Document:

exv4w1

 

Exhibit 4.1

 

LAMAR ADVERTISING COMPANY

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee with respect to such series of Securities as shall

be designated from time to time pursuant to the terms hereof

 

SECOND SUPPLEMENTAL INDENTURE

Dated as of July 3, 2007

 

Supplement to Indenture dated as of June 16, 2003

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1.
	 	 	 	 
	 
	 	 	 	 
	CREATION OF THE NOTES
	 	 	 	 
	 
	 	 	 	 
	Section 1.1 Designation of Series
	 	 	2	 
	Section 1.2 Form of Notes
	 	 	2	 
	Section 1.3 Limit on Amount of Series
	 	 	2	 
	Section 1.4 Interest
	 	 	2	 
	Section 1.5 Certificate of Authentication
	 	 	2	 
	Section 1.6 No Sinking Fund
	 	 	3	 
	Section 1.7 Issuance in Global Form
	 	 	3	 
	Section 1.8 Discharge of Indenture; Defeasance
	 	 	3	 
	Section 1.9 Other Terms of Notes
	 	 	3	 
	 
	 	 	 	 
	ARTICLE 2.
	 	 	 	 
	 
	 	 	 	 
	CONVERSION OF NOTES
	 	 	 	 
	 
	 	 	 	 
	Section 2.1 Conversion Right
	 	 	3	 
	Section 2.2 Conversion Consideration and Settlement
	 	 	5	 
	Section 2.3 Conversion Rate and Conversion Trigger Price
	 	 	6	 
	Section 2.4 Exercise of Conversion Right
	 	 	6	 
	Section 2.5 Fractions of Common Stock Shares
	 	 	7	 
	Section 2.6 Adjustment of Conversion Rate
	 	 	7	 
	Section 2.7 Notice of Adjustments of Conversion Rate
	 	 	16	 
	Section 2.8 Notice of Certain Corporate Action
	 	 	17	 
	Section 2.9 Company to Reserve Common Stock
	 	 	18	 
	Section 2.10 Taxes on Conversions
	 	 	18	 
	Section 2.11 Covenant as to Common Stock
	 	 	18	 
	Section 2.12 Cancellation of Converted Securities
	 	 	18	 
	Section 2.13 Provisions in Case Certain Corporate Transactions
	 	 	18	 
	Section 2.14 Right of Holders to Convert
	 	 	20	 
	Section 2.15 Certain Definitions
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 3.
	 	 	 	 
	 
	 	 	 	 
	REPURCHASE OF NOTES AT THE OPTION OF THE

HOLDERS UPON A CHANGE OF CONTROL
	 	 	 	 
	 
	 	 	 	 
	Section 3.1 Repurchase at Option of Holders upon Change of Control
	 	 	23	 
	Section 3.2 Certain Definitions
	 	 	26	 

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	 	 	Page	 
	ARTICLE 4.
	 	 	 	 
	 
	 	 	 	 
	EVENTS OF DEFAULT
	 	 	 	 
	 
	Section 4.1 Additional Events of Default
	 	 	28	 
	 
	 	 	 	 
	ARTICLE 5.
	 	 	 	 
	 
	 	 	 	 
	AMENDMENTS, SUPPLEMENTS AND WAIVERS
	 	 	 	 
	 
	Section 5.1 With Consent of Holders
	 	 	28	 
	 
	 	 	 	 
	ARTICLE 6.
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	Section 6.1 Application of Second Supplemental Indenture
	 	 	29	 
	Section 6.2 Effective Date
	 	 	29	 
	Section 6.3 Counterparts
	 	 	29	 

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     SECOND SUPPLEMENTAL INDENTURE, dated as of July 3, 2007 (the “Second Supplemental Indenture”)
by and between LAMAR ADVERTISING COMPANY, a Delaware corporation, as issuer (the “Company”), and
THE BANK OF NEW YORK TRUST COMPANY, N.A., a trust company organized under the laws of Delaware, as
Trustee under the Indenture (as hereinafter defined) (the “Trustee”).

RECITALS

     WHEREAS, the Company and Wachovia Bank of Delaware, National Association, as prior trustee, as
of June 16, 2003 entered into an Indenture (as supplemented hereby, the “Indenture”, all
capitalized terms used and not otherwise defined herein shall have the meanings set forth in the
Indenture) providing for the issuance by the Company of Securities from time to time;

     WHEREAS, pursuant to Section 7.8 of the Indenture, the Trustee replaced Wachovia Bank of
Delaware, National Association as trustee under the Indenture;

     WHEREAS, the Company has previously issued under the Indenture a series of Securities,
designated as its 2-7/8% Convertible Notes due 2010 (the “Original Notes”), in an aggregate
principal amount of $287,500,000;

     WHEREAS, the Company desires to issue an additional Series of Securities under the Indenture,
and has duly authorized the creation and issuance of such securities and the execution and delivery
of this Second Supplemental Indenture to modify the Indenture and provide certain additional
provisions as hereinafter described;

     WHEREAS, the Company and the Trustee deem it advisable to enter into this Second Supplemental
Indenture for the purposes of establishing the terms of such Series of Securities;

     WHEREAS, Section 2.2 of the Indenture provides that a supplemental indenture may be entered
into by the Company to establish the form or terms of the issuance of any Securities within a
Series;

     WHEREAS, the execution and delivery of this Second Supplemental Indenture has been authorized
by a Board Resolution;

     WHEREAS, concurrent with the execution hereof, the Company has delivered a Board Resolution
and an Officers’ Certificate; and

     WHEREAS, all things necessary to make this Second Supplemental Indenture a valid agreement of
the Company in accordance with its terms have been done, and the execution and delivery thereof
have been in all respects duly authorized by the parties hereto.

     NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

 

 

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

ARTICLE 1.

CREATION OF THE NOTES

     Section 1.1 Designation of Series.

     Pursuant to the terms hereof and Sections 2.1 and 2.2 of the Indenture, the Company hereby
creates a Series of Securities designated as the “2-7/8% Convertible Notes due 2010—Series B” (the
“Notes”), which Notes shall be deemed “Securities” for all purposes under the Indenture.

     Section 1.2 Form of Notes.

     The definitive form of the Notes shall be substantially in the form set forth in Exhibit A
attached hereto, which is incorporated herein and made part hereof. The Stated Maturity of the
Notes shall be December 31, 2010.

     Section 1.3 Limit on Amount of Series.

     The Notes shall not exceed U.S.$287,500,000 in aggregate principal amount, and may, upon the
execution and delivery of this Second Supplemental Indenture or from time to time thereafter, be
executed by the Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Notes upon a Company Order and delivery of an Officers’
Certificate and Opinion of Counsel as contemplated by Section 2.3 of the Indenture.

     Section 1.4 Interest.

     The Notes shall bear interest at a rate of 2-7/8% per annum, payable semi-annually. The
Interest Payment Dates for the Notes shall be June 30 and December 31 of each year, commencing June
30, 2007, with interest payable in Dollars to Holders in whose names the Notes are registered at
the close of business on June 15 or December 15 of each year, as the case may be (each, a “Record
Date”), or, if such Record Date is not a Business Day, at the close of business of the immediately
succeeding Business Day.

     Section 1.5 Certificate of Authentication.

     The Trustee’s certificate of authentication to be borne on the Notes shall be substantially as
provided in the Form of Note attached hereto as Exhibit A.

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     Section 1.6 No Sinking Fund.

     No sinking fund will be provided with respect to the Notes.

     Section 1.7 Issuance in Global Form.

     The Notes shall be issued as one or more Global Securities, representing the aggregate
principal amount of the Notes, and shall be deposited with the Trustee as custodian for the
Depositary. The Notes shall be registered in the name of Cede & Co., or another nominee of the
Depositary.

     Section 1.8 Discharge of Indenture; Defeasance.

     The Notes shall not be subject to the provisions of Article 9 of the Indenture.

     Section 1.9 Other Terms of Notes.

     The other terms of the Notes shall be as expressly set forth in Articles 2, 3, 4, 5, 6 and 7
hereof and Exhibit A hereto.

     Section 1.10 Conversion Agent.

     The Company hereby appoints the Trustee as the conversion agent (the “Conversion
Agent”) for the Notes and authorizes the Conversion Agent, in such capacities, to take such
actions on its behalf and to exercise such powers as are delegated to the Conversion Agent, in such
capacities by the terms hereof, together with such actions and powers as are reasonably incidental
thereto.

     The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this
Second Supplemental Indenture as a whole and not to any particular Article, Section or other
subdivision.

ARTICLE 2.

CONVERSION OF NOTES

     Section 2.1 Conversion Right.

     (a) Subject to and upon compliance with the provisions of this Article 2, at the option of the
Holder thereof, any Note or any portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000, and which has not previously been repurchased pursuant to Article 3
hereof, may be converted, as set forth in Section 2.2, only upon the following circumstances:

     (i) on any Business Day in any calendar quarter commencing at any time after September
30, 2007, but only during such calendar quarter, if the Closing Sale Price

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of the Common
Stock for at least 20 Trading Days in a period of 30 consecutive Trading Days ending on the
last Trading Day of the preceding calendar quarter is more than 160% of the Conversion Price
during such period (the “Closing Price Condition”);

     (ii) on any Business Day during the five Business Day period after any five consecutive
Trading Day period in which the Trading Price per $1,000 principal amount of Notes for each
day of that period was less than 98% of the product of the Closing Sale Price of our Common
Stock and the then Conversion Rate (the “Trading Price Condition”);

     (iii) upon the occurrence of a specified corporate transaction set forth in Section
2.13 hereof; or

     (iv) at any time beginning ten Trading Days before the Stated Maturity and until the
close of business on the Business Day immediately preceding the Stated Maturity.

     (b) In the case of (i) the Closing Price Condition, the Conversion Agent shall determine at
the beginning of each calendar quarter commencing at any time after September 30, 2007, whether the
Notes are convertible as a result of the price of Common Stock and notify the Company and the
Trustee, to the extent the Trustee is not also serving as the Conversion Agent, and (ii) the
Trading Price Condition, the Trustee shall have no obligation to determine the Trading Price of the
Notes unless the Company has requested such determination; and the Company shall have no obligation
to make such request unless a Holder of the Notes provides the Company with reasonable evidence
that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product
of the Closing Sale Price of Common Stock and the then
Conversion Rate; provided, however, at such time, the Company shall instruct the Trustee to
determine the Trading Price of the Notes beginning on the next Trading Day and on each successive
Trading Day until the Trading Price per $1,000 principal amount of Notes is greater than 98% of the
product of the Closing Sale Price of Common Stock and the Conversion Rate.

     (c) Such conversion right shall commence on the date of original issuance of the Notes, and
shall expire at the close of business on the Business Day immediately preceding the Stated
Maturity. A Note in respect of which a Holder has delivered a Repurchase Notice pursuant to
Section 3.1 hereof may be converted only if such notice is withdrawn in accordance with the terms
of such section, unless the Company defaults in the payment of the Change of Control Repurchase
Price.

     (d) If any of the events described in clause (a) hereof occurs, Holders may surrender any
Notes for conversion pursuant to Section 2.4 hereof. Upon determining that Holders of Notes are or
will be entitled to convert their Notes in accordance with this Section 2.1, the Company will
promptly issue a press release or otherwise publicly disclose this information and use its
reasonable efforts to post such information on the Company’s website.

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     Section 2.2 Conversion Consideration and Settlement.

     (a) Upon surrendering any Notes for conversion, the Holder of such Notes shall receive, in
respect of each $1,000 principal amount of Notes, at the Company’s election:

     (i) a number of shares of Class A Common Stock of the Company, $0.001 par value per
share (the “Common Stock”), equal to the Conversion Rate, in addition to cash in lieu of
fractional shares, if applicable;

     (ii) cash in an amount equal to the Conversion Value; or

     (iii) for all days of the Conversion Period, (A) a fixed amount in cash specified by us
divided by 20 or an amount in cash representing the percentage that the Company elects of
the Daily Conversion Value Amount (in each case, the “specified cash amount”), and (B) a
number of whole shares, in addition to cash in lieu of fractional shares, per $1,000
principal amount of Notes equal to the sum of the Daily Share Amounts for all of the Trading
Days in the Conversion Period;

     provided however, at any time on or prior to the 11th Trading Day preceding the
Stated Maturity, the Company may irrevocably elect to satisfy in cash its conversion obligation
with respect to the principal amount of the Notes to be converted after the date of such election,
with any remaining amount to be satisfied in shares of Common Stock (the “Cash Payment of Principal
Election”), for each $1,000 principal amount of Notes surrendered for conversion, as follows:

     (A) where the Conversion Value is less than or equal to $1,000, the settlement amount shall be
an amount in cash equal to such Conversion Value, or

     (B) where the Conversion Value is greater than $1,000, the settlement amount shall be computed
as if the Company had elected to settle a portion of its conversion obligation pursuant to
paragraph (a)(iii) of this Section 2.2, with a specified cash amount equal to $1,000.

     The Company shall treat all Holders converting on the same day in the same manner. The
Company shall not, however, have any obligation to settle its conversion obligations arising on
different days in the same manner.

     (b) (i) In the case of Sections 2.2 (a)(i) and (iii), the Company shall inform the Holders
through the Trustee of the method it chooses to satisfy its obligation upon conversion (x) in
respect of Notes tendered for conversion during the period beginning 10 Trading Days preceding the
Stated Maturity and ending one Trading Day preceding the Stated Maturity, 11 Trading Days preceding
the Stated Maturity, and if a Holder has complied with all the requirements hereunder for Notes so
surrendered, the Conversion Date with respect to such Notes shall be the Stated Maturity; and (y)
in all other cases, no later than two Trading Days following the Conversion Date.

     (ii) In the case of Sections 2.2 (a)(ii) and (iii), the Company shall specify the amount to be
satisfied in cash as a percentage of the conversion obligation or as a fixed dollar amount,

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and the
settlement shall occur on the third Trading Day following the final Trading Day of the Conversion
Period.

     (iii) In the case of Section 2.2 (a)(i), the settlement shall occur as soon reasonably
practicable after the third Trading Day following the Conversion Date.

     (iv) In the case of a Cash Payment of Principal Election, the Company shall notify, by written
notice, the Trustee, the Conversion Agent and the Holders in the manner provided in Section 10.2 of
the Indenture.

     (c) Upon surrender of a Note for conversion, the Holder shall deliver to the Company cash
equal to the amount that the Company is required to deduct and withhold under applicable law in
connection with such conversion; provided, however, that if the Holder does not deliver such cash,
the Company may deduct and withhold from the consideration otherwise deliverable to such Holder the
amount required to be deducted and withheld under applicable law.

     Section 2.3 Conversion Rate and Conversion Trigger Price.

     The rate at which shares of Common Stock shall be delivered upon conversion (such rate as in
effect from time to time and on any date including any adjustments pursuant to Section 2.6 in
effect on such date, the “Conversion Rate”) shall be initially 20.4518 shares of Common Stock for
each $1,000 principal amount of Notes. The Conversion Rate shall be adjusted in certain instances
as provided in Section 2.6 hereof. All calculations under this Article 2 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.

     Section 2.4 Exercise of Conversion Right.

     To convert a Note, a Holder must (a) complete and manually sign the Conversion Notice or a
facsimile of the Conversion Notice on the back of the Note if certificated (or Holders may obtain
copies of the required form of the Conversion Notice from the Conversion Agent) and deliver such
notice to the Conversion Agent in accordance with the notice provisions set forth in Section 10.2
of the Indenture, (b) if the Notes are in certificated form, surrender the Note to the Conversion
Agent, (c) furnish appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, (d) pay any transfer or similar tax, if required, and (e) if required, pay
funds equal to the interest payable on the next Interest Payment Date or pursuant to Section
2.2(c). In the case of a Global Note, the Conversion Notice shall be completed by a Depositary
participant on behalf of the beneficial holder. Anything herein to the contrary notwithstanding,
in the case of Global Notes, Conversion Notices may be delivered and such Notes may be surrendered
for conversion in accordance with the applicable procedures of the Depositary as in effect from
time to time.

     Notes surrendered for conversion during the period from the close of business on any Record
Date immediately preceding any Interest Payment Date to the opening of business on such Interest
Payment Date shall be accompanied by payment in immediately available funds or other funds
acceptable to the Company of an amount equal to the interest payable on such Interest

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Payment Date
on the principal amount of Notes being surrendered for conversion; provided, however, that no such
payment need be made if (1) we have specified a repurchase date following a Change of Control or a
Fundamental Change that is during such period or (2) only to the extent of overdue interest, any
overdue interest exists at the time of conversion with respect to such note. No payment or
adjustment shall be made upon any conversion on account of any interest accrued on the Notes
surrendered for conversion from the Interest Payment Date preceding the day of conversion, or on
account of any dividends on the Common Stock issued upon conversion. In addition, Holders shall
not be entitled to receive any dividends payable to Holders of Common Stock as of any record date
before the close of business on the applicable conversion date. Notes shall be deemed to have been
converted immediately prior to the close of business on the day of surrender of such Notes for
conversion in accordance with the foregoing provisions and comply with the other foregoing
provisions, and at such time the rights of the Holders of such Notes as Holders shall cease, and
the Person or Persons entitled to receive the Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the Company shall issue and shall deliver
to the Trustee at its Corporate Trust Office and the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock issuable upon conversion, together with payment in
lieu of any fraction of a share thereof, as provided in Section 2.5 hereof, and the Trustee shall
forward such certificate or certificates at the addresses set forth in the written notices sent to
the Company by the Holders electing to convert their Notes.

     Section 2.5 Fractions of Common Stock Shares.

     No fractional shares of Common Stock shall be issued upon conversion of the Notes. If more
than one Note shall be surrendered for conversion at one time by the same Holder, the number of
full shares which shall be issuable upon conversion thereof shall be computed on the basis of the
principal amount of the Notes so surrendered. Instead of any fractional share of Common Stock
which would otherwise be issuable upon conversion of any Note or Notes, the Company shall pay a
cash adjustment in respect of such fraction in an amount equal to the same fraction of the Closing
Sale Price on the Trading Day prior to the date of the date of the conversion of the Notes
(determined by the Company in accordance with the following paragraph) per share of Common Stock.

     Section 2.6 Adjustment of Conversion Rate.

     (1) In case at any time after the date of the issuance of the Notes, the Company shall pay to
all holders of Common Stock a dividend or other distribution payable in shares of its Common Stock,
the Conversion Rate in effect at the opening of business on the day following the date fixed for
the determination of stockholders entitled to receive such dividend or other distribution shall be
increased by multiplying such Conversion Rate by a fraction of which:

     (i) the numerator shall be the sum of the number of shares of Common Stock outstanding
at the close of business on the date fixed for determining the stockholders

-7-

 

entitled to
receive such dividend or other distribution, plus the number of shares of Common Stock
constituting such dividend or other distribution and

     (ii) the denominator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for determining the stockholders entitled to receive
such dividend or other distribution,

such increase to become effective immediately after the opening of business on the day following
the date fixed for such determination. For the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company. If any dividend or
distribution of the type described in this paragraph (1) of Section 2.6 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.

     (2) Subject to paragraph 9 of this Section 2.6, in case at any time after the date of the
issuance of the Notes, the Company shall issue rights, options or warrants to all holders of its
Common Stock (other than any rights, options or warrants that by their terms will also be
issued to any Holder upon conversion of a Note into Common Stock without any action required by the
Company or any other person) entitling them (for a period ending within forty-five (45) days after
the date fixed for the determination of stockholders entitled to receive such rights or warrants)
to subscribe for or purchase shares of Common Stock at a price per share less than the then current
market price per share (determined as provided in paragraph (10) of this Section 2.6) of the Common
Stock on the date fixed for the determination of stockholders entitled to receive such rights,
options or warrants (other than pursuant to a dividend reinvestment plan), the Conversion Rate in
effect at the opening of business on the day following the date fixed for such determination shall
be increased by multiplying such Conversion Rate by a fraction of which:

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

     (ii) the denominator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for determining the stockholders entitled to receive
such rights, options or warrants plus the number of shares of Common Stock that the
aggregate of the offering price of all shares of Common Stock so offered for subscription or
purchase would purchase at the current market price.

     Such adjustment shall be successively made whenever any such rights or warrants are issued,
and shall become effective immediately after the opening of business on the day following the date
fixed for such determination. To the extent that all shares of Common Stock are not delivered
after the expiration of such rights, options or warrants, the Conversion Rate shall be

-8-

 

readjusted
to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of
such rights, options or warrants been made on the basis of delivery of only the number of shares of
Common Stock actually delivered. If such rights, options or warrants are not so 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, options or
warrants had not been fixed. In determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than such current market price, and in
determining the aggregate offering price of such shares of Common Stock, there shall be taken into
account any consideration received by the Company for such rights, options or warrants and any
amount payable on exercise or conversion thereof, the value of such consideration, if other than
cash, to be determined by the Board of Directors. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock. The Company will not issue any rights, options or
warrants in respect of shares of Common Stock held in the treasury of the Company.

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

     (4) In case at any time after the date of the issuance of the Notes, the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock, shares of any class of its
Capital Stock, evidences of its indebtedness or other assets (including securities, but excluding
any rights, options or warrants referred to in paragraph (2) of this Section 2.6, any dividend or
distribution paid exclusively in cash, any dividend or distribution referred to in paragraph (1) of
this Section 2.6 and distributions upon a Special Merger or Consolidation), the Conversion Rate
shall be adjusted by multiplying the Conversion Rate in effect immediately prior to the close of
business on the date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which:

     (i) the numerator shall be the current market price per share (determined as provided
in paragraph (10) of this Section 2.6) of the Common Stock on the date fixed for determining
the stockholders entitled to such distribution and

     (ii) the denominator shall be the current market price per share of Common Stock on the
date fixed for determining the stockholders entitled to such distribution

-9-

 

minus the fair
market value (as determined by the Board of Directors) of the portion of such distribution
applicable to one share of Common Stock,

such adjustment to become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to receive such
distribution; provided, however, that if the then fair market value (as so determined) of the
portion of the shares of Capital Stock, assets or evidences of indebtedness so distributed
applicable to one share of Common Stock is equal to or greater than the current market price per
share (determined as provided in paragraph (10) of this Section 2.6) on the date fixed for the
determination of stockholders entitled to receive such distribution, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the right to receive
upon conversion the amount of shares of Capital Stock, assets or evidences of indebtedness such
Holder would have received had such Holder converted each Note on the date fixed for determination
of stockholders entitled to receive such distribution. If such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then
be in effect if such dividend or distribution had not been declared if the Board of Directors
determines the fair market value of any distribution for purposes of this paragraph (4) by
reference to the actual or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such market over the same period used in
computing the current market price per share pursuant to paragraph (10) of this Section 2.6.

     Notwithstanding the foregoing, if the shares of Capital Stock, assets or evidences of
indebtedness distributed by the Company to all holders of its Common Stock consist of Capital Stock
of, or similar equity interests in, a Subsidiary or other business unit of the Company, the
Conversion Rate shall be increased so that the same shall be equal to the rate determined by
multiplying the Conversion Rate in effect on the date fixed for determination of stockholders
entitled to receive such distribution with respect to such distribution by a fraction of which:

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

     (ii) the denominator shall be the average Closing Sale Price of one share of Common
Stock over the Spinoff Valuation Period,

such adjustment to become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to receive such
distribution; provided, however, that the Company may in lieu of the foregoing adjustment make
adequate provision so that each Holder shall have the right to receive upon conversion the amount
of

-10-

 

shares of Capital Stock, assets or evidences or indebtedness such Holder would have received had
such Holder converted each Note on the date fixed for determination of stockholders entitled to
receive such distribution.

     (5) In case the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock cash (excluding (x) any distribution in connection with the liquidation, dissolution
or winding up of the Company, whether voluntary or involuntary, (y) any cash portions of
distributions referred to in paragraph (4) of this Section 2.6, and (z) cash distributions upon a
Special Merger or Consolidation to which paragraph (7) of this Section 2.6 applies) then, in such
case, the Conversion Rate shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the close of business on the record
date fixed for determination of stockholders entitled to receive such distribution by a fraction of
which,

     (i) the numerator shall be the sum of the average of the Closing Sale Price of the shares of Common Stock for the 10 consecutive Trading Days before the Business Day
immediately preceding the earlier of the record date or the day before the Ex-dividend Date
for such distribution, plus the amount in cash per share that the Company distributes to
holders of its shares of Common Stock in respect of such fiscal period, and

     (ii) the denominator shall be the sum of the average of the Closing Sale Price of the shares of Common Stock for the 10 consecutive Trading Days before the Business Day
immediately preceding the earlier of the record date or the day before the Ex-dividend Date
for such distribution,

such adjustment to be effective immediately prior to the opening of business on the day following
such record date; provided, however, that if the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the current market price (determined as
provided in paragraph (10) of this Section 2.6) on such record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the right to receive
upon conversion the amount of cash such Holder would have received had such Holder converted each
Note on such record date. If such 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 distribution had
not been declared. If any adjustment is required to be made as set forth in this paragraph (5) of
this Section 2.6 as a result of a distribution that is a quarterly dividend, such adjustment shall
be based upon the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant hereto. If an adjustment is required to be made as set
forth in this paragraph (5) of this Section 2.6 as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the distribution.
Notwithstanding the foregoing, in the event of an adjustment to the Conversion Rate pursuant to
this paragraph (5), in no event will the Conversion Rate exceed 28.6369 shares per $1,000 principal
amount of Notes. The cap on the adjustment to the Conversion Rate pursuant to this paragraph (5)
remains subject to adjustment pursuant to paragraphs (1), (2), (3) and (4) of this Section 2.6.

-11-

 

     (6) In case at any time after the date of the issuance of the Notes, a tender or exchange
offer made by the Company or any Subsidiary for all or any portion of the Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall require the
payment to stockholders (based on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of Purchased Shares (as defined below)) of an aggregate consideration
having a fair market value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee) that combined together with:

     (A) the aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board Resolution filed
with the Trustee), as of the expiration of such tender or exchange offer, of consideration
payable in respect of any other tender or exchange offer, by the Company or any Subsidiary
for all or any portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no adjustment pursuant
to this paragraph (6) has been made, and

     (B) the aggregate amount of any distributions to all holders of the Company’s Common
Stock made exclusively in cash within 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section 2.6 has been made,

exceeds 10% of the product of (I) the current market price per share of the Common Stock
(determined as provided in paragraph (10) of this Section 2.6) as of the last time (the “Expiration
Time”) tenders or exchanges could have been made pursuant to such tender or exchange offer (as it
may be amended), times (II) the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time, then, and in each such case, immediately
prior to the opening of business on the day after the date of the Expiration Time, the Conversion
Rate shall be increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the Expiration Time by a fraction,

     (i) the numerator of which shall be the sum of (x) the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted up to any such maximum, being referred to as the
“Purchased Shares”) and (y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) at the Expiration Time and the Closing Sale Price of a share of
Common Stock on the trading day next succeeding the Expiration Time, and

     (ii) the denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time

-12-

 

multiplied by the
Closing Sale Price of a share of Common Stock on the Trading Day next succeeding the
Expiration Time,

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

     To the extent the Company shall have in effect any shareholder rights plan, upon conversation
of its Notes, each Holder will receive in addition to shares of Class A Common Stock, cash or a
combination thereof, as provided in Section 2.2, the rights under such rights plan unless such
rights have been separated from the Class A Common Stock, subject to readjustment in the event of
the expiration, termination or redemption of such rights.

     (7) (a) In the event of a Special Merger or Consolidation, then, upon conversion of Notes, the
Holder will be entitled to receive the same type of consideration that such Holder would have been
entitled to receive if the Holder had converted its Notes into Common Stock immediately before any
Special Merger or Consolidation.

          (b) In the case of (i) a distribution of securities other than Common Stock to all holders of
Common Stock, the effective date of such reclassification shall be deemed to be “the date fixed for
the determination of stockholders entitled to receive such distribution” and “the date fixed for
such determination” within the meaning of paragraph (4) of this Section 2.6, and (ii) a subdivision
or combination, as the case may be, the effective date of such reclassification shall be deemed to
be “the day upon which such subdivision becomes effective” or “the day upon which such combination
becomes effective”, as the case may be, and “the day upon which such subdivision or combination
becomes effective” within the meaning of paragraph (3) of this Section 2.6.

     (8) In the case of a Fundamental Change, solely upon receipt by the Conversion Agent of any
Holder’s Conversion Notice pursuant to Section 2.4 hereof, from and including the day that is 30
Business Days before the anticipated Effective Date of the Fundamental Change up to and including
the Trading Day before the Effective Date of the Fundamental Change, the Company will increase the
Conversion Rate for the Notes surrendered for conversion by a number of additional shares of Common
Stock (the “Additional Fundamental Change Shares”) determined in accordance with this paragraph
(8); provided, however, that if the holders of Common Stock receive only cash in the Fundamental
Change transaction, the stock price shall be the cash amount paid per share of Common Stock. The
following table sets forth the hypothetical increase in the Conversion Rate, expressed as a number
of Additional Fundamental Change Shares issuable per $1,000 principal amount of Notes as a result
of a Fundamental Change that occurs in the corresponding period:

-13-

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Price
	Effective date	 	$34.92	 	$40.00	 	$45.00	 	$50.00	 	$55.00	 	$60.00	 	$65.00	 	$70.00	 	$80.00	 	$90.00	 	$100.00	 	$110.00	 	$120.00	 	$130.00
	6/29/2007
	 	 	8.19	 	 	 	4.55	 	 	 	3.17	 	 	 	2.35	 	 	 	1.81	 	 	 	1.45	 	 	 	1.21	 	 	 	1.03	 	 	 	0.80	 	 	 	0.66	 	 	 	0.56	 	 	 	0.49	 	 	 	0.43	 	 	 	0.38	 
	12/31/2007
	 	 	8.19	 	 	 	4.55	 	 	 	3.01	 	 	 	2.16	 	 	 	1.62	 	 	 	1.27	 	 	 	1.04	 	 	 	0.88	 	 	 	0.68	 	 	 	0.56	 	 	 	0.48	 	 	 	0.41	 	 	 	0.36	 	 	 	0.32	 
	6/30/2008
	 	 	8.19	 	 	 	4.55	 	 	 	2.85	 	 	 	1.96	 	 	 	1.42	 	 	 	1.08	 	 	 	0.87	 	 	 	0.72	 	 	 	0.55	 	 	 	0.46	 	 	 	0.39	 	 	 	0.34	 	 	 	0.30	 	 	 	0.26	 
	12/31/2008
	 	 	8.19	 	 	 	4.55	 	 	 	2.66	 	 	 	1.74	 	 	 	1.19	 	 	 	0.87	 	 	 	0.67	 	 	 	0.55	 	 	 	0.42	 	 	 	0.35	 	 	 	0.30	 	 	 	0.26	 	 	 	0.23	 	 	 	0.20	 
	6/30/2009
	 	 	8.19	 	 	 	4.55	 	 	 	2.45	 	 	 	1.48	 	 	 	0.93	 	 	 	0.63	 	 	 	0.47	 	 	 	0.38	 	 	 	0.28	 	 	 	0.24	 	 	 	0.20	 	 	 	0.18	 	 	 	0.16	 	 	 	0.14	 
	12/31/2009
	 	 	8.19	 	 	 	4.55	 	 	 	2.21	 	 	 	1.16	 	 	 	0.62	 	 	 	0.36	 	 	 	0.24	 	 	 	0.19	 	 	 	0.14	 	 	 	0.12	 	 	 	0.11	 	 	 	0.09	 	 	 	0.08	 	 	 	0.07	 
	6/30/2010
	 	 	8.19	 	 	 	4.55	 	 	 	1.95	 	 	 	0.75	 	 	 	0.23	 	 	 	0.05	 	 	 	0.01	 	 	 	0.01	 	 	 	0.01	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 
	12/31/2010
	 	 	8.19	 	 	 	4.55	 	 	 	1.77	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 	 	 	0.00	 

The stock price paid per share of Common Stock in a Fundamental Change transaction (the “Stock
Price”) shall be the average of the Closing Sale Prices of Common Stock on the 10 consecutive
Trading Days up to but excluding the date on which the Fundamental Change transaction becomes
effective (the “Effective Date”).

     The Stock Prices set forth in the first row of the table will be adjusted as of any date on
which the Conversion Rate of the Notes is adjusted. The adjusted Stock Prices will equal the Stock
Prices applicable immediately before such adjustment multiplied by a fraction, the numerator of
which is the Conversion Rate immediately before the adjustment giving rise to the Stock Price
adjustment, and the denominator of which is the Conversion Rate as so adjusted. In addition, the
number of additional fundamental change shares will be subject to adjustment pursuant to this
Section 2.6.

     The exact Stock Prices and Effective Dates may not be set forth in the table, in which case:

     (a) if the Stock Price is between two Stock Price amounts in the table or the
Effective Date is between two dates in the table, the additional fundamental change shares
will be determined by straight-line interpolation between the number of additional
fundamental change shares set forth for the higher and lower stock price amounts and the two
dates, as applicable, based on a 365-day year;

     (b) if the Stock Price is in excess of $130.00 per share of Common Stock (subject to
adjustment), no additional fundamental change shares will be issued upon conversion; and

     (c) if the Stock Price is less than $34.92 per share of Common Stock (subject to
adjustment), no additional fundamental change shares will be issued upon conversion.

     Notwithstanding the foregoing, in no event will the Conversion Rate exceed 28.6369 shares per
$1,000 principal amount of Notes. The cap on the adjustment to the Conversion Rate pursuant to a
Fundamental Change remains subject to adjustment pursuant to paragraphs (1), (2), (3) and (4) of
this Section 2.6.

     If the Fundamental Change is also a Public Acquirer Fundamental Change, then, in lieu of
increasing the Conversion Rate pursuant to this paragraph (8), the Company may elect to change the
Conversion Rate pursuant to paragraph (9).

-14-

 

     (9) If the Fundamental Change is a Public Acquirer Fundamental Change, the Company may, at its
sole option, elect to change the Conversion Rate pursuant to this paragraph (9), in lieu of
increasing the Conversion Rate applicable to Notes that are converted in connection with the Public
Acquirer Fundamental Change. If the Company makes this election, then the Conversion Rate will be
adjusted and the Company’s related conversion obligation such that, from and after the Effective
Date of the Public Acquirer Fundamental Change, the right to convert a Note pursuant to Section 2.2
(a) will be changed into a right to convert Notes into shares of Public Acquirer Common Stock still
subject to Section 2.2 (a), by adjusting the Conversion Rate in effect immediately before the
effective time by a fraction of which:

     (i) the numerator is the fair market value (as determined in good faith by the Board of
Directors), as of the Effective Date of the Public Acquirer Fundamental Change, of the cash,
securities and other property paid or payable per share of Common Stock, and,

     (ii) the denominator is the average of the Closing Sale Prices per share of the Public
Acquirer Common Stock for the 10 consecutive Trading Days commencing on, and including, the
Trading Day immediately after the Effective Date of the Public Acquirer Fundamental Change.

     If the Company elects to change the Conversion Rate pursuant to this paragraph (9), the change
in the Conversion Rate will apply to all Holders from and after the Effective Date of the Public
Acquirer Fundamental Change, and not just those Holders, if any, that convert their Notes in
connection with the Public Acquirer Fundamental Change. If the Company elects to change the
Conversion Rate as described above in connection with a Public Acquirer Fundamental Change that is
not consummated, than the Company will not be obligated to effect such election.

     (10) For the purpose of any computation under paragraphs (2), (4), (5) or (6) of this Section
2.6, the current market price per share of Common Stock on any date shall be deemed to be the
average of the daily Closing Sale Prices of the Common Stock for the five consecutive Trading Days
selected by the Company commencing not more than ten Trading Days before, and ending not later than
the earlier of, the day in question and the day before the “ex” date with respect to the issuance
or distribution requiring such computation. For purposes of this paragraph, the term “ex” date,
when used with respect to any issuance or distribution, means the first date on which the Common
Stock trades regular way in the applicable securities market or on the applicable securities
exchange without the right to receive such issuance or distribution.

     (11) No adjustment in the Conversion Rate shall be required unless such adjustment (plus any
adjustments not previously made by reason of this paragraph (11)) would require an increase or
decrease of at least 1.0% in the Conversion Rate; provided, however, that any adjustments which by
reason of this paragraph (11) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this paragraph (11) shall be made to
the nearest whole cent.

-15-

 

     (12) The Company may make such increases in the Conversion Rate, in addition to those required
by this Section 2.6, as it considers to be advisable in order to avoid or diminish any income tax
to any holders of shares of Common Stock resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reasons. The Company shall have the power to resolve any
ambiguity or correct any error in this paragraph (12) and its actions in so doing shall be final
and conclusive.

     (13) To the extent permitted by applicable law, the Company from time to time may increase the
Conversion Rate by any amount for any period of time if the period is at least 20 days, the
increase is irrevocable during such period, and the Board of Directors shall have made a
determination that such increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the preceding sentence,
the Company shall give notice of the increase to the Holders in the manner provided for in Section
10.2 of the Indenture at least 15 days prior to the date the increased Conversion Rate takes
effect, and such notice shall state the increased Conversion Rate and the period during which it
will be in effect.

     (14) In the event that this Article 2 requires adjustments to the Conversion Rate under more
than one of Sections 2.6(1), 2.6(2), 2.6(4) or 2.6(5) hereof, and the record dates for the
distributions giving rise to such adjustments shall occur on the same date, then such adjustments
shall be made by applying, first, the provisions of Section 2.6(4), second, the provisions of
Section 2.6(5), third, the provisions of Section 2.6(1) and, fourth, the provisions of Section
2.6(2). After an adjustment to the Conversion Rate under this Article 2, any subsequent event
requiring an adjustment under this Article 2 shall cause an adjustment to the Conversion Rate as so
adjusted. Whenever successive adjustments to the Conversion Rate are called for pursuant to this
Article 2, such adjustments shall be made to the provisions of Section 2.6(10) hereof as may be
necessary or appropriate to effectuate the intent of this Article 2 and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.

     Section 2.7 Notice of Adjustments of Conversion Rate.

     Whenever the Conversion Rate is adjusted as herein provided: (a) the Company shall compute the
adjusted Conversion Rate in accordance with Section 2.6 hereof and shall prepare an Officers’
Certificate, one of the signatories of which shall be the Treasurer or Chief Financial Officer of
the Company, setting forth the adjusted Conversion Rate (certified by the Company’s independent
public accountants or other certified public accountant) and showing in reasonable detail the facts
upon which such adjustment is based, and such certificate shall forthwith be filed with the Trustee
at each office or agency maintained for the purpose of conversion of Securities pursuant to Section
2.4 hereof; and (b) a notice stating that the Conversion Rate has been adjusted and setting forth
the adjusted Conversion Rate shall forthwith be required, and as soon as practicable after it is
required, such notice shall be given by the Company to the Trustee and all Holders in the manner
provided for in Section 10.2 of the Indenture. In the case of a Fundamental Change, or Public
Acquirer Fundamental Change, as the case may be, the Company shall notify Holders of the Notes and
the Conversion Agent at least 30 Business Days before the

-16-

 

anticipated Effective Date of a
Fundamental Change (the “Fundamental Change Notice”) and indicate whether the election to increase
the Conversion Rate pursuant to Section 2.6 (8) or (9).

     The Trustee shall not be deemed to have notice of any change in the Conversion Rate unless and
until it receives the Officers’ Certificate provided for in the foregoing clause (a) setting forth
such change.

     Section 2.8 Notice of Certain Corporate Action.

     In case:

     (a) the Company shall declare a dividend or make any other distribution that would
require any adjustment pursuant to Section 2.6 hereof;

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

     (c) of any reclassification of the Common Stock of the Company, 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 that is otherwise subject to Section 2.13 hereof, or of the
conveyance, lease, 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,

then the Company shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 2.4 hereof, and shall cause to be mailed to all
Holders at their last addresses as they shall appear in the register for the Securities, at least
20 days prior to the applicable record or effective date hereinafter specified, a notice (which
notice shall also be sent by release to Reuters Economic Services and Bloomberg Business News as
set forth in Section 10.2 of the Indenture) stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, share exchange, conveyance, lease, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the date as of which it
is expected that holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, conveyance, lease, sale, transfer, dissolution, liquidation
or winding up. Neither the failure to give such notice nor any defect therein shall affect the
legality or validity of the proceedings described in clauses (a) through (d) of this Section 2.8.
If at the time the Trustee shall not be the Conversion Agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee. The Company shall cause to be filed at the
Corporate Trust Office and each

-17-

 

office or agency maintained for the purpose of conversion of Notes
pursuant to Section 2.4 of the Indenture, and shall cause to be provided to all Holders in
accordance with Section 10.2 of the Indenture, notice of any tender offer by the Company or any
Subsidiary for all or any portion of the Common Stock at or about the time that such notice of
tender offer is provided to the public generally.

     Section 2.9 Company to Reserve Common Stock.

     The Company shall at all times reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock, for the purpose of effecting the conversion of Notes, the
full number of shares of Common Stock then issuable upon the conversion of all outstanding Notes.

     Section 2.10 Taxes on Conversions.

     The Company will pay any and all taxes that may be payable in respect of the issue or delivery
of shares of Common Stock on conversion of Notes pursuant hereto. The Company shall not, however,
be required to pay any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder of the Note or Notes
to be converted, and no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid.

     Section 2.11 Covenant as to Common Stock.

     The Company covenants that all shares of Common Stock which may be issued upon conversion of
Notes will upon issue be fully paid and nonassessable and, except as provided in Section 2.10
hereof, the Company will pay all taxes, liens and charges with respect to the issue thereof.

     The Company will endeavor promptly to comply with all Federal and state securities laws
regulating the issuance and delivery of shares of Common Stock upon conversion of Notes, if any,
and will use its best efforts to list or cause to have quoted all such shares of Common Stock on
each United States national securities exchange or over-the-counter or other domestic market on
which the Common Stock is then listed or quoted.

     Section 2.12 Cancellation of Converted Securities.

     All Notes delivered for conversion shall be delivered to the Trustee to be canceled by or at
the direction of the Trustee, which shall dispose of the same as provided in Section 2.13 of the
Indenture.

     Section 2.13 Provisions in Case Certain Corporate Transactions.

     (a) In the case of a Dividend Event, the Company shall deliver written notice of such Dividend
Event (a “Dividend Event Notice”) by first-class mail, postage prepaid, not later than

-18-

 

the 20th day
prior to the Ex-dividend Date for such Dividend Event to the Trustee, the Conversation Agent and
the Holders in the manner provided in Section 10.2 of the Indenture;

     (b) In the case of any transaction or event other than a Fundamental Change (including, but
not limited to, any consolidation, merger or binding share exchange that does not constitute a
Fundamental Change, but excluding changes resulting from a subdivision or combination) pursuant to
which all or substantially all shares of Common Stock would be converted into cash, securities or
other property, a Holder may surrender Notes for conversion at any time from and after the date
that is 30 days prior to the anticipated effective date of such transaction or event,
until the earlier of (i) 30 days after the actual date of such transaction or event, or (ii)
the date that the Company announces that such transaction or event will not take place; provided,
however, Notes will not become convertible by reason of a merger, consolidation or other
transaction effected with one of the Company’s direct or indirect subsidiaries for the purpose of
changing its state of incorporation to any other state within the United States or the District of
Columbia. In the case of such transaction or event, the Company shall deliver notice as soon as
practicable following the public announcement of such transaction or event, but not later than the
30th day prior to the anticipated effective date of such transaction or event, to the Trustee, the
Conversion Agent and the Holders in the manner required by Section 10.2 of the Indenture; or

     (c) In the case of a Fundamental Change or a Change of Control, Holders may surrender Notes
for conversion at any time beginning 30 days before the anticipated effective date of a Fundamental
Change or Change of Control, until (i) the Trading Day prior to the Fundamental Change or Change of
Control Purchase Date or (ii) the date that the Company announces that such transaction will not
take place. In the case of a Fundamental Change or a Change of Control, the Company shall deliver
written notice by first-class mail, postage prepaid, not later than the 30th day prior to the
anticipated effective date of the Fundamental Change or Change of Control that the Company knows or
reasonably should know will occur, to the Trustee, the Conversion Agent and the Holders in the
manner required by Section 10.2 of the Indenture. If the notice delivered under this Section
2.13(c) contains all the information required to be delivered pursuant to Sections 2.7 in respect
of a Fundamental Change or in a Change of Control Notice then no additional notice under Section
2.7 or a Change of Control Notice shall be required.

     (d) With respect to conversions upon subsections (b) and (c) above, if the Company is a party
to a consolidation, merger or binding share exchange pursuant to which all shares of Common Stock
are exchanged for cash, securities or other property, then commencing with the effective time of
such transaction, any conversion of Notes and the Conversion Value will be based on the kind and
amount of cash, securities or other property that a Holder would have received if such Holder had
converted its Notes into Common Stock immediately prior to the effective time of the transaction.
For purposes of this Section 2.15(d), where a consolidation, merger or binding share exchange
involves a transaction that causes Common Stock to be converted into the right to receive more than
a single type of consideration based upon any form of shareholder election, such consideration will
be deemed to be the weighted average of the amounts and types of consideration that the holders of
Common Stock who affirmatively made such an election received in such transaction or as a result of
such event.

-19-

 

     If this Section 2.13 applies to any event or occurrence, paragraph (5) of Section 2.6 shall
not apply.

     Section 2.14 Right of Holders to Convert.

     The limitations set forth in Section 6.6 of the Indenture shall not apply to the right of a
Holder to bring a suit for the enforcement of such Holder’s right to convert Notes pursuant to this
Article 2.

     Section 2.15 Certain Definitions.

     For purposes of this Article 2:

     (1) the term “Closing Sale Price” of Common Stock on any date means the Closing Sale
Price per share (or if no Closing Sale Price is reported, the average of the average bid and
the average asked prices) on that date as reported by the NASDAQ Global Select Market or, if
Common Stock is not listed on the NASDAQ Global Select Market, as reported in composite
transactions for the principal U.S. securities exchange on which Common Stock is traded. In
the absence of such quotations, the Company shall be entitled to determine the Closing Sale
Price on the basis of such quotations as it considers appropriate. Closing Sale Price shall
be determined without reference to extended or after hours trading.

     (2) the term “Conversion Date”, with respect to a Note, means the date on which the
Holder of such Note complied with all requirements of this Indenture to convert such Note.

     (3) the term “Conversion Period” means the 20 consecutive trading-day period commencing
on the third Trading Day following the Conversion Date.

     (4) the term “Conversion Price” means, per share of Common Stock at any time, $1,000
divided by the Conversion Rate.

     (5) the term “Conversion Value” for each $1,000 principal amount of Notes is equal to
the sum of the Daily Conversion Value Amounts for all of the Trading Days in the Conversion
Period.

     (6) the term “Daily Conversion Value Amount” for each $1,000 principal amount of Notes
and each Trading Day in the Conversion Period is the amount equal to the Closing Sale Price
of Common Stock on such Trading Day multiplied by the Conversion Rate in effect on such
Trading Day divided by 20.

     (7) the term “Daily Share Amount” means, for each $1,000 principal amount of Notes and
each Trading Day in the Conversion Period, a number of shares (but in no event less than
zero) determined by the following formula:

-20-

 

Daily Conversion Value Amount – specified cash amount

 

Closing Sale Price of Common Stock on such Trading Day

     (8) the term “Dividend Event” means if the Company elects to (a) distribute to all
holders of Common Stock certain rights entitling them to purchase, for a period expiring
within 45 days of the date of issuance, Common Stock, or securities convertible into Common
Stock, at less than, or having a conversion price per share less than, the Closing Sale
Price of our Common Stock on the Trading Day immediately preceding the declaration date for
such distribution, or (b) distribute to all holders of Common Stock the Company’s assets,
cash, debt securities or certain rights to purchase the Company’s securities, which
distribution has a per share value as determined by the Company’s Board of Directors
exceeding 15% of the Closing Sale Price of Common Stock on the Trading Day immediately
preceding the declaration date for such distribution.

     (9) the term “Ex-dividend Date” means the first date upon which a sale of the Common
Stock does not automatically transfer the right to receive the relevant distribution from
the seller of the Common Stock to its buyer.

     (10) a “Fundamental Change” will be deemed to have occurred at the time that any of the
following occurs:

     (A) consummation of any transaction or event (whether by means of a share exchange or
tender offer applicable to the Company’s shares of voting stock, a liquidation,
consolidation, recapitalization, reclassification, combination or merger of the Company or a
sale, lease or other transfer of all or substantially all of the consolidated assets of the
Company) or a series of related transactions or events pursuant to which all of the
outstanding shares of voting stock of the Company are exchanged for, converted into or
constitute solely the right to receive cash, securities or other property; provided,
however, that none of the following transactions shall be deemed to be a Fundamental Change:
(i) a transaction in which the holders of the Company’s voting stock immediately before
such transaction hold, directly or indirectly, more than 50% of the total voting power in
the aggregate of all classes of shares of beneficial interest of the Company then
outstanding entitled to vote generally in elections of directors immediately after such
transaction; (ii) a transaction that is effected solely to change the Company’s jurisdiction
of incorporation and results in a reclassification, conversion or exchange of our
outstanding voting stock solely into shares of voting stock of the surviving entity or a
direct or indirect parent of the surviving entity; (iii) a transaction that does not result
in a reclassification, conversion, exchange or cancellation of the Company’s outstanding
voting stock; or (iv) a consolidation, merger, conveyance, transfer sale, lease or other
disposition with or into any of the Company’s subsidiaries (so long as such transaction is
not part of a plan or series of transactions designed to or having the effect of merging or
consolidating with

-21-

 

or conveying, transferring, selling, leasing or disposing all or substantially all of
the Company’s properties and assets to any other person);

     (B) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act, whether or not applicable), other than any majority-owned
subsidiary of the Company, any employee benefit plan of the Company or such subsidiary or
any Permitted Holder (as defined in Section 3.2 hereof), is or becomes the “beneficial
owner,” directly or indirectly, of more than 50% of the total voting power in the aggregate
of all classes of shares of beneficial interest of the Company then outstanding entitled to
vote generally in elections of directors;

     (C) during any period of 24 consecutive months after the date of original issuance of
the Notes, persons who at the beginning of such 24 month period constituted the Board of
Directors, together with any new persons whose election was approved by a vote of a majority
of the persons then still comprising the Board of Directors who were either members of the
Board of Directors at the beginning of such period or whose election, designation or
nomination for election was previously so approved (either by a specific vote or by approval
of the proxy statement issued by the Company on behalf of the entire Board of Directors in
which such individual is named as a nominee for director), cease for any reason to
constitute a majority of the Board of Directors; or

     (D) the Common Stock (or other common stock into which the Notes 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.

     However, a Fundamental Change will not be deemed to have occurred if at least 90% of the
consideration (excluding cash payments for fractional shares and cash payments made pursuant to
dissenters’ appraisal rights) in a merger, consolidation or other transaction otherwise
constituting a Fundamental Change consists of shares of common stock (or depositary receipts or
other certificates representing common equity interests) traded on a national securities exchange
or quoted on an established automated over-the-counter trading market in the United States (or will
be so traded or quoted immediately following such merger, consolidation or other transaction) and
as a result of the merger, consolidation or other transaction the Notes become convertible into
such shares of common stock (or depositary receipts or other certificates representing common
equity interests).

     (11) the term “person” includes any syndicate or group that would be deemed to be a
“person” under Section 13(d)(3) of the Exchange Act.

     (12) the term “Public Acquirer Common Stock” means a class of common stock of an
acquirer (or any entity that is a direct or indirect wholly owned subsidiary of the acquirer
or of which the acquirer is a direct or indirect wholly owned subsidiary) in a Public
Acquirer Fundamental Change, that is traded on a national securities exchange or that will
be so traded when issued or exchanged in connection with the Fundamental Change.

-22-

 

     (13) the term “Public Acquirer Fundamental Change” means an acquisition of the Company
pursuant to a Fundamental Change in which the acquirer (or any entity that is a direct or
indirect wholly owned subsidiary of the acquirer or of which the acquirer is a direct or
indirect wholly owned subsidiary) has a class of common stock that is traded on a national
securities exchange or that will be so traded when issued or exchanged in connection with
the Fundamental Change.

     (14) the term “Special Merger or Consolidation” means the occurrence of (i) any
reclassification of Common Stock; (ii) a consolidation, merger or combination involving the
Company; or (iii) a sale or conveyance to another person or entity of all or substantially
all of the Company’s property and assets, in which holders of Common Stock would be entitled
to receive stock, other securities, other property, assets or cash for their Common Stock,
which occurrence does not constitute a Fundamental Change.

     (15) “Trading Day” means, in respect of any securities exchange or securities market,
each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day on which securities
are not traded on the applicable securities exchange or in the applicable securities market.

     (16) the term “Trading Price” means, on any date of determination, the average of the
secondary market bid quotations obtained by the Trustee for $2,000,000 principal amount of
the Notes at approximately 3:30 p.m., New York City time, on such determination date from
three nationally recognized securities dealers selected by the Company; provided that if
three such bids cannot reasonably be obtained by the Trustee, 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 Trustee, that one bid shall be used. If the Trustee cannot
reasonably obtain at least one bid for $2,000,000 principal amount of the Notes from a
nationally recognized securities dealer, then the trading price per $1,000 principal amount
of Notes will be deemed to be less than 98% of the product of the Closing Sale Price of
Common Stock and the Conversion Rate.

ARTICLE 3.

REPURCHASE OF NOTES AT THE OPTION OF THE

HOLDERS UPON A CHANGE OF CONTROL

     Pursuant to Section 2.2(8) of the Indenture, so long as any of the Notes are outstanding, the
following provisions shall be applicable to the Notes:

     Section 3.1 Repurchase at Option of Holders upon Change of Control.

     (a) Upon the occurrence of a Change of Control (the date of such occurrence, the “Change of
Control Date”), the Company shall notify the Holders of the Notes in writing of such
occurrence in accordance with paragraph (b) below, and shall make an offer to purchase (a
“Change of Control Offer”), and shall purchase, on a Business Day (a “Change of Control

-23-

 

purchase
Date”) not more than 60 nor less than 30 days following the Change of Control Date all, but not
less than all, of the then outstanding Notes at a purchase price in cash equal to 100% of the
principal amount thereof plus accrued interest, if any, to the Change of Control Purchase Date (the
“Change of Control Purchase Price”).

     (b) Notice of a Change of Control Offer (a “Change of Control Notice”) shall be sent, by
first-class mail, postage prepaid, by the Company not later than the 30th day after the Change of
Control Date to the Holders of the Notes at their last registered addresses with a copy to the
Trustee and the Paying Agent (and shall also be given by release made to Reuters Economic Services
and Bloomberg Business News as provided in Section 10.2 of the Indenture). The Change of Control
Offer shall remain open from the time of mailing for at least 20 Business Days and until 5:00 p.m.,
New York City time, on the Business Day before the Change of Control Purchase Date. The Change of
Control Notice, which shall govern the terms of the Change of Control Offer, shall include such
disclosures as are required by law and shall state:

     (i) that the Change of Control Offer is being made pursuant to this Section 3.1 and
that any portion of the principal amount of Notes that is equal to $1,000 or an integral
multiple thereof, validly tendered into the Change of Control Offer and not withdrawn, will
be accepted for payment;

     (ii) the cash purchase price (including the amount of accrued interest, if any) for
each Note, the Change of Control Purchase Date and the date on which the Change of Control
Offer expires;

     (iii) that any Note not tendered for payment will continue to accrue interest in
accordance with the terms thereof;

     (iv) that, unless the Company shall default in the payment of the purchase price, any
Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Purchase Date;

     (v) that Holders electing to have Notes purchased pursuant to a Change of Control Offer
will be required to surrender their Notes to the Paying Agent at the address (in the Borough
of Manhattan, The City of New York) specified in the Change of Control Notice prior to 5:00
p.m., New York City time, on the Business Day prior to the Change of Control Purchase Date
and must complete any form of letter of transmittal proposed by the Company and reasonably
acceptable to the Trustee and the Paying Agent;

     (vi) that Holders of Notes will be entitled to withdraw their election if the Paying
Agent receives, not later than 5:00 p.m., New York City time, on the Business Day prior to
the Change of Control Purchase Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes the Holder delivered for purchase, the Note certificate number (if any) and a statement that such Holder is
withdrawing its election to have such Notes purchased;

-24-

 

     (vii) that Holders whose Notes are purchased only in part will be issued Notes equal in
principal amount to the unpurchased portion of the Notes surrendered;

     (viii) the instructions that Holders must follow in order to tender their Notes; and

     (ix) information concerning the business of the Company, the most recent annual and
quarterly reports of the Company filed with the SEC pursuant to the Exchange Act (or, if the
Company is not then permitted to file any such reports with the SEC, the comparable reports
prepared pursuant to Section 4.2 of the Indenture), a description of material developments
in the Company’s business, information with respect to pro forma historical financial
information after giving effect to such Change of Control and such other information
concerning the circumstances and relevant facts regarding such Change of Control Offer as
would be material to a Holder of Notes in connection with the decision of such Holder as to
whether or not it should tender Notes pursuant to the Change of Control Offer.

     (c) To exercise a repurchase right pursuant to this Section 3.1, a Holder shall deliver to the
Trustee a written notice (a “Repurchase Notice”) of such Holder’s exercise of such right, in
accordance with the terms and conditions set forth in the Change of Control Notice. Upon receipt
by the Trustee of a Repurchase Notice, the Holder of the Note in respect of which such Repurchase
Notice was given shall (unless such Purchase Notice or Repurchase Notice is withdrawn) thereafter
be entitled to receive solely the Change of Control Purchase Price with respect to such Note.
Notes in respect of which a Repurchase Notice has been given by the Holder thereof may not be
converted into shares of Common Stock on or after the date of the delivery of such Repurchase
Notice, unless such Repurchase Notice has first been validly withdrawn in the manner provided for
in the foregoing paragraph (b)(vi) (unless the Company has defaulted in the payment of the Change
of Control Purchase Price).

     (d) On the Change of Control Purchase Date, the Company shall

     (i) accept for payment Notes or portions thereof validly tendered pursuant to the
Change of Control Offer,

     (ii) deposit with the Paying Agent (no later than 10:00 A.M. EST on the Change of
Control Purchase Date) money, in immediately available funds, sufficient to pay the purchase
price of all Notes or portions thereof so tendered and accepted, and

     (iii) deliver to the Trustee the Notes so accepted together with an Officers’
Certificate setting forth the Notes or portions thereof tendered to and accepted for payment
by the Company.

The Paying Agent shall promptly mail or deliver to the Holders of Notes so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate and mail or deliver
to such Holders a new Note equal in principal amount to any unpurchased portion to the

-25-

 

Notes
surrendered; provided, however, that each such new Note shall be issued in an original principal
amount in denominations of $1,000 and integral multiples thereof. Any Notes not validly tendered
and not accepted by the Company shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Change of Control Offer not later
than the first Business Day following the Change of Control Purchase Date.

     (e) In the event that a Change of Control occurs and the Holders of Notes exercise their right
to require the Company to purchase Notes, if such purchase constitutes a “tender offer” for
purposes of Rule 14e-1 under the Exchange Act at that time, the Company will comply with the
requirements of Rule 14e-1 as then in effect with respect to such repurchase.

     Section 3.2 Certain Definitions.

     For purposes of this Article 3:

     (1) the term “Change of Control” means the occurrence of any of the following events:

          (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), excluding Permitted Holders, is or becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon the happening of an
event or otherwise), directly or indirectly, of more than 35% of the total voting
power of all Voting Stock of the Company; provided, however, that the Permitted
Holders (i) “beneficially own” (as so defined) a lower percentage of such total
voting power with respect to the Voting Stock than such other person or “group” and
(ii) do not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the Board of Directors of the Company;

          (b) the Company consolidates with, or merges with or into, another person or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person, or any person consolidates with, or
merges with or into, the Company, in any such event pursuant to a transaction in
which the outstanding Voting Stock of the Company is converted into or exchanged for
cash, securities or other property, other than any such transaction where (i) the
Voting Stock of the Company is converted into or exchanged for
Voting Stock (other than Disqualified Capital Stock) of the surviving or
transferee corporation and (ii) immediately after such transaction no “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
excluding Permitted Holders, is the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed to
have

-26-

 

“beneficial ownership” of all securities that such person or group has the
right to acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise), directly or
indirectly, of more than 50% of the total voting power of all Voting Stock of the
surviving or transferee corporation;

          (c) at any time during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company (together
with any new directors whose election by such Board of Directors or whose nomination
for election by the stockholders of the Company was approved by a vote of at least
66-2/3% of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board of Directors
of the Company then in office; or

          (d) the Company is liquidated or dissolved or adopts a plan of liquidation;

     (2) the term “Permitted Holders” means:

          (a) any of Charles W. Lamar, III and Kevin P. Reilly, Sr., members of their
immediate families or any lineal descendant of any of those persons and the
immediate families of any lineal descendant of those persons;

          (b) any trust, to the extent it is for the benefit of any of the persons listed
under (a) above; or

          (c) any person, entity or group of persons controlled by any of the persons
listed under (a) or (b) above; and

     (3) the term “Voting Stock” means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof to vote under
ordinary circumstances in the election of members of the Board of Directors or other
governing body of such Person.

     (4) the term “Disqualified Capital Stock” means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the Holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the Holder thereof, in whole or in part, before the Stated
Maturity of the Notes, for cash or securities constituting Indebtedness.

-27-

 

ARTICLE 4.

EVENTS OF DEFAULT

     Section 4.1 Additional Events of Default.

     Pursuant to Sections 2.2 (18) and 6.1(8) of the Indenture, so long as any of the Notes are
outstanding, the following shall be an Event of Default with respect to the Notes, in addition to
the Events of Default contained in Section 6.1 of the Indenture:

     (1) The Company fails to give a Change of Control Notice in accordance with Section
3.1(b) hereof, or defaults in the payment of the Change of Control Purchase Price.

     (2) The Company fails to give a Fundamental Change Notice in accordance with Section
2.7 hereof.

     (3) The Company fails to convert, or deliver when due, any portion of the principal
amount or conversion value of a Note following the exercise by the Holder of such Note of
the right to convert such Note into Common Stock pursuant to and in accordance with Article
2 hereof.

ARTICLE 5.

AMENDMENTS, SUPPLEMENTS AND WAIVERS

     Section 5.1 With Consent of Holders.

     Pursuant to Sections 2.2 (and subject to Section 8.4) of the Indenture, so long as any of the
Notes are outstanding, without the consent of each Securityholder affected, an amendment,
supplement or waiver, including a waiver pursuant to Section 6.4 of the Indenture, may not (in
addition to the events described in paragraphs (1) through (9) of the Indenture):

     (1) make any change that impairs or adversely affects the right to convert any Security
into Common Stock;

     (2) impair or adversely affect the right of a Holder to institute suit for the
enforcement of any payment with respect to, or conversion of, the Notes;

     (3) make any change that adversely affects the right to require the Company to
repurchase the Notes upon a Change of Control pursuant to and in accordance with Article 3
hereof; or

     (4) reduce or impair or adversely affect the right of a Holder to receive the Change of
Control Purchase Price.

-28-

 

ARTICLE 6.

MISCELLANEOUS

     Section 6.1 Application of Second Supplemental Indenture.

     Each and every term and condition contained in the Second Supplemental Indenture that
modifies, amends or supplements the terms and conditions of the Indenture shall apply only to the
Notes created hereby and not to any future series of Notes established under the Indenture. Except
as specifically amended and supplemented by, or to the extent inconsistent with, this Second
Supplemental Indenture, the Indenture shall remain in full force and effect and is hereby ratified
and confirmed.

     Section 6.2 Effective Date.

     This Second Supplemental Indenture shall be effective as of the date first above written and
upon the execution and delivery hereof by each of the parties hereto.

     Section 6.3 Counterparts.

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

-29-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be
duly executed by their respective officers hereunto duly authorized, all as of the day and year
first above written.

	 	 	 	 	 
	 	LAMAR ADVERTISING COMPANY

 	 
	 	By:  	/s/ Keith A. Istre
 	 
	 	 	Name:  	Keith A. Istre 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 
	Attest:
	 	 
	 
	 	 
	/s/ Kevin P. Reilly
 

Name: Kevin P. Reilly

Title: Chief Executive Officer

	 	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK TRUST

     COMPANY, N.A., as Trustee

 	 
	 	By:  	/s/ Christie Leppert
 	 
	 	 	Name:  	Christie Leppert 	 
	 	 	Title:  	Assistant Vice President 	 
	 

	 	 	 
	Attest:
	 	 
	 
	 	 
	/s/ Tina D. Gonzalez
 

Name: Tina D. Gonzalez

Title: Assistant Treasurer

	 	 

-30-

 

	 	 	 	 	 	 	 
	STATE OF NEW YORK

	) 	 		 	 	 
	 

	)ss: 	 		 	 	
	COUNTY OF NEW YORK

	) 	 		 	 	 

     On
the ___ day of                     , ___, before me personally came                     , to me known,
who, being by me duly sworn, did depose and say that he is the       
               of
                 
                                           , one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that he signed his name thereto by authority of the Board of Directors.

       
                 
                 
                  
                 
    

-31-

 

Exhibit A

[FORM OF FACE OF NOTE]

     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITARY.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER 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.

LAMAR ADVERTISING COMPANY

2-7/8% Convertible Note due 2010—Series B

			
	No.                     
	 	$                    

CUSIP No.

     LAMAR ADVERTISING COMPANY, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the “Company”, which term includes any successor Person under the
Indenture hereinafter defined), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of $                     (                     Dollars) on December 31, 2010,
and to pay interest thereon from July 3, 2007 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi annually on June 30 and December 31 in each
year, commencing June 30, 2007, at the rate of 2-7/8% per annum, until the principal hereof is paid
or made available for payment.

     The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name this Note is
registered at the close of business on the regular record date for such interest, which shall be
the 15th of June or 15th of December, as the case may be, next preceding such Interest Payment Date
or, if such record date is not a Business Day, at the close of business of the immediately

 

 

succeeding Business Day. A “Business Day” shall mean any day other than a Saturday, Sunday, a
federally recognized holiday or a day on which banking institutions are not authorized or required
by law or executive order to be open in the State of New York. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on such regular record
date and shall be paid to the Person in whose name this Note is registered at the close of business
on a subsequent special record date, which date shall be the fifteenth day next preceding the date
fixed by the Company for the payment of defaulted interest or the next succeeding Business Day if
such date is not a Business Day. At least 30 days before the special record date, the Company
shall mail or cause to be mailed to each Holder, with a copy to the Trustee, a notice that states
the special record date, the payment date, and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.

     Payments of principal of and interest on this Note and any additional payments due hereunder
shall be made at the office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, State of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and private debts.
Interest may, at the option of the Company, be paid either (i) by check mailed to the registered
address of the Person entitled thereto; provided, however, that a Holder of Notes with an aggregate
principal amount in excess of $2,000,000 shall, at the written election (timely made and containing
appropriate wire transfer information) of such Holder, be paid by wire transfer of immediately
available funds or (ii) by transfer to an account maintained by such Person located in the United
States; provided, however, that payment to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.

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

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

-2-

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed and delivered
under its corporate seal.

Dated:

	 	 	 	 	 	 	 
	 	 	LAMAR ADVERTISING COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:

Title:
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:

Title:
	 	 

     This is one of the Securities of the Series designated therein referred to in the
within-mentioned Indenture.

Dated:

	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST

     COMPANY, N.A., as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Authorized Signatory
	 	 

-3-

 

[FORM OF REVERSE OF NOTE]

     This Note is one of a duly authorized issue of securities of the Company (herein called the
“Notes”), issued and to be issued in one or more series under an Indenture, dated as of June 16,
2003 (as supplemented by a Second Supplemental Indenture, dated as of July 3, 2007, the
“Indenture”), between the Company and The Bank of New York Trust Company, N.A., as Trustee (herein
called the “Trustee”, which term includes any successor trustee under the Indenture), and reference
is hereby made to the Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, and the Holders of the Notes and of
the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one
of the series designated on the face hereof as “2-7/8% Convertible Notes due 2010—Series B”,
limited in aggregate principal amount to $287,500,000. All terms used in this Note which are
defined in the Indenture shall have the meanings assigned to them in the Indenture.

     No sinking fund is provided for the Notes.

     Subject to and upon compliance with the provisions of the Indenture, any Note (or any portion
of the principal amount thereof which is $1,000 or an integral multiple of $1,000) that has not
previously been repurchased, is convertible at the option of the Holder thereof, to the extent
permitted by Article 2 of the Second Supplemental Indenture into cash, shares of fully paid and
nonassessable shares of Class A common stock of the Company, $0.001 par value per share (the
“Common Stock”), or a combination of both as provided in Section 2.2 of the Second Supplemental
Indenture at an initial conversion rate (calculated to the nearest 1/100 of a share) of 20.4518
shares of Common Stock for each $1,000 principal amount of Note, or at the current adjusted
conversion rate if an adjustment has been made as provided in the Indenture. A Note or portion
thereof in respect of which the Holder has delivered a Repurchase Notice may be converted only if
such notice is withdrawn in accordance with the terms of the Indenture, unless the Company has
defaulted in the payment of the Change of Control Purchase Price. To convert this Note the Holder
must (a) complete and manually sign the Conversion Notice or a facsimile of the Conversion Notice
on the back of the Note and deliver such notice to the Conversion Agent, (b) surrender the Note to
a Conversion Agent, (c) furnish appropriate endorsements and transfer documents if required by the
Registrar or the Conversion Agent, (d) pay any transfer or similar tax, if required and (e) if
required, pay funds equal to the interest payable on the next Interest Payment Date. In the case
of a Global Note, the Conversion Notice shall be completed by a DTC participant on behalf of the
beneficial holder. Notes surrendered for conversion during the period from the close of business
on any Record Date immediately preceding any Interest Payment Date to the opening of business on
such Interest Payment Date shall be accompanied by payment in immediately available funds or other
funds acceptable to the Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of Notes being surrendered for conversion; provided, however, that no
such payment need be made if (1) we have specified a repurchase date following a Change of Control
that is during such period or (2) only to the extent of overdue interest, any overdue interest
exists at the time of conversion with respect to such note. No payment or adjustment shall be made
upon any conversion on account of any interest accrued hereon from the Interest Payment Date
immediately preceding the day of

-4-

 

conversion, or on account of any dividends on the Common Stock issued on conversion hereof.
In addition, the Holders shall not be entitled to receive any dividends payable to holders of
Common Stock as of any record date before the close of business on the conversion date. No
fractional shares will be issued on conversion, but instead of any fractional interest (calculated
to the nearest 1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture.

     The Indenture provides that in the event of (i) certain types of reclassification or changes
of the outstanding shares of Common Stock, (ii) any consolidation, merger or combination of the
Company with another Person as a result of which holders of Common Stock shall be entitled to
receive stock, other securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which holders of Common
Stock shall be entitled to receive stock, other securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Company or the successor or
purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture
(which shall comply with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) providing that this Note shall be convertible into the kind and amount of
shares of stock, other securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance by a holder of a
number of shares of Common Stock issuable upon conversion of such Note (assuming, for such
purposes, a sufficient number of authorized shares of Common Stock are available to convert all
such Notes) immediately prior to such reclassification, change, consolidation, merger, combination,
sale or conveyance assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of stock, other securities or other property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or
conveyance (provided, however, that, if the kind or amount of stock, other securities or other
property or assets (including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance is not the same for each share of Common Stock in respect
of which such rights of election shall not have been exercised (a “nonelecting share”), the kind
and amount of stock, other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or conveyance for each
non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality
of the non-electing shares).

     Upon the occurrence of a Change of Control, the Company shall notify the Holders of the Notes
of such occurrence by delivering a Change of Control Notice, and shall make a Change of Control
Offer, and shall purchase, on a Business Day not more than 60 nor less than 30 days following the
Change of Control Date (a “Change of Control Purchase Date”) all, but not less than all, of the
then outstanding Notes at a purchase price in cash equal to 100% of the principal amount thereof
plus accrued interest, if any, to the Change of Control Purchase Date (the “Change of Control
Purchase Price”). The Change of Control Offer shall remain open from the time of mailing for at
least 20 Business Days and until 5:00 p.m., New York City time, on the Business Day prior to the
Change of Control Purchase Date. To exercise its repurchase right, a Holder shall deliver to the
Trustee a written a Repurchase Notice, in accordance with the terms

-5-

 

and conditions set forth in the Change of Control Notice. Upon receipt by the Trustee of a
Repurchase Notice, the Holder of the Note in respect of which such Repurchase Notice was given
shall (unless such Repurchase Notice is withdrawn) thereafter be entitled to receive solely the
Change of Control Purchase Price with respect to such Note and, unless the Company has defaulted in
the payment of the Change of Control Purchase Price, any Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of Control Purchase Date.
Holders of Notes will be entitled to withdraw their election if the Paying Agent receives, not
later than 5:00 p.m., New York City time, on the Business Day prior to the Change of Control
Purchase Date. Notes in respect of which a Repurchase Notice has been given by the Holder thereof
may not be converted into shares of Common Stock on or after the date of the delivery of such
Repurchase Notice, unless such Repurchase Notice has first been validly withdrawn in the manner
provided for in the Indenture (unless the Company has defaulted in the payment of the Change of
Control Purchase Price). Holders electing to have Notes purchased pursuant to a Change of Control
Offer will be required to surrender their Notes to the Paying Agent at the address (in the Borough
of Manhattan, The City of New York) specified in the Change of Control Notice prior to 5:00 p.m.,
New York City time, on the Business Day prior to the Change of Control Purchase Date and must
complete any form of letter of transmittal proposed by the Company and reasonably acceptable to the
Trustee and the Paying Agent. Any portion of the principal amount of Notes that is equal to $1,000
or an integral multiple thereof, validly tendered into the Change of Control Offer and not
withdrawn, will be accepted for payment.

     In the event of repurchase or conversion of this Note in part only, a new Note or Notes for
the unrepurchased or unconverted portion hereof will be issued in the name of the Holder hereof
upon the cancellation thereof.

     If an Event of Default with respect to the Notes shall occur and be continuing, the principal
of all the Notes may be declared due and payable in the manner and with the effect provided in the
Indenture.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Notes under the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in principal amount of the Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of no less than a majority in principal
amount of the Notes at the time outstanding, on behalf of the Holders of all the Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note
issued in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note or such other Note.

     As provided in and subject to the provisions of the Indenture, the Holder of this Note shall
not have the right to institute any proceeding with respect to the Indenture or for the appointment
of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default, the Holders of

-6-

 

not less than 25% in principal amount of the outstanding Notes shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity and the Trustee shall not have received from the Holders of a
majority in principal amount of the outstanding Notes a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder
of this Note for the enforcement of any payment of principal hereof or interest hereon on or after
the respective due dates expressed herein or for the enforcement of the right to convert this Note
as provided in the Indenture.

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

     The Notes are issuable only in registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to certain limitations
therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes of a
different authorized denomination, as requested by the Holder surrendering the same.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable on the security register maintained by the Registrar, upon
surrender of this Note for registration of transfer at the office or agency of the Company in any
place where the principal of and any interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing, and
thereupon one or more Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees by the Registrar.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to recover any tax or other governmental charge
payable in connection therewith.

     Prior to due presentation of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name Note is registered,
as the owner thereof for all purposes, whether or not such Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the contrary.

     A director, officer, employee, stockholder or incorporation, as such, of the Company shall not
have any liability (except in the case of bad faith or willful misconduct) for any obligations of
the Company under the Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creations. Each Holder by accepting a Note waives and releases all
such liability. Such waiver and release are part of the consideration for the issuance of the
Notes.

-7-

 

     THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

-8-

 

ABBREVIATIONS

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

	 	 	 	 	 
	TEN COM

	 	–
	 	as tenants in common
	 
	 	 	 	 
	TEN ENT

	 	–
	 	as tenants by the entireties (Cust)
	 
	 	 	 	 
	JT TEN

	 	–
	 	as joint tenants with right of survivorship and not as tenants in common
	 
	 	 	 	 
	UNIF GIFT MIN ACT

	 	–
	 	Uniform Gifts to Minors Act
	 
	Additional abbreviations may also be used though not in the above list.

-9-

 

ELECTION OF HOLDER TO REQUIRE REPURCHASE

UPON A CHANGE OF CONTROL

     (1) Pursuant to Article 3 of the Second Supplemental Indenture dated July 3, 2007 to the
Indenture, the undersigned hereby acknowledges receipt of a notice from the Company of a Change of
Control Offer and requests and instructs the Company to repurchase this Note, or the portion hereof
(which is $1,000 in principal amount or an integral multiple of $1,000) below designated, as of the
Change of Control Purchase Date pursuant to the terms and conditions specified in such Article 3.

     (2) The undersigned hereby directs the Trustee or the Company to pay to the undersigned an
amount in cash equal to 100% of the principal amount to be repurchased (as set forth below), plus
interest accrued to the Change of Control Purchase Date, as provided in the Indenture.

     (3) The undersigned elects (check one):

o to withdraw this notice with respect to the following Notes:

Principal
amount:                                                             

Certificate
numbers:                                                             

     o to receive cash in respect of the entire Change of Control Purchase Price with respect
to the Notes that are subject to this notice.

Notice: If the Holder fails to make an election, the Holder shall be deemed to have elected to
receive cash in respect of the entire Change of Control Purchase Price for all Notes subject to
this notice.

Dated:                                                             

	 	 	 
	 

	 	 
 
	 

	 	 
 
Signature(s)

	 	 	 	 	 
	 

	 	 	 	Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an approved signature guarantee program pursuant
to Rule 17Ad 15 under the Securities Exchange Act of
1934.
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature Guaranteed

-10-

 

	 	 	 	 	 
	 

	 	 	 	Security certificate number:
	 
	 	 	 	 
	 

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

$                
    
	 
	 	 	 	 
	 

	 	 	 	Remaining principal amount after repurchase:

$                
    
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Social Security or Other Taxpayer

Identification Number

-11-

 

CONVERSION NOTICE

     The undersigned Holder of this Note hereby irrevocably exercises the option to convert this
Note, or any portion of the principal amount hereof (which is $1,000 in principal amount or an
integral multiple of $1,000), below designated, into cash, shares of fully paid and nonassessable
shares of Class A common stock of the Company, $0.001 par value per share (the “Common Stock”), or
a combination of both as provided in Section 2.2 of the Second Supplemental Indenture, in
accordance with the terms of the Indenture referred to in this Note, and directs that such shares,
together with a check in payment for any fractional share and any Notes representing any
unconverted principal amount hereof, be issued and delivered to and be registered in the name of
the undersigned unless a different name has been indicated below. If shares of Common Stock or any
portion of this Note not converted are to be registered in the name of a Person other than the
undersigned, (a) the undersigned will pay all transfer taxes payable with respect thereto and (b)
signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved
signature guarantee program pursuant to Rule 17Ad 15 under the Securities Exchange Act of 1934.

Dated:                                         

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Signature(s)

If shares or Notes are to be registered in the name of a Person other than the Holder, please print
such Person’s name and address:

	 	 	 
	 

Name

	 	 
	 
	 	 
	 

Address

	 	 
	 
	 	 
	 

Social Security or Other Taxpayer

Identification Number

	 	 
	 
	 	 
	 

[Signature Guaranteed]

	 	 

-12-

 

If only a portion of the Notes is to be converted, please indicate:

1. Principal amount to be converted:

$                                        

2. Principal amount and denomination of Notes representing unconverted principal amount to be
issued:

$   
                
               
      

-13-

 

FORM OF ASSIGNMENT

     For value received  
                 
   hereby sell(s), assign(s) and transfer(s) unto
                
     [also insert social security or other identifying number of assignee] the within
Note, and hereby irrevocably constitutes and appoints         
             as attorney to transfer
the said Note on the books of the Company, with full power of substitution in the premises.

Dated:                                         

	 	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature(s)
	 
	 	 	 	 
	 

	 	 	 	Signature(s) must be guaranteed by an Eligible

Guarantor Institution with membership in an 
approved signature guarantee program pursuant to 

Rule 17Ad 15 under the Securities Exchange Act

of 1934.

-14-exv10w1

 

Exhibit 10.1

DEUTSCHE BANK TRUST COMPANY AMERICAS

DEUTSCHE BANK SECURITIES INC.

60 Wall Street

New York, New York 10005

CONFIDENTIAL

July 2, 2007

Activant Solutions Inc.

7683 Southfront Road

Livermore, CA 94551

Attention: Kathy Crusco, Senior Vice President

                    and Chief Financial Officer

Activant Solutions Inc.

Project Iceland Commitment Letter

Ladies and Gentlemen:

     You have advised Deutsche Bank Trust Company Americas (“DBTCA”) and Deutsche Bank Securities
Inc. (“DBSI” and, together with DBTCA, “DB”,“we”, “us” or the “Commitment Parties”) that Activant
Solutions Inc. (the “Company” or “you”) intends to acquire, either directly or through one or more
newly-formed wholly-owned subsidiaries of the Company, the assets and liabilities of a division
identified to us as “Iceland” (the “Target”) of a public company (the “Seller”) pursuant to the
Acquisition (as defined in Exhibit A). You have further advised us that, in connection with the
foregoing, you intend to consummate the other Transactions described in the Transaction Description
attached hereto as Exhibit A (the “Transaction Description”). Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Transaction Description and the
Summary of Principal Terms and Conditions attached hereto as Exhibit B (the “Term Sheet”; this
commitment letter, the Transaction Description, the Term Sheet and the Summary of Additional
Conditions attached hereto as Exhibit C, collectively, the “Commitment Letter”).

     In connection with the Transactions, DBTCA (together with any Initial Lender appointed
pursuant to the second succeeding paragraph of this Commitment Letter, each an “Initial Lender” and
collectively, the “Initial Lenders”) is pleased to advise you of its (a) commitment to provide 100%
of the entire aggregate principal amount of the Acquisition Facility, (b) commitment to acquire at
par, by way of assignment, 100% of the Term Loans (as defined in the Existing Credit Agreement)
and/or Revolving Credit Commitments (as defined in the Existing Credit Agreement) tendered to the
Initial Lenders by the lenders from time to time party to the Existing Credit Agreement (the
“Existing Lenders”), to the extent (and only to the extent) necessary to obtain the consent of the
“Required Lenders” (as defined in the Existing Credit Agreement) under the Existing Credit
Agreement in respect of the Amendment (the “Amendment Back-Stop Facility” and, together with the
Acquisition Facility, the “Facilities”),

 

2

and (c) agreement to vote, and cause its controlled affiliates to vote, with respect to its Term
Loans (as defined in the Existing Credit Agreement) and/or Revolving Credit Commitments (as defined
in the Existing Credit Agreement) after giving effect to any required purchases pursuant to the
Amendment Back-Stop Facility, in favor of the Amendment, subject only to the conditions set forth
in the eleventh paragraph of this Commitment Letter, in the section entitled “Conditions to
Borrowing” in the Term Sheet and in Exhibit C hereto.

     In addition (and without limiting the agreements set forth in the preceding paragraph), if the
Term Loans (as defined in the Existing Credit Agreement) and/or Revolving Credit Commitments (as
defined in the Existing Credit Agreement) to be acquired pursuant to the Amendment Back-Stop
Facility will only be tendered by Existing Lenders to the Initial Lenders at a price above par,
each Initial Lender hereby severally agrees (upon the request of the Company) to commit to provide
(in lieu of the Amendment Back-Stop Facility and the Acquisition Facility) new credit facilities
(the “Replacement Facilities”), comprised of (1) a term loan facility (the “Replacement Term
Facility”) in an aggregate principal amount equal to the aggregate principal amount of the
outstanding Term Loans (as defined in the Existing Credit Agreement) on the Closing Date on terms
identical to the Term Loans (as defined in the Existing Credit Agreement), (2) a revolving credit
facility in an aggregate principal amount equal to the Revolving Credit Commitments (as defined in
the Existing Credit Agreement) on terms identical to the Revolving Credit Commitments (the
“Replacement Revolver”), and (3) the Acquisition Facility on the terms provided herein, except that
(i) the proceeds of the Refinancing Facilities (other than the Acquisition Facility) shall be used
by the Company to prepay, in full, in cash, all amounts outstanding under the Existing Credit
Agreement, and (ii) the conditions to the availability of the Replacement Facilities shall be as
provided in the eleventh paragraph of the Commitment Letter and Exhibit C hereto (including the
last paragraph thereof). If the Replacement Facilities are to be provided in lieu of the Amendment
Back-Stop Facility and the Acquisition Facility (the “Replacement Option”) as set forth above, each
reference to the “Facilities” in this Commitment Letter shall be deemed to be a reference to the
“Replacement Facilities”, and each reference to the “Credit Agreement” in this Commitment Letter
shall be deemed to be a reference to the definitive replacement credit agreement for the
Replacement Facilities on the terms provided in this Commitment Letter (the “Replacement Credit
Agreement”).

     You hereby appoint DBSI to act, and DBSI agrees to act, as co-lead arranger and joint
bookrunner for the Facilities and to manage the Amendment (together with any other joint bookrunner
appointed pursuant to this paragraph, each a “Joint Bookrunner” and collectively, the “Joint
Bookrunners”). Within a time limit to be mutually agreed, you may appoint additional
“Initial Lenders”, agents, co-agents, lead arrangers, co-arrangers, bookrunners, managers or
co-managers or confer other titles in respect of any Facility and the Amendment in a manner and
with economics to be mutually agreed (it being understood that, to the extent you appoint
additional financial institutions as additional “Initial Lenders”, agents, co-agents, lead
arrangers, co-arrangers, bookrunners, managers or co-managers, the commitments of DBTCA in respect
of the Facilities will be reduced ratably by the amount of the commitments of such financial
institutions upon the execution by such financial institution of customary joinder documentation
and, thereafter, each such financial institution shall constitute an “Initial Lender” hereunder).
It is agreed that DBSI shall have “left” placement in any and all marketing materials or other
documentation used in connection with each of the Facilities and to hold the leading role

 

3

and responsibilities conventionally associated with such “left” placement, including
maintaining sole “physical books” in respect of each of the Facilities. No compensation (other than
compensation expressly contemplated by this Commitment Letter and the Fee Letter referred to below
and other than in connection with any additional appointments referred to above) will be paid to
any Lender (as defined below) in connection with the Facilities unless you and we shall so agree.

     The Initial Lenders reserve the right, prior to or after the execution of definitive
documentation for the Facilities (including, for the avoidance of doubt, all loans acquired or
originated pursuant to the Amendment Back-Stop Facility), to syndicate all or a portion of their
respective commitments hereunder to a group of banks, financial institutions and other
institutional lenders (together with the Initial Lenders, the “Lenders”) identified by the Joint
Bookrunners in consultation with you and reasonably acceptable to them and you (your consent not to
be unreasonably withheld or delayed); provided that (a) we agree not to syndicate our commitments
to certain banks, financial institutions and other institutional lenders or to competitors of the
Company, the Target and their respective subsidiaries that, in any such case, have been specified
by you in a separate letter delivered to us at any time on or prior to the date of this Commitment
Letter (“Disqualified Lenders”) and (b) notwithstanding the Initial Lenders’ right to syndicate the
Facilities and receive commitments with respect thereto, no Initial Lender may assign all or any
portion of its commitment hereunder prior to the date of the consummation of the Acquisition and
the initial funding under the Facilities (the date of such funding, “Closing Date”) and, unless you
otherwise agree in writing, each Initial Lender shall retain exclusive control over all rights and
obligations with respect to its commitments, including all rights with respect to consents,
modifications and amendments, until the Closing Date has occurred. The Joint Bookrunners intend to
commence syndication efforts promptly upon the execution of this Commitment Letter and as part of
their syndication efforts, it is their intent to have Lenders commit to the Facilities prior to the
Closing Date (subject to the limitations set forth in the provisos to the preceding sentence). You
agree actively to assist the Joint Bookrunners in completing a timely syndication that is
reasonably satisfactory to them and you. Such assistance shall include, without limitation, (a)
your using commercially reasonable efforts to ensure that any syndication efforts benefit
materially from your existing lending and investment banking relationships and, to the extent
practical and appropriate, the Target, (b) direct contact between senior management,
representatives and advisors of you, on the one hand, and the proposed Lenders, on the other hand,
(and your using commercially reasonable efforts to ensure such contact between senior management,
representatives and advisors of the Target, on the one hand, and the proposed Lenders, on the other
hand), in all such cases at times mutually agreed upon, (c) your assistance (including the use of
commercially reasonable efforts to cause the Target to assist) in the preparation of the
Information Materials (as defined below) and other customary marketing materials to be used in
connection with the syndications within at least 20 calendar days prior to the Closing Date, (d)
using your commercially reasonable efforts to procure, at least 5 calendar days prior to the
Closing Date, ratings for the Acquisition Facility (or, if the Replacement Option is exercised, the
Replacement Facilities), and corporate or corporate family ratings, as applicable, of the Company,
from each of Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investors Service, Inc.
(“Moody’s”), and (e) the hosting, with the Joint Bookrunners, of one or more meetings of
prospective Lenders at times and locations mutually agreed upon. Notwithstanding anything to the
contrary contained in this Commitment Letter or the Fee Letter (as defined below) or any other
letter agreement or undertaking concerning the

 

4

financing of the Transactions to the contrary (but without limiting your obligations to assist
with syndication efforts as set forth below), neither the commencement nor the completion of the
syndication of the Facilities nor the obtaining of the ratings referenced above shall constitute a
condition to the availability of the Facilities on the Closing Date or at any time thereafter.

     The Joint Bookrunners will, in consultation with you, manage all aspects of any syndication of
the Facilities, including decisions as to the selection of institutions reasonably acceptable to
you to be approached and when they will be approached, when their commitments will be accepted,
which institutions will participate (subject to your consent rights set forth in the preceding
paragraph and excluding Disqualified Lenders), the allocation of the commitments among the Lenders
(subject to your rights of appointment as specified above) and the amount and distribution of fees
among the Lenders. To assist the Joint Bookrunners in their syndication efforts, you agree to use
commercially reasonable efforts to prepare and provide (and to use commercially reasonable efforts
to cause the Target to provide) to us all customary information with respect to you, the Target and
each of your and their respective subsidiaries and the Transactions, including all financial
information and projections (including financial estimates, forecasts and other forward-looking
information, the “Projections”), as the Joint Bookrunners may reasonably request in connection with
the structuring, arrangement and syndication of the Facilities.

     You hereby represent and warrant that, to the best of your knowledge, (a) all written
information and written data other than the Projections and information of a general economic or
general industry nature (the “Information”) that has been or will be made available to any
Commitment Party by or on behalf of you, any of your representatives or the Target (at your
request), taken as a whole, is or will be, when furnished, correct in all material respects and
does not or will not, when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are made (after giving effect
to all supplements made thereto prior to the Closing Date) and (b) the Projections that have been
or will be made available to any Commitment Party by or on behalf of you or any of your
representatives have been, or will be, prepared in good faith based upon assumptions that are
believed by you to be reasonable at the time made and at the time the related Projections are so
made available; it being understood that the Projections are as to future events and are not to be
viewed as facts and that actual results during the period or periods covered by any such
Projections may differ significantly from the projected results and such differences may be
material. You agree that, if at any time prior to the Closing Date, you become aware that any of
the representations and warranties in the preceding sentence would be, to the best of your
knowledge, incorrect in any material respect if the Information and the Projections were being
furnished, and such representations were being made, at such time, then you will use your
commercially reasonable efforts to supplement the Information and the Projections from time to time
until the Closing Date such that, to the best of your knowledge, the representations and warranties
in the preceding sentence will be correct in all material respects under those circumstances. In
arranging and syndicating the Facilities, each of the Commitment Parties will be entitled to use
and rely primarily on the Information and the Projections without responsibility for independent
verification thereof.

 

5

     You hereby acknowledge that (a) the Joint Bookrunners will make available Information,
Projections and other marketing material and presentations, including confidential information
memoranda (collectively, with the Term Sheet, the “Information Materials”) to the proposed
syndicate of Lenders by posting the Information Materials on Intralinks, SyndTrak Online or by
similar electronic means and (b) certain of the Lenders may be “public side” Lenders (i.e. Lenders
that do not wish to receive material non-public information with respect to you, the Target or your
and their respective securities and who may be engaged in investment and other market related
activities with respect to you, the Target or your or the Target’s respective securities) (each, a
“Public Sider”). If reasonably requested by the Joint Bookrunners, you agree to use commercially
reasonable efforts to assist (and to use commercially reasonable efforts to cause the Target to
assist) us in preparing an additional version of the Information Materials that is intended to
consist exclusively of information that is not material with respect to you or the Target or any of
your or their respective subsidiaries for the purpose of United States federal and state securities
laws (“Public Information”) to be used by Public Siders. The parties intend that the information
to be included in the additional version of the confidential information memorandum will be
substantially consistent with the information included in filings made by you with the Securities
and Exchange Commission. It is understood that in connection with your assistance described above,
authorization letters will be included in any Information Materials that authorize the distribution
thereof to prospective lenders and exculpate you, the Target and us with respect to any liability
related to the use of the contents of the Information Materials or related marketing materials by
the recipients thereof. Before distribution of any information, you agree to use commercially
reasonable efforts to identify that portion of the Information Materials that may be distributed to
the Public Siders as “Public Information”.

     You agree that the following documents may be distributed to both Private Siders and Public
Siders, unless you advise the Joint Bookrunners in writing (including by email) within a reasonable
time prior to their intended distribution that such materials should only be distributed to Private
Siders: (a) administrative materials prepared by the Joint Bookrunners for prospective Lenders
(such as a lender meeting invitation, bank allocation, if any, and funding and closing memoranda),
(b) notification of changes in the Facilities’ terms and (c) drafts of the Credit Agreement and the
Joinder Documentation (as defined below). If you advise us that any of the foregoing should be
distributed only to Private Siders, then Public Siders will not receive such materials without
further discussions with you.

     As consideration for the commitments of the Initial Lenders hereunder and for the agreement of
the Joint Bookrunners to perform the services described herein, you agree to pay (or cause to be
paid) to the Initial Lenders the fees set forth in the Term Sheet and in the Fee Letter dated the
date hereof and delivered herewith with respect to the Facilities (the “Fee Letter”). Once paid,
such fees shall not be refundable under any circumstances, except as otherwise contemplated by the
Fee Letter.

     The commitments of the Initial Lenders hereunder and the agreements of the Joint Bookrunners
to perform the services described herein are subject solely to (a) the conditions set forth in the
section of the Term Sheet entitled “Conditions to Borrowing”, (b) the conditions set forth in
Exhibit C hereto and (c) the execution and delivery of the Amendment and definitive joinder
documentation (the “Joinder Documentation”) to the Existing Credit Agreement and the other Loan
Documents (as defined in the Existing Credit Agreement) consistent with the Term

 

6

Sheet and otherwise consistent with the requirements of Sections 2.15 and 6.11 of the Existing
Credit Agreement (or, if the Replacement Option is exercised, the execution and delivery of (x) the
Replacement Credit Agreement on terms consistent with this Commitment Letter and (y) related
guaranty and security documentation on the same terms as provided in the Loan Documents (as defined
in the Existing Credit Agreement) (collectively, the “Replacement Facilities Documentation”));
provided that, notwithstanding anything in this Commitment Letter, the Fee Letter, the Joinder
Documentation, the Amendment, the Existing Credit Agreement, the Credit Agreement, the Replacement
Facilities Documentation, the other Loan Documents or any other letter agreement or other
undertaking concerning the financing of the Transactions to the contrary, (i) the only
representations relating to you (or your holding company parent), the Target, your and their
respective subsidiaries and your (or your holding company parent’s) and their respective businesses
the making of which shall be a condition to the availability of the Facilities (other than any
extension of credit under the Replacement Revolver not made to refinance Revolving Loans (as
defined in the Existing Credit Agreement) outstanding on the Closing Date (each, an “Additional
Replacement Revolver Extension of Credit”)) on the Closing Date shall be (A) such of the
representations made with respect to the Target by the Seller in the Purchase Agreement as are
material to the interests of the Lenders, but only to the extent that you have the right to
terminate your obligations under the Purchase Agreement as a result of a breach of such
representations in the Purchase Agreement and (B) the Specified Representations (as defined below)
and (ii) the Joinder Documentation, the Credit Agreement and the Loan Documents (or, if the
Replacement Option is exercised, the Replacement Facilities Documentation) shall be in a form such
that they do not impair availability of the Facilities on the Closing Date (other than any
Additional Replacement Revolver Extension of Credit) if the conditions set forth herein, in the
Term Sheet and in Exhibit C hereto are satisfied (it being understood that, to the extent any
security interest in any Collateral (as defined in the Existing Credit Agreement) owned by Target
or its subsidiaries and, if the Replacement Option is exercised, the Borrower, the Target or any of
their respective subsidiaries (other than the U.S. pledge and perfection of the security interests
(1) in the capital stock, if any, of the Target and any domestic subsidiaries of the Target (to the
extent required by the Existing Credit Agreement) and, if the Replacement Option is exercised, the
Borrower, the Target and their respective domestic subsidiaries (to the extent required by the
Existing Credit Agreement) and (2) in other assets of the Target and its subsidiaries (and, if the
Replacement Option is exercised, the Borrower, the Target and their respective domestic
subsidiaries) with respect to which a lien may be perfected by the filing of a financing statement
under the Uniform Commercial Code) is not provided and/or perfected on the Closing Date after your
use of commercially reasonable efforts to do so, the granting and/or perfection of a security
interest in such Collateral shall not constitute a condition precedent to the availability of the
Facilities on the Closing Date but shall be required to be delivered after the Closing Date
pursuant to arrangements to be mutually agreed). For purposes hereof, “Specified Representations”
means the representations and warranties set forth in the Credit Agreement relating to corporate
existence, power and authority, the due authorization, execution, delivery and enforceability of
the Credit Agreement and the Joinder Documentation (and, in the case of enforceability, the other
Loans Documents referred to in the Joinder Documentation), no violation of the Senior Subordinated
Notes Indenture (as defined in the Existing Credit Agreement), Federal Reserve margin regulations,
the Investment Company Act and status of the Credit Agreement (including

 

7

the Facilities and the guaranties thereof) as “senior debt” for purposes of the Senior
Subordinated Notes Indenture.

     You agree (a) to indemnify and hold harmless each Commitment Party, their respective
affiliates and the respective officers, directors, employees, agents and controlling persons of
each of the foregoing (each, an “Indemnified Person”), from and against any and all losses, claims,
damages, liabilities and reasonable and documented out-of-pocket expenses, joint or several, to
which any such Indemnified Person may become subject arising out of or in connection with this
Commitment Letter (including the Term Sheet), the Fee Letter, the Transactions, the Amendment, the
Facilities or any claim, litigation, investigation or proceeding relating to any of the foregoing
(any of the foregoing, a “Proceeding”), regardless of whether any such Indemnified Person is a
party thereto, and to reimburse each such Indemnified Person upon demand for any reasonable and
documented out-of-pocket legal expenses of one firm of counsel for all Indemnified Persons (and, in
the case of an actual or perceived conflict of interest where the Indemnified Person affected by
such conflict informs you of such conflict and thereafter, after receipt your consent (not to be
unreasonably withheld or delayed), retains its own counsel, of another firm of counsel for such
affected Indemnified Person) or other reasonable and documented out-of-pocket expenses incurred in
connection with investigating or defending any of the foregoing; provided that the foregoing
indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or
related expenses (i) to the extent that they have resulted from the willful misconduct, bad faith
or gross negligence of such Indemnified Person or any of its affiliates or any of its or their
officers, directors, employees, agents or controlling persons, (ii) arising from a material breach
of the obligations of such Indemnified Person under this Commitment Letter, the Credit Agreement,
the Loan Documents and the Joinder Documentation or (iii) arising out of, or in connection with,
any Proceeding that does not involve an act or omission by you or any of your affiliates and that
is brought by an Indemnified Person against any other Indemnified Person, and (b) if the Closing
Date occurs, to (i) reimburse each Commitment Party from time to time, upon presentation of a
summary statement, for all reasonable out-of-pocket expenses (including but not limited to expenses
of each Commitment Party’s due diligence investigation, consultants’ fees (to the extent any such
consultant has been retained with your prior written consent), syndication expenses, travel
expenses and reasonable fees, disbursements and other charges of counsel to the Commitment Parties
identified in the Term Sheet and of a single local counsel to the Commitment Parties in each
relevant jurisdiction, in each case incurred in connection with the Facilities and the preparation
of this Commitment Letter, the Fee Letter, the Credit Agreement and the Joinder Documentation, (ii)
reimburse all breakage costs (if any) incurred by Existing Lenders in connection with the purchase
of obligations by the Initial Lenders pursuant to the Amendment Back-Stop Facility on a day other
than the last day of an interest period applicable thereto, and (iii) all amounts (if any) required
to compensate Initial Lenders for purchasing Eurocurrency Rate Loans (as defined in the Existing
Credit Agreement) pursuant to the Amendment Back-Stop Facility in the middle of an interest period
applicable thereto (i.e., bearing interest at a Eurocurrency Rate lower than the
Eurocurrency Rate applicable to loans maintained as Eurocurrency Rate Loans under the Existing
Credit Agreement and not purchased pursuant to the Amendment Back-Stop Facility). Upon satisfaction
of the condition set forth in paragraph 7 of Exhibit C hereto, the foregoing provisions in this
paragraph shall be superseded in each case by the applicable provisions contained in the Credit
Agreement on the Closing Date and thereafter shall have no further force and effect.
Notwithstanding any other provision of this Commitment Letter, (i) no Indemnified

 

8

Person shall be liable for any damages arising from the use by others of information or other
materials obtained through electronic, telecommunications or other information transmission
systems, except to the extent that such damages have resulted from the willful misconduct, bad
faith or gross negligence of any Indemnified Person or any of its affiliates or its or their
officers, directors, employees, agents or controlling persons and (ii) neither you nor any
Indemnified Person shall be liable for any indirect, special, punitive or consequential damages in
connection with your or its activities related to this Commitment Letter, the Facilities or the
related transactions.

     You shall not be liable for any settlement of any Proceeding effected without your consent
(which consent shall not be unreasonably withheld or delayed), but if settled with your written
consent or if there is a final judgment for the plaintiff in any such Proceeding, you agree to
indemnify and hold harmless each Indemnified Person from and against any and all losses, claims,
damages, liabilities and expenses by reason of such settlement or judgment in accordance with the
preceding paragraph. Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Person shall have requested that you reimburse such Indemnified Person for legal or
other expenses in connection with investigating, responding to, or defending any Proceedings, you
shall be liable for any settlement of any Proceedings effected without your written consent if (a)
such settlement is entered into more than 30 days after receipt by you of such request for
reimbursement and (b) you shall not have reimbursed such Indemnified Person in accordance with such
request prior to the date of such settlement. You shall not, without the prior written consent of
an Indemnified Person (which consent shall not be unreasonably withheld), effect any settlement of
any pending or threatened Proceedings in respect of which indemnity could have been sought
hereunder by such Indemnified Person unless (i) such settlement includes an unconditional release
of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person
from all liability on claims that are the subject matter of such Proceedings and (ii) does not
include any statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.

     You acknowledge that the Commitment Parties and their affiliates may be providing debt
financing, equity capital or other services (including, without limitation, financial advisory
services) to other persons in respect of which you may have conflicting interests regarding the
transactions described herein and otherwise. None of the Commitment Parties or their affiliates
will use confidential information obtained from you by virtue of the transactions contemplated by
this Commitment Letter or their other relationships with you in connection with the performance by
them or their affiliates of services for other persons, and none of the Commitment Parties or their
affiliates will furnish any such information to other persons. You also acknowledge that none of
the Commitment Parties or their affiliates has any obligation to use in connection with the
transactions contemplated by this Commitment Letter, or to furnish to you, confidential information
obtained by them from other persons.

     As you know, each Commitment Party is a full service securities firm engaged, either directly
or through its affiliates, in various activities, including securities trading, commodities
trading, investment management, financing and brokerage activities and financial planning and
benefits counseling for both companies and individuals. In the ordinary course of these
activities, the Commitment Parties and their respective affiliates may actively engage in
commodities trading or trade the debt and equity securities (or related derivative securities) and

 

9

financial instruments (including bank loans and other obligations), you, the Seller, the
Target and other companies which may be the subject of the arrangements contemplated by this letter
for their own account and for the accounts of their customers and may at any time hold long and
short positions in such securities. Each Commitment Party or its affiliates may also co-invest
with, make direct investments in, and invest or co-invest client monies in or with funds or other
investment vehicles managed by other parties, and such funds or other investment vehicles may trade
or make investments in securities of you, the Seller, the Target or other companies which may be
the subject of the arrangements contemplated by this Commitment Letter or engage in commodities
trading with any thereof.

     The Commitment Parties and their respective affiliates may have economic interests that
conflict with those of the Target and you. You agree that the Commitment Parties will act under
this letter as independent contractors and that nothing in this Commitment Letter or the Fee Letter
will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other
implied duty between the Commitment Parties and you and the Target, your and their respective
stockholders or your and their respective affiliates. You acknowledge and agree that (i) the
transactions contemplated by this Commitment Letter and the Fee Letter are arm’s-length commercial
transactions between the Commitment Parties, on the one hand, and you and the Target, on the other,
(ii) in connection therewith and with the process leading to such transaction each Commitment Party
is acting solely as a principal and not as agents or fiduciaries of you, the Target, your and their
management, stockholders, creditors or any other person, (iii) the Commitment Parties have not
assumed an advisory or fiduciary responsibility or any other obligation in favor of you with
respect to the transactions contemplated hereby or the process leading thereto (irrespective of
whether the Commitment Parties or any of their respective affiliates have advised or are currently
advising you or the Company on other matters) except the obligations expressly set forth in this
Commitment Letter and the Fee Letter and (iv) you have consulted your own legal and financial
advisors to the extent you deemed appropriate. You further acknowledge and agree that you are
responsible for making your own independent judgment with respect to such transactions and the
process leading thereto. You agree that you will not claim that the Commitment Parties have
rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to you, in
connection with such transaction or the process leading thereto.

     This Commitment Letter and the commitments hereunder shall not be assignable by you without
the prior written consent of the Joint Bookrunners (and any attempted assignment without such
consent shall be null and void), is intended to be solely for the benefit of the parties hereto
(and Indemnified Persons) and is not intended to confer any benefits upon, or create any rights in
favor of, any person other than the parties hereto (and Indemnified Persons). Any and all
obligations of, and services to be provided by, the Commitment Parties hereunder (including,
without limitation, its commitments) may be performed and any and all rights of the Commitment
Parties hereunder may be exercised by or through any of their affiliates or branches; provided
that, with respect to the commitments, any assignment thereof to an affiliate will not relieve the
Initial Lender from any of its obligations hereunder unless and until such affiliate shall have
funded the portion of the commitment so assigned. This Commitment Letter may not be amended or any
provision hereof waived or modified except by an instrument in writing signed by each of the Joint
Bookrunners and you. This Commitment Letter may be executed in any number of counterparts, each of
which shall be deemed an original and all of

 

10

which, when taken together, shall constitute one agreement. Delivery of an executed
counterpart of a signature page of this Commitment Letter by facsimile transmission or other
electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually
executed counterpart hereof. This Commitment Letter (including the exhibits hereto) and, together
with the Fee Letter dated the date hereof, (i) are the only agreements that have been entered into
among the parties hereto with respect to the Facilities and (ii) supersede all prior
understandings, whether written or oral, among us with respect to the Facilities and sets forth the
entire understanding of the parties hereto with respect thereto. THIS COMMITMENT LETTER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; provided,
however, that the interpretation of the definition of Target Material Adverse Effect (and whether
or not a Target Material Adverse Effect has occurred) in this Commitment Letter shall be governed
by, and construed in accordance with, the laws of the State of California, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws thereof.

     EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF
THIS COMMITMENT LETTER OR THE FEE LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.

     Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and
its property, to the non-exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Commitment Letter or the Fee Letter or the
transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and
agrees that all claims in respect of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such Federal court, (b) waives, to the
fullest extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to this
Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby in any New
York State or in any such Federal court and (c) waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
Each of the parties hereto agrees that service of process, summons, notice or document by
registered mail addressed to you or us at the addresses set forth above shall be effective service
of process for any suit, action or proceeding brought in any such court.

     We hereby notify you that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT Act”), each of us and each of the
Lenders may be required to obtain, verify and record information that identifies you and the
Target, which information may include your and their names and addresses and other information that
will allow each of us and the Lenders to identify you or the Target in accordance with the PATRIOT
Act. This notice is given in accordance with the requirements of the PATRIOT Act and is effective
for each of us and the Lenders.

 

11

     You agree that you will not disclose, directly or indirectly, the Fee Letter and the contents
thereof or, prior to your acceptance hereof, this Commitment Letter, the Term Sheet, the other
exhibits and attachments hereto and the contents of each thereof, or the activities of any
Commitment Party pursuant hereto or thereto, to any person or entity without prior written approval
of the Joint Bookrunners, except (a) to your affiliates and to your and your affiliates’ officers,
directors, agents, employees, attorneys, accountants and advisors on a confidential and
need-to-know basis, (b) if the Commitment Parties consent to such proposed disclosure or (c)
pursuant to the order of any court or administrative agency in any pending legal or administrative
proceeding, or otherwise as required by applicable law or compulsory legal process or to the extent
requested or required by governmental and/or regulatory authorities, in each case based on the
reasonable advice of your legal counsel (in which case you agree, to the extent permitted by
applicable law, to inform us promptly thereof prior to disclosure); provided that (i) you may
disclose this Commitment Letter and the contents hereof to the Seller, the Target and their
respective officers, directors, controlling persons, employees, attorneys, accountants and
advisors, on a confidential and need-to-know basis, (ii) you may disclose the Commitment Letter and
its contents in any public filing relating to the Acquisition or the financing contemplated hereby,
(iii) you may disclose this Commitment Letter, and the contents hereof, to potential Lenders and to
rating agencies in connection with obtaining ratings for the Facilities or the Company and (iv) you
may disclose the fees contained in the Fee Letter as part of a generic disclosure of aggregate
sources and uses related to fee amounts to the extent customary or required in marketing materials
or public filing and (v) to the extent portions thereof have been redacted in a manner satisfactory
to us, you may disclose the Fee Letter and the contents thereof to the Seller, the Target and their
respective officers, directors, controlling persons, employees, attorneys, accountants and
advisors, on a confidential and need-to-know basis.

     The Commitment Parties and their affiliates will use all confidential information provided to
them or such affiliates by or on behalf of you hereunder solely for the purpose of providing the
services which are the subject of this Commitment Letter and shall treat confidentially all such
information; provided that nothing herein shall prevent the Commitment Parties from disclosing any
such information (a) pursuant to the order of any court or administrative agency or in any pending
legal or administrative proceeding, or otherwise as required by applicable law or compulsory legal
process based on the advice of counsel (in which case the Commitment Parties, to the extent
permitted by applicable law, agree to inform you promptly thereof prior to disclosure), (b) upon
the request or demand of any regulatory authority having jurisdiction over the Commitment Parties
or any of their affiliates (in which case the Commitment Parties agree, to the extent permitted by
applicable law, to inform you promptly thereof prior to disclosure), (c) to the extent that such
information becomes publicly available other than by reason of improper disclosure by the
Commitment Parties or any of their affiliates or any related parties thereto in violation of any
confidentially obligations owing to you, the Target, the Seller or any of your or their respective
affiliates (including those set forth in this paragraph), (d) to the extent that such information
is received by the Commitment Parties from a third party that is not, to the Commitment Parties’
knowledge, subject to confidentiality obligations owing to you, the Target, the Seller or any of
your or their respective affiliates, (e) to the extent that such information is independently
developed by the Commitment Parties, (f) to the Commitment Parties’ affiliates and to its and their
respective employees, legal counsel, independent auditors and other experts or agents who need to
know such information in connection with the Transactions and are informed of the confidential
nature of such information

 

12

and who agree to be bound by the terms of this paragraph (or language substantially similar to
this paragraph) (with each such Commitment Party responsible for such person’s compliance with this
paragraph) or (g) to potential or prospective Lenders, participants or assignees and to any direct
or indirect contractual counterparty to any swap or derivative transaction relating to the Company
or any of its subsidiaries, in each case who agree to be bound by the terms of this paragraph (or
language substantially similar to this paragraph). The Commitment Parties’ obligations under this
paragraph shall automatically terminate and be superseded by the confidentiality provisions in the
Credit Agreement upon the initial funding of the Facilities.

     The reimbursement, indemnification, jurisdiction, governing law, venue, waiver of jury trial,
syndication and confidentiality provisions contained herein and in the Fee Letter shall remain in
full force and effect regardless of whether Amendment shall be executed and delivered and
notwithstanding the termination of this Commitment Letter or the Initial Lenders’ commitments
hereunder; provided that your obligations under this Commitment Letter (other than your obligations
with respect to (a) assistance to be provided in connection with the syndication thereof and (b)
confidentiality of the Fee Letter and the contents thereof) shall automatically terminate and be
superseded by the provisions of the Credit Agreement upon the initial funding of the Acquisition
Facility, and you shall automatically be released from all liability in connection therewith at
such time. You may terminate this Commitment Letter and/or reduce or terminate the Initial
Lenders’ commitments with respect to any Facility hereunder at any time subject to the provisions
of the preceding sentence.

     If the foregoing correctly sets forth our agreement, please indicate your acceptance of the
terms of this Commitment Letter and of the Fee Letter by returning to DBSI on behalf of the
Commitment Parties executed counterparts hereof and of the Fee Letter not later than 5:00 p.m., New
York City time, on July 6, 2007. The Initial Lenders’ respective commitments hereunder will expire
at such time in the event that DBSI has not received such executed counterparts in accordance with
the immediately preceding sentence. In the event that the initial borrowing in respect of the
Acquisition Facility does not occur on or before October 14, 2007, then this Commitment Letter and
the commitments and undertakings of each of the Commitment Parties hereunder shall automatically
terminate unless we shall, in our discretion, agree to an extension.

[Remainder of this page intentionally left blank]

 

 

     We are pleased to have been given the opportunity to assist you in connection with the
financing for the Transactions.

	 	 	 	 	 
	 	Very truly yours,

DEUTSCHE BANK TRUST COMPANY AMERICAS

 	 
	 	By:  	/s/ David Mayhew
 	 
	 	 	Name:  	David Mayhew 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Patrick W. Dowling
 	 
	 	 	Name:  	Patrick W. Dowling 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	DEUTSCHE BANK SECURITIES INC.

 	 
	 	By:  	/s/ Sean Mahoney
 	 
	 	 	Name:  	Sean Mahoney 	 
	 	 	Title:  	Vice Chairman of Global Banking and Managing Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Jake Foley
 	 
	 	 	Name:  	Jake Foley 	 
	 	 	Title:  	Managing Director 	 
	 

[Signature Page to Commitment Letter]

 

 

Accepted and agreed to as of
the date first above written:

ACTIVANT SOLUTIONS INC.

	 	 	 	 	 
	By

	 	/s/ Kathleen M. Crusco	 	 
	 	 	 	 	 
	 

	 	Name: Kathleen M. Crusco	 	 
	 

	 	Title: Senior Vice President, Chief Financial Officer
	 	 

[Signature Page to Commitment Letter]

 

 

			
	 	 	 
	CONFIDENTIAL
	 	EXHIBIT A

Activant Solutions, Inc.

Project Iceland Transaction Description

          Capitalized terms used but not defined in this Exhibit A shall have the meanings set forth in
the other Exhibits to the Commitment Letter to which this Exhibit A is attached (the “Commitment
Letter”) or in the Commitment Letter.

          Activant Group Inc., a Delaware corporation (the “Holdings”), and Activant Solutions Inc., a
Delaware corporation and a wholly-owned subsidiary of Holdings (the “Company”) intend to acquire,
either directly or through one or more newly-formed wholly-owned subsidiaries of the Company, the
assets and liabilities of a division identified to us as “Iceland” (the “Target”), of a public
company (the “Seller”).

          In connection with the foregoing, it is intended that:

	a)	 	Pursuant to the Asset Purchase Agreement, dated as of July 2, 2007 (together with all
exhibits and schedules thereto, collectively, the “Purchase Agreement”), the assets and
liabilities of the Target will be acquired (the “Acquisition”) by the Company in accordance
with the terms thereof. Pursuant to the Acquisition, the Seller shall have the right to
receive the acquisition consideration in accordance with the terms of the Purchase Agreement.
	 
	b)	 	The Company will obtain a new incremental term loan facility (the “Acquisition Facility”) in
an aggregate principal amount of up to $125 million to be used for purposes set forth in the
Term Sheet.
	 
	c)	 	The Company will amend its existing credit agreement, dated as of May 2, 2006 (as amended,
restated, supplemented or otherwise modified prior to the date hereof, the “Existing Credit
Agreement”) and the other Loan Documents (as defined in the Existing Credit Agreement) in a
manner consistent with the Term Sheet and Exhibit C to the Commitment Letter to, among other
things, permit the Acquisition and allow the incurrence of the indebtedness under the
Acquisition Facility (the “Amendment”; the Existing Credit Agreement, together with the
Amendment, the “Credit Agreement”).

Notwithstanding the foregoing, if the Replacement Option is exercised, the Company shall enter into
the Replacement Credit Agreement in lieu of entering into the Amendment. The transactions
described above, the repayment of certain existing third-party indebtedness of the Target and its
subsidiaries (and, if the Replacement Option is exercised, the Company, the Target and their
respective subsidiaries) and the payment of related fees and expenses are collectively referred to
herein as the “Transactions”.

 

 

EXHIBIT B

Activant Solutions Inc.

Project Iceland Summary of Principal Terms and Conditions1

	 	 	 
	Borrower:

	 	The Company (the “Borrower”).
	 
	 	 
	Transaction:

	 	As set forth in Exhibit A to the Commitment Letter.
	 
	 	 
	Administrative Agent and
Collateral Agent:

	 	Deutsche Bank Trust Company Americas (in such
capacity, the “Administrative Agent”).
	 
	 	 
	Co-Lead Arrangers and Joint
Bookrunners:

	 	DBSI and a financial institution to be appointed
(as contemplated by the Commitment Letter) will
act as co-lead arrangers for the Acquisition
Facility (the “Co-Lead Arrangers”), DBSI and each
other financial institution appointed by the
Borrower as a joint bookrunner pursuant to the
Commitment Letter will act as bookrunners (the
“Joint Bookrunners”), and each will perform the
duties customarily associated with such roles.
	 
	 	 
	Acquisition Facility:

	 	A secured incremental term loan facility (the
“Acquisition Facility”) in an aggregate principal
amount of up to $125 million (the loans
thereunder, the “Acquisition Term Loans”).
	 
	 	 
	Incremental Facilities:

	 	The Amendment will permit the Borrower to “reset”
the basket for incremental term loan facilities
and/or an increase the Revolving Credit
Commitments under Section 2.15 of the Credit
Agreement (after giving effect to the
Transactions) to $75 million, which incremental
facilities shall be subject to terms and
conditions substantially similar to those set
forth in the Existing Credit Agreement.
	 
	 	 
	Purpose:

	 	The proceeds of borrowings under the Acquisition
Facility will be used by the Borrower, on the
Closing Date, together with cash on hand at the
Target, to finance the Acquisition, repay certain
existing third-party indebtedness of the Target
and its subsidiaries, to repay any outstanding
borrowings under the Revolving Credit Facility (as
defined in the Existing Credit Agreement) and to
pay fees, costs and expenses incurred in
connection therewith.

 

			
	1	 	All capitalized terms used but not defined
herein shall have the meaning given them in the Commitment Letter to which this
term sheet is attached, including Exhibit A thereto.

 

2

	 	 	 
	Availability:

	 	The Acquisition Facility will be available in a
single drawing on the Closing Date. Amounts
borrowed under the Acquisition Facility that are
repaid or prepaid may not be reborrowed.
	 
	 	 
	Interest Rates and Fees:

	 	As set forth on Annex I hereto.
	 
	 	 
	Default Rate:

	 	As set forth in the Existing Credit Agreement.
	 
	 	 
	Final Maturity and
Amortization:

	 	The Acquisition Facility will mature on May 2,
2013 and will amortize in equal quarterly
installments in aggregate annual amounts equal to
1% of the original principal amount of the Acquisition Facility, with the balance payable on
May 2, 2013.
	 
	 	 
	Guarantees:

	 	As set forth in the Existing Credit Agreement, it
being understood that Target and its subsidiaries
shall provide guaranties of the obligations under
the Credit Agreement on the terms provided by
Section 6.11 of the Credit Agreement.
	 
	 	 
	Security:

	 	As set forth in the Existing Credit Agreement, it
being understood that Target and its subsidiaries
shall pledge Collateral (as defined in the
Existing Credit Agreement) to secure their
guaranties of the obligations under the Credit
Agreement on the terms provided by Section 6.11 of
the Credit Agreement.
	 
	 	 
	Mandatory Prepayments:

	 	As set forth in the Existing Credit Agreement.

Mandatory prepayments shall be applied pro rata to
the Term Loans (as defined in the Existing Credit
Agreement) outstanding and Acquisition Term Loans
outstanding and otherwise as set forth in the
Existing Credit Agreement.
	 
	Voluntary Prepayments:

	 	As set forth in the Existing Credit Agreement.
	 
	 	 
	 

	 	Voluntary prepayments shall be applied pro rata to
the Term Loans (as defined in the Existing Credit
Agreement) outstanding and Acquisition Term Loans
outstanding and otherwise as set forth in the
Existing Credit Agreement.
	 
	 	 
	Representations and
Warranties:

	 	As set forth in the Existing Credit Agreement.
	 
	 	 
	Conditions to
Initial Borrowing:

	 	Delivery of customary legal opinions, evidence of
authority, corporate documents, if any (with
respect to

 

3

	 	 	 
	 

	 	the Target and its subsidiaries) and
officer’s incumbency certificates; solvency
certificate (with respect to the Borrower and its
subsidiaries on a consolidated basis); officer’s
certificate demonstrating that the incurrence of
the Acquisition Term Loans complies with the terms
of the Senior Subordinated Notes Indenture; and
delivery of a customary borrowing certificate,
except that the certification with respect to the
accuracy of the representations and warranties
shall be subject to the limitations set forth in
the eleventh paragraph of the Commitment Letter
(the form of all such opinions, documents and
certificates to be consistent with those delivered
in connection with the closing of the Existing
Credit Agreement) and, subject to the limitations
set forth in the eleventh paragraph of the
Commitment Letter, the accuracy of the
representations and warranties in the Credit
Agreement.
	 
	 	 
	 

	 	Under the Credit Agreement, the availability of
the initial borrowing under the Acquisition
Facility will also be subject to the applicable
conditions set forth in the eleventh paragraph of
the Commitment Letter and in Exhibit C to the
Commitment Letter.
	 
	 	 
	Affirmative Covenants:

	 	As set forth in the Existing Credit Agreement.
	 
	 	 
	Negative Covenants:

	 	As set forth in the Existing Credit Agreement.
	 
	 	 
	Financial Maintenance 

Covenants:

	 	As set forth in the Existing Credit Agreement.
	 
	 	 
	Events of Default:

	 	As set forth in the Existing Credit Agreement.
	 
	 	 
	Counsel to the Administrative
Agent, Co-Lead Arrangers and
Joint Bookrunners:

	 	White & Case LLP.
	 
	 	 
	Interest Rates:

	 	The interest rates under the
Acquisition Facility will be as follows:
	 
	 	 
	 

	 	At the option of the Borrower, initially, the
Eurocurrency Rate (as defined in the Existing
Credit Agreement) plus 2.25% or Base Rate (as
defined in the Existing Credit Agreement) plus
1.25%.
	 
	 	 
	 

	 	From and after the delivery by the Borrower to the
Administrative Agent of the Borrower’s financial
statements for the first full fiscal quarter of
the Borrower

 

4

	 	 	 
	 

	 	completed after the Closing Date,
interest rate spreads under the Acquisition
Facility shall be determined by reference to the
leverage-based pricing grid to be agreed.

 

 

EXHIBIT C

Activant Solutions Inc.

Project Iceland Summary of Additional Conditions2

     Under the Credit Agreement, the initial borrowings under the Facilities shall be subject to
the following conditions:

          1. Except as set forth in the Disclosure Letter (as defined in the Purchase Agreement)
delivered to the Commitment Parties on the date hereof, since April 30, 2007, there shall not have
occurred any events, changes, circumstances, effects, occurrences, results or state or facts that,
individually or in the aggregate, have had, or would reasonably be expected to have, a Material
Adverse Effect (as defined in the Purchase Agreement as in effect on the date hereof).

          2. The Joint Bookrunners shall be reasonably satisfied that, from the date hereof and until
the Closing Date, there shall be no competing issues of debt securities or commercial bank or other
credit facilities of you, the Target or any of your or their subsidiaries being offered, placed or
arranged (other than any indebtedness of the Target and its subsidiaries permitted to be incurred
pursuant to the Purchase Agreement as in effect on the date hereof), if such debt securities or
commercial bank or other credit facilities would have, in the reasonable judgment of the Joint
Bookrunners, a detrimental effect upon the primary syndication of the Facilities.

          3. The Acquisition shall have been consummated, or substantially simultaneously with the
initial borrowing under the Facilities, shall be consummated, in all material respects in
accordance with the terms of the Purchase Agreement, without giving effect to any modifications,
amendments or express consents or waivers thereto that are material and adverse to the Lenders,
without the consent of the Joint Bookrunners (such consent not to be unreasonably withheld or
delayed). The Joint Bookrunners hereby acknowledge that they are satisfied with the Purchase
Agreement as in effect on the date hereof. After giving effect to the Acquisition and the
financing contemplated hereby, Target and its subsidiaries will have no outstanding indebtedness
other than indebtedness in respect of the Credit Agreement, indebtedness permitted by the Existing
Credit Agreement and certain other indebtedness to be agreed.

          4. The Joint Bookrunners shall have received (i) unaudited consolidated balance sheets as of
April 30, 2007 and related statements of income, stockholders’ equity and cash flows of the Target
for nine-month period ended April 30, 2007, and (ii) unaudited consolidated balance sheets and
related statements of income, stockholders’ equity and cash flows of the Target for each subsequent
fiscal quarter ended after April 30, 2007 and at least 45 days before the Closing Date.

          5. The Joint Bookrunners shall have received a pro forma consolidated balance
sheet of the Company as of the date of the most recent fiscal quarter ended at least 45 days prior
to the Closing Date and a pro forma statement of operations for the four
consecutive

 

			
	2	 	Capitalized terms used in this Exhibit C
shall have the meanings set forth in the other Exhibits attached to the
Commitment Letter to which this Exhibit C is attached (the
“Commitment Letter”). In the case of any such capitalized
term that is subject to multiple and differing definitions, the appropriate
meaning thereof in this Exhibit C shall be determined by reference to the
context in which it is used.

 

2

fiscal quarter period ending on such date, in each case adjusted to give effect to the
Transactions and the other transactions related thereto.

          6. Subject in all respects to the eleventh paragraph of the Commitment Letter, all documents
and instruments required to perfect the Administrative Agent’s (as defined in Exhibit B) security
interest in the Collateral (as defined in the Existing Credit Agreement) of the Target and its
subsidiaries (or, if the Replacement Option is exercised, Holdings, the Borrower, the Target and
their respective subsidiaries) shall have been executed and delivered and, if applicable, be in
proper form for filing, and none of the Collateral shall be subject to any other pledges, security
interest or mortgages, except for the liens permitted under the Credit Agreement.

          7. All fees and expenses then due and payable to the Commitment Parties pursuant to the
Commitment Letter and the Fee Letter shall have been paid to the extent invoiced in reasonable
detail at a reasonable time prior to the Closing Date.

     In addition to the foregoing, if the Replacement Option is exercised, then the initial
borrowings and extensions of credit under the full amount of the Replacement Facilities shall also
be subject to: (i) the delivery of (a) customary legal opinions, evidence of authority, corporate
documents, if any (with respect to Holdings, the Borrower, Target and their respective
subsidiaries) and officer’s incumbency certificates, (b) a solvency certificate (with respect to
the Borrower and its subsidiaries on a consolidated basis); (c) an officer’s certificate
demonstrating that the incurrence of the full amount of the Replacement Facilities complies with
the terms of the Senior Subordinated Notes Indenture; and (d) a customary borrowing certificate,
except that the certification with respect to the accuracy of the representations and warranties
shall be subject to the limitations set forth in the eleventh paragraph of the Commitment Letter
(the form of all such opinions, documents and certificates to be consistent with those delivered in
connection with the closing of the Existing Credit Agreement); (ii) subject to the limitations set
forth in the eleventh paragraph of the Commitment Letter with respect to the Replacement Facilities
(other than with respect to the Additional Replacement Revolver Extensions of Credit), the accuracy
of the representations and warranties in the Replacement Credit Agreement; and (iii) with respect
to the Additional Replacement Revolver Extensions of Credit only, the absence of any default or
event of default under the Replacement Credit Agreement.

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