Document:

Exhibit 4.1

 

EXECUTION COPY

 

 

PROVIDIAN
FINANCIAL CORPORATION

 

as Issuer

 

and

 

J.P.
MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

(as successor trustee to Bank One Trust
Company, N.A. and

The First National Bank of Chicago)

 

as Trustee

 

FOURTH
SUPPLEMENTAL INDENTURE

 

Dated
as of March 19, 2004

 

 

Supplement
to Indenture dated as of May 1, 1999

 

 

2-3/4%
Convertible Cash to Accreting Senior Notes due March 15, 2016

 

1

 

	
  ARTICLE 1

  	
   

  
	
  CREATION OF THE NOTES

  	
   

  
	
   

  	
   

  
	
  Section 1.01. 
  Designation Of Series

  	
   

  
	
  Section 1.02.  Form Of Notes

  	
   

  
	
  Section 1.03. 
  Limit On Amount Of Series

  	
   

  
	
  Section 1.04. 
  Interest

  	
   

  
	
  Section 1.05. 
  Accretion of Principal

  	
   

  
	
  Section 1.06. 
  Certificate Of Authentication

  	
   

  
	
  Section 1.07.  No Sinking Fund

  	
   

  
	
  Section 1.08. 
  Issuance In Global Form

  	
   

  
	
  Section 1.09. 
  No Discharge; Defeasance

  	
   

  
	
  Section 1.10. 
  Tax Treatment Of The Notes

  	
   

  
	
  Section 1.11. 
  Other Terms Of Notes

  	
   

  
	
  Section 1.12. 
  Additional Definitions

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
  MAKE WHOLE PREMIUM

  	
   

  
	
   

  	
   

  
	
  Section 2.01.  Make Whole Premium

  	
   

  
	
  Section 2.02. 
  Adjustments Relating To Make Whole Premium

  	
   

  
	
  Section 2.03. 
  Limitation On Creation Of Certain Liens

  	
   

  
	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
  CONVERSION OF NOTES

  	
   

  
	
   

  	
   

  
	
  Section 3.01. 
  Conversion Privilege

  	
   

  
	
  Section 3.02. 
  Exercise Of Conversion Privilege; Issuance Of Common Stock On
  Conversion; No Adjustment For Interest Or Dividends

  	
   

  
	
  Section 3.03. 
  Cash Payments in Lieu of Fractional Shares

  	
   

  
	
  Section 3.04.  Conversion Rate

  	
   

  
	
  Section 3.05. 
  Adjustment Of Conversion Rate

  	
   

  
	
  Section 3.06. 
  Effect Of Reclassification, Consolidation, Merger or Sale

  	
   

  
	
  Section 3.07. 
  Taxes On Shares Issued

  	
   

  
	
  Section 3.08. 
  Reservation of Shares, Shares to Be Fully Paid; Compliance With
  Governmental Requirements; Listing of Common Stock

  	
   

  
	
  Section 3.09. 
  Responsibility Of Trustee

  	
   

  
	
  Section 3.10. 
  Notice To Holders Prior To Certain Actions

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
  REPURCHASE AT OPTION OF HOLDERS UPON A
  FUNDAMENTAL CHANGE

  	
   

  
	
   

  	
   

  
	
  Section 4.01. 
  Repurchase At Option of Holders Upon a Fundamental Change

  	
   

  

 

2

 

	
  ARTICLE 5

  	
   

  
	
  REPURCHASE AT OPTION OF HOLDERS UPON SCHEDULED
  REPURCHASE DATES

  	
   

  
	
   

  	
   

  
	
  Section 5.01. 
  Repurchase At Option Of Holders Upon Scheduled Repurchase Dates

  	
   

  
	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
  REDEMPTION AT OPTION OF COMPANY

  	
   

  
	
   

  	
   

  
	
  Section 6.01. 
  Redemption At Option Of Company

  	
   

  
	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
  CONTINGENT INTEREST

  	
   

  
	
   

  	
   

  
	
  Section 7.01.  Contingent Interest

  	
   

  
	
  Section 7.02. 
  Payment of Contingent Interest

  	
   

  
	
  Section 7.03. 
  Contingent Interest Notification

  	
   

  
	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  
	
  Section 8.01. 
  Additional Events Of Default

  	
   

  
	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  
	
  Section 9.01. 
  With Consent Of Holders

  	
   

  
	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 10.01. 
  Corporate Trustee Eligibility

  	
   

  
	
  Section 10.02. 
  Application Of Fourth Supplemental Indenture

  	
   

  
	
  Section 10.03.  Effective Date

  	
   

  
	
  Section 10.04.  Counterparts

  	
   

  

 

3

 

FOURTH SUPPLEMENTAL INDENTURE, dated as of March 19, 2004 by and
between PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation, as issuer (the
“Company”),
and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking
association duly organized and existing under the laws of the United States of
America, as Trustee under the Indenture (as hereinafter defined) (the “Trustee”).

 

RECITALS

 

WHEREAS, the Company and the Trustee (as successor in interest to Bank
One Trust Company, N.A., which was successor in interest to The First National
Bank of Chicago), are parties to an Indenture dated as of May 1, 1999 (the “Indenture,”
and 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, the Company desires to issue a new series of Securities under
the Indenture, and has duly authorized the creation and issuance of such
Securities and the execution and delivery of this Fourth 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 Fourth Supplemental Indenture for the purposes of establishing the terms
of the new series of Securities;

 

WHEREAS, the execution and delivery of this Fourth Supplemental
Indenture has been authorized by a Board Resolution, concurrent with the
execution hereof, the Company has delivered an Officers’ Certificate and has
caused its counsel to deliver to the Trustee an Opinion of Counsel, and all
things necessary to make this Fourth 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 FOURTH 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:

 

4

 

ARTICLE 1

CREATION OF THE NOTES

 

Section 1.01.  Designation Of Series.  Pursuant to the terms hereof and
Section 301 of the Indenture, the Company hereby creates a series of
Securities designated as the “2-3/4% Convertible Cash to Accreting Senior Notes
due March 15, 2016” (the “Notes”), which Notes shall be deemed
“Securities” for all purposes under the Indenture.

 

Section 1.02.  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 Accreted
Principal Amount (as defined below) of the Notes shall be March 15, 2016.

 

Section 1.03.  Limit On Amount Of Series.  The Notes shall not exceed U.S.
$250,000,000 in aggregate original principal amount (or U.S. $302,797,875 in
aggregate Accreted Principal Amount at maturity), or U.S. $287,500,000 in
aggregate original principal amount (or U.S. $302,797,875 in aggregate Accreted
Principal Amount at maturity) if the underwriters exercise their over-allotment
option in connection with the initial offering of the Notes, and may, upon the
execution and delivery of this Fourth 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 303 of the Indenture. The Company
can not reissue a Note that has matured or been converted, purchased or
redeemed by the Company, or otherwise cancelled, except for registration of
transfer, exchange or replacement of such Note.

 

Section 1.04.  Interest.   Until March 15, 2011, the
Company will pay cash interest on the original principal amount of the Notes at
the rate per annum of 2-3/4%.  From and
after March 15, 2011, the Company will pay cash interest on the original
principal amount of the Notes at the rate per annum of 1-3/4% and the Accreted
Principal Amount (as defined below) of the Notes will accrete as set forth in
Section 1.05.  Cash interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from March 19, 2004.  The Company will pay interest semi-annually
in arrears on each March 15 and September 15 (each, an “Interest
Payment Date”) to the Holders of record on the immediately preceding
March 1 and September 1 (each a “Regular  Record Date”), respectively,
commencing on September 15, 2004. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months and consistent with NASD Rule 11620(b).  The Company shall pay interest on overdue Accreted Principal
Amount of the Notes from time to time on demand at the initial rate borne by
the Notes and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful.  The Company shall pay contingent interest on the Notes as set
forth in Article 7 hereof.  The
terms governing the payment of interest on the Notes shall otherwise be as set
forth in Article 7, the Form of Note attached hereto as Exhibit A, and the
Indenture.

 

5

 

Section 1.05.  Accretion of Principal.  From and after March 15, 2011, the
principal amount of the Notes will accrete at a rate that provides the holder
with an aggregate annual yield to maturity of 2-3/4% (computed on a semiannual
bond equivalent yield basis from March 15, 2011, after giving effect to
cash interest paid but excluding contingent interest, if any).  The “Accreted Principal Amount” of the Notes on
any date will be, for each $1,000 original principal amount of Notes, (i) prior
to March 15, 2011, $1,000, and (ii) from and after March 15, 2011,
that principal amount that provides holders with an aggregate annual yield to
maturity of 2-3/4% (computed on a semiannual bond equivalent yield basis from
March 15, 2011, after giving effect to cash interest paid but excluding
contingent interest, if any).  Except as
otherwise expressly set forth herein or as otherwise clearly required by the
context, any references to the “principal” of the Notes in this Fourth
Supplemental Indenture or the Indenture shall be deemed to refer to the
Accreted Principal Amount of the Notes.

 

Section 1.06.  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.

 

Section 1.07.  No Sinking Fund.  No sinking fund will be provided
with respect to the Notes.

 

Section 1.08.  Issuance In Global Form.  The Notes shall be issued as one
or more Global Securities, representing the aggregate principal amount at
maturity of the Notes, and shall be deposited with the Depositary or its
custodian, which shall initially be the Trustee. The Notes shall be registered
in the name of Cede & Co., or other nominee of the Depositary.

 

Section 1.09.  No Discharge; Defeasance.  The Notes shall not be subject to
the provisions of Article XIII of the Indenture.

 

Section 1.10.  Tax Treatment Of The Notes.  The Company and the Holders, by
purchasing the Notes, agree that:

 

(i)            the Notes are contingent payment debt
instruments as described in Treasury Regulation Section 1.1275-4;

 

(ii)           each Holder shall be bound by the Company’s
application of the Treasury Regulations to the Notes, including the Company’s
determination that the rate at which interest will be deemed to accrue on the
Notes for United States federal income tax purposes will be 9.5% compounded
semi-annually, which is the rate comparable to the rate at which the Company
would borrow on a noncontingent, nonconvertible borrowing with terms and
conditions otherwise comparable to the Notes;

 

(iii)          each Holder shall use the projected payment
schedule with respect to the Notes provided by the Company to the Holder,
as provided in Treasury Regulation Section 1.1275-4(b)(4), to determine
its interest accruals and adjustments as provided in Treasury Regulation
Section 1.1275-4(b)(4)(iv); and

 

6

 

(iv)          the Company and each Holder will not take any
position on a tax return inconsistent with clauses (i), (ii), or (iii) of this
Section 1.10, unless required by applicable law.

 

Section 1.11.  Other Terms Of Notes.  The other terms of the Notes
shall be as expressly set forth herein and in Exhibit A hereto.

 

Section 1.12.  Additional Definitions.  The words “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Fourth Supplemental
Indenture as a whole and not to any particular Article, Section or other
subdivision. For purposes of this Fourth Supplemental Indenture, the following
terms shall have the following definitions:

 

“Advance
Notice of Fundamental Change” has the meaning specified in
Section 3.01(a)(vi).

 

“Accreted
Principal Amount” has the meaning specified in Section 1.05.

 

“Additional
Premium” has the meaning specified in Section 2.01(b)(iii).

 

“Additional
Premium Table” has the meaning specified in
Section 2.01(b)(iii).

 

“Adjustment
Event” has the meaning specified in Section 3.05(k).

 

“Calculation
Agent” means the calculation agent from time to time appointed by
the Company pursuant to Section 3.01.

 

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

 

“Common
Stock” means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company.  Subject to the provisions of
Section 3.06 and Section 2.01(c), however, shares issuable on conversion
of Notes or otherwise issuable under the Fourth Supplemental Indenture shall
include only shares of the class designated as common stock of the Company at
the date of this Indenture (namely, the Common Stock, par value $0.01) or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in

 

7

 

respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

 

“Company”
means the corporation named as the “Company” in the first paragraph of this
Fourth Supplemental Indenture, and, subject to the provisions of
Section 801 of the Indenture and Section 3.06, shall include its
successors and assigns.

 

“contingent
interest” means interest that accrues and is payable as provided in
Article 7.

 

“Contingent
Interest Test Period” has the meaning specified in
Section 7.01.

 

“Conversion
Price” as of any day means the amount equal to the Accreted
Principal Amount per $1,000 original principal amount of Notes divided by the
number of shares of Common stock issuable upon conversion of $1,000 original
principal amount of Notes.

 

“Conversion
Rate” has the meaning specified in Section 3.04.

 

“Current
Market Price” has the meaning specified in Section 3.05(g)(i).

 

“Determination
Date” has the meaning specified in Section 3.05(k).

 

“Effective
Date” has the meaning specified in Section 2.01(b)(i).

 

“ex-dividend
trading” has the meaning specified in Section 3.05(g)(i).

 

“Expiration
Time” has the meaning specified in Section 3.05(f).

 

“Fair
Market Value” has the meaning specified in Section 3.05(g)(ii).

 

“Fundamental
Change” means the occurrence of any transaction, series of related
transactions or event (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) in connection with which (A) more than 50% of
the Common Stock or other capital stock or equity or voting interests in the
Company is exchanged for, converted into, acquired for or constitutes the right
to receive cash, securities or other property, or the Common Stock ceases to be
listed on a national securities exchange or quoted on the Nasdaq National
Market, or (B) the Company sells or otherwise disposes of all or substantially
all of its and its subsidiaries’ assets, properties or businesses, taken as a
whole.

 

“Fundamental
Change Expiration Time” has the meaning specified in
Section 4.01(b).

 

“Fundamental
Change Notice” has the meaning specified in Section 4.01(b).

 

8

 

“Fundamental
Change Repurchase Date” has the meaning specified in
Section 4.01(a).

 

“interest”
means, when used with reference to the Notes, any cash interest payable under
the terms of the Notes, including contingent interest, if any.

 

“Interest
Payment Date” has the meaning specified in Section 1.04.

 

“Make
Whole Premium” has the meaning specified in
Section 2.01(b)(iv).

 

“Market
Price Threshold” has the meaning specified in
Section 3.01(a)(i).

 

“non-electing
share” has the meaning specified in Section 3.06.

 

“Notes”
has the meaning set forth in Section 1.01.

 

“Outstanding”
has the meaning specified in the Indenture, except that Notes converted into
Common Stock pursuant to Article 3 shall not be deemed outstanding.

 

“Principal
Value Conversion” has the meaning specified in
Section 3.01(a)(iii).

 

“Principal
Value Conversion Amount” has the meaning specified in  Section 3.01(a)(iii).

 

“Purchased
Shares” has the meaning specified in Section 3.05(f).

 

“Record
Date” has the meaning specified in
Section 3.05(g)(iii).

 

“Redemption
Date” has the meaning specified in Section 6.01.

 

“Redemption
Date Notice” has the meaning specified in Section 6.01.

 

“Regular
Record Date” has the meaning specified in Section 1.04.

 

“Rights”
has the meaning specified in Section 3.05(d).

 

“Scheduled
Repurchase Date” has the meaning specified in Section 5.01(a).

 

“Scheduled
Repurchase Date Expiration Time” has the meaning specified in
Section 5.01(b).

 

“Scheduled
Repurchase Date Notice” has the meaning specified in
Section 5.01(b).

 

 “Securities” has the meaning
specified in Section 3.05(d).

 

“Stock
Price” has the meaning specified in Section 2.01(b)(ii).

 

“Stock
Price Cap” has the meaning specified in Section 2.01(b)(iv)(C).

 

9

 

“Stock
Price Threshold” has the meaning specified in
Section 2.01(b)(iv)(B).

 

“Trading
Day” has the meaning specified in Section 3.05(g)(iv).

 

“Trading
Price” means, on any date, the trading price per $1,000 original
principal amount of the Notes on such date, as determined by the average of the
secondary market bid quotations obtained by the Trustee for $5,000,000 original
principal amount of Notes at approximately 3:30 p.m., New York City time, on
such date from three independent nationally recognized securities dealers
selected by the Company; provided that if at least three such bids
cannot reasonably be obtained by the Trustee, but two bids are obtained, then
the average of the two bids shall be used, and if only one such bid can
reasonably be obtained by the Trustee, one bid shall be used; and provided
further that if the Trustee cannot reasonably obtain at least one
bid for $5,000,000 original principal amount of Notes from a nationally
recognized securities dealer, then the Trading Price per $1,000 original
principal amount of Notes shall be deemed to be less than 98% of the product of
(A) the number of shares of Common Stock issuable upon conversion of $1,000
original principal amount of Notes and (B) the Closing Price on such date.

 

“Trigger
Event” has the meaning set forth in Section 3.05(d).

 

ARTICLE 2

MAKE WHOLE PREMIUM

 

Section 2.01.  Make Whole Premium.  (a) If a Fundamental Change
occurs, the Company will pay the Make Whole Premium (as defined below) to
holders of the Notes who convert their Notes pursuant to
Section 3.01(a)(vi) in connection with such Fundamental Change or to
holders of the Notes who tender their Notes for repurchase upon such
Fundamental Change pursuant to Article 4. 
The Make Whole Premium will be paid on the Fundamental Change Repurchase
Date in shares of the Company’s Common Stock as described below.

 

(b)           The
Make Whole Premium will be determined as follows:

 

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

 

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

 

(A)        If holders of the Common Stock receive only
cash in the Fundamental Change, the Stock Price shall be the cash amount paid
per share of Common Stock; or

 

(B)         Otherwise, the Stock Price shall be the
average of the Closing Price of the Common Stock on the 10 Trading Days up to
but not including the Effective Date.

 

10

 

(iii)          “Additional Premium” means the percentage
set forth on the table below (the “Additional Premium Table”) for the Stock
Price and the Effective Time:

 

	
   

  	
   

  	
  Stock Price

  	
   

  
	
  Effective Date

  	
   

  	
  $11.73

  	
   

  	
  $13.00

  	
   

  	
  $14.00

  	
   

  	
  $15.00

  	
   

  	
  $16.00

  	
   

  	
  $17.50

  	
   

  	
  $20.00

  	
   

  	
  $22.50

  	
   

  	
  $25.00

  	
   

  	
  $27.50

  	
   

  	
  $30.00

  	
   

  	
  $35.00

  	
   

  	
  $40.00

  	
   

  	
  $50.00

  	
   

  	
  $100.00

  	
   

  
	
  March 15, 2004

  	
   

  	
  0.0

  	
  %

  	
  5.5

  	
  %

  	
  9.9

  	
  %

  	
  14.5

  	
  %

  	
  19.3

  	
  %

  	
  23.7

  	
  %

  	
  21.5

  	
  %

  	
  19.8

  	
  %

  	
  18.4

  	
  %

  	
  17.2

  	
  %

  	
  16.2

  	
  %

  	
  14.6

  	
  %

  	
  13.4

  	
  %

  	
  11.5

  	
  %

  	
  0.0

  	
  %

  
	
  March 15, 2005

  	
   

  	
  0.0

  	
  %

  	
  3.9

  	
  %

  	
  8.2

  	
  %

  	
  12.8

  	
  %

  	
  17.4

  	
  %

  	
  21.7

  	
  %

  	
  19.5

  	
  %

  	
  17.8

  	
  %

  	
  16.3

  	
  %

  	
  15.2

  	
  %

  	
  14.2

  	
  %

  	
  12.7

  	
  %

  	
  11.6

  	
  %

  	
  9.9

  	
  %

  	
  0.0

  	
  %

  
	
  March 15, 2006

  	
   

  	
  0.0

  	
  %

  	
  2.6

  	
  %

  	
  6.9

  	
  %

  	
  11.2

  	
  %

  	
  15.7

  	
  %

  	
  20.0

  	
  %

  	
  17.5

  	
  %

  	
  15.8

  	
  %

  	
  14.3

  	
  %

  	
  13.2

  	
  %

  	
  12.2

  	
  %

  	
  10.8

  	
  %

  	
  9.8

  	
  %

  	
  8.4

  	
  %

  	
  0.0

  	
  %

  
	
  March 15, 2007

  	
   

  	
  0.0

  	
  %

  	
  1.7

  	
  %

  	
  5.6

  	
  %

  	
  9.8

  	
  %

  	
  14.2

  	
  %

  	
  18.2

  	
  %

  	
  15.6

  	
  %

  	
  13.7

  	
  %

  	
  12.2

  	
  %

  	
  11.1

  	
  %

  	
  10.2

  	
  %

  	
  8.9

  	
  %

  	
  8.0

  	
  %

  	
  6.8

  	
  %

  	
  0.0

  	
  %

  
	
  March 15, 2008

  	
   

  	
  0.0

  	
  %

  	
  0.8

  	
  %

  	
  4.4

  	
  %

  	
  8.3

  	
  %

  	
  12.5

  	
  %

  	
  16.2

  	
  %

  	
  13.4

  	
  %

  	
  11.4

  	
  %

  	
  9.9

  	
  %

  	
  8.8

  	
  %

  	
  7.9

  	
  %

  	
  6.8

  	
  %

  	
  6.1

  	
  %

  	
  5.2

  	
  %

  	
  0.0

  	
  %

  
	
  March 15, 2009

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  3.0

  	
  %

  	
  6.5

  	
  %

  	
  10.3

  	
  %

  	
  13.7

  	
  %

  	
  10.6

  	
  %

  	
  8.4

  	
  %

  	
  7.0

  	
  %

  	
  6.0

  	
  %

  	
  5.3

  	
  %

  	
  4.5

  	
  %

  	
  4.1

  	
  %

  	
  3.6

  	
  %

  	
  0.0

  	
  %

  
	
  March 15, 2010

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  1.3

  	
  %

  	
  4.2

  	
  %

  	
  7.4

  	
  %

  	
  10.3

  	
  %

  	
  6.8

  	
  %

  	
  4.7

  	
  %

  	
  3.5

  	
  %

  	
  2.9

  	
  %

  	
  2.5

  	
  %

  	
  2.2

  	
  %

  	
  2.0

  	
  %

  	
  1.9

  	
  %

  	
  0.0

  	
  %

  
	
  March 15, 2011

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  

 

If the Stock
Price is between two Stock Price amounts on the table or the Effective Date is
between two dates on the table, the additional premium will be determined by
straight-line interpolation between Additional Premium amounts set forth for
the higher and lower Stock Price amounts and the two dates, as applicable,
based on a 365 day year.  The Stock
Prices set forth in the column headers are subject to adjustment pursuant to
Section 2.02.

 

(iv)          “Make Whole Premium” means the amount per
$1,000 original principal amount of Notes equal to:

 

(A)        If the Effective Date is on or after
March 15, 2011, $0;

 

(B)         If the Stock Price is less than $11.73
(subject to adjustment pursuant to Section 2.02) (the “Stock Price
Threshold”), $0; and

 

(C)         If the Stock Price is more than $100.00
(subject to adjustment pursuant to Section 2.02) (the “Stock Price
Cap”), $0; and

 

(D)         Otherwise, the dollar amount equal to

 

(1)        the sum of one percent (1%) and the Additional
Premium, times

 

(2)        $1,000.

 

For example, if the Stock Price were $15.00 and the Effective Date were
March 15, 2010,  the Additional
Premium would be 4.2% and the Make Whole Premium would be $52.00.

 

(c)           The
Company will pay the Make Whole Premium solely in shares of Common Stock (other
than cash paid in lieu of fractional shares) or in the same form of
consideration into which all or substantially all of the Common Stock has been
converted in connection with the Fundamental Change. If holders of the Common
Stock have the right to elect the form of consideration received in a
Fundamental Change, then for purposes of the foregoing the

 

11

 

consideration into which a share of Common Stock has been converted
shall be deemed to equal the aggregate consideration distributed in respect of
all shares of Common Stock divided by the total number of shares of Common
Stock participating in the distribution.

 

(d)           The
value of the shares of Common Stock for purposes of determining the number of
shares to be issued in respect of the Make Whole Premium will be calculated as
follows:

 

(i)    in the case of a Fundamental Change in which all or
substantially all of the shares of Common Stock have been converted as of the
Effective Date into the right to receive securities or other assets or
property, then the value of the shares of Common Stock will equal the value of
the consideration paid per share, with the consideration valued as follows:

 

(A)               securities that are traded on an United
States national securities exchange or approved for quotation on the Nasdaq
National Market or any similar system of automated dissemination of quotations
of securities prices will be valued based on 98% of the average Closing Price
or last sale price, as applicable, on the ten (10) Trading Days prior to but
excluding the Fundamental Change Repurchase Date,

 

(B)               other securities, assets or property
(other than cash) which holders will have the right to receive will be valued
based on 98% of the average of the fair market value of such securities, assets
or property (other than cash) as determined by two independent nationally
recognized investment banks selected by the Trustee, and

 

(C)               100% of any cash

 

(ii)   in all other cases, the value of each share of
Common Stock will equal 98% of the average of the Closing Price of Common Stock
on the ten (10) Trading Days prior to but excluding the Fundamental Change
Repurchase Date.

 

Notwithstanding the foregoing, in no event shall the value of each
share of Common Stock (or of the securities or other assets or property into
which each share of Common Stock has been converted) be less than 50% of the
Stock Price used to determine the amount of the Make Whole Premium.

 

A Calculation Agent appointed from time to time by the Company shall,
on behalf of and on request by the Company or the Trustee, calculate (A) the
Stock Price, and (B) the Additional Premium and Make Whole Premium with respect
to such Stock Price, based on the Effective Date specified by the Company or
the Trustee, and shall deliver its calculation of the Stock Price and Make
Whole Premium to the Company and the Trustee within three Business Days of the
request by the Company or the Trustee. 
In addition, the Calculation Agent shall, on behalf of and upon request
by the Company or the Trustee no less than three Business Days prior to a
Fundamental Change Repurchase Date, make the determinations described in
Section 2.01(d)(i)(A)

 

12

 

and Section 2.01(d)(ii) above and deliver its calculations to the
Company or the Trustee by 9 p.m., New York City time, on the day prior to the
Fundamental Change Repurchase Date. The Company, or at the Company’s request,
the Trustee in the name and at the expense of the Company, (X) shall notify the
Holders of the Stock Price and  Make
Whole Premium per $1,000 original principal amount of Notes with respect to a
Fundamental Change as part of the Fundamental Change Notice and (Y) shall
notify the Holders promptly upon the opening of business on the Fundamental
Change Repurchase Date of the number of shares of Common Stock (or such other securities,
assets or property into which all or substantially all of the shares of Common
Stock have been converted as of the Effective Date as described above) to be
paid in respect of the Make Whole Amount in connection with such Fundamental
Change, in the manner provided in Section 106 of the Indenture, and the
Company shall also publicly announce such information and publish it on the
Company’s web site.  Any notice so given
shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice.

 

(e)           On
or prior to the Fundamental Change Repurchase Date, the Company will deposit
with the Trustee or with one or more paying agents (or, if the Company is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 1003 of the Indenture) an amount of shares of Common
Stock (or in the case of a Fundamental Change in which all or substantially all
of the shares of Common Stock have been converted as of the Effective Date into
the right to receive securities or other assets or property, an amount of such
other securities or other assets or property) sufficient to pay the Make Whole
Premium with respect to all the Notes to be repurchased on such date and all
the Notes converted in connection with such Fundamental Change; provided
that if such payment is made on the Fundamental Change Repurchase Date it must
be received by the Trustee or paying agent, as the case may be, by 10:00 a.m.,
New York City time, on such date. Payment of the Make Whole Premium for Notes
surrendered for repurchase (and not withdrawn) prior to the Fundamental Change
Expiration Time or surrendered for conversion within the period described in
Section 3.01(a)(vi), will be made promptly (but in no event more than five
(5) Business Days) following the Fundamental Change Repurchase Date by mailing
checks in respect of cash and otherwise delivering entitlements to securities,
other assets or property for the amount payable to the Holders of such Notes
entitled thereto as they shall appear in the Security Register.

 

Section 2.02.  Adjustments Relating To Make Whole
Premium.  Whenever the
Conversion Rate shall be adjusted from time to time by the Company pursuant to
Section 3.05, the Stock Price Threshold and the Stock Price Cap shall be
adjusted and each of the Stock Prices set forth in the Additional Premium Table
will be adjusted by multiplying each such amount by a fraction the numerator of
which is the Conversion Rate immediately prior to such adjustment and the
denominator of which is the Conversation Rate as so adjusted.

 

Section 2.03.  Limitation On Creation Of Certain
Liens.  Notwithstanding
Section 1009 of the Indenture, nothing in Section 1009 shall require
that the Company equally and ratably secure solely its obligation to pay the
Make Whole Premium under the circumstances therein described.

 

13

 

ARTICLE 3

CONVERSION OF NOTES

 

Section 3.01.  Conversion Privilege.  (a)  Subject to and upon
compliance with the provisions of this Indenture, prior to March 15, 2016,
the Holder of any Note shall have the right, at such Holder’s option, to
convert the original principal amount of the Note, or any portion of such
original principal amount which is a multiple of $1,000, into fully paid and non-assessable
shares of Common Stock (as such shares shall then be constituted) at the
Conversion Rate in effect at such time, by surrender of the Note so to be
converted in whole or in part, together with any required funds, under the
circumstances described in this Section 3.01 and in the manner provided in
Section 3.02. The Notes shall be convertible only upon the occurrence of
one of the following events:

 

(i)            during any calendar quarter commencing
after June 30, 2004, if the Closing Price of the Common Stock exceeds
$20.41 (subject to adjustment pursuant to Section 3.05) (the “Market Price
Threshold”) for at least 20 Trading Days in the 30 consecutive
Trading Day period ending on the last Trading Day of the immediately preceding
calendar quarter (it being understood for purposes of this
Section 3.01(a)(i) that the Market Price Threshold in effect at the close
of business on each of the 30 consecutive Trading Days shall be used);

 

(ii)           on and after March 15, 2011, if the
Closing Price of the Common Stock exceeds the Market Price Threshold on any
Trading Day on or after March 15, 2011;

 

(iii)          during the five Business Day period after any
five consecutive Trading Day period in which the Trading Price per $1,000
original principal amount of the Notes for each day of such five Trading Day
period was less than 98% of the product of the Closing Price of the Common
Stock and the number of shares of Common Stock issuable upon conversion of
$1,000 original principal amount of the Notes; provided that if on the date
of any conversion pursuant to this clause (iii) the Closing Price of the Common
Stock is greater than the Conversion Price, a Holder shall receive, in lieu of
Common Stock based on the Conversion Price, cash or Common Stock or a
combination of cash and Common Stock, at the Company’s option, with a value
equal to the Accreted Principal Amount of the Holder’s Notes plus accrued and
unpaid interest, including contingent interest, if any, as of the conversion
date (such amount, the “Principal Value Conversion Amount”, and
such a conversion, a “Principal Value Conversion”);

 

(iv)          during the period from the date of any
Redemption Date Notice to the close of business on the Business Day immediately
prior to the Redemption Date, unless the Company fails to make payment on the
Redemption Date, in which case until the date the Company shall pay the
Redemption Price;

 

(v)           during any period in which the Notes are
rated at or below either CCC+ by Standard & Poor’s Ratings Group or its
successor entity, or Caa1 by Moody’s Investors

 

14

 

Service or its successor entity; provided that the Company shall be under
no obligation to have the Notes rated;

 

(vi)          during the period from the opening of
business on the date the Company gives Advance Notice of a Fundamental Change
to the close of business on the 10th Trading Day from and including
the date the Company gives a Fundamental Change Notice or publicly announces
that such Fundamental Change will not take place; or

 

(vii)         any time on and after the date that the
Company gives notice to the Holders of a Specified Distribution, which shall be
not less than 20 days prior to the commencement of ex-dividend trading for such
Specified Distribution, until the earlier of the close of business on the
Business Day immediately preceding, but not including, the commencement of
ex-dividend trading or the date the Company publicly announces that such
Specified Distribution will not take place. 
A “Specified
Distribution” means the Company distributes to all holders of its
Common Stock (A) rights or warrants entitling them (for a period expiring
within 45 days of the record date for the determination of the stockholders
entitled to receive such distribution) to subscribe for or purchase shares of Common
Stock, at a price per share less than the average of the Closing Price of the
Common Stock for the ten Trading Days immediately preceding, but not including,
the date such distribution is first publicly announced by the Company, or (B)
cash or other assets, debt securities or rights to purchase its securities,
where the Fair Market Value of such distribution per share of Common Stock
exceeds 5% of the Closing Price of the Common Stock on the Trading Day
immediately preceding the date such distribution is first publicly announced by
the Company;
provided that no adjustment to the Conversion Rate or the ability of
a Holder of a Note to convert will be made if the Holder will otherwise
participate in such Specified Distribution without conversion.

 

A Calculation Agent from time to time appointed by the Company shall,
on behalf of the Company, determine whether the Notes shall be convertible as a
result of the occurrence of an event specified in clause (i) above on a
quarterly basis, or as a result of the occurrence of an event specified in
clause (ii) above on a daily basis on and after March 15, 2011, and if the
Notes shall be so convertible, the Calculation Agent appointed by the Company
shall promptly deliver to the Company and the Trustee written notice thereof.  Whenever the Notes shall become convertible
pursuant to this Section 3.01, the Company or, at the Company’s request,
the Trustee in the name and at the expense of the Company, shall notify the
Holders of the event triggering such convertibility in the manner provided in
Section 106 of the Indenture, and the Company shall also publicly announce
such information and publish it on the Company’s web site.  Any notice so given shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice.

 

The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price of the Notes under this
Section 3.01 unless the Company has requested such a determination; and
the Company shall have no obligation to make such request unless a Holder
provides it, on or prior to 12:00 noon (New York City time) on any Trading Day,
with reasonable evidence that the Trading Price per $1,000 original principal

 

15

 

amount of Notes would be less than 98% of the product of the Closing
Price of the Common Stock and the number of shares of Common Stock issuable
upon conversion of $1,000 original principal amount of Notes.  If such evidence is provided, the Company
shall instruct the Trustee (or other conversion agent) 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 original principal amount of
Notes is greater than or equal to 98% of the product of the Closing Price of
the Common Stock and the number of shares issuable upon conversion of $1,000
original principal amount of the Notes.

 

(b)           A
Note in respect of which a Holder is electing to exercise its option to require
repurchase upon a Fundamental Change Repurchase Date pursuant to
Section 4.01 or upon a Scheduled Repurchase Date pursuant to
Section 5.01(a) may be converted only if such Holder withdraws its
election in accordance with Section 4.01 or Section 5.01(b), as
applicable.  A Holder of Notes is not
entitled to any rights of a holder of Common Stock until such Holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article 3.

 

(c)           On
or before the tenth Trading Day prior to and excluding the anticipated
Effective Date, as determined by the Board of Directors of the Company, of a
Fundamental Change, the Company or at its written request (which must be
received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below, unless the Trustee
shall agree in writing to a shorter period), the Trustee, in the name of and at
the expense of the Company, shall mail or cause to be mailed to all holders of
record on such date a notice (the “Advance Notice of a Fundamental Change”) of
the anticipated Effective Date with respect to such Fundamental Change, the
repurchase right and conversion right at the option of the Holders arising as a
result thereof, and whether a Make Whole Premium will be payable in connection
with any such repurchase or conversion. 
If the Effective Date with respect to a Fundamental Change occurs
without notice to, or the knowledge of, the Company, the Company shall give the
Fundamental Change Notice required by Section 4.01(b) and the date of the
Advance Notice of Fundamental Change shall be deemed to be the date of such
Fundamental Change Notice.  The Advance
Notice of a Fundamental Change shall be mailed by first class mail to each
Holder of Notes at its last address as the same appears on the Security
Register. If the Company shall give such notice, the Company shall also deliver
a copy of such notice to the Trustee at such time as it is mailed to
Holders.  Each notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice.  In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note shall not affect the validity of the
proceedings for the conversion of any other Note.  Concurrently with the mailing of such notice, the Company shall
issue a press release with the information contained in such notice, the form
and content of which press release shall be determined by the Company in its
sole discretion, and the Company shall also publish such information on the
Company’s web site.  The failure to
issue any such press release or any defect therein shall not affect the validity
of such notice or any proceedings for the conversion of any Note which any
Holder may elect to convert as provided in Section 3.01(a)(vi).

 

16

 

Section 3.02.  Exercise Of Conversion Privilege; Issuance Of
Common Stock On Conversion; No Adjustment For Interest Or Dividends.  (a)  In order to exercise the
conversion privilege with respect to any Note in certificated form, the Company
must receive at the office or agency of the Company maintained for that purpose
or, at the option of such Holder, the Corporate Trust Office, such Note with
the original or facsimile of the form entitled “Conversion Notice” on the
reverse thereof, duly completed and manually signed, together with such Note
duly endorsed for transfer, accompanied by the funds, if any, required by this
Section 3.02.  Such notice shall
also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer or
similar taxes, if required pursuant to Section 3.07.

 

(b)           In
order to exercise the conversion privilege with respect to any interest in a
Global Security, the beneficial owner must complete, or cause to be completed,
the appropriate instruction form for conversion pursuant to the Depositary’s
book-entry conversion program, deliver, or cause to be delivered, by book-entry
delivery an interest in the aggregate original principal amount and corresponding
Accreted Principal Amount represented thereby to be converted of such Global
Security, furnish appropriate endorsements and transfer documents if required
by the Company or the Trustee or conversion agent, and pay the funds, if any,
required by this Section 3.02 and any transfer or similar taxes, if
required pursuant to Section 3.07. Upon the conversion of an interest in a
Global Security, the Trustee (or other conversion agent appointed by the
Company), or the Custodian at the direction of the Trustee (or other conversion
agent appointed by the Company), shall make a notation on such Global Security
as to the reduction in the original principal amount and corresponding Accreted
Principal Amount represented thereby. 
The Company shall notify the Trustee in writing of any conversions of
Notes effected through any conversion agent other than the Trustee.

 

(c)           In
the case of a Principal Value Conversion, a Holder will receive either cash,
Common Stock or a combination of cash and Common Stock, at the Company’s
option, with a value equal to the Principal Value Conversion Amount.  If a Holder surrenders its Notes for
conversion and it is a Principal Value Conversion, the Company will notify the
Holder by the second Trading Day following the conversion date whether it will
pay all or a portion of the Principal Value Conversion Amount in cash, Common
Stock or a combination of cash and Common Stock, and in what percentage.  Any Common Stock delivered upon a Principal
Value Conversion will be valued at the greater of (x) the Conversion Price on
the conversion date and (y) the Closing Price of the Common Stock on the third
Trading Day after the conversion date. 
The Company will pay any portion of the Principal Value Conversion
Amount to be paid in cash on the third Trading Day after the conversion
date.  If the Company elects to deliver
Common Stock to pay any portion of such Principal Value Conversion Amount, it
will deliver such Common Stock on the fourth Trading Day following the
conversion date.

 

(d)           As
promptly as practicable after satisfaction of the requirements for conversion
set forth above, subject to compliance with any restrictions on transfer if
shares issuable on conversion are to be issued in a name other than that of the
Holder (as if such transfer were a transfer of the Note or Notes (or portion
thereof) so converted), the Company shall issue and

 

17

 

shall deliver to such Holder at the office or agency maintained by the
Company for such purpose pursuant to Section 1002 of the Indenture,

 

(i)            a certificate or certificates for the
number of full shares of Common Stock issuable upon the conversion of such Note
or portion thereof as determined by the Company in accordance with the
provisions of this Article 3 (or, in the case of Notes submitted for
conversion in connection with a Fundamental Change pursuant to
Section 3.01(a)(vi) on or after the record date for receiving
distributions in connection with the Fundamental Change, or if earlier, the
Effective Time of the Fundamental Change, the kind and amount of cash,
securities and other assets or property which the Holder would have received if
it had held the number of shares of Common Stock issuable upon the conversion
of such Note or portion thereof prior to such record date or Effective Time);

 

(ii)           in the case of Notes submitted for
conversion in connection with a Fundamental Change pursuant to
Section 3.01(a)(vi), cash in respect of any accrued but unpaid interest,
including contingent interest, if any, to but excluding the date of conversion;
and

 

(iii)          cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, calculated by
the Company as provided in Section 3.03.

 

In case any Note of a denomination greater than $1,000 original
principal amount shall be surrendered for partial conversion, subject to
Section 3.03, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder of the Note so surrendered, without charge to him, a
new Note or Notes in authorized denominations in an aggregate original
principal amount and corresponding Accreted Principal Amount equal to the
unconverted portion of the surrendered Note.

 

(e)           Each
conversion shall be deemed to have been effected as to any such Note (or
portion thereof) on the date on which the requirements set forth above in
Section 3.02(a) or Section 3.02(b) have been satisfied as to such
Note (or portion thereof), and the Person in whose name any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become on said date the holder of record of the shares
represented thereby; provided that any such surrender on any
date when the stock transfer books of the Company shall be closed shall
constitute the Person in whose name the certificates are to be issued as the
record holder thereof for all purposes on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Rate in effect on the date upon which such Note shall be surrendered.

 

(f)            Any
Note or portion thereof surrendered for conversion during the period from the
close of business on the record date for any interest payment date to the close
of business on the Business Day preceding the following 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 otherwise payable
on such interest payment date on the original principal amount

 

18

 

being converted; provided that no such payment need be
made (i) if the Company has specified a Redemption Date that is during such
period, (ii) to the extent of any interest, including contingent interest, if
any, with respect to which there is an ongoing default in payment on the Notes,
if any, at the time of conversion. 
Except as provided above in this Section 3.02(f), no payment or
other adjustment shall be made for interest accrued on any Note converted or
for dividends on any shares issued upon the conversion of such Note as provided
in this Article 3.

 

(g)           Upon
the conversion of a Note, that portion of the Accreted Principal Amount and
accrued but unpaid interest, including contingent interest, if any, with
respect to the converted Note shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through delivery of the Common Stock, together, in the case of a Principal
Value Conversion, with any cash payment paid in lieu of shares of Common Stock,
in the case of Notes submitted for conversion in connection with a Fundamental
Change pursuant to Section 3.01(a)(vi) or in connection with a redemption
pursuant to Section 3.01(a)(iv), with any cash payment of accrued but
unpaid interest, including contingent interest, if any, on Notes converted, and
in each case, with cash in lieu of fractional shares, in exchange for the Note
being converted pursuant to the provisions hereof; and the Fair Market Value of
such shares of Common Stock together, in the case of a Principal Value
Conversion, with any such cash payment paid in lieu of shares of Common Stock,
in the case of Notes submitted for conversion in connection with a Fundamental
Change pursuant to Section 3.01(a)(vi) or in connection with a redemption
pursuant to Section 3.01(a)(iv), with any such cash payment of accrued but
unpaid interest, including contingent interest, if any, on Notes converted, and
in each case, with any such cash payment in lieu of fractional shares, shall be
treated as delivered, to the extent thereof, first in exchange for and in
satisfaction of our obligation to pay the Accreted Principal Amount of the
converted Note, the accrued but unpaid interest thereon, if any, and the
contingent interest thereon, if any, and the balance, if any, of such Fair
Market Value of such Common Stock (and any such payments) shall be treated as
issued in exchange for and in satisfaction of the right to convert the Note
being converted pursuant to the provisions hereof.  Notwithstanding the foregoing, in the case of Notes submitted for
conversion in connection with a Fundamental Change pursuant to
Section 3.01(a)(vi), such Notes shall continue to represent the right to
receive the Make Whole Premium, if any, payable pursuant to Article 2
until such Make Whole Premium is so paid.

 

Section 3.03.  Cash Payments in Lieu of Fractional
Shares.  No fractional shares
of Common Stock or scrip certificates representing fractional shares shall be issued
upon conversion of Notes.  If more than
one Note shall be surrendered for conversion at one time by the same Holder,
the number of full shares that shall be issuable upon conversion shall be
computed on the basis of the aggregate original principal amount of the Notes
(or specified portions thereof to the extent permitted hereby) so
surrendered.  If any fractional share of
stock would be issuable upon the conversion of any Note or Notes, the Company
shall make an adjustment and payment therefor in cash at the current market
price thereof to the Holder of Notes. 
The current market price of a share of Common Stock shall be the Closing
Price of the Common Stock on the last Trading Day immediately preceding the day
on which the Notes (or specified portions thereof) are deemed to have been
converted.

 

19

 

Section 3.04.  Conversion Rate.  Each $1,000 original principal
amount of the Notes shall be convertible into 58.7941 shares of Common Stock
(the “Conversion
Rate”), subject to adjustment as provided in this Article 3.

 

Section 3.05.  Adjustment Of Conversion Rate.  The Conversion Rate shall be
adjusted from time to time by the Company as follows:

 

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

 

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

 

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

 

Such an increase shall be
successively made whenever any such payment of a dividend or distribution in
shares of Common Stock on the Company’s outstanding Common Stock is made, and
each such increase shall become effective immediately after the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution.  If any dividend or distribution of the type
described in this Section 3.05(a) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate that would then
be in effect if such dividend or distribution had not been declared.

 

(b)           In
case the Company shall issue rights or warrants to all holders of its
outstanding shares of Common Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the Current Market Price
on the date fixed for determination of stockholders entitled to receive such
rights or warrants, the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the date fixed for determination of stockholders entitled
to receive such rights or warrants by a fraction,

 

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

 

20

 

(ii)           the denominator of which shall be the sum of
the number of shares of Common Stock outstanding at the close of business on
the date fixed for determination of stockholders entitled to receive such
rights or warrants plus the number of shares that the aggregate offering price
of the total number of shares so offered would purchase at such 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 determination of
stockholders entitled to receive such rights or warrants.  To the extent that shares of Common Stock
are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered.  If such rights or
warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate that would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed.  In determining whether
any rights or warrants entitle the holders to subscribe for or purchase shares
of Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.

 

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

 

(d)           In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock shares of any class of capital stock of the Company or
evidences of its indebtedness or assets (including capital stock of or similar
equity interests in a Subsidiary or other business unit of the Company or any
other securities, but excluding any rights or warrants referred to in
Section 3.05(b), and excluding any dividend or distribution (x) paid
exclusively in cash or (y) referred to in Section 3.05(a)) (any of the
foregoing hereinafter in this Section 3.05(d) called the “Securities”),
then, in each such case, the Conversion Rate shall be increased so that the
same shall be equal to the rate determined by multiplying the Conversion Rate
in effect on the Record Date with respect to such distribution by a fraction,

 

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

 

21

 

(ii)           the denominator of which shall be the
Current Market Price on such Record Date less the Fair Market Value (which, in
the case of Securities consisting in whole or in part of capital stock or
similar equity interests, shall be determined based the Current Market Price of
such Securities (replacing all references in the definition of Current Market
Price to the Common Stock with references to such Securities), and which shall
otherwise be determined by the Company’s Board of Directors, whose
determination shall be conclusive, and which determination shall be described
in a resolution of the Board of Directors) on the Record Date of the portion of
the Securities so distributed applicable to one share of Common Stock,

 

such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that if the then
Fair Market Value (as so determined) of the portion of the Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the 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 Securities such Holder would
have received had such Holder converted each Note on the Record Date. If such
dividend or distribution is not so paid or made, the Conversion Rate shall
again be adjusted to be the Conversion Rate that would then be in effect if
such dividend or distribution had not been declared.  If the Board of Directors determines the Fair Market Value of any
distribution for purposes of this Section 3.05(d) by reference to the
actual or when issued trading market for any securities, it must in doing so
consider the prices in such market over the same period used in computing the
Current Market Price on the applicable Record Date. If the amount of any adjustment
hereunder is not determinable as of the effective date of such adjustment, then
a Holder converting Notes on and after such effective date and prior to the
date such adjustment is determinable shall be entitled to receive the amount of
shares of Common Stock of the Company determined by applying the Conversion
Rate as in effect immediately prior to such effective date and an additional
amount of shares of Common Stock, if any, as shall result from the adjustment
of such Conversion Rate.

 

Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company’s capital stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
(“Trigger
Event”): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock (such rights or warrants, “Rights”), shall be deemed not
to have been distributed for purposes of this Section 3.05 (and no
adjustment to the Conversion Rate under this Section 3.05 will be
required) until the occurrence of the earliest Trigger Event, whereupon such
Rights shall be deemed to have been distributed and an appropriate adjustment
(if any is required) to the Conversion Rate shall be made under this
Section 3.05(d).  If any such
Right, including any such existing Rights distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such Rights
become exercisable to purchase different securities, evidences of indebtedness
or other assets, then the date of the occurrence of any and each such event
shall be deemed to be the date of distribution and record date with respect to
new Rights (and a termination or expiration of the existing Rights without
exercise by any of the holders thereof). 
In addition, in the event of any distribution (or deemed distribution)
of Rights, or any Trigger

 

22

 

Event or other event (of the type described in the preceding sentence)
with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Rate under this
Section 3.05 was made, (1) in the case of any such Rights that shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect
to such Rights (assuming such holder had retained such Rights), made to all
holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such Rights that shall have expired or been terminated
without exercise by any holders thereof, the Conversion Rate shall be
readjusted as if such Rights had not been issued. No adjustment of the
Conversion Rate shall be made pursuant to this Section 3.05(d) in respect
of Rights distributed or deemed distributed on any Trigger Event to the extent
that such Rights are actually distributed, or reserved by the Company for
distribution to Holders of Notes upon conversion by such Holders of Notes to
Common Stock.

 

Holders shall be entitled to receive upon conversion of their Notes, in
addition to the shares of Common Stock issuable upon conversion, the related
Rights for the Common Stock pursuant to that certain Rights Agreement, dated as
of June 1, 1997, between the Company and First Chicago Trust Company of
New York, as amended by Amendment No. 1 to Rights Agreement dated
February 17, 1999, or any replacement or successor plan thereto, subject
to the generally applicable terms of such plan, and no additional adjustment to
the Conversion Rate shall be made with respect to such Rights; provided
that if a Trigger Event has occurred with respect to such Rights at the time of
conversion of Notes, then Holders of such Notes shall not be entitled to
receive such Rights upon conversion of their Notes but the Conversion Rate
shall be adjusted as set forth in the foregoing paragraph (disregarding the
last sentence thereof).

 

For purposes of this Section 3.05(d) and Section 3.05(a) and
(b), any dividend or distribution to which this Section 3.05(d) is
applicable that also includes shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock (or both), shall be deemed
instead to be (1) a dividend or distribution of the evidences of indebtedness,
assets or shares of capital stock other than such shares of Common Stock or
rights or warrants (and any Conversion Rate adjustment required by this
Section 3.05(d) with respect to such dividend or distribution shall then
be made) immediately followed by (2) a dividend or distribution of such shares
of Common Stock or such rights or warrants (and any further Conversion Rate
adjustment required by Sections 3.05(a) and 3.05(b) with respect to such
dividend or distribution shall then be made), except (A) the Record Date of
such dividend or distribution shall be substituted as “the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution”, “the date fixed for the determination of stockholders entitled
to receive such rights or warrants” and “the date fixed for such determination”
within the meaning of Section 3.05(a) and 3.05(b) and (B) any shares of
Common Stock included in such dividend or distribution shall not be deemed
“outstanding at the close of business on the date fixed for such determination”
within the meaning of Section 3.05(a).

 

23

 

(e)           In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary), 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 such
record date by a fraction,

 

(i)            the numerator of which shall be the Current
Market Price on such record date; and

 

(ii)           the denominator of which shall be the
Current Market Price on such record date less the amount of cash so distributed
(and not excluded as provided above) applicable to one share of Common Stock,

 

such adjustment to be effective
immediately prior to the opening of business on the day following the record
date;
provided 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 on the 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 the record date. 
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.

 

(f)            In
case 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 of consideration per share of Common Stock having a Fair Market
Value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) that as of
the last time (the “Expiration Time”) tenders or exchanges may
be made pursuant to such tender or exchange offer (as it may be amended)
exceeds the Closing Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,

 

(i)            the numerator of which shall be the sum of
(x) the Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any
maximum number of shares to be accepted in such 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
Price of a share of Common Stock on the Trading Day next succeeding the
Expiration Time; and

 

24

 

(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 multiplied by the Closing 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.

 

(g)           For
purposes of this Section 3.05, the following terms shall have the meaning
indicated:

 

(i)            “Current Market Price” shall mean the
average of the daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days ending on the earlier of the date in question and the
day before the date on which “ex-dividend trading” commences with respect to
the issuance, distribution, subdivision or combination requiring such
computation immediately prior to the date in question.  For purpose of this paragraph, “ex-dividend
trading” commences, (1) when used with respect to any issuance or
distribution, on the first date on which the Common Stock trades, regular way,
on New York Stock Exchange, or the Nasdaq National Market or such other
national or regional exchange or market on which the Common Stock is then
principally traded, without the right to receive such issuance or distribution,
and (2) when used with respect to any subdivision or combination of shares of
Common Stock, on the first date on which the Common Stock trades, regular way,
on such exchange or in such market after the time at which such subdivision or
combination becomes effective. If another issuance, distribution, subdivision
or combination to which Section 3.05 applies occurs during the period
applicable for calculating “Current Market Price” pursuant to the
definition in the preceding paragraph, “Current Market Price” shall be calculated
for such period in a manner determined by the Board of Directors to reflect the
impact of such issuance, distribution, subdivision or combination on the
Closing Price of the Common Stock during such period.

 

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

 

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

 

25

 

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

 

(h)           The
Company may make such increases in the Conversion Rate, in addition to those
required by Section 3.05(a), (b), (c), (d), (e), or (f) as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.

 

To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
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.

 

(i)            No
adjustment in the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one-half of one percent
(0.5%) in such rate; provided that any adjustments that by
reason of this Section 3.05(i) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.  All calculations under this
Section 3.05 (and under Section 3.05(m) and Section 2.02) shall
be made by the Company and shall be made to the nearest cent or to the nearest
one-ten thousandth (1/10,000) of a share, as the case may be.  No adjustment need be made for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest or for any issuance of Common Stock or convertible or exchangeable
securities or rights to purchase Common Stock or convertible or exchangeable
securities.  To the extent the Notes
become convertible into cash, assets, property or securities (other than
capital stock of the Company), no adjustment need be made thereafter as to the
cash, assets, property or such securities. 
Interest will not accrue on any cash into which the Notes are
convertible.

 

(j)            Whenever
the Conversion Rate is adjusted as herein provided (and the Market Price
Threshold, Stock Price Threshold, Stock Price Cap and Additional Premium Table
are adjusted as provided in Section 3.05(m) and Section 2.02), the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers’ Certificate setting forth the Conversion Rate,
Market Price Threshold, Stock Price Threshold, Stock Price Cap and Additional
Premium Table after such adjustment and setting forth a brief statement of the
facts requiring such adjustment.  Unless
and until a Responsible Officer of the Trustee shall have received such
Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate, Market Price Threshold, Stock Price
Threshold, Stock Price Cap and Additional Premium Table and may assume that the
last such amounts of which it has knowledge are still in effect.  Promptly after delivery of such certificate,
the Company shall

 

26

 

prepare a notice of such adjustment of the Conversion Rate, Market
Price Threshold, Stock Price Threshold, Stock Price Cap and Additional Premium
Table and setting forth the adjusted Conversion Rate, Market Price Threshold,
Stock Price Threshold, Stock Price Cap and Additional Premium Table and the
date on which each adjustment becomes effective and shall mail such notice to
the Holder of each Note at its last address appearing on the Security Register
provided for in Section 305 of the Indenture, within twenty (20) days
after execution thereof.  Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.

 

(k)           In
any case in which this Section 3.05 provides that an adjustment shall
become effective immediately after (1) a record date or Record Date for an event,
(2) the date fixed for the determination of stockholders entitled to receive a
dividend or distribution pursuant to Section 3.05(a), (3) a date fixed for
the determination of stockholders entitled to receive rights or warrants
pursuant to Section 3.05(b), or (4) the Expiration Time for any tender or
exchange offer pursuant to Section 3.05(f) (each a “Determination Date”), the
Company may elect to defer until the occurrence of the applicable Adjustment
Event (as hereinafter defined) (x) issuing to the Holder of any Note converted
after such Determination Date and before the occurrence of such Adjustment
Event, the additional shares of Common Stock or other securities issuable upon
such conversion by reason of the adjustment required by such Adjustment Event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (y) paying to such Holder any amount in cash in
lieu of any fraction pursuant to Section 3.03.  For purposes of this Section 3.05(k), the term “Adjustment
Event” shall mean:

 

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

 

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

 

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

 

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

 

(l)            For
purposes of this Section 3.05, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. 
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.

 

(m)          Whenever
the Conversion Rate shall be adjusted from time to time by the Company pursuant
to this Section 3.05, the Market Price Threshold shall be adjusted by
multiplying such amount by a fraction the numerator of which is the Conversion
Rate immediately prior to such adjustment and the denominator of which is the
Conversation Rate as so adjusted.

 

27

 

Section 3.06.  Effect Of Reclassification,
Consolidation, Merger or Sale.  If
any of the following events occur, namely (i) any reclassification or change of
the outstanding shares of Common Stock (other than a subdivision or combination
to which Section 3.05(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other property
or assets (including cash) with respect to or in exchange for such Common
Stock, 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 each Note shall be convertible
into the kind and amount of securities or other assets or property 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 Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance, and if holders of the Common Stock have the
right to elect the form of consideration receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance, then for
purposes of the foregoing, the consideration into which each Note shall be
convertible shall be deemed to equal (X) the aggregate consideration
distributed in respect of all shares of the Common Stock, (Y) divided by the
total number of shares of Common Stock participating in the distribution, (Z)
times the 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, plus, in the case of Notes converted in connection with a
Fundamental Change pursuant to Section 3.01(a)(vi), the Make Whole Premium
with respect to such Notes.  Such
supplemental indenture shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article 3.

 

The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Notes, at its address appearing on the
Security Register provided for in Section 305 of the Indenture, within
twenty (20) days after execution thereof. 
Failure to deliver such notice shall not affect the legality or validity
of such supplemental indenture.

 

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

 

If this Section 3.06 applies to any event or occurrence,
Section 3.05 shall not apply.

 

Section 3.07.  Taxes On Shares Issued.  The issue of stock certificates
on conversions of Notes shall be made without charge to the converting Holder
for any documentary, stamp or similar issue or transfer tax in respect of the
issue thereof.  The Company shall not,
however, be

 

28

 

required to pay any such tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than
that of the Holder of any Note converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

 

Section 3.08.  Reservation of Shares, Shares to Be
Fully Paid; Compliance With Governmental Requirements; Listing of
Common Stock.  The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.

 

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

 

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

 

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

 

The Company further covenants that, if at any time the Common Stock
shall be listed on the New York Stock Exchange, the Nasdaq National Market or
any other national securities exchange or automated quotation system, the
Company will, if permitted by the rules of such exchange or automated quotation
system, list and keep listed, so long as the Common Stock shall be so listed on
such exchange or automated quotation system, all Common Stock issuable upon
conversion of the Notes; provided that if the rules of such
exchange or automated quotation system permit the Company to defer the listing
of such Common Stock until the first conversion of the Notes into Common Stock
in accordance with the provisions of this Indenture, the Company covenants to
list such Common Stock issuable upon conversion of the Notes in accordance with
the requirements of such exchange or automated quotation system at such time.

 

Section 3.09.  Responsibility Of Trustee.  The Trustee and any other conversion
agent shall not at any time be under any duty or responsibility to any Holder
of Notes to determine the Conversion Rate, Market Price Threshold, Stock Price
Threshold, Stock Price Cap or Additional Premium Table or whether any facts
exist which may require any adjustment of the Conversion

 

29

 

Rate, Market Price Threshold, Stock Price Threshold, Stock Price Cap
and Additional Premium Table or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or whether the same conforms with the provisions herein or in any
supplemental indenture provided to be employed, in making the same.  The Trustee and any other conversion agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at any time be issued or delivered upon the conversion of any Note; and the
Trustee and any other conversion agent make no representations with respect
thereto.  Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Note for the purpose
of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article 3.  Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 3.06 relating
either to the kind or amount of shares of stock or securities or property
(including cash) receivable by Holders upon the conversion of their Notes after
any event referred to in such Section 3.06 or to any adjustment to be made
with respect thereto, but, subject to the provisions of Section 601 of the
Indenture, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Opinion of Counsel and
Officers’ Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.

 

Section 3.10.  Notice To Holders Prior To Certain
Actions.  In case:

 

(a)           the
Company shall declare a dividend (or any other distribution) on its Common
Stock that would require an adjustment in the Conversion Rate pursuant to
Section 3.05; or

 

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

 

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

 

(d)           of
the voluntary or involuntary dissolution, liquidation or winding up of the
Company;

 

the Company shall cause to be
filed with the Trustee and to be mailed to each Holder of Notes at its address
appearing on the Security Register provided for in Section 305 of the
Indenture, as promptly as possible but in any event at least ten (10) days
prior to the applicable date

 

30

 

hereinafter specified, a notice stating (x) the date on which a record
is to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution or
rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.  Failure to
give such notice, or any defect therein, shall not affect the legality or
validity of such dividend, distribution, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up.

 

ARTICLE 4

REPURCHASE AT OPTION OF HOLDERS
UPON A FUNDAMENTAL CHANGE

 

Section 4.01.  Repurchase At Option of Holders Upon
a Fundamental Change.  (a)  If there shall occur a Fundamental Change at
any time prior to maturity of the Notes, then each Holder shall have the right,
at such Holder’s option, to require the Company to repurchase all of such
Holder’s Notes, or any portion thereof that is a multiple of $1,000 original
principal amount, on the date (the “Fundamental Change Repurchase Date”) that
is twenty (20) Trading Days from and including the date of the Fundamental
Change Notice with respect to such Fundamental Change  at a repurchase price equal to 100% of the Accreted Principal
Amount thereof, together with accrued and unpaid cash interest, including
contingent interest, if any, to, but excluding, the Fundamental Change
Repurchase Date payable in cash, plus a Make Whole Premium, if any; provided
that if such Fundamental Change Repurchase Date is an interest payment date,
then the interest payable on such interest payment date shall be paid to the
holders of record of the Notes on the applicable record date instead of the
holders surrendering the Notes for repurchase on such date.

 

Upon presentation of any Note to be repurchased in part only, the
Company shall execute and, upon the Company’s written direction to the Trustee,
the Trustee shall authenticate and make available for delivery to the Holder
thereof, at the expense of the Company, a new Note or Notes, of authorized
denominations of $1,000 original principal amount or multiples thereof, in
aggregate principal amount equal to the portion of the Notes presented not to
be repurchased.

 

(b)           On
or before the fifth Trading Day after the occurrence of a Fundamental Change,
the Company or at its written request (which must be received by the Trustee at
least five (5) Business Days prior to the date the Trustee is requested to give
notice as described below, unless the Trustee shall agree in writing to a
shorter period), the Trustee, in the name of and at the expense of the Company,
shall mail or cause to be mailed to all holders of record on the date of the
Fundamental Change a notice (the “Fundamental Change Notice”) of the
occurrence of the Effective Date with respect to such Fundamental Change and of
the repurchase right at the option of the Holders arising as a result
thereof.  The Fundamental Change Notice
shall be mailed by first class mail to each Holder of Notes at its last address
as the same appears on the

 

31

 

Security Register. If the Company shall give such notice, the Company
shall also deliver a copy of such notice to the Trustee at such time as it is
mailed to Holders.  Each notice, if
mailed in the manner herein provided, shall be conclusively presumed to have
been duly given, whether or not the Holder receives such notice.  In any case, failure to give such notice by
mail or any defect in the notice to the Holder of any Note shall not affect the
validity of the proceedings for the repurchase of any other Note.  Concurrently with the mailing of such
notice, the Company shall issue a press release with the information contained
in such notice, the form and content of which press release shall be determined
by the Company in its sole discretion, and the Company shall also publicly
announce such information and publish it on the Company’s web site.  The failure to issue any such press release
or any defect therein shall not affect the validity of such notice or any
proceedings for the repurchase of any Note which any Holder may elect to have
the Company repurchase as provided in this Section 4.01.

 

Each Fundamental Change Notice shall specify the circumstances
constituting the Fundamental Change, the Fundamental Change Repurchase Date,
the price at which the Company shall be obligated to repurchase Notes, the Make
Whole Premium, if any, that the Holder must exercise the repurchase right on or
prior to the close of business on the Trading Day preceding the Fundamental
Change Repurchase Date (the “Fundamental Change Expiration Time”), that
the Holder shall have the right to withdraw any Notes surrendered prior to the
Fundamental Change Expiration Time, a description of the procedure which a Note
Holder must follow to exercise such repurchase right and to withdraw any
surrendered Notes, the place or places where the Holder is to surrender such
Holder’s Notes, the amount of interest accrued on each Note to the Fundamental
Change Repurchase Date and the CUSIP number or numbers of the Notes (if then
generally in use).

 

No failure of the Company to give the foregoing notices and no defect
therein shall limit the Note Holders’ repurchase rights or affect the validity
of the proceedings for the repurchase of the Notes pursuant to this
Section 4.01.

 

(c)           For
a Note other than a Global Security to be so repurchased at the option of the
Holder, the Company must receive at the office or agency of the Company
maintained for that purpose or, at the option of such Holder, the Corporate
Trust Office, such Note with the form entitled “Option to Elect Repurchase Upon A
Fundamental Change” on the reverse thereof duly completed, together
with such Notes duly endorsed for transfer, on or before the Fundamental Change
Expiration Time.  All questions as to
the validity, eligibility (including time of receipt) and acceptance of any
Note for repurchase shall be determined by the Company, whose determination
shall be final and binding absent manifest error.  Any Note or portion thereof surrendered for repurchase on a
Fundamental Change Repurchase Date that is during the period from the close of
business on the record date for any interest payment date to the close of
business on the Business Day preceding the following 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 otherwise payable
on such interest payment date on the original principal amount being tendered
for repurchase.

 

32

 

(d)           On
or prior to the Fundamental Change Repurchase Date, the Company will deposit
with the Trustee or with one or more paying agents (or, if the Company is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 1003 of the Indenture) an amount of cash sufficient to
repurchase on the Fundamental Change Repurchase Date all the Notes to be repurchased
on such date at the appropriate repurchase price, together with accrued and
unpaid interest, including contingent interest, if any, to, but excluding, the
Fundamental Change Repurchase Date; provided that if such payment is made on
the Fundamental Change Repurchase Date it must be received by the Trustee or
paying agent, as the case may be, by 10:00 a.m., New York City time, on such
date. Payment for Notes surrendered for repurchase (and not withdrawn) prior to
the Fundamental Change Expiration Time will be made promptly (but in no event
more than five (5) Business Days) following the Fundamental Change Repurchase
Date by mailing checks for the amount payable to the Holders of such Notes
entitled thereto as they shall appear in the Security Register.

 

(e)           In
the case of a reclassification, change, consolidation, merger, combination,
sale or conveyance to which Section 3.06 applies, in which the Common
Stock of the Company is changed or exchanged as a result into the right to
receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States and such shares
constitute at the time such change or exchange becomes effective in excess of
50% of the aggregate fair market value of such stock, securities or other property
or assets (including cash) (as determined by the Company, which determination
shall be conclusive and binding), then the Person formed by such consolidation
or resulting from such merger or which acquires such assets, as the case may
be, shall execute and deliver to the Trustee a supplemental indenture
(accompanied by an Opinion of Counsel that such supplemental indenture complies
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this Indenture relating to
the right of holders of the Notes to cause the Company to repurchase the Notes
following a Fundamental Change, including without limitation the applicable
provisions of this Section 4.01 and the definitions of Common Stock and
Fundamental Change, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from the Company and the common stock
issued by such Person (in lieu of the Company and the Common Stock of the
Company).

 

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

 

ARTICLE 5

REPURCHASE AT OPTION OF HOLDERS
UPON SCHEDULED REPURCHASE DATES

 

Section 5.01.  Repurchase At Option Of Holders Upon
Scheduled Repurchase Dates.  (a)  On each of March 15, 2011 and March 15,
2014 (each a “Scheduled  Repurchase Date”), each

 

33

 

Holder shall have the right, at such Holder’s option, to require the
Company to repurchase all of such Holder’s Notes, or any portion thereof that is
a multiple of $1,000 original principal amount, on the Scheduled Repurchase
Date at a repurchase price equal to 100% of the Accreted Principal Amount
thereof on such date (which shall be $1,000.00 on March 15, 2011 and
$1,031.05 on March 15, 2014).

 

Upon presentation of any Note to be repurchased in part only, the
Company shall execute and, upon the Company’s written direction to the Trustee,
the Trustee shall authenticate and make available for delivery to the Holder
thereof, at the expense of the Company, a new Note or Notes, of authorized
denominations of $1,000 original principal amount or multiples thereof, in
aggregate principal amount equal to the portion of the Notes presented not to
be repurchased.

 

(b)           Not
less than the 20 Trading Days prior to each Scheduled Repurchase Date, the
Company or at its written request (which must be received by the Trustee at
least five (5) Business Days prior to the date the Trustee is requested to give
notice as described below, unless the Trustee shall agree in writing to a
shorter period), the Trustee, in the name of and at the expense of the Company,
shall mail or cause to be mailed to all holders of record a notice (the “Scheduled
Repurchase Date Notice”) of the Scheduled Repurchase Date.  The Scheduled Repurchase Date Notice shall
be mailed by first class mail to each Holder of Notes at its last address as
the same appears on the Security Register. If the Company shall give such
notice, the Company shall also deliver a copy of such notice to the Trustee at
such time as it is mailed to Holders. 
Each notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.  In any case,
failure to give such notice by mail or any defect in the notice to the Holder
of any Note shall not affect the validity of the proceedings for the repurchase
of any other Note.  Concurrently with
the mailing of such notice, the Company shall issue a press release with the
information contained in such notice, the form and content of which press
release shall be determined by the Company in its sole discretion.  The failure to issue any such press release
or any defect therein shall not affect the validity of such notice or any
proceedings for the repurchase of any Note which any Holder may elect to have
the Company repurchase as provided in this Section 5.01.

 

Each Scheduled Repurchase Date Notice shall specify the Scheduled
Repurchase Date, the price at which the Company shall be obligated to
repurchase Notes, that the Holder must exercise the repurchase prior to the
close of business on the Trading Day preceding the Scheduled Repurchase Date
(the “Scheduled
Repurchase Date Expiration Time”), that the Holder shall have the
right to withdraw any Notes surrendered prior to the Scheduled Repurchase Date
Expiration Time, a description of the procedure which a Note Holder must follow
to exercise such repurchase right and to withdraw any surrendered Notes, the
place or places where the Holder is to surrender such Holder’s Notes, the
amount of interest accrued on each Note to the Scheduled Repurchase Date and
the CUSIP number or numbers of the Notes (if then generally in use).

 

No failure of the Company to give the foregoing notices and no defect
therein shall limit the Note Holders’ repurchase rights or affect the validity
of the proceedings for the repurchase of the Notes pursuant to this
Section 5.01.

 

34

 

(c)           For
a Note other than a Global Security to be so repurchased at the option of the
Holder, the Company must receive at the office or agency of the Company
maintained for that purpose or, at the option of such Holder, the Corporate
Trust Office, such Note with the form entitled “Option to Elect Repurchase Upon A Scheduled
Repurchase Date” on the reverse thereof duly completed, together
with such Notes duly endorsed for transfer, on or before the Scheduled
Repurchase Date Expiration Time.  All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Note for repurchase shall be determined by the Company, whose
determination shall be final and binding absent manifest error.

 

(d)           On
or prior to the Scheduled Repurchase Date, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in
Section 1003 of the Indenture) an amount of money sufficient to repurchase
on the Scheduled Repurchase Date all the Notes to be repurchased on such date
at the appropriate repurchase price; provided that if such payment is made on
the Scheduled Repurchase Date it must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m., New York City time, on such date.
Payment for Notes surrendered for repurchase (and not withdrawn) prior to the
Scheduled Repurchase Date Expiration Time will be made promptly (but in no
event more than five (5) Business Days) following the Scheduled Repurchase Date
by mailing checks for the amount payable to the Holders of such Notes entitled
thereto as they shall appear in the Security Register.

 

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

 

ARTICLE 6

REDEMPTION AT OPTION OF COMPANY

 

Section 6.01.  Redemption At Option Of Company.  Beginning on March 31, 2011,
the Company may elect to redeem the Notes, in whole or in part, for cash at a
price of 100% of the Accreted Principal Amount, plus accrued and unpaid cash
interest, including contingent interest, if any, to but excluding the date of
redemption (the “Redemption Price”). 
The Company may not redeem the Notes if the Company shall have failed to
pay accrued but unpaid interest, including contingent interest, if any, and
such failure to pay such interest shall be continuing.  If the Redemption Date is an interest
payment date, then the interest payable on such interest payment date shall be
paid to the holders of record of the Notes on the applicable record date
instead of the Holders of the Notes being redeemed on such date.  The Company shall give notice of the
redemption (the “Redemption Date Notice”) specifying the Business Day on or
after March 31, 2011 on which the redemption is to occur (the “Redemption
Date”) and the Redemption Price, not less than 30 nor more than 60
days prior to the Redemption Date, and otherwise as provided in Section 1104
of the Indenture.  Except as otherwise
set forth herein, the redemption shall otherwise be on the terms and conditions
set forth in Article XI of the Indenture.

 

35

 

ARTICLE 7

CONTINGENT INTEREST

 

Section 7.01.  Contingent Interest.  Commencing with the six-month
interest period commencing on March 15, 2011, for each six-month interest
period commencing on March 15th or September 15th,
if the Trading Price for the Notes for each of the five Trading Days immediately
preceding the first day of the applicable six-month interest period (the “Contingent
Interest Test Period”) is greater than 120% or more of the original
principal amount of the Notes, then the Company will pay contingent interest
for such six-month interest period in an amount per $1,000 original principal
amount of Notes equal to 0.3125% of the average Trading Price during the
Contingent Interest Test Period.  “Trading
Price” as used herein shall have the meaning set forth in
Section 1.12, provided that if the Trustee cannot
reasonably obtain at least one bid for $5,000,000 principal amount of the Notes
from a nationally recognized securities dealer, then the Trading Price shall
equal the trading price as of the next preceding Trading Day for which the
Trustee could reasonably obtain at least one such bid.

 

Section 7.02.  Payment of Contingent Interest.  The Company will pay contingent
interest, if any, semi-annually in arrears on each Interest Payment Date to the
Holders of record on the immediately preceding Regular Record Date.  Except as otherwise expressly provided
herein, contingent interest due under this Article 7 shall be treated for
all purposes of this Indenture like any other interest accruing on the Notes.

 

Section 7.03.  Contingent Interest Notification.  On or prior to the date that is
five Trading Days after the end of any Contingent Interest Test Period, the
Company will disseminate a press release through Dow Jones & Company, Inc.
or Bloomberg Business News, and deliver a copy thereof to the Trustee, stating
whether contingent interest will be paid on the Notes and the amount and record
date thereof.

 

ARTICLE 8

EVENTS OF DEFAULT

 

Section 8.01.  Additional Events Of Default.  Pursuant to Sections 301(17) and
501(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 501 of the Indenture:

 

(a)           Default
in the payment of the principal of or premium, if any, on any of the Notes as
and when the same shall become due and payable either at Maturity or in
connection with any repurchase pursuant to Article 4, by acceleration or
otherwise.

 

(b)           Default
in the payment of any interest, including contingent interest, if any, on any
Note when it becomes due and payable, and continuance of such default for a
period of 30 days;

 

36

 

(c)           Default
in the performance, or breach, of any covenant or warranty of the Company in
the Notes, this Fourth Supplemental Indenture or the Indenture (other than a
covenant or warranty a default in the performance of which or a breach of which
is elsewhere in this Section or in Section 501 of the Indenture
specifically dealt with or which has expressly been included in the Indenture
solely for the benefit of series of Securities other than this series), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and stating that such
notice is a “Notice of Default” hereunder;

 

(d)           Default
in the Company’s obligation to convert any portion of the principal amount of a
Note in accordance with its terms following exercise by the Holder of the right
to convert such Note; or

 

(e)           Default
in the Company’s obligation to provide a Fundamental Change Notice upon a
Fundamental Change as provided in Section 4.01.

 

ARTICLE 9

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 9.01.  With Consent Of Holders.  Pursuant to Section 301 (and
subject to Section 902) of the Indenture, so long as any of the Notes are
outstanding, without the consent of each Holder affected, an amendment,
supplement or waiver, including a waiver pursuant to Section 513 of the
Indenture, may not (in addition to the events described in paragraphs (1)
through (9) of Section 901 of the Indenture):

 

(a)           make
any change that impairs or adversely affects the rights of the Holders of the
Notes to convert any Notes into Common Stock, or to institute suit for the
enforcement of any conversion of the Notes; or

 

(b)           reduce
or impair or adversely affect the right of a Holder to receive the applicable
Fundamental Change repurchase price pursuant to Article 4 hereof, or to
institute suit for the enforcement of payment of such Fundamental Change repurchase
price.

 

Notwithstanding the foregoing,
the Company and the Trustee may enter into a supplemental indenture without the
consent of any Holders affected to provide that any provision that gives the
Company the option to make a payment in cash or stock shall be changed into a
provision that requires the Company to make such payment solely in cash or in
stock, as the case may be.

 

37

 

ARTICLE 10

MISCELLANEOUS

 

Section 10.01.  Corporate Trustee Eligibility.  Each Trustee shall be a Person
which shall have (or, in the case of a corporation included in a bank holding
company system, the related bank holding company shall have) a combined capital
and surplus of at least $250,000,000, and otherwise shall meet the requirements
set forth in Section 609 of the Indenture.

 

Section 10.02.  Application Of Fourth Supplemental
Indenture.  Each and every
term and condition contained in this Fourth 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
Securities established under the Indenture. 
Except as specifically amended and supplemented by, or to the extent
inconsistent with, this Fourth Supplemental Indenture, the Indenture shall
remain in full force and effect and is hereby ratified and confirmed.

 

Section 10.03.  Effective
Date. 
This Fourth 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 10.04.  Counterparts.  This Fourth 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.

 

38

 

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

 

	
   

  	
  PROVIDIAN FINANCIAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony Vuoto

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Janice Ott  Rotunno

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

39

 

EXHIBIT
A – FORM OF NOTE

 

40Exhibit
4.2

 

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), TO PROVIDIAN
FINANCIAL CORPORATION, AS 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 THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.

 

PROVIDIAN FINANCIAL CORPORATION

 

2-3/4% CONVERTIBLE CASH TO ACCRETING SENIOR NOTES

DUE MARCH 15, 2016

 

	
  No. R-1

  	
   

  	
  CUSIP:  74406AAD4

  
	
   

  	
   

  	
  U.S. $277,200,000 ORIGINAL PRINCIPAL AMOUNT

  

 

Providian Financial
Corporation, 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 referred to), for value
received, hereby promises to pay to Cede & Co. or registered assigns on
March 15, 2016 the aggregate accreted principal sum of Two Hundred
Ninety-One Million Nine Hundred Forty-Nine Thousand Eight Hundred Twelve
Dollars in respect of the Two Hundred Seventy-Seven Million Two Hundred
Thousand Dollars original principal amount hereof, to pay cash interest on the
original principal amount at the rate per annum of 2-3/4% until March 15, 2011,
to pay cash interest on such original principal amount at the rate per annum of
1-3/4% from and after March 15, 2011, and to accrete the principal amount
hereof after March 15, 2011 at that rate that provides an aggregate annual
yield to maturity of 2-3/4% (computed on a semiannual bond equivalent yield
basis from March 15, 2011, after giving effect to cash interest paid but
excluding contingent interest, if any). 
Interest will accrue from the most recent Interest Payment Date to which
interest has been paid or duly provided for, or, if no interest has been paid,
from March 19, 2004.  The Company will
pay interest semi-annually on March 15 and September 15 in each year,
commencing September 15, 2004, at the applicable rate per annum as set forth
above, until the principal hereof is paid or made available for payment, and
pay contingent interest, if any, upon the conditions described herein and in
the Indenture. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or

 

 

one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest, which shall
be the March 1 or September 1 (whether or not a Business Day), as the case may
be, immediately preceding such Interest Payment Date.  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 may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture, dated as of May 1, 1999, between the Company and
J.P. Morgan Trust Company, National Association (as successor in interest to
Bank One Trust Company, N.A., as successor in interest to The First National
Bank of Chicago, in such capacity, together with its successors in trust, the
“Trustee”), as supplemented by that certain Fourth Supplemental Indenture,
dated as of March 19, 2004, between the Company and the Trustee (the
Indenture as so supplemented is herein called the “Indenture”).

 

Payment of the
principal of, and cash interest, including contingent interest, if any, on,
this Security, including upon any redemption or repurchase hereof, will be made
by wire transfer to an account maintained by the payee or its nominee located
inside the United States. Payments with respect to the Securities of this
series that are not a Global Securities will be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.

 

All terms used
in this Security which are defined in the Indenture and not otherwise defined
herein shall have the meanings assigned to them in the Indenture.

 

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

 

Unless the
certificate of authentication hereon has been executed by the Trustee referred
to on the reverse hereof by manual signature, this Security 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.

 

Dated:  March 19, 2004

 

	
   

  	
  PROVIDIAN
  FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

3

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
   

  	
  J.P. Morgan
  Trust Company, National Association,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

4

 

REVERSE SIDE OF SECURITY

2-3/4% Convertible Cash to Accreting Senior
Notes due March 15, 2016

 

1.                                     Indenture;
Series Limited in Amount; Ranking

 

This Security
is one of a duly authorized issue of securities of the Company designated on
the face hereof (herein collectively referred to as the “Notes”) issued 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.  The terms of this Security include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as in effect from time to time (the “TIA”).
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. This Security is subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of those
terms.

 

The Notes are limited to
U.S. $277,200,000 in aggregate original principal amount (U.S. $291,949,812 in
aggregate accreted principal amount at maturity), or U.S. $287,500,000 in aggregate
original principal amount (U.S. $302,797,875 in aggregate accreted principal
amount at maturity) if the underwriters exercise the remainder of their
over-allotment option in connection with the initial offering of the Notes,
subject to Section 306 of the Indenture.

 

The Notes are
general unsubordinated unsecured obligations of the Company. The Indenture does
not limit other indebtedness of the Company, secured or unsecured.

 

2.                                       Paying
Agent, Conversion Agent and Registrar.

 

Initially, the
Trustee will act as Paying Agent, Conversion Agent and Registrar. The Company
may appoint and change any Paying Agent, Conversion Agent, Registrar or
co-registrar without notice, other than notice to the Trustee, except that the
Company will maintain at least one Paying Agent in the State of New York, City
of New York, Borough of Manhattan, which shall initially be an office or agency
of the Trustee. The Company or any of its Subsidiaries or any of their
Affiliates may act as Paying Agent, Conversion Agent, Registrar or
co-registrar.

 

3.                                       Denominations;
Transfer; Exchange.

 

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

 

5

 

4.                                       Contingent
Interest.

 

Commencing with the six-month interest period
commencing on March 15, 2011, for each six-month interest period
commencing on March 15th or September 15th, if
the Trading Price for the Notes for each of the five Trading Days immediately
preceding the first day of the applicable six-month interest period (the “Contingent
Interest Test Period”) is greater than 120% or more of the original
principal amount of the Notes, then the Company will pay contingent interest in
an amount per $1,000 original principal amount of Notes equal to 0.3125% of the
average Trading Price during the Contingent Interest Test Period. “Trading
Price”
means, on any date, the trading price per $1,000 original principal amount of
the Notes on such date, as determined by the average of the secondary market
bid quotations obtained by the Trustee for $5,000,000 original principal amount
of Notes at approximately 3:30 p.m., New York City time, on such date from
three independent nationally recognized securities dealers selected by the
Company;
provided that if at least three such bids cannot reasonably be
obtained by the Trustee, but two bids are obtained, then the average of the two
bids shall be used, and if only one such bid can reasonably be obtained by the
Trustee, one bid shall be used; and provided further that if the Trustee
cannot reasonably obtain at least one bid for $5,000,000 principal amount of
Notes from a nationally recognized securities dealer, then the Trading Price shall
equal the trading price as of the next preceding Trading Day for which the
Trustee could reasonably obtain at least one such bid.  The Company will pay contingent interest, if
any, semi-annually in arrears on each Interest Payment Date to the Holders of
record on the immediately preceding Regular Record Date.  Except as otherwise expressly provided in
the Indenture, contingent interest due on this Security shall be treated for
all purposes of the Indenture like any other interest accruing on this Security.

 

5.                                       Contingent
Conversion.

 

Before March 15, 2016, the Holder of this
Security shall have the right, at such Holder’s option, to convert the original
principal amount of this Security, or any portion of such original principal
amount which is a multiple of $1,000, into fully paid and non-assessable shares
of Common Stock of the Company (as such shares shall then be constituted) at
the Conversion Rate (as defined below) in effect at such time, by surrender of
this Security in whole or in part, together with any required funds, under the
circumstances described in and in the manner provided in the Indenture. This
Security shall be convertible only upon the occurrence of one of the following
events:

 

(i)             during any calendar quarter commencing
after June 30, 2004, if the Closing Price of the Common Stock exceeds $20.41
(subject to adjustment) (the “Market Price Threshold”) for at least 20
Trading Days in the 30 consecutive Trading Day period ending on the last
Trading Day of the immediately preceding calendar quarter (it being understood

 

6

 

for purposes of this clause (i) that the
Market Price Threshold in effect at the close of business on each of the 30
consecutive Trading Days shall be used);

 

(ii)          on and after March 15, 2011, if the Closing
Price of the Common Stock exceeds the Market Price Threshold on any Trading Day
on or after March 15, 2011;

 

(iii)       during the five Business Day period after any
five consecutive Trading Day period in which the Trading Price per $1,000
original principal amount of the Notes for each day of such five Trading Day
period was less than 98% of the product of the Closing Price of the Common
Stock and the number of shares of Common Stock issuable upon conversion of
$1,000 original principal amount of the Notes; provided that if on the date of
any conversion pursuant to this clause (iii) the Closing Price of the Common
Stock is greater than the Conversion Price, a Holder shall receive, in lieu of
Common Stock based on the Conversion Price, cash or Common Stock or a
combination of cash and Common Stock, at the Company’s option, with a value
equal to the accreted principal amount of the Holder’s Notes plus accrued and
unpaid interest, including contingent interest, if any, as of the conversion
date (such amount, the “Principal Value Conversion Amount”, and
such conversion, a “Principal Value Conversion”);

 

(iv)      during the period from the date of any Redemption
Date Notice to the close of business on the Business Day immediately prior to
the Redemption Date, unless the Company fails to make payment on the Redemption
Date, in which case until the date the Company shall pay the Redemption Price;

 

(v)         during any period in which the Notes are rated
at or below either CCC+ by Standard & Poor’s Ratings Group or its successor
entity, or Caa1 by Moody’s Investors Service or its successor entity; provided that
the Company shall be under no obligation to have the Notes rated;

 

(vi)      during the period from the opening of business on
the date the Company gives Advance Notice of a Fundamental Change to the close
of business on the 10th Trading Day from and including the date the
Company gives a Fundamental Change Notice or publicly announces that such
Fundamental Change will not take place; or

 

(vii)   any time on and after the date that the Company
gives notice to the Holders of a Specified Distribution, which shall be not
less than 20 days prior to the commencement of ex-dividend trading for such
Specified Distribution, until the earlier of the close of business on the
Business Day immediately preceding, but not including, the commencement of
ex-dividend trading or the date the Company publicly

 

7

 

announces that such Specified Distribution
will not take place.  A “Specified
Distribution” means the Company distributes to all holders of its
Common Stock (A) rights or warrants entitling them (for a period expiring
within 45 days of the record date for the determination of the stockholders
entitled to receive such distribution) to subscribe for or purchase shares of
Common Stock, at a price per share less than the average of the Closing Price
of the Common Stock for the ten Trading Days immediately preceding, but not
including, the date such distribution is first publicly announced by the
Company, or (B) cash or other assets, debt securities or rights to purchase its
securities, where the Fair Market Value of such distribution per share of
Common Stock exceeds 5% of the Closing Price of the Common Stock on the Trading
Day immediately preceding the date such distribution is first publicly
announced by the Company; provided that no adjustment to the
Conversion Rate or the ability of a Holder of a Note to convert will be made if
the Holder will otherwise participate in such Specified Distribution without
conversion.

 

To convert
this Security, a Holder must (1) complete and manually sign the conversion
notice below (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Conversion Agent, (2) surrender this Security to the
Conversion Agent, (3) furnish appropriate endorsements and transfer documents
if required by the Conversion Agent, the Company or the Trustee and (4) pay any
transfer or similar tax, if required.

 

The initial “Conversion
Rate” is 58.7941 shares of Common Stock per $1,000 original
principal amount hereof, subject to adjustment in certain events described in
the Indenture, and the “Conversion Price” as of any day means the
amount equal to the Accreted Principal Amount per $1,000 original principal
amount of Notes divided by the number of shares of Common Stock issuable upon
conversion of $1,000 original principal amount of Notes. The Company will
deliver cash or a check in lieu of any fractional share of Common Stock. A Holder
of this Security is not entitled to any rights of a holder of Common Stock
until such Holder has converted this Security to Common Stock, and only to the
extent this Security is deemed to have been converted to Common Stock under the
Indenture.

 

In the case of
a Principal Value Conversion, a Holder will receive either cash, Common Stock
or a combination of cash and Common Stock, at the Company’s option, with a
value equal to the Principal Value Conversion Amount.  If a Holder surrenders this Security for conversion and it is a
Principal Value Conversion, the Company will notify the Holder hereof by the
second Trading Day following the conversion date whether it will pay all or a
portion of the Principal Value Conversion Amount in cash, Common Stock or a combination
of cash and Common Stock, and in what percentage.  Any Common Stock delivered upon a Principal Value Conversion will
be valued at the greater of (x) the Conversion Price on the conversion date and
(y) the Closing Price of the Common Stock on the third Trading Day after the
conversion date.  The Company will pay

 

8

 

any portion of the Principal Value Conversion
Amount to be paid in cash on the third Trading Day after the conversion
date.  If the Company elects to deliver
Common Stock to pay any portion of such Principal Value Conversion Amount, it
will deliver such Common Stock on the fourth Trading Day following the
conversion date.

 

In the case of
Notes submitted for conversion in connection with a Fundamental Change pursuant
to clause (vi), the Holder will also receive cash in respect of any accrued but
unpaid cash interest, including contingent interest, if any, to but excluding
the date of conversion.  This Security
or any portion thereof surrendered for conversion during the period from the
close of business on the record date for any interest payment date to the close
of business on the Business Day preceding the following 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 otherwise payable
on such interest payment date on the principal amount being converted; provided
that no such payment need be made (i) if the company has specified a Redemption
Date that is during such period, or (ii) to the extent of any interest,
including  contingent interest, if any,
with respect to which there is an ongoing default in payment on the Notes, if
any, at the time of conversion.  Except
as provided above, no payment or other adjustment shall be made for interest
accrued on this Security converted or for dividends on any shares issued upon
the conversion of such Security as provided herein and in the Indenture.

 

Pursuant to
the terms and conditions described in the Indenture, the Conversion Rate will
be adjusted for dividends or distributions on Common Stock payable in Common
Stock or other capital stock of the Company; subdivisions or combinations of
Common Stock; distributions to all holders of Common Stock of rights or
warrants to purchase shares of Common Stock at a price less than the Current
Market Price on the date fixed for determination of stockholders entitled to
receive such rights or warrants; distributions to such holders of assets or
debt securities of the Company or certain rights to purchase securities of the
Company (excluding any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary); and tender or exchange offers made by the Company or any
Subsidiary for all or any portion of the Common Stock. However, no adjustment
need be made if Holders will participate in the distribution or in certain
other cases. The Company from time to time may voluntarily increase the
Conversion Rate.  Whenever the
Conversion Rate shall be adjusted, the Market Price Threshold shall be adjusted
by multiplying such amount by a fraction the numerator of which is the
Conversion Rate immediately prior to such adjustment and the denominator of
which is the Conversation Rate as so adjusted.

 

If there is
any reclassification of the outstanding shares of Common Stock or the Company
is a party to a consolidation, merger or binding share exchange or sells all or
substantially all of its assets as described in the Indenture, and if holders
of the Common Stock have the right to elect the form of consideration
receivable

 

9

 

upon such reclassification, change, consolidation, merger, combination,
sale or conveyance, then for purposes of the foregoing, the consideration into
which each Note shall be convertible shall be deemed to equal (X) the aggregate
consideration distributed in respect of all shares of the Common Stock, (Y)
divided by the total number of shares of Common Stock participating in the
distribution, (Z) times the 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, plus, in the case of Notes converted in
connection with a Fundamental Change, the Make Whole Premium with respect to
such Notes, if any.

 

6.                                       Make
Whole Premium Upon a Fundamental Change.

 

If a
Fundamental Change occurs on or prior to March 15, 2011, the Company will pay a
Make Whole Premium as described in the Indenture upon the repurchase of the
Notes upon such Fundamental Change or upon the conversion of the Notes in
connection with such Fundamental Change . 
A “Fundamental
Change” means the occurrence of any transaction, series of related
transactions or event (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) in connection with which (A) more than 50% of
the Common Stock or other capital stock or equity or voting interests in the
Company is exchanged for, converted into, acquired for or constitutes the right
to receive cash, securities or other property, or the Common Stock ceases to be
listed on a national securities exchange or quoted on the Nasdaq National
Market, or (B) the Company sells or otherwise disposes of all or substantially
all of its and its subsidiaries’ assets, properties or businesses, taken as a
whole.  The Make Whole Premium will be
paid solely in shares of the Company’s Common Stock or in the same form of
consideration into which all or substantially all of the shares of the
Company’s Common Stock have been converted in connection with the Fundamental
Change, valued as set forth in the Indenture. 
If holders of the Company’s Common Stock have the right to elect the
form of consideration received in a Fundamental Change, then for purposes of
the foregoing the consideration into which a share of the Company’s Common
Stock has been converted shall be deemed to equal the aggregate consideration
distributed in respect of all shares of the company’s Common Stock divided by
the total number of shares of Common Stock participating in the distribution.

 

7.                                       Repurchase
at Option of Holder Upon A Fundamental Change.

 

This Security
is subject to repurchase at the option of the Holder thereof upon a Fundamental
Change at any time prior to maturity at a price equal to 100% of the Accreted
Principal Amount thereof, plus accrued and unpaid cash interest, including
contingent interest, if any, to but excluding the Fundamental Change Repurchase
Date, payable in cash, plus a Make Whole Premium, if any, on the

 

10

 

repurchase date (the “Fundamental Change Repurchase Date”)
that is twenty (20) Trading Days from and including the Fundamental Change
Notice, which notice shall be mailed on or before the fifth Trading Day after
the occurrence of a Fundamental Change. 
If the Fundamental Change Repurchase Date is an interest payment date,
the interest payable on that interest payment date shall be paid to the holders
of record of this Security instead of the holder surrendering this Security for
repurchase on the repurchase date.

 

To have this
Security repurchased upon a Fundamental Change Repurchase Date, a Holder must
(1) complete and manually sign the  form
entitled “Option to Elect Repurchase Upon a Fundamental Change” below (or
complete and manually sign a facsimile of such notice) and deliver such notice
to the Company, (2) surrender this Security to the Company at the office or
agency of the Company maintained for that purpose or, at the option of such
holder, the Corporate Trust Office, on or prior to the close of business on the
Fundamental Change Repurchase Date, and (3) if this Security or any portion
thereof is surrendered for repurchase after a Record Date but prior to the next
succeeding Interest Payment Date, payment in immediately available funds or
other funds acceptable to the Company, of an amount equal to the interest
otherwise payable on such Interest Payment Date on the principal amount of this
Security being repurchased.  The Holder
shall have the right to withdraw this Security after it is so surrendered prior
to the close of business on the Fundamental Change Repurchase Date.

 

In the event
of repurchase of this Security in part only, new Notes of like tenor for the
portion hereof not repurchased will be issued in the name of the Holder hereof
upon the cancellation hereof.

 

8.                                       Repurchase
at Option of the Holder.

 

On each of March 15, 2011 and March 15, 2014,
the Holder of this Security shall have the right, at such Holder’s option, to
require the Company to repurchase all of such Holder’s Notes or any portion
thereof that is a multiple of $1,000 original principal amount, at a repurchase
price equal to 100% of the Accreted Principal Amount thereof on such date
(which shall be $1,000.00 on March 15, 2011 and $1,031.05 on March 15,
2014).  The Company must give notice of
an upcoming Scheduled Repurchase Date by mail to Holders not less than 20
Trading Days prior to the Scheduled Repurchase Date.

 

To have this
Security so repurchased on a Scheduled Repurchase Date, a Holder must (1)
complete and manually sign the  form
entitled “Option to Elect Repurchase Upon a Scheduled Repurchase Date” below
(or complete and manually sign a facsimile of such notice) and deliver such
notice to the Company, and (2) surrender this Security to the Company at the
office or agency of the Company maintained for that purpose or, at the option
of such Holder, the Corporate Trust Office, on or prior to the close of
business on the Trading Day

 

11

 

preceding the Scheduled Repurchase Date, and
the Holder shall have the right to withdraw this Security after it is so
surrendered prior to such time.

 

In the event
of repurchase of this Security in part only, new Notes of like tenor for the
portion hereof not repurchased will be issued in the name of the Holder hereof
upon the cancellation hereof.

 

9.                                       Optional
Redemption.

 

Beginning on
March 31, 2011, the Company shall have the option to redeem the Notes, in whole
or in part, for cash at a price of 100% of the Accreted Principal Amount, plus
accrued and unpaid cash interest, including contingent interest, if any, to but
excluding the date of redemption.  The
Company may not redeem the Notes if the Company shall have failed to pay
accrued but unpaid interest, including contingent interest, if any, and such
failure to pay such interest shall be continuing.  The Company must give notice of the redemption by mail to Holders
not less than 30 nor more than 60 days prior to the Redemption Date.

 

10.                                 Amendment;
Waiver.

 

Subject to
certain exceptions set forth in the Indenture, (i) the Indenture (as it relates
to the Notes) or the Notes may be amended with the written consent of the
Holders of at least 66-2/3% in aggregate principal amount of the Notes at the
time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
at the time outstanding. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company and the Trustee may amend the
Indenture or the Notes to cure any ambiguity, defect or inconsistency, to add
additional events of default, to provide for uncertificated Notes in addition
to or in place of certificated Notes or to make any change that does not
adversely affect the rights of any Holder in any material respect.

 

11.                                 Defaults
and Remedies.

 

Under the Indenture, Events of Default
include (i) default in the payment of the principal of or premium, if any, on
any of the Notes as and when the same shall become due and payable either at
Maturity or in connection with any repurchase required upon a Fundamental
Change, by acceleration or otherwise; (ii) default in the payment of interest,
including contingent interest, if any, on any Note when due and continuance of
such default for 30 days; (iii) default in the performance, or breach, of any
other covenant or warranty of the Company in the Indenture (other than a
covenant or warranty a default in the performance or breach of which is
otherwise addressed) with respect to any Note and continuance of such default
or breach for 60 days after written notice to the Company by the Trustee or to
the Company and the Trustee by holders of not less than 25% in aggregate
principal amount of the Notes; (iv) default in the Company’s obligation to
convert any portion of the principal amount of a Note in accordance with its

 

12

 

terms following exercise by the Holder of the
right to convert such Note; (v) default in the Company’s obligation to provide
notice upon a Fundamental Change; (vi) any event of default under any mortgage,
indenture or other instrument under which any indebtedness for borrowed money
in an aggregate principal amount exceeding $5,000,000 of the Company or
Providian National Bank shall become due and payable, if such acceleration is
not rescinded or annulled within 30 days after written notice as provided by
the Indenture; (vii) certain events of bankruptcy, insolvency or reorganization
of the Company; or (viii) any other event that may be specified with respect to
the Notes or Securities of all series in the Indenture.

 

12.                                 Return
of Unclaimed Funds and Securities.

 

The Trustee
and the Paying Agent shall return to the Company upon written request any money
or securities held by them for the payment of any amount with respect to the
Notes that remains unclaimed for two years, subject to applicable unclaimed
property law. After return to the Company, Holders entitled to the money or
securities must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.

 

13.                                 Persons
Treated As Owner.

 

The registered
Holder hereof on the Security Register of the Company shall be deemed to be and
shall be treated as the absolute owner of this Security for all purposes,
including for the purpose of receiving payment on account hereof, for the
conversion hereof and for all other purposes, and none of the Company, the
Trustee, the Paying Agent, the Conversion Agent or any Registrar shall be
affected by any notice to the contrary.

 

14.                                 Trustee
Dealings with the Company.

 

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

 

15.                                 No
Recourse Against Others.

 

A director,
officer, employee or stockholder, 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 creation. By
accepting this Security, the Holder hereof waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Notes.

 

13

 

16.                                 Authentication.

 

This Security
shall not be valid until an authorized signatory of the Trustee manually signs
the Trustee’s Certificate of Authentication on the other side of this Security.

 

17.                                 Abbreviations.

 

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

 

18.                                 GOVERNING
LAW.

 

THE INDENTURE
AND THE NOTES WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.

 

19.                                 DEFEASANCE.

 

The provisions
for defeasance and covenant defeasance set forth in Article XIII of the
Indenture will not apply to the Notes.

 

 

The Company
will furnish to any Holder upon written request and without charge a copy of
the Indenture or a copy of the text of this Security in larger type. Requests
may be made to:

 

Providian
Financial Corporation

201 Mission
Street

San Francisco,
CA 94105

Attention:
Investor Relations

 

14

 

ASSIGNMENT FORM

 

To assign this Security, fill in the form below:

 

I or we hereby assign and
transfer this Security to

 

	
   

  
	
   

  
	
   

  
	
   

  
	
  (Insert assignee’s social security or tax identification no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  ­

  
	
   

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

  
	
   

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

  
	
   

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  
	
   

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

  
	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  
						

 

*                                         The
Holder’s signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an “eligible guarantor institution” as defined by Rule 17Ad-15
under the Exchange Act.

 

15

 

CONVERSION NOTICE

 

To convert this Security into
Common Stock of the Company, check the box: 
o

 

To convert only part of this
Security, state the original principal amount to be converted (which must be
$1,000 or an integral multiple of $1,000):

 

$

 

If you want the stock
certificate made out in another person’s name, fill in the form below:

 

	
   

  
	
   

  
	
   

  
	
  (Insert other person’s social security or tax identification no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  
	
   

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

  
	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  
						

 

*                                         The
Holder’s signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an “eligible guarantor institution” as defined by Rule 17Ad-15
under the Exchange Act.

 

16

 

OPTION TO ELECT REPURCHASE UPON A FUNDAMENTAL CHANGE

 

To elect to have the Company
repurchase this Security, check the box: 
o

 

To elect to have the Company
repurchase only part of this Security, state the original principal amount to
be repurchased (which must be $1,000 or an integral multiple of $1,000):

 

$

 

If you want payment to be made
to another person, fill in the form below:

 

	
   

  
	
   

  
	
   

  
	
  (Insert other person’s social security or tax identification no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  
	
   

  
	
  In
  consideration of payment of repurchase price upon the date of repurchase, I
  or we hereby assign and transfer this Security to the Company and irrevocably
  appoint
                                          
  as agent to transfer this Security or such portion thereof set forth above on
  the books of the Company.  The agent
  may substitute another to act for him.

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  
	
   

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

  
	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  
						

 

*                                         The
Holder’s signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an “eligible guarantor institution” as defined by Rule 17Ad-15
under the Exchange Act.

 

17

 

OPTION TO ELECT REPURCHASE UPON A SCHEDULED REPURCHASE DATE

 

To elect to have the Company
repurchase this Security, check the box: 
o

 

To elect to have the Company
repurchase only part of this Security, state the original principal amount to
be repurchased (which must be $1,000 or an integral multiple of $1,000):

 

$

 

If you want payment to be made
to another person, fill in the form below:

 

	
   

  
	
   

  
	
   

  
	
  (Insert other person’s social security or tax identification no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  
	
   

  
	
  In
  consideration of payment of repurchase price upon the date of repurchase, I
  or we hereby assign and transfer this Security to the Company and irrevocably
  appoint
                                          
  as agent to transfer this Security or such portion thereof set forth above on
  the books of the Company.  The agent
  may substitute another to act for him.

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  
	
   

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

  
	
   

  
	
   

  
	
  Signature Guarantee*:

  	
   

  
						

 

*                                         The
Holder’s signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an “eligible guarantor institution” as defined by Rule 17Ad-15
under the Exchange Act.

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