Document:

Participation Agreement dated as January 26, 2007

 Exhibit 10.1 
 PARTICIPATION AGREEMENT 
 THIS PARTICIPATION AGREEMENT (“Agreement”) is made and entered
into as of January 26, 2007 (the “Effective Date”), by and between Centurion Exploration Company (“Centurion”), a Delaware corporation, with an address at 10333 Richmond Avenue, Suite 800, Houston, Texas 77042, and Energy
XXI Gulf Coast, Inc. (“EXXI”), a Delaware corporation, with an address at 1201 Main St., Suite 2626, Houston, Texas 77002. Centurion and EXXI are sometimes referred to herein individually as a “Party” and collectively as the
“Parties.” 
 RECITALS 
 WHEREAS: 
  

	 	A.	Centurion represents, with a special limited warranty of title, by through and under Centurion, but not otherwise, that it is the sole current owner and record title holder of those
certain Oil, Gas and Mineral Leases set forth on Exhibit “A- 1” attached hereto and made a part hereof covering 4,808.33 gross acres and 4,748.77 net acres, more or less, located in Plaquemines and St. Bernard Parishes, Louisiana,
hereinafter referred to as “Leases”; 

  

	 	B.	Centurion likewise represents, with a special limited warranty of title, by through and under Centurion, but not otherwise, that it is the sole current owner and record title holder
of those certain agreements set forth on Exhibit “A-2” attached hereto and made a part hereof covering 8,008.21 gross acres and 8,008.21 net exercisable acres, more or less, located in Plaquemines and St. Bernard Parishes,
Louisiana, hereinafter referred to as “Options”, by virtue of which Centurion has the right, privilege and option to acquire oil, gas and mineral leases, both the Leases and Options jointly referred to herein as “Leasehold
Assets”; 

  

	 	C.	Centurion has identified seven (7) distinctive and separate geologic Prospects (as defined below in Section 3.01) which are set forth on Exhibit
“B” attached hereto and made a part hereof and which are associated with the Leasehold Assets; 

  

	 	D.	Centurion has entered into: 

  

	 	(i)	that certain 2D & 3D Onshore/Offshore Master Seismic Data Participation and Licensing Agreement dated September 15, 2003, by and between Seitel Data, Ltd.
(“Seitel”), and Centurion LLC, a wholly owned subsidiary of Centurion; 

  

	 	(ii)	that certain Library Card Purchase Agreement dated October 2, 2003, by and between Seitel and Centurion LLC referenced as Contract # B-03-10-003 REP; and

  

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	 	(iii)	that certain Pre-Stack Time Migration and AVO License Agreement dated October 2, 2003, by and between Seitel and Centurion LLC, referenced as Contract E 03-10-004 REP;

 as amended (collectively referred to as the “Seitel Agreements”), which expressly provide for overriding
royalty interests for the benefit of Seitel, and in certain specific situations as set forth below in Section 2.01(ii) for other consideration to be due and payable to Seitel, as to oil and gas interests acquired within the geographic confines
of seismic data reviewed and/or licensed by virtue of the Seitel Agreements. EXXI has executed that certain Investor Confidentiality Agreement (“Investor Confidentiality Agreement”) dated January 30, 2007, relative to the
Seitel Agreements, said Investor Confidentiality Agreement attached hereto and made a part hereof as Exhibit “C”; 
  

	 	E.	EXXI desires to acquire from Centurion an undivided fifty percent (50.00%) interest in and to the Leasehold Assets and the Prospects subject to all of the terms and provisions
of the Leasehold Assets, the Seitel Agreements, the governing JOA (as defined below in Article 4), and this Agreement; and 

  

	 	F.	Centurion and EXXI desire to jointly acquire, explore and develop the Leasehold Assets, the Prospects and additional oil and gas properties including leases, options, farm-ins,
contribution agreements and all other oil and gas property interests (“Oil and Gas Properties”) within a geographic area of mutual interest as outlined on the plat attached hereto and made a part hereof as Exhibit
“D”, such area hereinafter referred to as the “Gridiron AMI” and encompassing all of the Leasehold Assets, the Prospects and other lands located in Orleans, Plaquemines and St. Bernard Parishes, Louisiana, with EXXI
having the right to participate for an undivided fifty percent (50.00%) interest in and to all such Oil and Gas Properties acquired within the Gridiron AMI subject to the terms and provisions of Article 9 set forth below.

 AGREEMENT 
 NOW, THEREFORE, for the mutual considerations set forth herein, the adequacy of which are hereby acknowledged, and subject to the terms and conditions set forth below. Centurion and EXXI agree as follows: 
 ARTICLE 1 
 Assignment and Consideration

 1.01 Assignment. Centurion does hereby transfer, assign and convey to EXXI an undivided fifty percent (50.00%) interest in
and to the Leasehold Assets. Simultaneously with execution of this Agreement, Centurion has executed and delivered to EXXI a recordable 

  

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assignment of all such Leasehold Assets which it presently has the authority to assign. Further, Centurion shall execute and deliver to EXXI a recordable
assignment of any remaining Leasehold Assets upon securing the requisite approvals. All assignments made pursuant to this Agreement shall be made in substantially the same form as Exhibit “E” attached hereto and made a part hereof. Each of
such assignments shall be made with a special limited warranty of title, by through and under Centurion, but not otherwise, and shall expressly be made subject only to all of the terms and provisions of the pertinent: (i) Leasehold Assets;
(ii) jointly owned Oil and Gas Properties; (iii) governing JOA (as defined below in Article 4); (iv) terms and provisions of the Seitel Agreements; and (v) this Agreement. 
 1.02 Reservations. Centurion shall reserve from all assignments made pursuant to this Agreement a proportionate overriding royalty interest equal
to the difference between thirty percent (30%) and the sum of all existing lease burdens (including landowner royalties; all overriding royalty interests due Seitel under and by virtue of the Seitel Agreements; and all third party overriding
royalty interests presently in existence or as required in the acquisition of Oil and Gas Properties) thereby delivering to EXXI a net revenue interest of not less than a proportionate 70%. As to the future acquisition of Oil and Gas Properties
within the Gridiron AMI regardless of whether or not Centurion or EXXI is the acquiring party, without Centurion’s and EXXI’s express mutual written approval and consent, the net revenue interest delivered to EXXI shall not be less than a
proportionate seventy percent (70%). It is agreed that any overriding royalty interest reserved by Centurion or to be assigned to Centurion may be retained and/or subsequently assigned at the will of Centurion, in whole or in part. 
 1.03 Initial Consideration. Centurion and EXXI agree that the initial consideration (“Initial Consideration”) to be paid by EXXI
to Centurion simultaneously with execution of this Agreement for the transactions contemplated herein shall be $2,381,667, the receipt of which is hereby acknowledged by Centurion. Said Initial Consideration represents EXXI’s share of the total
costs, expenses and fees set forth on the detailed invoice attached hereto and made a part hereof as Exhibit “F”, such Initial Consideration comprised of the sum of the following separate items: 
  

	 	(i)	fifty percent (50%) of $2,838,334 being the actual costs for the acquisition and maintenance of the Leasehold Assets, including but not limited to lease bonuses, option
bonuses, rentals, brokerage, title work, bank fees and miscellaneous expenses, through December 31, 2006; 

  

	 	(ii)	fifty percent (50%) of $800,000 being the actual and/or allocated costs of the acquisition and/or reprocessing of geological and geophysical data associated with the Gridiron
AMI through December 31, 2006; 

  

	 	(iii)	fifty percent (50%) of $525,000 being prospect generation fees (“Prospect Fees”) based on $75,000 per each of the seven (7) Prospects as defined below in
Section 3.01; and 

  

	 	(iv)	the sum of $300,000 as additional consideration for reimbursement of expended general and administrative overhead. 

  

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 1.04 Additional Costs and Expenses. Centurion and/or EXXI will incur additional costs and expenses
(exclusive of well costs) associated with the Gridiron AMI and the Prospects as defined below in Section 3.01. It is hereby agreed that EXXI shall be designated as the Operator of the Gridiron AMI as to field operations associated with the
drilling, completing, equipping, operating and maintenance of wells and subsequent oil and gas production; however, on a Prospect-by-Prospect basis, Centurion shall continue to provide substantially the same land, permitting and administrative
services which were otherwise necessary for the management of the Leasehold Assets and the Prospects prior to the date of this Agreement (i.e. leasing, payment of rentals, negotiating farmouts, securing title opinions, unitization applications,
regulatory and mitigation matters), on an ongoing basis through and until May 1, 2007, including the payment of rentals due through June 30, 2007. The Parties agree to pay their proportionate shares of all such actual costs and expenses
incurred within fifteen (15) days of being billed for same. Failure to make such payments on a timely basis will be considered a material breach of this Agreement and will be treated as a Dispute under Article 10 of this Agreement. 

1.05 Representations. Centurion represents the following to the best of its knowledge and belief: 
  

	 	(i)	as to the Leasehold Assets, there are no burdens on production which will cause the net revenue interest of EXXI in production therefrom to be less than a proportionate seventy
percent (70%); 

  

	 	(ii)	the Leasehold Assets are free and clear of all liens, mortgages and other similar burdens; 

  

	 	(iii)	all lease bonuses and lease rental payments attributable to the Leasehold Assets up to and including the Effective Date of this Agreement, have been paid and/or maintained; and

  

	 	(iv)	Centurion shall take all actions and make the necessary expenditures to maintain the Leasehold Assets in full force until an orderly transition is made to EXXI for lease
maintenance; 

  

	 	(v)	all Leasehold Assets are in full force and effect, and Centurion is not in default or breach, nor has it received notice of any alleged default or breach, regarding such Leasehold
Assets; and 

  

	 	(vi)	Centurion is not aware of any non-compliance with any laws, rules, regulations or orders applicable to the Leasehold Assets and/or to the Prospects, including those relating to the
protection of the environment. 

 Article 2  
 Seismic Data 
 2.01 Seitel Obligations. EXXI acknowledges that Centurion
has secured the Leasehold Assets and has developed all of the Prospects subject to this Agreement pursuant to the Seitel Agreements, copies of which were provided to EXXI subsequent to EXXI’s execution of the 

  

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Investor Confidentiality Agreement. Further, EXXI acknowledges that the Leasehold Assets, and all Oil and Gas Properties located within the Gridiron AMI and
acquired subsequent to the effective date of this Agreement will be subject to the Seitel Agreements regardless of whether or not such Leasehold Assets and Oil and Gas Properties are acquired directly by Centurion, by EXXI or by some third party.
EXXI hereby agrees to be bound by all of the terms and provisions of the Seitel Agreements, and EXXI expressly acknowledges the limitations and obligations of Centurion and its assigns including EXXI as set forth therein. The Seitel Agreements
expressly provide for various obligations of Centurion and its assigns including EXXI (“Seitel Obligations”) including, but not necessarily limited to, the following: 
  

	 	(i)	Seitel owns and is entitled to an assignment of an overriding royalty interest on all Leases and non-producing Oil and Gas Properties (undeveloped leases) based on the following
sliding scale: 

  

	 	(a)	an undivided 5.0% of 8/8ths of the oil and gas produced from the lands covered by any such Leases and non-producing Oil and Gas Properties which grant to Lessee the right to receive
an amount equal to or greater than 80% of the oil and gas produced from the lands covered thereby; or 

  

	 	(b)	an undivided 4.00% of 8/8ths of the oil and gas produced from the lands covered by any such Leases and non-producing Oil and Gas Properties which grant to Lessee the right to
receive an amount equal to or greater than 77.5% but less than 80% of the oil and gas produced from the lands covered thereby; or 

  

	 	(c)	an undivided 2.00% of 8/8ths of the oil and gas produced from the lands covered by any such Leases and non-producing Oil and Gas Properties which grant to Lessee the right to
receive an amount less than 77.5% of the oil and gas produced from the lands covered thereby. 

 If any Lease or non-producing
Oil and Gas Property in which Seitel is entitled to an overriding royalty interest under the Seitel Agreements covers less than the entire mineral fee estate in any of the lands covered thereby, such overriding royalty, as to such lands, shall be
reduced to the proportion thereof which the undivided mineral interest covered by such lease bears to the entire mineral fee estate. Further, in the event Centurion and/or its assigns acquire less than the entire leasehold working interest in any
such Lease or non-producing Oil and Gas Property, such overriding royalty, as to such Leases or non-producing Oil and Gas Properties, shall 

  

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be reduced to the proportion thereof which the leasehold working interest so acquired bears to the entire undivided leasehold working interest; and

  

	 	(ii)	if, in the process of acquiring any Leases or producing Oil and Gas Properties, either Party hereto shall purchase or farm-in existing production, then Centurion and/or its assigns
will owe no overriding royalty interest to Seitel as to those lands and/or formations within any proved developed and/or proved undeveloped reservoirs identified by one or more previous owners and confirmed by an independent third-party reserve
report; however, the overriding royalty interest shall apply to all other lands and formations located within the geographic confines of the Gridiron AMI. In lieu of the overriding royalty interest on the proved developed and/or proved undeveloped
reservoirs acquired by Centurion and/or its assigns, for each such purchase or farm-in having a price or value in the aggregate in excess of $500,000, Seitel will be entitled to the sum of $50,000 within thirty (30) days of consummation of each
such acquisition. 

 2.02 Seitel Data. Pursuant to the Seitel Agreements, Centurion secured the rights to certain 3-D
seismic datasets within and covering the Gridiron AMI and has reprocessed all or some portion of such 3-D seismic dataset. All of such data and its reprocessing presently in the possession of Centurion, hereinafter referred to as the
“Gridiron Seismic Data”, shall be available to EXXI for its review at reasonable times in the offices of Centurion subject to all of the terms, provisions and obligations of the Seitel Agreements. 
 2.03 EXXI License. It is anticipated that EXXI will acquire a 3-D license or licenses from Seitel as to all or some portion of the Seitel Data
associated with the Gridiron Seismic Data. In such event, Centurion shall, within 15 days of written request, provide EXXI with all processed versions of the Gridiron Seismic Data that it owns, including but not limited to all amplitude/AVO, AVO
modeling, conditioned gathers, petrophysical and AVO modeling, pore pressure and fracture gradient volumes as long as the transfer of said volumes and/or reprocessing is not in violation of existing agreements between Centurion and Seitel or any
third-party geophysical vendor who contributed to such Gridiron Seismic Data. 
 Article 3  
 Prospects 
 3.01 Prospects.
Through the use of the Gridiron Seismic Data, Centurion has identified seven (7) specific geologically prospective areas (individually referred to herein as a “Prospect” and collectively referred to herein as
“Prospects”) as scheduled on Exhibit “B” attached hereto and made a part hereof. The Prospects have been geologically evaluated 

  

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adequately and independently by both Centurion and EXXI to justify the drilling of an Initial Prospect Well (as defined below in Section 4.02) in each
of such Prospects. 
 3.02 Additional Prospects. All Prospects and all additional prospects (“Additional Prospects”)
generated within the Gridiron AMI during the term hereof by Centurion, by EXXI, jointly by Centurion and EXXI, or by a third party, whether or not based on information derived from the Gridiron Seismic Data, shall be subject to this Agreement.

 3.03 Additional Prospect Proposal. When a Party hereto believes an Additional Prospect is adequately evaluated technically to
justify the acquisition of Oil and Gas Properties, it will schedule and conduct a formal meeting in its offices at a mutually agreeable time between EXXI and Centurion and will present such Additional Prospect to the other Party with all of the
information in its possession that it is legally permitted to disclose concerning such Additional Prospect (an “Additional Prospect Proposal”) to enable each Party to make a determination whether it wishes to participate in such
Additional Prospect Proposal pursuant to Section 3.04 below. An Additional Prospect Proposal shall include the following information: 
  

	 	(i)	a map and/or plat establishing the geographic boundaries of the Additional Prospect not to exceed 1,280.00 contiguous acres, and setting forth restrictions, if any, as to depths,
formations or substances (“Additional Prospect Contract Area”); 

  

	 	(ii)	a geologic/geophysical summary setting forth potential hydrocarbon bearing zones and horizons; 

  

	 	(iii)	a well name and information required to complete Article VI.A. of the proposed Additional Prospect JOA including the proposed initial drilling location, its anticipated commencement
date for drilling operations, its anticipated objective total drilling depth and the deepest formation to be tested (“Initial Additional Prospect Well”); 

  

	 	(iv)	a current Authorization for Expenditure (“AFE”) setting forth the estimated total costs to drill the Initial Additional Prospect Well in such Additional Prospect to
casing point and to complete it into the tanks or line; and 

  

	 	(v)	any third party agreements pertaining to the Additional Prospect, (e.g., farmin and farmout agreements, bottom hole or dry hole agreements, confidentiality agreements, seismic
license agreements, operating, unit or pooling agreements). 

  

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 3.04 Additional Prospect Election. A Party shall have fifteen (15) days from the date of the
formal Additional Prospect Proposal meeting to provide the proposing Party with written notification as to whether or not it elects to participate in such Additional Prospect, and if so, at what percentage of participation. Should a Party fail to
timely make any such election, the proposing Party shall provide the electing Party with a written Failure Notice and the electing Party shall have an additional three (3) business days from its receipt of such Failure Notice to make such
election to the proposing party. Failure of the electing Party to respond within such time period shall be deemed an election not to participate. An election not to participate in such Initial Additional Prospect shall immediately result in the
electing Party’s forfeiture to the proposing Party of all of its right to participate in said Additional Prospect, including but not limited to, all Leasehold Assets and Oil and Gas Properties within such Additional Prospect Contract Area
without any reimbursement. The Parties hereto agree to timely execute whatever documents and assignments are necessary to effect such forfeiture and relinquishment within thirty (30) days from said election not to participate. 
 3.05 Initial Additional Prospect Well. If the electing Party timely exercises its right to participate in an Additional Prospect, once the Parties
have secured adequate Leasehold Assets and/or Oil and Gas Properties to proceed with the drilling of an initial well (“Initial Additional Prospect Well”) the proposing Party shall submit to the electing Party a well proposal
(“Initial Additional Prospect Well Proposal”) including the proposed surface and bottom hole locations, the anticipated depth and target formation, the proposed drilling commencement date and an updated AFE setting forth the
estimated total costs to drill such Initial Additional Prospect Well to casing point and to complete it into the tanks or line. 
 3.06
Initial Additional Prospect Well Election. A Party shall have fifteen (15) days from the date of its receipt of an Initial Additional Prospect Well Proposal to provide the proposing Party with written notification as to whether or not it
elects to participate in such Initial Additional Prospect Well, and if so, at what percentage of participation. Should a Party fail to timely make any such election, the proposing Party shall provide the electing Party with a written Failure Notice
and the electing Party shall have an additional three (3) business days from its receipt of such Failure Notice to make such election to the proposing party. Failure of the electing Party to respond within such time period shall be deemed an
election not to participate. An election not to participate in such Initial Additional Prospect Well shall immediately result in the electing Party’s forfeiture to the proposing Party of all of its right to participate in said Additional
Prospect and the Additional Prospect Contract Area, including but not limited to, all Leasehold Assets and Oil and Gas Properties within such Additional Prospect Contract Area, without any reimbursement. The Parties hereto agree to timely execute
whatever documents and assignments are necessary to effect such forfeiture and relinquishment within thirty (30) days from said election not to participate. The electing Parties shall enter into an Additional Prospect JOA in substantially the
same form as the JOA but reflecting the appropriate changes thereto to establish the Additional Prospect Contract Area, the percentages of working interest elected for participation by each Party and the pertinent terms and provisions relative to

  

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the Initial Additional Prospect Well as set forth in the Initial Additional Prospect Well Proposal. Should a Party participate in the Initial Additional
Prospect Well, but non-consent a subsequent well within such Additional Prospect Contract Area, said non-consent penalty shall be as set forth in the governing Additional Prospect JOA. 
 3.07 Prospect Fees. The only Prospect Fees to be paid by EXXI to Centurion are those set forth above in Section 1.03(iii) associated with the
Prospects. There are no Prospect Fees owed by EXXI to Centurion or by Centurion to EXXI as to Additional Prospects. 
 Article 4 

 Joint Operating Agreement 
 4.01 JOA. Attached hereto and made a part hereof as Exhibit “G” is a Joint Operating Agreement (“JOA”) covering the entirety of the Gridiron AMI and naming EXXI as Operator. Upon execution of this
Agreement, the JOA shall be deemed to be in effect in all respects (including but not limited to the accounting procedures) except as to Prospects and as to the proposal and drilling of wells within Prospects which shall be governed by the terms and
provisions of this Agreement and the separate, respective Prospect JOAs (as defined in 4.02 below) for each such Prospect. 
 4.02
Prospect JOAs. Upon execution of this Agreement, on a Prospect-by-Prospect basis, a separate joint operating agreement (“Prospect JOA”) in the same form as the JOA, except as expressly provided for otherwise in this
Section 4.02, shall be deemed to be in force and effect as provided for herein. Separately as to each Prospect there are seven (7) “Notices of [Insert Prospect Name] Prospect JOA” attached hereto and
made a part hereof as Exhibits “H-1” through “H-7”, thus establishing seven (7) separate Prospect JOAs. Each such Exhibit “H-l” through “H-7” sets forth all of the particulars for its Prospect JOA and its
respective initial Prospect well (“Initial Prospect Well”) including the anticipated commencement date (“Commencement Date”), the minimum required depth and/or formation, a target area for the bottom hole location,
and any other appropriate revisions to each such Prospect JOA, and attaching thereto an Exhibit “A” and an Exhibit “A-1” clearly establishing the pertinent information relative to such Prospect, such Prospect JOA, the Initial
Prospect Well and establishing the Prospect contract area (“Prospect Contract Area”) for each such Prospect. The term of the Prospect JOA shall be Option No. 2 under Article XIII, of the A.A.P.L. Form 610-1989 Model Form
Operating Agreement (as opposed to Option No. 1 as provided for in the JOA). All operations within each such Prospect Contract Area shall be conducted under the terms and provisions of this Agreement and such Prospect JOA until termination of
such Prospect JOA at which time any remaining leasehold jointly owned by Centurion and EXXI shall be governed by this Agreement and the JOA attached hereto. 
 4.03 Additional Prospect JOAs. In the event Additional Prospects are generated and the Parties hereto jointly own Leasehold Assets and/or Oil and Gas Properties and elect to 

  

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participate in an Initial Additional Prospect Well, an Additional Prospect JOA shall be deemed to be in force and effect as to such Additional Prospect as
provided for above in Section 3.06. The term of the Additional Prospect JOA shall be Option No. 2 under Article XIII, of the A.A.P.L. Form 610-1989 Model Form Operating Agreement (as opposed to Option No. 1 as provided for in the
JOA). All operations within each such Additional Prospect Contract Area shall be conducted under the terms and provisions of this Agreement and such Additional Prospect JOA until termination of such Additional Prospect JOA at which time any
remaining leasehold jointly owned by Centurion and EXX1 shall be governed by this Agreement and the JOA attached hereto. 
 4.04 Third
Party JOAs. If any given Prospect (or Additional Prospect) is or becomes subject to a pre-existing operating agreement at the time it is acquired because of one or more third party participants, or if Centurion and EXXI mutually agree to enter
into an operating agreement among themselves and a third party covering drilling and operations on a Prospect (or Additional Prospect) or on lands and leases which are pooled or unitized with Prospect (or Additional Prospect) acreage, then as to the
affected lands, leases and depths only, such other operating agreement (“Third Party JOA”) shall control and the JOA and/or the Prospect JOA and/or the Additional Prospect JOA shall be suspended during the term of the Third Party
JOA as to the rights and obligations of Centurion and EXXI with respect to additional drilling and other operations governed by the Third Party JOA. During the term of such Third Party JOA, the Prospect JOA (or the Additional Prospect JOA), if then
in force and effect between Centurion and EXXI, or the JOA if not, shall continue to govern the rights and obligations of Centurion and EXXI as to the balance of the lands and/or depths included in the Prospect Contract Area (or Additional Prospect
Contract Area) and not covered by the Third Party JOA, if any. At such time that the Third Party JOA shall terminate, or any portion of its Contract Area is released therefrom, then the underlying Prospect JOA (or Additional Prospect JOA) and/or JOA
shall immediately again become effective as to such acreage or the respective portions thereof. 
 4.05 Memorandum of JOAs. All
Parties agree to execute one or more recordable Memorandums of the JOA and/or all other operating agreements (Prospect JOAs, Additional Prospect JOAs or Third Party JOAs) effective hereunder, or becoming effective hereunder, as necessary to
accurately reflect joint operating agreements in effect pursuant to this Agreement. All Parties agree to timely execute, witness and have acknowledged any such Memorandums. Upon recordation, recorded copies of any such Memorandums shall be provided
to each appropriate Party. 
 4.06 Ellora Disclosure. Centurion hereby notifies EXXI that Ellora Energy, Inc. (“Ellora”),
a Delaware corporation with an address at 5480 Valmont, Suite 350, Boulder, Colorado 80301, owns a beneficial interest in the Leasehold Assets, the Prospects and the Gridiron AMI as to an undivided twelve and one-half percent
(12.50%) leasehold interest. Of the interests acquired by EXXI, 13.1579% (12.5/95) is derived from Ellora’s ownership and the balance, 86.8421% (82.5/95) is derived from Centurion’s ownership. Except as to elections to be

  

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made under any JOA deemed to be in effect and/or to be prepared pursuant to this Agreement based on the interests shown on the pertinent Exhibit
“A” to the JOA and to each such Prospect JOA, Centurion is acting hereunder as Ellora’s agent and warrants and represents that it shall distribute Ellora’s proportionate share of the Initial Consideration paid by EXXI to
Centurion pursuant to this Agreement. 
 4.07 Prepayments. Notwithstanding the terms and provisions of the governing JOA, it is hereby
understood and agreed that EXXI shall not pre-bill Centurion for any proposed operations other than for proposals to drill wells including, but not limited to, Initial Prospect Wells drilled pursuant to this Agreement. Drilling costs are expressly
to be paid by Centurion prior to the spud of each such well or Centurion shall relinquish to EXXI its paying working interest as set forth on the Exhibit “A” to the governing JOA in the entirety of the Prospect if the proposal was for an
Initial Prospect Well or in the production unit for the proposed well if the proposal was for a subsequent well unless Centurion and EXXI have agreed to some other mutually acceptable arrangement prior to the spudding of the well. 
 Article 5  
 Initial Drillable
Prospect Wells 
 5.01 Initial Prospect Well Proposal. At least thirty (30) days prior to the anticipated spud date of each
Initial Prospect Well, EXXI shall provide Centurion and the other participating working interest owners (“Before Casing Point Participants” or “BCP Participants”) as identified on Exhibit “A” of the
governing Prospect JOA, with a formal well proposal including a detailed estimate of the anticipated costs and expenses to drill the Initial Prospect Well in the form of an AFE. The execution and return of an original AFE to EXXI within thirty
(30) days of receipt of such AFE by each BCP Participant shall be BCP Participant’s commitment to join in such Initial Prospect Well as to its proportionate share of the actual costs incurred in the drilling of such well. If a BCP
Participant does not timely and properly elect to join in such Initial Prospect Well, such BCP Participant shall relinquish to the parties who have timely elected to participate, in the percentages to which each participating party’s interest
bears to the sum of all participating parties’ interests, all of its interests in and to the Prospect and the Leasehold Assets associated therewith. 
 5.02 Initial Prospect Well Commencement. Separately as to each Prospect, on or before the Commencement Date of each Initial Prospect Well, EXXI, as Operator, will commence or cause to be commenced the actual
drilling of such Initial Prospect Well for oil and/or gas at the location set forth on such Notice of Prospect JOA and will thereafter prosecute or cause to be prosecuted the drilling of such well as a reasonable and prudent operator in a good and
workmanlike manner with due diligence and dispatch in accordance with good oil field practice to: 
  

	 	(i)	the depth set forth on such Notice of Prospect JOA; 

  

	 	(ii)	a depth sufficient to test the formation set forth on such Notice of Prospect JOA; or 

  

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	 	(iii)	the depth in the opinion of Operator, which renders the further drilling of the well impracticable or dangerous, or there is encountered in the well an impenetrable formation,
heaving shale, cavity, excessive pressure or water flow, loss of circulation or any other subsurface condition, similar or dissimilar, encountered in the well, which in the opinion of the Operator, cannot reasonably be overcome by ordinary drilling
methods, hereinafter referred to as “Mechanical or Gulf Coast Conditions”, 

 whichever is the lesser depth. If such Initial
Prospect Well is drilled to either of the depths defined as (i) or (ii) above (“Authorized Depth”), EXXI shall pay sixty-six and two-thirds percent (66.667%) of the entire portion of such costs and expenses through
Casing Point as defined below in Section 5.03. If prior to attaining Authorized Depth such well encounters Mechanical or Gulf Coast Conditions, EXXI agrees to pay sixty-six and two-thirds percent (66.667%) of all of such costs and expenses
plus sixty-six and two-thirds percent (66.667%) of the costs and expenses of plugging and abandoning such Initial Prospect Well. 
 5.03
Casing Point. When such Initial Prospect Well has been drilled to such Authorized Depth, EXXI shall provide each BCP Participant, Centurion and Ellora with: 
  

	 	(a)	notification of such fact; 

  

	 	(b)	copies of electric logs run through Authorized Depth in such Initial Prospect Well; and 

  

	 	(c)	an estimated statement of all costs and expenses theretofore incurred in drilling and testing such Initial Prospect Well prior to the commencement of running of a production string
of casing therein, 

 and the Initial Prospect Well will be deemed to have reached casing point (“Casing Point”). It is
expressly herein understood and agreed that neither Centurion nor Ellora are required to make any elections as to their after casing point interests until Casing Point is reached in each such Initial Prospect Well. 
 5.04 Completion Elections. When an Initial Prospect Well has been drilled to Authorized Depth and Casing Point has been reached, EXXI will
simultaneously with the notice provided for above in Section 5.03 notify all BCP Participants, Centurion and Ellora of its election to proceed with one (1) of the operations prescribed in Article VI.C. of the governing Prospect JOA. Each
working interest owner having the right to make an election shall do so pursuant to the terms and provisions of the governing Prospect JOA except as otherwise provided for in this Section 5.04. 
 Notwithstanding the terms and provisions of the governing Prospect JOAs and solely as to Initial Prospect Wells, it is hereby understood and agreed that
in the event Ellora elects not to 

  

 Page 12 of 20 

 
participate is the setting of production casing and in a completion attempt for all of its after casing point interest, Ellora shall relinquish all of its
after casing point interest proportionately to the BCP Participants in the entirety of such Prospect Contract Area. Ellora shall timely execute whatever documents and assignments are necessary to effect such forfeiture and relinquishment within
thirty (30) days after any such election. 
 Notwithstanding the terms and provisions of the governing Prospect JOAs and solely as to
Initial Prospect Wells, it is hereby understood and agreed that as to any particular Prospect JOA and its respective Prospect Contract Area, Centurion has the right upon reaching Casing Point in each Initial Prospect Well drilled pursuant hereto to
participate or not to participate in the setting of production casing and a completion attempt with all or some portion of its after casing point carried interest as set forth on the respective Exhibit “A” to the governing Prospect JOA.
Should Centurion elect not to participate in the setting of production casing and in a completion attempt for all or some portion of its after casing point carried interest, Centurion shall relinquish such non-participating portion proportionately
to the BCP Participants in the entirety of such Prospect Contract Area. Centurion shall timely execute whatever documents and assignments are necessary to effect such forfeiture and relinquishment within thirty (30) days after any such
election. 
 If EXXI recommends no attempt be made to continue further operations in the Initial Prospect Well, and such Initial Prospect
Well is plugged and abandoned, EXXI shall pay sixty-six and two-thirds percent (66.667%) of all of the costs and expenses of plugging and abandoning such Initial Prospect Well. Upon receipt of any such recommendation from EXXI, Centurion and/or
Ellora shall either consent to such plugging and abandonment or shall notify EXXI of its (or their) election to takeover such Initial Prospect Well in return for committing to plug and abandon such Initial Prospect Well. 
 All subsequent wells drilled within each Prospect (except for a substitute well for the Initial Prospect Well as provided for below in Section 5.06)
shall be governed by the terms and provisions of the pertinent Prospect JOA. 
 5.05 Failure to Timely Perform. A significant portion
of the consideration for the assignment of Leasehold Assets provided for above in Article 1.01 is the development by EXXI of said Leasehold Assets and each Prospect through drilling operations. Except as provided for below in this Section 5.05,
on a Prospect-by-Prospect basis, each Initial Prospect Well must be commenced by EXXI on or before its respective Commencement Date as set forth on Exhibits “H-l” through “H-7” in the Notices of Prospect JOA. Should EXXI not
timely spud a particular Initial Prospect Well as provided for herein, EXXI shall be deemed to have relinquished to Centurion ab initio all of its rights, titles and interests in and to the Prospect and the Leasehold Assets associated with
such Prospect. Centurion shall not be required to reimburse EXXI for any costs EXXI has incurred or obligations accrued prior to such Commencement Date attributable to any and all such Leasehold Assets and Prospects deemed to have been relinquished.
The Parties hereby agree that the above relinquishment of title and interest shall be Centurion’s sole remedy for EXXI not participating in one or all of the Prospects. The failure by EXXI to timely spud one Initial Prospect Well shall have no
effect on its participation in any other Initial 

  

 Page 13 of 20 

 
Prospect Well or the Prospect associated therewith. The Parties hereto agree to timely execute whatever documents and assignments are necessary to effect
such forfeiture and relinquishment within thirty (30) days after each such Commencement Date for which an Initial Prospect Well is not timely commenced. 
 To avoid the relinquishment penalty provided for above, EXXI will have the express right to substitute any Initial Prospect Well for another by providing Centurion with written notice of such substitution at least ten
days prior to any given Commencement Date such that the respective Commencement Dates of each such Initial Prospect Well are revised accordingly. 
 5.06 Substitute Test Wells. On a Prospect-by-Prospect basis, if prior to attaining Authorized Depth during the drilling of an Initial Prospect Well, EXXI encounters a Mechanical or Gulf Cost Condition, and such Mechanical or Gulf
Cost Condition prevents further drilling of the Initial Prospect Well, the BCP Participants shall have the option, but not the obligation, to participate in the drilling of a substitute well (“Substitute Well”) in order to reach the
Authorized Depth, provided actual drilling of the Substitute Well is commenced within ninety (90) days between the date of suspension of operations or release of the rig used to drill the Initial Prospect Well (whichever is later) and the
commencement of the drilling of the Substitute Well. Any Substitute Well drilled shall be drilled pursuant to all the terms and conditions of this Agreement and the governing JOA as if drilled as the Initial Prospect Well. 
 5.05 Force Majeure. The obligations of EXXI relative to the Commencement Dates of Initial Prospect Wells established in this Article shall be
subject to reasonable timing allowances in the event Centurion and/or EXXI have made preparations in good faith to drill, the appropriate permits have not been secured, an appropriate rig is unavailable, the weather, the condition of locations, acts
of God or other events beyond the reasonable control of EXXI prevent it from timely commencing one or more of such Initial Prospect Wells. Such situations, on a case-by-case basis, shall be deemed a force majeure event under this Agreement and the
governing JOA. If Centurion and/or EXXI are rendered unable, wholly or in part, by such a force majeure event to carry out their obligations under this Agreement or the governing JOA, Centurion and/or EXXI shall give prompt written notice to the
other Party and to all appropriate parties of the force majeure event with reasonably full particulars concerning; thereupon, the obligations of Centurion and EXXI, so far as they are affected by such force majeure event, shall be suspended during,
but no longer than, the continuance of the force majeure event. Centurion and EXXI shall use all reasonable diligence to remove the force majeure event as quickly as practicable. 
 5.6 TODCO Contract. EXXI has received a copy and reviewed that certain Domestic Daywork Drilling Contract – Offshore/Inland Waters dated
April 10, 2006, as amended June 26, 2006 (“TODCO Barge Contract”), by and between Centurion, as Operator, and The Offshore Drilling Company (“TODCO”), as Contractor, covering Rig 49. EXXI hereby expressly agrees to take
assignment of such TODCO Barge Contract provided such TODCO Barge Contract can be legally assigned, and does not require modification of the terms and provisions thereof unless mutually agreed upon by and between Centurion, EXXI and TODCO.

  

 Page 14 of 20 

 Article 6 
 Project and Leasehold Maintenance 
 Centurion and/or EXXI shall schedule and conduct one or more
meetings between Centurion, EXXI and those other third party joint interest owners who share common ownership of Leasehold Assets and/or Oil and Gas Properties, at mutually agreeable times and locations upon the request of either Party hereto during
the term of this Agreement in order to review activities within the Gridiron AMI, the status of Prospects, the anticipated timing and priority of drilling activities, and the anticipated land, geological and geophysical expenditures necessary to
further explore for, develop, and produce hydrocarbons and maintain or acquire Leasehold Assets and Oil and Gas Properties associated with the Prospects within the Gridiron AMI. 
 Article 7  
 Confidentiality 
 The Parties entered into that certain Confidentiality Agreement (“Confidentiality Agreement”) dated November 29, 2006, relative to
the Gridiron AMI a copy of which is attached hereto and made a part hereof as Exhibit “I”. Regardless of the term set forth in such Confidentiality Agreement, EXXI and its agents, representatives and contractors agree to be bound by
the terms and provisions of such Confidentiality Agreement as to all matters pertaining to the Gridiron AMI, the Prospects and all wells drilled pursuant to this Agreement during the term of this Agreement, except as to the non-compete provisions
set forth therein which are herein expressly terminated in as much as the Parties have elected to jointly acquire, explore and develop the Leasehold Assets and Oil and Gas Properties pursuant to this Agreement. 
 Article 8 
 Well Access and Information

 8.01 Well Access. Unless otherwise in default of any provisions to this Agreement or the governing Prospect JOA, Centurion and
Ellora shall, at their sole cost, risk and expense, have freedom of access to the derrick floor and the premises of the Leasehold Assets and the Oil and Gas Properties, subject to the notification and access limitations imposed by a drilling
contractor and prior written notice to EXXI, Leasehold Assets and/or the Oil and Gas Properties, if any, to witness all operations and to observe all tests made. Each day by telecopy, mail (physical or electronic), telephone or telegram, EXXI will
report to Centurion and to Ellora the progress of drilling in each well drilled pursuant to this Agreement and all formations encountered since the report of the previous day. Prior to conducting any testing of such well, EXXI will notify Centurion
and Ellora a sufficient period in advance thereof to enable Centurion and Ellora to have a representative present to witness the same. 
  

 Page 15 of 20 

 8.02 Well Information. Attached hereto and made a part hereof as Exhibit “J” are
Centurion’s geological requirements. Ellora will provide EXXI in writing with its current geological requirements prior to commencement of the first well to be drilled pursuant to this Agreement. EXXI will rely upon such geological requirements
for notifications and delivery of all well information to Centurion and to Ellora, and such shall be applicable to all wells drilled hereunder. Should there be a conflict between Sections 8.01 and 8.02 (or the information provided pursuant to
Section 8.02), Section 8.02 shall govern. Centurion and Ellora may update their respective geological requirements unilaterally at any time by providing EXXI with written notification of a substitution therefor. As soon as is practical and
within a reasonable time of EXXI’s receipt of such written notification of substitution, EXXI will use its best efforts to revise its notifications and delivery of well information to Centurion and/or to Ellora. 
 Article 9  
 Area of Mutual Interest

 9.01 AMI. The Gridiron AMI is an area of mutual interest (“AMI”) by and among the Parties hereto as to the lands
within such Gridiron AMI to be administered pursuant to the terms and provisions of Article XVI.D. of the JOA (or any other governing JOA). 
 Article 10  
 Arbitration 
 10.01 Binding Arbitration. At the request in writing (“Request for Arbitration”) of either Party, any action, dispute, claim or controversy of any kind between the Parties and in any way arising out
of, pertaining to or in connection with this Agreement (a “Dispute”) shall be resolved by binding arbitration in accordance with the terms hereof. Any Party may, by summary proceedings, bring an action in court to compel arbitration of any
Dispute. 
 10.02 Governing Rules. Any arbitration shall be administered by the American Arbitration Association (the “AAA”)
in accordance with the terms of this Article 10 and the Commercial Arbitration Rules of the AAA. 
 10.03 Arbitrator. Any arbitration
shall be conducted before one arbitrator. The arbitrator shall be a disinterested third party who is knowledgeable in the subject matter of the Dispute, selected by agreement between the Parties. If the Parties cannot agree on an arbitrator within
thirty (30) days after the Request for Arbitration, then either Party may request the AAA to select an arbitrator. The arbitrator may engage geologists, geophysicists, landmen, engineers, accountants or other consultants that the arbitrator
deems necessary to render a conclusion in the arbitration proceeding. 
  

 Page 16 of 20 

 10.04 Conduct of Arbitration. To the maximum extent practicable, any arbitration proceedings
hereunder shall be concluded within sixty (60) days of the Parties’ selection of the arbitrator or the filing of the Dispute with the AAA for the appointment of the arbitrator. All arbitration proceedings shall be conducted in Houston,
Texas. At the conclusion of the arbitration proceedings, the arbitrator shall make specific written findings of fact and conclusions of law. The decision of the arbitrator shall likewise be in writing. The arbitrator shall not have the authority to
award any special, indirect, punitive or exemplary damages. The arbitrator shall have the power to award recovery of all costs and fees to the prevailing Party. Each Party agrees to keep all Disputes and arbitration proceedings strictly confidential
except for disclosure of information required by law. 
 10.05 Costs of Arbitration. All fees of the arbitrator and any consultant
engaged by the arbitrator shall be paid one-half by each Party, unless otherwise awarded by the arbitrator. 
 Article 11  

Term 
 This Agreement shall remain
in full force and effect until the expiration or termination of all of the Leasehold Assets and all Oil and Gas Properties that presently are, or become, subject to this Agreement. The only obligations of the Parties hereto that shall or may survive
termination of this agreement are those found in Articles 7 and 9 hereof. 
 ARTICLE 12  
 Miscellaneous Provisions 
 12.01
Entire Agreement. This Agreement, the attachments hereto and the agreements set forth and referred to in each, constitute the sole and entire agreement between the Parties with respect to the subject matter referred to herein and supersede
all prior arrangements or understandings between the Parties with respect thereto, including, but not limited to, that certain Revised Offer to Purchase Working Interest December 28, 2006. This Agreement shall not be modified or amended except
pursuant to a written amendment executed by both Centurion and EXXI, and each Party hereby acknowledges receipt of a true and correct copy of this Agreement and its attachments. 
 12.02 Descriptive Headings. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any
provision of this Agreement. 
  

 Page 17 of 20 

 12.03 Notices. Except as may be otherwise provided for in the Geological Requirements regarding
well information, all notices, consents, requests, instructions, approvals and other communications provided for herein must be in writing and (a) delivered in person, (b) transmitted by facsimile or telefax or (c) mailed by
certified mail, postage prepaid, as follows: 
  

			
	 If to Centurion:
	  	 Centurion Exploration Company
 10333 Richmond Avenue,
Suite 800
 Houston, Texas 77042
 Attention: Ms. Nicola
Maddox, Executive Vice President
 Telephone: (281) 220-3300 (General Number)
 Telephone: (281) 220-3302 (Direct Number)
 Facsimile:  (281) 220-3305
 (E-mail: nmaddox@centurionexp.com)

		
	 If to EXXI:
	  	 Energy XXI Gulf Coast, Inc.
 1021 Main St, Suite
2626
 Houston, Texas 77002
 Attention: Mr. Glynn Broussard,
Land Manager
 Telephone: (713) 351-3043
 Facsimile:
(713)351-3343
 (E-mail: gbroussard@energyxxi.com)

 or to such other address as any Party hereto may from time to time designate in writing, delivered in like manner.
Notice given by mail as set out above shall be deemed delivered when actually received. E-mail addresses are provided for reference and information only. Notifications made exclusively by E-mail do not constitute proper notification under this
Agreement (except as to daily drilling reports and production reports if so specified to be given in such manner by a Party on its Geological Requirements). 
 12.04 Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of and extend to, the Parties and their respective representatives, successors and assigns. Subject, however,
to any limitations established in any of the Leasehold Assets and Oil and Gas Properties acquired pursuant to this Agreement, this Agreement and the rights and obligations set forth herein are assignable, in whole or in part, by either Party
provided the non-assigning Party consents, or has consented herein, to such assignment in writing, which consent shall not be unreasonably withheld. No assignment by a Party shall in any way diminish or otherwise adversely affect the rights,
interests, or obligations of the other Party. It is expressly understood and agreed that all actual assignments made of any of the rights or obligations provided for herein shall expressly be made subject to the terms and provisions of this
Agreement. 
 12.05 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF LOUISIANA. IF ANY PORTION OF THIS AGREEMENT OR ANY OTHER INSTRUMENT REFERRED TO HEREIN IS RENDERED INVALID FOR ANY REASON BY A COURT OF PROPER JURISDICTION, THE BALANCE OF THIS AGREEMENT ANY OTHER INSTRUMENT REFERRED TO HEREIN SHALL
CONTINUE IN FULL FORCE AND EFFECT. 
 12.06 Usage of Term. As used in this Agreement, the term “proportionate” and other
variations thereof is intended to mean proportionately reduced or similar reduction, it being the intent that all proportionate interests are intended to be reduced to the proportion that a lease 

  

 Page 18 of 20 

 
covers the entirety of the mineral estate in and under the lands covered thereby, or to the proportion that a Party or third party owns an interest in a
lease or well bears to one hundred percent interest in such lease or well. 
 12.07 Rights and Remedies. The rights and remedies
herein granted are cumulative, and the exercise thereof by Centurion or EXXI shall be without prejudice to the enforcement of any other rights or remedies authorized by law, or by other provisions of this Agreement, the JOA or any other operating
agreement entered into pursuant to this Agreement. The pursuit of any rights or remedies shall not constitute a waiver of any other amounts due or damages accruing by reason of the violation of the terms, provisions and covenants herein contained.

 12.08 Control. In the event there is a conflict between any of the terms and provisions of this
Agreement, the JOA attached hereto, any other operating agreement entered into pursuant to this
Agreement the terms and provisions of this Agreement shall control. 
 12.09 Further Acts. Centurion and EXXI shall, from time to
time, and at all times, and without additional consideration therefore, do all such further acts and execute and deliver all further instruments and documents as shall be reasonably required in order fully to perform and carry out the terms of this
Agreement. 
 12.10 Regulatory Representation. Except as expressly provided for otherwise within this Agreement, in the JOA or in any
other operating agreement entered into pursuant to this Agreement, neither Centurion nor EXXI is authorized or obligated to represent the other party hereto before any federal, state, or local administrative or regulatory agency. 
 (The balance of this page is intentionally left blank.) 
  

 Page 19 of 20 

 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
this 1st day of February, 2007, as of the Effective Date. 
  

			
	CENTURION EXPLORATION COMPANY
		
	By:	 	/s/ Nicola L. Maddox
		 	 Nicola L. Maddox
 Executive Vice
President

  

			
	ENERGY XXI GULF COAST, INC.
		
	By:	 	/s/ Glynn P. Broussard
		 	 Glynn P. Broussard
 Land
Manager

 Attachments: 
 Exhibit “A-1” – Leases 
 Exhibit “A-2” – Options 
 Exhibit “B” – Prospects 
 Exhibit “C” – Investor Confidentiality Agreement 
 Exhibit “D” – Gridiron AMI Plat 
 Exhibit “E” –
Form of Partial Assignment of Oil and Gas Leases 
 Exhibit “F” – Initial Consideration Invoice 
 Exhibit “G” – JOA 
 Exhibit “H-1” – Notice of
BAZ Prospect JOA 
 Exhibit “H-2” – Notice of DAZ Prospect JOA 
 Exhibit “H-3” – Notice of Italia Prospect JOA 
 Exhibit “H-4” – Notice of Marius Prospect JOA

 Exhibit “H-5” – Notice of Zama Prospect JOA 
 Exhibit “H-6” – Notice of Zama 16 Prospect JOA 
 Exhibit “H-7” – Notice of Zamason Prospect JOA 
 Exhibit “I” – Confidentiality Agreement 
 Exhibit “J”
– Centurion’s Geological Requirements 
  

 Page 20 of 20Indenture between Kyphon Inc. and U.S. Bank National Association

 Exhibit 4.1 
 KYPHON INC., 
 AND 
 U.S. BANK NATIONAL ASSOCIATION, 
 AS TRUSTEE 
 1.00% Convertible Senior Notes due 2012 
 1.25% Convertible Senior Notes due 2014 
 INDENTURE 
 Dated as of February 6, 2007 

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page
	
	ARTICLE 1
	DEFINITIONS AND INCORPORATION BY REFERENCE
			
	Section 1.01.	 	Definitions	  	1
	Section 1.02.	 	Other Definitions	  	10
	Section 1.03.	 	Incorporation by Reference of Trust Indenture Act	  	11
	Section 1.04.	 	Rules of Construction	  	11
	
	ARTICLE 2
	THE SECURITIES
			
	Section 2.01.	 	Title; Amount and Issue of Securities; Principal and Interest	  	12
	Section 2.02.	 	Form of Securities	  	13
	Section 2.03.	 	Legends	  	14
	Section 2.04.	 	Execution and Authentication	  	18
	Section 2.05.	 	Registrar and Paying Agent	  	19
	Section 2.06.	 	Paying Agent to Hold Money in Trust	  	20
	Section 2.07.	 	Holder Lists	  	20
	Section 2.08.	 	General Provisions Relating to Transfer and Exchange	  	20
	Section 2.09.	 	Book-Entry Provisions for the Global Securities	  	21
	Section 2.10.	 	Special Transfer Provisions	  	23
	Section 2.11.	 	Mutilated, Destroyed, Lost or Stolen Securities	  	24
	Section 2.12.	 	Outstanding Securities	  	25
	Section 2.13.	 	Temporary Securities	  	26
	Section 2.14.	 	Cancellation	  	26
	Section 2.15.	 	Payment of Interest; Defaulted Interest	  	27
	Section 2.16.	 	Computation of Interest	  	28
	Section 2.17.	 	CUSIP and ISIN Numbers	  	28
	
	ARTICLE 3
	COVENANTS
	Section 3.01.	 	Payment of Securities	  	29
	Section 3.02.	 	Financial Statements	  	29
	Section 3.03.	 	Maintenance of Office or Agency	  	30
	Section 3.04.	 	Corporate Existence	  	30
	Section 3.05.	 	Payment of Taxes and Other Claims	  	30
	Section 3.06.	 	Compliance Certificate	  	31
	Section 3.07.	 	Further Instruments and Acts	  	31
	Section 3.08.	 	Statement by Officers as to Default	  	31
	Section 3.09.	 	Additional Interest	  	31
	Section 3.10.	 	SEC Reports	  	32

  

 ii 

					
	ARTICLE 4
	SUCCESSOR COMPANY
			
	Section 4.01.	 	Consolidation, Merger and Sale of Assets	  	32
	
	ARTICLE 5
	[RESERVED]
	
	ARTICLE 6
	DEFAULTS AND REMEDIES
			
	Section 6.01.	 	Events of Default	  	33
	Section 6.02.	 	Acceleration	  	35
	Section 6.03.	 	Other Remedies	  	36
	Section 6.04.	 	Waiver of Past Defaults	  	36
	Section 6.05.	 	Control by Majority	  	37
	Section 6.06.	 	Limitation on Suits	  	37
	Section 6.07.	 	Rights of Holders to Receive Payment	  	37
			
	Section 6.08.	 	Collection Suit by Trustee	  	38
	Section 6.09.	 	Trustee May File Proofs of Claim	  	38
	Section 6.10.	 	Priorities	  	38
	Section 6.11.	 	Restoration of Rights and Remedies	  	39
	Section 6.12.	 	Undertaking of Costs	  	39
	
	ARTICLE 7
	TRUSTEE
	Section 7.01.	 	Duties of Trustee	  	39
	Section 7.02.	 	Rights of Trustee	  	41
	Section 7.03.	 	Individual Rights of Trustee	  	42
	Section 7.04.	 	Trustee’s Disclaimer	  	42
	Section 7.05.	 	Notice of Defaults	  	42
	Section 7.06.	 	Reports by Trustee to Holders	  	43
	Section 7.07.	 	Compensation and Indemnity	  	43
	Section 7.08.	 	Replacement of Trustee	  	44
	Section 7.09.	 	Successor Trustee by Merger	  	45
	Section 7.10.	 	Eligibility; Disqualification	  	45
	Section 7.11.	 	Preferential Collection of Claims Against Company	  	45
	
	ARTICLE 8
	DISCHARGE OF INDENTURE
	Section 8.01.	 	Discharge of Liability on Securities	  	46
	Section 8.02.	 	Reinstatement	  	47
	Section 8.03.	 	Officers’ Certificate; Opinion of Counsel	  	47

  

 iii 

					
	ARTICLE 9
	AMENDMENTS
			
	Section 9.01.	 	Without Consent of Holders	  	47
	Section 9.02.	 	With Consent of Holders	  	48
	Section 9.03.	 	Compliance with Trust Indenture Act	  	49
	Section 9.04.	 	Revocation and Effect of Consents and Waivers	  	49
	Section 9.05.	 	Notation on or Exchange of Securities	  	50
	Section 9.06.	 	Trustee to Sign Amendments	  	50
	
	ARTICLE 10
	[RESERVED]
	
	ARTICLE 11
	PURCHASE AT THE OPTION OF HOLDER UPON A
FUNDAMENTAL CHANGE
			
	Section 11.01.	 	Purchase at the Option of the Holder Upon a Fundamental Change	  	50
	Section 11.02.	 	[Reserved].	  	53
	Section 11.03.	 	Further Conditions and Procedures for Purchase at the Option of the Holder Upon a Fundamental Change.	  	53
	
	ARTICLE 12
	CONVERSION
			
	Section 12.01.	 	Conversion of Securities	  	56
	Section 12.02.	 	Adjustments to Conversion Rate	  	63
	Section 12.03.	 	Adjustment Upon Certain Fundamental Changes	  	70
	Section 12.04.	 	[Reserved].	  	72
	Section 12.05.	 	Effect of Reclassification, Consolidation, Merger or Sale	  	72
	Section 12.06.	 	Responsibility of Trustee	  	73
	Section 12.07.	 	Notice to Holders Prior to Certain Actions	  	74
	Section 12.08.	 	Stockholder Rights Plan	  	75
	Section 12.09.	 	Withholding Taxes for Adjustments in Conversion Rate	  	75
	
	ARTICLE 13
	MISCELLANEOUS
			
	Section 13.01.	 	Trust Indenture Act Controls	  	75
	Section 13.02.	 	Notices	  	75
	Section 13.03.	 	Communication by Holders with other Holders	  	76

  

 iv 

					
	Section 13.04.	 	Certificate and Opinion as to Conditions Precedent	  	77
	Section 13.05.	 	Statements Required in Certificate or Opinion	  	77
	Section 13.06.	 	When Securities Are Disregarded	  	77
	Section 13.07.	 	Rules by Trustee, Paying Agent and Registrar	  	78
	Section 13.08.	 	Legal Holidays	  	78
	Section 13.09.	 	Governing Law	  	78
	Section 13.10.	 	No Recourse Against Others	  	78
	Section 13.11.	 	Successors	  	78
	Section 13.12.	 	Multiple Originals	  	78
	Section 13.13.	 	Qualification of Indenture	  	78
	Section 13.14.	 	Table of Contents; Headings	  	78
	Section 13.15.	 	Severability Clause	  	79
	Section 13.16.	 	Calculations	  	79

  

					
	SCHEDULE A	  	 Additional Shares
	  	
	EXHIBIT A	  	Form of the 2012 Note	  	
	EXHIBIT B	  	Form of the 2014 Note	  	

  

 v 

 INDENTURE dated as of February 6, 2007, among KYPHON INC., a Delaware corporation (the
“Company”) and U.S. BANK NATIONAL ASSOCIATION, as Trustee (the “Trustee”). 
 Each party agrees as follows
for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Company’s 1.00% Convertible Senior Notes due 2012 (the “2012 Notes”) and the 1.25% Convertible Senior Notes due 2014 (the
“2014 Notes” and together with the 2012 Notes, the “Securities”) on the date hereof. 
 ARTICLE 1

 DEFINITIONS AND INCORPORATION BY REFERENCE 
 Section 1.01. Definitions.  
 “2012 Notes” has the meaning ascribed to it in the second introductory paragraph of this Indenture. 
 “2014 Notes” has the meaning ascribed to it in the second introductory paragraph of this Indenture. 
 “Additional Interest” means all amounts, if any, payable pursuant to Section 2 of the Registration Rights Agreement. 
 “Affiliate” of any specified Person means any other Person directly or indirectly controlling, 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. 
 “Bankruptcy
Law” means Title 11 of the United States Code or any similar federal or state law for the relief of debtors. 
 “Beneficial
Owner” shall mean any person who is considered a beneficial owner of a security in accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act. 
 “Board of Directors” means, as to any Person, the board of directors of such Person or any duly authorized committee thereof. 
 “Board Resolution” means a copy of a resolution certified by the Secretary or Assistant Secretary of a Person to have been duly adopted
by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. 
  

 “Bid Solicitation Agent” means the agency appointed by the Company to solicit bids for
the Trading Price of the Securities in accordance with Section 12.01(a)(ii). The Bid Solicitation Agent appointed by the Company shall initially be the Trustee. 
 “Business Day” means each day that is not a Saturday, Sunday or other day on which the Federal Reserve Bank of New York is closed. 
 “Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. 
 “Code” means the Internal Revenue Code of 1986, as amended. 
 “Common
Equity” of any Person means Capital Stock of such Person that is generally entitled to (1) vote in the election of directors of such Person or (2) if such Person is not a corporation, vote or otherwise participate in the selection
of the governing body, partners, managers or others that will control the management or policies of such Person. 
 “Common
Stock” means the Company’s Common Stock, par value $0.001 per share. 
 “Company” means Kyphon Inc. or its
successors and assigns. 
 “Continuing Director” means a director who either was a member of the Company’s board of
directors on January 31, 2007 or who becomes a director of the Company subsequent to that date and whose election, appointment or nomination for election by stockholders of the Company, is duly approved by a majority of the Continuing Directors
on the Board of Directors of the Company at the time of such approval, either by a specific vote or by approval of the proxy statement issued by the Company on behalf of the entire Board of Directors of the Company in which such individual is named
as nominee for director. 
 “Conversion Agent” means the office or agency appointed by the Company where Securities may be
presented for conversion. The Conversion Agent appointed by the Company shall initially be the Trustee. 
 “Conversion
Price” means, in respect of each $1,000 principal amount of Securities of each series, $1,000 divided by the Conversion Rate of such series, as may be adjusted from time to time as set forth herein. 
 “Conversion Rate” means, in respect of each $1,000 principal amount of each series of Securities, initially 17.1951 shares of Common
Stock, subject to adjustments as set forth herein. 
  

 2 

 “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law. 
 “Default” means any event which is, or after notice or passage of time or both would
be, an Event of Default. 
 “Definitive Securities” means certificated Securities that are not Global Securities.

 “DTC” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other
depository institution hereinafter appointed by the Company pursuant to the terms of this Indenture. 
 “Ex-Dividend Date”
means, (i) for the purposes of Section 12.02, the first date on which shares of Common Stock trade in the applicable exchange or in the applicable market, regular way, without the right to receive the issuance or distribution in question,
and (ii) for all other purposes, in respect of a dividend or distribution to holders of Common Stock, the first date upon which a sale of the Common Stock does not automatically transfer the right to receive the relevant dividend or
distribution from the seller of the Common Stock to its buyer. 
 “Exchange Act” means the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the SEC promulgated thereunder. 
 “Fair Market Value” means the amount that a
willing buyer would pay a willing seller in an arm’s length transaction. 
 A “Fundamental Change” shall be deemed to
have occurred at such time after the original issuance of the Securities as any of the following occurs: 
  

	 	(i)	any “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, any Subsidiary of the Company or any employee
benefit plan of the Company or any such Subsidiary, has become the Beneficial Owner of Common Equity of the Company representing more than 50% of the ordinary voting power of the Company’s Common Equity; 

  

	 	(ii)	 consummation of (A) any recapitalization, reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to
which Section 12.02(a) applies) as a result of which the Common Stock would be converted into, or exchanged for, Capital Stock, other securities, other property or assets, or (B) any share exchange, consolidation or merger of the Company
pursuant to which the Common Stock will be converted into cash, securities or other property or any sale, lease or other 

  

 3 

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

  

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

  

	 	(iv)	the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or 

  

	 	(v)	the Company’s Common Stock (or other Common Stock into which the Securities are then convertible) ceases to be listed on a national securities exchange or quoted on an
established automated over-the-counter trading market in the United States; 

 provided, however, that a Fundamental Change as a result
of clause (ii) above shall not be deemed to have occurred if 100% of the consideration received or to be received by the holders of the Company’s Common Stock, excluding cash payments for fractional shares, in connection with the
transaction or transactions constituting the Fundamental Change consists of shares of common stock traded on a national securities exchange or which shall be so traded or quoted when issued or exchanged in connection with such Fundamental Change
(such securities being referred to as “Publicly Traded Securities”) and as a result of such transaction or transactions the Securities become convertible into such Publicly Traded Securities (excluding cash payments for fractional
shares) pursuant to the terms of this Indenture. 
 “GAAP” means generally accepted accounting principles set forth in the
opinions and pronouncements of the (i) Public Company Accounting Oversight Board, (ii) statements and pronouncements of the Financial Accounting Standards Board, (iii) in such other statements by such other entity as may be approved
by a significant segment of the accounting profession as in effect from time to time and (iv) the rules and regulations of the SEC governing to inclusion of financial statements in period reports required to be filed pursuant to Section 13
of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. 
  

 4 

 “Global Securities” means certificated Securities in global form, without interest
coupons, substantially in the form of Exhibit A or Exhibit B hereto and registered in the name of DTC or a nominee of DTC. 
 “Holder” means the Person in whose name a Security is registered in the Securities Register. 
 “Indenture” means this Indenture, as amended or supplemented from time to time. 
 “Initial
Purchasers” means the several initial purchasers named in Schedule I to the Purchase Agreement. 
 “Issue
Date” means February 6, 2007. 
 “Last Reported Sale Price” of the Common Stock on any date means the closing
sale price per share (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) on that date as reported in the composite transactions
for the principal U.S. securities exchange on which the Common Stock is traded. 
 If the Common Stock is not listed for trading on a U.S.
national or regional securities exchange on the relevant date, the Last Reported Sale Price shall be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or
similar organization. 
 If the Common Stock is not so quoted, the Last Reported Sale Price shall be the average of the midpoint of the last
bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. 
 “Majority Owner” of a Person means the Person having “beneficial ownership” (as defined in Rule 13(d)(3) under the
Exchange Act) of more than 50% of the total voting power of all shares of the respective Person’s Common Equity. 
 “Market
Disruption Event” means (a) for the purposes of Section 12.01(c), if the Common Stock is listed on a United States national or regional securities exchange, (i) failure by the primary United States national or regional
securities exchange or market on which the Common Stock is listed or admitted to trading to open for trading during its regular trading session, or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled
Trading Day for the Common Stock for an aggregate one half-hour 

  

 5 

 
period of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in
the Common Stock or in any options, contracts or future contracts relating to the Common Stock and (b) for every other purpose, the occurrence or existence on any Scheduled Trading Day for Common Stock of any suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in Common Stock on the relevant exchange, or in any options, contracts or future contracts relating to Common Stock on the relevant
exchanges, and such suspension or limitation occurs or exists during the one hour period before the closing time of the relevant exchange on such day. 
 “Observation Period” means, (i) with respect to a conversion of any Security prior to
December 1, 2011, in the case of the 2012 Notes, and December 1, 2013, in the case of the 2014 Notes, the 30 consecutive Trading Day period beginning on and including the third Trading Day immediately following the Conversion Date for such
Security, and (ii) with respect to any conversion of any Security on or after December 1, 2011, in the case of the 2012 Notes, and December 1, 2013, in the case of the 2014 Notes, the 30 consecutive Trading Day period beginning on,
and including, the 32nd Scheduled Trading Day prior to the Stated Maturity. 
 “Offering Memorandum” means the offering memorandum, dated January 31, 2007, relating to the offering by the Company of the
Securities. 
 “Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial
Officer, any Vice President, the Treasurer or the Secretary of the Company. 
 “Officers’ Certificate” means a
certificate signed by two Officers or attorneys-in-fact or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company. 
 “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. 
 “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company, government or any agency or political subdivision hereof or any other entity. 
 “Preferred
Stock”, as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. 
  

 6 

 “Purchase Agreement” means the Purchase Agreement dated as of January 30, 2007
between the Company and the Initial Purchasers relating to the initial purchase and sale of the Securities. 
 “QIB” means
any “qualified institutional buyer” (as term is defined in Rule 144A). 
 “Record Date” means, in respect of a
dividend or distribution to holders of Common Stock, the date fixed for determination of holders of Common Stock entitled to receive such dividend or distribution. 
 “Registration Rights Agreement” means the Registration Rights Agreement dated as of the Issue Date among the Initial Purchasers and the Company. 
 “Regular Record Date” for the payment of interest on the Securities (including Additional Interest, if any), means the January 15
(whether or not a Business Day) immediately preceding an interest payment date on February 1 and the July 15 (whether or not a Business Day) immediately preceding an interest payment date on August 1. 
 “Rule 144A” means Rule 144A under the Securities Act. 
 “SEC” means the United States Securities and Exchange Commission. 
 “Scheduled
Trading Day” means a day that is scheduled to be a Trading Day on the primary Unites States national securities exchange or market on which the Common Stock of the Company is listed or admitted for trading. If the Common Stock is not listed
or quoted, “Scheduled Trading Day” means “Business Day.” 
 “Securities” has the meaning ascribed to it
in the second introductory paragraph of this Indenture. 
 “Securities Act” means the Securities Act of 1933 (15 U.S.C.
§§ 77a – 77aa), as amended, and the rules and regulations of the SEC promulgated thereunder. 
 “Securities
Custodian” means the custodian with respect to the Global Security (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee. 
  

 7 

 “Shelf Registration Statement” shall have the meaning contemplated by and in accordance
with the terms of the Registration Rights Agreement. 
 “Significant Subsidiary” means any Subsidiary that would be a
“Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. 
 “Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory
redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof. 
 “Stock Price” means, in respect of a Fundamental Change, the price per share of Common Stock in connection with such Fundamental Change,
which shall be equal to (i) if such Fundamental Change is a transaction set forth in clause (i) or (ii) of the definition thereof, and holders of Common Stock receive only cash in such transaction, the cash amount paid per share of
Common Stock and (ii) in all other cases, the average of the Last Reported Sale Prices of the Common Stock over the five Trading Day period ending on the Trading Day preceding the effective date of such Fundamental Change. 
 “Subsidiary” of the Company means (i) a corporation a majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned by the Company, by the Company and one or more Subsidiaries of the Company or by one or more Subsidiaries of the Company or (ii) any other Person (other than a
corporation) in which the Company, one or more Subsidiaries of the Company or the Company and one or more Subsidiaries of the Company, directly or indirectly, at the date of determination thereof, has greater than a 50% ownership interest.

 “TIA” or “Trust Indenture Act” means the Trust Indenture Act of 1939 (15 U.S.C. §§
77aaa-77bbbb), as in effect on the date of this Indenture, except as provided in Section 9.03. 
 “Trading Day” means
(a) for the purposes of Section 12.01(c), a day on which (i) there is no Market Disruption Event and (ii) trading in securities generally occurs on the Nasdaq Global Select Market or, if the Common Stock is not then listed on the
Nasdaq Global Select Market, on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities
exchange, on the principal other market on which the Common Stock is then traded; provided, that if the Common stock (or other security for which a Daily VWAP must be determined) is not so listed or quoted, 

  

 8 

 
“Trading Day” means a “Business Day,” and (b) for all other purposes, a day on which (i) trading in securities generally occurs
on the Nasdaq Global Select Market or, if the Common Stock is not then listed on the Nasdaq Global Select Market, on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the
Common Stock is not then listed on a United States national or regional securities exchange, in the principal other market on which the Common Stock is then traded, (ii) there is no Market Disruption Event and (iii) a Last Reported Sale
Price for the Common Stock is available on such securities exchange or market; provided, that if the Common Stock (or other security for which a Last Reported Sale Price must be determined) is not so listed or quoted, “Trading Day”
means a “Business Day.” 
 “Trading Price” of the Securities of each series on any date of determination means the
average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $2,000,000 principal amount of the Securities of such series at approximately 3:30 p.m., New York City time, on such determination date from three independent
nationally recognized securities dealers selected by the Company; provided that, if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such bids are obtained, then the average of the two bids shall be used,
and if only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $2,000,000 principal amount of the Securities of the
applicable series from a nationally recognized securities dealer, then the Trading Price per $1,000 principal amount of Securities of such series will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock
and the applicable Conversion Rate. If the Company does not so instruct the Bid Solicitation Agent to obtain bids when required, the Trading Price per $1,000 principal amount of Securities of the applicable series will be deemed to be less than 98%
of the product of the Last Reported Sale Price on each day the Company fails to do so. 
 “Trustee” means the party named as
such in this Indenture until a successor replaces it and, thereafter, means the successor. 
 “Trust Officer” means, when
used with respect to the Trustee, the officer within the corporate trust department of the Trustee having direct responsibility for the administration of this Indenture. 
 “UCC” means the Uniform Commercial Code as in effect in the State of New York. 
  

 9 

 Section 1.02. Other Definitions.  
  

				
	 Term
	  	Defined in
Section	 
	 “Additional Shares”
	  	12.03	(a)
	 “Adjustment Event”
	  	12.02	(m)
	 “Agent Members”
	  	2.09	(a)
	 “Authenticating Agent”
	  	2.04	 
	 “Certificate of Destruction”
	  	2.14	 
	 “Company Notice”
	  	11.03	(a)
	 “Company Notice Date”
	  	11.03	(a)
	 “Company Order”
	  	2.04	 
	 “Conversion Date”
	  	12.01	(b)
	 “Conversion Notice”
	  	12.01	(b)(i)
	 “Daily Settlement Amount”
	  	12.01	(c)
	 “Daily Conversion Value”
	  	12.01	(c)
	 “Daily VWAP”
	  	12.01	(c)
	 “Defaulted Interest”
	  	2.15	 
	 “Determination Date”
	  	12.02	(m)
	 “Effective Date”
	  	12.03	(b)
	 “Event of Default”
	  	6.01	 
	 “Expiration Time”
	  	12.02	(e)
	 “Fundamental Change Purchase Date”
	  	11.01	 
	 “Fundamental Change Purchase Notice”
	  	11.01	(b)
	 “Fundamental Change Purchase Price”
	  	11.01	 
	 “Global Security Legend”
	  	2.03	(iv)
	 “Legal Holiday”
	  	13.08	 
	 “Measurement Period”
	  	12.01	(a)(ii)
	 “Paying Agent”
	  	2.05	 
	 “Publicly Traded Securities”
	  	1.01	 
	 “Reorganization Event”
	  	12.05	(a)
	 “Reference Property”
	  	12.05	(a)
	 “Registrar”
	  	2.05	 
	 “Reporting Interest”
	  	6.02	 
	 “Restricted Securities”
	  	2.03	 
	 “Restricted Securities Legend”
	  	2.03	 
	 “Securities Register”
	  	2.05	 
	 “Settlement Amount”
	  	12.01	(c)
	 “Special Interest Payment Date”
	  	2.15	(a)
	 “Special Record Date”
	  	2.15	(a)
	 “Spin-Off”
	  	12.02	(c)
	 “Successor Company”
	  	4.01	(a)

  

 10 

 Section 1.03. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to
the mandatory provisions of the TIA which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings: 
 “Commission” means the SEC. 
 “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. 
 “obligor” on the indenture securities means the Company and any other obligor on the Securities. 
 All other TIA
terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. 
 Section 1.04. Rules of Construction. Unless the context otherwise requires: 
 (a) a term has the meaning assigned to it; 
 (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 
 (c) “or” is not
exclusive; 
 (d) “including” means including without limitation; 
 (e) words in the singular include the plural and words in the plural include the singular; 
 (f) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on
a balance sheet of the issuer dated such date prepared in accordance with GAAP; and 
 (g) the principal amount of any Preferred Stock shall
be the greater of (i) the maximum liquidation value of such Preferred Stock and (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock. 
  

 11 

 ARTICLE 2 
 THE SECURITIES 
 Section 2.01. Title; Amount and Issue of Securities;
Principal and Interest. (a) The 2012 Notes shall be known and designated as the “1.00% Convertible Senior Notes due 2012” of the Company and the 2014 Notes shall be known and designated as the “1.25% Convertible Senior Notes
due 2014” of the Company. The aggregate principal amount of Securities of each series which may be authenticated and delivered under this Indenture is initially limited to $200,000,000, except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other Securities pursuant to Section 2.03, 2.04, 2.08, 2.09, 2.10, 2.11, 2.13, 9.05, 11.03, or 12.01; provided that additional Securities may be issued in an unlimited
aggregate principal amount from time to time thereafter as set forth pursuant to Section 2.04. The Securities shall be issuable in denominations of $1,000 or multiples thereof. 
 (b) The 2012 Notes shall mature on February 1, 2012 and the 2014 Notes shall mature on February 1, 2014, in each case unless earlier converted,
or repurchased in accordance with the provisions hereof. 
 (c) Interest on the Securities shall accrue from and including the date specified
on the face of such Securities until the principal thereof is paid or made available for payment. Interest shall be payable semiannually in arrears on February 1 and August 1 in each year, commencing August 1, 2007. If any interest
payment date (other than an interest payment date coinciding with the Stated Maturity or earlier required Fundamental Change Purchase Date) of a Security falls on a day that is not a Business Day, such interest payment date will be postponed to the
next succeeding Business Day. If the Stated Maturity or earlier required Fundamental Change Purchase Date would fall on a day that is not a Business Day, the required payment of interest, if any, and principal (and Additional Interest and Reporting
Interest, if any), will be made on the next succeeding Business Day and no interest on such payment will accrue for the period from and after the Stated Maturity or earlier required Fundamental Change Purchase Date to such next succeeding Business
Day. 
 (d) A Holder of any Security at 5:00 p.m., New York City time, on a Regular Record Date shall be entitled to receive interest
(including any Additional Interest), on such Security on the corresponding interest payment date, notwithstanding the conversion of such Securities at any time after the close of business on such Regular Record Date. Securities surrendered for
conversion during the period after 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the corresponding interest payment date must be accompanied by payment of an amount equal to the interest (including
any Additional Interest) that the Holder is to receive on the Securities. Notwithstanding the foregoing, no such payment of interest (including any 

  

 12 

 
Additional Interest) need be made by any converting Holder (i) for conversions following the Regular Record Date immediately preceding the Stated
Maturity, (ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the third Trading Day after the corresponding interest payment date, or (iii) to the extent of any
overdue interest (including any Additional Interest) existing at the time of conversion of such Security. Except as described above, no interest, Additional Interest on converted Securities will be payable by the Company on any interest payment date
subsequent to the date of conversion and delivery of the cash and shares of Common Stock, if applicable, pursuant to Article 12 hereunder, together with any cash payment for any fractional share, upon conversion will be deemed to satisfy in full the
Company’s obligation to pay the principal amount of the Securities and accrued and unpaid interest and Additional Interest, if any, to, but not including, the related Conversion Date. 
 (e) Principal of and interest (including Additional Interest and Reporting Interest, if any) on, Global Securities shall be payable to DTC in immediately
available funds. 
 (f) Principal on Definitive Securities shall be payable at the office or agency of the Company maintained for such
purpose, which initially shall be the corporate trust office of the Trustee at its agency in New York, New York. Interest (including Additional Interest and Reporting Interest, if any), on Definitive Securities will be payable (i) to Holders
having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to each Holder or, upon
application by a Holder to the Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to such Holder’s account within the United States, which application shall remain in effect until the
Holder notifies, in writing, the Registrar to the contrary. 
 Section 2.02. Form of Securities. 
 (a) Except as otherwise provided pursuant to this Section 2.02, the Securities are issuable in fully registered form without coupons in
substantially the form of Exhibit A or Exhibit B hereto, with such applicable legends as are provided for in Section 2.03. 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.
In the event of any inconsistency between the terms of the Securities and the terms of this Indenture, the terms of this Indenture shall control. Any of the Securities may have such letters, numbers or other marks of identification and such
notations, 

  

 13 

 
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 shall be issued initially in the form
of one or more permanent Global Securities, with the applicable legends as provided in Section 2.03. 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 DTC or its nominee and retained by the Trustee, as Securities Custodian, at its corporate trust office, for credit to the accounts of the Agent 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 Securities Custodian, and of DTC or its nominee, as hereinafter provided. 
 Section 2.03. Legends. Each Security issued hereunder shall, upon issuance, bear the legend set forth in Section 2.03(i), and each
Common Stock certificate representing shares of the Common Stock issued upon conversion of any Security issued hereunder, shall, upon issuance, unless as otherwise set forth below, bear the legend set forth in Section 2.03(ii) (each such
legend, a “Restricted Securities Legend”), and such legend shall not be removed except as provided in Section 2.03(iii). Each Security that bears or is required to bear the Restricted Securities Legend set forth in
Section 2.03(i) (together with each Common Stock certificate representing shares of the Common Stock issued upon conversion of such Security that bears or is required to bear the Restricted Securities Legend set forth in Section 2.03(ii),
collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.03 (including the Restricted Securities Legend set forth below), and the Holder of each such Restricted
Security, by such Holder’s acceptance thereof, shall be deemed to have agreed to be bound by all such restrictions on transfer. 
 As
used in Section 2.03, the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security. 
 (i) Restricted Securities Legend for Securities. Except as provided in Section 2.03(iii), any certificate evidencing such Security (and all Securities issued in exchange therefor or substitution thereof,
other than stock certificates representing shares of the Common Stock, if any, issued upon conversion thereof which shall bear the legend set forth in Section 2.03(ii), if applicable) shall bear a Restricted Securities Legend in substantially
the following form: 
  

 14 

 “THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, EXCEPT (A) TO THE COMPANY; (B) UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (C) TO A PERSON THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT) THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE); OR (D) UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (2) IT WILL, PRIOR TO ANY TRANSFER OF THIS
SECURITY FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED PURSUANT TO THE INDENTURE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. 
 (ii) Restricted Securities Legend for the Common Stock
Issued Upon Conversion of the Securities. Each stock certificate representing Common Stock issued upon conversion of Securities bearing a Restricted Securities Legend will, subject to the availability of a Shelf Registration Statement and
registration thereunder as set forth in the Registration Rights Agreement, bear the following legend: 
 “THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES
(1) THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO THE ISSUER; (B) UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (C) TO A PERSON THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE 

  

 15 

 
SECURITIES ACT) THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE); OR (D) UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (2) IT WILL, PRIOR TO ANY TRANSFER
OF THIS SECURITY FURNISH TO THE TRANSFER AGENT AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. 
 (iii) Removal of the Restricted Securities Legends. The
Restricted Securities Legend may be removed from any Security or any Common Stock certificate representing shares of the Common Stock issued upon conversion of any Security if there is delivered to the Company such satisfactory evidence, which may
include an opinion of independent counsel, as may be reasonably required by the Company, that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers of such Security or shares of the Common Stock
issued upon conversion of Securities, as the case may be, will not violate the registration requirements of the Securities Act or the qualification requirements under any state securities laws. Upon provision of such satisfactory evidence, at the
written direction of the Company, (x) in the case of a Security, the Trustee shall authenticate and deliver in exchange for such Security another Security or Securities of the same series having an equal aggregate principal amount that does not
bear such legend or (y) in the case of a Common Stock certificate representing shares of the Common Stock, the transfer agent for the Common Stock shall authenticate and deliver in exchange for the Common Stock certificate or certificates
representing such shares of Common Stock bearing such legend, one or more new Common Stock certificates representing a like aggregate number of shares of Common Stock that do not bear such legend. If the Restricted Securities Legend has been removed
from a Security or Common Stock certificates representing shares of the Common Stock issued upon conversion of any Security as provided above, no other Security issued in exchange for all or any part of such Security, or no other Common Stock
certificates issued in exchange for such Common Stock, shall bear such legend, unless the Company has reasonable cause to believe that such other Security is a “restricted security” (or such shares of Common Stock are “restricted
securities”) within the meaning of Rule 144 and instructs the Trustee in writing to cause a Restricted Securities Legend to appear thereon. 
  

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 Any Security (or Security issued in exchange or substitution therefor) as to which the conditions for
removal of the Restricted Securities Legend set forth in Section 2.03(i) as set forth therein have been satisfied may, upon surrender of such Security for exchange to the Registrar in accordance with the provisions of Section 2.08, be
exchanged for a new Security or Securities of the same series, of like tenor and aggregate principal amount, which shall not bear the Restricted Securities Legend required by Section 2.03(i). 
 Any Common Stock certificate representing shares of Common Stock issued upon conversion of any Security as to which the conditions for removal of the
Restricted Securities Legend set forth in Section 2.03(ii) have been satisfied may, upon surrender of the Common Stock certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent
for the Common Stock, be exchanged for a new Common Stock certificate or certificates representing a like aggregate number of shares of Common Stock, which shall not bear the Restricted Securities Legend. 
 (iv) Global Security Legend. Each Global Security shall also bear the following legend (the “Global Security
Legend”) on the face thereof: 
 “UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO IN THE TERMS OF SECURITIES ATTACHED HERETO.” 
  

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 (v) Legend for Definitive Securities. Definitive Securities, in addition to the
legend set forth in Section 2.03(i) or (ii)Section 2.03(ii), 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 SECURITIES.” 
 Section 2.04. Execution and Authentication. One Officer shall sign the Securities for the Company by manual or facsimile signature. If an
Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. 
 A Security shall not be valid until an authorized signatory of the Trustee manually authenticates the Security. The signature of the Trustee on a Security shall be conclusive evidence that such Security has been duly
and validly authenticated and issued under this Indenture. A Security shall be dated the date of its authentication. 
 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 in an unlimited aggregate principal amount to the Trustee for authentication, together with a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company (the “Company Order”) for the authentication and delivery of such Securities, which order shall set forth the number
of separate Securities certificates, the principal amount of each of the Securities to be authenticated, the registered holder of each of the said Securities, and delivery instructions, and the Trustee in accordance with such Company Order shall
authenticate and deliver such Securities as in this Indenture provided and not otherwise. All Securities issued on the Issue Date shall be identical in all respects with any such Securities authenticated and delivered thereafter, other than issue
dates, the date from which interest accrues, appropriate CUSIP numbers or other identifying notations and any changes relating thereto. Notwithstanding anything to the contrary contained in this Indenture, subject to Section 2.12, all
Securities issued under this Indenture shall vote and consent together on all matters as one class and no series of Securities will have the right to vote or consent as a separate class on any matter. 
 The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the Company to authenticate the Securities.
Initially, the Trustee will act as the Authenticating Agent. Any such instrument shall be evidenced by an instrument signed by a Trust Officer of the Trustee, a copy of which shall be furnished to the Company. Unless limited by the terms of such
appointment, any such Authenticating Agent may authenticate Securities 

  

 18 

 
whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent. An
Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. 
 In case the Company,
pursuant to Article 4, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article 4, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the
successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall authenticate and deliver Securities as specified in such order for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to this Section 2.04 in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time outstanding for Securities authenticated and delivered in such new name. 
 Section 2.05. 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 and of their transfer and exchange (the “Securities Register”). The
Company may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent and the term “Registrar” includes any co-registrar. 
 The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any of its domestically organized, wholly owned Subsidiaries may act as Paying Agent, Registrar,
co registrar or transfer agent. 
  

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 The Company initially appoints the Trustee as Registrar and Paying Agent for the Securities. The Company
may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of any appointment by a successor as
evidenced by an appropriate agreement entered into by the Company and such successor Registrar or successor Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee. 
 Section 2.06. Paying Agent to Hold Money in Trust. By no later than 11:00 a.m., New York City time, on the date on which any principal of or
interest and Additional Interest and Reporting Interest, if any, on any Security is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such principal or interest (including any
Additional Interest and Reporting Interest), when due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by
such Paying Agent for the payment of principal of or interest (including any Additional Interest and Reporting Interest), on the Securities and shall notify the Trustee in writing of any default by the Company in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to
the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.06, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money delivered to the Trustee.
Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities. 
 Section 2.07. 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 TIA §
312(a). If the Trustee is not the Registrar, or to the extent otherwise required under the TIA, the Company, shall furnish or cause the Registrar to furnish to the Trustee, in writing at least five Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders and the Company shall otherwise comply with TIA § 312(a). 

Section 2.08. General Provisions Relating to Transfer and Exchange. The Securities are issuable only in registered form. A Holder may
transfer a 

  

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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 Securities 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 the same series 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 2.04, 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 repurchase 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 in connection with which a Security is issued to a Person other than the Holder submitting the Security for exchange). 
 Neither the Company nor the Registrar shall be required to exchange or register a transfer of any Securities surrendered for conversion or, if a portion
of any Security is surrendered for conversion, the portion thereof surrendered for conversion. 
 The Trustee shall have no obligation or
duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between beneficial
owners of any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same
to determine substantial compliance as to form with the express requirements hereof. 
 Section 2.09. Book-Entry Provisions for the
Global Securities. (a) The Global Securities initially shall: 
  

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 (i) be registered in the name of DTC (or a nominee thereof); 
 (ii) be delivered to the Trustee as Securities Custodian; 
 (iii) bear the Restricted Securities Legend set forth in Section 2.03(i); and 
 (iv) bear the Global Security Legend set forth in Section 2.03(iv). 
 Members of, or participants in, DTC (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held
on their behalf by DTC, or the Trustee as its custodian, or under such Global Security, and DTC 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 DTC or
impair, as between DTC 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 Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities. 
 (c) A Global Security may not be transferred, in whole or in part, to any Person
other than DTC (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 DTC and the provisions of
Section 2.10. 
 (d) If at any time: 
 (i) DTC notifies the Company in writing that it is unwilling or unable to continue to act as depositary for the Global Securities and a successor depositary for the Global Securities is not appointed by the Company
within 90 days of such notice; 
 (ii) DTC ceases to be registered as a “clearing agency” under the Exchange Act and
a successor depositary for the Global Securities is not appointed by the Company within 90 days of such cessation; 
 (iii)
the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Definitive Securities under this 

  

 22 

 
Indenture in exchange for all or any part of the Securities represented by a Global Security or Global Securities, subject to the procedures of DTC; or

 (iv) an Event of Default has occurred and is continuing and the Registrar has received a request from DTC for the issuance
of Definitive Securities in exchange for such Global Security or Global Securities; 
 DTC 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, Definitive Securities in an aggregate principal amount equal to the aggregate principal amount of such Global Security or Global Securities. Such Definitive Securities shall be registered in such names as DTC 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 2.09(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. 
 Section 2.10. Special Transfer Provisions. Unless a Security is no longer a Restricted Security, the following provisions shall apply to any
sale, pledge or other transfer of such Securities: 
 (a) Transfer of Securities to a QIB. The following provisions shall apply with
respect to the registration of any proposed transfer of Securities to a QIB: 
 (i) If the Securities to be transferred
consist of a beneficial interest in the Global Securities, the transfer of such interest may be effected only through the book-entry systems maintained by DTC. 
 (ii) If the Securities to be transferred consist of Definitive Securities, the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on the form of Security stating (or has otherwise advised the Company and the Registrar in writing) that the sale has been made in compliance with the provisions of Rule 144A
to a transferee who has signed a certification stating or has otherwise advised the Company and the Registrar in writing that: 
  

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 (A) it is purchasing the Securities for its own account or an account with respect to
which it exercises sole investment discretion; 
 (B) it and any such account is a QIB within the meaning of Rule 144A;

 (C) it is aware that the sale to it is being made in reliance on Rule 144A; 
 (D) it acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has
determined not to request such information; and 
 (E) it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided by Rule 144A. 
 (b) General. By its acceptance of any
Security bearing the Restricted Securities Legend, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and agrees that it will transfer such Security only as provided in this
Indenture. The Registrar shall not register a transfer of any Security unless such transfer complies with the restrictions on transfer of such Security set forth in this Indenture. The Registrar shall be entitled to receive and rely on written
instructions from the Company verifying that such transfer complies with such restrictions on transfer. In connection with any transfer of Securities, each Holder agrees by its acceptance of the Securities to furnish the Registrar or the Company
such certifications, legal opinions or other information as either of them may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or a transaction not subject to, the registration requirements of the
Securities Act; provided that the Registrar shall not be required to determine (but may rely on a determination made by the Company with respect to) the sufficiency of any such certifications, legal opinions or other information. 

The Registrar shall retain copies of all certifications, letters, notices and other written communications received pursuant to Section 2.09
hereof or this Section 2.10. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

 Section 2.11. Mutilated, Destroyed, Lost or Stolen Securities. If a mutilated Security is surrendered to the Registrar or if
the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if 

  

 24 

 
the requirements of Section 8-405 of the UCC are met, such that the Holder (a) notifies the Company or the Trustee within a reasonable time after
such Holder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior to receiving such notification, (b) makes such request to the Company or Trustee prior to the Security being acquired by a
protected purchaser as defined in Section 8-303 of the UCC and (c) satisfies any other reasonable requirements of the Trustee. Such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect
the Company, the Trustee, the Paying Agent and the Registrar from any loss or liability which any of them may suffer if a Security is replaced and subsequently presented or claimed for payment, and, 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 Company Order the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in lieu of any
such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount, bearing a number not contemporaneously outstanding. 
 In case any such mutilated, destroyed, lost or stolen Security has become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. 
 Upon the issuance of any new Security under this Section 2.11, the Company may require the payment by the Holder 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) in connection therewith. 
 Every new Security issued pursuant to this Section 2.11 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company and any other
obligor upon the Securities of the same series, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and ratably with any and all
other Securities of the same series duly issued hereunder. 
 The provisions of this Section 2.11 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 2.12. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this
Section 2.12 as not outstanding. A Security does not cease to be outstanding in the event the Company or a Subsidiary of the Company holds the Security; provided, however,  

  

 25 

 
that (i) for purposes of determining which Securities are outstanding for consent or voting purposes hereunder, the provisions of Section 13.06
shall apply and (ii) in determining whether the Trustee shall be protected in making a determination whether the Holders of the requisite principal amount of outstanding Securities of the applicable series are present at a meeting of Holders of
Securities of such series for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote,
only Securities which a Trust Officer of the Trustee actually knows to be held by the Company or an Affiliate of the Company shall not be considered outstanding. 
 If a Security is replaced or paid pursuant to Section 2.11, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a bona fide
purchaser. 
 If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a Fundamental Change Purchase Date or
at the applicable Stated Maturity, money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be repurchased or maturing, as the case may be, and the Paying Agent is not prohibited
from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue. 
 Section 2.13. Temporary Securities. In the event that Definitive Securities are to be issued under the terms of this Indenture, until such
Definitive Securities are ready for delivery, the Company may prepare and upon receipt of a Company Order the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of Definitive Securities but may
have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and upon receipt of a Company Order the Trustee shall authenticate Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Company for that purpose and such exchange shall be without charge
to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee shall authenticate and make available for delivery in exchange therefor, one or more Definitive Securities of the same
series representing an equal principal amount of such Securities. Until so exchanged, the Holder of such temporary Securities shall in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Securities.

 Section 2.14. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and
the Paying Agent 

  

 26 

 
shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel
all Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies and customary procedures including delivery of a certificate (a “Certificate
of Destruction”) describing such Securities disposed (subject to the record retention requirements of the Exchange Act) or deliver canceled Securities to the Company pursuant to written direction by an Officer. The Company may not issue new
Securities to replace Securities it has paid for or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange. 
 At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, repurchased or canceled, such Global Security shall be returned by DTC to the Trustee
for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global
Security, repurchased or canceled, the principal amount of Securities of the applicable series represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction. 
 Section 2.15. Payment of Interest; Defaulted Interest. Interest (including any Additional Interest and Reporting 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 such Security (or one or more predecessor Securities) is registered at the close of business on the Regular Record Date for such payment at the office or agency of the Company maintained for such
purpose pursuant to Section 2.05. 
 Any interest on any Security which is payable, but is not paid when the same becomes due and
payable and such nonpayment continues for a period of 30 days, shall forthwith cease to be payable to the Holder on the Regular Record Date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities of such series (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Company at its election, in each case, as provided in clause (a) or
(b) below: 
 (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in
writing of the 

  

 27 

 
amount of Defaulted Interest proposed to be paid on each Security and the date (not less than 30 days after such notice) of the proposed payment (the
“Special Interest Payment Date”), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date, and in the name and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 13.02, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b). 
 (b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable
by the Trustee. 
 Subject to the foregoing provisions of this Section 2.15, each Security delivered under this Indenture upon
registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest (including any Additional Interest and Reporting Interest) accrued and unpaid, and to accrue, which were carried by such other
Security. 
 Section 2.16. Computation of Interest. Interest (including any Additional Interest but excluding Reporting Interest)
on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. 
 Section 2.17. CUSIP and ISIN Numbers.
The Company in issuing the Securities may use “CUSIP” and “ISIN” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of repurchase as a convenience to
Holders; provided, however, that any such notice may state that 

  

 28 

 
no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a repurchase and that
reliance may be placed only on the other identification numbers printed on the Securities, and any such repurchase shall not be affected by any defect in or omission of such CUSIP or ISIN numbers. The Company shall promptly notify the Trustee in
writing of any change in the CUSIP and ISIN numbers. 
 ARTICLE 3 
 COVENANTS 
 Section 3.01. Payment of Securities. The Company shall promptly pay the principal of
and interest (including any Additional Interest and Reporting Interest) on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest (including any Additional Interest and Reporting
Interest) shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture immediately available funds sufficient to pay all principal and interest (including any Additional Interest
and Reporting Interest) then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture. 
 The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments
of interest at the same rate to the extent lawful. 
 Notwithstanding anything to the contrary contained in this Indenture, the Company may,
to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest (including any Additional Interest and Reporting Interest) payments hereunder.

 Section 3.02. Financial Statements. In the event and for so long as the Company is not subject to Section 13 or 15(d) of
the Exchange Act, it shall file with the Trustee and cause to be mailed to each Holder at such Holder’s registered address, upon the request of any Holder or beneficial holder of the Securities or the Common Stock issued upon conversion
thereof, and make available to such Holder or beneficial holder of such Securities or Common Stock in connection with any sale thereof and any prospective purchaser of Securities or Common Stock designated by such Holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act and it will take such further action as any Holder or beneficial holder of such Securities or Common Stock may reasonably request, all to the extent required from time to time
to enable such Holder or beneficial holder to sell its Securities or Common Stock without registration under the Securities Act within the limitation of the exemption provided by Rule 144A, as such Rule may be amended from time to time. 

 

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 Delivery of such reports, information and documents to the Trustee is for informational purposes only and
the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officers’ Certificates). The Trustee is under no duty to examine such reports, information or documents to ensure compliance with the provisions of this Indenture or to ascertain the
correctness or otherwise the of the information or the statements contained therein. The Trustee is entitled to assume such compliance and correctness unless a Trust Officer of the Trustee is informed otherwise. 
 Section 3.03. Maintenance of Office or Agency. The Company will maintain an office or agency where the Securities may be presented or
surrendered for payment, where, if applicable, the Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company
will give prompt written notice to the Trustee of 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 or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or served at the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. 
 The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or
all such purposes and may from time to time rescind any such designation. The Company will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency. 

Section 3.04. Corporate Existence. Except as otherwise provided in Article 4, the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect (i) its corporate existence and (ii) the material rights (charter and statutory), licenses and franchises of the Company, except, in the case of clause (ii), to the extent the Board of
Directors of the Company otherwise reasonably determines it no longer desirable. 
 Section 3.05. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the
income, profits or property of the Company or any Subsidiary and (ii) all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a material liability or lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability 

  

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or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of
management of the Company), are being maintained in accordance with GAAP or where the failure to effect such payment will not be disadvantageous to the Holders. 
 Section 3.06. Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate, one of the signers of which
shall be the principal executive officer, principal financial officer or principal accounting officer of the Company, 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 Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during such period. If they do, the certificate shall describe each Default or Event of Default, its status and the
action the Company is taking or proposes to take with respect thereto. The Company also shall comply with TIA § 314(a)(4). Except with respect to receipt of payments on the Securities and any Default or Event of Default information delivered to
it pursuant to this Section 3.06, the Trustee shall have no duty to review, ascertain or confirm the Company’s compliance with, or the breach of any representation, warranty or covenant made in this Indenture. 
 Section 3.07. Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. 
 Section 3.08. Statement by Officers as to Default. The Company shall deliver to the Trustee, as soon as possible and in any event within 30 days after the Company becomes aware of the occurrence of any Event of Default or an
event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate setting forth the details of such Event of Default or Default, its status and the action which the Company proposes to take
with respect thereto. 
 Section 3.09. Additional Interest. If Additional Interest is payable by the Company pursuant to the
Registration Rights Agreement, the Company shall deliver to the Trustee an Officers’ Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is
payable. Unless and until a Trust Officer of the Trustee receives such a certificate, the Trustee may assume without inquiry that no Additional Interest is payable. If the Company has paid Additional Interest directly to the persons entitled to it,
the Company shall deliver to the Trustee an Officers’ Certificate setting forth the particulars of such payment. 
  

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 Section 3.10. SEC Reports. The Company shall file with the Trustee and the SEC, and transmit
to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act, provided that any such information, documents or reports required to be filed by the Company with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 30 days after the same is required to be filed by the Company with the SEC. 
 ARTICLE 4 
 SUCCESSOR COMPANY 
 Section 4.01. Consolidation, Merger and Sale of Assets. The Company shall not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to, another Person, unless: 
 (a) the resulting, surviving or transferee Person (the
“Successor Company”) if not the Company shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Securities, this Indenture and, to
the extent that it is otherwise still operative, the Registration Rights Agreement; 
 (b) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be continuing; and 
 (c) the Company shall have delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel, stating that such consolidation, merger or transfer and such supplemental indenture, if any, comply with this Indenture. 
 For purposes of this Section 4.01, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a
consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. 
 The
Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, but, in the case of a lease of all or substantially all its assets, the Company will not be released from the
obligation to pay the principal of and interest (including any Additional Interest and Reporting Interest) on the Securities. 
  

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 ARTICLE 5 
 [RESERVED] 
 ARTICLE 6 
 DEFAULTS AND REMEDIES 
 Section 6.01. Events of Default. Each of the following is an “Event of Default”: 
 (a) default in any
payment of interest or Additional Interest (as required by the Registration Rights Agreement) on any Security when the same becomes due and payable, and such default continues for a period of 30 days; 
 (b) default in the payment of the principal of any Security when the same becomes due and payable at its Stated Maturity, upon required repurchase, upon
declaration or otherwise; 
 (c) failure by the Company to comply with its obligation to convert the Securities in accordance with this
Indenture, upon exercise of a Holder’s conversion right; 
 (d) failure by the Company to give a Fundamental Change Notice to Holders or
notice to Holders required pursuant to Section 12.01(a)(iv), in each case when due; 
 (e) failure by the Company to comply with any of
its obligations under Article 4; 
 (f) default in the performance of or a breach by the Company of any other covenant or agreement in this
Indenture or under the Securities (other than those referred to in Section 6.01(a) through (e) and Section 6.01(g) through (i)) and such default continues for 90 days after the notice specified below; 
 (g) default by the Company or any Subsidiary with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by
which there may be secured or evidenced any indebtedness for money borrowed in excess of $15,000,000 in the aggregate of the Company and/or any such Subsidiary, whether such indebtedness now exists or shall hereafter be created, (i) resulting
in such indebtedness becoming or being declared due and payable or (ii) constituting failure to pay the principal of any such debt when due and payable at the Stated Maturity, upon required repurchase, upon declaration or otherwise; 

 

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

 (i) commences a voluntary case or proceeding; 
 (ii) consents to the entry of judgment, decree or order for relief against it in an involuntary case or proceeding; 
 (iii) consents to the appointment of a Custodian of it or for any substantial part of its property; 
 (iv) makes a general assignment for the benefit of its creditors; 
 (v) consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it; 
 (vi) takes any corporate action to authorize or effect any of the foregoing; or 
 (vii) takes any comparable action under any foreign laws relating to insolvency; 
 (i) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 
 (i) is for relief against the Company or any Significant Subsidiary in an involuntary case; 
 (ii) appoints a Custodian of the Company for all or substantially all of the Company’s or any Significant Subsidiary’s property;
or 
 (iii) orders the winding up or liquidation of the Company or Significant Subsidiary; 
 and, in each case, the order or decree or relief remains unstayed and in effect for 90 days; or 
 (j) there has been entered in a court of competent jurisdiction a final judgment for the payment of $15,000,000 or more (excluding any amounts covered by
insurance) rendered against the Company or any Significant Subsidiary, which judgment is not discharged or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or
(ii) the date on which all rights to appeal have been extinguished. 
  

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 The foregoing will constitute Events of Default whatever the reason for any such Event of Default and
whether it is voluntary or involuntary or is 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. 
 Notwithstanding the foregoing, a Default under clause (f) of this Section 6.01 will not constitute an Event of Default until the Trustee or the
Holders of 25% or more in principal amount of the outstanding Securities notify the Company of the Default in writing and the Company does not cure such Default within the time specified in clause (f) of this Section 6.01 after receipt of
such notice. 
 Section 6.02. Acceleration. (a) If an Event of Default (other than an Event of Default specified in
Section 6.01(h) or 6.01(i) above) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in outstanding principal amount of the outstanding Securities by notice to the Company and the Trustee, may, and
the Trustee at the request of such Holders shall, declare the principal of and accrued and unpaid interest, if any, and Additional Interest and Reporting Interest, if any, on all the Securities to be due and payable. Upon such a declaration, such
principal, premium, if any, and accrued and unpaid interest and Additional Interest and Reporting Interest, if any, shall be due and payable immediately. If an Event of Default specified in Section 6.01(h) or 6.01(i) above occurs and is
continuing, the principal of and accrued and unpaid interest, if any, and Additional Interest and Reporting Interest, if any, on all the Securities outstanding shall be immediately due and payable with no further action by the Trustee or the
Holders. 
 (b) Notwithstanding the foregoing, if so elected by the Company, the sole remedy for an Event
of Default relating to the failure to comply with Section 3.10 hereof or Section 314(a)(1) of the Trust Indenture Act, will for the first sixty (60) days after the occurrence of such an Event of Default consist exclusively of the
right to receive additional interest (the “Reporting Interest”) on the Securities of each series equal to 0.25% of the principal amount of the Securities of such series. The Reporting Interest will be in addition to any Additional
Interest that may accrue pursuant to Section 3.09. The Reporting Interest will accrue on all outstanding Securities from and including the date on which an Event of Default relating to a failure to comply with the reporting obligations herein
first occurs to, but not including, the sixtieth (60th) day thereafter. On the sixtieth (60th) day after such Event of Default (if the Event of Default relating to the reporting obligations is not cured or waived
prior to such sixtieth (60th) day), the Reporting Interest will cease to accrue and the Securities will be
subject to acceleration as provided above. The foregoing provisions in this Section 6.02(b) will not affect the rights of Holders of Securities in the event of the occurrence of any other Event of Default. In the event the Company does not
elect to pay the 

  

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Reporting Interest upon an Event of Default in accordance with this paragraph, the Securities will be subject to acceleration as provided in
Section 6.02(a). 
 (b) In order to elect to pay the Reporting Interest as the sole remedy during the first sixty (60) days after
the occurrence of an Event of Default relating to the failure to comply with the reporting obligations in accordance with the immediately preceding paragraph, the Company must (i) notify all Holders of Securities and the Trustee and Paying
Agent of such election and pay such Reporting Interest on or before the close of business on the date on which such Event of Default occurs and (ii) upon the failure to timely give such Holders or pay such Reporting Interest, the Securities
will be immediately subject to acceleration as provided in Section 6.02(a). 
 Section 6.03. Other Remedies. If an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest (including any Additional Interest and Reporting Interest) on the Securities or to enforce the performance of any
provision of the Securities or this Indenture. 
 The Trustee may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in
the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. 
 Section 6.04. Waiver of
Past Defaults. The Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee may (a) waive, by their consent (including, without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Securities), an existing Default or Event of Default and its consequences except (i) a Default or Event of Default in the payment of the principal of or interest (including any Additional Interest and
Reporting Interest) on a Security or (ii) a Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected and (b) rescind any such acceleration with respect
to the Securities and its consequences if (i) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (ii) all existing Events of Default, other than the nonpayment of the principal of and
interest (including any Additional Interest and Reporting Interest) on the Securities that have become due solely by such declaration of acceleration, have been cured or waived. When a Default or Event of Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right. 
  

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 Section 6.05. Control by Majority. The Holders of a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or, if the Trustee, being advised by counsel, determines that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors or trustees, executive
committee, or a trust committee of directors or trustees and/or Trust Officers shall determine that the action or proceeding so directly would involve the Trustee in personal liability or expense for which it is not reasonably compensated, or,
subject to Sections 7.01 and 7.02, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. 
 Section 6.06. Limitation on Suits. Subject to
Section 6.07, a Holder may not pursue any remedy with respect to this Indenture or the Securities unless: 
 (a) such Holder has
previously given to the Trustee written notice stating that an Event of Default is continuing; 
 (b) Holders of at least 25% in principal
amount of the outstanding Securities have requested that the Trustee pursue the remedy; 
 (c) such Holders have offered to the Trustee
security or indemnity reasonably satisfactory to it against any loss, liability or expense to be incurred in compliance with such request; 
 (d) the Trustee has not complied with such request within 60 days after receipt of the request and the offer of security or indemnity; and 
 (e) the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period. 
 A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. 
 Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture (including, without limitation,
Section 6.06), the right of any Holder to receive payment of principal of or interest (including any Additional Interest and Reporting Interest) on the Securities held by such Holder, on or after the respective due dates expressed in the
Securities, or to bring 

  

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suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 Section 6.08. Collection Suit by Trustee. If an Event of Default specified in clauses (a) or (b) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest (including any
Additional Interest and Reporting Interest) to the extent lawful) and the amounts provided for in Section 7.07. 
 Section 6.09.
Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company, its Subsidiaries or its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may be entitled and empowered to participate as a member of any official committee of creditors appointed in such matter, and may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due to the Trustee under Section 7.07. 
 Section 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in
the following order: 
 FIRST: to the Trustee for amounts due under Section 7.07; 
 SECOND: to Holders for amounts due and unpaid on the Securities for principal and interest (including any Additional Interest and
Reporting Interest), ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and 
 THIRD: to the Company. 
 The
Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the
payment date and amount to be paid. 
  

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 Section 6.11. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted
a proceeding to enforce any right or remedy under this Indenture and the proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the Holder, then, subject to any determination in the
proceeding, the Company, the Trustee, any Subsidiaries and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, the Trustee, any Subsidiaries and the
Holders will continue as though no such proceeding had been instituted. 
 Section 6.12. Undertaking of Costs. In any suit for
the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.12 does not apply to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in outstanding principal amount of the
Securities. 
 ARTICLE 7 
 TRUSTEE 
 Section 7.01. Duties of Trustee. (a) The Trustee, prior to the occurrence of an Event of
Default with respect to the Securities and after the curing and waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the
conduct of such Person’s own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any
of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against loss, liability or expense that might be incurred in compliance with such request or direction. 
 (b) Except during the continuance of an Event of Default: 
 (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

  

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 (ii) 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, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates,
opinions or orders which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but
need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). 
 (c) The Trustee may not be
relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: 
 (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01; 
 (ii) the Trustee
shall not be liable for any error of judgment made in good faith by a Trust Officer of the Trustee unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and 
 (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05. 
 (d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01. 
 (e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. 
 (f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law. 
 (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. 
 (h) Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to the provisions of the TIA. 
  

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 (i) 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. 
 Section 7.02. Rights of Trustee. Subject to
Section 7.01: 
 (a) The Trustee may conclusively rely on any document (whether in its original or facsimile form) reasonably 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. The Trustee shall receive and retain financial reports and statements of the Company as provided
herein, but shall have no duty to review or analyze such reports or statements to determine compliance under covenants or other obligations of the Company. 
 (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officers’ Certificate or Opinion of Counsel. 
 (c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due care. 
 (d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence. 
 (e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. 
 (f) The Trustee shall not be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not
limited to, loss of profit) resulting from actions taken in good faith and which the Trustee believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence. 
 (g) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, Securities Custodian and other Person employed to act hereunder. 
  

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 (h) The Trustee may request that the Company deliver a certificate setting forth the names of individuals
and/or titles of Officers authorized at such time to take specified actions pursuant to this Indenture. 
 (i) The Trustee shall not be
deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the corporate trust
office of the Trustee, and such notice references the Securities and this Indenture. 
 (j) The Trustee shall not be required to give any
bond or surety in respect of the execution of the trusts and powers under this Indenture. 
 (k) The Trustee shall not be responsible or
liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes;
fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer hardware or software or communication services; accidents; labor disputes; acts of civil or military
authorities and governmental action. 
 Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other
capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. In addition, the Trustee shall be permitted to engage in transactions with the Company; provided, however, that if the Trustee acquires any conflicting interest
the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest, (ii) apply to the SEC for permission to continue acting as Trustee or (iii) resign. 
 Section 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities, shall not be accountable for the Company’s use of the proceeds from the Securities, shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and
shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication. 
 Section 7.05. Notice of Defaults. If a Default or Event of Default occurs and is continuing and if a Trust Officer of the Trustee has actual
knowledge thereof, the Trustee shall mail by first class mail to each Holder at the address set 

  

 42 

 
forth in the Securities Register notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of or interest (including any Additional Interest and Reporting Interest) on any Security (including payments pursuant to the optional redemption or required repurchase provisions of such Security, if any), the
Trustee may withhold the notice if and so long as its board of directors, a committee of its board of directors or a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders. 
 Section 7.06. Reports by Trustee to Holders. As promptly as practicable after each May 15 beginning with the May 15 following the
date of this Indenture, and in any event prior to July 1 in each year, the Trustee shall mail to each Holder a brief report dated as of such May 15 that complies with TIA § 313(a), if required by such TIA § 313(a). The Trustee
also shall comply with TIA § 313(b). The Trustee shall also transmit by mail all reports required by TIA § 313(c). 
 Section 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the Company and the Trustee shall from time to
time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. In addition to the compensation the Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it. Such expenses shall include the reasonable compensation and out-of-pocket expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts. The Company shall indemnify
the Trustee against any and all loss, liability, damages, claims or expense (including reasonable attorneys’ fees and expenses) incurred by it without negligence or bad faith on its part in connection with the administration of this trust and
the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture (including this Section 7.07) and of defending itself against any claims (whether asserted by any Holder, the Company or otherwise). The
Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee
shall provide reasonable cooperation at the Company’s expense in the defense. The Trustee may have separate counsel and the Company shall pay the fees and expenses of such counsel, provided that the Company shall not be required to pay such
fees and expenses if it assumes the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of interest between the Company and the Trustee in connection with such defense. The Company need not
reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith. 
  

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 To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a lien
prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest (including any Additional Interest and Reporting Interest) on particular Securities. Such
lien shall survive the satisfaction and discharge of this Indenture. The Trustee’s right to receive payment of any amounts due under this Section 7.07 shall not be subordinate to any other unsecured liability or debt of the Company.

 The Company’s payment obligations pursuant to this Section 7.07 shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.01(h) and 6.01(i) with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law. 
 Section 7.08. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if: 
 (a) the Trustee fails to comply with Section 7.10; 
 (b) the Trustee is adjudged bankrupt or insolvent;

 (c) a receiver or other public officer takes charge of the Trustee or its property; or 
 (d) the Trustee otherwise becomes incapable of acting. 
 If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists
in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. 
 A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. 
  

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 If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Securities may petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a successor Trustee. 
 If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any Holder
may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 
 Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. 
 Section 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all
its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. 
 In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at
that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; provided that the
right to adopt the certificate of authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor Trustee shall only apply to its successor or successors by merger, consolidation or conversion. 
 Section 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA § 310(a). The Trustee shall
have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the
operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA §
310(b)(1) are met. 
 Section 7.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA §
311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated. 
  

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 ARTICLE 8 
 DISCHARGE OF INDENTURE 
 Section 8.01. Discharge of
Liability on Securities. When (1) the Company shall deliver to the Registrar for cancellation all Securities theretofore 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 theretofore canceled, or (2) all the Securities not theretofore canceled or delivered to the Registrar for cancellation shall have (a) been deposited for
conversion (after all related Observation Periods have elapsed) and the Company shall deliver to the Holders cash and shares of Common Stock, as applicable, sufficient to pay all amounts owing in respect of all Securities (other than any Securities
which 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 theretofore canceled or delivered to the Registrar for cancellation or
(b) become due and payable on the Stated Maturity or Fundamental Change Purchase Date, as applicable, and the Company shall deposit with the Trustee cash, and shares of Common Stock (in respect of conversions), as applicable, sufficient to pay
all amounts owing in respect of all Securities (other than any Securities which 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
theretofore canceled or delivered to the Registrar for cancellation, including the principal amount and interest (including any Additional Interest and Reporting Interest) accrued and unpaid to such Stated Maturity or Fundamental Change Purchase
Date, as the case may be, and if in either case (1) or (2) the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture with respect to the Securities 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 from the Trustee payments of the amounts then due, including
interest (including any Additional Interest and Reporting Interest) with respect to the Securities and the other rights, duties and obligations of Holders, as beneficiaries hereof solely with respect to the amounts, if any, so deposited with the
Trustee; and (iii) the rights, obligations and immunities of the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar under this Indenture with respect to the Securities), and the Trustee, on demand of the Company
accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 8.03 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with
respect to the Securities; however, the Company hereby agrees to reimburse the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar for any costs or expenses thereafter reasonably and properly incurred by the Trustee,
Authenticating Agent, Paying Agent, Conversion Agent and Registrar and to compensate the Trustee, Authenticating 

  

 46 

 
Agent, Paying Agent, Conversion Agent and Registrar for any services thereafter reasonably and properly rendered by the Trustee, Authenticating Agent, Paying
Agent, Conversion Agent and Registrar in connection with this Indenture with respect to the Securities. 
 Section 8.02.
Reinstatement. If the Trustee or the Paying Agent is unable to apply any money to the Holders entitled thereto by reason of any order or judgment of any court of governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s obligations under this Indenture with respect to the Securities and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or the
Paying Agent is permitted to apply all such money in accordance with this Indenture and the Securities to the Holders entitled thereto; provided, however, that if the Company makes any payment of principal amount of or interest (including any
Additional Interest and Reporting Interest) on any Securities following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee
or Paying Agent. 
 Section 8.03. Officers’ Certificate; Opinion of Counsel. Upon any application or demand by the Company
to the Trustee to take any action under Section 8.01, the Company shall furnish to the Trustee an Officers’ Certificate or Opinion of Counsel stating that all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with. 
 ARTICLE 9 
 AMENDMENTS 
 Section 9.01. Without Consent of Holders. The Company, and the
Trustee may amend this Indenture or the Securities without notice to or consent of any Holder: 
 (a) to cure any ambiguity, omission, defect
or inconsistency; 
 (b) to comply with Article 4 in respect of the assumption by a Successor Company of an obligation of the Company under
this Indenture; 
 (c) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided,
however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code; 

(d) to add guarantees with respect to the Securities; 
  

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 (e) to secure the Securities; 
 (f) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company;

 (g) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA; 
 (h) to make any change that does not materially adversely affect the rights of any Holder; or 
 (i) to conform the provisions of this Indenture to the “Description of Notes” section of the Offering Memorandum. 
 After an amendment under this Section 9.01 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01. 
 Section 9.02. With Consent of Holders. The Company, and the Trustee may amend this Indenture or the Securities without notice to any Holder but with the written or electronic consent of the Holders of at
least a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) and past Defaults or compliance with the
provisions of this Indenture may be waived with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding (including, without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Securities). However, without the consent of each Holder affected, an amendment or waiver may not: 
 (a)
reduce the amount of Securities whose Holders must consent to an amendment; 
 (b) reduce the rate of or extend the stated time for payment
of interest, including Additional Interest and Reporting Interest, on any Security; 
 (c) reduce the principal of or extend the Stated
Maturity of any Security; 
 (d) make any change that adversely affects the conversion rights of any Securities; 
 (e) reduce the Fundamental Change Purchase Price payable upon repurchase of any Security or amend or modify in any manner adverse to holders of the
Securities the Company’s obligation to make such payments, whether through an amendment to or waiver of a provision in the covenants, definitions or otherwise; 
  

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 (f) make any Security payable in money other than that stated in the Security (it being understood that
all references to cash in this Indenture and the Securities are to U.S. legal tender); 
 (g) impair the right of any Holder to receive
payment of principal of and interest (including any Additional Interest and Reporting Interest) on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such
Holder’s Securities; or 
 (h) make any change to the amendment provisions which require each Holder’s consent or to the waiver
provisions. 
 It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment or waiver under this Indenture by any Holder of the Securities given in connection with a tender or exchange of such
Holder’s Securities will not be rendered invalid by such tender or exchange. 
 After an amendment under this Section 9.02 becomes
effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.

 Section 9.03. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Securities shall
comply with the TIA as then in effect. 
 Section 9.04. Revocation and Effect of Consents and Waivers. A consent to an amendment
or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is
not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective or otherwise in accordance with any related solicitation documents. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.01 or 9.02, as applicable. 
  

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 The Company may, but shall not be obligated to, fix a record date for the purpose of determining the
Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who
were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be
Holders after such record date. No such consent shall become valid or effective more than 120 days after such record date. 
 Section 9.05. Notation on or Exchange of Securities. If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation
on the Security regarding the changed terms and return it to the Holder. Alternatively, 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 to issue a new Security shall not affect the validity of such amendment. 
 Section 9.06. Trustee to Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive and (subject to Sections 7.01 and 7.02) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture. 
 ARTICLE 10 
 [RESERVED] 
 ARTICLE 11

 PURCHASE AT THE OPTION OF HOLDER
UPON A FUNDAMENTAL CHANGE 
 Section 11.01. Purchase at the Option of the
Holder Upon a Fundamental Change. If a Fundamental Change shall occur at any time, each Holder shall have the right, at such Holder’s option, to require the Company to purchase any or all of such Holder’s Securities on a date specified
by the Company that is no later than 35 calendar days after the date of the Company Notice of the occurrence of such Fundamental Change (subject to extension to comply with applicable law, as provided in Section 11.03(d)) (the
“Fundamental Change Purchase Date”). The 

  

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Securities shall be repurchased in multiples of $1,000 of the principal amount. The Company shall purchase such Securities at a price (the
“Fundamental Change Purchase Price”), which shall be paid in cash, equal to 100% of the principal amount of the Securities to be purchased plus accrued and unpaid interest, including any Additional Interest and Reporting Interest,
to but excluding the Fundamental Change Purchase Date, unless the Fundamental Change Purchase Date is between a Regular Record Date and the interest payment date to which it relates, in which case the Fundamental Change Purchase Price shall equal
100% of the principal amount of Securities to be purchased, and accrued and unpaid interest, including Additional Interest and Reporting Interest, shall be paid to the Holder of record on the Regular Record Date. 
 (a) Notice of Fundamental Change. The Company, or at its request (which must be received by the Paying Agent
at least three Business Days (or such lesser period as agreed to by the Paying Agent) prior to the date the Paying Agent is requested to give such notice as described below) the Paying Agent, in the name of and at the expense of the Company, shall
mail to all Holders and the Trustee a Company Notice of the occurrence of a Fundamental Change and of the purchase right arising as a result thereof, including the information required by Section 11.03(a) hereof, on or before the 20th calendar day after the occurrence of such Fundamental Change. The Company shall promptly furnish to the Paying Agent a copy of
such Company Notice. 
 (b) Exercise of Option. For a Security to be so purchased at the option of the Holder, the Paying Agent must
receive such Security duly endorsed for transfer, together with a written notice of purchase (a “Fundamental Change Purchase Notice”) in the form entitled “Form of Fundamental Change Purchase Notice” attached to the
Security duly completed, on or before the Business Day immediately preceding the Fundamental Change Purchase Date, subject to extension to comply with applicable law. The Fundamental Change Purchase Notice shall state: 
 (i) if certificated, the certificate numbers of the Securities which the Holder shall deliver to be purchased; 
 (ii) the portion of the principal amount of the Securities which the Holder shall deliver to be purchased, which portion must be $1,000
in principal amount or a multiple thereof; and 
 (iii) that such Securities shall be purchased as of the Fundamental Change
Purchase Date pursuant to the terms and conditions specified in paragraph 4 of the Securities and in this Indenture. 
  

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 (c) Procedures. The Company shall purchase from a Holder, pursuant to this Section 11.01,
Securities if the principal amount of such Securities is $1,000 or a multiple of $1,000 if so requested by such Holder. 
 Any purchase by
the Company contemplated pursuant to the provisions of this Section 11.01 shall be consummated by the delivery of the Fundamental Change Purchase Price to be received by the Holder promptly following the later of the Fundamental Change Purchase
Date or the time of book-entry transfer or delivery of the Securities. 
 Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Fundamental Change Purchase Notice contemplated by this Section 11.01 shall have the right at any time prior to the close of business on the Business Day prior to the Fundamental Change Purchase Date to
withdraw such Fundamental Change Purchase Notice (in whole or in part) by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 11.03(b). 
 The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Purchase Notice or written notice of withdrawal
thereof. 
 On or before 11:00 a.m. (New York City time) on the Fundamental Change Purchase Date, the Company shall deposit with the Paying
Agent (or if the Company or an Affiliate of the Company is acting as the Paying Agent, shall segregate and hold in trust) cash sufficient to pay the aggregate Fundamental Change Purchase Price of the Securities to be purchased pursuant to this
Section 11.01. Payment by the Paying Agent of the Fundamental Change Purchase Price for such Securities shall be made promptly following the later of the Fundamental Change Purchase Date or the time of book-entry transfer or delivery of such
Securities. If the Paying Agent holds, in accordance with the terms of this Indenture, cash sufficient to pay the Fundamental Change Purchase Price of such Securities on the Fundamental Change Purchase Date, then, on and after such date, such
Securities shall cease to be outstanding and interest (including any Additional Interest and Reporting Interest), on such Securities shall cease to accrue, whether or not book-entry transfer of such Securities is made or such Securities are
delivered to the Paying Agent, and all other rights of the Holder shall terminate (other than the right to receive the Fundamental Change Purchase Price and previously accrued and unpaid interest (including any Additional Interest and Reporting
Interest), upon delivery or transfer of the Securities). Nothing herein shall preclude any withholding tax required by law. 
 The Company
shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all cash held by the Paying Agent for the payment of the 

  

 52 

 
Fundamental Change Purchase Price and shall notify the Trustee of any default by the Company in making any such payment. If the Company or an Affiliate of
the Company acts as Paying Agent, it shall segregate the cash held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to deliver all cash held by it to the Trustee and to account for any
funds disbursed by the Paying Agent. Upon doing so, the Paying Agent shall have no further liability for the cash delivered to the Trustee. 
 Section 11.02. [Reserved].  
 Section 11.03. Further Conditions and Procedures for Purchase at the Option of
the Holder Upon a Fundamental Change.  
 (a) Notice of Fundamental Change. The Company shall
send notices (each, a “Company Notice”) to the Holders at their addresses shown in the Securities Register maintained by the Registrar, and delivered to the Trustee and Paying Agent, on or before the 20th calendar day after the occurrence of the Fundamental Change, as the case may be (each such date of delivery, a
“Company Notice Date”). Each Company Notice shall include a form of Fundamental Change Purchase Notice to be completed by a Holder and shall state: 
 (i) the applicable Fundamental Change Purchase Price; 
 (ii) if applicable, the Conversion Rate at the time of such notice and any expected adjustments to the Conversion Rate; 
 (iii) the applicable Fundamental Change Purchase Date and the last date on which a Holder may exercise its repurchase rights under
Section 11.01; 
 (iv) the name and address of the Paying Agent and the Conversion Agent; 
 (v) that Securities must be surrendered to the Paying Agent to collect payment of the Fundamental Change Purchase Price; 
 (vi) that Securities as to which a Fundamental Change Purchase Notice has been given may be converted only if the applicable Fundamental
Change Purchase Notice has been withdrawn in accordance with the terms of this Indenture; 
 (vii) that the Fundamental Change
Purchase Price for any Securities as to which a Fundamental Change Purchase Notice has been given and not withdrawn shall be paid by the Paying Agent promptly following the later of the Fundamental Change Purchase Date, or the time of book-entry
transfer or delivery of such Securities; 
  

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 (viii) the procedures the Holder must follow under Section 11.01 and
Section 11.03; 
 (ix) briefly, the conversion rights of the Securities; 
 (x) that, unless the Company defaults in making payment of such Fundamental Change Purchase Price on Securities covered by any Fundamental
Change Purchase Notice, interest (including any Additional Interest and Reporting Interest) will cease to accrue on and after the Fundamental Change Purchase Date; 
 (xi) the CUSIP or ISIN number of the Securities; 
 (xii) the procedures for withdrawing a Fundamental Change Purchase Notice; and 
 (xiii) the events causing a Fundamental Change and the date of the Fundamental Change. 
 Simultaneously with providing such Company Notice, the Company will publish a notice containing the information in such Company Notice in a newspaper of
general circulation in The City of New York or publish such information on its then existing website or through such other public medium as it may use at the time. 
 At the Company’s request, made at least three Business Days prior to the date upon which such notice is to be mailed, and at the Company’s expense, the Paying Agent shall give the Company Notice in the
Company’s name; provided, however, that, in all cases, the text of the Company Notice shall be prepared by the Company. 
 (b)
Effect of Fundamental Change Purchase Notice; Withdrawal; Effect of Event of Default. Upon receipt by the Company of the Purchase Notice or Fundamental Change Purchase Notice specified in Section 11.01(b), the Holder of the Securities in
respect of which such Fundamental Change Purchase Notice, was given shall (unless such Fundamental Change Purchase Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely the Fundamental Change
Purchase Price with respect to such Securities. Such Fundamental Change Purchase Price shall be paid by the Paying Agent to such Holder promptly following the later of (x) the Fundamental Change Purchase Date, with respect to such Securities
(provided that the conditions in this Article 11 have been satisfied) and (y) the time of delivery or book-entry transfer of such 

  

 54 

 
Securities to the Paying Agent by the Holder thereof in the manner required by Section 11.01. Securities in respect of which a Fundamental Change
Purchase Notice has been given by the Holder thereof may not be converted on or after the date of the delivery of such Fundamental Change Purchase Notice, unless such Fundamental Change Purchase Notice, has first been validly withdrawn as specified
in the following two paragraphs. 
 A Fundamental Change Purchase Notice, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent at any time prior to 5:00 p.m., New York City time, on the Business Day prior to the Fundamental Change Purchase Date, to which it relates, specifying: 
 (i) the series of Securities with respect to which such notice of withdrawal is being submitted; 
 (ii) the principal amount of the Securities with respect to which such notice of withdrawal is being submitted; 
 (iii) if certificated, the certificate number of the Securities in respect of which such notice of withdrawal is being submitted, or, if
not certificated, the written notice of withdrawal must comply with appropriate DTC procedures; and 
 (iv) the principal
amount, if any, of such Securities which remains subject to the original Fundamental Change Purchase Notice and which has been or shall be delivered for purchase by the Company. 
 There shall be no purchase of any Securities pursuant to Section 11.01 if an Event of Default has occurred and is continuing (other than a default
that is cured by the payment of the Fundamental Change Purchase Price). The Paying Agent shall promptly return to the respective Holders thereof any Securities (x) with respect to which a Fundamental Change Purchase Notice, has been withdrawn
in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default that is cured by the payment of the Fundamental Change Purchase Price) in which case, upon such return, the Fundamental
Change Purchase Notice with respect thereto shall be deemed to have been withdrawn. 
 (c) Securities Purchased in Part. Any
Securities that are to be purchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Company shall execute and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder of such Securities,
without 

  

 55 

 
service charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Securities so surrendered which is not purchased or redeemed. 
 (d) Covenant to
Comply with Securities Laws Upon Purchase of Securities. In connection with any offer to purchase Securities under Section 11.01, the Company shall, to the extent applicable, (a) comply with Rules 13e-4 and 14e-1 (and any successor
provisions thereto) under the Exchange Act, if applicable; (b) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, if applicable; and (c) otherwise comply with all applicable federal and state
securities laws so as to permit the rights and obligations under Section 11.01 to be exercised in the time and in the manner specified in Section 11.01. 
 (e) Repayment to the Company. The Trustee and the Paying Agent shall return to the Company any cash or property that remains unclaimed, as provided in paragraph 8 of the Securities, together with interest that
the Trustee or Paying Agent has expressly agreed in writing to pay, if any, that is held by them for the payment of a Fundamental Change Purchase Price, as the case may be; provided, however, that to the extent that the aggregate amount of
cash or property deposited by the Company pursuant to Section 11.01(c), exceeds the aggregate Fundamental Change Purchase Price, of the Securities or portions thereof which the Company is obligated to purchase as of the Fundamental Change
Purchase Date, then promptly on and after the Business Day following the Fundamental Change Purchase Date, the Trustee and the Paying Agent shall return any such excess to the Company together with interest that the Trustee or Paying Agent, as the
case may be, has expressly agreed in writing to pay, if any. 
 (f) Officers’ Certificate. At least five Business Days before the
Company Notice Date, the Company shall deliver an Officers’ Certificate to the Trustee specifying whether the Company desires the Trustee to give the Company Notice required by Section 11.03(a) herein. 
 ARTICLE 12 
 CONVERSION 
 Section 12.01. Conversion of Securities. (a) Right to Convert. Subject to the
procedures for conversion set forth in this Article 12, a Holder may convert its Securities at the Conversion Rate (i) prior to December 1, 2011, in the case of the 2012 Notes and December 1, 2013, in the case of the 2014 Notes, in
each case when any of the conditions specified below are met and during the related specified period, and (ii) at any time on or after December 1, 2011, in the case of the 2012 Notes and December 1, 2013, in the case of the 2014 Notes
and, in each case, on or prior to the close of business on the third Business Day immediately 

  

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preceding the applicable Stated Maturity. Whenever the Securities shall become convertible upon one or more of the conditions stated in clauses (i),
(ii) or (iv)(A) below, the Company or, at the Company’s request, the Trustee in the name and at the expense of the Company, shall notify the Holders of the event triggering such convertibility in the manner provided in
Section 13.02 and the Company shall also publicly announce such information by publication on the Company’s website or through such other public medium as it may use at such time. Whenever the Securities shall become convertible upon one
or more of the conditions stated in clauses (iv)(B) or (iv)(C), notice of the event triggering such convertibility shall be given in accordance with the provisions of Sections 11.01(a) and 11.03. Any notice so given shall be conclusively
presumed to have been duly given, whether or not the Holder receives such notice. 
 (i) Conversion Upon Satisfaction of
Sale Price Condition. A Holder may surrender all or a portion of its Securities of either series for conversion during any fiscal quarter (and only during such fiscal quarter) commencing after June 30, 2007 if the Last Reported Sale Price
for the Common Stock for at least 20 Trading Days during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter is greater than or equal to 130% of the Conversion Price in effect on such
last Trading Day. 
 (ii) Conversion Upon Satisfaction of Trading Price Condition. A Holder may surrender its
Securities of either series for conversion during the five Business Day period after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Securities of such
series, as determined following a request by a Holder in accordance with the procedures set forth in this Section 12.01(a)(ii), for each day of that period was less than 98% of the product of the Last Reported Sale Price of the Common Stock and
the applicable Conversion Rate. In connection with any conversion in accordance with this Section 12.01(a)(ii), the Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Securities of either series unless
requested by the Company; and the Company shall have no obligation to make such request unless a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Securities of either series would be less
than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. Promptly after receiving such evidence, the Company shall instruct the Bid Solicitation Agent to determine the Trading Price of the
Securities of such series beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Securities of such series is greater than or equal to 98% of the product of the Last Reported Sale
Price of the Common Stock and the applicable Conversion Rate. If the condition set 

  

 57 

 
forth in this Section 12.01(a)(ii) has been met, the Company shall so notify the Trustee and the Holders. If at any time after the condition set forth
in this Section 12.01(a)(ii) has been met, the Trading Price per $1,000 principal amount of the applicable Securities is greater than 98% of the product of the Last Reported Sale Price of Common Stock and the Conversion Rate for such date, the
Company shall so notify the Trustee and the Holders. 
 (iii) [Reserved]. 
 (iv) Conversion Upon Specified Corporate Transactions.  
 (A) If the Company (1) issues to all or substantially all holders of Common Stock rights entitling them to purchase, for a period
expiring within 60 days after the date of the distribution, shares of Common Stock at less than the average of the Last Reported Sale Price of a share of Common Stock for the 10 consecutive Trading Day period ending on the Trading Day preceding the
commencement of such issuance, or (2) distributes to all or substantially all holders of Common Stock assets, debt securities or rights to purchase securities of the Company, which distribution has a per share Fair Market Value, as reasonably
determined by the Company’s Board of Directors, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day preceding the declaration date for such distribution, then, in each case, the Company must notify the Holders,
in the manner provided in Section 13.02, at least 35 Scheduled Trading Days prior to the Ex-Dividend Date for such distribution. Once the Company has given such notice, Holders may surrender Securities for conversion at any time until the
earlier of 5:00 p.m., New York City time, on the Business Day immediately prior to such Ex-Dividend Date or the Company’s announcement that such distribution will not take place. 
 (B) If the Company is party to a transaction described in clause (ii) of the definition of Fundamental Change (without giving effect
to the proviso set forth in clause (ii) of such definition or to the proviso set forth in such definition relating to Publicly Traded Securities), the Company must notify Holders, in the manner provided in Section 13.02, at least 35
Scheduled Trading Days prior to the anticipated effective date for such transaction. Once the Company has given such notice, Holders may surrender Securities for conversion at any time until 35 calendar days after the actual effective date of such
transaction (or if such transaction also constitutes a Fundamental Change, the related Fundamental Change Purchase Date). 
  

 58 

 (C) If a Fundamental Change of the type described in clause (1) or (5) in the
definition thereof occurs, Holders may surrender Securities for conversion at any time beginning on the actual effective date of such Fundamental Change until and including the date which is 35 calendar days after the actual effective date of such
transaction or, if later, until the related Fundamental Change Purchase Date. 
 A Holder may convert a portion of the principal amount of Securities if the
portion is $1,000 or a multiple of $1,000. The cash payable, and the number of shares of Common Stock issuable, if any, upon conversion of a Security shall be determined as set forth in Section 12.01(c). 
 (b) Conversion Procedures. The following procedures shall apply to the conversion of Securities: 
 (i) In respect of a Definitive Security, a Holder must (A) complete and manually sign the conversion notice attached to the Security
(the “Conversion Notice”), or facsimile of such Conversion Notice; (B) deliver such Conversion Notice, which is irrevocable, and the Security to the Conversion Agent at the office maintained by the Conversion Agent for such
purpose; (C) to the extent any shares of Common Stock issuable upon conversion are to be issued in a name other than the Holder’s, furnish endorsements and transfer documents as may be required by the Conversion Agent and, if required
pursuant to Section 12.01(e) below, pay all transfer or similar taxes; and (D) if required pursuant to Section 2.01(d) above, pay funds equal to interest payable on the next interest payment date to which such Holder is not entitled.

 (ii) In respect of a beneficial interest in a Global Security, a Beneficial Owner must comply with DTC’s procedures
for converting a beneficial interest in a Global Security and, if required pursuant to Section 2.01(d) above, pay funds equal to interest payable on the next interest payment date to which such Beneficial Owner is not entitled, and if required,
taxes or duties, if any. 
 The date a Holder satisfies the foregoing requirements is the “Conversion Date” hereunder. 
 The Conversion Agent shall, as soon as practicable, and in no event later than one Business Day of the Conversion Date, provide the Company and such
other parties as designated by the Company from time to time copies of the 

  

 59 

 
Conversion Notice. The Company hereby initially designates the following parties in addition to the Company to receive copies of the Conversion Notice with
respect to the 2012 Notes: 
 Goldman, Sachs & Co. 
 One New York Plaza 
 New York, NY 10004 
 Attn: Equity Operations: Options and Derivatives 
 Telephone: (212) 902-1981 
 Facsimile: (212) 428-1980/1983 
 With a copy to: 
 Attn: Tracey McCabe

 Equity Capital Markets 
 Telephone: (212) 357-0428 
 Bank of America, N.A. 
 c/o Banc of America Securities LLC 
 Equity
Financial Products 
 9 West 57th Street, 40th Floor

 New York, NY 10019 
 Telephone:
(212) 583-8373 
 Facsimile: (212) 847-5124 
 The Company hereby initially designates the following parties in addition to the Company to receive copies of the Conversion Notice with respect to the 2014 Notes: 
 JPMorgan Chase Bank, National Association 
 277 Park Avenue, 11th Floor 
 New York, NY 10172 
 Attn: Eric Stefanik 
 Title: Operations
Analyst 
 EDG Corporate Marketing 
 Telephone: (212) 622-5814 
 Facsimile: (212) 622-8534 
 If a Holder converts more than one Security at the same time, the cash and number of shares of Common Stock issuable upon the conversion, if any, shall
be based on the total principal amount of the Securities converted. 
 Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder, a new Security in an authorized denomination equal in principal amount to the unconverted portion of the Security surrendered. 
  

 60 

 (c) Payment Upon Conversion. Upon any conversion of any Security, the Company will deliver to
converting Holders, in respect of each $1,000 principal amount of Securities being converted, a “Settlement Amount” equal to the sum of the Daily Settlement Amounts for each of the 30 Trading Days during the Observation Period for
such Security. 
 “Daily Settlement Amount,” for each of the 30 Trading Days during the Observation Period, shall consist
of: 
 (i) cash equal to the lesser of one-thirtieth (1/30th) of $1,000 and the Daily Conversion Value; and 
 (ii) to the extent the Daily Conversion Value exceeds one-thirtieth (1/30th) of $1,000, a number of shares equal to (A) the difference between the Daily Conversion Value and one-thirtieth
(1/30th) of $1,000, divided by (B) the Daily VWAP for such day. 
 “Daily Conversion Value” means, for each of the 30 consecutive Trading Days during the Observation
Period, one-thirtieth (1/30th) of the product of (1) the applicable Conversion Rate and (2) the Daily
VWAP of the Common Stock on such day. 
 “Daily VWAP” means, for each of the 25 consecutive Trading Days during the
Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “KYPH.UQ<equity> AQR”, or any successor page, in respect of the period from the scheduled
open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such Trading Day as determined using a
volume-weighted average method by a nationally recognized independent investment banking firm retained for the purpose by the Company). Daily VWAP shall be determined without regard to after hours trading or any other trading outside of the regular
trading session hours. 
 The Settlement Amount in respect of any Security converted will be delivered to converting Holders on the third
Business Day immediately following the last day of the Observation Period for such Security. 
 (d) Cash Payments in Lieu of Fractional
Shares. The Company shall not issue a fractional share of Common Stock upon conversion of Securities. Instead the Company shall deliver cash for the current market value of the fractional share. The current market value of a fractional share
shall be determined to the nearest 1/10,000th of a share by multiplying the Daily VWAP of a full share of Common Stock on the final Trading Day of the related Observation Period by the fractional amount and rounding the product to the nearest whole
cent. 
  

 61 

 (e) Taxes on Conversion. If a Holder converts Securities, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon the conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s
name. The Conversion Agent may refuse to deliver the certificates representing the Common Stock being issued in a name other than the Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which shall be due because
the shares are to be issued in a name other than the Holder’s name, but the Conversion Agent shall have no duty to determine if any such tax is due. Nothing herein shall preclude any withholding of tax required by law. 
 (f) Certain Covenants of the Company. 
 (i) The Company shall, prior to issuance of any Securities hereunder, and from time to time as may be necessary, reserve out of its authorized but unissued Common Stock or shares of Common Stock held in treasury, a
sufficient number of shares of Common Stock, free of preemptive rights, to permit the conversion of the Securities. 
 (ii)
All shares of Common Stock delivered upon conversion of the Securities shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien
or adverse claim. 
 (iii) The Company shall endeavor promptly to comply with all federal and state securities laws regulating
the issuance and delivery of shares of Common Stock upon the conversion of Securities, if any, and shall cause to have listed or quoted all such shares of Common Stock on each U.S. national securities exchange or over-the-counter or other domestic
market on which the Common Stock is then listed or quoted. 
 (iv) Before taking any action which would cause an adjustment
increasing the Conversion Rate to an amount that would cause the Conversion Price to be reduced below the then par value per share the Common Stock, if any, of the shares of Common Stock issuable upon conversion of the Securities, the Company will
take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate. 
  

 62 

 Section 12.02. Adjustments to Conversion Rate. The Conversion Rate shall be adjusted from
time to time by the Company as follows: 
 (a) If the Company issues shares of Common Stock as a dividend or distribution on shares of the
Common Stock, or effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula: 
  

									
	 CR’ = CR0 ×
	  	 OS’
	  		  		  	
	  	OS0	  		  		  	

  

					
	where,	  	  	  	  
	CR0	  	=	  	the Conversion Rate in effect immediately prior to the Ex-Dividend Date of such dividend or distribution, or
the effective date of such share
split or combination, as applicable
			
	CR’	  	=	  	the Conversion Rate in effect immediately after such Ex-Dividend Date or effective date
			
	OS0	  	=	  	the number of shares of Common Stock outstanding immediately prior to such Ex-Dividend Date or effective date
			
	OS’	  	=	  	the number of shares of Common Stock outstanding immediately prior to such Ex-Dividend Date or effective date after giving effect to such dividend, contribution, share split or share
combination.

 Such adjustment shall become effective immediately after 9:00 a.m., New York City time, on the Business Day
following the Record Date for such dividend or distribution, or the date fixed for determination for such share split or share combination. If any dividend or distribution of the type described in this Section 12.02(a) is declared but not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. 
 (b) If the Company issues to all or substantially all holders of its Common Stock any rights or warrants entitling them for a period of not more than 60 calendar days to subscribe for or purchase shares of Common
Stock at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on the Business Day immediately preceding the date of announcement of such issuance, the
Conversion Rate will be adjusted based on the following formula (provided that the Conversion Rate will be readjusted to the extent that such rights or warrants are not exercised prior to their expiration): 
  

 63 

											
	 CR’ =CR0 ×
	  	 OS0 +X
	  		  		  		  	
	  	OS0 +Y	  		  		  		  	

  

					
	 where,
	  		  	
			
	 CR0
	  	=	  	the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such issuance
			
	 CR’
	  	=	  	the Conversion Rate in effect immediately after such Ex-Dividend Date
			
	 OS0
	  	=	  	the number of shares of Common Stock outstanding immediately after such Ex-Dividend Date
			
	 X
	  	=	  	the total number of shares of Common Stock issuable pursuant to such rights or warrants
			
	 Y
	  	=	  	the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the average of the Last Reported Sale Prices of the Common Stock over
the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement of the issuance of such rights or warrants.

 Such adjustment shall be successively made whenever any such rights or warrants are issued and shall become
effective immediately after 9:00 a.m., New York City time, on the Business Day following the date fixed for determination of Holders entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such 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 Last Reported Sale Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company
for such rights or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors. 
  

 64 

 (c) If the Company distributes shares of Capital Stock, evidences of its indebtedness or other assets or
property of the Company to all or substantially all holders of the Common Stock, excluding: 
 (i) dividends or distributions
and rights or warrants referred to in clause (a) or (b) above; and 
 (ii) dividends or distributions paid
exclusively in cash; 
 then the Conversion Rate will be adjusted based on the following formula: 
  

									
	 CR’ =CR0 ×
	  	 SP0
	  		  		  	
	  	SP0 – FMV	  		  		  	

  

					
	 where,
	  		  	
			
	 CR0
	  	=	  	the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such distribution
			
	 CR’
	  	=	  	the Conversion Rate in effect immediately after such Ex-Dividend Date
			
	 SP0
	  	=	  	the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Business Day immediately preceding the Ex-Dividend Date for such
distribution
			
	 FMV
	  	=	  	the Fair Market Value (as determined by the Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets or property distributed with respect to each outstanding
share of Common Stock on the Record Date for such distribution.

 Such adjustment shall become effective immediately prior to 9:00 a.m., New York City time, on the Business Day
following the date fixed for the determination of stockholders entitled to receive such distribution. 
 With respect to an adjustment pursuant to this
clause (c) where there has been a payment of a dividend or other distribution on the Common Stock or shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit (a
“Spin-Off”), the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the effective date for such Spin-Off will be increased based on the following formula: 
  

									
	 CR’ =CR0 ×
	  	 FMV0 + MP0
	  		  		  	
	  	MP0	  		  		  	

  

 65 

					
	 where,
	  		  	
			
	 CR0
	  	=	  	the Conversion Rate in effect immediately prior to the effective date of the adjustment
			
	 CR’
	  	=	  	the Conversion Rate in effect immediately after the effective date of the adjustment
			
	 FMV0
	  	=	  	the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10
consecutive Trading Day period after, and including, the effective date of the Spin-Off
			
	 MP0
	  	=	  	the average of the Last Reported Sale Prices of Common Stock over the first 10 consecutive Trading Day period after, and including, the effective date of the Spin-Off.

 Such adjustment shall occur on the tenth Trading Day from, and including, the effective date of the Spin-Off;
provided that in respect of any conversion within 10 Trading Days immediately following, and including, the effective date of any Spin-Off, references with respect to 10 Trading Days shall be deemed replaced with such lesser number of Trading
Days as have elapsed between the effective date of the Spin-Off and the Conversion Date in determining the applicable Conversion Rate. 
 (d)
If any cash dividend or distribution is made to all or substantially all holders of Common Stock, the Conversion Rate will be adjusted based on the following formula: 
  

									
	 CR’ =CR0 ×
	  	 SP0
	  		  		  	
	  	SP0 – C	  		  		  	

  

					
	 where,
	  		  	
			
	 CR0
	  	=	  	the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such distribution
			
	 CR’
	  	=	  	the Conversion Rate in effect immediately after the Ex-Dividend Date for such distribution
			
	 SP0
	  	=	  	the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such distribution
			
	 C
	  	=	  	the amount in cash per share the Company distributes to holders of Common Stock.

 Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the Record Date for
such dividend or distribution; provided that if such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not
been declared. 
  

 66 

 (e) If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for
Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer (such last date, the “Expiration Time”), the Conversion Rate will be increased based on the following formula: 
  

											
	 CR’ =CR0 ×
	  	 AC +(SP’× OS’ )
	  		  		  		  	
	  	OS0 × SP’	  		  		  		  	

  

					
	 where,
	  		  	
			
	 CR0
	  	=	  	the Conversion Rate in effect immediately prior to the effective date of the adjustment
			
	 CR’
	  	=	  	the Conversion Rate in effect immediately after the effective date of the adjustment
			
	 AC
	  	=	  	the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares purchased in such tender or exchange offer
			
	 OS0
	  	=	  	the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires
			
	 OS’
	  	=	  	the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchases or exchange of shares pursuant to such
tender or exchange offer)
			
	 SP’
	  	=	  	the Last Reported Sale Prices of Common Stock on the Trading Day next succeeding the date such tender or exchange offer expires;

 If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had
not been made. 
 (f) In the event of an increase in the Conversion Rate pursuant to clauses (b) through (e) of this
Section 12.02 or Section 12.03, that would result in the Securities, in the aggregate, becoming convertible into shares of Common Stock in excess of limitation set forth in NASDAQ Rule 4350, or a successor to such rule, as may then be in
effect and interpreted by NASDAQ, the Company shall, at its option, either obtain stockholder approval of such issuances or deliver cash in lieu of any shares otherwise deliverable upon conversions in excess of such limitations (based on the Last
Reported Sale Price of the Common Stock on the Trading Day immediately prior to the date when such shares would otherwise be required to be distributed). 
  

 67 

 (g) Notwithstanding the foregoing provisions of this Section 12.02, (i) no adjustment shall be
made thereunder, nor shall an adjustment be made to the ability of a Holder to convert, for any distribution described therein if the Holder will otherwise participate in the distribution without conversion of such Holder’s Securities, and
(ii) no adjustment shall be made hereunder if the application of the foregoing formulas would result in a decline in the Conversion Rate (other than as a result of a share split or share combination pursuant to Section 12.02(a)).

 (h) [Reserved.] 
 (i)
[Reserved.] 
 (j) Notwithstanding any provision herein to the contrary, no adjustment to the Conversion Rate need be made:

 (i) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment
of dividends or interest payable on securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan; 
 (ii) upon the issuance of any shares of Common Stock or options or rights to purchase shares of Common Stock pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by
the Company or any of its Subsidiaries; 
 (iii) upon the issuance of any shares of Common Stock pursuant to any option,
warrant, right, or exercisable, exchangeable or convertible security not described in clause (ii) above and outstanding as of the Issue Date; 
 (iv) for a change in the par value of the Common Stock; or 
 (v) for accrued and unpaid
interest (including any Additional Interest and Reporting Interest). 
 To the extent the Securities become convertible into cash, assets or property (other
than Capital Stock of the Company or securities to which Section 12.03 applies), no adjustment shall be made thereafter as to the cash, assets or property. Interest shall not accrue on such cash, assets or property. 
 (k) All calculations under this Section 12.02 shall be made by the Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be. 
  

 68 

 (l) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the
Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Trust
Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has knowledge is still in
effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Rate to the Holder of each Security at such Holder’s last address appearing on the Securities Register provided for in Section 2.05 of this Indenture within 20 days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity of any such adjustment. 
 (m) Any case in which this
Section 12.02 provides that an adjustment shall become effective immediately after (i) a Record Date for a dividend or distribution described in Section 12.02(a), Section 12.02(c) or Section 12.02(d), (ii) the date
fixed for the determination of a share split or combination pursuant to Section 12.02(a), (iii) the date fixed for the determination of Holders entitled to receive rights or warrants pursuant to 12.02(b), or (iv) the Expiration Time
for any tender or exchange offer pursuant to Section 12.02(e), (each a “Determination Date”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to
the Holder of any Security converted after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by
such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such Holder any amount in cash in lieu of any fraction pursuant to Section 12.01. For purposes of
this Section 12.02(m), the term “Adjustment Event” shall mean: 
 (1) in any case referred to in
clause (i) and (ii) hereof, the occurrence of such event, 
 (2) in any case referred to in clause (iii)
hereof, the date of expiration of such rights or warrants, 
 (3) in any case referred to in clause (iv) hereof, the date
a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable. 
 (n) For purposes of
this Section 12.02, the number of shares of Common Stock at any time outstanding shall not include shares held in the 

  

 69 

 
treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. If the
Company pays any dividend or makes any distribution on, or issues any rights, options or warrants in respect of, shares of Common Stock held in treasury by the Company, the Company shall not issue, transfer or convey such shares of Common Stock in a
manner that would have the effect of circumventing the provisions of this Section 12.02. 
 (o) Whenever any provision of this Article
12 requires a calculation of the Last Reported Sale Prices or Daily VWAP over a span of multiple days, the Company will make appropriate adjustments (determined in good faith by the Board of Directors) to account for any adjustment to the Conversion
Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of the event occurs, at any time during the period from which such prices are to be calculated. 
 Section 12.03. Adjustment Upon Certain Fundamental Changes. (a) If a Holder elects to convert Securities pursuant to
Section 12.01(a)(iv) above in connection with a transaction described therein and the transaction (1) has an effective date occurring on or prior to the Stated Maturity and (2) constitutes a Fundamental Change, the Conversion Rate for
such Securities shall be increased by an additional number of shares of Common Stock (the “Additional Shares”) as described below. Any conversion will be deemed to have occurred in connection with such Fundamental Change only if
such Securities are surrendered for conversion at a time when the Securities would be convertible in light of the expected or actual occurrence of a Fundamental Change and notwithstanding the fact that a Security may then be convertible because
another condition to conversion has been satisfied. 
 (b) The number of Additional Shares will be determined by reference to the table
attached as Schedule A hereto, based on the actual effective date on which the Fundamental Change occurs or becomes effective (the “Effective Date”) and the Stock Price with respect to such transaction; provided that if the
Stock Price is between two Stock Price amounts set forth in such table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares will be determined by a straight-line interpolation between the number of
Additional Shares set forth for the higher and lower Stock Price amounts and the two dates, as applicable, based on a 365-day year; provided further that if the Stock Price is greater than $46.90 per share or less than $115.00 per share (in
each case, subject to adjustment as set forth in clause (c) below), then no Additional Shares will be added to the Conversion Rate. Notwithstanding the foregoing, in no event will the total number of shares of Common Stock issuable upon
conversion exceed 21.3220 shares per $1,000 principal amount of Securities, subject to adjustments in the same manner as the Conversion Rate pursuant to Section 12.02. 
  

 70 

 (c) The Stock Prices set forth in the first row of the table in Schedule A hereto will be adjusted as of
any date on which the Conversion Rate of the Securities is adjusted pursuant to Section 12.02. The adjusted Stock Prices will equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of
which is the Conversion Rate immediately prior to such adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such table will be adjusted in the same manner as the Conversion Rate
as set forth in Section 12.02. 
 (d) Settlement of Securities tendered for conversion as to which the Conversion Rate will be increased
by Additional Shares pursuant to this Section 12.03 shall occur as follows: 
 (i) if the last day of the Observation
Period for such Securities is on or prior to the fourth Trading Day immediately preceding the Effective Date, the Company shall deliver the Settlement Amount (together with cash in lieu of fractional shares), determined in accordance with
Section 12.01(c) and Section 12.01(d) above, on the third Business Day immediately following the last day of the Observation Period; provided that such Settlement Amount and related Daily Conversion Values shall be based on the
Conversion Rate without giving effect to the Additional Shares to be added thereto as set forth in this subsection. As soon as practicable following the Effective Date, the Company shall calculate an increased Settlement Amount for such Securities
(based upon the same Observation Period and the same Daily VWAP for each Trading Day in such Observation Period) as if the Conversion Rate had been increased by the number of Additional Shares pursuant to this subsection. Promptly following the
Effective Date, the Company shall deliver the excess of the cash portion, if any, and Common Stock portion, if any, of such increased Settlement Amount over the cash and Common Stock portions of the Settlement Amount calculated without such
Additional Shares. Any shares of Common Stock to be delivered following the Effective Date shall be subject to Section 12.05 and shall be delivered in Reference Property. 
 (ii) If the last day of the Observation Period for such Securities is after the fourth Trading Day immediately preceding the Effective
Date, the Company shall deliver the Settlement Amount (together with cash in lieu of fractional shares) in accordance with Section 12.01(c) and Section 12.01(d) above (such determination, for the avoidance of doubt, to include the number
of Additional Shares to be added to the Conversion Rate as set forth in this subsection) on the later to occur of (x) the Business Day following the Effective Date and (y) the third Business Day immediately following the Conversion Date
relating to such Securities. Any shares of Common Stock to be delivered on or following the Effective Date shall be subject to Section 12.05 and shall be delivered in Reference Property. 
  

 71 

 In no event shall the Company pay any such increase to the Settlement Amount if the transaction causing the increase to
the Conversion Rate pursuant to this subsection never becomes effective. 
 Section 12.04. [Reserved].  
 Section 12.05. Effect of Reclassification, Consolidation, Merger or Sale. If any of the following events occur: (i) any
recapitalization, reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to which Section 12.02(a) applies), (ii) any consolidation, merger, statutory share exchange or combination of
the Company with another Person, or (iii) any sale, lease or other transfer of the consolidated properties and assets of the Company and its Subsidiaries substantially as an entirety to any other Person, in each case as a result of which the
Common Stock would be converted into, or exchanged for, Capital Stock, other securities, other property or assets (including cash or any combination thereof) (any such event or transaction, a “Reorganization Event”), then after the
effective time of such Reorganization Event, the Securities shall only be convertible into the kind and amount of Capital Stock, other securities, other property or assets (including cash or any combination thereof and in the same proportion)
receivable (the “Reference Property”) upon such Reorganization Event by a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Reorganization Event, and the Company or successor Person
shall execute a supplemental indenture to such effect. For purposes of the foregoing, the type and amount of consideration that a holder of Common Stock would have been entitled to receive in the case of any such Reorganization Event that causes the
Common Stock to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election) will be deemed to be the weighted average of the types and amounts of consideration
received by the holders of Common Stock that affirmatively make such an election. Such supplemental indenture shall provide for provisions and adjustments which shall be as nearly equivalent as may be practicable to the provisions and adjustments
provided for in this Article 12, Article 9 and Article 11 and the definition of Fundamental Change, as appropriate, as determined in good faith by the Company (which determination shall be conclusive and binding), to make such provisions apply to
such other Person if different from the original issuer of the Securities. 
 (a) Following the effective time of any such Reorganization
Event, settlement of Securities converted shall be in cash and units of Reference Property determined in accordance with Section 12.01(c) above based on the Daily Conversion Value and Daily VWAP of such Reference Property. For the 

  

 72 

 
purposes of determining such Daily Conversion Value and Daily VWAP, (i) if the Reference Property includes securities for which the price can be
determined in a manner contemplated by the definition of Daily VWAP, then the value of such securities shall be determined in accordance with the principles set forth in such definition, as determined in good faith by the Company (which
determination shall be conclusive and binding); (ii) if the Reference Property includes other property (other than securities as to which clause (i) applies or cash), then the value of such property shall be the Fair Market Value of such
property as determined by the Company’s Board of Directors in good faith; and (iii) if the Reference Property includes cash, then the value of such cash shall be the amount thereof. 
 (b) Any issuer of securities included in the Reference Property shall execute an amendment to the Registration Rights Agreement (to the extent any
Registrable Securities (as defined therein) remain outstanding) to make the provisions thereof applicable to such securities included in the Applicable Consideration. 
 (c) The Company shall cause notice of the execution of any supplemental indenture required by this Section 12.05 to be mailed to each Holder, at its address appearing on the Securities Register provided for in
Section 2.05 of this Indenture, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. 
 (d) The above provisions of this Section 12.05 shall similarly apply to successive Reorganization Events. 
 (e) If this Section 12.05 applies to any event or occurrence, Section 12.02 shall not apply in respect of such event or occurrence. 

(f) The Company shall not become a party to any Reorganization Event unless its terms are consistent with the foregoing. None of the foregoing
provisions shall affect the right of a Holder of Securities to convert the Securities into cash and shares of Common Stock, if applicable, as set forth in Section 12.01 prior to the effective time of such Reorganization Event. 
 Section 12.06. Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or
responsibility to the Company or any Holder of Securities to determine the Conversion Rate, or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such
adjustment when made, or with respect to the method employed in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or

  

 73 

 
of any securities or property, which may at any time be issued or delivered upon the conversion of any Security; and the Trustee and any other Conversion
Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any cash or shares of Common Stock or stock certificates or other
securities or property upon the surrender of any Security for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 12. Without limiting the generality of the foregoing,
neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 12.05 relating either to the kind or amount
of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Securities after any Reorganization Event or to any adjustment to be made with respect thereto, but, subject to the provisions of
Section 7.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Officers’ Certificate with respect thereto. 
 Section 12.07. Notice to Holders Prior to Certain Actions. Except where notice is required pursuant to Section 12.01(a)(iv), in case:

 (a) the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion
Rate pursuant to Section 12.02; or 
 (b) the Company shall authorize the granting to the holders of all or substantially all of its
Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants that would require an adjustment in the Conversion Rate pursuant to Section 12.02; or 
 (c) of any reclassification or reorganization of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of
the sale or transfer of all or substantially all of the assets of the Company; or 
 (d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; 
 the Company shall cause to be filed with the Trustee and to be mailed to each Holder of
Securities at his address appearing on the Securities Register provided for in Section 2.05 of this Indenture, as promptly as possible but in any event at least three calendar days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such

  

 74 

 
dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. 
 Section 12.08. Stockholder Rights
Plan. To the extent that the Company has a rights plan in effect upon conversion of the Securities into Common Stock, the Holder will receive, in addition to the Common Stock, the rights under the rights plan, unless prior to any conversion, the
rights have separated from the Common Stock, in which case, and only in such case, the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of Common Stock shares of the Company’s Capital
Stock, evidences of indebtedness or assets as described in Section 12.02(c) above, subject to readjustment in the event of the expiration, termination or redemption of such rights. In lieu of any such adjustment, the Company may amend such
applicable stockholder rights agreement to provide that upon conversion of the Securities the Holders will receive, in addition to the Common Stock issuable upon such conversion, the rights which would have attached to such Common Stock if the
rights had not become separated from the Common Stock under such applicable stockholder rights agreement. 
 Section 12.09.
Withholding Taxes for Adjustments in Conversion Rate. If the Company pays withholding taxes on behalf of a Holder as a result of an adjustment to the Conversion Rate, the Company may, at its option, set off such payments against payments of cash
and shares of Common Stock on the Securities. 
 ARTICLE 13 
 MISCELLANEOUS 
 Section 13.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control. 
 Section 13.02. Notices. Any notice or communication shall be in writing (including telecopy promptly confirmed in writing) and delivered in
person or mailed by first-class mail addressed as follows: 
  

 75 

 if to the Company: 
 Kyphon Inc. 
 1221 Crossman Avenue 
 Sunnyvale, California 94089 
 Attention: Vice President, Legal Officers, 
 General Counsel and Secretary 
 Fax: (408) 548-6501 
 With a copy to: 
 Latham & Watkins LLP 140 Scott Drive 
 Menlo Park, CA 94025 Attention: Robert Koenig 
 Fax: (650) 463-2600 
 if to the Trustee: 
 U.S. Bank National Association Corporate Trust Services 
 EP-MN-WS3C 
 60 Livingston Avenue 
 St. Paul MN 55107-1419 
 Attention: Raymond S. Haverstock 
 Fax: (651) 495-8097 
 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 mailed to a registered Holder shall be mailed to
the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. 
 Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it, except that notices to the Trustee shall be effective only upon receipt. 
 Section 13.03. Communication by Holders with other Holders. Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee,
the Registrar and anyone else shall have the protection of TIA § 312(c). 
  

 76 

 Section 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or
application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee: 
 (a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action
have been complied with; and 
 (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the
opinion of such counsel, all such conditions precedent have been complied with. 
 Section 13.05. Statements Required in Certificate
or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: 
 (a) a statement that the individual making such certificate or opinion has read such covenant or condition; 
 (b) 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; 
 (c) a statement that, in the opinion of 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 
 (d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been
complied with. 
 In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on
certificates of public officials. 
 Section 13.06. When Securities Are Disregarded. In determining whether the Holders of the
required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the
Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which a Trust Officer of the
Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. 
  

 77 

 Section 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable
rules for action by, or a meeting of, Holders. The Registrar and the Paying Agent may make reasonable rules for their functions. 
 Section 13.08. Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York City. If a payment date is a
Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest or Additional Interest or Reporting Interest, if any, shall accrue for the intervening period. If a Regular Record Date is a Legal Holiday,
the record date shall not be affected. 
 Section 13.09. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
 Section 13.10. No Recourse Against Others. An
incorporator, director, officer, employee, Affiliate or stockholder of the Company, solely by reason of this status, shall not have any liability for any obligations of the Company under the Securities, this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities. 
 Section 13.11. Successors. All agreements of the Company in this Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors. 
 Section 13.12. Multiple Originals. The parties may sign
any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. 
 Section 13.13. Qualification of Indenture. The Company shall qualify this Indenture under the TIA in accordance with the terms and conditions
of the Registration Rights Agreement and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Company, the Trustee and the Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and the printing of this Indenture and the Securities. 
 Section 13.14. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. 
  

 78 

 Section 13.15. Severability Clause. In case any provision in this Indenture 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 and such provision shall be ineffective only to the extent of such invalidity, illegality or
unenforceability. 
 Section 13.16. Calculations. Except as otherwise provided herein, the Company will be responsible for making
all calculations called for under the Indenture and the Securities. The Company will make all such calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders. The Company upon request will provide a
schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The
Trustee will deliver a copy of such schedule to any Holder upon the request of such Holder. 
 [Remainder of the page intentionally left
blank] 
  

 79 

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

			
	 KYPHON INC.

		
	 By:
	 	 /s/ Maureen L. Lamb

	 Name:
	 	Maureen L. Lamb
	 Title:
	 	Vice President, Chief Financial Officer and Treasurer

  

			
	 U.S. BANK NATIONAL ASSOCIATION, as Trustee

		
	 By:
	 	 /s/ Raymond S. Haverstock

	 Name:
	 	Raymond S. Haverstock
	 Title:
	 	Vice President

 SCHEDULE A 
 The following table sets forth the number of Additional Shares to be received per $1,000 principal amount of 2012 Notes pursuant to Section 12.03 of this Indenture: 
  

																															
	 	  	 Stock Price

	 Effective Date
	  	$46.90	  	$50.00	  	$55.00	  	$60.00	  	$65.00	  	$70.00	  	$75.00	  	$80.00	  	$85.00	  	$90.00	  	$95.00	  	$100.00	  	$105.00	  	$110.00	  	$115.00
	 February 1, 2007
	  	4.1269	  	3.5068	  	2.8069	  	2.2733	  	1.8599	  	1.5352	  	1.2771	  	1.0696	  	0.9012	  	0.7633	  	0.6494	  	0.5548	  	0.4756	  	0.4088	  	0.3523
	 February 1, 2008
	  	4.1269	  	3.5460	  	2.7939	  	2.2268	  	1.7928	  	1.4563	  	1.1923	  	0.9831	  	0.8156	  	0.6805	  	0.5705	  	0.4803	  	0.4059	  	0.3440	  	0.2923
	 February 1, 2009
	  	4.1269	  	3.5433	  	2.7277	  	2.1223	  	1.6671	  	1.3209	  	1.0549	  	0.8486	  	0.6870	  	0.5595	  	0.4581	  	0.3768	  	0.3112	  	0.2579	  	0.2144
	 February 1, 2010
	  	4.1269	  	3.4534	  	2.5575	  	1.9088	  	1.4355	  	1.0876	  	0.8299	  	0.6377	  	0.4933	  	0.3841	  	0.3009	  	0.2370	  	0.1877	  	0.1492	  	0.1191
	 February 1, 2011
	  	4.1269	  	3.2137	  	2.1902	  	1.4855	  	1.0045	  	0.6783	  	0.4584	  	0.3106	  	0.2115	  	0.1451	  	0.1004	  	0.0703	  	0.0499	  	0.0359	  	0.0262
	 February 1, 2012
	  	4.1269	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000

 The following table sets forth the number of Additional Shares to be received per $1,000 principal amount of 2014
Notes pursuant to Section 12.03 of this Indenture: 
  

																															
	 	  	 Stock Price

	 Effective Date
	  	$46.90	  	$50.00	  	$55.00	  	$60.00	  	$65.00	  	$70.00	  	$75.00	  	$80.00	  	$85.00	  	$90.00	  	$95.00	  	$100.00	  	$105.00	  	$110.00	  	$115.00
	 February 1, 2007
	  	4.1269	  	3.3696	  	2.7612	  	2.2906	  	1.9203	  	1.6245	  	1.3852	  	1.1893	  	1.0273	  	0.8922	  	0.7784	  	0.6819	  	0.5995	  	0.5288	  	0.4676
	 February 1, 2008
	  	4.1269	  	3.4364	  	2.7893	  	2.2925	  	1.9045	  	1.5972	  	1.3504	  	1.1501	  	0.9858	  	0.8497	  	0.7361	  	0.6404	  	0.5594	  	0.4903	  	0.4310
	 February 1, 2009
	  	4.1269	  	3.4874	  	2.7956	  	2.2694	  	1.8626	  	1.5436	  	1.2902	  	1.0867	  	0.9215	  	0.7862	  	0.6744	  	0.5813	  	0.5031	  	0.4371	  	0.3811
	 February 1, 2010
	  	4.1269	  	3.5067	  	2.7635	  	2.2050	  	1.7789	  	1.4495	  	1.1917	  	0.9878	  	0.8248	  	0.6933	  	0.5863	  	0.4984	  	0.4258	  	0.3654	  	0.3147
	 February 1, 2011
	  	4.1269	  	3.4921	  	2.6854	  	2.0891	  	1.6426	  	1.3045	  	1.0457	  	0.8455	  	0.6892	  	0.5661	  	0.4683	  	0.3899	  	0.3266	  	0.2750	  	0.2327
	 February 1, 2012
	  	4.1269	  	3.3943	  	2.5059	  	1.8661	  	1.4019	  	1.0627	  	0.8129	  	0.6277	  	0.4893	  	0.3851	  	0.3059	  	0.2453	  	0.1985	  	0.1619	  	0.1332
	 February 1, 2013
	  	4.1269	  	3.1546	  	2.1339	  	1.4362	  	0.9640	  	0.6473	  	0.4361	  	0.2959	  	0.2030	  	0.1415	  	0.1006	  	0.0733	  	0.0548	  	0.0422	  	0.0334
	 February 1, 2014
	  	4.1269	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000	  	0.0000

  

 Schedule A 

 EXHIBIT A 
 [FORM OF FACE OF 2012 NOTE] 
 [Restricted Securities Legend, if applicable] 
 [Global Security Legend, if applicable] 
 No.
[            ]                            
                                 Principal Amount
$[            ], as revised by the Schedule of Increases and Decreases in Global Security attached hereto. 
 CUSIP NO.: [            ] 
 ISIN:
[            ] 
 1.00% Convertible Senior Notes due 2012 
 Kyphon Inc., a Delaware corporation, promises to pay to [            ], or registered
assigns, the principal sum of [            ] Dollars, as revised by the Schedule of Increases and Decreases in Global Security attached hereto, on February 1, 2012. 
 Interest Payment Dates: February 1 and August 1 
 Regular Record Dates: January 15 and July 15 
 Additional provisions of this Security are set
forth on the attached “Terms of Securities.” 

 Dated:
[                    ] 
  

			
	KYPHON INC.
		
	 By:
	 	  

	 Name:
	 	Maureen L. Lamb
	 Title:
	 	 Vice President, Chief Financial
 Officer and
Treasurer

  

 A-2 

			
	 TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	
	 U.S. BANK NATIONAL ASSOCIATION
 as Trustee, certifies that this is one of the Securities referred to in the Indenture.

		
	 By:
	 	  

		 	Authorized Signatory

  

 A-3 

 TERMS OF SECURITIES 
 1.00% Convertible Senior Notes due 2012 
 The Company issued this Security under an Indenture dated as of
February 6, 2007 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Company and the Trustee, to which reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders. Additional Securities may be issued under the Indenture in an unlimited aggregate principal amount subject to certain conditions
specified in the Indenture. 
 1) Interest 
 Kyphon Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this
Security at the rate of 1.00% per annum plus Additional Interest as provided in the Registration Rights Agreement and Reporting Interest, if any. 
 The Company will pay interest semiannually on February 1 and August 1 of each year commencing August 1, 2007. Interest on the Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from February 6, 2007. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 
 2) Method of Payment 
 By no later than 11:00 a.m. (New York City time) on the date on which any
principal of or interest (including any Additional Interest and Reporting Interest), on any Security is due and payable, the Company shall deposit with the Paying Agent money sufficient to pay such amount. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of Securities represented by a Global Security (including principal and interest (including any Additional
Interest and Reporting Interest)) will be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will pay principal of Definitive Securities at the office or agency designated by
the Company for such purpose. Interest (including any Additional Interest and Reporting Interest), on Definitive Securities will be payable (i) to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the
Holders of these Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to each Holder or, upon application by a Holder to the Registrar not later than the relevant record date, by
wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Registrar to the contrary. 
  

 A-4 

 3) [Reserved.] 
 4)
Purchase at the Option of the Holder Upon a Fundamental Change 
 If a Fundamental Change shall occur at any time, each Holder shall
have the right, at such Holder’s option and subject to the terms and conditions of the Indenture, to require the Company to purchase all or a portion of its Securities at the Fundamental Change Purchase Price specified in the Indenture.

 5) Conversion 
 Subject to the
conditions and procedures set forth in the Indenture, and during the periods specified in the Indenture, a Holder may convert Securities, on or prior to the close of business on the third Business Day immediately preceding Stated Maturity, into cash
and shares of Common Stock, if any, at the Conversion Rate. 
 The initial Conversion Rate is 17.1951 shares of Common Stock per $1,000
principal amount of Securities, subject to adjustment in certain events described in the Indenture. Upon conversion, the Company will pay cash and shares of Common Stock, if any, based on a Daily Conversion Value calculated on a proportionate basis
for each day of the 30-day Observation Period, as set forth in the Indenture. The Company shall deliver cash in lieu of any fractional share of Common Stock. 
 A Holder may convert a portion of the Securities only if the principal amount of such portion is $1,000 or a multiple of $1,000. No payment or adjustment shall be made for dividends on the Common Stock except as
provided in the Indenture. 
 6) Denominations; Transfer; Exchange 
 The Securities are in registered form without coupons in denominations of principal amount of $1,000 and multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of
Securities surrendered for conversion or, if a portion of any Security is surrendered for conversion, the portion thereof surrendered for conversion. 
  

 A-5 

 7) Persons Deemed Owners 
 The registered Holder of this Security may be treated as the owner of it for all purposes. 
 8) Unclaimed Money

 If money for the payment of principal or interest (including any Additional Interest and Reporting Interest) remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 
 9) Amendment, Waiver 
 Subject to certain exceptions,
the Indenture contains provisions permitting an amendment of the Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities and the waiver of any Event of Default
(other than with respect to nonpayment or in respect of a provision that cannot be amended without the written consent of each Holder affected) or noncompliance with any provision with the written consent of the Holders of a majority in principal
amount of the then outstanding Securities. 
 In addition, the Indenture permits an amendment of the Indenture or the Security without the
consent of any Holder under circumstances specified in the Indenture. 
 10) Defaults and Remedies 
 If an Event of Default specified in the Indenture occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the
Securities may declare all the Securities by notice to the Company to be due and payable immediately. In addition, certain specified Events of Default will cause the Securities to become immediately due and payable without further action by the
Holders. 
 Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce
the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal or interest (including any Additional Interest and Reporting Interest)) if it determines that
withholding notice is in their interest. 
  

 A-6 

 11) Trustee Dealings with the Company 
 Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner
or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 

12) No Recourse Against Others 
 An incorporator,
director, officer, employee, Affiliate or stockholder, of the Company, solely by reason of this status, shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 
 13) Authentication 
 This Security shall not be valid
until an authorized signatory of the Trustee manually authenticates this Security. 
 14) Abbreviations 
 Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT
TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act). 
 15) 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 the Securities and has directed the Trustee to use CUSIP numbers in notices of repurchase as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of repurchase, and reliance may be placed only on the other identification numbers placed thereon. 
 16) Governing Law

 This Security shall be governed by, and construed in accordance with, the laws of the State of New York. 
  

 A-7 

 The Company will furnish to any Holder upon written request and without charge to the Holder a copy of
the Indenture which has in it the text of this Security. Requests may be made to: 
 Kyphon Inc. 
 1221 Crossman Avenue 
 Sunnyvale, California 94089 
 Attention: Vice President, Legal Officers, 
 General Counsel and Secretary

 Fax: (408) 548-6501 
  

 A-8 

 EXHIBIT B 
 [FORM OF FACE OF 2014 NOTE] 
 [Restricted Securities Legend, if applicable] 
 [Global Security Legend, if applicable] 
 No.
[            ]                           
                                 Principal Amount
$[            ], as revised by the Schedule of Increases and Decreases in Global Security attached hereto. 
 CUSIP NO.: [            ] 
 ISIN: [            ] 
 1.25% Convertible Senior Notes due 2014

 Kyphon Inc., a Delaware corporation, promises to pay to [            ],
or registered assigns, the principal sum of [            ] Dollars, as revised by the Schedule of Increases and Decreases in Global Security attached hereto, on February 1,
2014. 
 Interest Payment Dates: February 1 and August 1 
 Regular Record Dates: January 15 and July 15 
 Additional provisions of this Security are set forth on the attached “Terms of Securities.” 
  

 B-1 

 Dated:
[                    ] 
  

			
	KYPHON INC.
		
	By:	 	  

	Name:	 	Maureen L. Lamb
	Title:	 	 Vice President, Chief Financial Officer and Treasurer

  

 B-2 

			
	 TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	
	 U.S. BANK NATIONAL ASSOCIATION
 as Trustee, certifies that this is one of the Securities referred to in the Indenture.

		
	By:	 	  

		 	Authorized Signatory

  

 B-3 

 TERMS OF SECURITIES 
 1.25% Convertible Senior Notes due 2014 
 The Company issued this Security under an Indenture dated as of
February 6, 2007 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Company and the Trustee, to which reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders. Additional Securities may be issued under the Indenture in an unlimited aggregate principal amount subject to certain conditions
specified in the Indenture. 
 1) Interest 
 Kyphon Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this
Security at the rate of 1.25% per annum plus Additional Interest as provided in the Registration Rights Agreement and Reporting Interest, if any. 
 The Company will pay interest semiannually on February 1 and August 1 of each year commencing August 1, 2007. Interest on the Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from February 6, 2007. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 
 2) Method of Payment 
 By no later than 11:00 a.m. (New York City time) on the date on which any
principal of or interest (including any Additional Interest and Reporting Interest), on any Security is due and payable, the Company shall deposit with the Paying Agent money sufficient to pay such amount. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of Securities represented by a Global Security (including principal and interest (including any Additional
Interest and Reporting Interest)) will be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will pay principal of Definitive Securities at the office or agency designated by
the Company for such purpose. Interest (including any Additional Interest and Reporting Interest), on Definitive Securities will be payable (i) to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the
Holders of these Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either by check mailed to each Holder or, upon application by a Holder to the Registrar not later than the relevant record date, by
wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Registrar to the contrary. 
  

 B-4 

 3) [Reserved.] 
 4)
Purchase at the Option of the Holder Upon a Fundamental Change 
 If a Fundamental Change shall occur at any time, each Holder shall
have the right, at such Holder’s option and subject to the terms and conditions of the Indenture, to require the Company to purchase all or a portion of its Securities at the Fundamental Change Purchase Price specified in the Indenture.

 5) Conversion 
 Subject to the
conditions and procedures set forth in the Indenture, and during the periods specified in the Indenture, a Holder may convert Securities, on or prior to the close of business on the third Business Day immediately preceding Stated Maturity, into cash
and shares of Common Stock, if any, at the Conversion Rate. 
 The initial Conversion Rate is 17.1951 shares of Common Stock per $1,000
principal amount of Securities, subject to adjustment in certain events described in the Indenture. Upon conversion, the Company will pay cash and shares of Common Stock, if any, based on a Daily Conversion Value calculated on a proportionate basis
for each day of the 30-day Observation Period, as set forth in the Indenture. The Company shall deliver cash in lieu of any fractional share of Common Stock. 
 A Holder may convert a portion of the Securities only if the principal amount of such portion is $1,000 or a multiple of $1,000. No payment or adjustment shall be made for dividends on the Common Stock except as
provided in the Indenture. 
 6) Denominations; Transfer; Exchange 
 The Securities are in registered form without coupons in denominations of principal amount of $1,000 and multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of
Securities surrendered for conversion or, if a portion of any Security is surrendered for conversion, the portion thereof surrendered for conversion. 
  

 B-5 

 7) Persons Deemed Owners 
 The registered Holder of this Security may be treated as the owner of it for all purposes. 
 8) Unclaimed Money

 If money for the payment of principal or interest (including any Additional Interest and Reporting Interest) remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Company. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 
 9) Amendment, Waiver 
 Subject to certain exceptions,
the Indenture contains provisions permitting an amendment of the Indenture or the Securities with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities and the waiver of any Event of Default
(other than with respect to nonpayment or in respect of a provision that cannot be amended without the written consent of each Holder affected) or noncompliance with any provision with the written consent of the Holders of a majority in principal
amount of the then outstanding Securities. 
 In addition, the Indenture permits an amendment of the Indenture or the Security without the
consent of any Holder under circumstances specified in the Indenture. 
 10) Defaults and Remedies 
 If an Event of Default specified in the Indenture occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the
Securities may declare all the Securities by notice to the Company to be due and payable immediately. In addition, certain specified Events of Default will cause the Securities to become immediately due and payable without further action by the
Holders. 
 Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce
the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal or interest (including any Additional Interest and Reporting Interest)) if it determines that
withholding notice is in their interest. 
  

 B-6 

 11) Trustee Dealings with the Company 
 Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner
or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 

12) No Recourse Against Others 
 An incorporator,
director, officer, employee, Affiliate or stockholder, of the Company, solely by reason of this status, shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 
 13) Authentication 
 This Security shall not be valid
until an authorized signatory of the Trustee manually authenticates this Security. 
 14) Abbreviations 
 Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT
TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act). 
 15) 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 the Securities and has directed the Trustee to use CUSIP numbers in notices of repurchase as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of repurchase, and reliance may be placed only on the other identification numbers placed thereon. 
 16) Governing Law

 This Security shall be governed by, and construed in accordance with, the laws of the State of New York. 
  

 B-7 

 The Company will furnish to any Holder upon written request and without charge to the Holder a copy of
the Indenture which has in it the text of this Security. Requests may be made to: 
 Kyphon Inc. 
 1221 Crossman Avenue 
 Sunnyvale, California 94089 
 Attention: Vice President, Legal Officers, 
 General Counsel and Secretary

 Fax: (408) 548-6501 
  

 B-8 

 [TO BE ATTACHED TO GLOBAL SECURITIES] 
 ASSIGNMENT FORM 
 To assign this Security, fill in the form below: 
 I or we assign and transfer this Security to 
  

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

 (Insert assignee’s soc. sec.
or tax I.D. No.) 
 and irrevocably appoint
                     agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. 

 

									
	Date:	 	  
	 		 	Your Signature:	 	  

  

									
		 	Signature Guarantee:	 		 		 	  

 (Signature must be guaranteed) 
  

 Sign exactly as your name appears on the other
side of this Security. 
 The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and
credit unions) with membership in an approved signature guarantee medallion program, pursuant to S.E.C. Rule 17Ad-15. 
 In connection with any transfer or
exchange of any of the Securities evidenced by this certificate occurring prior to the date that is two years after the later of the date of original issuance of such Securities and the last date, if any, on which such Securities were owned by the
Company or any Affiliate of the Company, the undersigned confirms that such Securities are being: 
 CHECK ONE BOX BELOW: 
  

					
	  ̈
	 	1        	 	acquired for the undersigned’s own account, without transfer; or
			
	  ̈
	 	2	 	transferred to the Company; or
			
	  ̈
	 	3	 	transferred pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”); or
			
	  ̈
	 	4	 	transferred pursuant to and in compliance with Rule 144A under the Securities Act; or
			
	  ̈
	 	5	 	transferred pursuant to another available exemption from the registration requirements of the Securities Act.

 Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this
certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Trustee or the Company may require, prior to registering any such transfer of the Securities, in their
sole discretion, such legal opinions, certifications and other information as the Trustee or the Company may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, such as the exemption provided by Rule 144 under such Act. 
  

	
	  

	Signature:

 Signature Guarantee: 
  

			
	  
	 	  

	 (Signature must be guaranteed)
	 	Signature:

 The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions) with membership in an approved signature guarantee medallion program, pursuant to S.E.C. Rule 17Ad-15. 
 TO BE COMPLETED BY
PURCHASER IF (1) OR (4) ABOVE IS CHECKED. 
 The undersigned represents and warrants that it is purchasing this Security for its own account or an
account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A. 
  

	
	  

	 Dated:

 SCHEDULE OF INCREASES AND DECREASES IN GLOBAL SECURITY 
 The following increases or decreases in this Global Security have been made: 
  

									
	 Date
	 	 Amount of decrease
 in Principal Amount
 of this Global
 Security
	 	 Amount of increase
 in Principal Amount
 of this Global
 Security
	 	 Principal Amount of
 this Global Security
 following such
 decrease or increase
	 	 Signature of
 authorized signatory
 of Trustee or
 Securities Custodian

 FORM OF CONVERSION NOTICE 
 To: Kyphon Inc. 
 The undersigned registered Holder of this Security hereby exercises the option to convert
this Security, or portion hereof (which is $1,000 principal amount or a multiple thereof) designated below, for cash and shares of Common Stock of Kyphon Inc., if any, in accordance with the terms of the Indenture referred to in this Security, and
directs that cash and the shares, if any, issuable and deliverable upon such conversion, 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 cash, 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 shall pay all transfer taxes payable with respect thereto. 
 This notice shall be deemed to be an irrevocable exercise of the option to convert this Security. 
  

			
	Dated:	 	  

		 	  

		 	Signature(s)
		 	The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature
guarantee medallion program, pursuant to S.E.C. Rule 17Ad-15.
		 	  

		 	Signature Guarantee
	 Fill in for registration of shares if to
 be
delivered, and Securities if to be
 issued other than to and in the name
 of registered holder:
	 	
	  
	 	
	(Name)	 	Principal amount to be converted (if less than all):
$                    ,000
	  
	 	
	(Street Address)	 	
	  
	 	  

	(City state and zip code)	 	Social Security or Other Taxpayer Number
	Please print name and address	 	

 FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE 
 To: Kyphon Inc. 
 The undersigned registered Holder of this
Security hereby acknowledges receipt of a notice from Kyphon Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to repurchase this Security, or the portion
hereof (which is $1,000 principal amount or a multiple thereof) designated below, in accordance with the terms of the Indenture referred to in this Security and directs that the check or Common Stock of the Company, as applicable, in payment for
this Security or the portion thereof and any Securities representing any unrepurchased principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. If any portion of this Security
not repurchased is to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect thereto. 
  

			
	Dated:	 	  

		 	  

		 	Signature(s)
		 	The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature
guarantee medallion program, pursuant to S.E.C. Rule 17Ad-15.
		 	  

		 	Signature Guarantee
	
	Fill in if a check is to be issued, or Securities are to be issued, other than to and in the name of registered Holder:
	  
	 	
	(Name)	 	Principal amount to be purchased (if less than all):
$                    ,000
	  
	 	
	(Street Address)	 	
	  
	 	  

	(City state and zip code)	 	Social Security or Other Taxpayer Number
	Please print name and address

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