Document:

Exhibit
4.1

 

 

 

INDENTURE

 

Between

 

VITESSE SEMICONDUCTOR CORPORATION

 

U.S.
BANK NATIONAL ASSOCIATION,

as
Trustee

 

8.00%
CONVERTIBLE SECOND LIEN DEBENTURES DUE 2014

 

DATED  AS  OF  October 30, 2009

 

 

 

 

CROSS-REFERENCE
TABLE*

 

	
  Trust Indenture

  Act Section

  	
   

  	
  Indenture

  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  5.11

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  5.11

  	
   

  
	
   

  	
  (a)(3)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (a)(4)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (a)(5)

  	
   

  	
  5.11

  	
   

  
	
   

  	
  (b)

  	
   

  	
  5.3; 5.11

  	
   

  
	
   

  	
  (c)

  	
   

  	
  n/a

  	
   

  
	
  311

  	
  (a)

  	
   

  	
  5.12

  	
   

  
	
   

  	
  (b)

  	
   

  	
  5.12

  	
   

  
	
   

  	
  (c)

  	
   

  	
  n/a

  	
   

  
	
  312

  	
  (a)

  	
   

  	
  2.10

  	
   

  
	
   

  	
  (b)

  	
   

  	
  15.3

  	
   

  
	
   

  	
  (c)

  	
   

  	
  15.3

  	
   

  
	
  313

  	
  (a)

  	
   

  	
  5.7

  	
   

  
	
   

  	
  (b)(1)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (b)(2)

  	
   

  	
  5.7

  	
   

  
	
   

  	
  (c)

  	
   

  	
  5.7; 15.2

  	
   

  
	
   

  	
  (d)

  	
   

  	
  5.7

  	
   

  
	
  314

  	
  (a)(1),
  (2), (3)

  	
   

  	
  9.6; 15.6

  	
   

  
	
   

  	
  (a)(4)

  	
   

  	
  9.6; 9.7; 15.6

  	
   

  
	
   

  	
  (b)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (c)(1)

  	
   

  	
  15.5

  	
   

  
	
   

  	
  (c)(2)

  	
   

  	
  15.5

  	
   

  
	
   

  	
  (c)(3)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (d)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (e)

  	
   

  	
  15.6

  	
   

  
	
   

  	
  (f)

  	
   

  	
  n/a

  	
   

  
	
  315

  	
  (a)

  	
   

  	
  5.1(a)

  	
   

  
	
   

  	
  (b)

  	
   

  	
  5.6; 15.2

  	
   

  
	
   

  	
  (c)

  	
   

  	
  5.1(b)

  	
   

  
	
   

  	
  (d)

  	
   

  	
  5.1(c)

  	
   

  
	
   

  	
  (e)

  	
   

  	
  4.14

  	
   

  
	
  316

  	
  (a)(last
  sentence)

  	
   

  	
  2.13

  	
   

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  4.5

  	
   

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  4.4

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (b)

  	
   

  	
  4.7

  	
   

  
	
   

  	
  (c)

  	
   

  	
  7.4

  	
   

  
	
  317

  	
  (a)(1)

  	
   

  	
  4.8

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
  4.9

  	
   

  
	
   

  	
  (b)

  	
   

  	
  2.5

  	
   

  
	
  318

  	
  (a)

  	
   

  	
  15.1

  	
   

  
	
   

  	
  (b)

  	
   

  	
  n/a

  	
   

  
	
   

  	
  (c)

  	
   

  	
  15.1

  	
   

  

 

“n/a”  means not applicable.

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

 

i

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1 DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
  1

  
	
  Section 1.1
  Definitions

  	
  1

  
	
  Section 1.2
  Incorporation by Reference of Trust Indenture Act

  	
  9

  
	
  Section 1.3
  Rules of Construction

  	
  9

  
	
   

  	
   

  
	
  ARTICLE 2 THE
  SECURITIES

  	
  9

  
	
  Section 2.1
  Title and Terms

  	
  9

  
	
  Section 2.2
  Form of Securities

  	
  10

  
	
  Section 2.3
  Legends

  	
  11

  
	
  Section 2.4
  Execution, Authentication, Delivery and Dating

  	
  11

  
	
  Section 2.5
  Registrar and Paying Agent

  	
  11

  
	
  Section 2.6
  Paying Agent to Hold Assets in Trust

  	
  12

  
	
  Section 2.7
  General Provisions Relating to Transfer and Exchange

  	
  12

  
	
  Section 2.8
  Book-Entry Provisions for the Global Securities

  	
  13

  
	
  Section 2.9
  [Intentionally Omitted]

  	
  14

  
	
  Section 2.10
  Holder Lists

  	
  14

  
	
  Section 2.11
  Persons Deemed Owners

  	
  14

  
	
  Section 2.12
  Mutilated, Destroyed, Lost or Stolen Securities

  	
  14

  
	
  Section 2.13
  Treasury Securities

  	
  14

  
	
  Section 2.14
  Temporary Securities

  	
  14

  
	
  Section 2.15
  Cancellation

  	
  15

  
	
  Section 2.16
  CUSIP Numbers

  	
  15

  
	
  Section 2.17
  Defaulted Interest

  	
  15

  
	
   

  	
   

  
	
  ARTICLE 3 SATISFACTION
  AND DISCHARGE

  	
  15

  
	
  Section 3.1
  Satisfaction and Discharge of Indenture

  	
  15

  
	
  Section 3.2
  Deposited Monies to be Held in Trust

  	
  16

  
	
  Section 3.3
  Return of Unclaimed Monies

  	
  16

  
	
   

  	
   

  
	
  ARTICLE 4 DEFAULTS AND
  REMEDIES

  	
  16

  
	
  Section 4.1
  Events of Default

  	
  16

  
	
  Section 4.2
  Acceleration of Maturity; Rescission and Annulment

  	
  17

  
	
  Section 4.3
  Other Remedies

  	
  18

  
	
  Section 4.4
  Waiver of Past Defaults

  	
  18

  
	
  Section 4.5
  Control by Majority

  	
  18

  
	
  Section 4.6
  Limitation on Suit

  	
  19

  
	
  Section 4.7
  Unconditional Rights of Holders to Receive Payment and to Convert

  	
  19

  
	
  Section 4.8
  Collection of Indebtedness and Suits for Enforcement by the Trustee

  	
  19

  
	
  Section 4.9
  Trustee May File Proofs of Claim

  	
  20

  
	
  Section 4.10
  Restoration of Rights and Remedies

  	
  20

  
	
  Section 4.11
  Rights and Remedies Cumulative

  	
  20

  
	
  Section 4.12
  Delay or Omission Not Waiver

  	
  20

  
	
  Section 4.13
  Application of Money Collected

  	
  20

  
	
  Section 4.14
  Undertaking for Costs

  	
  21

  

 

ii

 

	
  Section 4.15
  Waiver of Stay or Extension Laws

  	
  21

  
	
   

  	
   

  
	
  ARTICLE 5 THE TRUSTEE

  	
  21

  
	
  Section 5.1
  Certain Duties and Responsibilities

  	
  21

  
	
  Section 5.2
  Certain Rights of Trustee

  	
  22

  
	
  Section 5.3
  Individual Rights of Trustee

  	
  23

  
	
  Section 5.4
  Money Held in Trust

  	
  23

  
	
  Section 5.5
  Trustee’s Disclaimer

  	
  23

  
	
  Section 5.6
  Notice of Defaults

  	
  23

  
	
  Section 5.7
  Reports by Trustee to Holders

  	
  23

  
	
  Section 5.8
  Compensation and Indemnification

  	
  23

  
	
  Section 5.9
  Replacement of Trustee

  	
  24

  
	
  Section 5.10
  Successor Trustee

  	
  24

  
	
  Section 5.11
  Corporate Trustee Required; Eligibility

  	
  24

  
	
  Section 5.12
  Collection of Claims Against the Company

  	
  24

  
	
   

  	
   

  
	
  ARTICLE 6
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
  25

  
	
  Section 6.1
  Company May Consolidate Only on Certain Terms

  	
  25

  
	
  Section 6.2
  Successor Corporation Substituted

  	
  25

  
	
   

  	
   

  
	
  ARTICLE 7 AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
  25

  
	
  Section 7.1
  Without Consent of Holders of Securities

  	
  25

  
	
  Section 7.2
  With Consent of Holders of Securities

  	
  26

  
	
  Section 7.3
  Compliance with Trust Indenture Act

  	
  27

  
	
  Section 7.4
  Revocation of Consents and Effect of Consents or Votes

  	
  27

  
	
  Section 7.5
  Notation on or Exchange of Securities

  	
  27

  
	
  Section 7.6
  Trustee to Sign Amendment, Etc.

  	
  27

  
	
   

  	
   

  
	
  ARTICLE 8 MEETING OF
  HOLDERS OF SECURITIES

  	
  27

  
	
  Section 8.1
  Purposes for Which Meetings May Be Called

  	
  27

  
	
  Section 8.2
  Call Notice and Place of Meetings

  	
  27

  
	
  Section 8.3
  Persons Entitled to Vote at Meetings

  	
  28

  
	
  Section 8.4
  Quorum; Action

  	
  28

  
	
  Section 8.5
  Determination of Voting Rights; Conduct and Adjournment of Meetings

  	
  28

  
	
  Section 8.6
  Counting Votes and Recording Action of Meetings

  	
  29

  
	
   

  	
   

  
	
  ARTICLE 9 COVENANTS,
  REPRESENTATIONS AND WARRANTIES

  	
  29

  
	
  Section 9.1
  Payment of Principal, Premium and Interest

  	
  29

  
	
  Section 9.2
  Maintenance of Offices or Agencies

  	
  29

  
	
  Section 9.3
  Corporate Existence

  	
  30

  
	
  Section 9.4
  Maintenance of Properties

  	
  30

  
	
  Section 9.5
  Payment of Taxes and Other Claims

  	
  30

  
	
  Section 9.6
  Reports

  	
  30

  
	
  Section 9.7
  Compliance Certificate

  	
  30

  
	
  Section 9.8
  [Intentionally Omitted]

  	
  31

  
	
  Section 9.9
  Indebtedness

  	
  31

  

 

iii

 

	
  Section 9.10 Liens

  	
  31

  
	
  Section 9.11 Negative Pledge

  	
  31

  
	
  Section 9.12 Restricted Payments

  	
  31

  
	
  Section 9.13 Asset Dispositions

  	
  31

  
	
  Section 9.14 Transactions With Affiliates

  	
  32

  
	
  Section 9.15 Taxes

  	
  32

  
	
  Section 9.16 Investments

  	
  32

  
	
  Section 9.17 Shareholder Vote

  	
  32

  
	
  Section 9.18 Change in Nature of Business

  	
  33

  
	
  Section 9.19 Covenant to Obtain Prior
  Shareholder Approval

  	
  33

  
	
  Section 9.20 Accounts

  	
  33

  
	
  Section 9.21 Representations and Warranties
  of the Company

  	
  33

  
	
  Section 9.22 Post-Closing Deliveries

  	
  34

  
	
   

  	
   

  
	
  ARTICLE
  10 REDEMPTION OF SECURITIES

  	
  34

  
	
  Section 10.1 Optional Redemption

  	
  34

  
	
  Section 10.2 Notice to Trustee

  	
  34

  
	
  Section 10.3 Selection of Securities to Be
  Redeemed

  	
  34

  
	
  Section 10.4 Notice of Redemption

  	
  35

  
	
  Section 10.5 Effect of Notice of Redemption

  	
  35

  
	
  Section 10.6 Deposit of Redemption Price

  	
  35

  
	
  Section 10.7 Securities Redeemed in Part

  	
  36

  
	
   

  	
   

  
	
  ARTICLE
  11 REPURCHASE AT THE OPTION OF A HOLDER UPON A FUNDAMENTAL CHANGE

  	
  36

  
	
  Section 11.1 Repurchase Right

  	
  36

  
	
  Section 11.2 [Intentionally Omitted]

  	
  36

  
	
  Section 11.3 Repurchase Event Notice

  	
  36

  
	
  Section 11.4 Delivery of Repurchase Event
  Purchase Notice; Form of Repurchase Event Purchase Notice; Withdrawal of
  Repurchase Event Purchase Notice

  	
  37

  
	
  Section 11.5 Exercise of Repurchase Rights

  	
  38

  
	
  Section 11.6 Deposit and Payment of the
  Repurchase Price

  	
  38

  
	
  Section 11.7 Covenant to Comply with
  Securities Laws upon Repurchase of Securities

  	
  39

  
	
   

  	
   

  
	
  ARTICLE
  12 CONVERSION OF SECURITIES

  	
  39

  
	
  Section 12.1 Conversion Right and Conversion
  Price

  	
  39

  
	
  Section 12.2 Exercise of Conversion Right

  	
  39

  
	
  Section 12.3 Fractions of Shares

  	
  40

  
	
  Section 12.4 Adjustment of Conversion Price

  	
  40

  
	
  Section 12.5 Notice of Adjustments of
  Conversion Price

  	
  46

  
	
  Section 12.6 Notice Prior to Certain Actions

  	
  46

  
	
  Section 12.7 Company to Reserve Common Stock

  	
  47

  
	
  Section 12.8 Taxes on Conversions

  	
  47

  
	
  Section 12.9 Covenant as to Common Stock

  	
  47

  
	
  Section 12.10 Cancellation of Converted
  Securities

  	
  47

  
	
  Section 12.11 Effect of Reclassification,
  Consolidation, Merger or Sale

  	
  47

  
	
  Section 12.12 Cash Conversion Option

  	
  48

  
	
  Section 12.13 Responsibility of Trustee for
  Conversion Provisions

  	
  50

  

 

iv

 

	
  Section 12.14 Shares of Common Stock to be
  Issued

  	
  50

  
	
  Section 12.15 Conversion Prior to Capital
  Increase

  	
  51

  
	
   

  	
   

  
	
  ARTICLE
  13 MAKE-WHOLE PREMIUM

  	
  51

  
	
  Section 13.1 Make-Whole Amount

  	
  51

  
	
  Section 13.2 Make-Whole Premium

  	
  51

  
	
  Section 13.3 Adjustments Relating to the
  Make-Whole Premium

  	
  53

  
	
   

  	
   

  
	
  ARTICLE
  14 INTERCREDITOR AGREEMENT

  	
  53

  
	
  Section 14.1 Second Priority Nature of Liens

  	
  53

  
	
   

  	
   

  
	
  ARTICLE
  15 OTHER PROVISIONS OF GENERAL APPLICATION

  	
  53

  
	
  Section 15.1 Trust Indenture Act Controls

  	
  53

  
	
  Section 15.2 Notices

  	
  53

  
	
  Section 15.3 Communication by Holders with
  Other Holders

  	
  54

  
	
  Section 15.4 Acts of Holders of Securities

  	
  54

  
	
  Section 15.5 Certificate and Opinion as to
  Conditions Precedent

  	
  55

  
	
  Section 15.6 Statements Required in
  Certificate or Opinion

  	
  55

  
	
  Section 15.7 Effect of Headings and Table of
  Contents

  	
  55

  
	
  Section 15.8 Successors and Assigns

  	
  55

  
	
  Section 15.9 Separability Clause

  	
  55

  
	
  Section 15.10 Benefits of Indenture

  	
  56

  
	
  Section 15.11 Governing Law

  	
  56

  
	
  Section 15.12 Jurisdiction

  	
  56

  
	
  Section 15.13 Counterparts

  	
  56

  
	
  Section 15.14 Legal Holidays

  	
  56

  
	
  Section 15.15 Recourse Against Others

  	
  56

  
	
   

  	
   

  
	
  ARTICLE
  16 COLLATERAL

  	
  57

  
	
  Section 16.1 Security Documents

  	
  57

  
	
  Section 16.2 Collateral Agent

  	
  57

  
	
  Section 16.3 Opinions as to Recordings

  	
  57

  
	
  Section 16.4 Authorization of Actions to Be
  Taken

  	
  58

  
	
  Section 16.5 Release of Liens

  	
  58

  
	
  Section 16.6 Additional Guarantors

  	
  58

  

 

	
  EXHIBITS

  	
   

  
	
  EXHIBIT A:

  	
  Form of
  Security

  
	
  EXHIBIT B:

  	
  Form of
  Repurchase Event Purchase Notice

  
	
  EXHIBIT C:

  	
  Form of
  Conversion Notice

  

 

v

 

INDENTURE,
dated as of October 30, 2009, between VITESSE SEMICONDUCTOR CORPORATION, a
corporation duly organized and existing under the laws of the State of
Delaware, having its principal office at 741 Calle Plano, Camarillo,
California 93012 (the “Company”), and U.S. BANK NATIONAL ASSOCIATION, as
Trustee (the “Trustee”), having its principal corporate trust office at
60 Livingston Avenue, St. Paul, Minnesota 55107-2292.

 

RECITALS OF THE COMPANY

 

The Company has duly
authorized the creation of an issue of its 8.00% Convertible Second Lien
Debentures due 2014 (herein called the “Securities”) of substantially
the tenor and amount hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this Indenture.

 

All
things necessary to
make the Securities, when the Securities are executed by the Company and
authenticated and delivered hereunder and duly issued by the Company, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration
of the premises and the purchase of the Securities by the Holders thereof, it
is mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Securities, as follows:

 

ARTICLE
1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1  
Definitions.

 

For
all purposes of this Indenture and the Securities, the following terms are
defined as follows:

 

“Act,” when used with respect to any Holder of a Security, has
the meaning specified in Section 15.4(a).

 

“Additional Premium” has the meaning specified in Section 13.2(b).

 

“Additional Shares” has the meaning specified in Section 13.2(c)(iii).

 

“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 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 Member” has the meaning specified in Section 2.8(a).

 

“Applicable Stock Price” 
shall mean, in respect of a Determination Date, the average Closing Sale
Price of the Common Stock over the 20 Trading Day period (the “Cash Settlement
Averaging Period”): (i) ending on the second Trading Day preceding the
Redemption Date, if the Company has called the Securities for redemption
pursuant to Article 10; (ii) subject to the succeeding clause (iii),
beginning on the Trading Day following the Company’s receipt of the Holder’s
conversion notice, if the Company has irrevocably elected to make a cash
payment of principal upon conversion; (iii) ending on the second Trading
Day preceding the Maturity Date, with respect to conversion notices received
during the period beginning 25 Trading Days preceding the Maturity Date and
ending one Trading Day preceding the Maturity Date; and (iv) beginning on
the Trading Day following the final Trading Day of the Conversion Retraction
Period, in all other cases.

 

“Bankruptcy Law” means Title 11 of the U.S. Code or any
similar federal or state law for the relief of debtors.

 

“Board of Directors” means either the board of directors of the
Company or any committee of that board empowered to act for it with respect to
this Indenture.

 

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

 

“Business Day,” when used with respect to any Place of Payment
or Place of Conversion, means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in that Place of
Payment or Place of Conversion, as the case may be, are authorized or obligated
by law to close.

 

1

 

“Calculation Agent” has the meaning specified in Section 13.2.

 

“Capital Lease” means all obligations and liabilities
(contingent or otherwise) in respect of leases of such Person required, in
conformity with generally accepted accounting principles, to be accounted for
as capitalized lease obligations on the balance sheet of such Person.

 

“Capitalized Lease Obligation” means the discounted present
value of the rental obligations and liabilities (contingent or otherwise) under
a Capital Lease.

 

“Cash Amount” has the meaning specified in Section 12.12(e).

 

“Cash Equivalents” means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within six (6) months from the date of
acquisition thereof; (b) commercial paper maturing no more than six (6) months
from the date issued and, at the time of acquisition, having a rating of at least
A-1 from Standard & Poor’s Corporation or at least P-1 from Moody’s
Investors Service, Inc.; and (c) certificates of deposit or bankers’
acceptances maturing within six (6) months from the date of issuance
thereof issued by, or overnight reverse repurchase agreements from, any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia having combined capital and surplus
of not less than $250,000,000 and not subject to setoff rights in favor of such
bank.

 

“Cash-Only Settlement Amount” has the meaning specified in Section 12.12(e).

 

“Cash Settlement Averaging Period” has the meaning specified in
the definition of Cash Settlement Averaging Period.

 

“Closing Sale Price” 
means the closing sale price of any share of Common Stock on any Trading
Day (or if no closing sale price is reported, the average of the closing bid
and closing 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 principal United States securities
exchange on which the Common Stock is traded or, if the Common Stock is not
listed on a United States national or regional securities exchange, as reported
by the Nasdaq System or by the National Quotation Bureau Incorporated.  In the absence of such a quotation, the
Company shall determine the Closing Sale Price on the basis it considers
appropriate.

 

“Collateral” has the meaning assigned to such term in the Second
Lien Security Documents.

 

“Collateral Agent” means the Trustee, in its capacity as
Collateral Agent under this Indenture and the Second Lien Security Documents.

 

“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.  However, subject to the provisions of Section 12.11,
shares issuable on conversion of Securities shall include only shares of the
class designated as Common Stock, par value $0.01 per share, of the Company at
the date of this Indenture 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,
however, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable 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 instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter “Company”
shall mean such successor Person.

 

“Company Order” means a written order signed in the name of the
Company by any of the Chairman of the Board, the Chief Executive Officer, the
President, a Vice President, the Chief Financial Officer, the Controller, the
Treasurer or the Secretary of the Company, and delivered to the Trustee.

 

“Conversion Agent” means any Person authorized by the Company to
convert Securities in accordance with Article 12.

 

2

 

“Conversion Agreement” means that certain the Conversion
Agreement, dated as of the date hereof among the Company and certain of the
Holders parties thereto, as amended..

 

“Conversion Price” has the meaning specified in Section 12.1.

 

“Conversion Retraction Period” has the meaning specified in Section 12.12(c).

 

“Corporate Trust Office” means for purposes of presentation or
surrender of Securities for payment, registration, transfer, exchange or conversion
or for service of notices or demands upon the Company or for any other purpose
of this Indenture, both the office of the Trustee located at 60 Livingston
Avenue, St. Paul, Minnesota 55107-2292, Attention: Corporate Trust
Administration (Vitesse Semiconductor Corporation 8.00% Convertible Second Lien
Second Lien Debentures due 2014).

 

“corporation” means corporations, associations, limited
liability companies, companies and business trusts.

 

“Credit
Facility” means the First Lien Loan Agreement, or upon payment in full of
the First Lien Loan Agreement and the termination of all obligations of the
lenders thereunder to extend credit to the Company, one or more credit
facilities or commercial paper facilities, in each case with banks,
institutional lenders or other lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time by one or more of such facilities , whether with the
same or different banks and lenders.

 

“Current Market Price” has the meaning set forth in Section 12.4(g).

 

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

 

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

 

“Defaulted Interest” has the meaning specified in Section 2.17.

 

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

 

“Determination Date” has the meaning specified in Section 12.12(d).

 

“dollar,” “U.S. Dollar” or “$” means a dollar or
other equivalent unit in such coin or currency of the United States as at the
time shall be legal tender for the payment of public and private debts.

 

“Domestic Subsidiary” means any Subsidiary organized or existing under the laws of the United
States of America, or any state or territory thereof, or the District of
Columbia.

 

“Effective Date” has the meaning specified in Section 13.2.

 

“Event of Default” has the meaning specified in Section 4.1.

 

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

 

“‘Existing Securities” mean the securities issued pursuant to
that certain indenture dated as of September 22, 2004, among the Company
and the Trustee governing the issuance of the Company’s 1.50% Convertible
Subordinated Debentures due 2024, as amended.

 

“Expiration Time” has the meaning specified in Section 12.4(f).

 

“fair market value” has the meaning set forth in Section 12.4(g).

 

“First Lien Loan Agreement”
shall mean that certain Loan Agreement, dated as of August 23, 2007, among
the Company, the lenders from time to time parties thereto, and Whitebox VSC,
Ltd., as agent, as amended.

 

“First Lien Security
Documents” shall mean the Collateral Documents as defined in the
First Lien Loan Agreement.

 

“Fundamental Change” means any transaction or event (whether by
means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection
with which 50% or more of the Common Stock is exchanged for, converted into,
acquired for or constitutes solely the right to receive, consideration which is
not at least 90% common stock that is (i) listed on, or immediately after
the transaction or event will be listed on, a United States national securities
exchange or (ii) approved, or immediately after the transaction or 

 

3

 

event will be approved, for quotation on the Nasdaq National Market or
any similar United States system of automated dissemination of quotations of
securities prices.

 

“Global Security” has the meaning specified in Section 2.2(b).

 

“guarantee” means any obligation, contingent or otherwise, of
any Person, directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person:

 

(1)   to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or maintain financial statement conditions or otherwise); or

 

(2)   entered into for purposes of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part);

 

provided, however, that the term “guarantee”
will not include endorsements for collection or deposit in the ordinary course
of business.  The term “guarantee” used
as a verb has a corresponding meaning.

 

“Guarantors” shall mean (a) Vitesse Manufacturing &
Development Corporation, (b) Vitesse Semiconductor Sales Corporation and (c) Vitesse
International, Inc.

 

“Guarantor Security Agreement” shall mean the security agreement
dated as of the date hereof, delivered by each Guarantor to the Collateral
Agent, as amended.

 

“Guaranty” shall mean the guaranty agreement, dated as of the
date hereof, delivered by each Guarantor to the Collateral Agent, as amended.

 

“Holder,” when used with respect to any Security, including any
Global Security, means the Person in whose name the Security is registered in
the Register.

 

“Indebtedness,” when
used with respect to any Person, and without duplication means:

 

(1)   all indebtedness,
obligations and other liabilities (contingent or otherwise) of such Person for
borrowed money (including obligations of the Company in respect of overdrafts,
foreign exchange contracts, currency exchange agreements, Interest Rate
Protection Agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by bonds, debentures,
notes or other instruments for the payment of money, or Purchase Money Debt, or
incurred in connection with the acquisition of any services (whether or not the
recourse of the lender is to the whole of the assets of such Person or to only
a portion thereof), other than any account payable or other accrued current
liability or obligation to trade creditors incurred in the ordinary course of
business in connection with the obtaining of such services;

 

(2)   all reimbursement
obligations and other liabilities (contingent or otherwise) of such Person with
respect to letters of credit, bank guarantees, bankers’ acceptances, surety
bonds, performance bonds or other guaranty of contractual performance;

 

(3)   all obligations and
liabilities (contingent or otherwise) in respect of (a) Capital Leases;
and (b) any lease or related documents (including a purchase agreement) in
connection with the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of the leased
property to the landlord and the obligations of such Person under such lease or
related document to purchase or to cause a third party to purchase the leased
property;

 

(4)   all obligations of such
Person (contingent or otherwise) with respect to an interest rate or other
swap, cap or collar agreement or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument or agreement;

 

(5)   all direct or indirect
guarantees or similar agreements by such Person in respect of, and obligations
or liabilities (contingent or otherwise) of such Person to purchase or
otherwise acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind
described in clauses (1) through (4);

 

(6)   any indebtedness or other
obligations described in clauses (1) through (4) secured by any
mortgage, pledge, lien or other encumbrance existing on property which is owned
or held by such Person, regardless of whether the indebtedness or other
obligation secured thereby shall have been assumed by such Person; and

 

4

 

(7)   any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (1) through (6).

 

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

 

“Indenture Documents” means the Indenture and the Second Lien
Security Documents.

 

“Intercreditor Agreement” shall mean the intercreditor
agreement, dated as of the date hereof, between the First Lien Agent, the
Trustee, the Company and the Guarantors.

 

“Interest Payment Date” means each of April 1 and October 1;
provided, however, that if any
such date is not a Business Day, the Interest Payment Date shall be the next
succeeding Business Day.

 

“Interest Rate” means 8.00% per annum.

 

“Interest Rate Protection Agreement” means, with respect to any
Person, any interest rate swap agreement, interest rate cap or collar agreement
or other financial agreement or arrangement designed to protect such person
against fluctuations in interest rates, as in effect from time to time.

 

“Investments” shall mean the acquisition, purchase, making or
holding of any stock or other security, any loan, advance, contribution to
capital, extension of credit (except for trade and customer accounts receivable
for inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms), any acquisition of real or
personal property (other than real or personal property acquired in the
ordinary course of business) and any purchase, commitment or option to purchase
stock or other debt or equity securities of or any other interest in another
Person or an integral part of any business or the assets comprising such
business or the assets comprising such business or part thereof.  The amount of any Investment shall be the
original cost of such Investment plus the cost of additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.

 

“Issuer Security Agreement” shall mean the security agreement,
dated as of the date hereof, delivered by the Company to the Collateral Agent,
as amended.

 

“Lien” means, with respect to any Person, any security interest,
mortgage, pledge, lien, charge, encumbrance, title retention agreement, or
analogous instrument or device (including the interest of each lessor under any
Capital Lease) in, of or on any assets or properties of such Person, now owned
or hereafter acquired, whether arising by agreement or operation of law.

 

“Make-Whole Amount” has the meaning specified in Section 13.1(a).

 

“Make-Whole Percentage” has the meaning specified in Section 13.2(c)(iii).

 

“Make-Whole Premium” has the meaning specified in Section 13.2(b).

 

“Make-Whole Table” has the meaning specified in Section 13.2(c)(iii).

 

“Maturity” and “Maturity Date” means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by acceleration, conversion, call
for redemption, exercise of a Repurchase Right or otherwise.

 

“Nasdaq National Market” means the National Association of
Securities Dealers Automated Quotation National Market or any successor
national securities exchange or automated over-the-counter trading market in
the United States.

 

“Non-Electing Share” has the meaning specified in Section 12.11.

 

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

 

“Officers’ Certificate” means a certificate signed by both (1) the
Chairman of the Board, the Chief Executive Officer, the President or a Vice
President and (2) so long as not the same as the officer signing pursuant
to clause (1), the Chief Financial Officer, the Treasurer, the Controller
or the Secretary of the Company, and delivered to the Trustee.

 

“Opinion of Counsel” means a written opinion of counsel, who may
be counsel to the Company (and may include directors or employees of the
Company) and who is acceptable to the Trustee, which acceptance shall not be
unreasonably withheld.

 

5

 

“Outstanding,” when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except Securities:

 

(1)   previously canceled by the
Trustee or delivered to the Trustee for cancellation;

 

(2)   for the payment or
redemption of which money in the necessary amount has been previously deposited
with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided, however, that if such Securities
are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture; and

 

(3)   which have been paid in
exchange for or in lieu of other Securities which have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to
it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations
of the Company.

 

“Paying Agent” has the meaning specified in Section 2.5.

 

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

 

“Permitted Liens” shall mean (a) the Security Interest, (b) the
liens granted to the First Lien Agent pursuant to the First Lien Security
Documents, (c) deposits or pledges to secure payment of workers’
compensation, unemployment insurance, pensions or other social security
obligations, in the ordinary course of business of the Company and its
Subsidiaries; (d) Liens for taxes, fees, assessments and governmental
charges not delinquent, other than those being contested in good faith by
appropriate proceeding, and as long as the Company’s or such Subsidiary’s title
to its property is not materially adversely affected, its use of such property
in the ordinary course of business is not materially interfered with and
adequate reserves with respect thereto have been set aside on the Company’s or
such Subsidiary’s books in accordance with GAAP; (e) Liens of carriers,
warehousemen, mechanics and materialmen, and other like Liens arising in the
ordinary course of busines, for sums not due; (f) the interests of any
licensee under any intellectual property license agreement entered into in the
ordinary course of business; and (g) Liens incurred or deposits or pledges
made or given in connection with, or to secure payment of, indemnity,
performance or other similar bonds in an amount not to exceed $500,000; and (g) the
interest of any lessor under any Capital Lease entered into after the date
hereof or Liens securing Purchase Money Debt acquired after the date hereof,
provided that (i) the Indebtedness secured is permitted herein and (ii) such
Liens are limited to the property acquired and do not secure Indebtedness other
than the related Capitalized Lease Obligations or the purchase price of such
property.

 

“Permitted
Refinancing” means with respect to any Person, any modification,
refinancing, refunding, renewal or extension of any Indebtedness of such
Person; provided that (a) the principal amount (or accreted value, if
applicable) thereof does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so modified, refinanced, refunded, renewed or
extended (the “Refinanced Indebtedness”) except by an amount equal to
unpaid accrued interest and premium thereon plus other reasonable amounts paid,
and fees and expenses reasonably incurred, in connection with such
modification, refinancing, refunding, renewal or extension, (b) such
modification, refinancing, refunding, renewal or extension has a final maturity
date equal to or later than the final maturity date of the Refinanced
Indebtedness, and (c) the lenders thereunder either assume the
Intercreditor Agreement or enter into an intercreditor agreement on terms no
less favorable to the Holders of the Securities.

 

“Physical Securities” means Securities issued in definitive,
fully registered form without interest coupons, substantially in the form of Exhibit A
hereto, with the applicable legends as provided in Section 2.3.

 

“Place of Conversion” means any city in which any Conversion
Agent is located.

 

“Place of Payment” means any city in which any Paying Agent is
located.

 

“Pledge Agreement” shall mean the pledge agreement, dated as of
the date hereof, delivered by the Company to the Collateral Agent.

 

“Predecessor Security” of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.12 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.

 

6

 

“Purchase Money Debt” means all indebtedness, obligations and
other liabilities (contingent or otherwise) incurred in connection with the
acquisition of any property or assets (whether or not the recourse of the
lender is to the whole of the assets of the borrower or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation to trade creditors incurred in the ordinary course of business in
connection with the obtaining of materials.

 

“Purchased Shares” has the meaning set forth in Section 12.4(f).

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Record Date” means either a Regular Record Date or a Special
Record Date, as the case may be; provided
that, for purposes of Section 12.4, Record Date has the meaning specified
in 12.4(g).

 

“Redemption Date,” when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

 

“Redemption Price,” when used with respect to any Security to be
redeemed, means 100.0% of the principal amount of such Security to be redeemed
pursuant to this Indenture.

 

“Reference Dealer” means a dealer engaged in the trading of
convertible securities.

 

“Reference Period” has the meaning set forth in Section 12.4(d).

 

“Register” has the meaning specified in Section 2.5.

 

“Registrar” has the meaning specified in Section 2.5.

 

“Regular Record Date” for the interest on the Securities payable
means the March 15 (whether or not a Business Day) next preceding an
Interest Payment Date on April 1 and the September 15 (whether or not
a Business Day) next preceding an Interest Payment Date on October 1.

 

“Regulation S” means Regulation S under the Securities
Act.

 

“Repurchase Date” has the meaning specified in Section 11.1(a).

 

“Repurchase Event” has the meaning specified in Section 11.1(a).

 

“Repurchase Event Notice” has the meaning specified in Section 11.3.

 

“Repurchase Event Purchase Notice” has the meaning specified in Section 11.3.

 

“Repurchase Price” has the meaning specified in Section 11.1(a).

 

“Repurchase Right” has the meaning specified in Section 11.1(a).

 

“Responsible Officer,” when used with respect to the Trustee,
means any officer in the Corporate Trust Office of the Trustee and also means,
with respect to a particular corporate trust matter, any other officer of the
Trustee whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.

 

“Restricted Payments” means (a) all dividends (other than
from a wholly-owned Subsidiary to the Company) or other distributions with
respect to the equity interests of the Company or any Subsidiary of any nature,
and all payments on any class of equity interests issued by the Company or a
Subsidiary, whether authorized or outstanding on the date hereof, or at any
time thereafter and any redemptions or purchase of, or distribution in respect
of any of the foregoing and (b) any payments in respect of any
Indebtedness incurred pursuant to Section 9.9(f).

 

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

 

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

 

“Second Lien Security Documents” shall mean the Company Security
Agreement, the Pledge Agreement, the Collateral Assignment of IP, the Guaranty
and the Guarantor Security Agreement.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” has the meaning ascribed to it in the first
paragraph under the caption “Recitals of the Company.”

 

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

 

7

 

“Security Interest” has the meaning assigned to such term in the
Second Lien Security Documents.

 

“Senior Secured
Indebtedness” means Indebtedness of (a) the Company for borrowed money
or evidenced by an instrument for the payment of money under a Credit Facility
or (b) another Person for borrowed money or evidenced by an instrument for
the payment of money which has been assumed or guaranteed by the Company under
a Credit Facility, which by its terms is to be secured by a first priority Lien
on all or substantially all of the assets of the Company or a pledge by the
Company of the capital stock of any of its Subsidiaries.

 

“Significant Subsidiary” means any Subsidiary which is a “significant
subsidiary” within the meaning of Rule 405 under the Securities Act.

 

“Special Record Date” for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 2.17.

 

“Stated Maturity” means the date specified in any Security as
the fixed date for the payment of principal on such Security or on which an
installment of interest on such Security is due and payable.

 

“Stock Price” has the meaning specified in Section 13.2(c).

 

“Stock Price Cap” has the meaning specified in Section 13.2(b).

 

“Stock Price Threshold” has the meaning specified in Section 13.2(b).

 

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

 

“TIA” means the Trust Indenture Act of 1939, as amended
(15 U.S. Code Section 77aaa-77bbbb), as in effect on the date of this
Indenture; provided, however,
that in the event the TIA is amended after such date, “TIA” means, to the
extent such amendment is applicable to this Indenture, the Trust Indenture Act
of 1939, as so amended, or any successor statute.

 

“Trading Day” means:

 

(1)   if the applicable security
is listed or admitted for trading on the New York Stock Exchange or another
national security exchange, a day on which the New York Stock Exchange or such
other national security exchange is open for business;

 

(2)   if the applicable security
is quoted on the Nasdaq National Market, a day on which trades may be made
thereon; or

 

(3)   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” of a security on any date of determination
means:

 

(1)   the closing sale price (or,
if no closing sale price is reported, the last reported sale price) of such
security (regular day) on the New York Stock Exchange on such date;

 

(2)   if such security is not
listed for trading on the New York Stock Exchange on any such date, the closing
sale price as reported in the composite transactions for the principal U.S.
securities exchange on which such security is so listed;

 

(3)   if such security is not so
listed on a U.S. national or regional securities exchange, the closing sale
price as reported by the Nasdaq National Market;

 

(4)   if such security is not so
reported, the last price quoted by Interactive Data Corporation for such security
or, if Interactive Data Corporation is not quoting such price, a similar
quotation service selected by the Company;

 

(5)   if such security is not so
quoted, the average of the mid-point of the last bid and ask prices for such
security from at least two dealers recognized as market-makers for such
security; or

 

8

 

(6)   if such security is not so
quoted, the average of the last bid and ask prices for such security from a
Reference Dealer.

 

“Transfer Agent” means any Person, which may be the Company,
authorized by the Company to exchange or register the transfer of Securities.

 

“Trigger Event” has the meaning specified in Section 12.4(d).

 

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

 

“U.S. Government Obligations” means:  (1) direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged or (2) obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America and which in
either case, are non-callable at the option of the Company thereof.

 

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

 

Section 1.2  
Incorporation by Reference of Trust Indenture Act.

 

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

 

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

 

“indenture
securities” means the Securities;

 

“indenture security holder” means a Holder;

 

“indenture to be qualified” means this Indenture;

 

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

 

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

 

All other TIA terms used
in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule have the meanings assigned to them
by such definitions.

 

Section 1.3  
Rules of Construction.

 

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

 

(1)   the
terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;

 

(2)   all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with accounting principles generally accepted in the United
States prevailing at the time of any relevant computation hereunder; and

 

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

 

ARTICLE 2

THE SECURITIES

 

Section 2.1  
Title and Terms.

 

(a)     The Securities shall be known and
designated as the “8.00% Convertible Second Lien Debentures due 2014” of the
Company.  The aggregate principal amount
of Securities which may be authenticated and delivered under this Indenture is
limited to $49,993,000, except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other
Securities pursuant to Section 2.7, 2.8, 2.9, 2.12, 7.5, 10.6, 11.1 or
12.2.  The Securities shall be issuable
in denominations of $1,000 or integral multiples thereof.

 

9

 

(b)     The Securities shall mature on October 30,
2014.

 

(c)     Interest shall accrue from October 30, 2009
at the Interest Rate until the principal thereof is paid or made available for
payment.  Interest shall be payable
semiannually in arrears on April 1 and October 1 in each year,
commencing April 1, 2010.

 

(d)     Interest on the Securities shall be
computed (i) for any full semi-annual period for which a particular
Interest Rate is applicable, on the basis of a 360-day year of twelve 30-day
months and (ii) for any period for which a particular Interest Rate is
applicable shorter than a full semiannual period for which interest is
calculated, on the basis of a 30-day month and, for such periods of less than a
month, the actual number of days elapsed over a 30-day month.

 

(e)     A Holder of any Security at the close of
business on a Regular Record Date shall be entitled to receive interest on such
Security on the corresponding Interest Payment Date.  A Holder of any Security which is converted
after the close of business on a Regular Record Date and prior to the
corresponding Interest Payment Date (other than any Security whose Maturity is
prior to such Interest Payment Date) shall be entitled to receive interest on
the principal amount of such Security, notwithstanding the conversion of such
Security prior to such Interest Payment Date. 
However, any such Holder which surrenders any such Security for
conversion during the period between the close of business on such Regular
Record Date and ending with the opening of business on the corresponding
Interest Payment Date shall be required to pay the Company an amount equal to
the interest on the principal amount of such Security so converted, which is
payable by the Company to such Holder on such Interest Payment Date, at the time
such Holder surrenders such Security for conversion.  Notwithstanding the foregoing, any such
Holder which surrenders for conversion any Security which has been called for
redemption by the Company on a date that is after a Record Date but prior to the
corresponding Interest Payment Date in a notice of redemption given by the
Company pursuant to Section 10.4 shall be entitled to receive (and retain)
such interest and need not pay the Company an amount equal to the interest on
the principal amount of such Security so converted at the time such Holder
surrenders such Security for conversion.

 

(f)      Principal of, and premium, if any, and
interest on, Global Securities shall be payable to the Depositary in
immediately available funds.

 

(g)     Principal and premium, if any, on Physical
Securities shall be payable at the office or agency of the Company maintained
for such purpose, initially the Corporate Trust Office of the Trustee.  Interest on Physical Securities will be payable
by (i) U.S. Dollar check mailed to the address of the Person entitled
thereto as such address shall appear in the Register, or (ii) upon
application to the Registrar not later than the relevant Record Date by a
Holder of an aggregate principal amount of Securities in excess of $5,000,000, wire
transfer in immediately available funds to an account within the United States,
which application shall remain in effect until the Holder notifies, in writing,
the Registrar to the contrary.

 

(h)     The Securities shall be redeemable at the
option of the Company as provided in Article 10.

 

(i)      The Securities shall be repurchaseable by
the Company at the option of Holders as provided in Article 11.

 

(j)      The Securities shall be convertible at the
option of the Holders as provided in Article 12.

 

Section 2.2  
Form of Securities.

 

(a)     Except as otherwise provided pursuant to
this Section 2.2, the Securities are issuable in fully registered form,
without coupons, in substantially the form of Exhibit A hereto,
with such applicable legends as are provided for in Section 2.3.  The Securities are not issuable in bearer
form.  The terms and provisions contained
in the form of Security 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 Securities may have such letters, numbers or other marks of
identification and such notations, legends and endorsements 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 to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Securities may
be listed or designated for issuance, or to conform to usage.

 

(b)     The Securities are being exchanged for the
Existing Securities by the Company pursuant to the Conversion Agreement.  The Securities shall be issued initially in
the form of one or more permanent global Securities in fully registered form,
without interest coupons, substantially in the form of Exhibit A
hereto, with the applicable legends as provided in Section 2.3 (each a “Global
Security” and collectively the “Global Securities”).  Each Global Security shall be duly executed
by the Company and authenticated and delivered by the Trustee, and shall be
registered in the name of the Depositary or its nominee and retained by the
Trustee, as Custodian, at its Corporate Trust Office, for credit to the
accounts of the Agent 

 

10

 

Members
holding the Securities evidenced thereby. 
The aggregate principal amount of the Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as Custodian, and of the Depositary or its nominee, as hereinafter
provided.

 

Section 2.3  
Legends.

 

(a)     [Intentionally Omitted]

 

(b)     Global Security Legend.

 

Each Global Security
shall bear the following legend on the face thereof:

 

THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREIN.  THIS GLOBAL SECURITY MAY NOT BE
EXCHANGED OR TRANSFERRED, IN WHOLE OR IN PART, FOR A SECURITY REGISTERED IN THE
NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES SET FORTH IN THE INDENTURE. 
BENEFICIAL INTERESTS IN THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE INDENTURE.

 

(c)     Legend for Physical Securities.

 

Physical Securities will
also bear a legend substantially in the following form:

 

THIS SECURITY WILL NOT BE
ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A GLOBAL SECURITY UNLESS THE
HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO DEBENTURES.

 

Section 2.4  
Execution, Authentication, Delivery and Dating.

 

Two
Officers of the Company shall execute the Securities on behalf of the Company
by manual or facsimile signature.  If an
Officer of the Company whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall be valid
nevertheless.

 

At
any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.

 

Each Security shall be dated
the date of its authentication.

 

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

 

The
Trustee may appoint
an authenticating agent or agents reasonably acceptable to the Company with
respect to the Securities.  Unless limited
by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. 
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent.

 

Section 2.5  
Registrar and Paying Agent.

 

The
Company shall maintain an office or agency where Securities may be presented
for registration of transfer or for exchange (the “Registrar”) and an
office or agency where Securities may be presented for payment (the “Paying
Agent”).  The Registrar shall keep a
register of the Securities (the “Register”) and of their transfer and
exchange.  The Company may appoint one or
more co-Registrars and one or more additional Paying Agents for the
Securities.  The term “Paying Agent”
includes any additional paying agent and the term “Registrar” includes any
additional registrar.  The Company may
change any Paying Agent or Registrar without prior notice to any Holder.

 

The
Company will cause each Paying Agent (other than the Trustee) to execute and deliver
to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent
will:

 

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(1)   hold all sums held by it for
the payment of the principal of and premium, if any, or interest on Securities
in trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as provided in this Indenture;

 

(2)   give the Trustee notice of
any Default by the Company in the making of any payment of principal and
premium, if any, or interest; and

 

(3)   at any time during the
continuance of any such Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

 

The
Company shall give prompt written notice to the Trustee of the name and address
of any Agent who is not a party to this Indenture.  If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as
such.  The Company or any Affiliate of
the Company may act as Paying Agent or Registrar; provided, however, that none of the Company, its
subsidiaries or the Affiliates of the foregoing shall act:

 

(ii)           as Paying Agent in connection with
redemptions, offers to purchase and discharges, except as otherwise specified
in this Indenture, and

 

(iii)          as Paying Agent or Registrar if a
Default or Event of Default has occurred and is continuing.

 

The
Company hereby initially appoints the Trustee as Registrar and Paying Agent for
the Securities.

 

Section 2.6  
Paying Agent to Hold Assets in Trust.

 

Not
later than 11:00 a.m. (New York City time) on each due date of the
principal, premium, if any, and interest on any Securities, the Company shall
deposit with one or more Paying Agents money in immediately available funds in
an aggregate amount sufficient to pay the principal, premium, if any, and
interest due on such date.  The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee.  Upon payment over to the
Trustee, the Paying Agent (if other than the Company) shall have no further
liability for the money so paid over to the Trustee.

 

If the Company shall act
as a Paying Agent, it shall, prior to or on each due date of the principal of
and premium, if any, or interest on any of the Securities, segregate and hold
in trust for the benefit of the Holders a sum sufficient with monies held by
all other Paying Agents, to pay the principal and premium, if any, or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as provided in this Indenture, and shall promptly notify the
Trustee of its action or failure to act.

 

Section 2.7  
General Provisions Relating to Transfer and Exchange.

 

The
Securities are issuable only in registered form.  A Holder may transfer a Security only by
written application to the Registrar stating the name of the proposed
transferee and otherwise complying with the terms of this Indenture.  No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the
Register.  Furthermore, any Holder of a
Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book-entry system maintained by the Holder of such Global Security
(or its agent) and that ownership of a beneficial interest in the Global
Security shall be required to be reflected in a book-entry.

 

When
Securities are presented to the Registrar with a request to register the
transfer or to exchange them for an equal aggregate principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder).  Subject to Section 2.4, to
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar’s request.  No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.14, 7.5 or 10.6).

 

Neither
the Company nor the Registrar shall be required to exchange or register a
transfer of any Securities:

 

(1)   for a period of 15 Business
Days prior to the day of any selection of Securities for redemption under Article 10;

 

12

 

(2)   so selected for redemption
or, if a portion of any Security is selected for redemption, the portion
thereof selected for redemption; or

 

(3)   surrendered for conversion
or, if a portion of any Security is surrendered for conversion, the portion
thereof surrendered for conversion.

 

Section 2.8  
Book-Entry Provisions for the Global Securities.

 

(a)     The Global Securities initially shall:

 

(i)            be registered in the name of the
Depositary (or a nominee thereof);

 

(ii)           be delivered to the Trustee as
custodian for such Depositary;

 

(iii)          [Intentionally Omitted]; and

 

(iv)          the Global Securities Legend set forth
in Section 2.3(b).

 

Members
of, or participants in, the Depositary (“Agent Members”) shall have no
rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. 
Notwithstanding the foregoing, nothing contained herein shall prevent
the Company, the Trustee or any agent of the Company or Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and the Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.

 

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

 

(c)     A Global Security may not be transferred,
in whole or in part, to any Person other than the Depositary (or a nominee thereof),
and no such transfer to any such other Person may be registered.  Beneficial interests in a Global Security may
be transferred in accordance with the rules and procedures of the
Depositary.

 

(d)     If at any time:

 

(i)            the Depositary notifies the Company
in writing that it is no longer willing or able to continue to act as
Depositary for the Global Securities, or the Depositary ceases to be a “clearing
agency” registered under the Exchange Act and a successor depositary for the
Global Securities is not appointed by the Company within 90 days of such notice
or cessation;

 

(ii)           the Company, at its option, notifies
the Trustee in writing that it elects to cause the issuance of the Physical
Securities under this Indenture in exchange for all or any part of the
Securities represented by a Global Security or Global Securities; or

 

(iii)          an Event of Default has occurred and
is continuing and the Registrar has received a request from the Depositary for
the issuance of Physical Securities in exchange for such Global Security or
Global Securities;

 

(iv)          the Depositary shall surrender such
Global Security or Global Securities to the Trustee for cancellation and the
Company shall execute, and the Trustee, upon receipt of an Officers’
Certificate and Company Order for the authentication and delivery of
Securities, shall authenticate and deliver in exchange for such Global Security
or Global Securities, Physical Securities in an aggregate principal amount
equal to the aggregate principal amount of such Global Security or Global
Securities.  Such Physical Securities
shall be registered in such names as the Depositary shall identify in writing
as the beneficial owners of the Securities represented by such Global Security
or Global Securities (or any nominee thereof).

 

(e)     Notwithstanding the foregoing, in
connection with any transfer of beneficial interests in a Global Security to
the beneficial owners thereof pursuant to Section 2.8(d), the Registrar
shall reflect on its books and records the date and a decrease in the principal
amount of such Global Security in an amount equal to the principal amount of
the beneficial interests in such Global Security to be transferred.

 

13

 

Section 2.9  
[Intentionally Omitted]

 

Section 2.10   Holder Lists.

 

The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders and shall otherwise
comply with Section 312(a) of the TIA.  If the Trustee is not the Registrar, the
Company shall furnish to the Trustee prior to or on each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Holders relating to such Interest Payment Date or request, as the
case may be.

 

Section 2.11  
Persons Deemed Owners.

 

The Company, the Trustee
and any agent of the Company or the Trustee may treat the Holder as the owner
of such Security for the purpose of receiving payment of principal of and
premium, if any, and interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and notwithstanding any
notice of ownership or writing thereon, or any notice of previous loss or theft
or other interest therein.

 

Section 2.12  
Mutilated, Destroyed, Lost or Stolen Securities.

 

If any mutilated Security
is surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

 

If there is delivered to
the Company and the Trustee:

 

(1)   evidence to their
satisfaction of the destruction, loss or theft of any Security; and

 

(2)   such security or indemnity
as may be required by them to save each of them and any agent of either of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona
fide purchaser, the Company shall execute and, upon request, the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of like tenor and principal amount and bearing
a number not contemporaneously outstanding.

 

In
case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion, but subject to
any conversion rights, may, instead of issuing a new Security, pay such
Security, upon satisfaction of the condition set forth in the preceding
paragraph.

 

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

 

Every
new Security issued pursuant to this Section 2.12 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and such new
Security shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

 

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

 

Section 2.13 
 Treasury Securities.

 

In determining whether
the Holders of the requisite principal amount of Outstanding Securities are
present at a meeting of Holders for quorum purposes or have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such determination
as to the presence of a quorum or upon any such request, demand, authorization,
direction, notice, consent or waiver, only such Securities of which the Trustee
has received written notice and are so owned shall be so disregarded.

 

Section 2.14  
Temporary Securities.

 

Pending the preparation
of Securities in definitive form, the Company may execute and the Trustee
shall, upon written request of the Company, authenticate and deliver temporary
Securities (printed or lithographed).  Temporary
Securities shall be issuable in any authorized denomination, and substantially
in the form of the Securities in definitive form but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all
as may be determined

 

14

 

by the Company.  Every such
temporary Security shall be executed by the Company and authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
the same effect, as the Securities in definitive form.  Without unreasonable delay, the Company will
execute and deliver to the Trustee Securities in definitive form (other than in
the case of Securities in global form) and thereupon any or all temporary
Securities (other than any such Securities in global form) may be surrendered
in exchange therefor, at each office or agency maintained by the Company
pursuant to Section 9.2 and the Trustee shall authenticate and deliver in
exchange for such temporary Securities an equal aggregate principal amount of
Securities in definitive form.  Such
exchange shall be made by the Company at its own expense and without any charge
therefor.  Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as Securities in
definitive form authenticated and delivered hereunder.

 

Section 2.15   Cancellation.

 

All
securities surrendered for payment, redemption, repurchase, conversion,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee. 
All Securities so delivered shall be canceled promptly by the Trustee,
and no Securities shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. 
The Trustee shall destroy canceled Securities and, after such
destruction, shall deliver a certificate of such destruction to the
Company.  If the Company shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless the same
are delivered to the Trustee for cancellation.

 

Section 2.16  
CUSIP Numbers.

 

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

 

Section 2.17  
Defaulted Interest.

 

If
the Company fails to make a payment of interest on any Security when due and
payable (“Defaulted Interest”), it shall pay such Defaulted Interest
plus (to the extent lawful) any interest payable on the Defaulted Interest, in
any lawful manner.  It may elect to pay
such Defaulted Interest, plus any such interest payable on it, to the Persons
who are Holders of such Securities on which the interest is due on a subsequent
Special Record Date.  The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such
Security.  The Company shall fix any such
Special Record Date and payment date for such payment.  At least 15 days before any such Special
Record Date, the Company shall mail to Holders affected thereby a notice that
states the Special Record Date, the Interest Payment Date, and amount of such
interest to be paid.

 

ARTICLE 3

SATISFACTION AND DISCHARGE

 

Section 3.1  
Satisfaction and Discharge of Indenture.

 

When:

 

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

 

(2)   all
the Securities not previously 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;

 

(3)   the
Company shall deposit with the Trustee, in trust, cash in U.S. Dollars and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof, in accordance with their terms, will provide (and without
reinvestment and assuming no tax liability will be imposed on such Trustee),
not later than one day before the due date of any payment of money, an amount
in cash, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay principal of, premium, if any, or interest on
all of the Securities (other than any Securities which

 

15

 

shall have been mutilated, destroyed, lost or stolen and in lieu of or
in substitution for which other Securities shall have been authenticated and
delivered) not previously canceled or delivered to the Trustee for
cancellation, on the dates such payments of principal, premium, if any, or
interest are due to such date of Maturity or redemption, as the case may be;
and

 

(4)   the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel to the effect that (x) the Company has received from,
or there has been published by, the Internal Revenue Service a ruling or (y) since
the date of execution of this Indenture, there has been a change in the
applicable federal income tax law, in the case of either clause (x) or (y) to
the effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject to
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit and discharge had not
occurred; and

 

if, in the case of either clause (3) or (4), the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to:  (i) remaining rights of registration of
transfer, substitution and exchange and conversion of Securities; (ii) rights
hereunder of Holders to receive payments of principal of and premium, if any,
and interest on, the Securities and the other rights, duties and obligations of
Holders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee; and (iii) the rights, obligations and
immunities of the Trustee hereunder) and the Trustee, on demand of the Company
accompanied by an Officers’ Certificate and an Opinion of Counsel and at the
cost and expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture; provided, however, that the Company shall reimburse the
Trustee for all amounts due the Trustee under Section 5.8 and 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
Securities.

 

Section 3.2   Deposited
Monies to be Held in Trust.

 

Subject to Section 3.3, all monies deposited with the Trustee
pursuant to Section 3.1 shall be held in trust and applied by it to the
payment, notwithstanding the provisions of Article 14, either directly or
through any Paying Agent (including the Company if acting as its own Paying
Agent), to the Holders of the particular Securities for the payment 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.  All monies deposited with the
Trustee pursuant to Section 3.1 (and held by it or any Paying Agent) for
the payment of Securities subsequently converted shall be returned to the
Company upon the earlier of the request of the Company and the date on which
there are no Securities outstanding.

 

Section 3.3  
Return of Unclaimed Monies.

 

The Trustee and the Paying Agent shall pay to the Company any money
held by them for the payment of principal or premium, if any, or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due.  After payment to the
Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.

 

ARTICLE 4

DEFAULTS AND REMEDIES

 

Section 4.1  
Events of Default.

 

An
“Event of Default” with respect to the Securities occurs when any of the
following occurs (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article 14 or be voluntary or
involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental
body):

 

(a)     the Company defaults in the payment of
interest on any of the Securities when it becomes due and payable and such
default continues for a period of 30 days, whether or not such payment is
prohibited by Article 14; or

 

(b)     the Company defaults in the payment of the
principal of or premium, if any, on any of the Securities when it becomes due
and payable at Maturity, upon redemption or exercise of a Repurchase Right, or
otherwise, whether or not such payment is prohibited by Article 14; or

 

16

 

(c)     the Company fails to satisfy is obligations
with respect to any payments due Section 9.17(a), whether or not such
payment is prohibited by Article 14; or

 

(d)     the Company fails to deliver Common Stock,
cash or a combination of the foregoing, as required pursuant to Article 12
or Article 13 upon the conversion of any Securities, and such failure
continues for 5 days following the scheduled settlement date for such
conversion; or

 

(e)     the Company fails to provide notice of the
anticipated or actual effective date of a Fundamental Change or distribution
pursuant to Section 11.3 or 11.4, in each case, on a timely basis as
required under this Indenture; or

 

(f)      the Company defaults in the performance
of, or the Company breaches any, covenant or agreement contained in this
Indenture, any Indenture Document or the Securities (other than (i) a
default specified in clause (a), (b) or (c) above,  (ii) any non-payment default under Section 9.17(a),
and (iii) a default under Section 9.6) and such default or breach
continues for a period of 60 consecutive days after written notice of such
breach or default shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of 25% or more in aggregate principal
amount of the Outstanding Securities; or

 

(g)     the Company (i) defaults in the
performance of any covenant or agreement contained in any agreements,
indentures or instruments under which the Company has incurred Indebtedness of
$15,000,000 or more in the aggregate (not including any amounts the Company may
owe under reimbursement or similar obligations to banks, sureties or other
entities which have issued letters of credit, surety bonds, performance bonds
or other guarantees relating to the performance by the Company or its
Subsidiaries of contractual obligations to customers, to the extent any demands
made under any such reimbursement or similar obligation relate to a draw under
the related letter of credit or other instrument which draw is being contested
in good faith through appropriate proceedings) whether such indebtedness now
exists or shall hereafter be created, and (ii) such default has caused the
holders of such Indebtedness to declare such Indebtedness to be due and payable
prior to its stated maturity and such Indebtedness has not been discharged in
full or such acceleration has not been rescinded or annulled by the 30th day after written notice of such default shall
have been given to the Company by the Trustee or to the Company and the Trustee
by Holders of 25% or more in aggregate principal amount of the Outstanding
Securities; provided that if the
default under the agreement, indenture or instrument is remedied or cured by
the Company or waived by the holders of such Indebtedness before the entry of
judgment in favor of the Trustee, then the Event of Default under this
Indenture will be deemed likewise to have been remedied, cured or waived; or

 

(h)     the entry by a court having jurisdiction in
the premises of (i) a decree or order for relief in respect of the Company
in an involuntary case or proceeding under any applicable U.S. federal or state
bankruptcy, insolvency, reorganization or other similar law or (ii) 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 U.S. federal
or state law, or appointing a Custodian of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
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

 

(i)      the commencement by the Company of a
voluntary case or proceeding under any applicable U.S. 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 U.S. 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 U.S. federal or state
law, or the consent by the Company to the filing of such petition or to the
appointment of or the taking possession by a Custodian of the Company or of any
substantial part of its property, 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 expressly in furtherance of any such action.

 

Section 4.2   Acceleration
of Maturity; Rescission and Annulment.

 

If an Event of Default with respect to Outstanding Securities occurs
and is continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities, by written notice to the
Company, may declare due and payable 100% of the principal amount of all
Outstanding Securities plus any accrued and unpaid interest to the date of
payment.  Upon a declaration of
acceleration, such principal and accrued and unpaid interest to the date of
payment shall be immediately due and payable.

 

17

 

The Holders either (a) through notice to the Trustee of not less
than a majority in aggregate principal amount of the Outstanding Securities, or
(b) by the adoption of a resolution, at a meeting of Holders of the
Outstanding Securities at which a quorum is present, by the Holders of at least
a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting, may, on behalf of the Holders of all of the
Securities, rescind and annul an acceleration and its consequences if:

 

(1)   all
existing Events of Default, other than the nonpayment of principal of or
interest on the Securities which have become due solely because of the
acceleration, have been remedied, cured or waived, and

 

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

 

provided, however,
that in the event such declaration of acceleration has been made based on the
existence of an Event of Default under Section 4.1(g) and the default
with respect to Indebtedness for money borrowed which gave rise to such Event
of Default has been remedied, cured or waived, then, without any further action
by the Holders, such declaration of acceleration shall be rescinded
automatically and the consequences of such declaration shall be annulled.  No such rescission or annulment shall affect
any subsequent Default or impair any right consequent thereon.

 

Section 4.3   Other Remedies.

 

If
an Event of Default with respect to Outstanding Securities occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities.

 

The
Trustee may maintain a proceeding in which it may prosecute and enforce all
rights of action and claims under this Indenture or the Securities, even if it does not possess any of the
Securities or does not produce any of them in the proceeding.

 

Section 4.4   Waiver of Past
Defaults.

 

The
Holders, either (a  through the written consent of not less than a
majority in aggregate principal amount of the Outstanding Securities, or (b) by
the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities represented at such
meeting, may, on behalf
of the Holders of all of the Securities, waive an existing Default or Event of
Default, except a Default or Event of Default:

 

(1)   in
the payment of the principal of or premium, if any, or interest on any Security
(provided, however, that subject
to Section 4.7, the Holders of a majority in aggregate principal amount of
the Outstanding Securities may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration); or

 

(2)   in
respect of a covenant or provision hereof which, under Section 7.2, cannot
be modified or amended without the consent of the Holders of each Outstanding
Security affected.

 

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

 

Section 4.5   Control by
Majority.

 

The Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such lesser amount as shall have acted at a meeting
pursuant to the provisions of this Indenture) 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.  However, the Trustee may refuse
to follow any direction that:

 

(1)   conflicts
with any law or with this Indenture;

 

(2)   the
Trustee determines may be unduly prejudicial to the rights of the Holders not
joining therein; or

 

(3)   may
expose the Trustee to personal liability.

 

The Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

 

18

 

Section 4.6   Limitation on
Suit.

 

No Holder of any Security shall have any right to pursue any remedy
with respect to this Indenture or the Securities (including, instituting any
proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver or trustee) unless:

 

(1)   such
Holder has previously given written notice to the Trustee of an Event of
Default that is continuing;

 

(2)   the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities shall have made written request to the Trustee to pursue the remedy;

 

(3)   such
Holder or Holders have offered to the Trustee indemnity satisfactory to it
against any costs, expenses and liabilities incurred in complying with such
request;

 

(4)   the
Trustee has failed to comply with the request for 60 days after its receipt of
such notice, request and offer of indemnity; and

 

(5)   during
such 60-day period, no direction inconsistent with such written request has
been given to the Trustee by the Holders of a majority in aggregate principal
amount of the Outstanding Securities (or such amount as shall have acted at a
meeting pursuant to the provisions of this Indenture);

 

provided, however, that no one or more of such Holders may use this Indenture to
prejudice the rights of another Holder or to obtain preference or priority over another Holder.

 

Section 4.7   Unconditional
Rights of Holders to Receive Payment and to Convert.

 

Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the
principal of and premium (including, without limitation, the Make-Whole-Amount
and the Make-Whole Premium), if any, and interest on such Security on the
Stated Maturity expressed in such Security (or, in the case of redemption, on
the Redemption Date, or in the case of the exercise of a Repurchase Right, on
the Repurchase Date) and to convert such Security in accordance with Article 12,
and to bring an action for the enforcement of any such payment on or after such
respective dates and such right to convert, and such rights shall not be
impaired or affected without the consent of such Holder.

 

Section 4.8   Collection of
Indebtedness and Suits for Enforcement by the Trustee.

 

The Company
covenants that if:

 

(1)   a
Default or Event of Default is made in the payment of any interest on any
Security when such interest becomes due and payable and such Default or
Event of Default continues for a period of 30 days; or

 

(2)   a Default or Event of Default is made in the payment of the
principal of or premium, if any, on any Security at the Maturity thereof;

 

the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
(as expressed therein or as a result of any acceleration effected pursuant to Section 4.2)
on such Securities for principal and premium, if any, and interest and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal and premium, if any, and on any overdue interest,
calculated using the Interest Rate, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

 

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

 

If
an Event of Default occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders of
Securities by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

 

19

 

Section 4.9   Trustee May File
Proofs of Claim.

 

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

 

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

 

(2)   to
collect and receive any monies or other property payable or deliverable on any
such claim and to distribute the same;

 

and
any Custodian in any such judicial proceedings is hereby authorized by each
Holder of Securities to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders of Securities,
to pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 5.8.

 

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

 

Section 4.10   Restoration
of Rights and Remedies.

 

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

 

Section 4.11   Rights and
Remedies Cumulative.

 

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

 

Section 4.12   Delay or
Omission Not Waiver.

 

No
delay or omission of the Trustee or of any Holder of any Security to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein.  Every right and
remedy given by this Article or by law to the Trustee or to the Holders of
Securities may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities, as the case may be.

 

Section 4.13   Application
of Money Collected.

 

Subject
to Article 14, any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
premium, if any, or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

 

FIRST:  To the payment of all
amounts due the Trustee;

 

20

 

SECOND:  To the payment of the
amounts then due and unpaid for principal of and premium, if any, and
interest  on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and premium, if any, and interest,
respectively; and

 

THIRD:  Any remaining amounts
shall be repaid to the Company.

 

Section 4.14   Undertaking
for Costs.

 

All parties to this Indenture agree, and each Holder of any Security by
such Holder’s acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in aggregate principal amount of the Outstanding Securities, or to any
suit instituted by any Holder of any Security for the enforcement of the
payment of the principal of or premium, if any, or interest on any Security on
or after the Stated Maturity expressed in such Security (or, in the case of
redemption or exercise of a Repurchase Right, on or after the Redemption Date)
or for the enforcement of the right to convert any Security in accordance with Article 12.

 

Section 4.15   Waiver of
Stay or Extension Laws.

 

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

 

ARTICLE 5

THE TRUSTEE

 

Section 5.1   Certain Duties
and Responsibilities.

 

(a)     Except during the continuance of an Event
of Default,

 

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

 

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

 

(b)     In case an Event of Default actually known
to a Responsible Officer of the Trustee has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.

 

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

 

(1)   This
paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section 5.1;

 

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

 

21

 

(3)   The
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with a direction received by it of the
Holders of a majority in principal amount of the Outstanding Securities (or
such lesser amount as shall have acted at a meeting pursuant to the provisions
of this Indenture) relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture.

 

(d)     Whether or not herein 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 5.1.

 

(e)     No provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers.  The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability, cost or
expense (including, without limitation, reasonable fees of counsel).

 

(f)      The Trustee shall not be obligated to pay
interest on any money or other assets received by it unless otherwise agreed in
writing with the Company.  Assets held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.

 

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

 

(h)     The Trustee shall not be deemed to have
notice or actual knowledge of any 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 a Default is received by the Trustee pursuant to Section 15.2,
and such notice references the Securities and this Indenture.

 

(i)      The rights, privileges, protections,
immunities and benefits given to the Trustee hereunder, including, without
limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each
Paying Agent, authenticating agent, Conversion Agent or Registrar acting
hereunder.

 

Section 5.2   Certain Rights
of Trustee.

 

Subject to the
provisions of Section 5.1 and subject to Section 315(a) through (d) of
the TIA:

 

(1)   The
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. 
The Trustee need not investigate any fact or matter stated in the
document.

 

(2)   Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, or both. 
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.

 

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

 

(4)   The
Trustee shall not be liable for any action taken or omitted to be taken by it
in good faith which it believed to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture, unless the Trustee’s
conduct constitutes negligence.

 

(5)   The
Trustee may consult with counsel of its selection and the advice of such
counsel as to matters of law shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.

 

(6)   Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company shall be sufficient if signed by an
Officer of the Company.

 

(7)   The
permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty unless so specified herein.

 

22

 

Section 5.3   Individual
Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee.  However, in the event that the
Trustee acquires any conflicting interest (as such term is defined in Section 310(b) of
the TIA), it must eliminate such conflict within 90 days, apply to the SEC
for permission to continue as trustee (to the extent permitted under Section 310(b) of
the TIA) or resign.  Any agent may do the
same with like rights and duties.  The
Trustee is also subject to Sections 5.11 and 5.12.

 

Section 5.4   Money 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 expressly
agreed with the Company.

 

Section 5.5   Trustee’s
Disclaimer.

 

The recitals contained herein and in the Securities (except for those
in the 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, sufficiency or priority of this Indenture or of the Securities.  The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.

 

Section 5.6   Notice of
Defaults.

 

Within 90 days after the occurrence of any Default or Event of
Default hereunder of which the Trustee has received written notice, the Trustee
shall give notice to Holders pursuant to Section 15.2, unless such Default
or Event of Default shall have been cured or waived; provided, however, that, except in the case of a Default or
Event of Default in the payment of the principal of or premium, if any, or
interest, or in the payment of any redemption or repurchase obligation on any
Security, the Trustee shall be protected in withholding such notice if and so
long as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders.

 

Section 5.7   Reports by
Trustee to Holders.

 

The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required by Section 313
of the TIA at the times and in the manner provided by the TIA.

 

A copy of each report at the time of its mailing to Holders shall be
filed with the SEC, if required, and each stock exchange, if any, on which the
Securities are listed.  The Company shall
promptly notify the Trustee when the Securities become listed on any stock
exchange.

 

Section 5.8   Compensation
and Indemnification.

 

The
Company covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Company covenants and agrees to pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by or on behalf of it in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ), except to the extent that any such expense,
disbursement or advance is due to its negligence or bad faith.  When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 4.1,
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 Bankruptcy Law. 
The Company also covenants to indemnify the Trustee and its officers, directors,
employees and agents for, and to hold such Persons harmless against, any loss,
liability or expense incurred by them, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder or the
performance of their duties hereunder, including the costs and expenses of
defending themselves against or investigating any claim of liability in the
premises, except to the extent that any such loss, liability or expense was due
to the negligence or willful misconduct of such Persons.  The obligations of the Company under this Section 5.8
to compensate and indemnify the Trustee and its officers, directors, employees
and agents and to pay or reimburse such Persons for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture or the earlier resignation or removal of the Trustee.  Such additional indebtedness shall be a lien
prior to that of the Securities upon all property and funds held or collected
by the Trustee as such, except funds held in trust for the benefit of the
Holders of particular Securities, and the Securities are hereby 

 

23

 

subordinated to such senior claim. 
“Trustee” for purposes of this Section 5.8 shall include any
predecessor Trustee, but the negligence or willful misconduct of any Trustee
shall not affect the indemnification of any other Trustee.

 

Section 5.9   Replacement of
Trustee.

 

A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 5.9.

 

The
Trustee may resign and be discharged from the trust hereby created by so
notifying the Company in writing.  The
Holders of at least a majority in aggregate principal amount of Outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company
in writing.  The Company must remove the
Trustee if:

 

(i)            the Trustee fails to comply with Section 5.11
or Section 310 of the TIA;

 

(ii)           the Trustee becomes incapable of
acting;

 

(iii)          the Trustee is adjudged a bankrupt or
an insolvent or an order for relief is entered with respect to the Trustee
under any Bankruptcy Law; or

 

(iv)          a Custodian or public officer takes
charge of the Trustee or its property.

 

If
the Trustee resigns or is removed or if a vacancy exists in the office of the
Trustee for any reason, the Company shall promptly appoint a successor
Trustee.  The Trustee shall be entitled
to payment of its fees and reimbursement of its expenses while acting as
Trustee.  Within one year after the
successor Trustee takes office, the Holders of at least a majority in aggregate
principal amount of Outstanding Securities may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.

 

Any
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee if the Trustee fails to
comply with Section 5.11.

 

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 or removal, the resigning or removed Trustee, as the case may be,
may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The Company shall issue a notice of the
successor Trustee’s succession to the Holders. 
Upon payment of its charges, the retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject
nevertheless to its lien, if any, provided for in Section 5.8.  Notwithstanding replacement of the Trustee
pursuant to this Section 5.9, the Company’s obligations under Section 5.8
shall continue for the benefit of the retiring Trustee with respect to
expenses, losses and liabilities incurred by it prior to such replacement.

 

Section 5.10   Successor
Trustee.

 

Subject
to Section 5.11, if the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business
(including the administration of this Indenture) to, another Person, corporation
or national banking association, the successor entity without any further act
shall be the successor Trustee as to the Securities.

 

Section 5.11   Corporate
Trustee Required; Eligibility.

 

The
Trustee shall at all times satisfy the requirements of Section 310(a)(1), (2) and
(5) of the TIA.  The Trustee shall
at all times have (or, in the case of a corporation included in a bank holding
company system, the related bank holding company shall at all times have), a
combined capital and surplus of at least $25 million as set forth in its
(or its related bank holding company’s) most recent published annual report of
condition.  The Trustee is subject to Section 310(b) of
the TIA.

 

Section 5.12   Collection of
Claims Against the Company.

 

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

 

24

 

ARTICLE
6

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 6.1  
Company May Consolidate Only on Certain Terms.

 

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, and the Company shall not permit any Person to consolidate with or
merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

 

(1)   in the event that 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, limited liability company, partnership or trust organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and, if the entity surviving such
transaction or transferee entity is not the Company, then such surviving or
transferee entity 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 Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed and shall have provided
for conversion rights in accordance with Section 12.11;

 

(2)   at the time of consummation
of 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; and

 

(3)   the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such transaction
have been complied with.

 

Section 6.2  
Successor Corporation Substituted.

 

Upon
any consolidation or merger by the Company with or into any other corporation
or any conveyance, transfer or lease of the properties and assets of the
Company substantially as an entirety to any Person, in accordance with Section 6.1,
the successor corporation 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
corporation had been named as the Company herein, and shall expressly assume
all obligations of the Company under the Indenture and the other Indenture
Documents in a manner acceptable to the Holders of the Securities in their sole
discretion, and thereafter, except in the case of a lease to another Person,
the predecessor corporation shall be relieved of all obligations and covenants
under this Indenture and the Securities (provided that all assets securing the
Securities shall be transferred to the successor corporation in a manner
acceptable to the Holders of the Securities in their sole discretion).

 

ARTICLE
7

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 7.1  
Without Consent of Holders of Securities.

 

Without
the consent of any Holders of Securities, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may amend this Indenture
and the Securities to:

 

(a)     add to the covenants of the Company for the
benefit of the Holders of Securities;

 

(b)     surrender any right or power herein
conferred upon the Company;

 

(c)     make provision with respect to the
conversion rights of Holders of Securities pursuant to Section 12.11;

 

(d)     provide for the assumption of the Company’s
obligations to the Holders of Securities in the case of a merger,
consolidation, conveyance, transfer or lease pursuant to Article 6;

 

(e)     reduce the Conversion Price; provided, however, that such reduction in
the Conversion Price shall not adversely affect the interest of the Holders of
Securities (after taking into account tax and other consequences of such
reduction);

 

25

 

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

 

(g)     [Intentionally Omitted];

 

(h)     cure any ambiguity, to correct or
supplement any provision herein which may be inconsistent with any other
provision herein or which is otherwise defective, or to make any other
provisions with respect to matters or questions arising under this Indenture
which the Company and the Trustee may deem necessary or desirable and which
shall not be inconsistent with the provisions of this Indenture; provided, however, that such action
pursuant to this clause (h) does not, in the good faith opinion of
the Board of Directors (as evidenced by a Board Resolution) and the Trustee,
adversely affect the interests of the Holders of Securities in any material
respect;

 

(i)      add or modify any other provisions with
respect to matters or questions arising under this Indenture which the Company
and the Trustee may deem necessary or desirable and which shall not be
inconsistent with the provisions of this Indenture; provided, however, that such action pursuant to this
clause (i) does not, in the good faith opinion of the Board of
Directors (as evidenced by a Board Resolution) and the Trustee, adversely
affect the interests of the Holders of Securities in any material respect; or

 

(j)      make provision for the establishment of a
book-entry system, in which Holders would have the option to participate, for
the clearance and settlement of transactions in Securities originally issued in
definitive form.

 

Section 7.2  
With Consent of Holders of Securities.

 

Except
as provided below in this Section 7.2, this Indenture or the Securities
may be amended or supplemented, and noncompliance in any particular instance
with any provision of this Indenture or the Securities may be waived, in each
case (i) with the written consent of the Holders of at least a majority in
aggregate principal amount of the Outstanding Securities or (ii) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of a majority in aggregate
principal amount of the Outstanding Securities represented at such meeting.

 

Without
the written consent or the affirmative vote of each Holder of Securities
affected thereby, an amendment or waiver under this Section 7.2 may not:

 

(a)     change the Stated Maturity of the principal
of, or any installment of interest on, any Security;

 

(b)     reduce the principal amount of, or premium,
if any, on any Security;

 

(c)     reduce the Interest Rate or interest on any
Security;

 

(d)     change the currency of payment of principal
of, premium, if any, or interest on any Security;

 

(e)     impair the right of any Holder to institute
suit for the enforcement of any payment in or with respect to any Security;

 

(f)      modify the obligation of the Company to
maintain an office or agency in The City of New York pursuant to Section 9.2;

 

(g)     except as permitted by Section 12.11,
adversely affect the Repurchase Right or the right to convert any Security as
provided in Article 12;

 

(h)     [Intentionally Omitted];

 

(i)      modify the provisions in Article 10
relating to the redemption of the Securities in a manner adverse to the Holders
of Securities;

 

(j)      modify any of the provisions of this
Section, Section 4.4 or Section 15.11, except to increase any percentage
contained herein or therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each Outstanding Security affected thereby;

 

(k)     reduce the requirements of Section 8.4
for quorum or voting, or reduce the percentage in aggregate principal amount of
the Outstanding Securities the consent of whose Holders is required for any
such supplemental indenture or the consent of whose Holders is required for any
waiver provided for in this Indenture;

 

(l)      modify the provisions in Article 13
in a manner adverse to the Holders of the Securities; or

 

26

 

(m)    release all or substantially all of the
Collateral (except as permitted under the Intercreditor Agreement) or release
the Company or any Guarantor from their payment obligations under any Indenture
Document.

 

It
shall not be necessary for any Act of Holders of Securities under this Section 7.2
to approve the particular form of any proposal supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

 

Section 7.3  
Compliance with Trust Indenture Act.

 

Every amendment to this
Indenture or the Securities shall be set forth in a supplemental indenture that
complies with the TIA as then in effect.

 

Section 7.4  
Revocation of Consents and Effect of Consents or Votes.

 

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

 

An amendment, supplement
or waiver becomes effective on receipt by the Trustee of written consents from
or affirmative votes by, as the case may be, the Holders of the requisite
percentage of aggregate principal amount of the Outstanding Securities, and
thereafter shall bind every Holder of Securities; provided, however, if the amendment, supplement or waiver
makes a change described in any of the clauses (a) through (k) of Section 7.2,
the amendment, supplement or waiver shall bind only each Holder of a Security
which has consented to it or voted for it, as the case may be, and every
subsequent Holder of a Security or portion of a Security that evidences the
same indebtedness as the Security of the consenting or affirmatively voting
Holder, as the case may be.

 

Section 7.5  
Notation on or Exchange of Securities.

 

If an amendment, supplement or waiver changes the terms
of a Security:

 

(a)     the Trustee may require the Holder of a
Security to deliver such Securities to the Trustee, the Trustee may place an  appropriate notation on the Security
about the changed terms and return it to the Holder and the Trustee may place
an appropriate
notation on any Security thereafter authenticated; or

 

(b)     if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.

 

Failure
to make the appropriate notation or issue a new Security shall not affect the
validity and effect of such amendment, supplement or waiver.

 

Section 7.6  
Trustee to Sign Amendment, Etc.

 

The
Trustee shall sign any amendment authorized pursuant to this Article 7 if
the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  If the
amendment does adversely affect the rights, duties, liabilities or immunities
of the Trustee, the Trustee may but need not sign it.  In signing or refusing to sign such
amendment, the Trustee shall be entitled to receive and shall be fully
protected in relying upon an Officers’ Certificate and an Opinion of Counsel as
conclusive evidence that such amendment is authorized or permitted by this
Indenture.

 

ARTICLE
8

MEETING OF HOLDERS OF SECURITIES

 

Section 8.1  
Purposes for Which Meetings May Be Called.

 

A meeting of Holders of
Securities may be called at any time and from time to time pursuant to this Article to
make, give or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be made, given or
taken by Holders of Securities.

 

Section 8.2  
Call Notice and Place of Meetings.

 

(a)     The Trustee may at any time call a meeting
of Holders of Securities for any purpose specified in Section 8.1, to be
held at such time and at such place in The City of New York.  Notice of every meeting of Holders of
Securities, setting 

 

27

 

forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be given, in the manner provided in Section 15.2, not
less than 21 nor more than 180 days prior to the date fixed for the
meeting.

 

(b)     In case at any time the Company, pursuant
to a Board Resolution, or the Holders of at least 10% in principal amount of
the Outstanding Securities shall have requested the Trustee to call a meeting
of the Holders of Securities for any purpose specified in Section 8.1, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 21 days after receipt of such request
or shall not thereafter proceed to cause the meeting to be held as provided
herein, then the Company or the Holders of Securities in the amount specified,
as the case may be, may determine the time and the place in The City of New
York for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in paragraph (a) of this Section 8.2.

 

Section 8.3  
Persons Entitled to Vote at Meetings.

 

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

 

Section 8.4  
Quorum; Action.

 

The Persons entitled to
vote a majority in principal amount of the Outstanding Securities shall
constitute a quorum.  In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities, be
dissolved.  In any other case, the
meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting.  In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting.  Notice of the reconvening of any adjourned
meeting shall be given as provided in Section 8.2(a), except that such
notice need be given only once and not less than five days prior to the date on
which the meeting is scheduled to be reconvened.  Notice of the reconvening of an adjourned
meeting shall state expressly the percentage of the principal amount of the
Outstanding Securities which shall constitute a quorum.

 

Subject to the foregoing,
at the reconvening of any meeting adjourned for a lack of a quorum, the Persons
entitled to vote 25% in principal amount of the Outstanding Securities at the
time shall constitute a quorum for the taking of any action set forth in the
notice of the original meeting.

 

At a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as
aforesaid, any resolution and all matters (except as limited by the proviso to Section 7.2)
shall be effectively passed and decided if passed or decided by the Persons
entitled to vote not less than a majority in principal amount of Outstanding
Securities represented and voting at such meeting.

 

Any resolution passed or
decisions taken at any meeting of Holders of Securities duly held in accordance
with this Section shall be binding on all the Holders of Securities,
whether or not present or represented at the meeting.

 

Section 8.5  
Determination of Voting Rights; Conduct and Adjournment of Meetings.

 

(a)     Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities in regard to proof of the
holding of Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to vote, and such
other matters concerning the conduct of the meeting as it shall deem
appropriate.  Except as otherwise
permitted or required by any such regulations, the holding of Securities shall
be proved in the manner specified in Section 1.3 and the appointment of
any proxy shall be proved in the manner specified in Section 1.3.  Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 1.3 or other proof.

 

(b)     The Trustee shall, by an instrument in
writing, appoint a temporary chairman (which may be the Trustee) of the
meeting, unless the meeting shall have been called by the Company or by Holders
of Securities as provided in Section 8.2(b), in which case the Company or
the Holders of Securities calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. 
A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in principal amount
of the Outstanding Securities represented at the meeting.

 

28

 

(c)     At any meeting, each Holder of a Security
or proxy shall be entitled to one vote for each $1,000 principal amount of
Securities held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and ruled by the chairman
of the meeting to be not Outstanding. 
The chairman of the meeting shall have no right to vote, except as a
Holder of a Security or proxy.

 

(d)     Any meeting of Holders of Securities duly
called pursuant to Section 8.2 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities represented at the meeting, and the meeting may be
held as so adjourned without further notice.

 

Section 8.6  
Counting Votes and Recording Action of Meetings.

 

The
vote upon any resolution submitted to any meeting of Holders of Securities
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Securities or of their representatives by proxy and the principal
amounts and serial numbers of the Outstanding Securities held or represented by
them.  The permanent chairman of the
meeting shall appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting.  A record, at
least in duplicate, of the proceedings of each meeting of Holders of Securities
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 given as provided in Section 8.2 and, if applicable, Section 8.4.  Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another 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.

 

ARTICLE
9

COVENANTS, REPRESENTATIONS AND WARRANTIES

 

Section 9.1  
Payment of Principal, Premium and Interest.

 

The Company will duly and
punctually pay the principal of and premium, if any, and interest in respect of
the Securities in accordance with the terms of the Securities and this
Indenture.  The Company will deposit or
cause to be deposited with the Trustee as directed by the Trustee, no later
than the day of the Stated Maturity of any Security or installment of interest,
all payments so due.

 

Section 9.2  
Maintenance of Offices or Agencies.

 

The Company hereby appoints the Corporate Trust
Office of U.S. Bank National Association and its affiliated office in The City
of New York, where Securities may be:

 

(i)            presented or surrendered for
payment;

 

(ii)           surrendered for registration of
transfer or exchange;

 

(iii)          surrendered for conversion;

 

and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served.

 

The Company may at any
time and from time to time vary or terminate the appointment of any such office
or appoint any additional offices for any or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or monies
sufficient to pay the principal of and premium, if any, and interest on the
Securities have been made available for payment and either paid or returned to
the Company pursuant to the provisions of Section 9.3, the Company will
maintain in The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where Securities may be surrendered for
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.  The Company will give prompt written notice
to the Trustee, and notice to the Holders in accordance with Section 15.2,
of the appointment or termination of any such agents and of the location and
any change in the location of any such office or agency.

 

If at any time the
Company shall fail to maintain any such required office or agency in The City
of New York, or shall fail to furnish the Trustee with the address thereof,
presentations and surrenders may be made at, and notices and demands may be
served on, the Corporate Trust Office of the Trustee.

 

29

 

Section 9.3  
Corporate Existence.

 

Subject to Article 6,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights (charter and
statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company determines that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.

 

Section 9.4  
Maintenance of Properties.

 

The
Company will maintain and keep its properties and every part thereof in such
repair, working order and condition, and make or cause to be made all such
needful and proper repairs, renewals and replacements thereto, as in the
judgment of the Company are necessary in the interests of the Company; provided, however, that nothing contained
in this Section shall prevent the Company from selling, abandoning or
otherwise disposing of any of its properties or discontinuing a part of its
business from time to time if, in the judgment of the Company, such sale,
abandonment, disposition or discontinuance is advisable and does not materially
adversely affect the interests or business of the Company.

 

Section 9.5  
Payment of Taxes and Other Claims.

 

The Company will, and
will cause any Significant Subsidiary to, promptly pay and discharge or cause
to be paid and discharged all material taxes, assessments and governmental
charges or levies lawfully imposed upon it or upon its income or profits or
upon any of its property, real or personal, or upon any part thereof, as well
as all material claims for labor, materials and supplies which, if unpaid,
might by law become a lien or charge upon its property; provided, however, that neither the
Company nor any Significant Subsidiary shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge, levy, or claim
if the amount, applicability or validity thereof shall currently be contested
in good faith by appropriate proceedings and if the Company or such Significant
Subsidiary, as the case may be, shall have set aside on its books reserves
deemed by it adequate with respect thereto.

 

Section 9.6  
Reports.

 

(a)     The Company shall deliver to the Trustee copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act, in the form required by and within 15 days of the deadline specified by
the SEC in applicable rules and regulations;  provided,
however, if the Company fails to comply with this provision and such
failure remains uncured for a period of 60 days, the outstanding Securities
shall accrue interest at a rate that is 0.8% above the Interest Rate for the
period beginning on the date on which the Company first failed to comply with
this provision and ending on the date that the Company makes such filings with
the SEC and delivers to the Trustee the reports required under this provision;
provided further, the Company shall not be required to deliver to the Trustee
any materials for which the Company has sought and received confidential
treatment by the SEC.  The Company also
shall comply with the other provisions of Section 314(a) of the TIA.

 

(b)     If at any time the Company is not subject
to Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder of a Security, the Company will promptly furnish or cause to be
furnished to such Holder or to a prospective purchaser of such Security
designated by such Holder, as the case may be, the information, if any,
required to be delivered by it pursuant to Rule 144A(d)(4) under the
Securities Act to permit compliance with Rule 144A in connection with the
resale of such Security; provided, however,
that the Company shall not be required to furnish such information in
connection with any request made on or after the date which is two years from
the later of the date such security was last acquired from the Company or an “affiliate”
(as defined under Rule 144 under the Securities Act) of the Company.

 

Section 9.7  
Compliance Certificate.

 

The
Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company (which as of the date hereof is September 30),
an Officers’ Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company, they would normally have
knowledge of any failure by the Company to comply with all conditions, or any
Default by the Company with respect to any covenants, under this Indenture, and
further stating whether or not they have knowledge of any such failure or
Default and, if so, specifying each such failure or Default and the nature
thereof.  In the event an Officer of the
Company comes to have actual knowledge of a Default, regardless of the date,
the Company shall deliver an Officers’ Certificate to the Trustee specifying
such Default and the nature and status thereof.

 

30

 

Section 9.8  
[Intentionally Omitted]

 

Section 9.9  
Indebtedness.

 

The
Company will not, and will not permit any of its Subsidiaries to, incur,
create, issue, assume or suffer to exist any Indebtedness, except:

 

(a)     Indebtedness represented by the Securities;

 

(b)     Indebtedness outstanding under a Credit
Facility and any Permitted Refinancing thereof, provided that the total amount
of Indebtedness permitted under this clause (b) shall not exceed
$25,000,000 or such lesser amount as reduced pursuant to Section 9.13(b);

 

(c)     Indebtedness in respect of Capital Leases
and purchase money obligations in an aggregate amount not greater than
$5,000,000 at any one time, and any Permitted Refinancing thereof;

 

(d)     cash management obligations and other Indebtedness
in respect of netting services, overdraft protections and similar arrangements
in each case in connection with cash management and deposit accounts; provided
that such obligations and other Indebtedness shall not exceed $500,000 in the
aggregate at any time;

 

(e)     Indebtedness consisting of the financing
insurance premiums, so long as the aggregate amount payable pursuant to such
Indebtedness does not materially exceed the amount of the premium for such
insurance; and

 

(f)      unsecured Indebtedness in an amount not to
exceed $25,000,000 in the aggregate; provided that any Indebtedness incurred
pursuant to this clause (f) is (i) expressly subordinated in
right of payment to the Securities and (ii) is scheduled to mature no
earlier than, and cannot be put or otherwise redeemed prior to, October 30,
2015.

 

Section 9.10  
Liens.

 

The
Company will not, and will not permit any of its Subsidiaries to, incur,
create, assume or suffer to exist any Lien, or enter into, or make any
commitment to enter into, any arrangement for the acquisition of property
through a conditional sale, lease purchase or other title retention agreements,
with respect to any property now owned or hereinafter acquired by the Company
or Subsidiary, except for Permitted Liens.

 

Section 9.11 
 Negative Pledge.

 

The
Company will not, and will not permit any Subsidiary, to enter into any
agreement, bond, note or other instrument (other than the First Lien Loan
Agreement) with or for the benefit of any Person other than the Holders which
would (a) prohibit the Company or such Subsidiary from granting, or
otherwise limit the ability of the Company or such Subsidiary to grant, to the
Collateral Agent, any Lien on any assets or properties of the Company or such
Subsidiary, or (b) require the Company or such Subsidiary to grant a Lien
to any other Person if the Company or such Subsidiary grants any Lien to the
Collateral Agent.  The Company will not
permit any Subsidiary to place or allow any restriction, directly or
indirectly, on the ability of such Subsidiary to (a) pay dividends or any
distributions on or with respect to such Subsidiaries capital stock or (b) make
loans or other cash payments to the Company.

 

Section 9.12  
Restricted Payments.

 

The
Company will not make any Restricted Payments; provided that, so long as no
Default or Event of Default has occurred and is continuing hereunder:

 

(a) the
Company may make Restricted Payments in an aggregate amount not to exceed
$250,000 in any fiscal year;

 

(b) to
the extent constituting Restricted Payments, the Company and its Subsidiaries
may enter into transactions and make payments expressly permitted by the terms
of this Indenture;

 

(c) the
Company may satisfy any redemption or conversion of the Securities, and any
payment of the Make-Whole Amount or the Make-Whole-Premium, in each case as
required or permissible hereunder; and

 

(d) the
Company and its Subsidiaries may repurchase or redeem equity interests upon
exercise of stock options or warrants to the extent such equity interests
constitute a portion of the exercise price of such options or warrants.

 

Section 9.13  
Asset Dispositions.

 

(a)           If the Company or any Subsidiary,
directly or indirectly, sells, assigns, leases, conveys, transfers or otherwise
disposes of (whether in one transaction or series of transactions), including
without limitation, any transfer by the 

 

31

 

Company to a
Subsidiary (other than a Guarantor) or a Subsidiary to a Subsidiary (other than
a Guarantor) any property (“Asset Sale”), the Company shall, upon
receipt by the Company or such Subsidiary of any net cash proceeds of such
Asset Sale, apply such proceeds as required in clause (b); provided, that
the application in clause (b) shall not be required in connection
with:

 

(i)            dispositions
of inventory, or used, work-out or surplus equipment, all in the ordinary
course of business; and

 

(ii)           Assets Sales for which the net cash proceeds do not exceed
$5,000,000 in the aggregate.

 

(b)           Any
net cash proceeds received by the Company in excess of $5,000,000 in the
aggregate (i) shall, if required under the terms of the First Lien Loan
Agreement, prepay amounts outstanding under the First Lien Loan Agreement
(provided that such prepayments permanently reduce the amounts available
thereunder), and (ii) the Company shall establish and maintain a cash pool
(the “Cash Pool”) of such net cash proceeds. 
Upon the receipt of proceeds which increase the Cash Pool to an amount
greater than or equal to $10,000,000, the Company shall commence a tender offer
for the Securities,  in an aggregate amount equal to the
Cash Pool, at par no less than 75 days after the receipt of such proceeds.  If the closing sale price of the Common Stock
is at least 130% of the Conversion Price then in effect for 20 out of the 30
Trading Days immediately after the Cash Pool exceeds $10,000,000, the Company
will not be required to make the tender for the Securities hereunder, and the
Company shall be entitled to 50% of the Cash Pool at such time.

 

Section 9.14  
Transactions With Affiliates.

 

The
Company will not, nor will it permit any Subsidiary to enter into any
transaction with an Affiliate (other than an Affiliate that is an obligor
hereunder) of the Company, except upon fair and reasonable terms no less
favorable than the Company, or such Subsidiary would obtain in a comparable
arms-length transaction with a Person not an Affiliate.

 

Section 9.15  
Taxes.

 

The
Company will pay when due, all taxes, assessments, governmental charges and
levies imposed on it or its properties and all claims or demands of any kind
which, if not paid, could result in the creation of a Lien on its property,
other than in connection with taxes, assessments, governmental charges and
levies being contested in good faith by appropriate proceeding, and as long as
the Company’s or such Subsidiary’s title to its property is not materially
adversely affected, its use of such property in the ordinary course of business
is not materially interfered with and adequate reserves with respect thereto
have been set aside on the Company’s or such Subsidiary’s books in accordance
with GAAP.

 

Section 9.16  
Investments.

 

The
Company will not, and will not permit its Subsidiaries to, acquire for value,
make, have or hold any Investments, except:

 

(a)     travel and other expense advances to
management personnel and employees in the ordinary course of business;

 

(b)     Investments in Cash Equivalents and
Investments in readily marketable debt securities which are reasonably
acceptable to a majority of Holders of Securities;

 

(c)     Investments in Subsidiaries that are
Guarantors;

 

(d)     Payments and advances to Subsidiaries to
the extent permitted under Section 9.21; and

 

(e)     Investments existing on the date hereof.

 

Section 9.17  
Shareholder Vote.

 

(a)           On or prior to February 15,
2010, the authorized number of shares of Common Stock shall be increased such
that the number of authorized but unissued shares of Common Stock shall be
sufficient for purposes of effecting the conversion of Securities pursuant to
this Indenture (the “Capital Increase”) and the Company shall maintain such
sufficient number of shares at all times. 
If the Capital Increase has not occurred by February 16, 2010, the
Company shall pay on such date, and on the fifteenth day of each month
thereafter to the Trustee, for the benefit of the Holders of the Securities, an
amount in cash equal to 1% of the outstanding principal amount of the
Securities until the Capital Increase occurs; provided, however, that if the
Capital Increase has not occurred on or prior to February 15, 2011, the
Holders of the Securities shall have the right, at the Holder’s option, to
require the Company to repurchase for cash, and upon exercise of such right,
the Company shall purchase all of such Holder’s Securities at a purchase price
equal to value of (i) the as-converted amount of the shares that would
have been issued to the Holder had the Capital Increase  occurred
and such Holder had exercised its

 

32

 

conversion
option plus (ii) the Make-Whole Amount that would have been applicable if
such Holder had exercised its conversion right. 
The value and settlement of the as-converted amount of such shares will
be determined pursuant to 12.12, as if Holders had elected to convert on the
date Holders request payment pursuant to the Section, and the Company had
elected to settle the conversion request in cash.  Amounts payable under Section 13.1 shall
be calculated as if the Holder had elected to convert and the Company elected
to pay amounts due in cash.

 

(b)           On or prior to February 15,
2010, the Company shall hold a shareholder meeting and have a shareholder vote
to gain authorization for a reverse stock split of the Common Stock at a ratio
to be determined by the Board of Directors (with a minimum ratio of 10:1), (the
“Reverse Stock Split”).

 

Section 9.18  
Change in Nature of Business.

 

The
Company will not, and will not permit any Subsidiary to, make any material
change in the nature of the business of the Company and such Subsidiary, as
carried on at the date hereof.

 

Section 9.19  
Covenant to Obtain Prior Shareholder Approval.

 

Subsequent
to the Capital Increase, the Company shall not enter into any transaction, or
take any other action, that will require additional adjustment to the shares
issuable upon conversion (including shares issuable pursuant to Section 13.2)
such that the Company would require shareholder approval to authorize
additional shares without having obtained prior stockholder approval of such
increase.  In addition, the Company will
not make any election to pay converting Holders in stock in connection with a
conversion between a Notice of Redemption and a Redemption Date or during a
period in which a Holder can elect to use a Fundamental Change Conversion
unless such election provides for available authorized shares sufficient to
satisfy the conversion of each and every Holder electing to convert during such
time period, assuming all Holders convert during such a period.

 

Section 9.20  
Accounts.

 

The
Company will not, nor will permit any Subsidiary to, cause or permit (a) any
funds in excess of $50,000 to be transferred to or maintained in any deposit,
checking, brokerage, securities or other similar account maintained by the
Company or any Subsidiary which is not a Foreign Subsidiary unless such account
is subject to an account control agreement in form and substance satisfactory
to the Collateral Agent or (b) the Foreign Subsidiaries to maintain funds
in an aggregate amount in excess of (i) on or prior to August 23,
2011, $3,000,000 and (ii) on or after August 24, 2011, $5,000,000, in
all deposit, checking, brokerage, securities and other similar accounts
maintained by all Foreign Subsidiaries unless such accounts are subject to
account control agreements in form and substance satisfactory to the Collateral
Agent.  For purposes of this Section 9.21,
“Foreign Subsidiary” shall mean any corporation that is a foreign corporation,
as defined in Section 7701(a)(5) of the Internal Revenue Code of
1986.

 

Section 9.21  
Representations and Warranties of the Company.

 

The
Company represents and warrants to the Holders of the Securities the following:

 

(a)     The Securities are being issued pursuant to
Sections 3(a)(9) and Rule 149 of the Securities Act.  The Company has not engaged in any general
solicitation or engaged or agreed to compensate any broker or agent in
connection with the transactions contemplated by this Indenture.  None of the Company, its Subsidiaries, any of
their affiliates, and any person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the Securities Act or cause the exchange contemplated
hereunder to be integrated with prior offerings by the Company for purposes of
Securities Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or
automated quotation system on which any of the securities of the Company are
listed or designated.  None of the
Company, its subsidiaries, their affiliates and any person acting on their
behalf will take any action or steps referred to in the preceding sentence that
would require registration of any of the Securities under the Securities Act;

 

(b)     the execution, delivery and
performance by the Company of this Indenture has been duly authorized by all
necessary corporate or other organizational action, and do not and will not (i) contravene
the terms of any of the Company’s organizational documents; (ii) conflict
with or result in any breach or contravention of, or result in or require the
creation of any Lien under, or require any payment to be made under (A) any
contractual obligation to which the Company is a party or affecting such person
or the properties of such person or any of its subsidiaries or (B) any
order, injunction, writ or decree of any governmental authority or any arbitral
award to which the Company or its property is subject; or (iii) violate
any applicable law.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any 

 

33

 

governmental
authority or any other person is necessary or required in connection with the
execution, delivery or performance by, or enforcement against the Company of
this Indenture;

 

(c)     the Company has made all
necessary applications for this Indenture to be qualified under the TIA; and

 

(d)     The Company has paid as of the date hereof
all taxes, assessments, governmental charges and levies imposed on it or its
properties and all claims or demands of any kind which, if not paid, could
result in the creation of a lien on its property.

 

Section 9.22  
Post-Closing Deliveries.

 

The Company shall deliver
to the Trustee a deposit account control agreement in form and substance
reasonably satisfactory to the Trustee within 5 Business Days of the date
hereof or such later date agreed to by the Trustee and the Holders of at least
a majority in aggregate principal amount of the Outstanding Securities.

 

ARTICLE
10

REDEMPTION OF SECURITIES

 

Section 10.1  
Optional Redemption.

 

On
or after October 30, 2011, the Company may, at its option, redeem the
Securities in whole at any time or in part from time to time, on any date prior
to Maturity, upon notice as set forth in Section 10.4, at the Redemption
Price plus any interest accrued and unpaid to, but excluding, the Redemption
Date, if the closing sale price of the Common Stock has been at least 130% of
the Conversion Price then in effect for at least 20 Trading Days during any 30
consecutive Trading Day period ending on the day prior to the date of notice of
redemption.

 

The
Company may not redeem or provide notice of redemption of the Securities
pursuant to Section 10.1 on any date that is (a) subsequent to the
execution of any agreement that is reasonably likely to result in a Fundamental
Change and (b) prior to 45 days after the occurrence of a Fundamental
Change resulting from such agreement or the cancellation of such agreement.

 

Section 10.2  
Notice to Trustee.

 

If
the Company elects to redeem Securities pursuant to the provisions of Section 10.1,
it shall notify the Trustee at least 45 days (unless a shorter period is
reasonably acceptable to the Trustee) prior to the intended Redemption Date of (i) such
intended Redemption Date, (ii) the principal amount of Securities to be
redeemed and (iii) the CUSIP numbers of the Securities to be redeemed.

 

Section 10.3  
Selection of Securities to Be Redeemed.

 

If
fewer than all the Securities are to be redeemed, the Trustee shall select the
particular Securities to be redeemed in principal amounts of $1,000 or whole
multiples of $1,000 from the Outstanding Securities by a method that complies
with the requirements of any exchange on which the Securities are listed, or,
if the Securities are not listed on an exchange, on a pro rata basis or by lot or in accordance
with any other method the Trustee considers fair and appropriate.  Securities and portions thereof that the
Trustee selects shall be in amounts equal to the minimum authorized
denominations for Securities to be redeemed or any integral multiple thereof.

 

If
any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed to be the
portion selected for redemption; provided,
however, that, unless otherwise indicated by Sections 13.1 or 13.2 hereof,
the Holder of such Security so converted and deemed redeemed shall not be
entitled to any additional interest payment as a result of such deemed
redemption than such Holder would have otherwise been entitled to receive upon
conversion of such Security.  Securities
which have been converted during a selection of Securities to be redeemed may
be treated by the Trustee as Outstanding for the purpose of such selection.

 

The
Trustee shall promptly notify the Company and the Registrar in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

 

For
all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case
of any Securities redeemed or to be redeemed only in part, to the portion of
the principal amount of such Securities which has been or is to be redeemed.

 

34

 

Section 10.4  
Notice of Redemption.

 

Notice of redemption
shall be given in the manner provided in Section 15.2 to the Holders of
Securities to be redeemed.  Such notice
shall be given not less than 20 nor more than 60 days prior to the intended
Redemption Date.

 

All notices of redemption shall state:

 

(1)   such intended Redemption
Date;

 

(2)   the Redemption Price and
interest accrued and unpaid to, but excluding, the Redemption Date, if any;

 

(3)   if fewer than all the
Outstanding Securities are to be redeemed, the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of Securities
which will be Outstanding after such partial redemption;

 

(4)   that on the Redemption Date
the Redemption Price and interest accrued and unpaid to, but excluding, the
Redemption Date, if any, will become due and payable upon each such Security to
be redeemed, and that interest thereon shall cease to accrue on and after such
date;

 

(5)   the Conversion Price, the
date on which the right to convert the principal of the Securities to be
redeemed will terminate, whether the Company has elected to settle its
obligation upon conversion (including its settlement election related to any
applicable Make-Whole Amount, as per Section 13.1) in cash or a combination
of cash and shares of Common Stock in lieu of shares of Common Stock only (and,
in the event that the Company has elected to settle all or a portion of its
conversion obligation in cash, the date on which the Cash Settlement Averaging
Period will begin) and the places where such Securities may be surrendered for
conversion;

 

(6)   the place or places where
such Securities are to be surrendered for payment of the Redemption Price,
accrued and unpaid interest, if any;

 

(7)   the CUSIP number of the
Securities.

 

The
notice given shall specify the last date on which exchanges or transfers of
Securities may be made pursuant to Section 2.7, and shall specify the
serial numbers of Securities, if Physical Securities are selected for
redemption, and the portions thereof called for redemption.

 

Notice
of redemption of Securities to be redeemed at the election of the Company shall
be given by the Company or, at the Company’s request, by the Trustee in the
name of and at the expense of the Company.

 

Section 10.5  
Effect of Notice of Redemption.

 

Notice of redemption
having been given as provided in Section 10.4, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued and
unpaid interest) such Securities shall cease to bear interest.  Upon surrender of any such Security for
redemption in accordance with such notice, such Security shall be paid by the
Company at the Redemption Price; provided,
however, the installments of interest on Securities whose Stated
Maturity is prior to or on the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such
on the relevant Record Date according to their terms and the provisions of Section 2.7.

 

If any Security called
for redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid, bear interest from the
Redemption Date at the Interest Rate.

 

Section 10.6  
Deposit of Redemption Price.

 

Prior
to 11:00 a.m. (New York City time) on any Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent an amount of money
sufficient to pay the Redemption Price, and accrued and unpaid interest, in
respect of all the Securities to be redeemed on that Redemption Date, other
than any Securities called for redemption on that date which have been
converted prior to the date of such deposit, and accrued and unpaid interest,
if any, on such Securities.

 

If
any Security called for redemption is converted, any money deposited with the
Trustee or with a Paying Agent or so segregated and held in trust for the
redemption of such Security shall (subject to any right of the Holder of such
Security or any Predecessor Security to receive interest as provided in the
fourth to last paragraph of Section 2.1) be paid to the Company on Company
Request or, if then held by the Company, shall be discharged from such trust.

 

Section 10.7  
Securities Redeemed in Part.

 

Any
Security which is to be redeemed only in part shall be surrendered at an office
or agency of the Company designated for that purpose pursuant to Section 9.2
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or the Holder’s attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and

 

35

 

deliver to the Holder of such Security without service charge, a new
Security or Securities of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.

 

ARTICLE
11

REPURCHASE AT THE OPTION OF A HOLDER UPON A FUNDAMENTAL CHANGE

 

Section 11.1  
Repurchase Right.

 

(a)     In the event that a Fundamental Change (a “Repurchase
Event”) shall occur, each Holder shall have the right (the “Repurchase
Right”), at the Holder’s option, to require the Company to repurchase, and
upon the exercise of such right the Company shall repurchase, all of such
Holder’s Securities not previously called for redemption, or any portion of the
principal amount thereof that is equal to $1,000 or an integral multiple
thereof as directed by such Holder pursuant to Section 11.3 (provided that no single Security may be
repurchased in part unless the portion of the principal amount of such Security
to be Outstanding after such repurchase is equal to $1,000 or an integral
multiple thereof), on a date (the “Repurchase Date”) that is not less
than 25 nor more than 35 Business Days after the date of the Repurchase Event
Notice for an amount equal to 100% of the principal amount of the Securities to
be repurchased (the “Repurchase Price”) plus accrued and unpaid
interest, to, but excluding, the date on which such Securities are repurchased
pursuant to this Section; provided, however,
that installments of interest on Securities whose Stated Maturity is prior to
or on the Fundamental Change Purchase Date shall be payable to the Holders of
such Securities, or one or more Predecessor Securities, registered as such on
the relevant Regular Record Date according to their terms and the provisions of
Section 2.1 hereof.

 

(b)     If the Holders have a repurchase right
pursuant to this Section 11.1, the Company shall issue a press release through
Dow Jones & Company, Inc, Business Wire or Bloomberg Business News
(or, if such organizations are not in existence at the time of issuance of such
press release, such other news or press organization as is reasonably
calculated to broadly disseminate the relevant information to the public)
containing the relevant information and make such information available on the
Company’s web site or through another public medium as the Company may use at
such time.

 

Section 11.2  
[Intentionally Omitted]

 

Section 11.3  
Repurchase Event Notice.

 

No later than 10 Business
Days after the occurrence of a Fundamental Change, the Company shall mail a
written notice of the Repurchase Event (the “Repurchase Event Notice”)
by first-class mail to the Trustee and to each Holder (and to beneficial owners
to the extent practicable) pursuant to Section 15.2.  The Repurchase Event Notice shall include a
form of notice (the “Repurchase Event Purchase Notice”) to be completed
by the Holder and delivered to the Paying Agent pursuant to Section 11.4,
and shall state the following:

 

(1)   that it is a Repurchase
Event Notice pursuant to this Section;

 

(2)   the event causing the
Repurchase Event and the date of such Repurchase Event;

 

(3)   the procedures with which
such Holder must comply to exercise its right to have its Securities purchased
pursuant to Section 11.1, including the date by which the completed
Repurchase Event Purchase Notice pursuant to Section 11.4 and the
Securities the Holder elects to have purchased pursuant to Section 11.1
must be delivered to the Paying Agent in order to have such Securities
purchased by the Company pursuant to Section 11.1, the name and address of
the Paying Agent and that the Securities as to which a Repurchase Event
Purchase Notice has been given may be converted, if they are otherwise
convertible pursuant to Article 12, only if the completed and delivered
Repurchase Event Purchase Notice has been withdrawn in accordance with the
terms of the Indenture;

 

(4)   the Repurchase Date and the
Repurchase Price;

 

(5)   [Intentionally Omitted];

 

(6)   the Conversion Price, the
date on which the right to convert the principal of the Securities to be
redeemed will terminate, the date on which the Cash Settlement Averaging Period
will begin, and the places where such Securities may be surrendered for
conversion

 

(7)   that, unless the Company
defaults in making payment of such Repurchase Price, and interest, on the
Securities surrendered for purchase by the Company will cease to accrue on and
after the Repurchase Date, if applicable; and

 

(8)   the CUSIP number of the
Securities.

 

36

 

No
failure by the Company to give the foregoing Repurchase Event Notice shall
limit any Holder’s right to exercise its rights pursuant to Section 11.1
or affect the validity of the proceedings for the purchase of its Securities
hereunder.

 

Section 11.4  
Delivery of Repurchase Event Purchase Notice; Form of Repurchase
Event Purchase Notice; Withdrawal of Repurchase Event Purchase Notice.

 

(a)     The Company shall deliver, or cause the
Trustee or Paying Agent to deliver, to all Holders (and beneficial holders of
the Securities to the extent practicable) a form of Repurchase Event Purchase
Notice, which with respect to Holders’ Repurchase Rights set forth in Section 11.1,
shall be delivered to such Holders at least 20 Business Days prior to the
Repurchase Event Purchase Date and, as set forth in Section 11.3, shall be
included in the Repurchase Event Notice; provided,
that the delivery of such form of Repurchase Event Purchase Notice to the
Holders shall be made in the Company’s name and at the Company’s expense and
the text of such form of Repurchase Event Purchase Notice shall be prepared by
the Company pursuant to clause (b) of this Section.

 

(b)     The form of Repurchase Event Purchase
Notice shall provide instructions regarding procedures with which Holders must
comply to exercise their rights pursuant to Section 11.1 and the
completion of the Repurchase Event Purchase Notice and also shall state:

 

(1)       that it is the
Repurchase Event Purchase Notice pursuant to Sections 11.3 and 11.4 of the
Indenture and must be completed by the Holder and delivered to the Paying Agent
(and any beneficial holder of securities), together with the delivery of the
Holder’s Securities for which the Holder will exercise its Repurchase Rights
pursuant to Section 11.1, for such Holder to receive the Repurchase Price;

 

(2)       the name and address of
the Paying Agent to, and the date by, which the completed Repurchase Event
Purchase Notice and Securities must be delivered in order for the Holder to
receive the applicable purchase price;

 

(3)       the portion of the
principal amount of the Security which the Holder will deliver to be
repurchased, which portion must be in a principal amount of $1,000 or an
integral multiple thereof;

 

(4)       any other procedures
then applicable that the Holder must follow to exercise rights under Article 11
and a brief description of those rights;

 

(5)       the Repurchase Date and
the Repurchase Price;

 

(6)   the Conversion Price, the
date on which the Cash Settlement Averaging Period will begin) and the places
where such Securities may be surrendered for conversion;

 

(7)       the procedures with
which such Holder must comply to exercise its right to have its Securities
repurchased pursuant to Section 11.1, including the date by which the
completed Repurchase Event Purchase Notice pursuant to Section 11.4 and
the Securities the Holder elects to have repurchased pursuant to Section 11.1
must be delivered to Paying Agent in order to have such Securities repurchased
by the Company pursuant to Section 11.1, the name and address of the
Paying Agent and that the Securities as to which a Repurchase Event Purchase
Notice has been given may be converted, if they are otherwise convertible
pursuant to Article 12, only if the completed and delivered Repurchase
Event Purchase Notice has been withdrawn in accordance with the terms of the
Indenture, the Holder’s conversion rights pursuant to Article 12, the
Conversion Price then in effect and any adjustments thereto;

 

(8)       the Holder’s right to
withdraw a completed and delivered Repurchase Event Purchase Notice, the
procedures for withdrawing a Repurchase Event Purchase Notice, pursuant to
clause (c) below and that Securities as to which a completed and
delivered Repurchase Event Purchase Notice may be converted, if they are
convertible only in accordance with Article 12, if the applicable
completed and delivered Repurchase Event Purchase Notice has been withdrawn;

 

(9)       that, unless the Company
defaults in making payment on Securities for which a Repurchase Event Purchase
Notice has been submitted, interest on such Securities will cease to accrue on
the Repurchase Event Purchase Date; and

 

(10)     the CUSIP number of the
Securities.

 

(c)     Notwithstanding anything herein to the
contrary, any Holder which has delivered a completed Repurchase Event Purchase
Notice to the Paying Agent shall have the right to withdraw such Repurchase
Event Purchase Notice by delivery of a written notice of withdrawal delivered
to the office of the Paying Agent in accordance with the Repurchase Event
Purchase Notice at any time prior to the close of business on the Business Day
prior to the Repurchase Date specifying:

 

37

 

(1)   the certificate number, if
any, of the Security in respect of which such notice of withdrawal is being
submitted;

 

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

 

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

 

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

 

Section 11.5  
Exercise of Repurchase Rights.

 

To exercise a Repurchase Right pursuant to Section 11.1,
a Holder must deliver to the Trustee at its offices on or prior to the
Repurchase Date the following:

 

(a)     a completed Repurchase Event Purchase
Notice, the form of which is provided in Exhibit B hereto; and

 

(b)     the Securities or cause such Securities to
be delivered through the facilities of the Depositary, as applicable, with
respect to which the Repurchase Right is being exercised, with, if the Company
or the Trustee so requires, due endorsement by, or a written instrument of
transfer, in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or such Holder’s attorney duly authorized in writing.

 

Section 11.6  
Deposit and Payment of the Repurchase Price.

 

(a)     In the event a Repurchase Right shall be
exercised in accordance with the terms hereof, the Company shall pay or cause
to be paid to the Trustee the Repurchase Price in cash for payment to the
Holder on the Repurchase Date, together with accrued and unpaid interest to,
but excluding, the Repurchase Date payable in cash with respect to the
Securities as to which the Repurchase Right has been exercised; provided, however, that installments of
interest that mature prior to or on the Repurchase Date shall be payable in
cash to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Regular Record
Date.

 

(b)     If any Security (or portion thereof)
surrendered for repurchase shall not be so paid on the Repurchase Date, the
principal amount of such Security (or portion thereof, as the case may be)
shall, until paid, bear interest to the extent permitted by applicable law from
the Repurchase Date at the Interest Rate, and each Security shall remain
convertible into Common Stock until the principal of such Security (or portion
thereof, as the case may be) shall have been paid or duly provided for.

 

(c)     Any Security which is to be repurchased
only in part shall be surrendered to the Trustee (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without service charge, a new Security or Securities,
containing identical terms and conditions, each in an authorized denomination
in aggregate principal amount equal to and in exchange for the unrepurchased
portion of the principal of the Security so surrendered.

 

(d)     [Intentionally Omitted]

 

(e)     [Intentionally Omitted]

 

(f)      [Intentionally Omitted]

 

(g)     All Securities delivered for repurchase
shall be delivered to the Trustee to be canceled at the direction of the
Trustee, which shall dispose of the same as provided in Section 2.15.

 

Section 11.7  
Covenant to Comply with Securities Laws upon Repurchase of Securities.

 

When
complying with the provisions of this Article 11 (provided that such offer or purchase
constitutes an “issuer tender offer” for purposes of Rule 13e-4 (which
term, as used herein, includes any successor provision thereto) under the
Exchange Act at the time of such offer or purchase), the Company shall (a) comply
with Rule 13e-4, Rule 14e-1 and any other tender offer rules under
the Exchange Act which may then be applicable, (b) file the related
Schedule TO (or any successor schedule, form or report) under the Exchange Act
and (c) otherwise comply with all federal and state securities laws so as
to permit the rights and obligations under this Article 11 to be exercised
in the time and in the manner specified in this Article 11.

 

38

 

ARTICLE
12

CONVERSION OF SECURITIES

 

Section 12.1  
Conversion Right and Conversion Price.

 

Subject
to and upon compliance with the provisions of this Article, at the option of
the Holder thereof, any Security or any portion of the principal amount thereof
which is an integral multiple of $1,000 may be converted at the principal
amount thereof, or of such portion thereof, into duly authorized, fully paid
and nonassessable shares of Common Stock (such shares of Common Stock to meet
the conditions set forth in Section 12.14), at the Conversion Price
(together with the Make-Whole Amount, if applicable), determined as hereinafter
provided, in effect at the time of conversion. 
Such conversion right shall expire at the close of business on the
Business Day immediately preceding         
   , 2014.  Additional
consideration may be due upon conversion as required under the Indenture.

 

In
case a Security or portion thereof is called for redemption, such conversion
right in respect of the Security or the portion so called, shall expire at the
close of business on the second Business Day preceding the Redemption Date,
unless the Company defaults in making the payment due upon redemption; provided, that in no event shall the Holders have less than
20 Business Days from the receipt of a notice of redemption to exercise its
conversion right in respect of the Security or the portion so called.

 

In
the event of a Fundamental Change, each Holder’s right to convert through a
Fundamental Change Conversion shall expire at the close of business on the
Business Day immediately preceding the Repurchase Date, unless the Company
defaults in making the payment due upon redemption; provided,
that in no event shall the Holders have less than 20 Business Days from the
receipt of a notice of a Fundamental Change to exercise its conversion right
via a Fundamental Change Conversion.

 

The
price at which shares of Common Stock shall be delivered upon conversion (the “Conversion
Price”) shall be initially equal to $0.225 per share of Common Stock.  The Conversion Price shall be adjusted in
certain instances as provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and
(1) of Section 12.4. 
Additional shares may also be deliverable upon conversion as required
under the Indenture.

 

Section 12.2  
Exercise of Conversion Right.

 

To
exercise the conversion right, the Holder of any Security to be converted shall
surrender such Security duly endorsed or assigned to the Company or in blank,
at the office of any Conversion Agent, accompanied by a duly signed Conversion
Notice substantially in the form attached to the Security as Exhibit C, to
the Company, with a copy to the Trustee, stating that the Holder elects to
convert such Security or, if less than the entire principal amount thereof is
to be converted, the portion thereof to be converted.

 

In
the event of a Fundamental Change, Holders will have the right to elect to
convert and receive Additional Shares as per Section 13.2 (a “Fundamental
Change Conversion”) from the date of the Repurchase Event Notice through the
Repurchase Date.  To exercise the
conversion right in the event of a Fundamental Change and receive Additional
Shares pursuant to Section 13.2, the Holder of any Security to be
converted shall surrender such Security duly endorsed or assigned to the
Company or in blank, at the office of any Conversion Agent, accompanied by a
duly signed Fundamental Change Conversion Notice substantially in the form attached
to the Security as Exhibit D, to the Company, with a copy to the Trustee,
stating that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the portion thereof to be
converted.

 

For the
avoidance of doubt, in the event of a Fundamental Change Holders may elect to
receive consideration due pursuant to the Make Whole Amount (as per Section 13.1)
by electing to convert by notice using a Conversion Notice substantially in the
form of Exhibit C or elect to receive consideration due pursuant to the
Make Whole Premium (as per Section 13.2) by electing to convert by notice
using a Fundamental Change Conversion Notice substantially in the form of Exhibit D.  In no event shall any Holder be entitled to
elect to receive consideration pursuant to both the Make-Whole Amount as set
forth in Section 13.1 and the Make-Whole Premium as set forth in Section 13.2,
except to the extent that Holders may choose to elect differing treatment (if
available) in separate conversion notices, to the extent the Holders do not
convert all of their holdings at one time.

 

Unless
otherwise specified in Section 13.1 or 13.2, Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date to the opening of business on the next succeeding Interest Payment Date
(except in the case of any Security whose Maturity is prior to such Interest
Payment Date) shall be accompanied by payment in New York Clearing House funds
or other funds acceptable to the Company of an amount equal to the interest to
be received on such Interest Payment Date on the principal amount of Securities
being surrendered for conversion.

 

39

 

Securities
shall be deemed to have been converted immediately prior to the close of
business on the day of surrender of such Securities for conversion in
accordance with the provisions of this Article 12, including any required
payments, and at such time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons entitled to receive the Common
Stock issuable upon conversion shall be treated for all purposes as the record
Holder or Holders of such Common Stock at such time.  As promptly as practicable on or after the
conversion date, the Company shall cause to be issued and delivered to such
Conversion Agent a stock certificate or stock certificates representing the
number of full shares of Common Stock issuable upon conversion of such
Securities, together with payment in lieu of any fraction of a share as
provided in Section 12.3.

 

In
the case of any Security which is converted in part only, upon such conversion
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a new Security or Securities of
authorized denominations in aggregate principal amount equal to the unconverted
portion of the principal amount of such Securities.

 

Notwithstanding
the foregoing, a Holder will only be entitled to exercise its conversion rights
herein to the extent (and only to the extent) that the receipt of shares of
Common Stock upon exercise of the conversion right would not cause such Holder
(including its Affiliates) to become, directly or indirectly, a “beneficial
owner” (within the meaning of Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder) of more than 9.99% of
the shares of the Common Stock outstanding at such time.  Any purported delivery of shares of Common Stock
upon exercise of this conversion right shall be void and have no effect to the
extent (but only to the extent) that such delivery would result in such Holder
(including its Affiliates) becoming the beneficial owner of more than 9.99% of
the shares of Common Stock outstanding at such time.  Notwithstanding anything to the contrary
herein, the Holder shall not be entitled, with or without the consent of the
Company, to waive the restrictions set forth in this Section 12.2.

 

The
Company hereby initially appoints the Trustee as the Conversion Agent.

 

Section 12.3  
Fractions of Shares.

 

No fractional shares of
Common Stock shall be issued upon conversion of any Security or
Securities.  If more than one Security
shall be surrendered for conversion at one time by the same Holder, the number
of full shares which shall be issued upon conversion thereof shall be computed
on the basis of the aggregate principal amount of the Securities (or specified
portions thereof) so surrendered. 
Instead of any fractional share of Common Stock which would otherwise be
issued upon conversion of any Security or Securities (or specified portions
thereof), the Company shall pay a cash adjustment in respect of such fraction
(calculated to the nearest one-100th of a share) in an amount equal to the same
fraction of the Trading Price of the Common Stock as of the Trading Day
preceding the date of conversion.

 

Section 12.4  
Adjustment of Conversion Price.

 

The
Conversion Price shall be subject to adjustment, calculated by the Company,
from time to time 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 Price 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 shall be
reduced by multiplying such Conversion Price 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
Record Date (as defined in Section 12.4(g)) fixed for such determination;
and

 

(ii)           the denominator of which shall be the
sum of such number of shares and the total number of shares constituting such
dividend or other distribution.

 

Such
reduction shall become effective immediately after the opening of business on
the day following the Record Date.  If
any dividend or distribution of the type described in this Section 12.4(a) is
declared but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.

 

(b)     In case the outstanding shares of Common
Stock shall be subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
reduced, and conversely, in case outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased,

 

40

 

such reduction or
increase, 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.

 

(c)     In case the Company shall issue rights or
warrants (other than any rights or warrants referred to in Section 12.4(d))
to all holders of its outstanding shares of Common Stock exercisable for not
more than 60 days entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price on the
Record Date fixed for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price in
effect at the opening of business on the date after such Record Date 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
Record Date, plus the number of shares which the aggregate offering price of
the total number of shares so offered for subscription or purchase (or the
aggregate conversion price of the convertible securities so offered) would
purchase at such Current Market Price; and

 

(ii)           the denominator of which shall be the
number of shares of Common Stock outstanding on the close of business on the
Record Date, plus the total number of additional shares of Common Stock so
offered for subscription or purchase (or into which the convertible securities
so offered are convertible).

 

Such
adjustment shall become effective immediately after the opening of business on
the day following the Record Date fixed for determination of stockholders
entitled to receive such rights or warrants. 
To the extent that shares of Common Stock (or securities convertible
into Common Stock) are not delivered pursuant to such rights or warrants, upon
the expiration or termination of such rights or warrants, the Conversion Price
shall be readjusted to the Conversion Price which would then be in effect had
the adjustments made upon the issuance of such rights or warrants been made on
the basis of the delivery of only the number of shares of Common Stock (or
securities convertible into Common Stock) actually delivered.  In the event that such rights or warrants are
not so issued, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed.  In determining whether
any rights or warrants entitle the holders to subscribe for or purchase shares
of Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received for such rights or warrants, the value
of such consideration if other than cash, to be determined by the Board of
Directors.

 

Notwithstanding
the foregoing, in the event that the Company shall make a distribution subject
to this Section 12.4(c) the Company may, in lieu of making any
adjustment required pursuant to this Section 12.4(c), make proper
provision so that each Holder of a Security who converts such Security (or any
portion thereof) after the Record Date for such distribution shall be entitled
to receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion, the securities such Holder would have received
had such Holder converted such Security (or portion thereof) immediately prior
to such Record Date.

 

(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 (other than any dividends or distributions to
which Section 12.4(a) applies) or evidences of its indebtedness, cash
or other assets, including securities, but excluding (1) any rights or
warrants referred to in Section 12.4(c), (2) any stock, securities or
other property or assets (including cash) distributed in connection with a
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 12.11 applies and (3) dividends
and distributions paid exclusively in cash (the securities described in
foregoing clauses (1), (2) and (3) hereinafter in this Section 12.4(d) called
the “securities”), then, in each such case, subject to the second succeeding
paragraph of this Section 12.4(d), the Conversion Price shall be reduced
so that the same shall be equal to the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction:

 

(i)            the numerator of which shall be the
Current Market Price on such date, less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and set forth
in a Board Resolution) on such date of the portion of the securities so
distributed applicable to one share of Common Stock (determined on the basis of
the number of shares of the Common Stock outstanding on the Record Date); and

 

(ii)           the denominator of which shall be
such Current Market Price.

 

Such reduction shall
become effective immediately prior to the opening of business on the day
following the Record Date.  However, in
the event that (x) the then fair market value (as so determined) of the
portion of the securities so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price on the Record Date
or (y) the

 

41

 

Current Market Price on
the Record Date exceeds the fair market value of such distribution by less than
$1.00, then, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon conversion of a
Security (or any portion thereof) the amount of securities such Holder would
have received had such Holder converted such Security (or portion thereof) immediately
prior to such Record Date.  In the event
that such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which 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 12.4(d) by reference to the actual or when
issued trading market for any securities comprising all or part of such
distribution, it must in doing so consider the prices in such market over the
same period (the “Reference Period”) used in computing the Current
Market Price pursuant to Section 12.4(g) to the extent possible,
unless the Board of Directors in a Board Resolution determines in good faith
that determining the fair market value during the Reference Period would not be
in the best interest of the Holders.

 

Notwithstanding
the foregoing, in the event that the Company shall make a distribution subject
to this Section 12.4(d) the Company may, in lieu of making any
adjustment required pursuant to this Section 12.4(d), make proper
provision so that each Holder of a Security who converts such Security (or any
portion thereof) after the Record Date for such distribution shall be entitled
to receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion, the securities such Holder would have received
had such Holder converted such Security (or portion thereof) immediately prior
to such Record Date.

 

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”):

 

(iii)          are deemed to be transferred with such
shares of Common Stock;

 

(iv)          are not exercisable; and

 

(v)           are also issued in respect of future
issuances of Common Stock;

 

shall
be deemed not to have been distributed for purposes of this Section 12.4(d) (and
no adjustment to the Conversion Price under this Section 12.4(d) will
be required) until the occurrence of the earliest Trigger Event.  If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different securities, evidences of indebtedness
or other assets or entitle the holder to purchase a different number or amount
of the foregoing or to purchase any of the foregoing at a different purchase
price, then the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder 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 resulted in an adjustment to the
Conversion Price under this Section 12.4(d):

 

(1)   in the case of any such
rights or warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price 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 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 all of which shall have expired or been terminated without
exercise, the Conversion Price shall be readjusted as if such rights and
warrants had never been issued.

 

For
purposes of this Section 12.4(d) and Sections 12.4(a), 12.4(b) and
12.4(c), any dividend or distribution to which this Section 12.4(d) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 12.4(c) applies, or
rights or warrants to subscribe for or purchase shares of Common Stock to which
Section 12.4(c) applies (or any combination thereof), shall be deemed
instead to be:

 

(1)   a dividend or distribution
of the evidences of indebtedness, assets, shares of capital stock, rights or
warrants other than such shares of Common Stock, such subdivision or
combination or such rights or warrants to which Sections 12.4(a), 12.4(b) and
12.4(c) apply, respectively (and any Conversion Price reduction required
by this Section 12.4(d) with respect to such dividend or distribution
shall then be made), immediately followed by

 

42

 

(2)   a dividend or distribution
of such shares of Common Stock, such subdivision or combination or such rights
or warrants (and any further Conversion Price reduction required by
Sections 12.4(a), 12.4(b) and 12.4(c) 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 (x) “the date fixed for
the determination of stockholders entitled to receive such dividend or other
distribution,” “Record Date fixed for such determinations” and “Record Date”
within the meaning of Section 12.4(a), (y) “the day upon which such
subdivision becomes effective” and “the day upon which such combination becomes
effective” within the meaning of Section 12.4(b), and (z) as “the date fixed
for the determination of stockholders entitled to receive such rights or
warrants,” “the Record Date fixed for the determination of the stockholders
entitled to receive such rights or warrants” and such “Record Date” within the
meaning of Section 12.4(c); and

 

(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 12.4(a) and
any reduction or increase in the number of shares of Common Stock resulting
from such subdivision or combination shall be disregarded in connection with
such dividend or distribution.

 

(e)     In case the Company shall, by dividend or
otherwise, distribute to all or substantially all holders of its Common Stock
cash (excluding any cash that is distributed upon a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance to which Section 12.11 applies or as part of a distribution
referred to in Section 12.4(d)), then, and in each such case, immediately
after the close of business on such date, the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on such Record Date
by a fraction:

 

(i)            the numerator of which shall be
equal to the Current Market Price on the Record Date less an amount equal to
the quotient of (x) the amount of such distribution and (y) the
number of shares of Common Stock outstanding on the Record Date, and

 

(ii)           the denominator of which shall be
equal to the Current Market Price on such date.

 

In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.

 

(f)      In case a tender offer made by the Company
or any of its subsidiaries for all or any portion of the Common Stock shall
expire and such tender offer (as amended upon the expiration thereof) shall
require the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as defined
below)) of an aggregate consideration having a fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and set
forth in a Board Resolution) that combined together with:

 

(1)   the aggregate of the cash
plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board Resolution), as of
the expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this Section 12.4(f) has been made;

 

(2)   the aggregate amount of any
distributions to all holders of the Company’s Common Stock made exclusively in
cash within 12 months preceding the expiration of such tender offer and in
respect of which no adjustment pursuant to Section 12.4(e) has been
made; and

 

exceeds
10% of the product of the Current Market Price as of the last time (the “Expiration
Time”) tenders could have been made pursuant to such tender offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to close of business on the date of the Expiration Time by a
fraction:

 

(ii)           the numerator of
which shall be the number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time multiplied by the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time; and

 

(iii)          the denominator 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 offer)

 

43

 

of all shares validly
tendered 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) on the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time.

 

Such reduction (if any)
shall become effective immediately prior to the opening of business on the day
following the Expiration Time.  In the
event that the Company is obligated to purchase shares pursuant to any such tender
offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender offer had not been made.  If the application of this Section 12.4(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 12.4(f).

 

(g)     For
purposes of this Section 12.4, the following terms shall have the meanings
indicated:

 

(1)   “Current Market Price” shall
mean the average of the daily Trading Prices per share of Common Stock for the
ten consecutive Trading Days immediately prior to the date in question; provided, however, that if:

 

(i)        the “ex”
date (as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f) occurs
during such ten consecutive Trading Days, the Trading Price for each Trading
Day prior to the “ex” date for such other event shall be adjusted by
multiplying such Trading Price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other event;

 

(ii)       the “ex”
date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price pursuant to Section 12.4(a),
(b), (c), (d), (e) or (f) occurs on or after the “ex” date for the
issuance or distribution requiring such computation and prior to the day in
question, the Trading Price for each Trading Day on and after the “ex” date for
such other event shall be adjusted by multiplying such Trading Price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event; and

 

(iii)      the “ex”
date for the issuance or distribution requiring such computation is prior to
the day in question, after taking into account any adjustment required pursuant
to clause (i) or (ii) of this proviso, the Trading Price for each
Trading Day on or after such “ex” date shall be adjusted by adding thereto the
amount of any cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Section 12.4(d) or (f), whose determination shall be
conclusive and set forth in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being distributed applicable to
one share of Common Stock as of the close of business on the day before such “ex”
date.

 

For
purposes of any computation under Section 12.4(f), the Current Market
Price of the Common Stock on any date shall be deemed to be the average of the
daily Trading Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however,
that if the “ex” date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant to Section 12.4(a),
(b), (c), (d), (e) or (f) occurs on or after the Expiration Time for
the tender or exchange offer requiring such computation and prior to the day in
question, the Trading Price for each Trading Day on and after the “ex” date for
such other event shall be adjusted by multiplying such Trading Price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. 
For purposes of this paragraph, the term “ex” date, when used:

 

(A)  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 Trading
Price was obtained without the right to receive such issuance or distribution;

 

(B)   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; and

 

(C)   with respect to any tender
or exchange offer, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration Time of
such offer.

 

44

 

Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are called
for pursuant to this Section 12.4, such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to effectuate the intent of this Section 12.4 and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.

 

(2)   “fair market value” shall
mean the amount which a willing buyer would pay a willing seller in an arm’s
length transaction which, in the absence of a current market for such
transaction, shall be determined in good faith by the Board of Directors.

 

(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).

 

(h)     The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 12.4(a), (b), (c), (d), (e) or
(f), as the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

 

To
the extent permitted by applicable law, the Company from time to time may
reduce the Conversion Price by any amount for any period of time if the period
is at least 20 days and the reduction is irrevocable during the period and
the Board of Directors determines in good faith that such reduction would be in
the best interests of the Company, which determination shall be conclusive and
set forth in a Board Resolution; provided,
however, that the Board of Directors shall not be permitted to
reduce the Conversion Price pursuant to this sentence in such a manner that
will violate NASD Rule 4350(i) or any similar or successor rule then
in effect.  Whenever the Conversion Price
is reduced pursuant to the preceding sentence, the Company shall mail to the
Trustee and each Holder at the address of such Holder as it appears in the
Register a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.

 

(i)      No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however,
that any adjustments which by reason of this Section 12.4(i) are not
required to be made shall be carried forward and taken into account (A) in
any subsequent adjustment; (B  if and when the Company has called the
Securities for redemption pursuant to Article 10 or (C) on the
Maturity Date.  All calculations under
this Article 12 shall be made by the Company and shall be made to the
nearest cent or to the nearest one-100th of a share, as the case may be.  No adjustment need be made for a change in
the par value or no par value of the Common Stock.

 

(j)      In any case in which this Section 12.4 provides
that an adjustment shall become effective immediately after a Record Date for
an event, the Company may defer until the occurrence of such event (i) issuing
to the Holder of any Security converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and above
the Common Stock issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such Holder any amount in cash in lieu of
any fraction pursuant to Section 12.3.

 

(k)     For purposes of this Section 12.4, 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.

 

(l)      If the distribution date for the rights provided in
the Company’s rights agreement, if any, occurs prior to the date a Security is
converted, and the Holder of the Security who converts such Security after the
distribution date is not entitled to receive the rights that would otherwise be
attached (but for the date of conversion) to the shares of Common Stock
received upon such conversion, then an adjustment shall be made to the
Conversion Price pursuant to Section 12.4(b) as if the rights were
being distributed to the holders of Common Stock immediately prior to such
conversion.  If such an adjustment is
made and the rights are later redeemed, invalidated or terminated, then a
corresponding reversing adjustment shall be made to the Conversion Price, on an
equitable basis, to take account of such event.

 

Section 12.5   Notice of Adjustments of Conversion Price.

 

Whenever
the Conversion Price is adjusted as herein provided (other than in the case of
an adjustment pursuant to the second paragraph of Section 12.4(h) for
which the notice required by such paragraph has been provided), the Company
shall promptly file with the Trustee and any Conversion Agent other than the
Trustee an Officers’ Certificate setting forth the

 

45

 

adjusted Conversion Price and showing in reasonable detail the facts
upon which such adjustment is based.  The
Company shall also issue a press release through Dow Jones & Company,
Inc, Business Wire or Bloomberg Business News (or, if such organizations are
not in existence at the time of issuance of such press release, such other news
or press organization as is reasonably calculated to broadly disseminate the
relevant information to the public) containing the relevant information and
make such information available on the Company’s web site or through another
public medium as the Company may use at such time.  Unless and until the Trustee and any Conversion
Agent other than the Trustee receive an Officer’s Certificate setting forth an
adjustment to the Conversion Price, the Trustee and such Conversion Agent may
assume without inquiry that the Conversion Price has not and is not required to
be adjusted and that the last Conversion Price of which the Trustee and such
Conversion Agent have knowledge remains in effect.  Promptly after delivery of such Officers’
Certificate, the Company shall prepare a notice stating that the Conversion
Price has been adjusted and setting forth the adjusted Conversion Price and the
date on which each adjustment becomes effective, and shall mail such notice to
each Holder at the address of such Holder as it appears in the Register within
20 days of the effective date of such adjustment.  Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.

 

Section 12.6   Notice Prior to Certain Actions.

 

In
case at any time after the date hereof:

 

(1)   the Company shall declare a
dividend (or any other distribution) on its Common Stock payable otherwise than
in cash out of its capital surplus or its consolidated retained earnings;

 

(2)   the Company shall authorize
the granting to the holders of its Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any class (or of
securities convertible into shares of capital stock of any class) or of any
other rights;

 

(3)   there shall occur any
reclassification of the Common Stock of the Company (other than a subdivision or
combination of its outstanding Common Stock, a change in par value, a change
from par value to no par value or a change from no par value to par value), or
any merger, consolidation, statutory share exchange or combination to which the
Company is a party and for which approval of any shareholders of the Company is
required, or the sale, transfer or conveyance of all or substantially all of
the assets of the Company; or

 

(4)   there shall occur the
voluntary or involuntary dissolution, liquidation or winding up of the Company;

 

the
Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of securities pursuant to Section 9.2, and shall
cause to be provided to the Trustee and all Holders in accordance with Section 15.2,
at least 20 days (or 10 days in any case specified in clause (1) or
(2) above) prior to the applicable record or effective date hereinafter
specified, a notice stating:

 

(A)  the date on which a record
is to be taken for the purpose of such dividend, distribution, 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, rights
or warrants are to be determined; or

 

(B)   the date on which such
reclassification, merger, consolidation, statutory share exchange, combination,
sale, transfer, conveyance, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such
reclassification, merger, consolidation, statutory share exchange, sale,
transfer, dissolution, liquidation or winding up.

 

Neither
the failure to give such notice nor any defect therein shall affect the
legality or validity of the proceedings or actions described in clauses (1) through
(4) of this Section 12.6.

 

Section 12.7   Company to Reserve Common Stock.

 

The Company shall at all
times after the Shareholder Vote use its best efforts to reserve and keep
available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, the full number of shares of fully paid and nonassessable
Common Stock then issuable upon the conversion of all Outstanding Securities.

 

Section 12.8   Taxes on Conversions.

 

Except as provided in the
next sentence, the Company will pay any and all taxes (other than taxes on
income) and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant hereto.  A Holder delivering a Security for conversion
shall be liable for and will be required to pay any tax or duty 

 

46

 

which may be
payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that of the Holder of the Security or
Securities to be converted, and no such issue or delivery shall be made unless
the Person requesting such issue has paid to the Company the amount of any such
tax or duty, or has established to the satisfaction of the Company that such
tax or duty has been paid.

 

Section 12.9   Covenant as to Common Stock.

 

The Company covenants
that all shares of Common Stock which may be issued upon conversion of
Securities will upon issuance be fully paid and nonassessable and that the
Company will pay all taxes, liens and charges with respect to the issuance
thereof, except (1) as provided in Section 12.8 or (2) with
respect to any liens or charges created by or imposed upon such Common Stock by
the Holder of the Security or Securities to be converted.

 

Section 12.10   Cancellation of Converted Securities.

 

All Securities delivered
for conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section 2.15.

 

Section 12.11   Effect of Reclassification, Consolidation,
Merger or Sale.

 

If any of following
events occur, namely:

 

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

 

(b)           any merger, consolidation, statutory share exchange or
combination of the Company with another corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock; or

 

(c)           any sale or conveyance of the properties and assets of
the Company as, or substantially as, an entirety to any other corporation as a
result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock;

 

the
Company or the successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
TIA as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that each
Holder shall have the right to convert its Securities into the kind and amount
of shares of stock and other securities or property or assets (including cash)
receivable on such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance by a Holder of the Common Stock
immediately prior to such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance.  In the event the Holders have the opportunity
to elect the form of consideration to be received in such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the Company will make adequate provisions whereby the Holders of
the Securities shall have, on a timely basis, the right to determine the form
of consideration into which all Securities, treated as a single class, shall be
convertible.  The form of consideration
into which all Securities, treated as a single class, shall be convertible
shall be determined by the Holders of a majority of the Securities (based on
principal outstanding thereunder) who have made an election as to such form of
consideration and shall be subject to any limitations to which all of the
holders of Common Stock are subject, such as pro rata reductions or fractional
share limitations applicable to any portion of the consideration paid.  To the extent a majority of the Holders did
not make such election on or prior to the date that is 10 days after receipt of
notice that such election is required, then for purposes of this Section 12.11
the kind or amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance shall be
deemed to be the kind and amount so receivable per share by the holders of a
plurality of the Common Stock.  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 12.  If, in the case of any such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock includes shares of stock or other securities
and assets of a corporation other than the successor or purchasing corporation,
as the case may be, in such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the
Holders of the Securities as the Board of Directors shall reasonably consider
necessary by reason of the foregoing, including to the extent practicable the
provisions providing for the Repurchase Rights set forth in Article 11.

 

47

 

The
Company shall cause notice of the execution of such supplemental indenture to
be mailed to each Holder, at the address of such Holder as it appears on the
Register, within 20 days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.

 

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

 

If
this Section 12.11 applies to any event or occurrence, Section 12.4
shall not apply.

 

Section 12.12   Cash Conversion Option.

 

(a)     Subject to the Company’s right to irrevocably elect to
make a cash payment of principal upon conversion pursuant to Section 12.12(f),
in lieu of delivery of shares of Common Stock in satisfaction of its obligation
upon conversion of Securities, the Company may elect to deliver cash or a
combination of cash and shares of Common Stock. 
Except to the extent that the Company has irrevocably elected to make a
cash payment of principal upon conversion pursuant to Section 12.12(f),
the Company shall inform the Holders through the Trustee of the method it
elects to satisfy its obligation upon conversion:

 

(1)   if the Company has called
the Securities for redemption pursuant to Article 10, in its notice of
redemption;

 

(2)   if a Fundamental Change has
occurred, in its Repurchase Event Notice;

 

(3)   in respect of Securities to
be converted during the period beginning 25 Trading Days preceding the Maturity
Date and ending one Trading Day preceding the Maturity Date, 26 Trading Days
preceding the Maturity Date; and

 

(4)   in all other cases, no later
than two Trading Days following the conversion date.

 

(b)     If the Company elects to satisfy any portion of its
conversion obligation in cash, the Company shall specify the amount to be
satisfied in cash as a percentage of the conversion obligation or a fixed
dollar amount.  The Company shall treat
all Holders converting on the same Trading Day in the same manner.  The Company shall not, however, have any
obligation to settle its conversion obligations arising on different Trading
Days in the same manner.

 

(c)     If the Company elects to satisfy any portion of its
conversion obligation in cash (other than cash in lieu of fractional shares), a
Holder may retract its conversion notices at any time during the two Trading
Day period beginning on the Trading Day after the Company has notified the
Trustee of its method of settlement (such period, the “Conversion Retraction
Period”).  However, a Holder shall
not be permitted to retract its conversion notice if:

 

(1)   the Company has irrevocably
elected to make a cash payment of principal upon conversion before such Holder
delivered its conversion notice;

 

(2)   such Holder is converting
its Securities in connection with a redemption pursuant to Article 10;

 

(3)   such Holder is converting
its Securities during the period beginning 25 Trading Days preceding the Maturity
Date and ending one Trading Day preceding the Maturity Date; or

 

(4)   the Company has not elected
to satisfy any portion of its conversion obligation in cash.

 

(d)     Settlement in shares of our Common Stock shall occur
as soon as practicable after the Company has notified the Holders that it has
elected this method of settlement. 
Settlement in cash or in a combination of cash and shares of Common
Stock shall occur on the second Trading Day following the final Trading Day
(the “Determination Date”) of the Cash Settlement Averaging Period.  The Determination Date shall be the 26th Trading Day
following the Company’s receipt of a Holder’s conversion notice (if such Holder
does not retract its conversion notice and has satisfied all other conversion
requirements), unless conversion is:

 

(1)   in connection with a
redemption pursuant to Article 10, in which case the Determination Date
shall be the Redemption Date;

 

(2)   in connection with a
Fundamental Change, in which case the Determination Date shall be the Repurchase
Date;

 

(3)   subject to the succeeding
clause (4), after the Company has irrevocably elected to make a cash payment of
principal upon conversion, in which case the Determination Date shall be the 22nd Trading Day
following the Company’s receipt of such Holder’s conversion notice; or

 

48

 

(4)   during the period beginning
25 Trading Days preceding the Maturity Date and ending one Trading Day
preceding the Maturity Date, in which case the Determination Date shall be the
Maturity Date.

 

(e)     The settlement amount shall be computed as follows:

 

(1)   If the Company elects to
satisfy the entire conversion obligation in shares of Common Stock, the Company
shall deliver to the Holder a number of shares of Common stock equal to the sum
of (X): shares equal to (i) the aggregate principal amount of Securities
to be converted divided by (ii) the Conversion Price then in effect
(substituting cash in lieu of fractional shares) and (Y) any Additional
Shares required pursuant to Section 13.2 .

 

(2)   If the Company elects to
satisfy the entire conversion obligation in cash, the Company shall deliver to
the Holder cash in an amount (the “Cash-Only Settlement Amount”) equal
to the product of:

 

(A)  the sum of (X): shares equal
to (i) the aggregate principal amount of Securities to be converted
divided by (ii) the Conversion Price then in effect and (Y) any
Additional Shares required pursuant to Section 13.2; and

 

(B)   the Applicable Stock Price.

 

(3)   If the Company elects to
satisfy the conversion obligation in a combination of cash and shares of Common
Stock, the Company shall deliver to the Holder:

 

(A)  (i) the fixed dollar
amount per $1,000 principal amount of Securities specified in the notice
regarding the Company’s chosen method of settlement multiplied by the quotient
of the aggregate principal amount of Securities to be converted divided by
1,000 or (ii) the percentage of the conversion obligation specified in the
notice regarding the Company’s chosen method of settlement multiplied by the
amount of cash that would be paid pursuant to clause (2) above, as
the case may be (the “Cash Amount”); and

 

(B)   a number of shares equal to (i) the
Cash-Only Settlement Amount minus the Cash Amount divided by (ii) the
Applicable Stock Price (substituting cash in lieu of fractional shares).

 

The
“Applicable Stock Price” means, in respect of a Determination Date, the average
Closing Sale Price (as defined below) of the Common Stock over the 20 Trading
Day period (the “Cash Settlement Averaging Period”):

 

(i)        ending on the second Trading Day
preceding the Redemption Date, if the Company has called the Securities for
redemption pursuant to Article 10;

 

(ii)       ending on the second Trading Day
preceding the Repurchase date, if a Fundamental Change has occurred;

 

(iii)      subject
to the succeeding clause (iii), beginning on the Trading Day following the
Company’s receipt of the Holder’s conversion notice, if the Company has
irrevocably elected to make a cash payment of principal upon conversion;

 

(iv)      ending on the second Trading Day
preceding the Maturity Date, with respect to conversion notices received during
the period beginning 25 Trading Days preceding the Maturity Date and ending one
Trading Day preceding the Maturity Date; and

 

(v)       beginning on the Trading Day following
the final Trading Day of the Conversion Retraction Period, in all other cases.

 

The
“Closing Sale Price” of any share of Common Stock on any Trading Day means the
closing sale price of such security (or if no closing sale price is reported,
the average of the closing bid and closing 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 principal
United States securities exchange on which the Common Stock is traded or, if
the Common Stock is not listed on a United States national or regional
securities exchange, as reported by the Nasdaq System or by the National
Quotation Bureau Incorporated.  In the
absence of such a quotation, the Company shall determine the Closing Sale Price
on the basis it considers appropriate.

 

(f)      At any time on or prior to the 26th Trading Day
preceding the Maturity Date, the Company may irrevocably elect to satisfy in
cash its conversion obligation with respect to the principal amount of the
Securities to be converted after the date of such election, with any remaining
amount to be satisfied in shares of Common Stock.  Such election shall be in the Company’s sole
discretion without the consent of the Holders. 
If the Company makes such election, the Company shall notify the Trustee
and the Holders at their addresses shown in the Register kept by the Registrar.

 

49

 

If the Company
irrevocably elects to pay the principal amount of the Securities in cash upon
conversion, the settlement amount shall be computed as follows:

 

(1)   a cash amount equal to the
lesser of (i) the aggregate principal amount of Securities to be converted
and (ii) the Cash-Only Settlement Amount; and

 

(2)   if the Cash-Only Settlement
Amount exceeds the aggregate principal amount of Securities to be converted, a
number of shares of Common Stock equal to (i) the Cash-Only Settlement
Amount minus the aggregate principal amount of Securities to be converted
divided by (ii) the Applicable Stock Price.

 

Section 12.13   Responsibility of Trustee for Conversion
Provisions.

 

The
Trustee, subject to the provisions of Section 5.1, and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder
of Securities to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or intent of
any such adjustments when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same.  Neither the Trustee, subject to
the provisions of Section 5.1, nor any Conversion Agent shall be
accountable with respect to the validity or value (of the kind or amount) of
any Common Stock, or of any other securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and it or they do
not make any representation with respect thereto.  Neither the Trustee, subject to the
provisions of Section 5.1, nor any Conversion Agent shall be responsible
for any failure of the Company to make any cash payment or to issue, transfer
or deliver any shares of stock or share certificates or other securities or
property upon the surrender of any Security for the purpose of conversion; and
the Trustee, subject to the provisions of Section 5.1, and any Conversion
Agent shall not be responsible or liable for any failure of the Company to
comply with any of the covenants of the Company contained in this Article.

 

Section 12.14   Shares of Common Stock to be Issued.

 

Any shares of
Common Stock issued by the Company to the Holders:

 

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

 

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

 

(b)           The shares of Common Stock
to be listed upon repurchase of Securities hereunder are, or shall have been,
approved for listing on the Nasdaq National Market or the New York Stock
Exchange or listed on another national securities exchange, in any case, prior
to the Repurchase Date.

 

(c)           All shares of Common Stock
which may be issued upon repurchase of Securities will be issued out of the
Company’s authorized but unissued Common Stock or treasury stock and will, upon
issue, be duly and validly issued and fully paid and nonassessable and free of
any preemptive or similar rights.

 

(d)           If such payment in shares of
Common Stock would cause any Holder (including its Affiliates) to become,
directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder) of
more than 9.99% of the shares of the Common Stock outstanding at such time,
than any purported payment made by the Company by delivery of shares of Common
Stock shall be void, and any amounts owed to such Holder (in excess of the
9.99%) shall be payable by the Company in cash.

 

Section 12.15   Conversion Prior to Capital Increase.

 

In
the event that a Fundamental Change occurs prior to the Capital Increase, the
Holders shall have right, at the Holder’s option, to require the Company to
repurchase for cash, and upon exercise of such right, the Company shall
purchase all of such Holder’s Securities at a purchase price equal  to
value of (i) the as-converted amount of the shares that would have been
issued to the Holder had the Capital Increase occurred and such Holder had
exercised its conversion option through a Fundamental Change Conversion Notice
(which amount will include the Make-Whole Premium) that would have been
applicable if such Holder had exercised its conversion right.  The cash
value and settlement of the as-converted amount of such shares (including
shares attributable to the Make-Whole Premium) will be determined pursuant to
12.12, as if Holders

 

50

 

had
elected to convert on the date Holders request payment pursuant to the Section,
and the Company had elected to settle the conversion request in cash.

 

ARTICLE 13

MAKE-WHOLE PREMIUM

 

Section 13.1   Make-Whole Amount.

 

(a)           In addition to the
consideration received pursuant to Article 12, if any Holder exercises its
conversion right under Section 12.1 prior to October 30, 2012, the Company
shall, upon such conversion, pay to such Holder an amount equal to the sum of (i) any
accrued and unpaid interest as of the date of such election and (ii) interest
that would have been payable from the conversion date through October 30, 2012
had the Holder not exercised its conversion rights hereunder (the “Make-Whole
Amount”); provided, however,
that such amounts to be paid pursuant to this Section 13.1(a) shall
not exceed 16% of the principal amount of the Securities exercised by such
Holder.

 

(b)           Any amounts payable under
clause (a) shall be payable by the Company at its option either (i) in
cash or (ii) in shares of Common Stock (such shares of Common Stock to
meet the conditions set forth in Section 12.14).  The Company shall provide notice to the
Holder of the manner of payment no later than two Trading Days following the
conversion date and, in the event the Company opts to pay in shares of Common
Stock, such shares shall be valued at 95% of the average daily volume weighted
average price per share for the 10 Trading Days beginning on the first Trading
Day after receipt by the Holders of such notice.  Payment in cash shall be settled as soon as
practical after the Company has elected to pay the Make-Whole Amount in Cash;
payment in shares shall be settled as soon as practicable after the
determination of the number of shares required to satisfy the Make-Whole
Amount.

 

Section 13.2   Make-Whole Premium.

 

(a)     If a Fundamental Change occurs, the Company shall pay
the Make-Whole Premium, if any, to Holders of the Securities who convert their
Securities pursuant to the Fundamental Change (by submitting a Fundamental
Change Conversion Notice substantially similar in form to Exhibit D.  Accrued but unpaid interest and the the
Make-Whole Premium, if any, shall be paid on the Repurchase Date to Holders who
exercise such conversion right.

 

(b)     The “Make-Whole Premium” shall be determined as
follows:

 

(i)            [Intentionally Omitted];

 

(ii)           If the Stock Price is less than $0.16 (subject to
adjustment pursuant to Section 13.2) (the “Stock Price Threshold”),
no Make-Whole Premium shall be paid;

 

(iii)          If the Stock Price exceeds $0.80 (subject to
adjustment pursuant to Section 13.2) (the “Stock Price Cap”), no
Make-Whole Premium shall be paid; and

 

(iv)          In all other cases, the shares delivered with respect
to each Note surrendered for conversion in connection with a Fundamental Change
shall be increased by an additional number of shares of Common Stock (the “Additional
Shares”) as described in Section 13.1(c)(iii) below.

 

(c)     For purposes of Section 13.1(c), the following
terms shall have the meaning indicated:

 

“Effective Date” means
the date that a Fundamental Change becomes effective.

 

“Stock Price” means the
price paid per share of Common Stock in the transaction constituting the
Fundamental Change, determined as follows:

 

(A)  If holders of the Common
Stock receive only cash in the transaction constituting the Fundamental Change,
the Stock Price shall equal the cash amount paid per share of Common Stock; and

 

(B)   In all other cases, the
Stock Price shall be the average of the daily Trading Prices per share of
Common Stock for the ten consecutive Trading Day period ending on the Trading
Day immediately preceding the Effective Date.

 

“Additional Shares”
means the additional shares to be paid in connection with the Make-Whole
Premium (the “Make-Whole Premium”), as set forth on the table below (the
“Make-Whole Table”) for the Stock Price and the Effective Date.  The Number of Additional Shares set forth in
the Make-Whole Table shall be adjusted as of any date on which the Conversion
Price is adjusted pursuant to Section 12.4, such that  the Additional Shares shall be the Additional
Shares immediately prior 

 

51

 

to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Price
immediately prior to the adjustment and the denominator of which shall be the
Conversion Price as so adjusted.  The
Stock Prices set forth in the first row of the table below (i.e., the column
headers) shall be adjusted as of any date on which the Conversion Price is
adjusted to equal the Stock Prices applicable immediately prior to such
adjustment, multiplied by a fraction, the numerator of which shall be the
Conversion Price as so adjusted and the denominator of which shall be the
Conversion Price immediately prior to the adjustment.

 

The following table illustrates what the Additional
Premiums would be for various Stock Prices.

 

Additional Shares Upon Fundamental Change

(shares per $1,000 face value of bond)

 

	
  STOCK PRICE

  	
   

  
	
  Effective
  Date

  	
   

  	
  $

  	
  0.16

  	
   

  	
  $

  	
  0.18

  	
   

  	
  $

  	
  0.20

  	
   

  	
  $

  	
  0.22

  	
   

  	
  $

  	
  0.24

  	
   

  	
  $

  	
  0.26

  	
   

  	
  $

  	
  0.28

  	
   

  	
  $

  	
  0.30

  	
   

  	
  $

  	
  0.32

  	
   

  	
  $

  	
  0.34

  	
   

  	
  $

  	
  0.36

  	
   

  	
  $

  	
  0.38

  	
   

  	
  $

  	
  0.40

  	
   

  	
  $

  	
  0.50

  	
   

  	
  $

  	
  0.60

  	
   

  	
  $

  	
  0.70

  	
   

  	
  $

  	
  0.80

  	
   

  
	
  Nov. 15,
  2009

  	
   

  	
  2,500

  	
   

  	
  2,222

  	
   

  	
  2,000

  	
   

  	
  1,818

  	
   

  	
  1,667

  	
   

  	
  1,538

  	
   

  	
  1,429

  	
   

  	
  1,333

  	
   

  	
  750

  	
   

  	
  706

  	
   

  	
  667

  	
   

  	
  632

  	
   

  	
  600

  	
   

  	
  480

  	
   

  	
  400

  	
   

  	
  343

  	
   

  	
  300

  	
   

  
	
  Nov. 15,
  2010

  	
   

  	
  2,000

  	
   

  	
  1,778

  	
   

  	
  1,600

  	
   

  	
  1,455

  	
   

  	
  1,333

  	
   

  	
  1,231

  	
   

  	
  1,143

  	
   

  	
  1,067

  	
   

  	
  500

  	
   

  	
  471

  	
   

  	
  444

  	
   

  	
  421

  	
   

  	
  400

  	
   

  	
  320

  	
   

  	
  267

  	
   

  	
  229

  	
   

  	
  200

  	
   

  
	
  Nov. 15,
  2011

  	
   

  	
  1,500

  	
   

  	
  1,333

  	
   

  	
  1,200

  	
   

  	
  1,091

  	
   

  	
  1,000

  	
   

  	
  1,000

  	
   

  	
  923

  	
   

  	
  857

  	
   

  	
  800

  	
   

  	
  250

  	
   

  	
  235

  	
   

  	
  222

  	
   

  	
  200

  	
   

  	
  160

  	
   

  	
  133

  	
   

  	
  114

  	
   

  	
  100

  	
   

  
	
  Nov. 15,
  2012

  	
   

  	
  1,000

  	
   

  	
  889

  	
   

  	
  800

  	
   

  	
  727

  	
   

  	
  667

  	
   

  	
  615

  	
   

  	
  571

  	
   

  	
  533

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Nov. 15,
  2013

  	
   

  	
  500

  	
   

  	
  444

  	
   

  	
  400

  	
   

  	
  364

  	
   

  	
  333

  	
   

  	
  308

  	
   

  	
  286

  	
   

  	
  267

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Nov. 15,
  2014

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
																																																					

 

The
exact Stock Price and Effective Date may not be set forth on the table.  In such event if the Stock Price is between
two Stock Prices on the table or the Effective Date is between two dates on the
table, the Additional Premium will be determined by straight-line interpolation
between Additional Premium amounts set forth for the higher and lower Stock
Prices and the two dates, as applicable, based on a 365-day year.

 

A
calculation agent (not the Trustee) appointed from time to time by the Company
(the “Calculation Agent”) shall, on behalf of and on request by the
Company or the Trustee, calculate (A) the Stock Price and (B) the
Make-Whole Premium with respect to such Stock Price, based on the Effective
Date specified by the Company or the Trustee, and shall deliver its calculation
of the Stock Price and Make-Whole Premium to the Company and the Trustee within
three Business Days of the request by the Company or the Trustee.  In addition, the Calculation Agent shall, on
behalf of and upon request by the Company or the Trustee no less than three
Business Days prior to a Repurchase Date, make the determinations described in Section 13.1(e)(i) above
and deliver its calculations to the Company or the Trustee by 9 p.m. (New
York City time) on the Trading Day preceding the Repurchase Date.  The Company, or at the Company’s request, the
Trustee in the name and at the expense of the Company, (X) shall notify
the Holders of the Stock Price and Make-Whole Premium per $1,000 original
principal amount of Securities with respect to a Fundamental Change as part of
the Repurchase Event Purchase Notice delivered in connection with the
Fundamental Change and (Y) shall notify the Holders promptly by 9 a.m.
(New York City time) on the Repurchase Date of the number or amount of such
securities, assets or property into which the shares of Common Stock have been
converted or exchanged as of the Effective Date to be paid in respect of the
Make-Whole Premium in connection with such Fundamental Change, in the manner
provided in Section 15.2, 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.

 

Section 13.3   Adjustments Relating to the Make-Whole
Premium.

 

Whenever
the Conversion Price shall be adjusted from time to time by the Company
pursuant to Section 12.4, the Stock Price Threshold and the Stock Price
Cap shall be adjusted and each of the Stock Prices set forth in the Make-Whole
Table shall be adjusted by multiplying each such amount by a fraction, the
numerator of which is the Conversion Price as so adjusted and the denominator
of which is the Conversion Price immediately prior to such adjustments.

 

52

 

ARTICLE 14

INTERCREDITOR AGREEMENT

 

Section 14.1   Second Priority Nature of Liens.

 

The liens and security
interest granted to the Collateral Agent for the benefit of the Holders
pursuant to the Second Lien Security Documents and the exercise of any rights
or remedies by the Collateral Agent or any Holder thereunder are subject to the
provisions of the Intercreditor Agreement. 
The Company covenants and agrees, and each Holder of the Securities, by
its acceptance thereof covenants and agrees, that the Security Interest
securing the Securities is hereby expressly subordinated and junior, to the
extent and in the manner set forth in the Intercreditor Agreement, to any Liens
securing Senior Secured Indebtedness permissible under this Indenture.  Each Holder of Securities, by its acceptance
thereof, authorizes and directs the Trustee on such Holder’s behalf to take
such actions as may be necessary or appropriate to effectuate the subordination
provision provided in this Article 14.

 

ARTICLE 15

OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 15.1   Trust Indenture Act Controls.

 

This
Indenture is subject to the provisions of the TIA which are required to be part
of this Indenture, and shall, to the extent applicable, be governed by such
provisions.

 

Section 15.2   Notices.

 

Any
notice or communication to the Company or the Trustee is duly given if in
writing and delivered in person or mailed by first-class mail to the address
set forth below:

 

(a)     if to the Company:

 

Vitesse
Semiconductor Corporation

741 Calle Plano

Camarillo, California  93012

Attention:  Chief Financial Officer

 

with
a copy to:

Perkins
Coie LLP

101 Jefferson Drive

Menlo
Park, CA 94025

Attention:  Bruce McNamara, Esq.

 

(b)     if to the Trustee:

 

U.S. Bank National
Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul, Minnesota  55107-2292

Attention:  Corporate Trust Department

 

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

 

Any
notice or communication to a Holder shall be mailed by first-class mail to his
address shown on the Register kept by the Registrar.  Failure to mail a notice or communication to
a Holder or any defect in such notice or communication shall not affect its
sufficiency with respect to other Holders.

 

If
a notice or communication is mailed or sent in the manner provided above within
the time prescribed, it is duly given as of the date it is mailed, whether or
not the addressee receives it, except that notice to the Trustee shall only be
effective upon receipt thereof by the Trustee.

 

If the Company mails a
notice or communication
to Holders, it shall mail a copy to the Trustee at the same time.

 

53

 

Section 15.3   Communication by Holders with Other Holders.

 

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

 

Section 15.4   Acts of Holders of Securities.

 

(a)     Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities may be embodied in and evidenced by:

 

(1)   one or more instruments of
substantially similar tenor signed by such Holders in person or by agent or
proxy duly appointed in writing;

 

(2)   the record of Holders of
Securities voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Securities duly called and
held in accordance with the provisions of Article 8; or

 

(3)   a combination of such
instruments and any such record.

 

Except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company.  Such instrument or instruments and record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Holders of Securities signing such instrument
or instruments and so voting at such meeting. 
Proof of execution of any such instrument or of a writing appointing any
such agent or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 5.1)
conclusive in favor of the Trustee and the Company if made in the manner
provided in this Section.  The record of
any meeting of Holders of Securities shall be proved in the manner provided in Section 8.6.

 

(b)     The fact and date of the execution by any Person of
any such instrument or writing may be provided in any manner which the Trustee
reasonably deems sufficient.

 

(c)     The principal amount and serial numbers of Securities
held by any Person, and the date of such Person holding the same, shall be
proved by the Register.

 

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

 

Section 15.5   Certificate and Opinion as to Conditions
Precedent.

 

In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

 

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

 

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

 

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

 

54

 

 

in the opinion of such Counsel all such conditions precedent, if any,
have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.

 

Section 15.6   Statements Required in Certificate or
Opinion.

 

Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

 

(1)          a statement that each individual signing such
certificate or opinion on behalf of the Company has read such covenant or
condition and the definitions herein relating thereto;

 

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

 

(3)          a statement that, in the opinion of each such
individual, 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, in the opinion of each
such individual, such condition or covenant has been complied with.

 

Section 15.7   Effect of Headings and Table of Contents.

 

The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

 

Section 15.8   Successors and Assigns.

 

All
covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.

 

Section 15.9   Separability Clause.

 

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

 

Section 15.10   Benefits of Indenture.

 

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

 

Section 15.11   Governing Law.

 

THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

Section 15.12   Jurisdiction.

 

Each
of the parties irrevocably agrees that any legal action or proceeding arising
out of or relating to this Indenture brought by the other party or its
successors or assigns shall be brought and determined in any New York State or
federal court sitting in the Borough of Manhattan in The City of New York (or,
if such court lacks subject matter jurisdiction, in any appropriate New York
State or federal court), and each of the parties hereby irrevocably submits to
the exclusive jurisdiction of the aforesaid courts for itself and with respect
to its property, generally and unconditionally, with regard to any such action
or proceeding arising out of or relating to this Indenture and the transactions
contemplated hereby.  Each of the parties
agrees not to commence any action, suit or proceeding relating thereto except
in the courts described above in New York, other than actions in any court of
competent jurisdiction to enforce any judgment, decree or award rendered by any
such court in New York as described herein. 
Each of the parties further agrees that notice as provided herein shall
constitute sufficient service of process and the parties further waive any argument
that such service is insufficient.  Each
of the parties hereby irrevocably and unconditionally waives, and agrees not to
assert, by way of motion or as a defense, counterclaim or otherwise, in any
action or proceeding arising out of or relating to this Indenture or the
transactions contemplated hereby, (a) any claim that it 

 

55

 

is not personally subject to the jurisdiction of the courts in New York
as described herein for any reason, (b) that it or its property is exempt
or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior
to judgment, attachment in aid of execution of judgment, execution of judgment
or otherwise) and (c) that (i) the suit, action or proceeding in any
such court is brought in an inconvenient forum, (ii) the venue of such
suit, action or proceeding is improper or (iii) this Indenture, or the
subject matter hereof, may not be enforced in or by such courts.

 

Section 15.13   Counterparts.

 

This
instrument may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original but all such counterparts shall
together constitute but one and the same instrument.

 

Section 15.14   Legal Holidays.

 

In
any case where any Interest Payment Date, Redemption Date, Repurchase Date or
Stated Maturity of any Security or the last day on which a Holder of a Security
has a right to convert such Security shall not be a Business Day at any Place
of Payment or Place of Conversion, then (notwithstanding any other provision of
this Indenture or of the Securities) payment of interest or principal or
premium, if any, or conversion of the Securities, need not be made at such
Place of Payment or Place of Conversion on such day, but may be made on the
next succeeding Business Day at such Place of Payment or Place of Conversion
with the same force and effect as if made on the Interest Payment Date,
Redemption Date, Repurchase Date or at the Stated Maturity or on such last day
for conversion; provided, however,
that in the case that payment is made on such succeeding Business Day, no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, Repurchase Date or Stated
Maturity, as the case may be.

 

Section 15.15   Recourse Against Others.

 

No recourse for the
payment of the principal of or premium, if any, or interest on any Security, or
for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or of 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 the acceptance thereof and as part of the consideration for the issue
thereof, expressly waived and released.

 

ARTICLE 16

COLLATERAL

 

Section 16.1   Security Documents.

 

The
payment of the principal of and interest and premium, if any, on the Notes when
due, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise and whether by the Company pursuant to the
Notes or by the Guarantor pursuant to its Guaranty, the payment and the
performance of all other obligations of the Company and the Guarantors under
the Indenture, the Notes and the Guaranty are secured as provided in the Second
Lien Security Documents which the Company and the Guarantor have entered into
on the date hereof and will be secured by Second Lien Security Documents
hereafter delivered as required or permitted by the Indenture.  The Company shall, and shall cause each
Guarantor to, and each Guarantor shall, make all filings (including filings of
continuation statements and amendments to UCC financing statements that may be
necessary to continue the effectiveness of such UCC financing statements) and
all other actions as are necessary or required by the Second Lien Security
Documents to maintain (at the sole cost and expense of the Company and the
Guarantors) the security interest created by the Second Lien Security Documents
in the Collateral (other than with respect to any Collateral the security
interest in which is not required to be perfected under the Security Documents)
as a perfected security interest subject only to Permitted Liens.

 

Section 16.2   Collateral Agent.

 

Subject
to Section 5.1, neither the Trustee nor the Collateral Agent nor any of
their respective officers, directors, employees, attorneys or agents will be
responsible or liable for the existence, genuineness, value or protection of
any Collateral, for the legality, enforceability, effectiveness or sufficiency
of the Second Lien Security Documents, for the creation, perfection, priority,
sufficiency or protection of Security Interest, or for any defect or deficiency
as to any such

 

56

 

matters, or for any failure to demand, collect, foreclose or realize
upon or otherwise enforce any of the Second Priority Liens or Second Lien
Security Documents or any delay in doing so.

 

Section 16.3   Opinions as to Recordings.

 

(a) 
The Company represents that it has caused or will promptly cause to be executed
and delivered, filed and recorded and covenants that it will promptly cause to
be executed and delivered and filed and recorded, all instruments and
documents, and represents that it has done and will do or will cause to be done
all such acts and other things, at the Company’s expense, as applicable, as are
necessary to subject the applicable Collateral to valid Security Interests and
to perfect those Security Interests to the extent contemplated by the Second
Lien Security Documents.

 

(b) 
The Company shall furnish to the Trustee and the Collateral Agent upon the
execution and delivery of this Indenture an Opinion of Counsel either (i) stating
that in the opinion of such counsel all action has been taken with respect to
the recording, registering and filing of this Indenture, financing statements
or other instruments or otherwise necessary to make effective the Security
Interests intended to be created by the Second Lien Security Documents and
reciting the details of such action, or (ii) stating that, in the opinion
of such counsel, no such action is necessary to make such Lien effective.  Such Opinion of Counsel may contain such
qualifications, assumptions and limitations as are customary for such opinions.

 

(c) 
The Company shall furnish to the Trustee and the Collateral Agent within three
months after each anniversary of the date hereof, an Opinion of Counsel, dated
as of such date, stating either that (i) in the opinion of such counsel,
all action has been taken with respect to the recording, filing, re-recording,
and re-filing of the Indenture and related financing statements, continuation
statements and other instruments and documents as is necessary to maintain the
effectiveness of the Security Interests intended to be created by the Second
Lien Security Documents and reciting the details of such action or (ii) in
the opinion of such counsel, no such action is necessary to maintain the
effectiveness of such Security Interests. 
Such Opinion of Counsel may contain such qualifications, assumptions and
limitations as are customary for such opinons.

 

(d) 
The Company and the Subsidiary Guarantors shall otherwise comply with the
provisions of § 314(b) and, as applicable §§ 314(c), (d) and
(e) of the TIA.

 

Section 16.4   Authorization of Actions to Be Taken.

 

(a)     Each Holder, by its acceptance thereof, consents and
agrees to the terms of each Second Lien Security Document and the Intercreditor
Agreement, as originally in effect and as amended, supplemented or replaced
from time to time in accordance with its terms or the terms of the Indenture,
authorizes and directs the Trustee and the Collateral Agent to enter into the
Second Lien Security Documents to which it is a party, authorizes and empowers
the Trustee to direct the Collateral Agent to enter into, and the Collateral
Agent to execute and deliver, the Intercreditor Agreement, and authorizes and
empowers the Trustee and the Collateral Agent to bind the Holders of Notes and
other holders of obligations as set forth in the Second Lien Security Documents
and the Intercreditor Agreement and to perform its obligations and exercise its
rights and powers thereunder.

 

(b)     The Collateral Agent and the Trustee are authorized
and empowered to receive for the benefit of the Holders any funds collected or
distributed under the Security Documents to which the Collateral Agent or Trustee
is a party and to make further distributions of such funds as permitted or
required in any Second Lien Security Document or the Intercreditor Agreement.

 

Section 16.5   Release of Liens.

 

Collateral
may be released from the Security Interest at any time or from time to time in
accordance with the provisions of the TIA, the Second Lien Security Documents and the
Intercreditor Agreement.  The applicable
assets included in the Collateral shall be released at the
Company’s sole cost and expense.

 

Section 16.6   Additional Guarantors.

 

The
Company shall not, and shall not permit any Subsidiary to, form or acquire any
corporation which would thereby become a Domestic Subsidiary unless such
Domestic Subsidiary simultaneously executes and delivers to the Collateral
Agent, (a) a Joinder Agreement in the form of Exhibit A
to the Guaranty, (b) a Joinder Agreement in the form of

 

57

 

Exhibit A to the Guarantor Security
Agreement, (c) such additional documents reasonably required by the
Collateral Agent, and (d) no Default of Event of Default shall result from
the joinder contemplated herein.

 

58

 

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

 

	
   

  	
  VITESSE
  SEMICONDUCTOR CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher R. Gardner

  
	
   

  	
  Name:

  	
  Christopher
  R. Gardner

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  trustee and not in its individual capacity

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  RAYMOND S. HAVERSTOCK

  
	
   

  	
  Name:

  	
  Raymond
  S. Haverstock

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

59

 

EXHIBIT A

 

FORM OF
SECURITY

 

[FACE OF SECURITY]

 

[GLOBAL SECURITY
LEGEND](1)

 

THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREIN.  THIS GLOBAL SECURITY MAY NOT BE EXCHANGED OR
TRANSFERRED, IN WHOLE OR IN PART, FOR A SECURITY REGISTERED IN THE NAME OF ANY
PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
SET FORTH IN THE INDENTURE.  BENEFICIAL
INTERESTS IN THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE INDENTURE.

 

(1)          Insert if the Security is a Global
Security.

 

A-1

 

VITESSE
SEMICONDUCTOR CORPORATION

 

8.0% Convertible
Second Lien Debenture due 2014

(the “Debentures”)

 

	
   

  	
  No.

  
	
   

  	
   

  
	
  CUSIP: [         ](2)

  	
  Initial principal
  balance of this Debenture:

  
	
   

  	
  $

  

 

VITESSE
SEMICONDUCTOR CORPORATION, a Delaware corporation (the “Company”, which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to                             
or its registered assigns, the principal sum listed on the Schedule of
Increases or Decreases in Global Security attached hereto on                     ,
2014.

 

Interest
Payment Dates:  April 1 and October 1,
commencing April 1, 2010

 

Regular
Record Dates:  March 15 and September 15

 

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

 

IN WITNESS WHEREOF, the Company has caused
this Security to be duly executed manually or by facsimile by its duly
authorized officers.

 

	
  Dated:

  	
   

  	
   

  	
  VITESSE SEMICONDUCTOR
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Trustee’s Certificate
  of Authentication

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  This is one of the 8.
  0% Convertible Second Lien Debentures due 2014 described in the within-named
  Indenture.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL
  ASSOCIATION,

  	
   

  	
   

  
	
  as Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
						

 

(2)          Insert if the Security is a Global
Security.

 

A-2

 

[REVERSE OF
SECURITY]

 

VITESSE
SEMICONDUCTOR CORPORATION

 

8.00% Convertible
Second Lien Debenture due 2014

 

Capitalized
terms used herein but not defined shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.

 

1.  Principal and Interest.

 

Vitesse
Semiconductor Corporation, a Delaware corporation (the “Company”),
promises to pay interest on the principal amount of this Security at the
Interest Rate from October 30, 2009 until repayment at Maturity, redemption or
repurchase.  The Company will pay
interest on this Security semiannually in arrears on April 1 and October 1
of each year (each an “Interest Payment Date”), commencing April 1,
2010.

 

Interest
on the Securities shall be computed (i) for any full semiannual period for
which a particular Interest Rate is applicable on the basis of a 360-day year
of twelve 30-day months and (ii) for any period for which a particular
Interest Rate is applicable shorter than a full semiannual period for which
interest is calculated, on the basis of a 30-day month and, for such periods of
less than a month, the actual number of days elapsed over a 30-day month.

 

A
Holder of any Security at the close of business on a Regular Record Date shall
be entitled to receive interest on such Security on the corresponding Interest
Payment Date.  A Holder of any Security
which is converted after the close of business on a Regular Record Date and
prior to the corresponding Interest Payment Date (other than any Security whose
Maturity is prior to such Interest Payment Date) shall be entitled to receive
interest on the principal amount of such Security, notwithstanding the
conversion of such Security prior to such Interest Payment Date.  However, any such Holder which surrenders any
such Security for conversion during the period between the close of business on
such Regular Record Date and ending with the opening of business on the
corresponding Interest Payment Date shall be required to pay the Company an
amount equal to the interest on the principal amount of such Security so
converted, which is payable by the Company to such Holder on such Interest
Payment Date, at the time such Holder surrenders such Security for
conversion.  Notwithstanding the
foregoing, any such Holder which surrenders for conversion any Security which
has been called for redemption by the Company on a date that is after a Record
Date but prior to the corresponding Interest Payment Date in a notice of
redemption given by the Company pursuant to Section 10.4 of the Indenture
shall be entitled to receive (and retain) such interest and need not pay the
Company an amount equal to the interest on the principal amount of such
Security so converted at the time such Holder surrenders such Security for
conversion.

 

2.  Method of Payment.

 

Interest
on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.

 

Principal
of, and premium, if any, and interest on, Global Securities will be payable to
the Depositary in immediately available funds.

 

Principal
and premium, if any, on Physical Securities will be payable at the office or
agency of the Company maintained for such purpose, initially the Corporate
Trust Office of the Trustee.  Interest on
Physical Securities will be payable by (i) U.S. Dollar check mailed to the
address of the Person entitled thereto as such address shall appear in the
Register, or (ii) upon application to the Registrar not later than the
relevant Record Date by a Holder of an aggregate principal amount in excess of
$5,000,000, wire transfer in immediately available funds to an account within
the United States, which application will remain in effect until the Holder
notifies, in writing, the Registrar to the contrary.

 

3.  Paying Agent and Registrar.

 

Initially,
U.S. Bank National Association, the Trustee under the Indenture, will act as
Paying Agent and Registrar.  The Company
may change the Paying Agent or Registrar without notice to any Holder.

 

4.  Indenture.

 

The
Company issued this Security under an Indenture, dated as of October 30, 2009
(the “Indenture”), between the Company and U.S. Bank National
Association, as trustee (the “Trustee”). 
The terms of the Security include those stated 

 

A-3

 

in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (the “TIA”).  This Security is subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of all
such terms.  To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control.

 

5.  Optional Redemption.

 

On
or after October 30, 2011, the Company may, at its option, redeem this Security
in whole at any time or in part from time to time, on any date prior to
Maturity, upon notice as set forth in Section 10.4 of the Indenture, at
the Redemption Price (as defined in the Indenture) plus any interest accrued
and unpaid to, but excluding, the Redemption Date; if the closing sale price of
the Company’s Common Stock (the “Common Stock”) has been at least 130%
of the Conversion Price then in effect for at least 20 Trading Days (as defined
in the Indenture) during any 30 consecutive Trading Day period.

 

Securities
in original denominations larger than $1,000 may be redeemed in part.  If any Security selected for partial
redemption is converted in part before termination of the conversion right with
respect to the portion of the Security so selected, the converted portion of
such Security shall be deemed to be the portion selected for redemption (provided, however, that the Holder of such
Security so converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Security).  Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as Outstanding for the purpose of such selection.

 

On
and after the Redemption Date, interest ceases to accrue on Securities or
portions of Securities called for redemption, unless the Company defaults in
the payment of the Redemption Price.

 

Notice
of redemption will be given by the Company to the Holders as provided in the
Indenture.

 

6.  Repurchase at the Option of a Holder upon
a Fundamental Change.

 

In
the event that a Fundamental Change (as defined in the Indenture) (a “Repurchase
Event”) shall occur, each Holder shall have the right, at the Holder’s
option, but subject to the provisions of Section 12.4 of the Indenture, to
require the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such Holder’s Securities not previously called
for redemption, or any portion of the principal amount thereof that is equal to
$1,000 or an integral multiple thereof as directed by such Holder pursuant to Section 11.3
of the Indenture (provided that
no single Security may be repurchased in part unless the portion of the
principal amount of such Security to be Outstanding after such repurchase is
equal to $1,000 or an integral multiple thereof), on a date (the “Repurchase
Date”) that is not less than 25 nor more than 35 Business Days after the
date of the Repurchase Event Notice (as defined in the Indenture) for an amount
equal to the sum of (i) the Repurchase Price plus accrued and unpaid
interest, to, but excluding, the Purchase Date (as defined in the Indenture)
and (ii) the Make-Whole Premium (as defined in the Indenture) if any; provided, however, that installments of
interest on Securities whose Stated Maturity is prior to or on the Fundamental
Change Purchase Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Regular
Record Date according to their terms and the provisions of Section 2.1 of
the Indenture.

 

The
Repurchase Price payable in the event of a Fundamental Change shall be payable
by the Company in cash.

 

7.  Conversion Rights.

 

Subject
to and upon compliance with the provisions of the Indenture including the
Make-Whole Amount (if applicable), the Holder of Securities is entitled, at
such Holder’s option, at any time before the close of business on the Business
Day immediately preceding October 30, 2014, to convert the Holder’s Securities
(or any portion of the principal amount hereof which is an integral multiple of
$1,000), at the principal amount thereof or of such portion, into duly
authorized, fully paid and nonassessable shares of Common Stock at the
Conversion Price in effect at the time of conversion.

 

In
the case of a Security (or a portion thereof) called for redemption, such
conversion right in respect of the Security (or such portion thereof) so
called, shall expire at the close of business on the second Business Day
preceding the Redemption Date, unless the Company defaults in making the
payment due upon redemption; provided, that
in no event shall any Holder have less than 20 Business Days from receipt of a
notice of redemption to exercise its conversion right in respect of the
Security or the portion so called.  In
the case of a Fundamental Change for which the Holder exercises its Repurchase
Right with respect to a Security (or a portion thereof), such conversion right
in respect of the Security (or portion thereof) shall expire at the close of
business on the Business Day preceding the Repurchase Date.

 

The
Conversion Price shall be initially equal to $.225 per share of Common
Stock.  The Conversion Price shall be
adjusted under certain circumstances as provided in the Indenture.

 

A-4

 

To
exercise the conversion right, the Holder must surrender the Security (or
portion thereof) duly endorsed or assigned to the Company or in blank, at the
office of the Conversion Agent, accompanied by a duly signed conversion notice
to the Company, with a copy to the Trustee. 
Any Security surrendered for conversion during the period from the close
of business on any Regular Record Date to the opening of business on the
corresponding Interest Payment Date (other than any Security whose Maturity is
prior to such Interest Payment Date), shall also be accompanied by payment in
New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of the Securities being surrendered for conversion.

 

No
fractional shares of Common Stock will be issued upon conversion of any
Securities.  Instead of any fractional
share of Common Stock which would otherwise be issued upon conversion of such
Securities, the Company shall pay a cash adjustment as provided in the
Indenture.

 

8.  Intercreditor Agreement.

 

The
Indebtedness evidenced by this Security is secured by a second priority lien
subject only to the liens securing the First Lien Loan Agreement and Permitted
Liens.  Each Holder of this Security, by
accepting the same, agrees to and shall be bound by the provisions of the
Intercreditor Agreement.

 

9.  Denominations; Transfer; Exchange.

 

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

 

In
the event of a redemption in part, the Company will not be required (a) to
register the transfer of, or exchange, Securities for a period of 15 Business
Days immediately preceding the date notice is given identifying the serial
numbers of the Securities called for such redemption, or (b) to register
the transfer of, or exchange, any such Securities, or portion thereof, called
for redemption.

 

In
the event of redemption, conversion or repurchase of the Securities in part
only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion thereof will be issued in the name of the Holder hereof.

 

10.  Persons Deemed Owners.

 

The
registered Holder of this Security shall be treated as its owner for all
purposes.

 

11.  Unclaimed Money.

 

The
Trustee and the Paying Agent shall pay to the Company any money held by them
for the payment of principal, premium, if any, or interest that remains
unclaimed for two years after the date upon which such payment shall have
become due.  After payment to the
Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.

 

12.  Discharge Prior to Redemption or Maturity.

 

Subject
to certain conditions contained in the Indenture, the Company may discharge its
obligations under the Securities and the Indenture if (1) (a) all of
the Outstanding Securities shall become due and payable at their scheduled
Maturity within one year or (b) all of the Outstanding Securities are
scheduled for redemption within one year, and (2) the Company shall have
deposited with the Trustee money and/or U.S. Government Obligations sufficient
to pay the principal of, and premium, if any, and interest on, all of the
Outstanding Securities on the date of Maturity or redemption, as the case may
be.

 

13.  Amendment; Supplement; Waiver.

 

The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Securities (or such lesser amount
as shall have acted at a meeting pursuant to the provisions of the
Indenture).  The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences.  Any such consent or waiver
by the 

 

A-5

 

Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security or
such other Security.

 

No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Security (or pay cash in lieu of
conversion) as provided in the Indenture.

 

14.  Defaults
and Remedies.

 

The Indenture provides that an Event of Default with
respect to the Securities occurs when any of the following occurs:

 

(a)               the Company defaults in the payment of interest on any
of the Securities when it becomes due and payable and such default continues
for a period of 30 days, whether or not such payment is prohibited by Article 14;
or

 

(b)              the Company defaults in the payment of the principal
of or premium, if any, on any of the Securities when it becomes due and payable
at Maturity, upon redemption or exercise of a Repurchase Right, or otherwise,
whether or not such payment is prohibited by Article 14; or

 

(c)               the Company fails to satisfy is obligations with
respect to any payments due Section 9.18 (a), whether or not such payment
is prohibited by Article 14; or

 

(d)              the Company fails to deliver Common Stock, cash or a
combination of the foregoing, as required pursuant to Article 12 or Article 13
upon the conversion of any Securities, and such failure continues for 5 days
following the scheduled settlement date for such conversion; or

 

(e)               the Company fails to provide notice of the anticipated
or actual effective date of a Fundamental Change or distribution pursuant to Section 11.3
or 11.4, in each case, on a timely basis as required under this Indenture; or

 

(f)                 the Company defaults in the performance of, or the
Company breaches any, covenant or agreement contained in this Indenture, any
Indenture Document or the Securities (other than (i) a default specified
in clause (a), (b) or (c) above, (ii) any non-payment default
under Section 9.18(a) and (iii) any default under Section 9.6)
and such default or breach continues for a period of 60 consecutive days after
written notice of such breach or default shall have been given to the Company
by the Trustee or to the Company and the Trustee by the Holders of 25% or more
in aggregate principal amount of the Outstanding Securities; or

 

(g)              the Company (i) defaults in the performance of
any covenant or agreement contained in any agreements, indentures or
instruments under which the Company has incurred Indebtedness of $15,000,000 or
more in the aggregate (not including any amounts the Company may owe under
reimbursement or similar obligations to banks, sureties or other entities which
have issued letters of credit, surety bonds, performance bonds or other
guarantees relating to the performance by the Company or its Subsidiaries of
contractual obligations to customers, to the extent any demands made under any
such reimbursement or similar obligation relate to a draw under the related
letter of credit or other instrument which draw is being contested in good
faith through appropriate proceedings) whether such indebtedness now exists or
shall hereafter be created, and (ii) such default has caused the holders
of such Indebtedness to declare such Indebtedness to be due and payable prior
to its stated maturity and such Indebtedness has not been discharged in full or
such acceleration has not been rescinded or annulled by the 30th day after
written notice of such default shall have been given to the Company by the
Trustee or to the Company and the Trustee by Holders of 25% or more in
aggregate principal amount of the Outstanding Securities; provided that if the default under the
agreement, indenture or instrument is remedied or cured by the Company or
waived by the holders of such Indebtedness before the entry of judgment in
favor of the Trustee, then the Event of Default under this Indenture will be
deemed likewise to have been remedied, cured or waived; or

 

(h)              the entry by a court having jurisdiction in the
premises of (i) a decree or order for relief in respect of the Company in
an involuntary case or proceeding under any applicable U.S. federal or state
bankruptcy, insolvency, reorganization or other similar law or (ii) 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 U.S. federal
or state law, or appointing a Custodian of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
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

 

A-6

 

(i)                  the commencement by the Company of a voluntary case or
proceeding under any applicable U.S. 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 U.S. 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 U.S. federal or state law, or the consent by the
Company to the filing of such petition or to the appointment of or the taking
possession by a Custodian of the Company or of any substantial part of its
property, 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 expressly in furtherance of any such actionIf an Event of Default
shall occur and be continuing, the principal of all the Securities may be
declared due and payable in the manner and with the effect provided in the
Indenture.

 

15.  Authentication.

 

This
Security shall not be valid until the Trustee (or authenticating agent)
executes the certificate of authentication on the other side of this Security.

 

16.  Abbreviations.

 

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

 

17.  [Intentionally Omitted].

 

18.  CUSIP
Numbers.

 

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

 

19.  Governing
Law.

 

The
Indenture and this Security shall be governed by, and construed in accordance
with, the law of the State of New York.

 

20.  Successor
Corporation.

 

In
the event a successor corporation assumes all the obligations of the Company
under this Security, pursuant to the terms hereof and of the Indenture, the
Company will be released from all such obligations.

 

21.  Counterparts.

 

This
Security may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original but all such counterparts shall
together constitute but one and the same instrument.

 

A-7

 

ASSIGNMENT FORM

 

To assign this
Security, fill in the form below and have your signature guaranteed:

(I) or (we) assign and transfer this Security to:

 

 

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

 

 

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

 

and
irrevocably appoint                     
to transfer this Security on the books of the Company.  The agent may substitute another to act for
him.

 

	
  Dated:
  

  	
   

  	
   

  	
  Your
  Name:

  	
   

  
	
   

  	
   

  	
  (Print your name exactly as it appears on the face
  of this Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  Guarantee*:

  	
   

  

 

The Trustee or other Registrar shall not be obligated
to register this Security in the name of any Person other than the Holder hereof
unless the conditions to any such transfer of registration set forth herein and
in Sections 2.7, 2.8 and 2.9 of the Indenture shall have been satisfied.

 

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature to this assignment must
  correspond with the name as written upon the face of the within-mentioned
  instrument in every particular, without alteration or any change whatsoever.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guarantee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature must be guaranteed by a participant in a
  recognized signature guaranty medallion program or other signature guarantor
  acceptable to the Trustee.

  

 

*                 Participant in a recognized
Signature Guarantee Medallion Program (or other signature guarantor acceptable
to the Trustee).

 

A-8

 

EXHIBIT
B

 

FORM OF REPURCHASE EVENT PURCHASE NOTICE

 

TO:                            VITESSE
SEMICONDUCTOR CORPORATION

741 Calle Plano

Camarillo, California  93012

Attn: Chief Financial Officer

 

The
undersigned registered owner of this Security hereby irrevocably acknowledges
receipt of a notice from Vitesse Semiconductor Corporation (the “Company”)
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repay the entire principal amount of this
Security, or the portion thereof (the principal amount of which is an integral
multiple of $1,000) below designated, in accordance with the terms of the
Indenture referred to in this Security, together with interest accrued and
unpaid to, but excluding, such date, to the registered Holder hereof.

 

The
undersigned represents that, immediately following the repurchase described
above, the undersigned will not own outstanding shares constituting more than
9.99% of the outstanding shares of Common Stock.

 

	
  Dated:
  

  	
   

  	
   

  	
  Your
  Name:

  	
   

  
	
   

  	
   

  	
  (Print your name exactly as it appears on the face of this Security)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  Guarantee*:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social
  Security or other Taxpayer

  
	
   

  	
   

  	
  Identification
  Number:

  	
   

  
	
   

  	
   

  	
   

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

  

 

*                 Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

B-1

 

EXHIBIT
C

 

FORM OF CONVERSION NOTICE

 

	
  TO:

  	
   

  	
  VITESSE
  SEMICONDUCTOR CORPORATION

  
	
   

  	
   

  	
  741
  Calle Plano

  
	
   

  	
   

  	
  Camarillo,
  California 93012

  
	
   

  	
   

  	
  Attention:
  Chief Financial Officer

  

 

	
  COPY TO:

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
  EP-MN-WS3C

  
	
   

  	
   

  	
  60 Livingston Avenue

  
	
   

  	
   

  	
  St. Paul, Minnesota
  55107-2292

  
	
   

  	
   

  	
  Attention: Corporate Trust
  Administration (Vitesse Semiconductor Corporation 8.00% Convertible Second
  Lien Debentures due 2014)

  

 

The
undersigned registered owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion hereof (the principal amount of
which is an integral multiple of $1,000) below designated, into shares of
Common Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below.  If shares or any
portion of this Security not converted are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.  Any amount
required to be paid to the undersigned on account of interest accompanies this
Security.

 

The
undersigned represents that, immediately following the conversion described
above, the undersigned will not own outstanding shares constituting more than
9.99% of the outstanding shares of Common Stock.

 

	
  Dated:
  

  	
   

  	
   

  	
  Your
  Name:

  	
   

  
	
   

  	
   

  	
  (Print your name exactly as it appears on the face of this Security)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  Guarantee*:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social
  Security or other Taxpayer

  
	
   

  	
   

  	
  Identification
  Number:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Principal amount to be converted (if less than all):  $

  

 

Fill
in for registration of shares (if to be issued) and Securities (if to be
delivered) other than to and in the name of the registered holder:

 

	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City, State and
  Zip Code)

  	
   

  

 

*                 Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

C-1

 

EXHIBIT
D

 

FORM OF
FUNDAMENTAL CHANGE NOTICE

 

	
  TO:

  	
   

  	
  VITESSE SEMICONDUCTOR
  CORPORATION

  
	
   

  	
   

  	
  741 Calle Plano

  
	
   

  	
   

  	
  Camarillo, California
  93012

  
	
   

  	
   

  	
  Attention: Chief Financial
  Officer

  

 

	
  COPY TO:

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
  EP-MN-WS3C

  
	
   

  	
   

  	
  60 Livingston Avenue

  
	
   

  	
   

  	
  St. Paul, Minnesota
  55107-2292

  
	
   

  	
   

  	
  Attention: Corporate Trust
  Administration (Vitesse Semiconductor Corporation 8.00% Convertible Second
  Lien Debentures due 2014)

  

 

The
undersigned registered owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion hereof (the principal amount of
which is an integral multiple of $1,000) below designated, into shares of
Common Stock in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below.  If shares or any
portion of this Security not converted are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.  Any amount
required to be paid to the undersigned on account of interest accompanies this
Security.

 

The
undersigned represents that, immediately following the conversion described
above, the undersigned will not own outstanding shares constituting more than
9.99% of the outstanding shares of Common Stock.

 

	
  Dated:
  

  	
   

  	
   

  	
  Your
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  (Print your name exactly as it appears on the face of this Security)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature
  Guarantee*:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Social
  Security or other Taxpayer

  
	
   

  	
   

  	
   

  	
  Identification
  Number:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  
	
  Principal amount
  to be converted (if less than all):   $

  

 

Fill
in for registration of shares (if to be issued) and Securities (if to be
delivered) other than to and in the name of the registered holder:

 

	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street Address)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City, State and
  Zip Code)

  	
   

  
	
   

  	
  SCHEDULE OF
  INCREASES OR DECREASES IN GLOBAL SECURITY

  	
   

  

 

*                 Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

 

 

The initial principal amount of this Global Security is $              .  The following increases or decreases of a
part of this Global Security have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of decrease in 

  Principal Amount of 

  this Global Security

  	
   

  	
  Amount of increase in 

  Principal Amount of 

  this Global Security

  	
   

  	
  Principal Amount of 

  this Global Security 

  following such 

  decrease (or increase)

  	
   

  	
  Signature of 

  Authorized officer of 

  Trustee or Securities 

  CoordinatorExhibit 4.3

 

CERTIFICATE
OF DESIGNATION

 

FOR SERIES
B PARTICIPATING NON-CUMULATIVE
  CONVERTIBLE PREFERRED STOCK

 

OF

 

VITESSE
SEMICONDUCTOR CORPORATION

 

Pursuant
to Section 151 of the General Corporation Law

of the
State of Delaware

 

Vitesse Semiconductor Corporation (the “Corporation”),
a corporation organized and existing under the General Corporation Law of the
State of Delaware (the “DGCL”), hereby certifies that pursuant to the
authority granted by Article 4 of the Amended and Restated Certificate of
Incorporation of the Corporation and in accordance with the provisions of Section 151
of the DGCL, the Board of Directors of the Corporation (the “Board of
Directors”) has adopted the following resolution fixing the designation and
certain terms, powers, preferences and other rights of a new series of
preferred stock to the Corporation and certain qualifications, limitations and
restrictions thereon:

 

RESOLVED, that pursuant to Article 4 of the
Amended and Restated Certificate of Incorporation of the Corporation, there be
and hereby is authorized and created a series of Preferred Stock, having the
designation, powers preferences and relative, participating, optional or other
rights, qualifications, limitations and restrictions as hereinafter set forth:

 

1.                                       Designation. 
The distinctive serial designation of this series shall be “Series B
Participating Non-Cumulative Convertible Preferred Stock” (hereinafter called “Series B”).  All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in Section 7
hereof.  Each share of Series B
shall be identical in all respects with the other shares of Series B.  The Series B shall consist of 800,000
shares with a par value of $0.01 per share. 
Shares of Series B purchased by the Corporation, canceled pursuant
to Section 3 below or converted into the common stock, par value $0.01 per
share of the Corporation (“Common Stock”), shall be canceled and retired
and shall revert to authorized but unissued preferred stock of the Corporation
undesignated as to series.

 

2.                                       Dividends.  The holders
of shares of Series B shall be entitled to receive, when, as and if
declared by the Board of Directors, but after and subject to the

 

1

 

payment in full of all amounts required to be
distributed to the holders of Senior Stock and then only out of funds legally
available therefor, dividends and distributions (payable in cash, stock or
otherwise, other than any stock dividend for which there is an adjustment pursuant
to Section 5 below), on each date that dividends or other distributions
are payable on or in respect of any Common Stock in an amount equal to ten
percent (10%) of par value per share plus the amount of dividends that would
have been payable with respect to the shares of common stock issuable upon
conversion of such shares of Series B had such shares of Series B
fully converted (excluding for such purpose, the restrictions of Section 5(l))
immediately prior to the record date for such dividends.  All dividends or distributions payable with
respect to the shares of Series B pursuant to this Section 2 shall be
payable in respect of fractional shares, adjusted to reflect such fractional
dividend or distribution.  Such dividends
or distributions shall be non-cumulative and shall be payable on the date
specified by the Board of Directors of the Corporation at the time such
dividend is declared.

 

3.                                       Liquidation Preference. 
In the event of any Liquidation, after and subject to the payment in
full of all amounts required to be distributed to the holders of Senior Stock,
the Series B shall be canceled and the holders of shares of Series B
shall thereafter be entitled to be paid out of the assets of the Corporation or
proceeds thereof available for distribution on a pro-rata basis amongst the
holders of the Common Stock and the holders of the Series B in an amount
equal to the amount such holders would receive if such shares of Series B
had been converted into Common Stock immediately prior to the distribution of
such remaining assets.

 

4.                                       Redemption.  The Series B
may not be redeemed by the Corporation at any time.

 

5.                                       Conversion.

 

(a)                                  Subject to the provisions for adjustment
hereinafter set forth, each share of Series B shall be convertible at the
option of the holder thereof, at any time, into 100 fully paid and
nonassesssable shares of Common Stock (and any fractional share of Series B
Preferred Stock shall be convertible on the same proportional basis), upon
surrender at the principal office of the Corporation or at such other office or
offices as the Board of Directors may designate of the certificate for the
share so to be converted, duly endorsed or assigned to the Corporation in blank
and accompanied by (i) an irrevocably written notice to the Corporation
that the holder thereof elects so to convert such share of Series B and
specifying the name or names (with address or addresses) in which a certificate
or certificates evidencing share(s) of Common Stock are to be issued and (ii) if
required pursuant to Section 5(f), an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). 
If a holder converts more than one share of Series B at a time, the
number of full shares of Common Stock issuable upon conversion shall be based
on the total number of shares of Series B so converted.  Subject to the following provisions of this
paragraph, each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for shares
of Series B to be converted shall have been surrendered together with the
irrevocable written notice and

 

2

 

payment of taxes (if applicable) as provided for above, and the person
or persons entitled to receive the Common Stock deliverable upon conversion of
such shares of Series B shall be treated for all purposes as the record
holder or holders of such Common Stock at such time on such date, unless the
stock transfer books of the Corporation shall be closed on such date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer books are open, but such conversion shall be at the
conversion rate in effect on the date on which such shares of Series B
shall have been surrendered and such notice (and, if applicable, payment)
received by the Corporation.

 

(b)                                 The number of shares of Common Stock and
the number of any other shares of the Corporation, if any, into which each
share of Series B is convertible, shall be adjusted from time to time as
set forth below.  Such adjustments shall
be made whether or not there are any outstanding shares of Series B, and
any shares of Series B subsequently issued shall be issued with such
adjustments having been effected.

 

(i)                                     Dividends, Subdivisions, Splits and
Combinations.  In case the Corporation shall (A) pay a
dividend or make a distribution in shares of Common Stock or shares convertible
into or otherwise exchangeable or exercisable for Common Stock, (B) subdivide
or split its outstanding shares of Common Stock into a greater number of shares
of Common Stock or (C) combine or reverse-split its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, then in each such
case the number of shares of Common Stock into which each share of Series B
shall thereafter be convertible shall be proportionately increased or decreased,
respectively, with effect as of the record date set for such dividend or the
effective date of such split, subdivision or combination.

 

(ii)                                  Reclassifications. 
In the case of any classifications, reclassifications or reorganizations
of the Common Stock (whether pursuant to a sale of all or substantially all
assets, merger or consolidation or otherwise) for which an adjustment is not
otherwise made pursuant to this Section 5 and for which no cancellation is
effected under Section 3, then the holder of each share of Series B
shall be entitled to receive upon the conversion of such share (on the same
basis and conditions as set forth herein with respect to the Common Stock), the
stock, securities or other property (including cash) that such holder would have
been entitled to receive upon the happening of any of the events described
above had such share been converted immediately prior to the happening of such
event and, in any such case, appropriate provision shall be made so that such
holder’s rights and interests herein with respect to the Series B
(including in this Section 5) shall be applicable as nearly as may be
practicable in relation to stock, securities or other property thereafter
deliverable upon conversion.

 

(c)                                  In case the Corporation shall take a
record of the holders of any class of its capital stock entitled to receive a
dividend or other distribution payable in Common Stock or securities
convertible into or otherwise exchangeable or exercisable for Common Stock,
whether or not immediately exercisable (collectively, “Convertible

 

3

 

Securities”) or to subscribe for or purchase or otherwise
acquire Common Stock or Convertible Securities, then such record date shall be
deemed to be the date of issue or sale of the shares deemed to have been issued
or sold upon the declaration of such dividend or other distribution or the
granting of such right of subscription, purchase or acquisition.

 

(d)                                 Whenever any adjustment is required in
the shares of Common Stock into which each share of Series B is
convertible, the Corporation shall forthwith (i) file in the corporate
minutes and with any transfer agent of the Series B a statement describing
in reasonable detail the adjustment and the method of calculation used and (ii) cause
a copy of such statement to be mailed to the holders of record of shares of Series B
as of the effective date of such adjustment.

 

(e)                                  The Corporation shall at all times
reserve and keep available out of its authorized but unissued Common Stock, for
the purpose of issuance upon conversion of the Series B, the full number
of shares of Common Stock then deliverable upon the conversion of all shares of
Series B then outstanding.

 

(f)                                    The Corporation will pay any and all
taxes that may be payable in respect of the issuance or delivery of Common
Stock on conversion of Series B. 
The Corporation shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issuance and delivery of
Common Stock in a name other than that in which the Series B so converted
were registered, and no such issuance or delivery shall be made unless and
until (i) the person requesting such issuance has paid to the Corporation
the amount of any such tax or has established to the satisfaction of the
Corporation that such tax has been paid and (ii) such issuance and
delivery is permitted under applicable federal, state and foreign securities
laws without registration thereof.

 

(g)                                 For the purpose of this Section 5
and, unless the context otherwise requires, the purpose of this serial
designation, the term “Common Stock” shall include any shares of the
Corporation of any class or series which has no preference or priority in the
payment of dividends or in the distribution of assets upon any Liquidation of
the Corporation and which is not subject to redemption by the Corporation.  However, Common Stock issuable upon
conversion of Series B shares shall include only shares of the class
designated as Common Stock as of the original date of issuance of the Series B,
or shares of the Corporation of any classes or series resulting from any
reclassification or reclassifications thereof and which have no preference or
priority in the payment of dividends or in the distribution of assets upon any
Liquidation of the Corporation and which are not subject to redemption by the
Corporation, provided that if at any time there shall be more than one such
resulting class or series, the shares of such class and series then so issuable
shall be substantially in the proportion which the total number of shares of
such class and series resulting from all such reclassifications bears to the
total number of shares of all such classes and series resulting from all such
reclassifications.

 

(h)                                 No fractional shares of Common Stock
shall be issued upon the conversion of any share or shares of Series B.  If any such conversion would otherwise
require the issuance of a fractional share, an amount equal to the fair market
value of

 

4

 

such fractional share, as determined in good faith by the Board of
Directors, shall be paid to the holder in cash by the Corporation.

 

(i)                                     The certificate of any independent firm
of public accountants or any independent investment bank or financial advisory
firm of nationally recognized standing selected in good faith by the Board of
Directors shall be presumptive evidence of the correctness of any computation
made under this Section 5.

 

(j)                                     Notwithstanding any other provision
hereof, if a conversion of this security is to be made in connection with a
holder’s participation in a registered public offering or a Sale Transaction,
the conversion may, at the election of the holder, be conditioned upon the
consummation of such public offering or Sale Transaction in which case such
conversion shall not be deemed to be effective until the consummation of such
transaction.

 

(k)                                  In case at any time or from time to time
the Corporation shall take any action of the type contemplated herein but not
expressly provided for by such provisions, then, unless in the opinion of the
Board of Directors such action is not reasonably likely to have a material
adverse effect upon the rights of the Series B (taking into consideration,
if necessary, any prior actions which the Board of Directors hereunder deemed
not reasonably likely to materially adversely affect the rights of the Series B),
the Series B shall be adjusted in such manner and at such time as the
Board of Directors may in good faith determine to be equitable in the
circumstances.

 

(l)                                     Notwithstanding any other provision
hereof, a holder of shares of Series B will only be entitled to the
conversion referred to in this Section 5 to the extent (and only to the
extent) that the receipt of Common Stock upon such conversion would not cause
the holder (including its “affiliated persons” within the meaning of Section 3(a)(19)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules and regulations promulgated thereunder) to become, directly
or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder) of
more than 9.99% of the shares of the Common Stock outstanding at such
time.  Any purported delivery of shares
of Common Stock upon conversion of the Series B shall be void and have no
effect to the extent (but only to the extent) that such delivery would result
in the Series B holder (including its affiliated persons) becoming the
beneficial owner of more than 9.99% of the shares of Common Stock outstanding
at such time.  Notwithstanding anything
to the contrary herein, the Series B holder shall not be entitled, with or
without the consent of the Corporation, to waive the restrictions set forth in
this Section 5(l).  At any time
while this Section 5(l) would operate as a restriction on the
conversion of the Series B, the Corporation shall deliver, upon request by
any Series B holder, a certified statement by the Chief Financial Officer
to such Series B holder of the number of shares of the Corporation’s
Common Stock outstanding as of a particular date, and the Series B holder
shall be entitled to rely on such certified statement in making its
determination as to whether the conversion of the Series B would be
permissible under this Section 5(l). Notwithstanding anything to the
contrary contained herein, the Corporation shall have no obligation to verify
whether the Series B holder would be deemed to be the beneficial 

 

5

 

owner of any shares of
Common Stock or to verify whether the Series B holder has correctly
calculated whether the conversion of the Series B is permissible under
this Section 5(l).

 

6.                                       Voting Rights. 
Except as may be required by law, the holders of Series B shall not
have voting rights.

 

7.                                       Definitions.

 

As used herein with respect to Series B, the
following terms shall have the following meanings:

 

(a)                                  “Liquidation” shall mean any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation or the consummation of any Sale Transaction.

 

(b)                                 “Sale Transaction” shall mean the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the property or
assets of the Corporation to, or the consolidation or merger of the Corporation
with or into, one or more other corporations or other entities, where the
stockholders of the Corporation immediately prior to such transaction do not
thereafter beneficially own, collectively, at least a majority of the shares of
capital stock entitled to vote generally in election of directors or persons
performing a similar function of the surviving or successor corporation or
other entity.  The good faith determination
of a majority of the Board of Directors (or persons performing a similar
function of a successor entity) that a Sale Transaction has occurred shall
conclusively establish the occurrence of such event.

 

(c)                                  “Senior Stock” shall mean any
class or series of stock or other security of the Corporation hereafter
authorized in accordance with the certificate of incorporation of the
Corporation by the terms of which the holders of shares of such shares of such
class or series would be entitled to the receipt of dividends and of amounts
distributable upon Liquidation or redemption in preference or priority to the
holders of shares of Series B.

 

8.                                       Replacement Certificates. 
The Corporation shall replace any mutilated certificates representing
shares of Series B at the holder’s expense upon surrender of such
certificates to the Corporation.  The
Corporation shall replace any certificates representing shares of Series B
that become destroyed, stolen or lost at the holder’s expense upon delivery to
the Corporation of reasonably satisfactory evidence that such certificates have
been destroyed, stolen or lost.

 

9.                                       Miscellaneous. 
The shares of Series B shall not have any relative, participating,
optional, conversion, voting or other special rights and powers other than as
set forth herein.  In the event that the
Corporation shall at any time be party to a transaction or series of
transactions that constitute a sale of all or substantially all assets, a
holding company reorganization or any other merger or consolidation pursuant to
which in each case all of the Common Stock shall be exchanged for equity
securities in another 

 

6

 

entity, the Corporation agrees that the entity
resulting from, or issuing securities in, such transaction or series of
transactions shall be deemed the successor to the Corporation pursuant to this
instrument and shall assume all of the Corporation’s rights and obligations
hereunder.

 

10.                                 Severability of Provisions. 
If any powers, preferences or relative, participating, optional or other
rights of the Series B or qualifications, limitations or restrictions
thereof set forth in this certificate of designation (as it may be amended from
time to time) are invalid, unlawful or incapable of being enforced by reason of
any rule or law or public policy, all other powers, preferences and
relative, participating, optional and other rights of Series B and
qualifications, limitations and restrictions being given effect thereby set
forth in this certificate of designation (as so amended), which can be given
effect without the invalid, unlawful or unenforceable powers, preferences and
relative, participating, optional and other rights to Series B and
qualifications, limitations and restrictions thereof, shall, nevertheless,
remain in full force and effect, and no powers, preferences or relative,
participating, optional or other rights of Series B or qualifications,
limitations and restrictions thereof herein set forth shall be deemed dependent
upon any other such powers, preferences or relative, participating, optional or
other rights of Series B or qualifications, limitations and restrictions
thereof unless so expressed herein.

 

7

 

IN WITNESS WHEREOF, we
have signed this certificate on the 29th day of October, 2009, and affirm the
statements contained herein as true under penalties of perjury.

 

	
   

  	
  Vitesse Semiconductor
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ MICHAEL B.GREEN

  
	
   

  	
  Michael B. Green

  
	
   

  	
  Vice President, General
  Counsel and Secretary

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