTION 6. Indemnification and Contribution.

               (a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Notice Holder and each person, if any, who controls any
Notice Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Holder
furnished to the Company in writing by or on behalf of such Holder expressly
for use therein. In connection with any underwritten offering pursuant to
Section 8, the Company will also indemnify the underwriters, if any, their
officers and directors and each person who controls such underwriters (within
the meaning of the Securities Act and the Exchange Act) to the same extent as
provided herein with respect to the indemnification of the Holders, if
requested in connection with any Registration Statement.

               (b) Indemnification by Holders. Each Holder agrees severally and not
jointly to indemnify and hold harmless the Company and its directors, its
officers and each person, if any, who controls the Company (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act)
or any other Holder, to the same extent as the foregoing indemnity from the
Company to such Holder, but only with reference to information relating to such
Holder furnished to the Company in writing by or on behalf of such Holder
expressly for use in such Registration Statement or Prospectus or amendment or
supplement thereto. In no event shall the liability of any Holder hereunder be
greater in amount than the dollar amount of the proceeds received by such
Holder upon the sale of the Registrable Securities pursuant to the Registration
Statement giving rise to such indemnification obligation. In connection with
any underwritten offering pursuant to Section 8, each Holder will also
indemnify the underwriters, if any, their officers and directors and each
person who controls such underwriters (within the meaning of the Securities Act
and the Exchange Act) to the same extent as provided herein with

15

 

respect to the
indemnification of the Company, if requested in connection with any
Registration Statement.

               (c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b) hereof, such person (the “indemnified party”) shall promptly notify the
person against whom such indemnity may be sought (the “indemnifying party”) in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by, in the case of parties
indemnified pursuant to Section 6(a), the Holders of a majority of the
Registrable Securities covered by the Registration Statement held by Holders
that are indemnified parties pursuant to Section 6(a) and, in the case of
parties indemnified pursuant to Section 6(b), the Company. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final,
non-appealable judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

               (d) Contribution. To the extent that the indemnification provided for in
Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The

16

 

relative benefits received by the Company shall be deemed to be equal to the total net proceeds from the initial sale of the Notes
pursuant to the Purchase Agreement (before deducting expenses) of the
Registrable Securities to which such losses, claims, damages or liabilities
relate. The relative benefits received by any Holder shall be deemed to be
equal to the value of receiving Registrable Securities that are registered
under the Securities Act. The relative fault of the Holders on the one hand
and the Company on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Holders or by the Company, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Holders’ respective obligations to
contribute pursuant to this Section 6 are several in proportion to the
respective number of Registrable Securities they have sold pursuant to a
Registration Statement, and not joint.

               The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding this Section 6, no indemnifying party that is a
selling Holder shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities sold by it
and distributed to the public were offered to the public exceeds the amount of
any damages that such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11 (f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

               (e) The remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity, hereunder, under the Purchase Agreement
or otherwise.

               (f) The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder, any person controlling any Holder or any affiliate of any Holder or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any
Holder.

               SECTION 7. Information Requirements. The Company covenants that, if at
any time before the end of the Effectiveness Period the Company is not subject
to the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further reasonable action as any Holder may reasonably
request in writing (including, without limitation, making such reasonable
representations as any such Holder may reasonably request), all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule

17

 

144 and Rule 144A under the Securities Act and customarily taken in connection with sales pursuant to such exemptions. Upon
the written request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company’s most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the Company
to register any of its securities (other than the Common Stock) under any
section of the Exchange Act.

               SECTION 8. Underwritten Registrations. The Holders of Registrable
Securities covered by a Shelf Registration Statement who desire to do so may
sell such Registrable Securities to an underwriter in an underwritten offering
for reoffering to the public. If any of the Registrable Securities covered by
any Shelf Registration Statement are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority of such
Registrable Securities included in such offering, subject to the consent of the
Company (which shall not be unreasonably withheld or delayed), and such Holders
shall be responsible for all underwriting commissions and discounts and any
transfer taxes in connection therewith. No person may participate in any
underwritten registration hereunder unless such person (i) agrees to sell such
person’s Registrable Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.

               SECTION 9. Miscellaneous.

               (a) No Conflicting Agreements. The Company is not, as of the date hereof,
a party to, nor shall it, on or after the date of this Agreement, enter into,
any agreement with respect to its securities that conflicts with the rights
granted to the Holders in this Agreement. The Company represents and warrants
that the rights granted to the Holders hereunder do not in any way conflict
with the rights granted to the holders of the Company’s securities under any
other agreements.

               (b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of Registrable Securities. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities being sold by such Holders pursuant to
such Registration Statement; provided that the provisions of this sentence may
not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence. Notwithstanding the
foregoing, this Agreement may be amended by written agreement signed by the
Company and Morgan Stanley & Co. Incorporated, on behalf of itself and the
other Initial Purchasers, without the consent of the Holders of Registrable
Securities, to cure any ambiguity or to correct or supplement any provision
contained

18

 

herein that may be defective or inconsistent with any other provision contained herein, or to make such other provisions in regard to matters or
questions arising under this Agreement that shall not adversely affect the
interests of the Holders of Registrable Securities. Each Holder of Registrable
Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected pursuant to
this Section 9(b), whether or not any notice, writing or marking indicating
such amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

               (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier,
by courier guaranteeing overnight delivery or by first-class mail, return
receipt requested, and shall be deemed given (i) when made, if made by hand
delivery, (ii) upon confirmation, if made by facsimile, (iii) one (1) Business
Day after being deposited with such courier, if made by overnight courier or
(iv) on the date indicated on the notice of receipt, if made by first-class
mail, to the parties as follows:

                              (i) if to a Holder, at the most current address given by such
Holder to the Company in a Notice and Questionnaire or any
amendment thereto;

                              (ii) if to the Company, to:

  	 	 
	 	NII Holdings, Inc
 10700 Parkridge Boulevard,
          Suite 600
 Reston, Virginia 20191
 Attention: General Counsel
 Fax:
          (703) 390-5191

        with a copy to:

  	 	 
	 	Williams Mullen
 A Professional
        Corporation
 1021 East Cary Street
 Richmond, Virginia 23219 
Attention:
        Robert E. Spicer, Jr., Esq.
 Fax: (804) 783-6507

                              (iii) if to the Initial Purchasers, to:

  	 	 
	 	Morgan Stanley & Co. Incorporated 1585
        Broadway 
New York, New York 10036
 Attention: Equity Capital Markets
 Fax:
        (212) 761-0538

  	 
	with a copy to:

  	 	 
	 	Shearman & Sterling LLP

19

 

  	 	 
	 	599 Lexington Avenue

        New York, New York 10022

        Attention: Andrew R. Schleider, Esq.

        Fax: (212) 848-7179

 

               or
  to such other address as such person may have furnished to the other persons
  identified in this Section 9(c) in writing in accordance herewith

               (d) Approval
  of Holders. Whenever the consent or approval of Holders of a specified percentage
  of Registrable Securities is required hereunder, Registrable Securities held
  by the Company or its affiliates (as such term is defined in Rule 405 under
  the Securities Act) (other than the Initial Purchasers or subsequent Holders
  if such subsequent Holders are deemed to be such affiliates solely by reason
  of their holdings of such Registrable Securities) shall not be counted in determining
  whether such consent or approval was given by the Holders of such required percentage.
  

               (e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchasers shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchasers. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities, provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Indenture. If any transferee of
any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Registrable Securities, such person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement and such person
shall be entitled to receive the benefits hereof.

               (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

               (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

               (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

               (i) Severability. If any term provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their reasonable best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction, it being

20

 

     intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted
by law.

               (j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, the Indenture and the Notes, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and undertakings among the parties with respect to such
registration rights. No party hereto shall have any rights, duties or
obligations other than those specifically set forth in this Agreement, the
Indenture and the Notes.

               (k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

21

 

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

  	 	 	 
	 	 	 NII HOLDINGS, INC
	 	 	 
	 	 	 
	 	 By: 	/s/ Robert J. Gilker
	 	 	

	 	 	 Name:
	 	 	 Title:

Confirmed and accepted as of

the date first above written:

MORGAN STANLEY & CO. INCORPORATED

BANC OF AMERICA SECURITIES LLC

CREDIT SUISSE FIRST BOSTON LLC

UBS SECURITIES LLC

By: MORGAN STANLEY & CO. INCORPORATED

	 	 	 
	By:	/s/ Kenneth G. Pott	 
	 	
	 
	Name:	Kenneth G. Pott	 
	Title:	Managing Director

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