Document:

EXHIBIT
10.22

 

CBOE HOLDINGS, INC. LONG-TERM INCENTIVE PLAN

 

CBOE Holdings, Inc.
has established this CBOE Holdings, Inc. Long-Term Incentive Plan to
provide an additional inducement for Eligible Individuals to provide services
to the Corporation or an Affiliate as an Employee or non-employee Director, to
reward such Eligible Individuals by providing an opportunity to acquire
incentive awards, and to provide a means through which the Corporation may
attract able persons to enter the employment of or engagement with the
Corporation or one of its Affiliates. 
Awards may, in the discretion of the Board or Committee, and subject to
such restrictions as the Board or Committee may determine or as provided
herein, consist of Non-Qualified Stock Options, Restricted Stock, Restricted
Stock Units, or any combination of the foregoing.

 

ARTICLE
1

DEFINITIONS

 

Whenever used in
the Plan, the following terms have the meanings set forth below, and when the
meaning is intended, the initial letter of the word is capitalized:

 

“Affiliate” means a Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Corporation.  For purposes of the preceding sentence, the
word “control” (by itself and as used in the terms “controlling,” “controlled
by” and “under common control with”) means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract, or
otherwise.

 

“Award” means a Non-Qualified Stock Option,
Restricted Stock, or Restricted Stock Unit award granted under the Plan.

 

“Award
Agreement” means
an agreement entered into between the Corporation and the applicable
Participant, setting forth the terms and provisions applicable to the Award
then being granted under the Plan, as further described in Section 4.2 of
the Plan.

 

“Award
Date” means, with
respect to any Award, the date of the grant or award specified by the Committee
in a resolution or other writing, duly adopted, and as set forth in the Award
Agreement, provided that such Award Date will not be earlier than the date of
the Committee action.

 

“Board” means the Board of Directors of the
Corporation.

 

“Cause” has the meaning set forth in
any employment, consulting, or other written agreement between the Participant
and the Corporation or an Affiliate.  If
there is no employment, consulting, or other written agreement between the
Corporation or an Affiliate and the Participant or if such agreement does not
define “Cause,” then “Cause” will have the meaning specified in the Award
Agreement, provided that if the Award Agreement does not so specify, “Cause”
will mean, as determined by the Committee in its sole discretion and solely
with respect 

 

 

to the
Plan and any Award made hereunder, the Participant’s (a) willful and
continued failure to perform his or her material duties with the Corporation or
an Affiliate, or the commission of any activities constituting a violation or breach
under any Federal, state or local law or regulation applicable to the
activities of the Corporation or an Affiliate, (b) fraud, breach of
fiduciary duty, dishonesty, misappropriation or other action that causes damage
to the property or business of the Corporation or an Affiliate, (c) repeated
absences from work such that the Participant is unable to perform his or her
employment or other duties in all material respects, other than due to becoming
Disabled, (d) admission or conviction of, or plea of nolo contendere to, any felony, or any
other crime that, in the reasonable judgment of the Board or Committee,
adversely affects the Corporation’s or an Affiliate’s reputation or the
Participant’s ability to carry out the obligations of his or her employment or
Service, (e) loss of any license or registration that is necessary for the
Participant to perform his or her duties for the Corporation or an Affiliate, (f) failure
to cooperate with the Corporation or an Affiliate in any internal investigation
or administrative, regulatory or judicial proceeding or, (g) act or
omission in violation or disregard of the Corporation’s or an Affiliate’s
policies, including but not limited to the Corporation’s or an Affiliate’s
harassment and discrimination policies and standards of conduct then in effect,
in such a manner as to cause loss, damage or injury to the property, reputation
or employees of the Corporation or an Affiliate.  In addition, the Participant’s Service will
be deemed to have terminated for Cause if, after the Participant’s Service has
terminated, facts and circumstances are discovered that would have justified a
termination for Cause.  Any act, or
failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Corporation or
an Affiliate will be conclusively presumed to be done, or omitted to be done,
in good faith and in the best interests of the Corporation or an Affiliate.

 

“Change
in Control” means
the first to occur of the following:

 

(a)                                  The acquisition by any Person of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of voting securities of the Corporation where such
acquisition causes such Person to own 35% or more of the combined voting power
of the then outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (the “Outstanding Voting Securities”);
provided that for purposes of this paragraph (a), the following acquisitions
will not be deemed to result in a Change in Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by the Corporation, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any Affiliate of the Corporation or (iv) any
acquisition by any corporation or entity pursuant to a transaction that
complies with clauses (A), (B) and (C) of paragraph (c) of this
definition below; and provided further that if any Person’s beneficial
ownership of the Outstanding Voting Securities reaches or exceeds 50% as a
result of a transaction described in clause (i) or (ii) above, and
such Person subsequently acquires beneficial ownership of additional voting
securities of the Corporation, such subsequent acquisition will be treated as
an acquisition that causes such Person to own 35% or more of the Outstanding
Voting Securities;

 

(b)                                 Individuals who, as of the Effective
Date, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, 

 

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provided that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Corporation’s stockholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board will be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;

 

(c)                                  The approval by the stockholders of the
Corporation and consummation of (i) a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets of the Corporation or (ii) the acquisition of assets or stock of
another corporation in exchange for voting securities of the Corporation (each
of (i) and (ii), a “Business Combination”); excluding, however, such a
Business Combination pursuant to which (A) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation that as a
result of such transaction owns the Corporation or all or substantially all of
the Corporation’s assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Voting Securities, (B) no
Person (excluding any employee benefit plan (or related trust) of the
Corporation or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly (except to the extent that such
ownership existed prior to the Business Combination), an amount of,
respectively, the then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation representing 20%
thereof; and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

 

(d)                                 Approval by the stockholders of the
Corporation of a complete liquidation or dissolution of the Corporation.

 

Notwithstanding the
foregoing, (i) unless a majority of the Incumbent Board determines
otherwise, no Change in Control will be deemed to have occurred with respect to
a particular Participant if the Change in Control results from actions or
events in which such Participant is a participant in a capacity other than
solely as an Officer, Employee or Director of the Corporation, and (ii) a
Public Offering will not constitute a Change in Control.

 

3

 

“Code” means the Internal Revenue Code of 1986,
as amended.  A reference to any provision
of the Code will include reference to any successor provision of the Code.

 

“Committee” means the Compensation Committee of the
Board, if any, or such similar or successor committee appointed by the
Board.  If the Board has not appointed a
Committee, the Board will function in place of the Committee.

 

“Corporation” means CBOE Holdings, Inc. or any
successor corporation thereto.

 

“Director” means any individual who is a member of
the Board on or after the Effective Date.

 

“Disabled” means the Participant:

 

(a)                                  becomes unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than 12 months; or

 

(b)                                 by reason of
any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receives income replacement benefits for a period of not
less than three months under an accident and health plan of the Corporation or
an Affiliate, as applicable.

 

“Dividend
Equivalent Right”
means a right to receive, with respect to any dividends or other distributions
on a share of Stock underlying a Restricted Stock Unit, dividend equivalents on
the share of Stock, as though such share of Stock had been issued and
outstanding, fully vested, and held by the Participant on the record date of
payment of such dividends.  Subject to Section 7.4,
Dividend Equivalent Rights may be provided in connection with an Award of
Restricted Stock Units under the Plan, but not in connection with an Award of
Restricted Stock or Options.

 

“Effective
Date” has the meaning set forth in Section 10.3 of the Plan.

 

“Eligible
Individual” means
any Employee or non-employee Director.

 

“Employee” means any person treated as a common law
employee in the records of the Corporation or one of its Affiliates.  The Corporation shall determine in good faith
and in the exercise of its discretion whether an individual has become or has
ceased to be an Employee and the effective date of such individual’s employment
or termination of employment, as the case may be.  For purposes of an individual’s rights, if
any, under the terms of the Plan as of the time of the Corporation’s
determination of whether or not the individual is an Employee, all such
determinations by the Corporation shall be final, binding and conclusive as to
such rights, if any, notwithstanding that the Corporation or any court of law
or governmental agency subsequently makes a contrary determination as to such
individual’s status as an Employee.

 

“Exchange
Act” means the
Securities Exchange Act of 1934, as amended. 
A reference to any provision of the Exchange Act will include reference
to any successor provision of the Exchange Act.

 

4

 

“Exercise
Price” means the
purchase price at which an Option may be exercised, subject to the provisions
of Article 5.

 

“Fair
Market Value”
means, as of any date:

 

(a)                                  if the Stock is readily tradeable on a
national or regional securities exchange or market system, or is quoted on the
Over the Counter Bulletin Board (OTCBB), the Fair Market Value of a share of
Stock will be the sales price at close of the Stock on the Award Date, time of
exercise, or other date of calculation (or on the last preceding trading date
if Stock was not traded on such date) as quoted on such national or regional
securities exchange or market system or the OTCBB (whichever constitutes the
primary market for the Stock), as reported by the Consolidated Tape
Association, the OTCBB or such other source as the Committee deems reliable; or

 

(b)                                 if the Stock is not readily tradeable on
a national or regional securities exchange or market system and is not quoted
on the OTCBB, the fair market value as determined in good faith by the Board or
the Committee, by the reasonable application of a reasonable valuation method
in accordance with Section 409A and Treasury Regulation Section 1.409A-1(b)(5)(iv)(B) (or
any similar or successor provision), thereunder, as the Board or the Committee
will in its discretion select and apply at the time of the Award Date, time of
exercise, or other date of calculation.

 

“Insider” means an Officer, Director, or other
person whose transactions in Stock are subject to Section 16 of the
Exchange Act.

 

“Insider Trading Policy” means the written policy of the
Corporation pertaining to the purchase, sale, transfer or other disposition of
the Corporation’s equity securities by Directors, Officers, Employees or other
service providers who may possess material, nonpublic information regarding the
Corporation or its securities.

 

“Non-Qualified
Stock Option”
means an Option that is not intended to (as set forth in the Award Agreement)
or that does not qualify as an “incentive stock option” within the meaning of
Code Section 422.

 

“Officer” means any person designated by the Board
as an officer of the Corporation.

 

“Option” means an option to purchase Stock at an
Exercise Price determined on the Award Date, subject to the applicable
provisions of Article 5, awarded in accordance with the terms and
conditions of the Plan.

 

“Participant” means an Eligible Individual to whom the
Committee has made one or more Awards under the Plan in accordance with Section 4.1
of the Plan.

 

“Performance
Goals” will mean
performance goals established by the Committee prior to the grant of an Award
and based on the attainment of one or any combination of the following, in each
case of the Corporation, an Affiliate, or business unit by or within which the
Participant is primarily employed or a combination thereof, and that are
intended to qualify under Section 

 

5

 

162(m): (a) net
earnings; (b) operating earnings or income; (c) earnings growth; (d) net
income; (e) net income per share; (f) gross revenue or revenue by
pre-defined business segment; (g) revenue backlog; (h) pre- or
post-tax profit margins; (i) cash flow, including operating cash flow,
free cash flow, discounted cash flow return on investment, and cash flow in
excess of cost of capital; (j) earnings per share; (k) return on
stockholders’ equity; (l) stock price; (m) return on common
stockholders’ equity; (n) return on capital; (o) return on assets; (p) economic
value added (income in excess of cost of capital); (q) customer
satisfaction; (r) cost control or expense reduction; (s) ratio of
operating expenses to operating revenues; (t) market share; (u) volume;
and (v) revenue per contract, in each case, absolute or relative to
peer-group comparative.

 

The Committee also may
benchmark Performance Goals under one or more of the measures described above
relative to the performance of other corporations.  The Committee will set such Performance Goals
within the time prescribed by Section 162(m).  The Committee will have the discretion to
adjust targets set for pre-established performance objectives as it deems
appropriate to reflect the inclusion or exclusion of the impact of
extraordinary or unusual items, events or circumstances in accordance with Section 162(m).  If the Committee determines it is advisable
to grant Awards that will not qualify for the performance-based exception of Section 162(m),
the Committee may grant Awards that do not so qualify.

 

“Performance
Period” means a period of one or more years, as determined by the Committee.

 

“Person”
means a “person”
as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act.

 

“Plan” means the CBOE Holdings, Inc.
Long-Term Incentive Plan, as set forth herein, as the same may be amended,
administered or interpreted from time to time.

 

“Public
Offering” means
any sale of any class of the Corporation’s equity securities pursuant to an
effective registration statement under Section 12 of the Exchange Act
filed with the SEC on Form S-1 (or any successor form adopted by the SEC),
provided that the following will not be considered a public offering: (a) any
issuance of common equity securities by the Corporation as consideration for a
merger or acquisition, (b) any issuance of common securities to employees,
directors or consultants of any of the Corporation or any of its Affiliates as
part of an incentive or compensation plan, (c) any issuance of common
equity securities as part of a unit with debt or preferred stock or any similar
structure in which the common equity securities are being offered primarily as
a means of enhancing the Corporation’s ability to sell the debt or preferred
stock and (d) the issuance of Stock by the Corporation upon conversion of
any preferred stock of the Corporation.

 

“Restricted
Stock” means an
award of shares of Stock delivered under the Plan subject to the requirements
of Article 6 and such other restrictions as the Committee deems
appropriate or desirable.  The
restrictions on, and risk of forfeiture of, Restricted Stock generally will
expire on a specified date, upon the occurrence of an event or achievement of
Performance Goals, or on an accelerated basis under certain circumstances
specified in the Plan or the Award Agreement. 

 

“Restricted
Stock Unit” means
a notional account established pursuant to an Award granted to a Participant,
as described in Article 7, that is (a) valued solely by reference to
shares of Stock, (b) subject to restrictions specified in the Award
Agreement, and (c) payable in Stock or cash, in 

 

6

 

the Committee’s
sole discretion.  The restrictions on,
and risk of forfeiture of, Restricted Stock Units generally will expire on a
specified date, upon the occurrence of an event or achievement of Performance
Goals, or on an accelerated basis under certain circumstances specified in the
Plan or the Award Agreement.

 

“Rule 16b-3” means Rule 16b-3 under the Exchange
Act, as amended, and any guidance issued thereunder by the SEC.

 

“Sarbanes-Oxley
Act” means the
Sarbanes-Oxley Act of 2002.  A reference
to any provision of the Sarbanes-Oxley Act will include reference to any
successor provision of the Sarbanes-Oxley Act.

 

“SEC” means the United States Securities and
Exchange Commission.

 

“Section 162(m)” means Code Section 162(m), as
amended, and any proposed and final regulations and other guidance issued
thereunder by the U.S. Department of Treasury and/or the Internal Revenue
Service.

 

“Section 409A” means Code Section 409A, as
amended, and any proposed and final regulations and other guidance issued
thereunder by the U.S. Department of Treasury and/or the Internal Revenue
Service.

 

“Securities
Act” means the
Securities Act of 1933, as amended.  A
reference to any provision of the Securities Act will include reference to any
successor provision of the Securities Act.

 

“Service”
means the
provision of personal services to the Corporation or its Affiliates in the
capacity of (a) an Employee, (b) a Director, or (c) a
consultant.  A Participant’s Service
shall not be deemed to have terminated merely because of a change in the
capacity in which the Participant renders Service to the Corporation or its
Affiliates, a transfer of the Participant among the Corporation and its
Affiliates,  or a change in the Corporation or
Affiliate for which the Participant renders such Service, provided in each case
that there is no interruption or termination of the Participant’s Service.  Additionally, a Participant’s Service shall
not be deemed to have terminated if the Participant takes any military leave,
sick leave, or other bona fide leave of absence approved by the Corporation,
provided that if any such leave taken by a Participant exceeds 90 days, then on
the 91st day immediately following such 90-day period, the Participant’s
Service shall be deemed to have terminated, unless the Participant’s right to
return to Service is guaranteed by statute or contract.  Notwithstanding the foregoing, unless
otherwise designated by the Corporation, a leave of absence authorized by the
Corporation shall be treated as Service for purposes of determining vesting
under the Award Agreement.  A Participant’s
Service shall be deemed to have terminated either upon an actual termination of
Service or upon the time that the entity for which the Participant performs
Service ceases to be an Affiliate of the Corporation.  Subject to the foregoing, the Corporation, in
its discretion, shall determine whether the Participant’s Service has terminated
and the effective date of and reason for such termination.

 

“Stock” means the “Unrestricted Common Stock” of
the Corporation (as defined in Article Fourth (a)(i) of the Amended
and Restated Certificate of Incorporation of the Corporation).

 

7

 

“Voting Stock” means the outstanding capital stock of
the Corporation entitled to vote for the election of Directors.

 

ARTICLE 2

PLAN ADMINISTRATION

 

Section 2.1            Administration. 
The Committee will administer the Plan. 
The Committee will interpret the Plan and any Award Agreement or other
form of agreement or other document used by the Corporation in the
administration of the Plan or of any Award, and prescribe such rules, regulations,
and procedures in connection with the operation of the Plan, as it deems to be
necessary and advisable for the administration of the Plan consistent with the
purposes of the Plan.  Without limiting
the foregoing, the Committee will have the authority and complete discretion
to:

 

(a)                                  Prescribe, amend, and rescind rules and
regulations relating to the Plan and any Awards;

 

(b)                                 Select Eligible Individuals (including
members of the Committee) to receive Awards, as provided in Section 4.1 of
the Plan;

 

(c)                                  Determine the form and terms of Awards;

 

(d)                                 Determine the number of shares of Stock
or other consideration subject to Awards, as provided in Articles 5 through 9
of the Plan;

 

(e)                                  Determine whether Awards will be granted
singly, in combination or in tandem with, in replacement of, or as alternatives
to, other Awards under the Plan or grants or awards under any other incentive
or compensation plan of the Corporation;

 

(f)                                    Construe and interpret the Plan, any
Award Agreement in connection with an Award and any other agreement or document
executed pursuant to the Plan;

 

(g)                                 Correct any defect or omission, or
reconcile any inconsistency in the Plan, any Award or any Award Agreement;

 

(h)                                 Accelerate or, with the consent of the
Participant, defer the vesting of any Award or the exercise date of any Award,
subject to the limitations of Section 409A;

 

(i)                                     Authorize any person to execute on behalf
of the Corporation any instrument required to effectuate the grant of an Award
and delegate to Officers of the Corporation the authority to perform administrative
functions under the Plan subject to any legal requirements that the Committee
as a whole take action with respect to such function, other than any such
delegation that would cause Awards or other transactions under the Plan to
cease to (i) be exempt from Section 16(b) of the Exchange Act, (ii) satisfy
the independent director requirements of the applicable national or regional
securities exchange or market system, or (iii) qualify as “performance-based
compensation” under Section 162(m);

 

8

 

(j)                                     To the extent permissible under Section 141(c) and
Section 157(c) of the Delaware General Corporation Law and other
applicable laws, regulations and stock exchange rules, the Board and the
Committee may each, in their discretion, delegate to another committee or one
or more officers of the Corporation, any or all of the authority and
responsibility of the Committee with respect to awards to Employees who are not
subject to Section 16 of the Exchange Act at the time any such delegated
authority or responsibility is exercised. 
To the extent that the Board or the Committee has delegated to such
other committee or to one or more officers of the Corporation, the authority
and responsibility of the Committee pursuant to the foregoing, all references
to the Committee in the Plan shall be deemed to refer to such other committee
or to such officer or officers;

 

(k)                                  Amend, modify, extend, cancel or renew
any Award, and authorize the exchange, substitution, or replacement of Awards,
provided that (i) no such amendment, modification, extension,
cancellation, renewal, exchange, substitution, or replacement will be to the
detriment of a Participant with respect to any Award previously granted without
the affected Participant’s written consent, (ii) any such amendment,
modification, extension, cancellation, renewal, exchange, substitution or
replacement must satisfy the requirements for exemption under Section 409A,
and (iii) in no event will the Committee be permitted to reduce the Exercise
Price of any outstanding Option or to exchange or replace an outstanding Option
with a new Option with a lower Exercise Price, except pursuant to Section 5.2;

 

(l)                                     Determine whether a Participant has
engaged in the operation or management of a business that is in competition
with the Corporation or any of its Affiliates, or whether a Participant has
violated the restrictive covenants referred to in Section 10.12; and

 

(m)                               Make all other determinations deemed
necessary or advisable for the administration of the Plan.

 

The Committee will keep
records of action taken at its meetings. 
A majority of the Committee will constitute a quorum at any meeting, and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by a majority of the Committee, will be
the acts of the Committee.

 

Section 2.2            Administration with Respect to
Insiders.  With respect to Eligible Individuals who are
Insiders, at any time that any class of equity security of the Corporation is
registered under Section 12 of the Exchange Act, the Plan shall be
administered in compliance with the requirements, if any, of Rule 16b-3.

 

Section 2.3            Indemnification. 
Each person who is or has been a member of the Committee or the Board,
and any individual or individuals to whom the Committee has delegated authority
under this Article 2, will be indemnified and held harmless in accordance
with the Corporation’s Certificate of Incorporation.

 

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ARTICLE 3

AUTHORIZED SHARES

 

Section 3.1            Shares Available Under the Plan.  Subject to adjustment as set forth in Section 3.2,
the maximum number of shares of Stock that may be issued or delivered and as to
which Awards may be granted under the Plan will be equal to the sum of: (a) 2.67%
of the shares of capital stock of the Corporation outstanding as of the date
and time of the demutualization of the Chicago Board Options Exchange,
Incorporated (on a fully-diluted basis, counting all shares of Stock subject to
Awards under this Plan as outstanding); (b) any shares of Stock subject to
an Award under the Plan that expire without being exercised, or are forfeited,
canceled, settled or otherwise terminated without a distribution of Stock to
the Participant; (c) shares of Stock not delivered to the Participant
because the Award is exercised through a reduction of shares subject to the
Award (i.e., “net exercised”); and (d) shares
of Stock delivered (either actually or by attestation) to or withheld by the
Corporation in connection with the exercise of an Option awarded under the
Plan, or in payment of any required income tax withholding for the exercise of
an Option or the vesting of Restricted Stock awarded under the Plan.  The shares that may be issued or delivered
under the Plan may be either authorized but unissued shares, repurchased
shares, or partly each.

 

If any Award granted
under the Plan is canceled by mutual consent or terminates or expires for any
reason without having been exercised in full, or, if and to the extent that an
Award of Restricted Stock Units is paid in cash rather than the issuance of
shares of Stock, the number of shares subject to such Award (or in the case of
Restricted Stock Units, the number of shares of Stock for which payment was made
in cash) will again be available for purposes of the Plan.

 

If, in connection with an
acquisition of another company or all or part of the assets of another company
by the Corporation or an Affiliate, or in connection with a merger or other
combination of another company with the Corporation or an Affiliate, the
Corporation either (i) assumes stock options or other stock incentive
obligations of such other company, or (ii) grants stock options or other
stock incentives in substitution for stock options or other stock incentive
obligations of such other company, then none of the shares of Stock that are
issuable or transferable pursuant to such stock options or other stock
incentives that are assumed or granted in substitution by the Corporation will
be charged against the limitations set forth in this Section 3.1.

 

Section 3.2            Adjustment and Substitution of
Shares.  If a dividend or other distribution will
be declared upon the Stock, payable in shares of Stock, the number of shares of
Stock then subject to any outstanding Award or by reference to which the amount
of any other Award is determined and the number of shares that may be issued or
delivered under the Plan will be adjusted by adding thereto the number of
shares that would have been distributable thereon if such shares had been
outstanding on the date fixed for determining the stockholders entitled to
receive such dividend or distribution.

 

If the outstanding shares
of Stock will be changed into or exchangeable for a different number or kind of
shares of Stock or other securities of the Corporation or another corporation,
whether through reorganization, reclassification, recapitalization, stock
split-up, combination of shares, merger or consolidation, then the Committee
will substitute for each share of Stock subject to any then-outstanding Award
and for each share of Stock, which may be issued or delivered under the Plan
but is not then subject to an outstanding Award, the number and kind of shares
of Stock 

 

10

 

or other securities into
which each outstanding share of Stock is so changed or for which each such
share is exchangeable, provided that in the event of a merger, acquisition or
other business combination of the Corporation with or into another entity, any
adjustment provided for in the applicable agreement and plan of merger (or
similar document) will be conclusively deemed to be appropriate for purposes of
this Section 3.2.

 

In the case of any
adjustment or substitution as provided for in this Section 3.2, the
aggregate Exercise Price for all shares subject to each then-outstanding Option
prior to such adjustment or substitution will be the aggregate Exercise Price
for all shares of Stock or other securities (including any fraction) to which
such shares will have been adjusted or which will have been substituted for
such shares.  Any new Exercise Price per
share will be carried to at least three decimal places with the last decimal
place rounded upwards.

 

No adjustment or
substitution provided for in this Section 3.2 will require the Corporation
to issue or sell a fraction of a share or other security.  Accordingly, all fractional shares or other
securities that result from any such adjustment or substitution will be
eliminated and not carried forward to any subsequent adjustment or
substitution.

 

If any adjustment or
substitution would cause a modification, extension or renewal of an Option
within the meaning of Section 409A, the Committee may elect that such
adjustment or substitution not be made but rather will use reasonable efforts
to effect such other adjustment of each then-outstanding Option as the
Committee in its sole discretion will deem equitable and that will not result
in any such modification, extension or renewal under Section 409A.

 

ARTICLE 4

ELIGIBILITY AND AWARDS

 

Section 4.1            Eligibility.  Subject to the provisions of the Plan, the Committee
will have full and final authority, in its discretion, to grant Awards as
described herein and to determine the Eligible Individuals to whom Awards will
be granted.

 

Section 4.2            Award Agreement.  Each Award granted under the Plan will be evidenced by
a written or electronic Award Agreement, in a form approved by the
Committee.  Such Award Agreement will be
subject to and incorporate the express terms and conditions, if any, required
under the Plan or as required by the Committee for the form of Award granted
and such other terms and conditions as the Committee may specify, and will be
executed by the Chief Executive Officer, the President (if other than the Chief
Executive Officer), or any person designated as an executive Officer by the
Board for Section 16 purposes, on behalf of the Corporation, and by the
Participant to whom such Award is granted. 
The Board may at any time and from time to time amend an outstanding
Award Agreement in a manner consistent with the Plan.

 

Section 4.3            Corporation’s Obligation to
Deliver Stock.  The obligation of the Corporation to issue or
deliver shares of Stock under the Plan will be subject to (a) the effectiveness
of a registration statement under the Securities Act, with respect to such
shares, if deemed necessary or appropriate by counsel for the Corporation; (b) the
condition that the shares will have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange on which such shares may
then be listed; and (c) all other applicable laws, regulations, rules and
orders that may then be in effect.

 

11

 

ARTICLE 5

STOCK OPTIONS

 

Section 5.1            Grant of Stock Options.  The Committee will have authority, in its discretion,
to grant Non-Qualified Stock Options. 
Options granted under the Plan will be subject to the following terms
and conditions of this Article 5.

 

Section 5.2            Exercise Price.  Subject to adjustment as set forth in Section 3.2,
the Exercise Price will be such price as the Committee, in its discretion, will
determine and set forth in the Award Agreement, except that, the Exercise Price
will not be less than one hundred percent (100%) of the Fair Market Value per
share of Stock covered by the Option as determined on the Award Date.

 

Section 5.3            Payment of Exercise Price. 
The Exercise Price will be payable in full in any one or more of the
following ways:

 

(a)                                  in cash, check, bank draft, money order
or wire transfer payable to the Corporation;

 

(b)                                 by delivery to the Corporation (either by
actual delivery or by attestation) of shares of Stock (which are owned by the
Participant free and clear of all liens and other encumbrances and which are
not subject to the restrictions set forth in Article 6) having an
aggregate Fair Market Value on the date of exercise of the Option equal to the
Exercise Price for the shares being purchased;

 

(c)                                  by requesting that the Corporation
withhold such number of shares of Stock then issuable upon exercise of the
Option as will have an aggregate Fair Market Value equal to the Exercise Price
for the shares being acquired upon exercise of the Option (and any applicable
withholding taxes);

 

(d)                                 by a “net exercise” arrangement under
which the Corporation will reduce the number of shares of Stock issued upon
exercise by the largest whole number of shares with a Fair Market Value that
does not exceed the aggregate Exercise Price; provided that the Corporation
shall accept a cash or other payment from the Participant to the extent of any
remaining balance of the aggregate Exercise Price not satisfied by such
reduction in the number of whole shares to be issued; and provided further that
shares of Stock will no longer be outstanding under an Option and will not be
exercisable thereafter to the extent that (i) shares are used to pay the
Exercise Price pursuant to the “net exercise,” (ii) shares are delivered
to the Participant as a result of such exercise, and (iii) shares are
withheld to satisfy tax withholding obligations;

 

(e)                                  provided that a public market for the
Corporation’s stock exists, and to the extent permitted by the Sarbanes-Oxley
Act:

 

(i)                                     through a “same day sale” commitment from
the Participant and a broker-dealer that is a member of the Financial Industry
Regulatory Authority (a “FINRA Dealer”) whereby the Participant irrevocably
elects to exercise the Option and to sell a portion of the shares so purchased
to pay the 

 

12

 

Exercise Price (or a
larger number of the shares so purchased), and whereby the FINRA Dealer
irrevocably commits upon receipt of such shares to forward the Exercise Price
directly to the Corporation (and any excess to the Participant);

 

(ii)                                  through a “margin” commitment from the
Participant and a FINRA Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the shares so purchased to the FINRA Dealer
in a margin account as security for a loan from the FINRA Dealer in the amount
of the Exercise Price, and whereby the FINRA Dealer irrevocably commits upon
receipt of such shares to forward the Exercise Price directly to the
Corporation; or

 

(f)                                    by any combination of the foregoing.

 

If the Exercise Price is
paid in whole or in part in shares of Stock, any portion of the Exercise Price
representing a fraction of a share will be paid in cash.  The date of exercise of an Option will be
determined under procedures established by the Committee, and the Exercise
Price will be payable at such time or times as the Committee, in its
discretion, will determine.  No shares
will be issued or delivered upon exercise of an Option until full payment of
the Exercise Price has been made.  When
full payment of the Exercise Price has been made, the Participant will be
considered for all purposes to be the owner of the shares with respect to which
payment has been made.

 

Section 5.4            Exercisability, Expiration, and
Term of Options.  Subject to this Section 5.4 and Section 2.1,
Options may be exercised at such times, in such amounts and subject to such
restrictions as will be determined by the Committee, in its discretion.  An Option may be exercised (a) at such
time as the Option vests, or (b) if and to the extent set forth in the
applicable Award Agreement, prior to the date on which the Option vests,
provided that such Stock obtained will be subject to the same requirements that
are applicable to grants of Restricted Stock set forth in Article 6 and in
the applicable Award Agreement.  After an
Option is granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option. 
Restrictions and conditions on the exercise of an Option need not be the
same for each Award or for each Participant.

 

Each Option will
terminate not later than the expiration date specified in the Award Agreement
pertaining to such Option, provided that the expiration date with respect to an
Option shall not be later than the 10th anniversary of its Award Date.

 

Except as otherwise provided
in the Award Agreement, the vesting conditions on an Option will lapse upon the
date that a Participant dies or becomes Disabled.  Except as otherwise provided in the Award
Agreement, a Participant (or his or her beneficiary, as applicable) must exercise
any outstanding Option, if any, within one year following the Participant’s
death or Disability (or by the 10th anniversary of the Option’s Award Date, if
earlier).  If the Participant does not
exercise  any outstanding Option within
one year from the Participant’s death or Disability (or by the 10th anniversary
of the Option’s Award Date, if earlier), the outstanding Option will be
cancelled and forfeited.

 

13

 

Subject to the preceding
paragraph, unless otherwise determined by the Committee and set forth in an
Award Agreement or an amendment thereto, following a Participant’s termination
of Service for any reason other than Cause, such Participant must exercise any
outstanding Option, if at all, within 90 days from the date of termination of
Service (or by the 10th anniversary of the Option’s Award Date, if
earlier).  If the Participant does not
exercise any outstanding Option within 90 days from the date of termination of
Service (or by the 10th anniversary of the Option’s Award Date, if earlier),
the outstanding Option will be cancelled and forfeited.  All Options, including vested Options, will
be cancelled and forfeited immediately upon a Participant’s termination of
Service for Cause.

 

Notwithstanding any
contrary provision of this Section 5.4, if, on the date an outstanding
Option would expire, the exercise of the Option would violate applicable
securities laws, the expiration date applicable to the Option will be extended
to a date that is 30 calendar days after the date the exercise of the Option
would no longer violate applicable securities laws.

 

ARTICLE 6

RESTRICTED STOCK

 

Section 6.1            Award.  Subject to the terms and provisions of the Plan, the
Committee may award, at any time, shares of Restricted Stock to any Eligible
Individual in the number and form, and subject to such restrictions on
transferability and other restrictions as the Committee may determine in its
discretion and set forth in the Award Agreement, including without limitation
the achievement of Performance Goals. 
Restricted Stock also may be received by a Participant as the result of
an exercise of an Option, when such award has not vested.

 

Section 6.2            Vesting and Restrictions on
Transfer.  Shares issued pursuant to any Restricted
Stock Award shall be made subject to vesting conditions based upon the
satisfaction of such Service requirements, conditions, restrictions or
Performance Goals as the Committee shall establish and set forth in the Award
Agreement.  During any period in which
shares acquired under a Restricted Stock Award remain subject to vesting
conditions, such shares may not be sold, exchanged, transferred, pledged,
assigned or otherwise disposed of. 
Except as otherwise provided in the Award Agreement, the vesting conditions
on any shares of Restricted Stock will expire and the restrictions on shares of
Restricted Stock will lapse upon the date that a Participant dies or becomes
Disabled.  Upon request by the
Corporation, each Participant shall execute any agreement evidencing such
transfer restrictions prior to the receipt of shares of Stock hereunder and
shall promptly present to the Corporation any and all certificates representing
shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.

 

Section 6.3            Termination of Service.  Except as otherwise provided in Section 6.2
above, if a Participant’s termination of Service occurs for any reason before
the expiration of the vesting conditions, all shares of Restricted Stock that
remain subject to vesting conditions will be forfeited by the Participant as of
the Participant’s termination of Service, unless the Committee otherwise
determines.  In the case of Restricted
Stock purchased through the exercise of an Option, the Corporation will refund
the Exercise Price paid on the exercise of the Option.  Such forfeited shares of Restricted Stock
will again become available for award under the Plan.

 

14

 

Section 6.4            Voting Rights; Dividends and
Distributions.  Except as provided in this Section 6.4
or the Award Agreement, during any period in which shares acquired pursuant to
a Restricted Stock Award remain subject to vesting conditions, the Participant
shall have all of the rights of a stockholder of the Corporation holding shares
of Stock, including the right to vote such shares and to receive all dividends
and other distributions paid with respect to such shares.  However, in the event of a dividend or distribution
paid in shares of Stock or other property or any other adjustment made upon a
change in the capital structure of the Corporation as described in Section 3.2,
any and all new, substituted or additional securities or other property (other
than normal cash dividends) to which the Participant is entitled by reason of
the Participant’s Restricted Stock Award shall be immediately subject to the
same vesting conditions as the shares subject to the Restricted Stock Award
with respect to which such dividends or distributions were paid or adjustments
were made.

 

ARTICLE
7

RESTRICTED
STOCK UNIT AWARDS

 

Section 7.1            Award.  Subject to the terms and provisions of the Plan, the
Committee may award, at any time, Restricted Stock Units to any Eligible
Individual in the number and form, and subject to such restrictions on
transferability and other restrictions as the Committee may determine in its
discretion and set forth in the Award Agreement, including without limitation
the achievement of Performance Goals.

 

Section 7.2            Purchase Price. 
No monetary payment (other than applicable tax withholding, if any)
shall be required as a condition of receiving a Restricted Stock Unit Award,
the consideration for which shall be services actually rendered to or for the
benefit of the Corporation or an Affiliate.

 

Section 7.3            Vesting. 
Restricted Stock Unit Awards shall be made subject to vesting conditions
based upon the satisfaction of such Service requirements, conditions,
restrictions or Performance Goals as the Committee shall establish and set
forth in the Award Agreement.  Except as
otherwise provided in the Award Agreement, the vesting conditions on any
Restricted Stock Unit Award will expire and the Restricted Stock Unit will
become fully vested upon the date that a Participant dies or becomes Disabled.

 

Section 7.4            Voting Rights, Dividend
Equivalent Rights and Distributions.  Participants
shall have no voting rights with respect to shares of Stock represented by
Restricted Stock Units until the date of the issuance of such shares (as
evidenced by the appropriate entry on the books of the Corporation or of a duly
authorized transfer agent of the Corporation).

 

The Committee, in its
discretion, may provide in the Award Agreement evidencing any Restricted Stock
Unit Award that the Participant shall be entitled to receive Dividend
Equivalent Rights during the period beginning on the date a Restricted Stock
Unit Award is granted and ending, with respect to each share of Stock
underlying the Award, on the earlier of the date the Award vests or the date on
which it is terminated.  However, in the
event of a dividend or distribution paid in shares of Stock or other property
or any other adjustment made upon a change in the capital structure of the
Corporation as described in Section 3.2, any and all new, substituted or
additional securities or other property (other than normal cash dividend

 

15

 

equivalents) to which the
Participant may be entitled by reason of the Participant’s Restricted Stock
Unit Award shall be immediately subject to the terms and conditions and shall
be settled in the same manner and at the same time as the Restricted Stock Unit
Award with respect to which such Dividend Equivalent Rights were paid or
adjustments were made.

 

Section 7.5            Effect of Termination of Service. 
Except as otherwise provided in Section 7.3 above or by the
Committee and set forth in the Award Agreement evidencing a Restricted Stock
Unit Award, if a Participant’s Service terminates for any reason, whether
voluntary or involuntary, then the Participant shall forfeit any Restricted
Stock Units that remain subject to vesting conditions as of the date of the
Participant’s termination of Service.

 

Section 7.6            Settlement of Restricted Stock
Unit Awards.  The Corporation shall issue to a Participant
on the date on which Restricted Stock Units subject to the Participant’s
Restricted Stock Unit Award vest or on such other date determined by the
Committee, in its discretion, and set forth in the Award Agreement one share of
Stock (and/or any other new, substituted or additional securities or other
property pursuant to an adjustment described in Section 3.2) for each
Restricted Stock Unit then becoming vested or otherwise to be settled on such
date, subject to the withholding of applicable taxes, if any.  If permitted by the Committee, the
Participant may elect, consistent with the requirements of Section 409A
and in accordance with such procedures as the Committee may specify from time
to time, to defer receipt of all or any portion of the shares of Stock or other
property otherwise issuable to the Participant pursuant to this Section 7.6.  Notwithstanding the foregoing, the Committee,
in its discretion, may provide in any Award Agreement for settlement of any
Restricted Stock Unit Award by payment to the Participant in cash of an amount
equal to the Fair Market Value on the vesting date of the shares of Stock or
other property otherwise issuable to the Participant pursuant to this Section 7.6.  Notwithstanding the foregoing, any stock
issued or cash paid to the Participant in settlement of the Restricted Stock
Units will be issued or paid, as applicable, as soon as administratively
practicable following the applicable vesting date but in no event later than March 15th
of the year following such vesting date (unless such Restricted Stock Unit has
been deferred as permitted by the Committee under this Section 7.6).

 

ARTICLE 8

CHANGE IN CONTROL

 

Section 8.1            Accelerated Vesting. 
The Committee will have the discretion to provide in applicable Award
Agreements that, in the event of a Change in Control, the following provisions
will apply:

 

(a)                                  each outstanding Option will immediately
become vested and exercisable in full; and

 

(b)                                 the vesting conditions on each share of
Restricted Stock or Restricted Stock Unit will lapse,

 

provided that full
vesting of all such outstanding Awards will be immediate unless the Corporation
is the surviving entity and any adjustments necessary to preserve the value of
the Participant’s outstanding Awards have been made, or the Corporation’s
successor at the time of the Change in Control irrevocably assumes the
Corporation’s obligations under the Plan or

 

16

 

replaces each Participant’s
outstanding Award with an award of equal or greater value and having terms and
conditions no less favorable to the Participant than those applicable to the
Participant’s Award immediately prior to the Change in Control.

 

In the event of a Change
in Control that is a merger or consolidation in which the Corporation is not
the surviving corporation or that results in the acquisition of substantially
all the Corporation’s outstanding Stock by a single person or entity or by a
group of persons or entities acting in concert, or in the event of a sale or
transfer of all or substantially all of the Corporation’s assets (a “Covered
Transaction”), the Committee will have the discretion to provide for the
termination of all outstanding Options as of the effective date of the Covered
Transaction, provided that no Option will be so terminated (without the consent
of the Participant) prior to the expiration of 20 days following the later of (i) the
date on which the Award became fully exercisable and (ii) the date on
which the Participant received written notice of the Covered Transaction.

 

Section 8.2            Excess Parachute Payment. 
In the event that any acceleration of vesting pursuant to an Award and
any other payment or benefit received or to be received by a Participant would
subject the Participant to any excise tax pursuant to Code Section 4999
due to the characterization of such acceleration of vesting, payment or benefit
as an excess parachute payment under Code Section 280G, the Participant
may elect, in his or her sole discretion, to reduce the amount of any
acceleration of vesting called for under the Award in order to avoid such
characterization.  To aid the Participant
in making any election made under this Section 8.2, no later than the date
of the occurrence of any event that might reasonably be anticipated to result
in an excess parachute payment to the Participant, the Corporation shall
request a determination in writing by independent experts selected by the
Corporation.  As soon as practicable
thereafter, the independent experts shall determine and report to the
Corporation and the Participant the amount of such acceleration of vesting,
payments and benefits that would produce the greatest after-tax benefit to the
Participant.  For the purposes of such
determination, the independent experts may rely on reasonable, good faith
interpretations concerning the application of Code Sections 280G and 4999.  The Corporation and the Participant shall
furnish to the independent experts such information and documents as the experts
may reasonably request in order to make their required determination.  The Corporation shall bear all fees and
expenses the independent experts may reasonably charge in connection with their
services contemplated by this Section 8.2, and any excise tax, income tax,
interest, or penalties imposed on the Participant as a result of a successful
Internal Revenue Service claim that, contrary to the determination and report
of the independent experts, the Participant must pay an excise tax under Code Section 4999
due to the characterization of such acceleration of vesting, payment or benefit
as an excess parachute payment under Code Section 280G.

 

ARTICLE
9

CERTIFICATES FOR AWARDS OF STOCK

 

Section 9.1            Stock Certificates.  Except as otherwise provided in this Section 9.1,
each Participant entitled to receive shares of Stock under the Plan will be
issued a certificate for such shares. 
Such certificate will be registered in the name of the Participant and
will bear an appropriate legend reciting the terms, conditions and
restrictions, if any, applicable to the Stock and will be subject to
appropriate stop-transfer orders.  To the
extent that the Plan provides for

 

17

 

issuance of stock
certificates to reflect the issuance of shares of Stock, the issuance may be
effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange or market
system.  If the issuance of shares under
the Plan is effected on a non-certificated basis, the issuance of shares to a
Participant will be reflected by crediting (by means of a book entry) the
applicable number of shares of Stock to an account maintained by the
Corporation in the name of such Participant, which account may be an account
maintained by the Corporation for such Participant under any dividend
reinvestment program offered by the Corporation.  The Committee may require, under such terms
and conditions as it deems appropriate or desirable, that the certificates for
Restricted Stock delivered under the Plan be held in custody by a bank or other
institution, or that the Corporation may itself hold such shares in custody
until the vesting conditions expire or until restrictions thereon otherwise
lapse, and may require, as a condition of any receipt of Restricted Stock, that
the recipient will have delivered a stock power endorsed in blank relating to
the Restricted Stock.  Certificates for
shares of unrestricted Stock may be delivered to the Participant after, and
only after, the vesting conditions will have expired without forfeiture in
respect of such shares of Restricted Stock.

 

Section 9.2            Compliance With Laws and
Regulations.  The grant of Awards and the issuance of
shares of Stock pursuant to an Award shall be subject to compliance with all
applicable requirements of Federal, state, local and foreign law with respect
to such securities and the requirements of any stock exchange or market system
upon which the Stock may then be listed. 
In addition, no Award may be exercised or shares of Stock issued
pursuant to an Award unless (a) a registration statement under the
Securities Act shall at the time of such exercise or issuance be in effect with
respect to the shares issuable pursuant to the Award, or (b) in the opinion
of legal counsel to the Corporation, the shares issuable pursuant to the Award
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act.  The inability of the Corporation to obtain
from any regulatory body having jurisdiction the authority, if any, deemed by
the Corporation’s legal counsel to be necessary to the lawful issuance and sale
of any shares hereunder shall relieve the Corporation of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. 
As a condition to issuance of any Stock, the Corporation may require the
Participant to satisfy any qualifications that may be necessary or appropriate,
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Corporation.

 

Section 9.3            Restrictions. 
All certificates for shares of Stock delivered under the Plan (and all
non-certificated shares credited to a Participant’s account as provided in Section 9.1)
also will be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the SEC, any stock exchange or quotation system upon which the
Stock is then listed and any applicable Federal or state securities laws; and
the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.  The foregoing provisions of this Section 9.3
will not be effective if and to the extent that the shares of Stock delivered
under the Plan are covered by an effective and current registration statement
under the Securities Act, or if and so long as the Committee determines that
application of such provisions is no longer required or desirable.  In making such determination, the Committee
may rely upon an opinion of counsel for the Corporation.

 

18

 

Section 9.4            Rights of Stockholders.  Except as otherwise provided herein, no Participant
awarded an Option or Restricted Stock Unit will have any right as a stockholder
with respect to any shares subject to such Award prior to the date of issuance
to him or her of a certificate or certificates for such shares, or if
applicable, the crediting of non-certificated shares to an account maintained
by the Corporation in the name of such Participant.  No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date
such shares are issued, except as provided in Sections 3.2, 6.4, 7.4, or
another provision of the Plan.

 

ARTICLE 10

MISCELLANEOUS

 

Section 10.1         Effect of the Plan on the Rights of
Employees and Employer.  Neither the
adoption of the Plan nor any action of the Board or the Committee pursuant to
the Plan will be deemed to give any Eligible Individual any right to be granted
an Award and nothing in the Plan, in any Award granted under the Plan or in any
Award Agreement will confer any right to any Participant to continue in the
employment of the Corporation or any Affiliate or to continue to be retained to
provide Services to the Corporation or any Affiliate as a Director, or
consultant or interfere in any way with the rights of the Corporation or any
Affiliate to terminate a Participant’s Service at any time.

 

Section 10.2         Amendment.  The Board specifically reserves the right to alter and
amend the Plan at any time and from time to time and the right to revoke or
terminate the Plan or to suspend the granting of Awards pursuant to the Plan;
provided that no such alteration, amendment, revocation, termination, or
suspension will terminate any outstanding Award theretofore granted under the
Plan, unless there is a liquidation or a dissolution of the Corporation; and
provided further that no such alteration or amendment of the Plan will, without
prior stockholder approval (a) increase the total number of shares that
may be issued or delivered under the Plan; (b) make any changes in the
class of Eligible Individuals; (c) extend the period set forth in the Plan
during which Awards may be granted; or (d) make any changes that require
stockholder approval under the rules and regulations of any securities
exchange or market on which the Stock is traded.  No alteration, amendment, revocation or
termination of the Plan or suspension of any Award will materially adversely
affect, without the written consent of the holder of an Award theretofore
granted under the Plan, the rights of such holder with respect to such
Award.  The Committee may not amend any
Award to extend the exercise period beyond a date that is later than the
earlier of the latest date upon which the Award could have expired by its
original terms under any circumstances or the 10th anniversary of the original
date of grant of the Award, or otherwise cause the Award to become subject to Section 409A.  However, if the exercise period of an Option
is extended at a time when the Exercise Price of the Option equals or exceeds
the Fair Market Value of the Stock that could be purchased, such extension will
not be considered an extension of the original Award.

 

Section 10.3         Effective Date and Duration of Plan.  The Plan will be effective January 13, 2010 (the “Effective
Date”), the date of its adoption by the Board. 
The Plan will remain in effect until the earliest of the date (a) all
shares authorized to be issued or transferred hereunder have been issued or
transferred (b) the Plan is terminated by the Board, or (c) the 10th
anniversary of the Effective Date, and will continue in effect thereafter with
respect to any Awards outstanding at the time of such termination.

 

19

 

Section 10.4         Unfunded Status of Plan.  The Plan will be unfunded.  The Corporation will not be required to
establish any special or separate fund nor to make any other segregation of
assets to assume the payment of any benefits under the Plan.  With respect to any payments not yet made to
a Participant pursuant to an Award, nothing contained in the Plan or any Award
will give any such Participant any rights that are greater than those of a
general unsecured creditor of the Corporation, provided that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Corporation’s obligations under the Plan to deliver cash, shares or other
property pursuant to any Award, which trusts or other arrangements will be
consistent with the “unfunded” status of the Plan unless the Committee
otherwise determines.

 

Section 10.5         Tax Withholding.  Whenever the Corporation proposes or is required to
distribute Stock under the Plan, the Corporation may require the recipient to
remit to the Corporation an amount sufficient to satisfy any Federal, state and
local tax withholding requirements prior to the delivery of any certificate for
such shares or, in the discretion of the Committee, the Corporation may
withhold from the shares to be delivered the minimum number of shares
sufficient to satisfy all or a portion of such tax withholding
requirements.  Whenever payments under
the Plan are to be made in cash, such payments may be net of an amount
sufficient to satisfy any Federal, state and local tax withholding
requirements.

 

Any Award may provide
that the Participant may elect, in accordance with any conditions set forth in
such Award, to pay any withholding taxes in shares of Stock, provided that the
Participant, by accepting the Award will be deemed to instruct and authorize
the Corporation or its delegatee for such purpose to sell on his or her behalf
a whole number of shares of Stock from those shares of Stock issuable to the
Participant in payment of vested shares of Restricted Stock or Restricted Stock
Units as the Corporation or its delegatee determines to be appropriate to
generate cash proceeds sufficient to satisfy the minimum tax withholding
obligation.  This direction and
authorization is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of
the Exchange Act, and to be interpreted to comply with the requirements of Rule 10b5-1(c) of
the Exchange Act.  Such shares will be
sold on the day the Restricted Stock or Restricted Stock Units become vested,
which is the date the tax withholding obligation arises, or as soon thereafter
as practicable.  Unless otherwise
provided by the Committee, the Participant will be responsible for all
brokerage fees and other costs of sale, and the Participant will agree to
indemnify and hold the Corporation harmless from any losses, costs, damages, or
expenses relating to any such sale.  To
the extent the proceeds of such sale exceed the Participant’s minimum tax
withholding obligation (e.g., because of the need to sell whole
shares), the Corporation or its delegatee will pay such excess in cash to the
Participant through payroll as soon as practicable.  The Corporation is under no obligation to
arrange for such sale at any particular price. 
The Participant agrees to pay to the Corporation as soon as practicable,
including through additional payroll withholding, any amount of the tax
withholding obligation that is not satisfied by the sale of shares described
above.

 

Section 10.6         Benefits. 
Amounts received under the Plan are not to be taken into account for
purposes of computing benefits under other plans.

 

Section 10.7         Successors and Assigns.  The terms of the Plan will be binding upon the
Corporation and its successors and assigns.

 

20

 

Section 10.8         Headings.  Captions preceding the sections hereof are inserted
solely as a matter of convenience and in no way define or limit the scope or
intent of any provision hereof.

 

Section 10.9         Federal and State Laws, Rules and
Regulations.  The Plan and the grant of Awards will be
subject to all applicable Federal, state, and local laws, rules and
regulations and to such approval by any government or regulatory agency as may
be required.

 

Section 10.10       Governing Law. 
To the extent not preempted by Federal law, the Plan, any Award
Agreement, and documents evidencing Awards or rights relating to Awards will be
construed, administered and governed in all respects under and by the laws of
the State of Delaware, without giving effect to its conflict of laws
principles.  If any provision of the Plan
will be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof will continue to be fully
effective.  The jurisdiction and venue
for any disputes arising under, or any action brought to enforce (or otherwise
relating to), the Plan will be exclusively in the courts in the State of
Illinois, County of Cook, including the Federal Courts located therein (should
Federal jurisdiction exist).

 

Section 10.11       Beneficiary Designation. 
Each Participant may name, from time to time, any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case the Participant should die or
become Disabled before receiving any or all of his or her Plan benefits.  Each beneficiary designation will revoke all
prior designations by the same Participant, must be in a form prescribed by the
Committee, and must be made during the Participant’s lifetime.  If the Participant’s designated beneficiary
predeceases the Participant or no beneficiary has been designated, benefits
remaining unpaid at the Participant’s death will be paid to the Participant’s
estate or other entity described in the Award Agreement.

 

Section 10.12       Forfeiture Events.

 

(a)                                  The Committee may specify in the Award
Agreement that the Participant’s rights, payments, and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture, or recoupment
upon the occurrence of specified events, in addition to any otherwise
applicable vesting or performance conditions of an Award.  Such events may include, but shall not be
limited to, termination of Service for Cause or any act by a Participant,
whether before or after termination of Service, that would constitute Cause for
termination of Service.

 

(b)                                 The Award Agreement may provide that,
notwithstanding any other provision of the Plan to the contrary, if the
Participant breaches the non-compete, non-solicitation, non-disclosure or other
restrictive covenants of the Award Agreement, whether during or after
termination of Service, in addition to any other penalties or restrictions that
may apply under any employment agreement, state law, or otherwise, the
Participant will forfeit:

 

(i)                                     any and all Awards granted to him or her
under the Plan, including Awards that have become vested and exercisable;
and/or

 

(ii)                                  the profit the Participant has realized
on the exercise of any Options, which is the difference between the Exercise
Price and the Fair Market 

 

21

 

Value of the Option that
the Participant exercises after terminating Service and within the six-month
period immediately preceding the Participant’s termination of Service (the
Participant may be required to repay such difference to the Corporation).

 

Section 10.13       Notice. 
Any notice or other communication required or permitted under the Plan
must be in writing and must be delivered personally, sent by certified,
registered or express mail, or sent by overnight courier, at the sender’s
expense.  Notice will be deemed given (a) when
delivered personally or, (b) if mailed, three days after the date of
deposit in the United States mail or, (c) if sent by overnight courier, on
the regular business day following the date sent.  Notice to the Corporation should be sent to
CBOE Holdings, Inc., 400 South LaSalle Street, Chicago, Illinois 60605,
Attention: General Counsel.  Notice to
the Participant should be sent to the address set forth on the Corporation’s
records.  Either party may change the
address to which the other party must give notice under this Section 10.13
by giving the other party written notice of such change, in accordance with the
procedures described above.

 

Section 10.14       Awards Not Transferable. 
Except as otherwise provided in the Award Agreement, no Option,
Restricted Stock Award, or Restricted Stock Unit (or the right to receive
shares of Stock under such Award) may be sold, transferred, exchanged, pledged,
assigned, garnished, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution, or pursuant to a domestic relations
order (as defined in Code Section 414(p)). 
The Committee may require, in its discretion, a Participant’s guardian
or legal representative to supply it with the evidence the Committee deems
necessary to establish the authority of the guardian or legal representative to
act on behalf of the Participant.  The
Award Agreement for a grant of Non-Qualified Stock Options may permit or may be
amended to permit the Participant who received the Option, at any time prior to
the Participant’s death, to assign all or any portion of the Option granted to
him or her to (a) the Participant’s spouse or lineal descendants; (b) the
trustee of a trust for the primary benefit of the Participant, the Participant’s
spouse or lineal descendants, or any combination thereof; (c) a
partnership of which the Participant, the Participant’s spouse and/or lineal
descendants are the only partners; (d) custodianships for lineal descendants
under the Uniform Transfers to Minors Act or any other similar statute; or (e) upon
the termination of a trust by the custodian or trustee thereof or the
dissolution or other termination of the family partnership or the termination
of a custodianship under the Uniform Transfers to Minors Act or other similar
statute, to the person or persons who, in accordance with the terms of such
trust, partnership or custodianship are entitled to receive Options held in
trust, partnership or custody.  In such
event, the spouse, lineal descendant, trustee, partnership or custodianship
will be entitled to all of the Participant’s rights with respect to the
assigned portion of such Option, and such portion of the Option will continue
to be subject to all of the terms, conditions and restrictions applicable to
the Option, as set forth herein and in the related Award Agreement.  Any such assignment will be permitted only if
(i) the Participant does not receive any value or consideration thereof
and (ii) the assignment is expressly permitted by the applicable Award
Agreement.  The Committee’s approval of
the Award Agreement with assignment rights will not require the Committee to
include such assignment rights in the Award Agreement with any other
Participant.  Any such assignment will be
evidenced by an appropriate written document executed by the Participant, and
the Participant will deliver a copy thereof to the Committee on or prior to the
effective date of the assignment.  An assignee
or transferee of

 

22

 

an Option must sign an
agreement with the Corporation to be bound by the terms of the applicable Award
Agreement.

 

Section 10.15       Awards to Foreign Nationals and
Employees Outside the United States.  To the extent
the Committee deems it necessary, appropriate or desirable to comply with
foreign law of practice and to further the purposes of the Plan, the Committee
may, without amending the Plan, (a) establish rules applicable to
Awards granted to Participants who are foreign nationals, are employed outside
the United States, or both, including rules that differ from those set
forth in the Plan, and (b) grant Awards to such Participants in accordance
with those rules.

 

Section 10.16       Compliance With Section 409A. 
Notwithstanding any provision of the Plan to the contrary, the Plan is,
and all Awards made under the Plan are, intended to comply with Section 409A,
including the exceptions for stock rights, short-term deferrals, separation pay
arrangements, reimbursements, and in-kind distributions, and shall be
construed, interpreted and administered accordingly.  If any provision of the Plan or the Award
Agreement needs to be revised to satisfy the requirements of Section 409A,
then such provision shall be modified or restricted to the extent and in the
manner necessary to be in compliance with such requirements of Section 409A
and any such modification will attempt to maintain the same economic results as
were intended under the Plan and Award Agreement.  The Corporation cannot guarantee that the
Awards, payments and benefits that may be made or provided under the Plan will
satisfy all applicable provisions of Section 409A.  Payments made to a Participant under the Plan
or the Award Agreement in error shall be returned to the Corporation and do not
create a legally binding right to such payments.

 

Section 10.17       Severability.  If any provision of the Plan or any Award Agreement is
determined to be invalid, illegal or unenforceable in any jurisdiction, or as
to any person, or would disqualify the Plan or any Award Agreement under any
law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or, if it cannot be so construed
or deemed amended without, in the Committee’s determination, materially
altering the intent of the Plan or the Award Agreement, such provision shall be
stricken as to such jurisdiction, person or Award Agreement, and the remainder
of the Plan and any such Award Agreement shall remain in full force and effect.

 

Section 10.18       Employment Agreement.  Notwithstanding any provision of the Plan or an Award
Agreement to the contrary, to the extent an
employment agreement between a Participant and the Corporation or an Affiliate
provides vesting terms with respect to an Award that are more favorable to the
Participant than those set forth in the Plan or an Award Agreement, the vesting
terms in such employment agreement shall control.

 

23Exhibit 4.7.1

 

AFFORDABLE RESIDENTIAL COMMUNITIES LP

 

71/2% SENIOR EXCHANGEABLE NOTES DUE 2025

 

 

INDENTURE

 

DATED AS OF AUGUST 9, 2005

 

 

U.S. BANK NATIONAL ASSOCIATION

 

AS TRUSTEE

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1 DEFINITIONS AND
  INCORPORATION BY REFERENCE

  	
  1

  
	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.2.

  	
  Other
  Definitions

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 1.3.

  	
  Trust
  Indenture Act Provisions

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 1.4.

  	
  Rules of
  Construction

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 THE SECURITIES

  	
  7

  
	
   

  	
   

  
	
  Section 2.1.

  	
  Form and
  Dating

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 2.2.

  	
  Execution
  and Authentication

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 2.3.

  	
  Registrar,
  Paying Agent and Exchange Agent

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.4.

  	
  Paying
  Agent to Hold Money in Trust

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.5.

  	
  Holder
  Lists

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.6.

  	
  Transfer
  and Exchange

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 2.7.

  	
  Replacement
  Securities

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 2.8.

  	
  Outstanding
  Securities

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 2.9.

  	
  Treasury
  Securities

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 2.10.

  	
  Temporary
  Securities

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 2.11.

  	
  Cancellation

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 2.12.

  	
  Legend;
  Additional Transfer and Exchange Requirements

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 2.13.

  	
  CUSIP
  Numbers

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 2.14.

  	
  Senior
  Unsecured Obligations

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 2.15.

  	
  Calculations
  Regarding the Securities

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 REDEMPTION AND
  REPURCHASES

  	
  15

  
	
   

  	
   

  
	
  Section 3.1.

  	
  Company’s
  Rights to Redeem; Notice to Trustee

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 3.2.

  	
  Selection
  of Securities to be Redeemed

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 3.3.

  	
  Notice
  of Redemption

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 3.4.

  	
  Effect
  of Notice of Redemption

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 3.5.

  	
  Deposit
  of Redemption Price

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 3.6.

  	
  Securities
  Redeemed in Part

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 3.7.

  	
  Repurchase
  of Securities at the Option of Holders on Specific Dates

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 3.8.

  	
  Repurchase
  of Securities at Option of the Holder Upon a Fundamental Change

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 3.9.

  	
  Company
  Purchases of Securities

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.10.

  	
  Repayment
  to the Company

  	
  23

  

 

i

 

	
  Section 3.11.

  	
  Compliance
  with Securities Laws

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 EXCHANGE

  	
  23

  
	
   

  	
   

  
	
  Section 4.1.

  	
  Exchange
  Right

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.2.

  	
  Exercise
  of Exchange Right

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.3.

  	
  Company’s
  Right to Elect to Pay Cash or Common Stock

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 4.4.

  	
  Fractions
  of Shares

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 4.5.

  	
  Adjustment
  of Exchange Rate

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 4.6.

  	
  Notice
  of Adjustment

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 4.7.

  	
  Consolidation
  or Merger of Parent

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 4.8.

  	
  Taxes
  on Exchange

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 4.9.

  	
  Exchange
  after Record Date

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 4.10.

  	
  Company
  Determination Final

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 4.11.

  	
  Responsibility
  of Trustee for Exchange Provisions

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 4.12.

  	
  Unconditional
  Right of Holders to Exchange

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 4.13.

  	
  Repayment
  to the Company

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 4.14.

  	
  Make-Whole
  Premium

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 COVENANTS

  	
  33

  
	
   

  	
   

  
	
  Section 5.1.

  	
  Payment
  of Securities

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.2.

  	
  SEC
  Reports

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 5.3.

  	
  Compliance
  Certificates

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.4.

  	
  Further
  Instruments and Acts

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.5.

  	
  Maintenance
  of Corporate Existence

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.6.

  	
  Rule144A
  Information Requirement

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.7.

  	
  Stay,
  Extension and Usury Laws

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 5.8.

  	
  Payment
  of Liquidated Damages

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
  35

  
	
   

  	
   

  
	
  Section 6.1.

  	
  Company
  May Consolidate, Etc, Only On Certain Terms

  	
  35

  
	
   

  	
   

  	
   

  
	
  Section 6.2.

  	
  Successor
  Substituted

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 DEFAULT AND
  REMEDIES

  	
  36

  
	
   

  	
   

  
	
  Section 7.1.

  	
  Events
  of Default

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 7.2.

  	
  Acceleration

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 7.3.

  	
  Other
  Remedies

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 7.4.

  	
  Waiver
  of Defaults and Events of Default

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.5.

  	
  Waiver
  of Compliance

  	
  38

  

 

ii

 

	
  Section 7.6.

  	
  Control
  by Majority

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.7.

  	
  Limitations
  on Suits

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 7.8.

  	
  Rights
  of Holders to Receive Payment and to Exchange

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 7.9.

  	
  Collection
  Suit by Trustee

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 7.10.

  	
  Trustee
  May File Proofs of Claim

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 7.11.

  	
  Priorities

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 7.12.

  	
  Undertaking
  for Costs

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 TRUSTEE

  	
  40

  
	
   

  	
   

  
	
  Section 8.1.

  	
  Duties
  of Trustee

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 8.2.

  	
  Rights
  of Trustee

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 8.3.

  	
  Individual
  Rights of Trustee

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.4.

  	
  Trustee’s
  Disclaimer

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.5.

  	
  Notice
  of Default or Events of Default

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.6.

  	
  Reports
  by Trustee to Holders

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.7.

  	
  Compensation
  and Indemnity

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 8.8.

  	
  Replacement
  of Trustee

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 8.9.

  	
  Successor
  Trustee by Merger, Etc

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.10.

  	
  Eligibility;
  Disqualification

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 8.11.

  	
  Preferential
  Collection of Claims Against Company

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 SATISFACTION AND
  DISCHARGE OF INDENTURE

  	
  44

  
	
   

  	
   

  
	
  Section 9.1.

  	
  Satisfaction
  and Discharge of Indenture

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 9.2.

  	
  Application
  of Trust Money

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.3.

  	
  Repayment
  to Company

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 9.4.

  	
  Reinstatement

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
  46

  
	
   

  	
   

  
	
  Section 10.1.

  	
  Without
  Consent of Holders

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 10.2.

  	
  With
  Consent of Holders

  	
  46

  
	
   

  	
   

  	
   

  
	
  Section 10.3.

  	
  Compliance
  with Trust Indenture Act

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 10.4.

  	
  Revocation
  and Effect of Consents

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 10.5.

  	
  Notation
  on or Exchange of Securities

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 10.6.

  	
  Trustee
  to Sign Amendments, Etc

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 10.7.

  	
  Effect
  of Supplemental Indentures

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 MISCELLANEOUS

  	
  48

  
	
   

  	
   

  
	
  Section 11.1.

  	
  Trust
  Indenture Act Controls

  	
  48

  

 

iii

 

	
  Section 11.2.

  	
  Notices

  	
  48

  
	
   

  	
   

  	
   

  
	
  Section 11.3.

  	
  Communications
  by Holders with Other Holders

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 11.4.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  49

  
	
   

  	
   

  	
   

  
	
  Section 11.5.

  	
  Record
  Date for Vote or Consent of Holders

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 11.6.

  	
  Rules by
  Trustee, Paying Agent, Registrar and Exchange Agent

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 11.7.

  	
  Legal
  Holidays

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 11.8.

  	
  Governing
  Law

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 11.9.

  	
  No
  Adverse Interpretation of Other Agreements

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 11.10.

  	
  No
  Recourse Against Others

  	
  50

  
	
   

  	
   

  	
   

  
	
  Section 11.11.

  	
  Successors

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.12.

  	
  Multiple
  Counterparts

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.13.

  	
  Separability

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 11.14.

  	
  Table
  of Contents, Headings, Etc.

  	
  51

  

 

iv

 

CROSS-REFERENCE TABLE*

 

	
  TIA SECTION

  	
   

  	
  INDENTURE

  SECTION

  
	
  Section

  	
  310(a)(1)

  	
   

  	
  8.10

  
	
   

  	
  (a)(2)

  	
   

  	
  8.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  8.10

  
	
   

  	
  (b)

  	
   

  	
  8.8; 8.10; 11.2

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
  311(a)

  	
   

  	
  8.11

  
	
   

  	
  (b)

  	
   

  	
  8.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
  312(a)

  	
   

  	
  2.5

  
	
   

  	
  (b)

  	
   

  	
  11.3

  
	
   

  	
  (c)

  	
   

  	
  11.2

  
	
  Section

  	
  313(a)

  	
   

  	
  8.6

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
  8.6

  
	
   

  	
  (c)

  	
   

  	
  8.6; 11.2

  
	
   

  	
  (d)

  	
   

  	
  8.6

  
	
  Section

  	
  314(a)

  	
   

  	
  5.2; 5.4; 11.2

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  11.4(a)

  
	
   

  	
  (c)(2)

  	
   

  	
  11.4(a)

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  11.4(b)

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  Section

  	
  315(a)

  	
   

  	
  8.1(b)

  
	
   

  	
  (b)

  	
   

  	
  8.5; 11.2

  
	
   

  	
  (c)

  	
   

  	
  8.1(a)

  
	
   

  	
  (d)

  	
   

  	
  8.1(c)

  
	
   

  	
  (e)

  	
   

  	
  7.12

  
	
  Section

  	
  316(a) (last
  sentence)

  	
   

  	
  2.9

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  7.6

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  7.4

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  7.8

  
	
   

  	
  (c)

  	
   

  	
  11.5

  
	
  Section

  	
  317(a)(1)

  	
   

  	
  7.9

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  2.4

  
	
  Section

  	
  318(a)

  	
   

  	
  11.1

  

 

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

 

v

 

THIS
INDENTURE dated as of August 9, 2005 is between Affordable Residential
Communities LP, a Delaware limited partnership (the “Company”), and U.S. Bank National Association, a national
banking association organized and existing under the laws of the United States,
as Trustee (the “Trustee”).

 

In
consideration of the premises herein and the purchase of the Securities by the
Holders thereof, the parties agree as follows for their mutual benefit and for
the equal and ratable benefit of the registered Holders of the Company’s 71/2% Senior Exchangeable Securities due 2025.

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1. Definitions.

 

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

 

“Agent”
means any Registrar, Paying Agent or Exchange Agent.

 

“Applicable
Procedures” means, with respect to any transfer or exchange of beneficial
ownership interests in a Global Security, the rules and procedures of the
Depositary, in each case to the extent applicable to such transfer or exchange.

 

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

 

“Business
Day” means each day on which the New York Stock Exchange is open for trading.

 

“Capital
Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) equity of such Person, but excluding any debt securities
convertible into such equity.

 

“Certificated
Security” means a Security that is in substantially the form attached hereto as
Exhibit A and that does not include the information or the schedule called
for by footnotes 1, 3 and 4 thereof.

 

“Change
of Control” means the occurrence of any of the following events:

 

(i)                                     any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing),
including any group acting for the purpose of acquiring, holding or disposing
of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act, becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act directly or indirectly) through a purchase, merger or
other acquisition transaction, of 50% or more of the total voting power of all
classes of Parent’s Voting Stock, other than an acquisition by the Company,
Parent, any of their Subsidiaries or any of the Company’s or Parent’s benefit
plans;

 

(ii)                                  the Company or
Parent consolidates with, or merges with or into, another person or conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any person, or any person consolidates with or merges with or into
the Company or Parent, other than (x) any transaction (A) that does
not result in any reclassification, exchange, or cancellation of outstanding
shares of Parent’s Capital Stock or the Company’s partnership interests, as the
case may be, and (B) pursuant to which holders of Parent’s Capital Stock
or the Company’s partnership interests, as applicable, immediately prior to the
transaction have the entitlement to exercise, directly or indirectly, 50% or
more of the total Voting Power of all shares of Parent’s Capital Stock or 50%
of the Voting Power of the Company’s partnership interests, as the case may be,
in each case, with 

 

 

respect
to the continuing or surviving entity of such transaction; or (y) any
merger solely for the purpose of changing jurisdiction of formation of the
Company or Parent and resulting in a reclassification, conversion or exchange
of outstanding shares of common stock or partnership units, as the case may be,
solely into shares of common stock or partnership units, as the case may be, of
the surviving entity;

 

(iii)                               from and after
the Issuance Date, during any consecutive two-year period, individuals who at
the beginning of that two-year period constituted the Board of Directors
(together with any new directors whose election to such Board of Directors, or
whose nomination for election by stockholders of Parent, was approved by a vote
of a majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of
the Board of Directors then in office; or

 

(iv)                              the Company or
Parent is liquidated or dissolved or approves a plan of liquidation or
dissolution.

 

“Closing
Price” means the price of a share of Common Stock on the relevant date,
determined (a) on the basis of the closing per share sale price (or if no
closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and average ask
prices) on such date on the principal national securities exchange on which the
Common Stock is listed; or (b) if the Common Stock is not listed on a
national securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System; or (c) if not so quoted, as
reported by National Quotation Bureau, Incorporated or similar organization. In
the absence of such a quotation or report, the Closing Price shall be such
price as the Board of Directors shall reasonably determine on the basis of such
quotations as most accurately reflecting the price that a fully informed buyer,
acting on his own accord, would pay to a fully informed seller, acting on his
own accord in an arms-length transaction, for a share of such Common Stock.

 

“Common
Stock” means the common stock of Parent, par value $0.01 per share, as it
exists on the date of this Indenture and any shares of any class or classes of
capital stock of Parent resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of Parent and which are not subject to redemption by
Parent; provided, however, that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable on exchange of Securities 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 party named as such in the first paragraph of this Indenture until a
successor replaces it pursuant to the applicable provisions of this Indenture,
and thereafter “Company” shall mean such successor Company.

 

“Corporate
Trust Office” means the office of the Trustee at which at any particular time
the trust created by this Indenture shall be administered which office at the
date of the execution of this Indenture is located at U.S. Bank National Association,
60 Livingston Avenue, EP-MN-WS3C, St. Paul, MN 55107-2292, Attention: Rick
Prokosch, or at any other time at such other address as the Trustee may
designate from time to time by notice to the Company.

 

“Default”
or “default” means, when used with respect to the Securities, any event which
is or, after notice or passage of time or both, would be an Event of Default.

 

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

 

2

 

“Exchange
Date” means, with respect to any Holder, the date on which such Holder has
satisfied all the requirements to exchange its Securities as described in Section 4.2
hereof.

 

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

 

“Exchange
Price” means, at any time, $1,000 divided by the Exchange Rate in effect at
such time, rounded to two decimal places (rounded up if the third decimal place
thereof is 5 or more and otherwise rounded down).

 

“Exchange
Rate” means initially 69.8812 shares per $1,000 principal amount of Securities,
subject to adjustment as set forth herein.

 

“Exchange
Value” means, on any Trading Day, the amount equal to the product of the Sale
Price at such time multiplied by the then current Exchange Rate.

 

“Final
Maturity Date” means August 15, 2025.

 

“Fundamental
Change” means the occurrence of either a “Change in Control” or a “Termination
of Trading.”

 

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

 

“GAAP”
means generally accepted accounting principles in the United States of America
as in effect from time to time, including those set forth in (1) the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (2) the statements and
pronouncements of the Financial Accounting Standards Board, (3) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (4) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma financial
statements) in registration statements filed under the Securities Act and
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC.

 

“Global
Security” means a permanent Global Security that is in substantially the form
attached hereto as Exhibit A and that includes the information and
schedule called for by footnotes 1, 3 and 4 thereof and which is deposited with
the Depositary or its custodian and registered in the name of the Depositary or
its nominee.

 

“Holder”
means the person in whose name a Security is registered on the Primary
Registrar’s books.

 

“Indenture”
means this Indenture as amended or supplemented from time to time pursuant to
the terms of this Indenture.

 

“Initial
Purchaser” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

“Issuance
Date” means the date on which the Securities are first authenticated and
issued.

 

“Liquidated
Damages” has the meaning specified in paragraph 3 of the Security.

 

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

 

“Officers’
Certificate” means a certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company and
by one other Officer.

 

3

 

“Opinion
of Counsel” means a written opinion from legal counsel. The counsel may be an
employee of, or counsel to, the Company or the Trustee.

 

“Parent”
means Affordable Residential Communities Inc., a Maryland corporation, and
its successors.

 

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

 

“Principal”
or “principal” of a debt security, including the Securities, means the
principal of the security plus, when appropriate, the premium, if any, on the
security.

 

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

 

“Registration
Rights Agreement” means the Registration Rights Agreement dated, as of August 9,
2005, among the Company, Parent and the Initial Purchaser.

 

“Rule 144”
means Rule 144 under the Securities Act or any successor to such Rule.

 

“Rule 144A”
means Rule 144A under the Securities Act or any successor to such Rule.

 

“SEC”
means the United States Securities and Exchange Commission.

 

“Securities”
means the 71/2% Senior Exchangeable Notes
due 2025 or any of them (each, a “Security”),
as amended or supplemented from time to time, that are issued under this
Indenture.

 

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

 

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

 

“Significant
Subsidiary” means, in respect of any Person, a Subsidiary of such Person that
would constitute a “significant subsidiary” as such term is defined under Rule 1-02
of Regulation S-X under the Securities Act and the Exchange Act.

 

“Subsidiary”
means, in respect of any Person, any corporation, association, partnership or
other business entity of which more than 50% of the total Voting Power thereof
is at the time owned or controlled, directly or indirectly, by (i) such
Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one
or more Subsidiaries of such Person.

 

“Termination
of Trading” means the occurrence
after the date hereof, of the following event: the Common Stock (or other
common stock for which the Securities are then exchangeable) is not listed for
trading on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United
States.

 

“TIA”
means the Trust Indenture Act of 1939, as amended, and the rules and
regulations thereunder as in effect on the date of this Indenture, except as
provided in Section 11.3, and except to the extent any amendment to the
Trust Indenture Act expressly provides for application of the Trust Indenture
Act as in effect on another date.

 

“Trading
Day” means, with respect to any security, each day, other than Saturday, Sunday
or any other day on which securities are not generally traded on the principal
exchange or market in which such security is traded.

 

“Transfer
Restricted Security” means a Security required to bear the restricted legend
set forth in the form of Security set forth in Exhibit A of this
Indenture.

 

4

 

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

 

“Trustee”
means the party named as such in the first paragraph of this Indenture until a
successor replaces it in accordance with the provisions of this Indenture, and
thereafter means the successor.

 

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

 

“Voting
Stock” of a Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof.

 

Section 1.2. Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Bankruptcy Law”

  	
   

  	
  8.1

  
	
  “Company Order”

  	
   

  	
  2.2

  
	
  “Exchange Agent”

  	
   

  	
  2.3

  
	
  “Exchange Notice”

  	
   

  	
  4.2(a)

  
	
  “Current Market Price”

  	
   

  	
  4.5(i)

  
	
  “Custodian”

  	
   

  	
  7.1

  
	
  “Depositary”

  	
   

  	
  2.1(a)

  
	
  “Distributed Assets or
  Securities”

  	
   

  	
  4.5(d)

  
	
  “Dividend Threshold
  Amount”

  	
   

  	
  4.5(e)

  
	
  “DTC”

  	
   

  	
  2.1(a)

  
	
  “Event of Default”

  	
   

  	
  7.1

  
	
  “Expiration Time”

  	
   

  	
  4.5(f)

  
	
  “Fair Market Value”

  	
   

  	
  4.5(i)

  
	
  “Fundamental Change
  Purchase Date”

  	
   

  	
  3.8(a)

  
	
  “Fundamental Change
  Company Notice”

  	
   

  	
  3.8(b)

  
	
  “Fundamental Change
  Purchase Notice”

  	
   

  	
  3.8(b)

  
	
  “Fundamental Change
  Purchase Price”

  	
   

  	
  3.8(a)

  
	
  “indenture securities”

  	
   

  	
  1.3

  
	
  “indenture securityholder”

  	
   

  	
  1.3

  
	
  “indenture to be
  qualified”

  	
   

  	
  1.3

  
	
  “indenture trustee”

  	
   

  	
  1.3

  
	
  “institutional trustee”

  	
   

  	
  1.3

  
	
  “Legal Holiday”

  	
   

  	
  11.7

  
	
  “Legend”

  	
   

  	
  2.12(a)

  
	
  “Make-Whole Premium”

  	
   

  	
  4.14

  
	
  “Maximum Exchange Rate”

  	
   

  	
  4.5(g)

  
	
  “Notice of Default”

  	
   

  	
  7.1

  
	
  “obligor”

  	
   

  	
  1.3

  
	
  “Optional Redemption”

  	
   

  	
  3.1(a)

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
  “Primary Registrar”

  	
   

  	
  2.3

  
	
  “Purchase Agreement”

  	
   

  	
  2.1

  
	
  “Purchased Shares”

  	
   

  	
  4.5(f)

  

 

5

 

	
  “Put Right Purchase Date”

  	
   

  	
  3.7(a)

  
	
  “Put Right Purchase
  Notice”

  	
   

  	
  3.7(b)

  
	
  “Put Right Purchase Offer”

  	
   

  	
  3.7(b)

  
	
  “Put Right Purchase Price”

  	
   

  	
  3.7(a)

  
	
  “QIB”

  	
   

  	
  2.1(a)

  
	
  “Record Date”

  	
   

  	
  4.5(i)

  
	
  “Redemption Price”

  	
   

  	
  3.1(a)

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Regular Record Date”

  	
   

  	
  3.1(a)

  
	
  “successor corporation”

  	
   

  	
  6.1(a)

  
	
  “Trigger Event”

  	
   

  	
  4.5(d)

  

 

Section 1.3. Trust Indenture Act Provisions.

 

Whenever
this Indenture refers to a provision of the TIA, that provision is incorporated
by reference in and made a part of this Indenture. The Indenture shall also
include those provisions of the TIA required to be included herein by the
provisions of the Trust Indenture Reform Act of 1990. The following TIA terms
used in this Indenture have the following meanings:

 

“indenture
securities” means the Securities;

 

“indenture
security holder” means a Holder;

 

“indenture
to be qualified” means this Indenture;

 

“indenture
trustee” or “institutional trustee” means the Trustee; and “obligor” on the
indenture securities means the Company or any other obligor on the Securities.

 

All
other terms used in this Indenture that are defined in the TIA, defined by TIA
reference to another statute or defined by any SEC rule and not otherwise
defined herein have the meanings assigned to them therein.

 

Section 1.4. Rules of Construction.

 

Unless
the context otherwise requires:

 

(a)                                  a term has the
meaning assigned to it;

 

(b)                                 an accounting
term not otherwise defined has the meaning assigned to it in accordance with
GAAP;

 

(c)                                  words in the
singular include the plural, and words in the plural include the singular;

 

(d)                                 provisions
apply to successive events and transactions;

 

(e)                                  the term
“merger” includes a statutory share exchange and the term “merged” has a
correlative meaning;

 

(f)                                    the masculine
gender includes the feminine and the neuter;

 

(g)                                 references to
agreements and other instruments include subsequent amendments thereto; and

 

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

 

6

 

ARTICLE 2

THE SECURITIES

 

Section 2.1. Form and Dating.

 

The
Securities and the Trustee’s certificate of authentication shall be substantially
in the respective forms set forth in Exhibit A, which Exhibit is
incorporated in and made part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall provide any such notations, legends or endorsements to
the Trustee in writing. Each Security shall be dated the date of its
authentication. The Securities are being offered and sold by the Company
pursuant to a Purchase Agreement, dated August 3, 2005 (the “Purchase Agreement”), among the Company,
Parent and the Initial Purchaser, in transactions exempt from, or not subject
to, the registration requirements of the Securities Act.

 

(a)                                  Restricted
Global Securities. All of the Securities are initially being offered
and sold to qualified institutional buyers as defined in Rule 144A
(collectively, “QIBs” or
individually, each a “QIB”) in
reliance on Rule 144A under the Securities Act and shall be issued
initially in the form of one or more Restricted Global Securities, which shall
be deposited on behalf of the purchasers of the Securities represented thereby
with the Trustee, at its Corporate Trust Office, as custodian for the
depositary, The Depository Trust Company (“DTC”)
(such depositary, or any successor thereto, being hereinafter referred to as
the “Depositary”), and registered
in the name of its nominee, Cede & Co., duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Securities
Custodian as hereinafter provided, subject in each case to compliance with the
Applicable Procedures.

 

(b)                                 Global
Securities In General. Each Global Security shall represent such
of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased,
as appropriate, to reflect exchanges, redemptions or purchases of such
Securities. Any adjustment of the aggregate principal amount of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee in
accordance with instructions given by the Holder thereof as required by Section 2.12
and shall be made on the records of the Trustee and the Depositary.

 

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

 

(c)                                  Book
Entry Provisions. The Company shall execute and the Trustee shall,
in accordance with this Section 2.1(c), authenticate and deliver initially
one or more Global Securities that (i) shall be registered in the name of
the Depositary, (ii) shall be delivered by the Trustee to the Depositary
or pursuant to the Depositary’s instructions and (iii) shall bear legends
substantially to the following effect:

 

“UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR 

 

7

 

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 DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”

 

Section 2.2. Execution and Authentication.

 

An
Officer shall sign the Securities for the Company by manual or facsimile
signature attested by the manual or facsimile signature of the Secretary or an
Assistant Secretary of the Company. Typographic and other minor errors or
defects in any such facsimile signature shall not affect the validity or
enforceability of any Security which has been authenticated and delivered by
the Trustee.

 

If
an Officer whose signature is on a Security no longer holds that office at the
time the Trustee authenticates the Security, the Security shall be valid
nevertheless.

 

A
Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under
this Indenture.

 

The
Trustee shall authenticate and make available for delivery Securities for
original issue in the aggregate principal amount of up to $87,000,000
($100,000,000 if the option set forth in Section 2(b) of the Purchase
Agreement is exercised in full) upon receipt of a written order or orders of
the Company signed by an Officer of the Company (a “Company Order”). The Company Order shall specify the amount
of Securities to be authenticated, shall provide that all such Securities will
be represented by a Restricted Global Security and the date on which each
original issue of Securities is to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed $87,000,000
($100,000,000 if the option set forth in Section 2(b) of the Purchase
Agreement is exercised in full) except as provided in Section 2.7.

 

The
Trustee shall act as the initial authenticating agent. Thereafter, the Trustee
may appoint an authenticating agent acceptable to the Company to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company or an Affiliate of
the Company.

 

The
Securities shall be issuable only in registered form without coupons and only
in denominations of $1,000 principal amount and any integral multiple thereof.

 

8

 

Section 2.3. Registrar, Paying Agent and Exchange Agent.

 

The
Company shall maintain one or more offices or agencies where Securities may be
presented for registration of transfer or for exchange (each, a “Registrar”), one or more offices or
agencies where Securities may be presented for payment (each, a “Paying Agent”), one or more offices or
agencies where Securities may be presented for exchange (each, an “Exchange Agent”) and one or more offices
or agencies where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will at all times
maintain a Paying Agent, Exchange Agent, Registrar and an office or agency
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served in the Borough of Manhattan, The City of New
York. One of the Registrars (the “Primary
Registrar”) shall keep a register of the Securities and of their
transfer and exchange.

 

The
Company shall enter into an appropriate agency agreement with any Agent not a
party to this Indenture. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of
the name and address of any Agent not a party to this Indenture. If the Company
fails to maintain a Registrar, Paying Agent, Exchange Agent or agent for
service of notices and demands in any place required by this Indenture, or
fails to give the foregoing notice, the Trustee shall act as such. The Company
or any Affiliate of the Company may act as Paying Agent (except for the
purposes of Section 5.1 and Article 9).

 

The
Company hereby initially designates the Trustee as Paying Agent, Registrar,
Custodian and Exchange Agent, and each of the Corporate Trust Office of the
Trustee and the office or agency of the Trustee (which shall initially be 100
Wall Street, Suite 1600, New York, NY 10005, Attention: Rick Prokosch),
shall be one such office or agency of the Company for each of the aforesaid
purposes.

 

Section 2.4. Paying Agent to Hold Money in Trust.

 

Prior
to 10:00 a.m., New York City time, on each due date of the principal of or
interest, if any, on any Securities, the Company shall deposit with a Paying
Agent a sum sufficient to pay such principal or interest, if any, so becoming
due. The Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal of or
interest, if any, on the Securities, and shall notify the Trustee of any
default by the Company (or any other obligor on the Securities) in making any
such payment. If the Company or an Affiliate of the Company acts as Paying
Agent, it shall, before 10:00 a.m., New York City time, on each due date
of the principal of or interest on any Securities, segregate the money and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee, and the Trustee may at any time
during the continuance of any default, upon written request to a Paying Agent,
require such Paying Agent to pay forthwith to the Trustee all sums so held in
trust by such Paying Agent. Upon doing so, the Paying Agent (other than the
Company) shall have no further liability for the money.

 

Section 2.5. Holder Lists.

 

The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders. If the
Trustee is not the Primary Registrar, the Company shall furnish to the Trustee
on or before each semiannual interest payment date, and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Holders.

 

Section 2.6. Transfer and Exchange.

 

Subject
to compliance with any applicable additional requirements contained in Section 2.12,
when a Security is presented to a Registrar with a request to register a
transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the Registrar 

 

9

 

shall register the transfer
or make the exchange as requested; provided,
however, that every Security
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by an assignment form and, if applicable, a transfer
certificate each in the form included in Exhibit B, and in form
satisfactory to the Registrar duly executed by the Holder thereof or its attorney
duly authorized in writing. To permit registration of transfers and exchanges,
upon surrender of any Security for registration of transfer or exchange at an
office or agency maintained pursuant to Section 2.3, the Company shall
execute and the Trustee shall authenticate Securities of a like aggregate
principal amount at the Registrar’s request. Any exchange or transfer shall be
without charge, except that the Company or the Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.

 

Neither
the Company, any Registrar nor the Trustee shall be required to exchange or
register a transfer of (i) any Securities for a period of 15 days
next preceding any mailing of a notice of Securities to be redeemed, (ii) any
Securities or portions thereof selected or called for redemption (except, in
the case of redemption of a Security in part, the portion thereof not to be
redeemed) or (iii) any Securities or portions thereof in respect of which
a Fundamental Change Company Notice has been delivered and not withdrawn by the
Holder thereof (except, in the case of the purchase of a Security in part, the
portion thereof not to be purchased). All Securities issued upon any transfer
or exchange of Securities shall be valid obligations of the Company, evidencing
the same debt and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.

 

Any
Registrar appointed pursuant to Section 2.3 shall provide to the Trustee
such information as the Trustee may reasonably require in connection with the
delivery by such Registrar of Securities upon transfer or exchange of
Securities.

 

Each
Holder of a Security agrees to indemnify the Company and the Trustee against
any liability that may result from the transfer, exchange or assignment of such
Holder’s Security in violation of any provision of this Indenture and/or
applicable United States federal or state securities law.

 

The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Agent Members or other
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.

 

Section 2.7. Replacement Securities.

 

If
any mutilated Security is surrendered to the Company, a Registrar or the
Trustee, or the Company, a Registrar and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company, the applicable Registrar and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company, such Registrar or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company
shall execute, and upon its written request the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.

 

In
case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, or is about to be redeemed or purchased by the
Company pursuant to Article 3, the Company in its discretion may, instead
of issuing a new Security, pay, redeem or purchase such Security, as the case
may be.

 

10

 

Upon
the issuance of any new Securities under this Section 2.7, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable
expenses (including the reasonable fees and expenses of the Trustee or the
Registrar) in connection therewith.

 

Every
new Security issued pursuant to this Section 2.7 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the mutilated, destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall
be entitled to all benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

 

The
provisions of this Section 2.7 are (to the extent lawful) exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.

 

Section 2.8. Outstanding Securities.

 

Securities
outstanding at any time are all Securities authenticated by the Trustee, except
for those canceled by it, those exchanged pursuant to Article 4, those
delivered to it for cancellation or surrendered for transfer or exchange and
those described in this Section 2.8 as not outstanding.

 

If
a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

 

If
a Paying Agent (other than the Company or an Affiliate of the Company) holds on
a Redemption Date, a Put Right Purchase Date, a Fundamental Change Purchase
Date or the Final Maturity Date money sufficient to pay the principal of
(including premium, if any) and accrued interest on Securities (or portions
thereof) payable on that date, then on and after such Redemption Date, Put
Right Purchase Date, Fundamental Change Purchase Date or the Final Maturity
Date, as the case may be, such Securities (or portions thereof, as the case may
be) shall cease to be outstanding and interest on them shall cease to accrue; provided, that if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefore satisfactory to the Trustee has been made.

 

A
Security does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Security.

 

Section 2.9. Treasury Securities.

 

In
determining whether the Holders of the required principal amount of Securities
have concurred in any notice, direction, waiver or consent, Securities owned by
the Company or any other obligor on the Securities or by any Affiliate of the
Company or of such other obligor shall be disregarded, except that, for
purposes of determining whether the Trustee shall be protected in relying on
any such notice, direction, waiver or consent, only Securities which a Trust
Officer of the Trustee actually knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right so to act with respect to the Securities and that the pledgee
is not the Company or any other obligor on the Securities or any Affiliate of
the Company or of such other obligor.

 

Section 2.10. Temporary Securities.

 

Until
definitive Securities are ready for delivery, the Company may prepare and
execute, and, upon receipt of a Company Order, the Trustee shall authenticate
and deliver, temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
with the consent of the Trustee considers appropriate for temporary Securities.

 

11

 

Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate and deliver definitive Securities in
exchange for temporary Securities.

 

Section 2.11. Cancellation.

 

The
Company at any time may deliver Securities to the Trustee for cancellation. The
Registrar, the Paying Agent and the Exchange Agent shall forward to the Trustee
or its agent any Securities surrendered to them for transfer, exchange,
redemption or payment. The Trustee and no one else shall cancel, in accordance
with its standard procedures, all Securities surrendered for transfer,
exchange, redemption or payment or cancellation and shall deliver the canceled
Securities to the Company. All Securities which are redeemed, purchased or
otherwise acquired by the Company or any of its Subsidiaries prior to the Final
Maturity Date shall be delivered to the Trustee for cancellation, and the
Company may not hold or resell such securities or issue any new Securities to
replace any such Securities or any Securities that any Holder has exchanged
pursuant to Article 4.

 

Section 2.12. Legend; Additional Transfer and Exchange
Requirements.

 

(a)                                  If Securities are
issued upon the transfer, exchange or replacement of Securities subject to
restrictions on transfer and bearing the legends set forth on the forms of
Securities attached hereto as Exhibit A (collectively, the “Legend”), or if a request is made to
remove the Legend on a Security, the Securities so issued shall bear the
Legend, or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence, which
shall include an opinion of counsel if requested by the Company or such
Registrar, as may be reasonably required by the Company and the Registrar, that
neither the Legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of Rule 144A
or Rule 144 under the Securities Act or that such Securities are not
“restricted” within the meaning of Rule 144 under the Securities Act; provided, that no such evidence need be
supplied in connection with the sale of such Security pursuant to a
registration statement that is effective at the time of such sale. Upon (i) provision
of such satisfactory evidence if requested, or (ii) notification by the
Company to the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
at the written direction of the Company, shall authenticate and deliver a
Security that does not bear the Legend. If the Legend is removed from the face
of a Security and the Security is subsequently held by an Affiliate of the
Company, the Legend shall be reinstated.

 

(b)                                 A Global
Security may not be transferred, in whole or in part, to any Person other than
the Depositary or a nominee or any successor thereof, and no such transfer to
any such other Person may be registered; provided,
that the foregoing shall not prohibit any transfer of a Security that is issued
in exchange for a Global Security but is not itself a Global Security. No
transfer of a Security to any Person shall be effective under this Indenture or
the Securities unless and until such Security has been registered in the name
of such Person. Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, shall be made
only in accordance with this Section 2.12.

 

(c)                                  Subject to the
succeeding paragraph, every Security shall be subject to the restrictions on
transfer provided in the Legend other than a Restricted Global Security.
Whenever any Transfer Restricted Security other than a Restricted Global
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder,
such Security must be accompanied by a certificate in substantially the form
set forth in Exhibit B, dated the date of such surrender and signed by the
Holder of such Security, as to compliance with such restrictions on transfer.
The Registrar shall not be required to accept for such registration of transfer
or exchange any Security not so accompanied by a properly completed
certificate.

 

12

 

(d)                                 The
restrictions imposed by the Legend upon the transferability of any Security
shall cease and terminate when such Security has been sold pursuant to an
effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor
provision thereto) or, if earlier, upon the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities
Act (or any successor provision). Any Security as to which such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the Registrar
in accordance with the provisions of this Section 2.12 (accompanied, in
the event that such restrictions on transfer have terminated by reason of a
transfer in compliance with Rule 144 or any successor provision, by, if
requested, an opinion of counsel reasonably acceptable to the Company,
addressed to the Company and in form acceptable to the Company, to the effect
that the transfer of such Security has been made in compliance with Rule 144
or such successor provision), be exchanged for a new Security, of like tenor
and aggregate principal amount, which shall not bear the restrictive Legend. The
Company shall inform the Trustee of the effective date of any registration
statement registering the Securities under the Securities Act. The Trustee
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the aforementioned opinion of counsel or registration
statement.

 

(e)                                  As used in the
preceding two paragraphs of this Section 2.12, the term “transfer”
encompasses any sale, pledge, transfer, hypothecation or other disposition of
any Security.

 

(f)                                    The provisions
of clauses (1), (2), (3), (4) and (5) below shall apply only to
Global Securities:

 

(1)                                  Notwithstanding
any other provisions of this Indenture or the Securities, a Global Security
shall not be exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more nominees thereof, provided, that a Global Security may be
exchanged for Securities registered in the names of any person designated by
the Depositary in the event that (A) the Depositary has notified the
Company that it is unwilling or unable to continue as Depositary for such
Global Security or such Depositary has ceased to be a “clearing agency”
registered under the Exchange Act, and a successor Depositary is not appointed
by the Company within 90 days, or (B) an Event of Default has
occurred and is continuing with respect to the Securities. Any Global Security
exchanged pursuant to clause (A) above shall be so exchanged in whole
and not in part, and any Global Security exchanged pursuant to clause (B) above
may be exchanged in whole or from time to time in part as directed by the
Depositary. Any Security issued in exchange for a Global Security or any
portion thereof shall be a Global Security; provided,
that any such Security so issued that is registered in the name of a Person
other than the Depositary or a nominee thereof shall not be a Global Security.

 

(2)                                  Securities
issued in exchange for a Global Security or any portion thereof shall be issued
in definitive, fully-registered book entry form, without interest coupons,
shall have an aggregate principal amount equal to that of such Global Security
or portion thereof to be so exchanged, shall be registered in such names and be
in such authorized denominations as the Depositary shall designate and shall
bear the applicable legends provided for herein. Any Global Security to be
exchanged in whole shall be surrendered by the Depositary to the Trustee, as
Registrar. With regard to any Global Security to be exchanged in part, either
such Global Security shall be so surrendered for exchange or, if the Trustee is
acting as custodian for the Depositary or its nominee with respect to such
Global Security, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the Security issuable on
such exchange to or upon the order of the Depositary or an authorized
representative thereof.

 

(3)                                  Subject to the
provisions of clause (5) below, the registered Holder may grant
proxies and otherwise authorize any Person, including Agent Members and persons
that may hold interests 

 

13

 

through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

 

(4)                                  In the event of
the occurrence of any of the events specified in clause (1) above,
the Company will promptly make available to the Trustee a reasonable supply of
Certificated Securities in definitive, fully registered form, without interest
coupons.

 

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

 

Section 2.13. CUSIP Numbers.

 

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

 

Section 2.14. Senior Unsecured Obligations.

 

The
Securities are senior unsecured obligations of the Company and rank equally in
right of payment with all existing and future unsecured and unsubordinated
indebtedness of the Company senior to existing and future subordinated
indebtedness of the Company.

 

Section 2.15. Calculations Regarding the Securities.

 

The
Company and its agents shall be responsible for making all calculations as
contemplated under this Indenture and the Securities. The Company and its
agents shall make such calculations in good faith, and absent manifest error,
such calculations shall be final and binding upon all Holders of the
Securities. The Company shall provide a copy of these calculations to the
Trustee, and, absent manifest error, the Trustee shall be entitled to rely on
the accuracy of such calculations without conducting an independent
verification as to the accuracy thereof.

 

14

 

ARTICLE 3

REDEMPTION AND REPURCHASES

 

Section 3.1. Company’s Rights to Redeem; Notice to
Trustee.

 

(a)                                  Prior to August 20,
2010, the Securities shall not be redeemable at the Company’s option. The
Securities may be redeemed at the election of the Company (the “Optional Redemption”), as a whole or from
time to time in part, at any time on or after August 20, 2010, at a
redemption price equal to 100% of the principal amount of those Securities plus
accrued and unpaid interest (including Liquidated Damages, if any) to, but not
including, such Redemption Date (the “Redemption
Price”), if the Closing Price of the Common Stock has exceeded 130%
of the Exchange Price for at least 20 Trading Days in any consecutive 30
Trading Day Period ending on or after the earliest date on which the Company
may mail the notice of redemption (and the Trustee shall be entitled to assume
that such condition has been satisfied based upon its receipt of the notice set
forth in Section 3.1(b)); provided,
that if the Redemption Date falls after an interest payment record date (the “Regular Record Date”) and on or before an
interest payment date, then the interest (including Liquidated Damages, if any)
will be payable to the Holders in whose name the Securities are registered at
the close of business on the Regular Record Date and the Redemption Price shall
not include such interest payment. The Company will make an additional payment
with respect to all Securities called for redemption, including any Securities
exchanged after the date the notice of redemption is mailed to Holders, equal
to the total value of the aggregate amount of the interest otherwise payable on
the Securities from the last day through which interest was paid on the
Securities through the Redemption Date.

 

(b)                                 If the Company
elects to redeem Securities pursuant to Section 3.1(a), it shall notify
the Trustee at least 45 but not more than 60 days prior to the Redemption
Date, as fixed by the Company, (unless a shorter notice shall be satisfactory
to the Trustee) of the Redemption Date and the principal amount of Securities
to be redeemed. If fewer than all of the Securities are to be redeemed, the
record date relating to such redemption shall be selected by the Company and
given to the Trustee, which record date shall not be less than ten days
after the date of notice to the Trustee.

 

Section 3.2. Selection of Securities to be Redeemed.

 

(a)                                  If less than
all of the Securities are to be redeemed, unless the Applicable Procedures
provide otherwise, the Trustee shall, at least 30 days but not more than
60 days prior to the Redemption Date, select the Securities to be
redeemed. The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption, by lot, or in its discretion, on a
pro rata basis. Securities in denominations of $1,000 may only be redeemed in
whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have denominations
larger than $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for partial
redemption.

 

(b)                                 If any Security
selected for partial redemption is exchanged in part before termination of the
exchange right with respect to the portion of the Security so selected, the
exchanged portion of such Security shall be deemed to be the portion selected
for redemption. Securities which have been exchanged during a selection of Securities
to be redeemed shall be treated by the Trustee as outstanding for the purpose
of such selection.

 

Section 3.3. Notice of Redemption.

 

(a)                                  At least
30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption to each Holder
of Securities to be redeemed at such Holder’s address as it appears on the
register of Securities maintained by the Primary Registrar.

 

15

 

(b)                                 The notice
shall identify the Securities (including CUSIP numbers) to be redeemed and
shall state:

 

(1)                                  the Redemption
Date;

 

(2)                                  the Redemption
Price;

 

(3)                                  the then
current Exchange Price;

 

(4)                                  the name and
address of each Paying Agent and Exchange Agent;

 

(5)                                  that Securities
called for redemption must be presented and surrendered to an Exchange Agent to
collect the Redemption Price;

 

(6)                                  that Holders
who wish to exchange Securities must surrender such Securities for exchange no
later than the close of business on the Business Day immediately preceding the
Redemption Date and must satisfy the other requirements set forth in Section 11
of the Securities;

 

(7)                                  that, unless
the Company defaults in making the payment of the Redemption Price, interest on
Securities called for redemption shall cease accruing on and after the
Redemption Date and the only remaining right of the Holder shall be to receive
payment of the Redemption Price plus any accrued but unpaid interest (including
Liquidated Damages, if any) upon presentation and surrender to a Paying Agent
of the Securities; and

 

(8)                                  if any Security
is being redeemed in part, the portion of the principal amount of such Security
to be redeemed and that, after the Redemption Date, upon presentation and
surrender of such Security, a new Security or Securities in aggregate principal
amount equal to the unredeemed portion thereof will be issued.

 

If any of the Securities to
be redeemed is in the form of a Global Security, then the Company shall modify
such notice to the extent necessary to accord with the Applicable Procedures.
At the Company’s written request, which request shall (i) be irrevocable
once given and (ii) set forth all relevant information required by clauses
(1) through (8) of the preceding paragraph, the Trustee shall give
the notice of redemption in the Company’s name and at the Company’s expense; provided that the text of such notice
shall be prepared by the Company.

 

Section 3.4. Effect of Notice of Redemption.

 

Once
notice of redemption is mailed, Securities called for redemption become due and
payable on the Redemption Date and at the Redemption Price stated in the
notice, together with accrued and unpaid interest (including Liquidated
Damages, if any) except for Securities that are exchanged in accordance with
the provisions of Article 4. Upon presentation and surrender to a Paying
Agent, Securities called for redemption shall be paid at the Redemption Price,
plus accrued and unpaid interest (including Liquidated Damages, if any) up to,
but not including, the Redemption Date; provided,
that if the Redemption Date falls after an interest payment record date and on
or before an interest payment date, then the interest (including Liquidated
Damages, if any) will be payable to the Holders in whose name the Securities
are registered at the Regular Record Date.

 

Section 3.5. Deposit of Redemption Price.

 

Prior
to noon, New York City time, on the Redemption Date, the Company shall deposit
with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of any
of them is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.4) an amount of cash (in immediately available funds
if deposited on such Redemption Date) sufficient to pay the Redemption Price of
and accrued and unpaid interest (including Liquidated Damages, if any) on all
Securities to be redeemed on that date, other than Securities or portions
thereof called for redemption on that date which have

 

16

 

been delivered by the
Company to the Trustee for cancellation or have been exchanged. The Paying
Agent shall as promptly as practicable return to the Company any money not
required for that purpose because of the exchange of Securities pursuant to Article 4
or, if such money is then held by the Company in trust and is not required for
such purpose, it shall be discharged from the trust.

 

If
the Paying Agent holds, in accordance with the terms hereof, at noon, New York
City time, on the Redemption Date, cash sufficient to pay the Redemption Price
and accrued and unpaid interest (including Liquidated Damages, if any) for all
Securities to be redeemed on such date, then, immediately after such Redemption
Date, such Securities shall cease to be outstanding and interest on such
Securities will cease to accrue, whether or not such Securities are delivered
to the Paying Agent, and the rights of the Holders in respect thereof shall
terminate (other than the right to receive the Redemption Price upon delivery
of such Securities).

 

Section 3.6. Securities Redeemed in Part.

 

Upon
presentation and surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder a
new Security equal in principal amount to the unredeemed portion of the Security
surrendered.

 

Section 3.7. Repurchase of Securities at the Option of
Holders on Specific Dates.

 

(a)                                  Securities
shall be purchased by the Company, at the option of the Holder thereof, on August 15,
2010, August 15, 2015 and August 15, 2020 (each, a “Put Right Purchase Date”), at a purchase
price equal to 100% of the principal amount of those Securities plus accrued
and unpaid interest (including Liquidated Damages, if any) to, but not
including, such Put Right Purchase Date (the “Put
Right Purchase Price”), subject to satisfaction by or on behalf of
the Holder of the requirements set forth in this Section 3.7.

 

(b)                                 No later than
20 days prior to each Put Right Purchase Date, the Company shall mail a
written notice of the repurchase right under Section 3.7(a) (a “Put Right Purchase Offer”) by first class
mail to the Paying Agent, which initially is the Trustee, and to each Holder
(and to beneficial owners as required by applicable law). The Company shall
disseminate a press release through Dow Jones & Company, Inc. or
Bloomberg Business News containing the information specified in such notice, or
publish the notice in a newspaper of general circulation in New York City, or
post the notice on Parent’s website, or disseminate the information through
some other public means that the Company, in its reasonable discretion, deems
appropriate. The Put Right Purchase Offer shall include a form of notice to be
completed by the Holder and returned to the Company in the event that the
Holder elects to exercise its repurchase rights under Section 3.7(a) (the
“Put Right Purchase Notice”). The
Put Right Purchase Offer shall briefly state, as applicable:

 

(1)                                  the amount of
Put Right Purchase Price;

 

(2)                                  that any
Securities with respect to which the Holder has delivered a Put Right Purchase
Notice may be exchanged in accordance with the terms of this Indenture only if
such Holder withdraws such Put Right Purchase Notice in accordance with Section 3.7(f);
and

 

(3)                                  the procedures
the Holder must follow in order to exercise its rights under this Section 3.7.

 

If any of the Securities
subject to the Put Right Purchase Offer is in the form of a Global Security,
then the Company shall modify such Put Right Purchase Offer to the extent
necessary to accord with the Applicable Procedures. At the Company’s written
request, which request shall (i) be irrevocable once given and (ii) set
forth all relevant information required by clauses (1) through (3) of
the preceding paragraph, the Trustee shall give the Put Right Purchase Offer in
the Company’s name and 

 

17

 

at the Company’s expense; provided that the text of the Put Right
Purchase Offer shall be prepared by the Company.

 

(c)                                  A Holder may
exercise its repurchase rights under Section 3.7(a) upon delivery of
a properly completed Put Right Purchase Notice to the Paying Agent at any time
during the period beginning at 9:00 a.m., New York City time, on the date
that is 20 days immediately preceding the relevant Put Right Purchase Date
until 5:00 p.m., New York City time, on the second Business Day
immediately preceding such Put Right Purchase Date, stating:

 

(1)                                  the certificate
number, if any, of the Security in respect of which such Put Right Purchase
Notice is being submitted or, if the Security is not then issued as a
Certificated Security, that the Put Right Purchase Notice complies with the
Applicable Procedures of the Depositary in effect at that time;

 

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

 

(3)                                  that such
Security shall be repurchased by the Company as of the Put Right Purchase Date
pursuant to the terms and conditions specified in the Securities and in this
Indenture.

 

(d)                                 The delivery of
a Security to the Paying Agent with, or at any time after delivery of, the
Purchase Notice (together with all necessary endorsements) at the offices of
the Paying Agent shall be a condition to the receipt by the Holder of the Put
Right Purchase Price therefor; provided,
however, that such Put Right
Purchase Price shall be so paid pursuant to this Section 3.7 only if the
Security so delivered to the Paying Agent shall conform in all respects to the
description thereof set forth in the related Put Right Purchase Notice.

 

The
Company shall repurchase from the Holder thereof, pursuant to this Section 3.7,
a portion of a Security, so long as the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the repurchase of all of a Security also apply to the repurchase of
such portion of such Security.

 

Notwithstanding
anything contained herein to the contrary, any Holder delivering to the Paying
Agent the Put Right Purchase Notice contemplated by Section 3.7(b) shall
have the right to withdraw such Put Right Purchase Notice at any applicable
time prior to 5:00 p.m., New York City time, on the second Business Day
immediately preceding the Put Right Purchase Date by delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 3.7(f).

 

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

 

(e)                                  Upon receipt by
the Paying Agent of the Put Right Purchase Notice specified in Section 3.7(b),
the Holder of the Security in respect of which such Put Right Purchase Notice
was given shall (unless such Put Right Purchase Notice is withdrawn as specified
in Section 3.7(f)) thereafter be entitled to receive solely the Put Right
Purchase Price with respect to such Security. Such Put Right Purchase Price
shall be paid to such Holder, subject to receipt of cash, by the Paying Agent,
promptly (but within two Business Days) following the later of (a) the Put
Right Purchase Date with respect to such Security (provided the conditions in Section 3.7(c) have
been satisfied) and (b) the time of delivery of such Security to the
Paying Agent by the Holder thereof in the manner required by Section 3.7(c).
Securities in respect of which a Put Right Purchase Notice has been given by
the Holder thereof may not be exchanged pursuant to Article 4 on or after
the date of the delivery of such Put Right Purchase Notice unless such Put
Right Purchase Notice has first been validly withdrawn as specified in Section 3.7(f).

 

18

 

(f)                                    A Put Right
Purchase Notice may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent in accordance with the Put Right
Purchase Notice at any time prior to 5:00 p.m., New York City time, on the
second Business Day immediately preceding the Put Right Purchase Date,
specifying:

 

(1)                                  the name of the
Holder;

 

(2)                                  a statement
that the Holder is withdrawing its election to require the Company to
repurchase its Securities;

 

(3)                                  the certificate
number, if any, of the Security in respect of which such notice of withdrawal
is being submitted or, if the Security is not then issued as a Certificated
Security, that the notice of withdrawal complies with the Applicable Procedures
of the Depositary in effect at that time;

 

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

 

(5)                                  the principal
amount, if any, of such Security which remains subject to the original Put
Right Purchase Notice and which has been or will be delivered for repurchase by
the Company, which must be an integral multiple of $1,000.

 

(g)                                 Prior to noon,
New York City time, on the Business Day following the applicable Put Right
Purchase Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of any of them is acting as the Paying
Agent, shall segregate and hold in trust as provided in Section 2.4) an
amount of cash (in immediately available funds if deposited on such Put Right
Purchase Date) sufficient to pay the aggregate Put Right Purchase Price of all
the Securities or portions thereof which are to be purchased on such Put Right
Purchase Date.

 

If
the Paying Agent holds, in accordance with the terms hereof, at noon, New York
City time, on the Business Day following the applicable Put Right Purchase
Date, cash sufficient to pay the Put Right Purchase Price of any Securities for
which a Put Right Purchase Notice has been tendered and not withdrawn pursuant
to Section 3.7(f), then, immediately after such Put Right Purchase Date,
such Securities will cease to be outstanding and interest on such Securities will
cease to accrue, whether or not such Securities are delivered to the Paying
Agent, and the rights of the Holders in respect thereof shall terminate (other
than the right to receive the Put Right Purchase Price upon delivery of such
Securities).

 

(h)                                 Any
Certificated Security which is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of the Security so
surrendered which is not repurchased.

 

Section 3.8. Repurchase of Securities at Option of the
Holder Upon a Fundamental Change.

 

(a)                                  If a
Fundamental Change occurs at any time prior to the Final Maturity Date, each
Holder will have the right to require the Company to repurchase all of its
Securities not previously called for redemption, or any portion of such
Securities, at a purchase price equal to 100% of the principal amount of all
such Securities, plus accrued and unpaid interest (including Liquidated
Damages, if any) on such Securities to, but not including, the Fundamental
Change Purchase Date (the “Fundamental
Change Purchase Price”), subject to satisfaction by or on behalf of
any Holder of the requirements set 

 

19

 

forth in this Section 3.8;
provided that the Company may not repurchase any Securities at the option of
Holders upon the occurrence of a Fundamental Change if there has occurred and
is continuing an Event of Default with respect to the Securities, other than a
default in the payment of the Fundamental Change Purchase Price. The date the
Company shall repurchase the Securities pursuant to this Section 3.8(a) (the
“Fundamental Change Purchase Date”)
shall be no earlier than 15 days and no later than 30 days after the
date of the mailing of the Fundamental Change Company Notice under Section 3.8(b).

 

(b)                                 No later than
20 days after the occurrence of a Fundamental Change, the Company shall
mail a written notice of such Fundamental Change (the “Fundamental Change Company Notice”) by
first class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law). The Company shall disseminate a press release
through Dow Jones & Company, Inc. or Bloomberg Business News
containing the information specified in such notice, or publish the notice in a
newspaper of general circulation in New York City, or post the notice on
Parent’s website, or disseminate the information through some other public
means that the Company, in its reasonable discretion, deems appropriate. The
Fundamental Change Company Notice shall include a form of notice to be
completed by the Holder in the event the Holder elects to exercise its
repurchase right under Section 3.8(a) (the “Fundamental Change Purchase Notice”). The
Fundamental Change Company Notice shall briefly state, as applicable:

 

(1)                                  the events
causing the Fundamental Change;

 

(2)                                  the date of
such Fundamental Change;

 

(3)                                  the Fundamental
Change Purchase Date;

 

(4)                                  the date by
which the Fundamental Change Purchase Notice must be delivered to the Paying
Agent in order for a Holder to exercise the Fundamental Change repurchase
right;

 

(5)                                  the amount of
the Fundamental Change Purchase Price;

 

(6)                                  the name and
address of the Paying Agent and the Exchange Agent;

 

(7)                                  the procedures
for withdrawing a Fundamental Change Repurchase Notice;

 

(8)                                  the Exchange
Rate applicable on the date of the Fundamental Change Company Notice and any
adjustments to the Exchange Rate that will result from the Fundamental Change
(including any Make-Whole Premium);

 

(9)                                  that the
Securities with respect to which the Holder has delivered a Fundamental Change
Purchase Notice may be exchanged in accordance with the terms of this
Indenture, only if such Holder withdraws such Fundamental Change Purchase
Notice in accordance with Section 3.8(f); and

 

(10)                            the procedures
the Holder must follow in order to exercise its rights under this Section 3.8.

 

If
any of the Securities subject to the Fundamental Change Company Notice is in
the form of a Global Security, then the Company shall modify such Fundamental Change
Company Notice to the extent necessary to accord with the Applicable
Procedures. At the Company’s written request, which request shall (i) be
irrevocable once given and (ii) set forth all relevant information
required by clauses (1) through (10) of the preceding paragraph, the
Trustee shall give the Fundamental Change Company Notice in the Company’s name
and at the Company’s expense; provided
that the text of the Fundamental Change Company Notice shall be prepared by the
Company.

 

(c)                                  A Holder may exercise
its repurchase rights under Section 3.8(a) upon delivery of a
properly completed Fundamental Change Purchase Notice to the Paying Agent at
any time from the opening of 

 

20

 

business on the date of the
Fundamental Change Company Notice until 5:00 p.m., New York City time, on
the fifth Business Day immediately preceding the Fundamental Change Purchase
Date, stating:

 

(1)                                  the certificate
number, if any, of the Security in respect of which such Fundamental Change
Purchase Notice is being submitted or, if the Security is not then issued as a
Certificated Security, that the Fundamental Change Purchase Notice complies
with the Applicable Procedures of the Depositary in effect at that time;

 

(2)                                  the portion of the
principal amount of the Security that the Holder will deliver to be
repurchased, which portion must be $1,000 or an integral multiple of $1,000;
and

 

(3)                                  that such
Security shall be repurchased on the Fundamental Change Repurchase Date
pursuant to the terms and conditions specified in the Securities and in this
Indenture.

 

(d)                                 The delivery of
a Security to the Paying Agent with, or at any time after delivery of, the
Fundamental Change Purchase Notice (together with all necessary endorsements)
at the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Fundamental Change Purchase Price therefor; provided, however,
that such Fundamental Change Purchase Price shall be so paid pursuant to this Section 3.8
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Fundamental Change
Purchase Notice.

 

The
Company shall repurchase from the Holder thereof, pursuant to this Section 3.8,
a portion of a Security, so long as the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the repurchase of all of a Security also apply to the repurchase of
such portion of such Security.

 

Notwithstanding
anything contained herein to the contrary, any Holder delivering to the Paying
Agent the Fundamental Change Purchase Notice contemplated by this Section 3.8
shall have the right to withdraw such Fundamental Change Purchase Notice at any
time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Fundamental Change Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section 3.8(f).

 

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

 

(e)                                  Upon receipt by
the Paying Agent of the Fundamental Change Purchase Notice specified in Section 3.8(b),
the Holder of the Security in respect of which such Fundamental Change Purchase
Notice was given shall (unless such Fundamental Change Purchase Notice is
withdrawn as specified in Section 3.8(f)) thereafter be entitled to
receive solely the Fundamental Change Purchase Price with respect to such Security.
Such Fundamental Change Purchase Price shall be paid to such Holder, subject to
receipt of cash, by the Paying Agent, promptly (but within two Business Days)
following the later of (a) the Fundamental Change Purchase Date with
respect to such Security (provided that the conditions set forth in Section 3.8(c) have
been satisfied) and (b) the time of delivery of such Security to the
Paying Agent by the Holder thereof in the manner required by Section 3.8(c).
Securities in respect of which a Fundamental Change Purchase Notice has been
given by the Holder thereof may not be exchanged pursuant to Article 4 on
or after the date of the delivery of such Fundamental Change Purchase Notice
unless such Fundamental Change Purchase Notice has first been validly withdrawn
as specified in Section 3.8(f).

 

(f)                                    A Fundamental
Change Purchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Fundamental Change Purchase Notice at any time prior to 5:00 p.m., New
York City time, on the fifth Business Day immediately preceding the Fundamental
Change Purchase Date, specifying:

 

(1)                                  the name of the
Holder;

 

21

 

(2)                                  a statement
that the Holder is withdrawing its election to require the Company to
repurchase its Securities;

 

(3)                                  the certificate
number, if any, of the Security in respect of which such notice of withdrawal
is being submitted or, if the Security is not then issued as a Certificated Security,
that the notice of withdrawal complies with the Applicable Procedures of the
Depositary in effect at that time;

 

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

 

(5)                                  the principal
amount, if any, of such Security which remains subject to the original
Fundamental Change Purchase Notice and which has been or will be delivered for
repurchase by the Company, which must be an integral multiple of $1,000.

 

(g)                                 Prior to noon,
New York City time, on the applicable Fundamental Change Purchase Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of any of them is acting as the Paying Agent, shall segregate
and hold in trust as provided in Section 2.4) an amount of cash (in
immediately available funds if deposited on such Fundamental Change Purchase
Date) sufficient to pay the aggregate Fundamental Change Purchase Price of all
the Securities or portions thereof which are to be repurchased on such
Fundamental Change Purchase Date.

 

If
the Paying Agent holds, in accordance with the terms hereof, at noon, New York
City time, on the applicable Fundamental Change Purchase Date, cash sufficient
to pay the Fundamental Change Purchase Price of any Securities for which a
Fundamental Change Fundamental Change Purchase Notice has been tendered and not
withdrawn pursuant to Section 3.8(f), then, immediately after such
Fundamental Change Purchase Date, such Securities will cease to be outstanding
and interest on such Securities will cease to accrue, whether or not such
Securities are delivered to the Paying Agent, and the rights of the Holders in
respect thereof shall terminate (other than the right to receive the
Fundamental Change Purchase Price upon delivery of such Securities).

 

(h)                                 Any
Certificated Security which is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of the Security so
surrendered which is not repurchased.

 

Section 3.9. Company Purchases of Securities.

 

The
Company may from time to time, to the extent permitted by applicable law,
purchase any or a certain amount of the Securities in the market on which such
Securities trade, or by commencing a tender offer under the rules and
regulations promulgated under the Securities Act and the Exchange Act, or by
entering into a private agreement with a third party. Upon the occurrence of
such an event, (a) after the date that is two years from the latest
issuance of the Securities, the Company may, at its option and to the extent
permitted by applicable law, reissue, resell or surrender to the Trustee for
cancellation any such Securities purchased and (b) on or prior to the date
that is two years from the latest issuance of the Securities, the Company
will surrender to the Trustee for cancellation any such Securities purchased.
Any such Securities surrendered to the Trustee for cancellation shall be
cancelled and shall not be reissued or resold.

 

22

 

Section 3.10. Repayment to the Company.

 

To
the extent that the aggregate amount of cash deposited by the Company pursuant
to this Article 3 exceeds the aggregate payment, thereon of the Securities
or portions thereof that the Company is obligated to purchase, then the Trustee
or a Paying Agent, as the case may be, shall promptly return any such excess
cash to the Company.

 

Section 3.11. Compliance with Securities Laws.

 

(a)                                  When complying
with the provisions of this Article 3 in respect of any redemption,
purchase or repurchase of the Securities, and subject to any exemptions
available under applicable law, the Company shall:

 

(1)                                  comply with Rule 13e-4
and Rule 14e-1 (or any successor provision) under the Exchange Act, as
applicable;

 

(2)                                  file the
related Schedule TO (or any successor schedule, form or report) under the
Exchange Act, as applicable; and

 

(3)                                  otherwise
comply with all federal and state securities laws so as to permit the rights
and obligations under this Article 3 to be exercised in the time and in
the manner specified therein.

 

(b)                                 To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of Article 3, the Company’s compliance with such laws and
regulations shall not in and of itself cause a breach of its obligations under
this Article 3.

 

ARTICLE 4

EXCHANGE

 

Section 4.1. Exchange Right.

 

(a)                                  Subject to the
provisions of this Article 4, a Holder of a Security shall have the right,
at such Holder’s option, to exchange all or any portion (if the portion to be
exchanged is $1,000 or an integral multiple of $1,000) of such Security into
shares of Common Stock at the Exchange Rate in effect on the date of exchange
at any time at any time prior to the earlier of (1) the close of business
on the Business Day prior to the Redemption Date and (2) the close of
business on the second Business Day immediately preceding the Final Maturity
Date.

 

(b)                                 The Company
agrees that it shall deliver cash, shares of Common Stock or a combination of
cash and shares of Common Stock to an exchanging Holder in accordance with the
provisions of this Article 4.

 

Section 4.2. Exercise of Exchange Right.

 

(a)                                  To exercise the
exchange right, the Holder of any Security to be exchanged shall in the case of
Global Securities, comply with the Applicable Procedures, and, in the case of
Certificated Securities, surrender such Security duly endorsed or assigned to
the Company or in blank, at the office of any Exchange Agent, accompanied by a
duly signed exchange notice (an “Exchange
Notice”) substantially in the form attached to the Security to the
Company stating that the Holder elects to exchange such Security or, if less
than the entire principal amount thereof is to be exchanged, the portion
thereof to be exchanged.

 

(b)                                 In the case of
any Certificated Security which is exchanged in part only, upon such exchange
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Company, a new Security or Securities of
authorized denominations in an aggregate principal amount equal to the
unexchanged portion of the principal amount of such Securities.

 

23

 

Section 4.3. Company’s Right to Elect to Pay Cash or
Common Stock.

 

In
lieu of delivery of Common Stock upon notice of exchange of any Securities (for
all or any portion of the Securities), the Company may elect to pay Holders
surrendering Securities an amount in cash per Security (or a portion of a
Security) equal to the Closing Price of Common Stock for the five consecutive
trading days commencing on and including the third Business Day following
the Exchange Date multiplied by the Exchange Rate in effect on the Exchange
Date. The Company will inform the Holders through the Trustee no later than two
business days following the Exchange Date of its election to pay cash in
lieu of delivery of Common Stock or to deliver a combination of cash and Common
Stock. If the Company elects to deliver all of such payment in Common Stock,
the Common Stock will be delivered by the Company through the Exchange Agent no
later than the third Business Day following the Exchange Date. If the Company
elects to pay all or a portion of such payment in cash, the payment, including
any delivery of Common Stock, will be made to Holders surrendering Securities
no later than the tenth Business Day following the applicable Exchange Date.

 

Section 4.4. Fractions of Shares.

 

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

 

Section 4.5. Adjustment of Exchange Rate.

 

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

 

(1)                                  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 of Parent entitled to receive such dividend or other distribution
plus the total number of shares of Common Stock constituting such dividend or
other distribution; and

 

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

 

such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. If any dividend or distribution of the type
described in this Section 4.5(a) is declared but not so paid or made,
the Exchange Rate shall again be adjusted to the Exchange Rate that would then
be in effect if such dividend or distribution had not been declared.

 

(b)                                 In case
outstanding shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the Exchange 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 Exchange 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 

 

24

 

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.

 

(c)                                  In case Parent
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 as of the record date
fixed for determination of stockholders of Parent entitled to receive such
rights or warrants, the Exchange Rate shall be increased so that the same shall
equal the rate determined by multiplying the Exchange Rate in effect
immediately prior to the date fixed for determination of stockholders of Parent
entitled to receive such rights or warrants by a fraction,

 

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

 

(2)                                  the denominator
of which shall be the sum of the number of shares of Common Stock outstanding
at the close of business on the record date fixed for determination of
stockholders of Parent 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 a price equal to the Current Market Price
as of the date immediately preceding the record date fixed for determination of
stockholders of Parent entitled to receive such rights or warrants.

 

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 of Parent
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 Exchange Rate shall be readjusted to the Exchange 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 Exchange
Rate shall again be adjusted to be the Exchange Rate that would then be in
effect if such date fixed for the determination of stockholders of Parent
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 a price less than the Current Market Price as of the
record date fixed for determination of stockholders of Parent entitled to
receive such rights or warrants, 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.

 

(d)                                 In case Parent
shall, by dividend or otherwise, distribute to all holders of its Common Stock
assets, debt securities, shares of any class of Capital Stock of Parent or
rights or warrants to purchase any securities of Parent excluding (x) any
dividend or distribution or issuance referred to in Section 4.5(c), (y) any
dividends or distributions in connection with a reclassification, change,
consolidation, merger, sale or conveyance for which the consideration payable
upon exchange of the Securities shall be changed in accordance with Section 4.7
and (z) any dividend or distribution paid exclusively in cash (any of the
foregoing hereinafter in this Section 4.5(d) referred to as “Distributed Assets or Securities”), then,
in each such case, the Exchange Rate shall be increased so that the same shall
be equal to the rate determined by multiplying the Exchange Rate in effect on
the Record Date with respect to such distribution by a fraction,

 

(1)                                  the numerator
of which shall be the Current Market Price on such Record Date plus the Fair
Market Value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of Directors)
on the Record Date of the 

 

25

 

portion
of the Distributed Assets or Securities so distributed applicable to one share
of Common Stock; and

 

(2)                                  the denominator
of which shall be the Current Market Price on such Record Date,

 

such adjustment to become
effective immediately prior to the opening of business on the day following
such Record Date. If such dividend or distribution is not so paid or made, the
Exchange Rate shall again be adjusted to be the Exchange 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 4.5(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.

 

Rights
or warrants distributed by the Company to all holders of Common Stock
(including, without limitation, rights issued pursuant to any rights agreement)
entitling the holders thereof to subscribe for or purchase shares of the
Company’s capital stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
(“Trigger Event”): (i) are
deemed to be transferred with such shares of Common Stock; (ii) are not
exercisable; and (iii) are also issued in respect of future issuances of
Common Stock, shall be deemed not to have been distributed for purposes of this
Section 4.5 (and no adjustment to the Exchange Rate will be required)
until the occurrence of the earliest Trigger Event, whereupon such rights and
warrants shall be deemed to have been distributed and an appropriate adjustment
(if any is required) to the Exchange Rate shall be made under this Section 4.5(d).
If any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon
the occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Exchange Rate under this Section 4.5
was made, (1) in the case of any such rights or warrants that shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Exchange Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect
to such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such rights or warrants
that shall have expired or been terminated without exercise thereof, the
Exchange Rate shall be readjusted as if such expired or terminated rights and
warrants had not been issued.

 

For
purposes of this Section 4.5(d) and Sections 4.5(a) and
(c), any dividend or distribution to which this Section 4.5(d) is
applicable that also includes shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock described in Sections 4.5(a) or
4.5(c) (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of assets, debt securities or shares of capital
stock other than such shares of Common Stock or rights or warrants (and any
Exchange Rate adjustment required by this Section 4.5(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 Exchange Rate adjustment required by
Sections 4.5(a) and 4.5(c) with respect to such dividend or
distribution shall then be made), except (A) the Record Date of such
dividend or distribution shall be substituted as “the date fixed for the
determination of stockholders of Parent entitled to receive such dividend or
other distribution”, “the date fixed for the determination of stockholders of
Parent entitled to receive such rights or warrants” 

 

26

 

and “the date fixed for such
determination” within the meaning of Sections 4.5(a) and 4.5(c) and
(B) any shares of Common Stock included in such dividend or distribution
shall not be deemed “outstanding at the close of business on the date fixed for
such determination” within the meaning of Section 4.5(a).

 

(e)                                  In case Parent
shall, by dividend or otherwise, make distributions consisting exclusively of
cash to all holders of its Common Stock, excluding any cash dividend on the
Common Stock to the extent that the aggregate cash dividends per share of
Common Stock in any quarter does not exceed $0.1875 (the “Dividend Threshold Amount”) then, in such
case, the Exchange Rate shall be increased so that the same shall equal the
rate determined by multiplying the Exchange Rate in effect immediately prior to
the close of business on such record date by a fraction,

 

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

 

(2)                                  the denominator
of which shall be the Current Market Price minus the amount of cash in excess
of the Dividend Threshold Amount applicable to one share of Common Stock on
such record date,

 

such adjustment to be
effective immediately prior to the opening of business on the day following the
record date. If such dividend or distribution is not so paid or made, the
Exchange Rate shall again be adjusted to be the Exchange Rate that would then
be in effect if such dividend or distribution had not been declared. If an
adjustment is required to be made as set forth in this Section 4.5(e) above
as a result of a distribution that is not a cash dividend, such adjustment
shall be based upon the full amount of the distribution.

 

(f)                                    In case a
tender or exchange offer made by Parent or any of its Subsidiaries (including
the Company) 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 Parent 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 Exchange Rate shall be increased so that the same shall
equal the rate determined by multiplying the Exchange Rate in effect
immediately prior to the Expiration Time by a fraction,

 

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

 

(2)                                  the denominator
of which shall be the number of shares of Common Stock outstanding (including
any Purchased 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 Exchange Rate shall again be adjusted to be the Exchange Rate
that would then be in effect if such tender or exchange offer had not been
made.

 

27

 

(g)                                 Notwithstanding
anything to the contrary, in the event of an adjustment to the Exchange Rate
pursuant to Section 4.5(e) or (f), in no event will the Exchange Rate
for any series of Securities exceed 82.1018 (the “Maximum Exchange Rate”). The Maximum Exchange Rate is
subject to the same proportional adjustments made to the Exchange Rate pursuant
to Sections 4.5(a), (b), (c) or (d).

 

(h)                                 If any
adjustment or readjustment is made to the Exchange Rate pursuant to this Section 4.5
(other than any adjustment pursuant to Section 4.5(e)), the same
proportional adjustment shall be made to the Dividend Threshold Amount; provided that, (x) in the event the
Exchange Rate is increased (other than pursuant to Section 4.5(e)), the
Dividend Threshold Amount shall be proportionally decreased, and (y) in
the event the Exchange Rate is decreased (other than pursuant to Section 4.5(e)),
the Dividend Threshold Amount shall be proportionally increased.

 

(i)                                     For purposes of
this Section 4.5, the following terms shall have the meaning indicated:

 

(1)                                  “Current Market Price” shall mean, for
purposes of any dividend or distribution requiring adjustment under Section 4.5(d) or
Section 4.5(e), the average of the daily Closing Prices per share of
Common Stock for the 5 consecutive Trading Days beginning on the Ex-Dividend
Date for such dividend or distribution.

 

If another dividend or distribution to which Section 4.5 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.

 

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

 

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

 

(j)                                     The Company may
make such reductions in the Exchange Rate in addition to those otherwise
required by this Section 4.5 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 Exchange Rate for any series of Securities by any amount for any
period of time if the period is at least 20 days, the increase is
irrevocable during the period and the Board of Directors shall have made a
determination that such increase would be in the best interests of the Company,
which determination shall be conclusive. Whenever the Exchange Rate is
increased pursuant to the preceding sentence, the Company shall mail to Holders
a notice of the increase at least 15 days prior to the date the increased
Exchange Rate takes effect, and such notice shall state the increased Exchange
Rate and the period during which it will be in effect.

 

(k)                                  No adjustment
in the Exchange Rate for any series of Securities shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%)
in such rate; provided that any
adjustments that by reason of this Section 4.5(k) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article 4 shall 

 

28

 

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.

 

(l)                                     No adjustment
to the Exchange Rate need be made for a transaction referred to in this Article 4
if Holders are to participate in the transaction without exchange on a basis
and with notice that the Board of Directors determines in good faith to be fair
and appropriate in light of the basis and notice on which holders of Common
Stock participate in the transaction (which determination shall be described in
a Board Resolution).

 

(m)                               For purposes of
this Section 4.5, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of Parent, unless
such treasury shares participate in any distribution or dividend that requires
an adjustment pursuant to this Section 4.5, but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares
of Common Stock.

 

Section 4.6. Notice of Adjustment.

 

(a)                                  Whenever an
adjustment in the Exchange Rate with respect to the Securities is required:

 

(1)                                  the Company
shall forthwith place on file with the Trustee and any Exchange Agent for such
securities a certificate of the Treasurer of the Company, stating the adjusted
Exchange Rate determined as provided herein and setting forth in reasonable
detail such facts as shall be necessary to show the reason for and the manner
of computing such adjustment; and

 

(2)                                  a notice
stating that the Exchange Rate has been adjusted and setting forth the adjusted
Exchange Rate shall forthwith be given by the Company or, at the Company’s
request, by the Trustee in the name and at the expense of the Company, to each
Holder. Any notice so given shall be conclusively presumed to have been duly
given, whether or not the Holder receives such notice.

 

(b)                                 If the Company
takes any action, or becomes aware of an event, that would require an
adjustment to the Exchange Rate as described in Section 4.5(a), (b), (c),
(d), (e) and (f), the Company shall mail to Holders a written notice of
such action or event at least 20 days prior to the record, effective or
expiration date, as the case may be, of the transaction.

 

Section 4.7. Consolidation or Merger of Parent.

 

If
any of the following events occurs, namely:

 

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

 

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

 

(c)                                  any sale or
conveyance of all or substantially all the properties and assets of Parent to
any other person as a result of which all of the holders of Common Stock shall
be entitled to receive stock, securities or other property or assets (including
cash or any combination thereof) with respect to or in exchange for all of
their Common Stock;

 

in each case as a result of
which holders of Common Stock are entitled to receive stock, other securities,
other property or assets (including cash or any combination thereof) with
respect to or in exchange for Common Stock, the Company shall execute with the
Trustee a supplemental indenture (which shall comply with the TIA as in force
at the date of execution of such supplemental indenture, 

 

29

 

if such supplemental
indenture is then required to so comply) providing that the Holder’s right to
exchange a Security into Common Stock shall be changed to a right to exchange a
Security into the kind and amount of shares of stock and other securities or
property or assets (including cash) which such Holder would have been entitled
to receive upon such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance had such Securities been
exchanged into Common Stock immediately prior to such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance. In the event holders of Common Stock have the opportunity to elect
the form of consideration to be received in a reclassification, change, consolidation,
merger combination, sale or conveyance, the Company shall make adequate
provision whereby the Holders of the Securities shall have the opportunity, on
a timely basis, to determine the form of consideration into which all of the
Securities, treated as a single class, shall be exchangeable. Such
determination shall be based on the blended, weighted average of elections made
by Holders of the Securities who participate in such determination and shall be
subject to any limitations to which all of the holders of Common Stock are
subject to, such as pro-rata reductions applicable to any portion of the
consideration payable.

 

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

 

The
above provisions of this Section 4.7 shall similarly apply to successive
reclassifications, changes, mergers, consolidations, statutory share exchanges,
combinations, sales and conveyances.

 

If
this Section 4.7 applies to any event or occurrence, Section 4.5
shall not apply.

 

Section 4.8. Taxes on Exchange.

 

The
issue of stock certificates on exchange of Securities shall be made without
charge to the exchanging Holder for any documentary, stamp or similar issue or
transfer taxes in respect of the issue thereof, and the Company shall pay any
and all documentary, stamp or similar issue or transfer taxes that may be
payable in respect of the issue or delivery of shares of Common Stock on
exchange of Securities pursuant hereto. The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or the portion, if
any, of the Securities which are not so exchanged in a name other than that in
which the Securities so exchanged were registered, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of such tax or has established to the
satisfaction of the Company that such tax has been paid.

 

Nothing
contained herein shall preclude any income tax withholding required by law or
regulation upon exchange of the Securities. Upon surrender of a Security for
exchange, the Holder shall deliver to the Company cash in an amount equal to
the applicable income tax withholding in connection with such exchange; provided, however,
that if the Holder does not deliver such cash, the Company may deduct and
withhold from the consideration otherwise deliverable to such Holder the amount
required to be so withheld.

 

Section 4.9. Exchange after Record Date.

 

Except
as provided in this Section 4.9, an exchanging Holder of Securities shall
not be entitled to receive any accrued and unpaid interest (including
Liquidated Damages, if any) on any such Securities being exchanged. By delivery
to the Holder of the number of shares of Common Stock or other consideration
issuable or payable upon exchange in accordance with this Article 4, any
accrued and unpaid interest (including Liquidated Damages, if any), on such
Securities will be deemed to have been paid in full. If any Securities are
surrendered for exchange subsequent to the Record Date preceding 

 

30

 

an Interest Payment Date but
prior to such Interest Payment Date, the Holder of such Securities at the close
of business on such Record Date shall receive the interest payable on such
Security on such Interest Payment Date notwithstanding the exchange thereof.
Securities surrendered for exchange during the period from the close of
business on any Record Date preceding any Interest Payment Date to the opening
of business on such Interest Payment Date shall (except in the case of
Securities which have been called for redemption on a Redemption Date within
such period) be accompanied by payment from exchanging Holders, for the account
of the Company, in New York Clearing House funds, or other funds of an amount
equal to the interest payable on such Interest Payment Date (excluding any
overdue interest, if applicable) on the Securities being surrendered for
exchange; provided, however, if the Company elects to redeem
Securities on a date that is after the Regular Record Date but prior to the
corresponding Interest Payment Date, and such Holder elects to exchange those
Securities, the Holder will not be required to pay the Company, at the time
that Holder surrenders those Securities for exchange, the amount of interest
such Holder will have received on the Interest Payment Date.

 

Section 4.10. Company Determination Final.

 

Any
determination that the Company or the Board of Directors must make pursuant to
this Article 4 shall be conclusive if made in good faith and in accordance
with the provisions of this Article, absent manifest error, and set forth in a
Board Resolution.

 

Section 4.11. Responsibility of Trustee for Exchange
Provisions.

 

The
Trustee has no duty to determine when an adjustment under this Article 4
should be made, how it should be made or what it should be. Unless and until a
Trust Officer of the Trustee receives a certificate delivered pursuant to Section 4.6
setting forth an adjustment of the Exchange Rate, the Trustee may assume
without inquiry that no such adjustment has been made and that the last
Exchange Rate of which the Trustee has knowledge remains in effect. The Trustee
makes no representation as to the validity or value of any securities or assets
issued upon exchange of Securities. The Trustee shall not be responsible for
any failure of the Company to comply with this Article 4. Each Exchange
Agent other than the Company shall have the same protection under this Section 4.11
as the Trustee.

 

The
rights, privileges, protections, immunities and benefits given to the Trustee
under this Indenture including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent or Exchange Agent acting
hereunder.

 

Section 4.12. Unconditional Right of Holders to
Exchange.

 

Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to exchange its Security in
accordance with this Article 4 and to bring an action for the enforcement
of any such right to exchange, and such rights shall not be impaired or
affected without the consent of such Holder.

 

Section 4.13. Repayment to the Company.

 

To
the extent that the aggregate amount of cash deposited by the Company pursuant
to this Article 4, if applicable, exceeds the aggregate payment thereon of
the Securities or portions thereof that the Company is obligated to purchase,
then the Trustee or a Paying Agent, as the case may be, shall promptly return
any such excess cash to the Company.

 

31

 

Section 4.14. Make-Whole Premium.

 

(a)                                  If a
Fundamental Change described in clauses (1), (2) or (4) of the
definition of “Change of Control” occurs prior to August 20, 2015, Holders
who exchange Securities in accordance with the provisions of this Article 4
in connection with such Fundamental Change shall be entitled to receive a “Make-Whole Premium” consisting of an
increase in the Exchange Rate. The Make-Whole Premium shall be calculated by
the Company and paid for in shares of Common Stock or, at the election of the
Company under Section 4.3, cash or a combination of cash and shares of
Common Stock. The number of additional shares of Common Stock by which the
Exchange Rate shall increase shall be determined by reference to the table
below and shall equal the number of shares of Common Stock for the applicable
Fundamental Change Effective Date and Stock Price (as set forth in such table)
of such Fundamental Change. If the applicable Fundamental Change Effective Date
and/or Stock Price is not set forth in the table then:

 

(1)                                  if the applicable
Fundamental Change Effective Date and/or Stock Price is between two Fundamental
Change Effective Dates or Stock Prices, as the case may be, set forth in the
table, the Make-Whole Premium shall be determined by a straight-line
interpolation between the Make-Whole Premiums set forth for the two Fundamental
Change Effective Dates and/or Stock Prices, as the case may be, set forth in
the table based on a 365-day year;

 

(2)                                  if the Stock
Price on the Fundamental Change Effective Date exceeds $50.00 a share, subject
to adjustment as set forth herein, no Make-Whole Premium shall be paid; and

 

(3)                                  if the Stock
Price on the Fundamental Change Effective Date is less than $12.18 a share,
subject to adjustment as set forth herein, no Make-Whole Premium shall be paid.

 

Effective Time

 

	
  Stock
  Price

  	
   

  	
  8/9/2005

  	
   

  	
  8/20/2006

  	
   

  	
  8/20/2007

  	
   

  	
  8/20/2008

  	
   

  	
  8/20/2009

  	
   

  	
  8/20/2010

  	
   

  	
  8/20/2011

  	
   

  	
  8/20/2012

  	
   

  	
  8/20/2013

  	
   

  	
  8/20/2014

  	
   

  	
  8/20/2015

  	
   

  
	
  $

  	
  12.18

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  12.2206

  	
   

  	
  0.0000

  	
   

  
	
  13.00

  	
   

  	
  10.2161

  	
   

  	
  9.8807

  	
   

  	
  9.5000

  	
   

  	
  9.1194

  	
   

  	
  8.6301

  	
   

  	
  7.9468

  	
   

  	
  7.4436

  	
   

  	
  7.0419

  	
   

  	
  7.0419

  	
   

  	
  7.0419

  	
   

  	
  0.0000

  	
   

  
	
  14.00

  	
   

  	
  8.3749

  	
   

  	
  8.0136

  	
   

  	
  7.6469

  	
   

  	
  7.2499

  	
   

  	
  6.7830

  	
   

  	
  6.2169

  	
   

  	
  5.5323

  	
   

  	
  4.6956

  	
   

  	
  3.7746

  	
   

  	
  2.7440

  	
   

  	
  0.0000

  	
   

  
	
  15.00

  	
   

  	
  6.9156

  	
   

  	
  6.4409

  	
   

  	
  6.0190

  	
   

  	
  5.6616

  	
   

  	
  5.2984

  	
   

  	
  4.9353

  	
   

  	
  4.4068

  	
   

  	
  3.6785

  	
   

  	
  2.7276

  	
   

  	
  1.4954

  	
   

  	
  0.0000

  	
   

  
	
  16.00

  	
   

  	
  5.9083

  	
   

  	
  5.2726

  	
   

  	
  4.6812

  	
   

  	
  4.1705

  	
   

  	
  3.7891

  	
   

  	
  3.3968

  	
   

  	
  3.0046

  	
   

  	
  2.6123

  	
   

  	
  2.2201

  	
   

  	
  1.2536

  	
   

  	
  0.0000

  	
   

  
	
  17.00

  	
   

  	
  5.2941

  	
   

  	
  4.5418

  	
   

  	
  3.7839

  	
   

  	
  3.0444

  	
   

  	
  2.3763

  	
   

  	
  2.0309

  	
   

  	
  1.9261

  	
   

  	
  1.6038

  	
   

  	
  1.2814

  	
   

  	
  0.9591

  	
   

  	
  0.0000

  	
   

  
	
  18.00

  	
   

  	
  5.0000

  	
   

  	
  4.1667

  	
   

  	
  3.2881

  	
   

  	
  2.4091

  	
   

  	
  1.4853

  	
   

  	
  0.4825

  	
   

  	
  0.4647

  	
   

  	
  0.4137

  	
   

  	
  0.3656

  	
   

  	
  0.2372

  	
   

  	
  0.0000

  	
   

  
	
  20.00

  	
   

  	
  4.5000

  	
   

  	
  3.7500

  	
   

  	
  2.8500

  	
   

  	
  2.0000

  	
   

  	
  1.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
  25.00

  	
   

  	
  3.6000

  	
   

  	
  3.0000

  	
   

  	
  2.2800

  	
   

  	
  1.6000

  	
   

  	
  0.8000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
  30.00

  	
   

  	
  3.0000

  	
   

  	
  2.5000

  	
   

  	
  1.9000

  	
   

  	
  1.3333

  	
   

  	
  0.6667

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
  40.00

  	
   

  	
  2.2500

  	
   

  	
  1.8750

  	
   

  	
  1.4250

  	
   

  	
  1.0000

  	
   

  	
  0.5000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
	
  50.00

  	
   

  	
  1.8000

  	
   

  	
  1.5000

  	
   

  	
  1.1400

  	
   

  	
  0.8000

  	
   

  	
  0.4000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  
																									

 

The Stock Prices set forth
in the table above shall be adjusted as of any date on which the Exchange Rate
of the Securities is adjusted by multiplying each such Stock Price in effect
immediately prior to such adjustment by a fraction, the numerator of which
shall be the Exchange Rate in effect immediately prior to the adjustment giving
rise to the Stock Price adjustment and the denominator of which shall be the
Exchange Rate as so adjusted. The number of additional shares set forth in the
table above shall be adjusted in the same manner as the Exchange Rate as set
forth in Section 4.5.

 

Delivery
of the payment of the Make-Whole Premium shall be upon the later of (x) the
settlement date of the exchange of Securities by the Holder and (y) promptly
following the Fundamental Change Effective Date.

 

32

 

(b)                                 An exchange of
Securities by a Holder will be deemed for the purposes of this Section 4.14
to be “in connection with” a Fundamental Change if the Exchange Notice
delivered by the Holder pursuant to Section 4.2(a) hereof is received
by a Exchange Agent (i) on or subsequent to the date that is 15 Business
Days prior to the date announced by the Company as the anticipated Fundamental
Change Effective Date but (ii) prior to the close of business on the
Business Day immediately preceding the related Fundamental Change Purchase
Date. The Company shall notify the Holders of an anticipated Fundamental Change
Effective Date at least 20 Business Days prior to such Fundamental Change
Effective Date.

 

(c)                                  Notwithstanding
any of the provisions of this Section 4.14, in no event shall the Exchange
Rate exceed 82.1018 shares per $1,000 principal amount of Securities (subject
to adjustment as provided herein).

 

ARTICLE 5

COVENANTS

 

Section 5.1. Payment of Securities.

 

The
Company shall promptly make all payments in respect of the Securities on the
dates and in the manner provided in the Securities and this Indenture. An
installment of principal or interest or Liquidated Damages, if any, shall be
considered paid on the date it is due if the Paying Agent (other than the Company)
holds by noon, New York City time, on that date money, deposited by the Company
or an Affiliate thereof, sufficient to pay the installment. The Company shall,
(in immediately available funds) to the fullest extent permitted by law, pay
interest on overdue principal (including premium, if any) and overdue
installments of interest at the rate borne by the Securities per annum.

 

Payment
of the principal of (and premium, if any) and any interest on the Securities
shall be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York (which shall
initially be U.S. Bank Trust National Association, an Affiliate of the Trustee,
as agent of the Trustee) or at the Corporate Trust Office of the Trustee in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address appears in
the register of Securities maintained by the Primary Registrar; provided, further,
that a Holder with an aggregate principal amount in excess of $5,000,000 will
be paid by wire transfer in immediately available funds at the election of such
Holder if such Holder has provided wire transfer instructions to the Company at
least 10 Business Days prior to the payment date.

 

Section 5.2. SEC Reports.

 

The
Company shall file all reports and other information and documents which it is
required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, and shall make such reports and other information and documents
available on its website to the extent required by law.

 

The
Company shall annually provide the Trustee with copies of Parent’s most-recent
annual report to stockholders, promptly after such annual report is mailed to
Parent’s holders of its Common Stock. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

33

 

Section 5.3. Compliance Certificates.

 

The
Company shall deliver to the Trustee, within 90 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending December 31,
2005), an Officers’ Certificate as to the signer’s knowledge of the Company’s
compliance with all conditions and covenants on its part contained in this
Indenture and stating whether or not the signer knows of any default or Event
of Default. If such signer knows of such a default or Event of Default, the
Officers’ Certificate shall describe the default or Event of Default and the
efforts to remedy the same. For the purposes of this Section 5.3,
compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.

 

Section 5.4. Further Instruments and Acts.

 

Upon
request of the Trustee, the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purposes of this Indenture.

 

Section 5.5. Maintenance of Corporate Existence.

 

Subject
to Article 6, the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its existence as a limited
partnership.

 

Section 5.6. Rule 144A Information Requirement.

 

Within
the period prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
provision), the Company covenants and agrees that it shall, during any period
in which it is not subject to Section 13 or 15(d) under the Exchange
Act, upon the request of any Holder or beneficial holder of the Securities make
available to such Holder or beneficial holder of Securities or any Common Stock
issued upon exchange thereof which continue to be Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
Securities or such Common Stock designated by such Holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the
Securities Act or such Common Stock and it will take such further action as any
Holder or beneficial holder of such Securities or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
Holder or beneficial holder to sell its Securities or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time.
Upon the request of any Holder or any beneficial holder of the Securities or
such Common Stock, the Company will deliver to such Holder a written statement
as to whether it has complied with such requirements.

 

Section 5.7. Stay, Extension and Usury Laws.

 

The
Company covenants (to the extent that it may lawfully do so) that it shall not
at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on the Securities as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance
of this Indenture, and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

 

34

 

Section 5.8. Payment of Liquidated Damages.

 

If
Liquidated Damages are payable by the Company pursuant to the Registration
Rights Agreement, the Company shall deliver to the Trustee a certificate to
that effect stating (i) the amount of such Liquidated Damages that are
payable (ii) the reason why such Liquidated Damages are payable and (iii) the
date on which such Liquidated Damages are payable. Unless and until a Trust
Officer of the Trustee receives such a certificate, the Trustee may assume
without inquiry that no such Liquidated Damages are payable. If the Company has
paid Liquidated Damages directly to the Persons entitled to it, the Company
shall deliver to the Trustee a certificate setting forth the particulars of
such payment.

 

ARTICLE 6

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 6.1. Company May Consolidate, Etc, Only On
Certain Terms.

 

The
Company shall not consolidate with or merge into any other Person (in a transaction
in which the Company is not the surviving corporation) or convey, transfer,
lease or otherwise dispose of all or substantially all of its properties and
assets to any Person, whether in a single transaction or series of related
transactions, unless:

 

(a)                                  either (i) the
Company is the surviving entity or (ii) the successor or transferee (the “successor corporation”) is a corporation
organized and existing under the laws of the United States, any State thereof,
or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, all of the
obligations of the Company under the Securities and the Indenture;

 

(b)                                 if as a result
of such transaction the Securities become convertible or exchangeable into
common stock or other securities issued by a third party, such third party
fully and unconditionally guarantees all obligations under the Securities and
the Indenture;

 

(c)                                  immediately
after giving effect to such transaction, no Default or Event of Default shall
exist; and

 

(d)                                 the Company
shall have delivered to the Trustee an Officers’ Certificate and, if requested
by the Trustee, an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer, sale, lease or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article 6 and that all conditions
precedent herein provided for relating to such transaction have been satisfied.

 

Section 6.2. Successor Substituted.

 

Upon
any consolidation of the Company with, or merger of the Company into, any other
Person or any conveyance, transfer or lease of all or substantially all of the
properties and assets of the Company in accordance with Section 6.1, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.

 

35

 

ARTICLE 7

DEFAULT AND REMEDIES

 

Section 7.1. Events of Default.

 

An
“Event of Default” shall occur
if:

 

(a)                                  the Company
defaults in the payment of the principal amount (or premium, if any), with respect
to the Securities, when the same become due and payable, whether at maturity,
upon redemption, on the Put Right Purchase Date or Fundamental Change Purchase
Date;

 

(b)                                 the Company
defaults in the payment of any accrued and unpaid interest (including Liquidated
Damages, if any), in each case, when due and payable, and continuance of such
default for a period of 30 days;

 

(c)                                  the Company
fails to satisfy its exchange obligation with respect to any portion of the
principal amount of any Security following the exercise by a Holder of the
right to exchange such Security into shares of Common Stock (or cash or a
combination of shares of Common Stock and cash, if the Company so elects)
pursuant to and in accordance with Article 4, which is not cured within
15 days;

 

(d)                                 the Company
defaults in its obligation to pay the Put Right Purchase Price or the
Fundamental Change Purchase Price, as applicable, with respect to any Security,
or any portion thereof, upon the exercise by a Holder of such Holder’s right to
require the Company to purchase or repurchase such Securities pursuant to and
in accordance with Section 3.7 or 3.8, as applicable;

 

(e)                                  the Company
fails to comply with any of its agreements or covenants in the Securities or
this Indenture (other than those referred to in clauses (a) through (e) above)
and such failure continues for 30 days after receipt by the Company of a
Notice of Default (defined below);

 

(f)                                    the Company
fails or any Significant Subsidiary of the Company fails to make any payment at
maturity on any indebtedness for money borrowed, including any applicable grace
periods, in an amount in excess of $5.0 million in the aggregate for all
such indebtedness for money borrowed and such amount has not been paid or
discharged within 30 days after receipt by the Company of a Notice of
Default;

 

(g)                                 a default by
the Company or any Significant Subsidiary of the Company that results in the
acceleration of maturity of any indebtedness for money borrowed of the Company
or any Significant Subsidiary, at any one time, in an amount in excess of
$5.0 million unless the acceleration is cured, waived or rescinded within
30 days after receipt by the Company of a Notice of Default;

 

(h)                                 the Company or
any Significant Subsidiary of the Company fails to pay final judgments, the
uninsured portion of which aggregates in excess of $5.0 million, if such
judgments are not paid or otherwise discharged within 30 days;

 

(i)                                     the Company,
pursuant to or under or within the meaning of any Bankruptcy Law:

 

(1)                                  commences a
voluntary case or proceeding;

 

(2)                                  consents to the
entry of any order for relief against it in an involuntary case or proceeding
or the commencement of any case against it;

 

(3)                                  consents to the
appointment of a Custodian of it or for any substantial part of its property;

 

(4)                                  makes a general
assignment for the benefit of its creditors;

 

(5)                                  files a
petition in bankruptcy or answer or consent seeking reorganization or relief;
or

 

36

 

(6)                                  consents to the
filing of such petition or the appointment of or taking possession by a
Custodian;

 

(j)                                     a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(1)                                  is for relief
against the Company, in an involuntary case or proceeding;

 

(2)                                  appoints a
Custodian of the Company, or for any substantial part of its property; or

 

(3)                                  orders the
winding up or liquidation of the Company,

 

and
in each case the order or decree remains unstayed and in effect for 60
consecutive days;

 

The
term “Bankruptcy Law” means
Title 11 of the United States Code (or any successor thereto) or any
similar federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee,
assignee, liquidator, sequestrator or similar official under any Bankruptcy
Law.

 

A
default under clause (e) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding notify the Company and the
Trustee, in writing of the default, and the Company does not cure the default
within 30 days after receipt of such notice. The notice given pursuant to
this Section 7.1 must specify the default, demand that it be remedied and
state that the notice is a “Notice of
Default.” When any default under this Section 7.1 is cured, it
ceases.

 

The
Trustee shall not be charged with knowledge of any Event of Default unless
written notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, a Paying Agent, any
Holder or any agent of any Holder.

 

Section 7.2. Acceleration.

 

If
an Event of Default (other than an Event of Default specified in clause (i) or
(j) of Section 7.1 occurs and is continuing, the Trustee may, by
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may, by notice to the Company and the
Trustee, declare all unpaid principal to the date of acceleration on the
Securities then outstanding (if not then due and payable) to be due and payable
upon any such declaration, and the same shall become and be immediately due and
payable. If an Event of Default specified in clause (i) or (j) of
Section 7.1 occurs, all unpaid principal of the Securities then
outstanding shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder. The
Holders of a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may rescind or annul such acceleration and
its consequences if (a) all existing Events of Default, other than the
nonpayment of the principal of the Securities which has become due solely by
such declaration of acceleration, have been cured or waived; (b) to the
extent the payment of such interest is lawful, interest (calculated at the rate
per annum borne by the Securities) on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid; (c) the rescission would not conflict with
any judgment, order or decree of a court of competent jurisdiction; and (d) all
payments due to the Trustee and any predecessor Trustee under Section 8.7
have been made. No such rescission shall affect any subsequent default or
impair any right consequent thereto.

 

Section 7.3. Other Remedies.

 

If
an Event of Default occurs and is continuing, the Trustee may, but shall not be
obligated to, pursue any available remedy by proceeding at law or in equity to
collect the payment of the principal of or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.

 

37

 

The
Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.

 

Section 7.4. Waiver of Defaults and Events of Default.

 

Subject
to Sections 7.7 and 10.2, the Holders of a majority in aggregate principal
amount of the Securities then outstanding by notice to the Trustee may waive an
existing default or Event of Default and its consequences, except a default or
Event of Default (i) in the payment of the principal of, premium, if any,
or interest (including Liquidated Damages, if any) on any Security, or the
payment of the Redemption Price, the Put Right Purchase Price, or the
Fundamental Change Purchase Price, (ii) arising from the Company’s failure
to comply with the exchange procedures provided in Article 4 of this
Indenture, or (iii) in respect of any provision of this Indenture which,
under Section 10.2, cannot be modified or amended without the consent of
the Holder of each Security affected. When a default or Event of Default is
waived, it is cured and ceases.

 

Section 7.5. Waiver of Compliance.

 

Except
as otherwise provided in this Indenture, the Holders of a majority in aggregate
principal amount of the Securities then outstanding, by notice to the Trustee,
may waive compliance with any provision of this Indenture, or of the Securities
(as described in this Indenture).

 

Section 7.6. Control by Majority.

 

The
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Holder or the Trustee, or that may involve
the Trustee in personal liability unless the Trustee is offered indemnity,
reasonably satisfactory to it, against the costs, expenses and liabilities the
Trustee may incur to comply with such request or demand; provided, however,
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.

 

Section 7.7. Limitations on Suits.

 

A
Holder may not pursue any remedy with respect to this Indenture or the
Securities (except actions for payment of overdue principal or interest or for
the exchange of the Securities pursuant to Article 4) unless:

 

(a)                                  the Holder
gives to the Trustee written notice of a continuing Event of Default;

 

(b)                                 the Holders of
at least 25% in aggregate principal amount of the then outstanding Securities
make a written request to the Trustee to pursue the remedy;

 

(c)                                  the Holder or
Holders offer to the Trustee indemnity reasonably satisfactory to it against
any loss, liability or expense; and

 

(d)                                 the Trustee
does not comply with the request within 60 days after receipt of the
request and the offer of indemnity and no direction inconsistent with such
written request has been given to the Trustee during such 60-day period by the
Holders of a majority in aggregate principal amount of the Securities then
outstanding.

 

38

 

A
Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over such other Holder.

 

Section 7.8. Rights of Holders to Receive Payment and to
Exchange.

 

Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of the principal of and interest on the Security, on or after
the respective due dates expressed in the Security and this Indenture, to
exchange such Security in accordance with Article 4 and to bring suit for
the enforcement of any such payment on or after such respective dates or the
right to exchange, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.

 

Section 7.9. Collection Suit by Trustee.

 

If
an Event of Default in the payment of principal or interest specified in
clause (a) or (b) of Section 7.1 occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or another obligor on the Securities for the whole
amount of principal and accrued interest remaining unpaid, together with, to
the extent that payment of such interest is lawful, interest on overdue
principal and on overdue installments of interest, in each case at the rate per
annum borne by the Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.

 

Section 7.10. Trustee May File Proofs of Claim.

 

The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities),
its creditors or its property and shall be entitled and empowered to collect
and receive any money or other property payable or deliverable on any such
claims and to distribute the same, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.7,
and to the extent that such payment of the reasonable compensation, expenses,
disbursements and advances in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
property which the Holders may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to, or, on behalf of any Holder, to authorize, accept or
adopt any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

Section 7.11. Priorities.

 

If
the Trustee collects any money pursuant to this Article 7, it shall pay
out the money in the following order:

 

(a)                                  First, to the
Trustee for amounts due under Section 8.7;

 

(b)                                 Second, to
Holders for amounts due and unpaid on the Securities for principal and interest
(including Liquidated Damages, if any), ratably, without preference or priority
of any kind, according to 

 

39

 

the amounts due and payable
on the Securities for principal and interest (including Liquidated, if any),
respectively; and

 

(c)                                  Third, the
balance, if any, to the Company.

 

The
Trustee may fix a record date and payment date for any payment to Holders pursuant
to this Section 7.11.

 

Section 7.12. Undertaking for Costs.

 

In
any suit for the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by it as Trustee,
a court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees
and expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section 7.12 does not apply to a suit made by the Trustee, a suit by
a Holder pursuant to Section 7.7, or a suit by Holders of more than 10% in
aggregate principal amount of the Securities then outstanding.

 

ARTICLE 8

TRUSTEE

 

Section 8.1. Duties of Trustee.

 

(a)                                  If an Event of
Default has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.

 

(b)                                 Except during
the continuance of an Event of Default:

 

(1)                                  the Trustee
need perform only those duties as are specifically set forth in this Indenture
and no others; and

 

(2)                                  in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee, however, shall examine any
certificates and opinions, which by any provision hereof are specifically
required to be delivered to the Trustee to determine whether or not they
conform to the requirements of this Indenture.

 

(c)                                  The Trustee may
not be relieved from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

 

(1)                                  this paragraph
does not limit the effect of subsection (b) of this Section 8.1;

 

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

 

(3)                                  the Trustee
shall not be liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to Section 7.6.

 

(d)                                 No provision of
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers unless the Trustee
shall have received adequate indemnity in its opinion against potential costs
and liabilities incurred by it relating thereto.

 

40

 

(e)                                  Every provision
of this Indenture that in any way relates to the Trustee is subject to
subsections (a), (b), (c) and (d) of Section 8.1.

 

(f)                                    The Trustee
shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.

 

Section 8.2. Rights of Trustee.

 

Subject
to Section 8.1:

 

(a)                                  The Trustee may
rely conclusively, and shall be protected in acting or refraining from acting,
upon any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.

 

(b)                                 Before the
Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel, which shall conform to Section 11.4(b). The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers’ Certificate or Opinion.

 

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

 

(d)                                 The Trustee
shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers.

 

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

 

(f)                                    The Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it in compliance with such request
or direction.

 

(g)                                 The Trustee
shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, security, other evidence
of indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation. Except with respect to
Sections 5.1 and 5.3, the Trustee shall have no duty to inquire as to the
performance of the Company’s covenants set forth in Sections 3.7, 3.9, 3.10 and
3.11 and in Articles 4, 5 and 6.

 

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

 

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

 

41

 

Section 8.3. Individual Rights of Trustee.

 

The
Trustee in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Company or an Affiliate of the
Company with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to
Sections 8.10 and 8.11.

 

Section 8.4. Trustee’s Disclaimer.

 

The
Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company’s use
of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.

 

Section 8.5. Notice of Default or Events of Default.

 

If
a default or an Event of Default occurs and is continuing and if the Trustee
has received notice thereof in accordance with this Indenture, the Trustee
shall mail to each Holder notice of the default or Event of Default within
30 days after it occurs. However, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interests of Holders, except in the case of a default
or an Event of Default in payment of the principal of or interest on any
Security.

 

Section 8.6. Reports by Trustee to Holders.

 

If
such report is required by TIA Section 313, within 60 days after each
May 15, beginning with the May 15 following the date of this
Indenture, the Trustee shall mail to each Holder a brief report dated as of
such May 15 that complies with TIA Section 313(a). The Trustee also
shall comply with TIA Section 313(b)(2) and (c).

 

A
copy of each report at the time of its mailing to Holders shall be mailed to
the Company and filed with the SEC and each stock exchange, if any, on which
the Securities are listed. The Company shall notify the Trustee whenever the
Securities become listed on any stock exchange or listed or admitted to trading
on any quotation system and any changes in the stock exchanges or quotation
systems on which the Securities are listed or admitted to trading and of any
delisting thereof.

 

Section 8.7. Compensation and Indemnity.

 

The
Company shall pay to the Trustee from time to time such compensation (as agreed
to from time to time by the Company and the Trustee in writing) for its
services (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust). The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses may include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The
Company shall indemnify the Trustee or any predecessor Trustee (which for
purposes of this Section 8.7 shall include its officers, directors,
employees and agents) for, and hold it harmless against, any and all loss,
liability or expense including taxes (other than taxes based upon, measured by
or determined by the income of the Trustee), (including reasonable legal fees
and expenses) incurred by it in connection with the acceptance or
administration of its duties under this Indenture or any action or failure to
act as authorized or within the discretion or rights or powers conferred upon
the Trustee hereunder including the reasonable costs and expenses of the
Trustee and its counsel in defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the 

 

42

 

Trustee for which it may
seek indemnity. The Company need not pay for any settlement without its written
consent, which shall not be unreasonably withheld.

 

The
Company need not reimburse the Trustee for any expense or indemnify it against
any loss or liability incurred by it resulting from its gross negligence or bad
faith.

 

To
secure the Company’s payment obligations in this Section 8.7, the Trustee
shall have a senior claim to which the Securities are hereby made subordinate
on all money or property held or collected by the Trustee, except such money or
property held in trust to pay the principal of and interest on the Securities.
The obligations of the Company under this Section 8.7 shall survive the
satisfaction and discharge of this Indenture or the resignation or removal of
the Trustee.

 

When
the Trustee incurs expenses or renders services after an Event of Default
specified in clause (j) or (k) of Section 7.1 occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law. The provisions of this Section shall
survive the termination of this Indenture.

 

Section 8.8. Replacement of Trustee.

 

The
Trustee may resign by so notifying the Company. The Holders of a majority in
aggregate principal amount of the Securities then outstanding may remove the
Trustee by so notifying the Trustee and may, with the Company’s written
consent, appoint a successor Trustee. The Company may remove the Trustee if:

 

(a)                                  the Trustee
fails to comply with Section 8.10;

 

(b)                                 the Trustee is
adjudged a bankrupt or an insolvent;

 

(c)                                  a receiver or
other public officer takes charge of the Trustee or its property; or

 

(d)                                 the Trustee
becomes incapable of acting.

 

If
the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company shall promptly appoint a successor Trustee.
The resignation or removal of a Trustee shall not be effective until a
successor Trustee shall have delivered the written acceptance of its
appointment as described below.

 

If
a successor Trustee does not take office within 45 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of 10% in principal amount of the Securities then outstanding may petition any
court of competent jurisdiction for the appointment of a successor Trustee at
the expense of the Company.

 

If
the Trustee fails to comply with Section 8.10, any Holder may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

 

A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee and be released from its obligations (exclusive of any liabilities that
the retiring Trustee may have incurred while acting as Trustee) hereunder, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Holder.

 

A
retiring Trustee shall not be liable for the acts or omissions of any successor
Trustee after its succession.

 

Notwithstanding
replacement of the Trustee pursuant to this Section 8.8, the Company’s
obligations under Section 8.7 shall continue for the benefit of the
retiring Trustee.

 

43

 

Section 8.9. Successor Trustee by Merger, Etc.

 

If
the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust assets (including the administration
of this Indenture) to, another corporation, the resulting, surviving or
transferee corporation, without any further act, shall be the successor
Trustee, provided such transferee corporation shall qualify and be eligible
under Section 8.10. Such successor Trustee shall promptly mail notice of
its succession to the Company and each Holder.

 

Section 8.10. Eligibility; Disqualification.

 

The
Trustee shall always satisfy the requirements of paragraphs (1), (2) and (5) of
TIA Section 310(a). The Trustee (or its parent holding company) shall have
a combined capital and surplus of at least $50,000,000. If at any time the Trustee
shall cease to satisfy any such requirements, it shall resign immediately in
the manner and with the effect specified in this Article 9. The Trustee
shall be subject to the provisions of TIA Section 310(b). Nothing herein
shall prevent the Trustee from filing with the SEC the application referred to
in the penultimate paragraph of TIA Section 310(b).

 

Section 8.11. Preferential Collection of Claims Against
Company.

 

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

 

ARTICLE 9

SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 9.1. Satisfaction and Discharge of Indenture.

 

This
Indenture shall cease to be of further effect (except as to any surviving
rights of exchange, registration of transfer or exchange of Securities herein
expressly provided for and except as further provided below), and the Trustee,
on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when

 

(a)                                  either:

 

(1)                                  all Securities
theretofore authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.7 and (ii) Securities for whose payment money
has theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 9.3) have been delivered to the Trustee for
cancellation; or

 

(2)                                  all such
Securities not theretofore delivered to the Trustee for cancellation

 

(i)                                     have become due
and payable, or

 

(ii)                                  will become due
and payable at the Final Maturity Date, Put Right Purchase Date or Fundamental
Change Purchase Date, or

 

(iii)                               are to be
called for redemption under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at the expense,
of the Company,

 

and the Company, in the case of clause (i), (ii) or (iii) above,
has irrevocably deposited or caused to be irrevocably deposited with the
Trustee or a Paying Agent (other than the Company or any of its Affiliates) as
trust funds in trust for the purpose cash and/or shares of Common Stock (as
permitted under the Indenture) in an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee

 

44

 

for
cancellation, for principal and interest (including Liquidated Damages, if any)
to the date of such deposit (in the case of Securities which have become due
and payable) or to the Final Maturity Date, Redemption Date, Put Right Purchase
Date or Fundamental Change Purchase Date, as the case may be; provided, however,
that there shall not exist, on the date of such deposit, a Default or Event of
Default; provided, further, that such deposit shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other agreement or instrument to which the Company is a party
or to which the Company is bound;

 

(b)                                 the Company has
paid or caused to be paid all other sums payable hereunder by the Company; and

 

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

 

Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company
to the Trustee under Section 8.7 shall survive and, if money shall have
been deposited with the Trustee pursuant to subclause (2) of clause (a) of
this Section, the provisions of Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.12,
3.7, 3.8, Article 4 and this Article 9, shall survive until the
Securities have been paid in full.

 

Section 9.2. Application of Trust Money.

 

Subject
to the provisions of Section 9.3, the Trustee or a Paying Agent shall hold
in trust, for the benefit of the Holders, all money deposited with it pursuant
to Section 9.1 and shall apply the deposited money in accordance with this
Indenture and the Securities to the payment of the principal of and interest on
the Securities.

 

Section 9.3. Repayment to Company.

 

The
Trustee and each Paying Agent shall promptly pay to the Company upon request
any excess money (i) deposited with them pursuant to Section 9.1 and (ii) held
by them at any time.

 

The
Trustee and each Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed
for two years after a right to such money has matured; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
payment, may, at the expense of the Company, either publish in a newspaper of
general circulation in the City of New York, or cause to be mailed to each
Holder entitled to such money, notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days from
the date of such mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Holders entitled
to money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person, and the Trustee
and each Paying Agent shall be relieved of all liability with respect to such
money.

 

Section 9.4. Reinstatement.

 

If
the Trustee or any Paying Agent is unable to apply any money in accordance with
Section 9.2 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company’s obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 9.1 until such time as the
Trustee or such Paying Agent is permitted to apply all such money in accordance
with Section 9.2; provided, however, that if the Company has made any
payment of the principal of or interest on any Securities because of the
reinstatement of its 

 

45

 

obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
any such payment from the money held by the Trustee or such Paying Agent.

 

ARTICLE 10

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 10.1. Without Consent of Holders.

 

The
Company, with the Trustee’s consent, may amend or supplement this Indenture or
the Securities without notice to or consent of any Holder to:

 

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

 

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

 

(c)                                  provide for the
assumption of the Company’s obligations to the Holders of Securities in the
case of a merger, consolidation, conveyance, transfer, sale, lease or other
disposition of all or substantially all of the Company’s property or assets
pursuant to Article 6;

 

(d)                                 increase the
Exchange Rate or make other adjustments to the Exchange Rate, in accordance
with this Indenture;

 

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

 

(f)                                    secure the
Securities;

 

(g)                                 supplement any
of the provisions of the Indenture to such extent as shall be necessary to
permit or facilitate the discharge of the Securities, provided, that such change or modification
does not adversely affect the interests of the Holders of the Securities in any
material respect;

 

(h)                                 make any
changes or modifications to this Indenture necessary in connection with the
registration of the Securities under the Securities Act as contemplated in the
Registration Rights Agreement; and

 

(i)                                     cure any ambiguity,
correct or supplement any provision herein which may be inconsistent with any
other provision herein or which is otherwise defective, or to make any other
provisions with respect to matters or questions arising under this Indenture
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of this Indenture; provided, however,
that such action does not adversely affect the interests of the Holders of
Securities.

 

Section 10.2. With Consent of Holders.

 

The
Company and the Trustee may amend or supplement this Indenture or the
Securities with the written consent of the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding. The Holders of
at least a majority in aggregate principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities without notice to any Holder.
However, notwithstanding the foregoing but subject to Section 10.4,
without the written consent of each Holder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 7.4, may not:

 

(a)                                  change the
stated maturity of the principal of, any premium due on or interest on
(including Liquidated Damages) any Security;

 

(b)                                 reduce the
principal amount of, Redemption Price, Put Right Purchase Price or Fundamental
Change Purchase Price or any premium (including any Make-Whole Premium) or
interest on (including Liquidated Damages) on, any Security;

 

46

 

(c)                                  alter the
manner of calculation or rate of accrual of interest (including Liquidated
Damages) on any Security;

 

(d)                                 change the
place or currency of payment of principal of, or any premium or interest on
(including Liquidated Damages), any Security;

 

(e)                                  impair the
right of any Holder to institute suit for the enforcement of any repurchase of,
payment on or with respect to, or exchange of, any Security on or after the
stated maturity of the Securities, in the case of redemption, on or after the
Redemption Date, or in the case of repayment at the option of the Holder, on or
after the Put Right Purchase Date or Fundamental Change Purchase Date;

 

(f)                                    adversely
affect the right of Holders to exchange Securities other than as provided in or
under Article 4 of this Indenture;

 

(g)                                 adversely
affect the right of Holders to require the Company to purchase or repurchase
the Securities as provided in Article 3 of this Indenture;

 

(h)                                 reduce the
percentage of the aggregate principal amount of the outstanding Securities
whose Holders must consent to a modification or amendment of this Indenture or
the Securities;

 

(i)                                     reduce the
percentage of the aggregate principal amount of the outstanding Securities
necessary for the waiver of compliance with any provision of this Indenture or
of the Securities or the waiver of any default or Event of Default; and

 

(j)                                     modify any of
the provisions of this Section 10.2 or Section 7.4, except to
increase any such percentage or to provide that certain provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Security affected thereby.

 

It
shall not be necessary for the consent of the Holders under this Section 10.2
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.

 

After
an amendment, supplement or waiver under this Section 10.2 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.

 

To
the extent that the Company or any of the Subsidiaries hold any Securities,
such Securities shall be disregarded for purposes of voting in connection with
any notice, waiver, consent or direction requiring the vote or concurrence of
Holders.

 

Section 10.3. Compliance with Trust Indenture Act.

 

Every
amendment to or supplement of this Indenture or the Securities shall comply
with the TIA as in effect at the date of such amendment or supplement.

 

Section 10.4. Revocation and Effect of Consents.

 

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

 

47

 

After
an amendment, supplement or waiver becomes effective, it shall bind every
Holder, unless it makes a change described in any of clauses (a) through (j) of
Section 10.2. In that case the amendment, supplement or waiver shall bind
each Holder of a Security who has consented to it and every subsequent Holder
of a Security or portion of a Security that evidences the same debt as the
consenting Holder’s Security.

 

Section 10.5. Notation on or Exchange of Securities.

 

If
an amendment, supplement or waiver changes the terms of a Security, the Trustee
may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.

 

Section 10.6. Trustee to Sign Amendments, Etc.

 

The
Trustee shall sign any amendment or supplemental indenture authorized pursuant
to this Article 11 if the amendment or supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, in its sole discretion, but need not sign it. In
signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and, subject to Section 8.1, shall be
fully protected in relying upon, an Opinion of Counsel stating that such
amendment or supplemental indenture is authorized or permitted by this
Indenture. The Company may not sign an amendment or supplement indenture until
the Board of Directors approves it.

 

Section 10.7. Effect of Supplemental Indentures.

 

Upon
the execution of any supplemental indenture under this Article, this Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

 

ARTICLE 11

MISCELLANEOUS

 

Section 11.1. Trust Indenture Act Controls.

 

If
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, such imposed duties shall
control.

 

Section 11.2. Notices.

 

Any
demand, authorization notice, request, consent or communication shall be given
in writing and delivered in person or mailed by first-class mail, postage
prepaid, addressed as follows or transmitted by facsimile transmission
(confirmed by delivery in person or mail by first-class mail, postage prepaid,
or by guaranteed overnight courier) to the following facsimile numbers:

 

If
to the Company, to:

 

600
Grant Street

Denver,
Colorado

Attn:
General Counsel

Facsimile
No.: 303-749-2073

 

48

 

with
a copy (for informational purposes only) to:

 

Brownstein Hyatt & Farber, P.C.

410
Seventeenth Street

Twenty-Second
Floor

Denver,
Colorado 80202-4437

Attention:
Jeff Knetsch

Facsimile
No.: 303-223-0954

 

if
to the Trustee, to:

 

U.S.
Bank National Association

60
Livingston Avenue

St.
Paul, Minnesota 55107-2292

Attention:
Corporate Trust Services

Internal
mail EP-MN-WS3C

(Affordable
Residential Communities LP 7.50%

Senior
Exchangeable Notes due 2025)

Facsimile
No.: (651) 495-8097

 

Such
notices or communications shall be effective when received.

 

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

 

Any
notice or communication mailed to a Holder shall be mailed by first-class mail
or delivered by an overnight delivery service to it at its address shown on the
register kept by the Primary Registrar.

 

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

 

Section 11.3. Communications by Holders with Other
Holders.

 

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

 

Section 11.4. Certificate and Opinion as to Conditions
Precedent.

 

(a)                                  Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee at the request of the
Trustee:

 

(1)                                  an Officers’
Certificate stating that, in the opinion of the signers, all conditions
precedent (including any covenants, compliance with which constitutes a
condition precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with; and

 

(2)                                  an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent (including any covenants, compliance with which constitutes a
condition precedent) have been complied with.

 

(b)                                 Each Officers’
Certificate and Opinion of Counsel with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

 

(1)                                  a statement
that the person making such certificate or opinion has read such covenant or
condition;

 

49

 

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

 

(3)                                  a statement
that, in the opinion of such person, he or she has made such examination or
investigation as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and

 

(4)                                  a statement as
to whether or not, in the opinion of such person, such condition or covenant
has been complied with;

 

provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers’ Certificate or certificates of public
officials.

 

Section 11.5. Record Date for Vote or Consent of
Holders.

 

The
Company (or, in the event deposits have been made pursuant to Section 9.1,
the Trustee) may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture, which record date shall not be more than
30 days prior to the date of the commencement of solicitation of such
action. Notwithstanding the provisions of Section 10.4, if a record date
is fixed, those persons who were Holders of Securities at the close of business
on such record date (or their duly designated proxies), and only those persons,
shall be entitled to take such action by vote or consent or to revoke any vote
or consent previously given, whether or not such persons continue to be Holders
after such record date.

 

Section 11.6. Rules by Trustee, Paying Agent,
Registrar and Exchange Agent.

 

The
Trustee may make reasonable rules (not inconsistent with the terms of this
Indenture) for action by or at a meeting of Holders. Any Registrar, Paying
Agent or Exchange Agent may make reasonable rules for its functions.

 

Section 11.7. Legal Holidays.

 

A
“Legal Holiday” is a Saturday,
Sunday or a day on which state or federally chartered banking institutions in
New York, New York and the state in which the Corporate Trust Office is located
are not required to be open. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If a Regular Record Date is a
Legal Holiday, the record date shall not be affected.

 

Section 11.8. Governing Law.

 

This
Indenture and the Securities shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to principles of
conflicts of laws.

 

Section 11.9. No Adverse Interpretation of Other
Agreements.

 

This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary of the Company. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.

 

Section 11.10. No Recourse Against Others.

 

All
liability described in paragraph 23 of the Securities of any director,
officer, employee or shareholder, as such, of the Company is waived and
released.

 

50

 

Section 11.11. Successors.

 

All
agreements of the Company in this Indenture and the Securities shall bind its
successor. All agreements of the Trustee in this Indenture shall bind its
successor.

 

Section 11.12. Multiple Counterparts.

 

The
parties may sign multiple counterparts of this Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent the
same agreement.

 

Section 11.13. Separability.

 

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

 

Section 11.14. Table of Contents, Headings, Etc.

 

The
table of contents, cross-reference sheet and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.

 

[SIGNATURE PAGE FOLLOWS]

 

51

 

IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
date and year first above written.

 

 

	
   

  	
  AFFORDABLE RESIDENTIAL COMMUNITIES LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Affordable Residential Communities Inc., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Scott Gesell

  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  Title:

  

 

52

 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

THE
NOTES AND THE SHARES OF COMMON STOCK OF AFFORDABLE RESIDENTIAL
COMMUNITIES INC. ISSUABLE UPON EXCHANGE OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT),
OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE, THE SHARES OF COMMON STOCK
ISSUABLE UPON EXCHANGE OF THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN OR
THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
NOTE PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH AFFORDABLE RESIDENTIAL COMMUNITIES LP
(THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR
ANY PREDECESSOR OF THIS NOTE) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE
THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.

 

A-1

 

AFFORDABLE RESIDENTIAL COMMUNITIES LP

 

CUSIP No.: 00828U AA1

 

71/2% SENIOR EXCHANGEABLE NOTES DUE 2025

 

Affordable
Residential Communities LP, a Delaware limited partnership (the “Company,”
which term shall include any successor corporation under the Indenture referred
to on the reverse hereof), promises to pay to Cede & Co., or
registered assigns, the principal sum of Eighty-Seven Million Dollars
($87,000,000) on August 15, 2025, or such greater or lesser amount as is
indicated on the Schedule of Exchanges of Securities on the other side of this
Security to reflect exchanges, redemptions, purchases and repurchases.

 

Interest
Payment Dates: February 15 and August 15, commencing February 15,
2006

 

Record
Dates: February 1 and August 1

 

This
Security is exchangeable as specified on the other side of this Security.
Additional provisions of this Security are set forth on the other side of this
Security.

 

SIGNATURE PAGE FOLLOWS

 

A-2

 

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

 

	
   

  	
  AFFORDABLE RESIDENTIAL
  COMMUNITIES LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title:

  

 

	
  Attest:

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  

 

Dated:

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

This is one of the
Securities referred to

in the within-mentioned Indenture.

 

U.S. Bank National
Association,

as Trustee

 

	
   

  	
   

  
	
  Authorized Signatory

  	
   

  

 

A-3

 

[FORM OF REVERSE SIDE OF SECURITY]

AFFORDABLE RESIDENTIAL COMMUNITIES LP

71/2% SENIOR EXCHANGEABLE NOTES DUE 2025

 

1.                                      Interest

 

Affordable
Residential Communities LP, a Delaware limited partnership (the “Company,” which term shall include any
successor corporation under the Indenture hereinafter referred to), promises to
pay interest on the principal amount of this Security at the rate of 71/2% per annum. The Company shall pay interest
semiannually on February 15 and August 15 of each year (each, an “Interest Payment Date”), commencing on February 15,
2006. Interest on the Securities shall accrue from the most recent date to which
interest has been paid to, but excluding, the next Interest Payment Date, or
the Final Maturity Date, as the case may be. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

 

If
this Security is redeemed pursuant to Section 7 of this Security or the
Holder elects to require the Company to repurchase this Security pursuant to Section 9
or 10 of this Security, on a date that is after the Regular Record Date and
prior to the corresponding Interest Payment Date, interest (including
Liquidated Damages, if any) accrued and unpaid hereon to, but not including,
the applicable Redemption Date, Put Right Purchase Date or Fundamental Change
Purchase Date will be paid to the same Holder to whom the Company pays the
principal of such Security regardless of whether such Holder was the registered
Holder on the Regular Record Date immediately preceding the applicable
Redemption Date, Put Right Purchase Date or Fundamental Change Purchase Date.

 

Interest
(including Liquidated Damages, if any) on Securities exchanged after the close
of business on a Regular Record Date but prior to the opening of business on
the corresponding Interest Payment Date will be paid to the Holder of the
Securities on February 1 or August 1 (whether or not a Business Day),
as the case may be, next preceding the corresponding Interest Payment Date (a “Regular Record Date”) but, upon exchange,
the Holder must pay the Company the interest (including Liquidated Damages, if
any, but not including any overdue interest) which has accrued and will be paid
on such Interest Payment Date.

 

Any
reference herein to interest accrued or payable as of any date shall include
Liquidated Damages accrued or payable on such date as provided in Section 3
hereof.

 

2.                                      Maturity

 

The
Securities will mature on August 15, 2025.

 

3.                                      Registration Rights Agreement

 

The
holder of this Security is entitled to the benefits of a Registration Rights
Agreement, dated as of August 9, 2005, among the Company, Parent and the
Initial Purchaser (the “Registration Rights
Agreement”). Pursuant to the Registration Rights Agreement the
Company and Parent agree for the benefit of the Holders of the Securities, that
(i) they will, at their cost, within 90 days after the closing of the
sale of the Securities (the “Closing”),
file a shelf registration statement (the “Shelf
Registration Statement”) with the Securities and Exchange Commission
(the “Commission”) with respect
to resales of the Securities and will use their best efforts to cause such
Shelf Registration Statement to be declared effective within 180 days
after the Closing, and (iii) their will use their best efforts to keep
such Shelf Registration Statement continuously effective under the Securities
Act of 1933, as amended (the “Securities Act”),
subject to certain exceptions specified in, and in accordance with, the
Registration Rights Agreement. In the event that (a) a Shelf Registration
Statement is not filed with the SEC on or before the 90th calendar day
following the Closing Date, (b) a Shelf Registration Statement is not
declared effective on or prior to the 180th calendar day following the Closing
Date, 

 

A-4

 

(c) after
effectiveness, subject to Section 2.5, the Shelf Registration Statement
fails to be effective or usable by the Holders without being succeeded within
five Business Days by a post-effective amendment or a report filed with the SEC
pursuant to the 1934 Act that cures the failure to be effective or usable, or (d) the
Prospectus has ceased to be effective or useable as described in clause (c) for
a period of 30 consecutive days (each such event being a “Registration
Default”), additional interest, as liquidated damages (“Liquidated Damages”),
will accrue at a rate per annum of 0.25% of the principal amount of the
Securities for the first 90-day period from day following the Registration
Default, and thereafter at a rate per annum of 0.50% of the principal amount of
the Securities, provided that in no event shall Liquidated Damages accrue at a
rate per annum exceeding 0.50% of the issue price of the Securities, provided
further that no Liquidated Damages shall accrue after the Effectiveness Period.
Upon the cure of all Registration Defaults then continuing, the accrual of
Liquidated Damages will automatically cease and the interest rate borne by the
Securities will revert to the original interest rate at such time. Holders who
have exchanged Securities into Common Stock will not be entitled to receive any
Liquidated Damages with respect to such Common Stock or the issue price of the
Securities exchanged.

 

4.                                      Method of Payment

 

Except
as provided in the Indenture (as defined below), the Company will pay interest
(including Liquidated Damages, if any) on the Securities to the persons who are
Holders of record of Securities at the close of business on the Regular Record
Date set forth on the face of this Security next preceding the applicable
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect the principal amount, Redemption Price, Put Right Purchase Price or
Fundamental Change Purchase Price of the Securities, plus, if applicable,
accrued and unpaid interest (including Liquidated Damages), if any. The Company
will pay, in money of the United States that at the time of payment is legal
tender for payment of public and private debts, all amounts due in cash with
respect to the Securities, which amounts shall be paid (A) in the case
this Security is in global form, by wire transfer of immediately available
funds to the account specified by the Holder hereof and (B) in the case
this Security is held in other than global form, by wire transfer of
immediately available funds to the account specified by the Holder hereof or,
if no such account is specified, by mailing a check to such Holder’s address
shown in the register of the Registrar. Any payments to be made in shares of
Common Stock shall be made in accordance with the terms of the Indenture.

 

5.                                      Paying Agent, Registrar, Bid Solicitation Agent and Exchange Agent

 

Initially,
U.S. Bank National Association (the “Trustee,”
which term shall include any successor trustee under the Indenture hereinafter
referred to) will act as Paying Agent, Registrar, and Exchange Agent. The
Company may change any Paying Agent, Registrar, or Exchange Agent without
notice to the Holder. The Company or any of its Subsidiaries may, subject to
certain limitations set forth in the Indenture, act as Paying Agent or
Registrar.

 

6.                                      Indenture, Limitations

 

This
Security is one of a duly authorized issue of Securities of the Company
designated as its 71/2% Senior Exchangeable Notes
due 2025 (the “Securities”),
issued under an Indenture dated as of August 9, 2005 (together with any
supplemental indentures thereto, the “Indenture”),
between the Company, the Subsidiary Guarantor and the Trustee. The terms of
this Security include those stated in the Indenture and those required by or
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended, as in effect on the date of the Indenture. This Security is subject to
all such terms, and the Holder of this Security is referred to the Indenture
and said Act for a statement of them. The Securities are senior unsecured
obligations of the Company limited to $87,000,000 aggregate principal amount (or
$100,000,000 if the option to purchase additional Securities is exercised in
full by the Initial Purchaser). The Indenture does not limit other debt of the
Company, secured or unsecured.

 

A-5

 

7.                                      Company’s Right to Redeem

 

Prior
to August 20, 2010, the Securities shall not be redeemable at the
Company’s option. The Securities may be redeemed at the election of the
Company, as a whole or from time to time in part, at any time on or after August 20,
2010, at a redemption price equal to 100% of the principal amount of those
Securities plus accrued and unpaid interest (including Liquidated Damages, if
any) to, but not including, such Redemption Date (the “Redemption Price”), if the Closing Price
of the Common Stock has exceeded 130% of the Exchange Price for at least 20
Trading Days in any consecutive 30 Trading Day Period; provided, that if the
Redemption Date falls after an interest payment record date (the “Regular Record Date”) and on or before an
interest payment date, then the interest (including Liquidated Damages, if any)
will be payable to the Holders in whose name the Securities are registered at
the close of business on the Regular Record Date and the Redemption Price shall
not include such interest payment.

 

The
Company will make an additional payment with respect to all Securities called
for redemption, including any Securities exchanged after the date the notice of
redemption is mailed to Holders, equal to the total value of the aggregate
amount of the interest otherwise payable on the Securities from the last day
through which interest was paid on the Securities through the Redemption Date.

 

No
sinking fund is provided for the Securities.

 

8.                                      Notice of Redemption

 

At
least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption to each Holder
of Securities to be redeemed at such Holder’s address as it appears on the
register of Securities maintained by the Primary Registrar. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the Redemption Date and at the Redemption Price stated in the notice,
together with accrued and unpaid interest (including Liquidated Damages, if
any), except for Securities that are exchanged in accordance with the
provisions of Section 11 of this Security. On and after the Redemption
Date, subject to the deposit with the Paying Agent of funds sufficient to pay
the Redemption Price plus accrued interest (including Liquidated Damages, if
any), accrued to, but not including, the Redemption Date, interest shall cease
to accrue on Securities or portions of them called for redemption.

 

9.                                      Repurchase of Securities at the Option of Holders on Specific Dates.

 

Securities
shall be purchased by the Company, at the option of the Holder thereof, on August 15,
2010, August 15, 2015 and August 15, 2020 (each, a “Put Right Purchase Date”), at a purchase
price equal to 100% of the principal amount of those Securities plus accrued
and unpaid interest (including Liquidated Damages, if any) to, but not
including, such Put Right Purchase Date (the “Put
Right Purchase Price”), subject to satisfaction by or on behalf of
the Holder of the requirements set forth in the Indenture.

 

To
exercise such right, a Holder shall deliver to the Paying Agent a Put Right
Purchase Notice containing the information set forth in the Indenture, at any
time from 9:00 a.m., New York City time, on the date that is 20 days
immediately preceding such Put Right Purchase Date until, 5:00 p.m., New
York City time, on the second Business Day immediately preceding such Put Right
Purchase Date, and shall deliver the Securities to the Paying Agent as set
forth in the Indenture.

 

Holders
have the right to withdraw any Put Right Purchase Notice by delivering to the
Paying Agent a written notice of withdrawal in accordance with the provisions
of the Indenture. The Paying Agent shall promptly notify the Company of the
receipt by it of any Purchase Notice or written notice of withdrawal thereof.

 

If
cash, sufficient to pay the Put Right Purchase Price of all Securities or
portions thereof to be repurchased with respect to a Purchase Date, have been
deposited with the Paying Agent, at noon, 

 

A-6

 

New York City time, on the
Business Day immediately following the Put Right Purchase Date, then,
immediately after the Put Right Purchase Date, such Securities will cease to be
outstanding and interest (including Liquidated Damages, if any and Special
Interest, if any), on such Securities will cease to accrue, whether or not such
Securities are delivered to the Paying Agent, and the Holder thereof shall have
no other rights as such other than the right to receive the Purchase Price upon
surrender of such Security.

 

10.                               Repurchase of Securities Upon a Fundamental Change

 

If
a Fundamental Change occurs at any time prior to the Final Maturity Date, each
Holder will have the right to require the Company to repurchase all of its
Securities not previously called for redemption, or any portion of such
Securities, at a purchase price equal to 100% of the principal amount of all
such Securities, plus accrued and unpaid interest (including Liquidated
Damages, if any) on such Securities to, but not including, the Fundamental
Change Purchase Date (the “Fundamental
Change Purchase Price”), subject to satisfaction by or on behalf of
any Holder of the requirements set forth in the Indenture; provided that the
Company may not repurchase any Securities at the option of Holders upon the
occurrence of a Fundamental Change if there has occurred and is continuing an
Event of Default with respect to the Securities, other than a default in the
payment of the Fundamental Change Purchase Price. The date the Company shall repurchase
the Securities pursuant to this Section 3.8(a) (the “Fundamental Change Purchase Date”) shall
be no earlier than 15 days and no later than 30 days after the date
of the mailing of the Fundamental Change Company Notice.

 

A
“Fundamental Change” shall be deemed to have occurred upon the occurrence of
either a “Change in Control” or a “Termination of Trading.”

 

A
“Change of Control” shall be deemed to have occurred if any of the following
occurs after the date hereof:

 

(i)                                     any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing),
including any group acting for the purpose of acquiring, holding or disposing
of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act, becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act directly or indirectly) through a purchase, merger or
other acquisition transaction, of 50% or more of the total voting power of all
classes of Parent’s Voting Stock, other than an acquisition by the Company,
Parent, any of their Subsidiaries or any of the Company’s or Parent’s benefit
plans;

 

(ii)                                  the Company or
Parent consolidates with, or merges with or into, another person or conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any person, or any person consolidates with or merges with or into
the Company or Parent, other than (x) any transaction (A) that does
not result in any reclassification, exchange, or cancellation of outstanding
shares of Parent’s Capital Stock or the Company’s partnership interests, as the
case may be, and (B) pursuant to which holders of Parent’s Capital Stock
or the Company’s partnership interests, as applicable, immediately prior to the
transaction have the entitlement to exercise, directly or indirectly, 50% or
more of the total Voting Power of all shares of Parent’s Capital Stock or 50%
of the Voting Power of the Company’s partnership interests, as the case may be,
in each case, with respect to the continuing or surviving entity of such
transaction; or (y) any merger solely for the purpose of changing
jurisdiction of formation of the Company or Parent and resulting in a
reclassification, exchange or exchange of outstanding shares of common stock or
partnership units, as the case may be, solely into shares of common stock or
partnership units, as the case may be, of the surviving entity;

 

(iii)                               From and after
the Issuance, Date, during any consecutive two-year period, individuals who at
the beginning of that two-year period constituted the Board of Directors
(together with any new directors whose election to such Board of Directors, or
whose nomination for election by 

 

A-7

 

stockholders
of Parent, was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors then in office; or

 

(iv)                              the Company or
Parent is liquidated or dissolved or approves a plan of liquidation or
dissolution.

 

A
“Termination of Trading” shall be deemed to have occurred if, after the date
hereof, the Common Stock (or other common stock into which the Securities are
then exchangeable) is not listed for trading on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States.

 

To
exercise such right, a Holder shall deliver to the Paying Agent a Fundamental
Change Purchase Notice containing the information set forth in the Indenture,
at any time from the opening of business on the date of the Fundamental Change
Company Notice until 5:00 p.m., New York City time, on the fifth Business
Day immediately preceding such Repurchase Date, and shall deliver the
Securities to the Paying Agent as set forth in the Indenture.

 

Holders
have the right to withdraw any Fundamental Change Company Notice by delivering
to the Paying Agent a written notice of withdrawal in accordance with the
provisions of the Indenture. The Paying Agent shall promptly notify the Company
of the receipt by it of any Fundamental Change Company Notice or written notice
of withdrawal thereof.

 

If
cash sufficient to pay the Fundamental Change Purchase Price of all Securities
or portions thereof to be repurchased with respect to a Fundamental Change
Repurchase Notice, has been deposited with the Paying Agent, at noon, New York
City time, on the Fundamental Change Purchase Date, then, immediately after
Fundamental Change Purchase Date, such Securities will cease to be outstanding
and interest (including Liquidated Damages, if any), on such Securities will
cease to accrue, whether or not such Securities are delivered to the Paying
Agent, and the Holder thereof shall have no other rights as such other than the
right to receive the Repurchase Price upon surrender of such Security.

 

11.                               Exchange Privilege

 

Subject
to the provisions of set forth in the Indenture, a Holder of a Security shall
have the right, at such Holder’s option, to exchange all or any portion (if the
portion to be exchanged is $1,000 or an integral multiple of $1,000) of such
Security into shares of Common Stock at the Exchange Price in effect on the
date of exchange at any time at any time prior to the earlier of (1) the
close of business on the Business Day prior to the Redemption Date and (2) the
close of business on the second Business Day immediately preceding the Final
Maturity Date.

 

A
Security in respect of which a Holder has delivered a Put Right Purchase Notice
or Fundamental Change Purchase Notice, as the case may be, exercising the right
of such Holder to require the Company to repurchase such Security may be
exchanged only if such Purchase Notice or Fundamental Change Purchase Notice is
withdrawn in accordance with the terms of the Indenture, unless the Company
defaults in the payment of the Put Right Purchase Price or the Fundamental
Change Purchase Price.

 

The
initial Exchange Rate is 69.8812 shares per $1,000 principal amount of
Securities, subject to adjustment in certain events described in the Indenture.

 

To
surrender a Security for exchange, a Holder must, in the case of Global
Securities, comply with the Applicable Procedures of the Depositary in effect
at that time, and in the case of Certificated Securities, (1) surrender
the Security duly endorsed to the Company or in blank, at the office of the
Exchange Agent, (2) complete and manually sign the exchange notice below
(or complete and manually 

 

A-8

 

sign a facsimile of such
notice) and deliver such notice to the Exchange Agent, (3) furnish
appropriate endorsements and transfer documents and (4) pay all funds
required, if any, relating to interest (including Liquidated Damages, if any),
and any withholding, transfer or similar tax, if required.

 

If
a Fundamental Change described in clauses (1), (2) or (4) of the
definition of “Change of Control” occurs prior to August 20, 2015, Holders
who exchange Securities in accordance with the provisions of Section 11 in
connection with such Fundamental Change shall be entitled to receive a
“Make-Whole Premium” consisting of an increase in the Exchange Rate as more fully
described in the Indenture.

 

No
fractional share of Common Stock shall be issued upon exchange of any Security.
Instead, the Company shall pay a cash adjustment as provided in the Indenture.

 

If
more than one Security shall be surrendered for exchange at one time by the
same Holder, the number of full shares of Common Stock which shall be
deliverable upon exchange shall be computed on the basis of the aggregate
principal amount of the Security (or specified portions thereof to the extent
permitted thereby) so surrendered. Subject to the next succeeding sentence, the
Company will, as soon as practicable thereafter, issue and deliver at said
office or place to such Holder of a Security, or to such Holder’s nominee or
nominees, certificates (other than in the case of Holders of Securities in
book-entry form with the Depositary, which shares shall be delivered in
accordance with the Depositary customary practices) for the number of full
shares of Common Stock to which such Holder shall be entitled as aforesaid,
together with cash in lieu of any fraction of a share to which such Holder
would otherwise be entitled.

 

If
shares of Common Stock to be issued upon exchange of a Transfer Restricted
Security are to be issued in the name of a Person other than the Holder of such
Transfer Restricted Security, such Holder must deliver to the Exchange Agent a
certification in substantially the form set forth in a Transfer Certificate
dated the date of surrender of such Transfer Restricted Security and signed by
such Holder, as to compliance with the restrictions on transfer applicable to
such Transfer Restricted Security. The Company shall not be required to issue
Common Stock upon exchange of any such Transfer Restricted Security to a Person
other than the Holder if such Transfer Restricted Security is not so
accompanied by a properly completed certification, and the Registrar shall not
be required to register Common Stock upon exchange of any such Transfer
Restricted Security in the name of a Person other than the Holder if such
Transfer Restricted Security is not so accompanied by a properly completed
certification.

 

If
any of the following events occurs:

 

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

 

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

 

(iii)                               any sale or
conveyance of all or substantially all the properties and assets of Parent to
any other person as a result of which all of the holders of Common Stock shall
be entitled to receive stock, securities or other property or assets (including
cash or any combination thereof) with respect to or in exchange for all of
their Common Stock;

 

in each case as a result of
which holders of Common Stock are entitled to receive stock, other securities,
other property or assets (including cash or any combination thereof) with respect
to or in exchange for Common Stock, the Company shall execute with the Trustee
a supplemental indenture (which shall comply with the TIA as in force at the
date of execution of such supplemental indenture, if such supplemental
indenture is then required to so comply) providing that the Holder’s right to 

 

A-9

 

exchange a Security into
Common Stock shall be changed to a right to exchange a Security into the kind
and amount of shares of stock and other securities or property or assets
(including cash) which such Holder would have been entitled to receive upon
such reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Securities been exchanged into Common
Stock immediately prior to such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance. In
the event holders of Common Stock have the opportunity to elect the form of
consideration to be received in a reclassification, change, consolidation,
merger combination, sale or conveyance, the Company shall make adequate
provision whereby the Holders of the Securities shall have the opportunity, on
a timely basis, to determine the form of consideration into which all of the
Securities, treated as a single class, shall be exchangeable. Such
determination shall be based on the blended, weighted average of elections made
by Holders of the Securities who participate in such determination and shall be
subject to any limitations to which all of the holders of Common Stock are
subject to, such as pro-rata reductions applicable to any portion of the
consideration payable.

 

In
case any Certificated Security shall be surrendered for partial exchange, the
Company shall execute and the Trustee shall, upon the written order of the
Company, authenticate and deliver to the Holder of the Security so surrendered,
without charge to such Holder (subject to the provisions of the Indenture), a
new Security or Securities in authorized denominations in an aggregate
principal amount equal to the unexchanged portion of the surrendered
Certificated Securities.

 

12.                               Merger

 

The
Company shall not consolidate with or merge into any other Person (in a
transaction in which the Company is not the surviving corporation) or convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets to any Person, whether in a single transaction or series
of related transactions, unless:

 

(i)                                     either (i) the
Company is the surviving entity or (ii) the successor or transferee (the “successor corporation”) is a corporation
organized and existing under the laws of the United States, any State thereof,
or the District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, all of the obligations of the
Company under the Securities and the Indenture;

 

(ii)                                  if as a result
of such transaction the Securities become convertible or exchangeable into
common stock or other securities issued by a third party, such third party
fully and unconditionally guarantees all obligations under the Securities and
the Indenture;

 

(iii)                               immediately
after giving effect to such transaction, no Default or Event of Default shall
exist; and

 

(iv)                              the Company
shall have delivered to the Trustee an Officers’ Certificate and, if requested
by the Trustee, an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer, sale, lease or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this Article 6 and that all conditions
precedent herein provided for relating to such transaction have been satisfied.

 

13.                               Denominations, Transfer, Exchange

 

The
Securities are in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000. A Holder may register the transfer of or
exchange Securities 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 or other governmental charges that may be
imposed in relation thereto by law or permitted by the Indenture.

 

A-10

 

14.                               Persons Deemed Owners

 

The
Holder of a Security may be treated as the owner of it for all purposes.

 

15.                               Unclaimed Money

 

If
money for the payment of principal or interest (including Liquidated Damages if
any), remains unclaimed for two years, the Trustee or Paying Agent will
pay the money back to the Company at its written request, subject to applicable
unclaimed property law. After that, Holders entitled to money must look to the
Company for payment as general creditors unless an applicable abandoned
property law designates another person.

 

16.                               Amendment, Supplement and Waiver

 

Subject
to certain exceptions, the Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding, and certain
existing defaults or Events of Default and their consequence or compliance with
any provision of the Indenture or the Securities may be waived in a particular
instance with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without the consent of or notice to
any Holder, the Company and the Trustee may amend or supplement the Indenture
or the Securities to, among other things, cure any ambiguity, defect or
inconsistency or make any other change that does not adversely affect the
rights of any Holder.

 

17.                               Successor Entity

 

When
a successor corporation assumes all the obligations of its predecessor under
the Securities and the Indenture in accordance with the terms and conditions of
the Indenture, the predecessor corporation (except in certain circumstances
specified in the Indenture) shall be released from those obligations.

 

18.                               Defaults and Remedies

 

Under
the Indenture, an Event of Default includes: (i) default for 30 days
in payment of any accrued and unpaid interest (including Liquidated Damages, if
any) on any Securities; (ii) default in payment of any principal
(including, without limitation, any premium, if any) on the Securities when
due; (iii) failure by the Company for 30 days after notice to it to
comply with any of its other agreements contained in the Indenture or the
Securities; (iv) default in the payment of certain indebtedness of the
Company or a Significant Subsidiary; and (v) certain events of bankruptcy,
insolvency or reorganization of the Company or any Significant Subsidiary.

 

If
an Event of Default (other than as a result of certain events of bankruptcy,
insolvency or reorganization of the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may, declare all unpaid principal to the date of
acceleration on the Securities then outstanding to be due and payable
immediately, all as and to the extent provided in the Indenture. If an Event of
Default occurs as a result of certain events of bankruptcy, insolvency or
reorganization of the Company, unpaid principal of the Securities then
outstanding shall become due and payable immediately without any declaration or
other act on the part of the Trustee or any Holder, all as and to the extent
provided in the Indenture. Holders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity reasonably satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders
notice of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their interests. The
Company is required to file periodic reports with the Trustee as to the absence
of default.

 

A-11

 

19.                               Trustee Dealings with the Company

 

U.S.
Bank National Association, the Trustee under the Indenture, in its individual
or any other capacity, may make loans to, accept deposits from and perform
services for the Company or an Affiliate of the Company, and may otherwise deal
with the Company or an Affiliate of the Company, as if it were not the Trustee.

 

20.                               No Recourse Against Others

 

A
director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture nor for any claim based on, in respect of or by reason of such
obligations or their creation. The Holder of this Security by accepting this
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of this Security.

 

21.                               Calculations in Respect of Securities

 

The
Company and its agents shall be responsible for making all calculations as
contemplated under this Indenture and the Securities. Any calculations made in
good faith and without manifest error shall be final and binding upon all
Holders of the Securities. The Company shall provide a copy of its calculations
to the Trustee, and, absent manifest error, the Trustee shall be entitled to
rely on the accuracy of such calculations without conducting an independent
verification as to their accuracy.

 

22.                               Authentication

 

This
Security shall not be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the other side of this
Security.

 

23.                               Abbreviations and Definitions

 

Customary
abbreviations may be used in the name of the 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 UGMA (= Uniform Gifts to Minors Act).

 

All
terms defined in the Indenture and used in this Security but not specifically
defined herein are defined in the Indenture and are used herein as so defined.

 

24.                               Indenture to Control; Governing Law

 

In
the case of any conflict between the provisions of this Security and the
Indenture, the provisions of the Indenture shall control.

 

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPALS OF CONFLICTS OF LAW.

 

The
Company will furnish to any Holder, upon written request and without charge, a
copy of the Indenture. Requests may be made to: Affordable Residential
Communities LP, 600 Grant Street, Suite 900, Denver Colorado, 80203,
Attention: General Counsel.

 

A-12

 

ASSIGNMENT FORM

 

To assign this Security,
fill in the form below:

 

	
  I or we assign and transfer this Security to

  	
   

  
	
   

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

  
	
      

  
	
      

  
	
      

  
	
      

  
	
      

  
	
      

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

  
	
   

  
	
  and
  irrevocably appoint

  
	
      

  
	
      

  
	
  agent
  to transfer this Security on the books of the Company. The agent may
  substitute another to act for him or her.

  

 

Your Signature:

 

	
  Date:

  	
   

  
	
   

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

  

 

*                                         Signature
guaranteed by:

 

	
  By:

  	
   

  	
   

  

 

*                                         The signature
must be guaranteed by an institution which is a member of one of the following
recognized signature guaranty programs: (i) the Securities Transfer Agent
Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion
Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such
other guaranty program acceptable to the Trustee.

 

A-13

 

EXCHANGE NOTICE

 

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

 

To exchange only part of
this Security, state the principal amount to be exchanged (must be $1,000 or a
integral multiple of $1,000): $          .

 

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

 

	
   

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

  
	
      

  
	
      

  
	
      

  
	
      

  
	
      

  
	
      

  
	
   

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

  
	
  Your
  Signature:

  
	
   

  
	
  Date:

  	
   

  
	
   

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

  

 

*                                         Signature
guaranteed by:

 

	
  By:

  	
   

  	
   

  

 

*                                         The signature
must be guaranteed by an institution which is a member of one of the following
recognized signature guaranty programs: (i) the Securities Transfer Agent
Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion
Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such
other guaranty program acceptable to the Trustee.

 

A-14

 

SCHEDULE OF EXCHANGES OF SECURITIES

 

The following exchanges,
redemptions, repurchases or purchases of a part of this global Note have
been made:

 

	
  Principal
  Amount of

  this Global Security Following

  Such Decrease

  Date of Exchange (or Increase)

  	
   

  	
  Authorized Signatory of

  Securities Custodian

  	
   

  	
  Amount of Decrease in

  Principal Amount of this

  Global Security

  	
   

  	
  Amount of Increase in

  Principal Amount of this

  Global Security

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-15

 

EXHIBIT B

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF TRANSFER RESTRICTED SECURITIES

 

Re:                               71/2% Senior Exchangeable Notes due 2025 (the “Securities”) of Affordable Residential
Communities LP

 

This certificate relates to
$                  principal
amount of Securities owned in (check applicable box)

 

o book-entry or  o definitive form
by                                     
(the “Transferor”).

 

The Transferor has requested
a Registrar or the Trustee to exchange or register the transfer of such
Securities.

 

In connection with such
request and in respect of each such Security, the Transferor does hereby
certify that the Transferor is familiar with transfer restrictions relating to
the Securities as provided in Section 2.12 of the Indenture dated as of August 9,
2005 between Affordable Residential Communities LP and U.S. Bank National
Association, as trustee (the “Indenture”),
and the transfer of such Security is being made pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the “Securities Act”) (check applicable
box) or the transfer or exchange, as the case may be, of such Security
does not require registration under the Securities Act because (check
applicable box):

 

o                                    Such Security
is being transferred pursuant to an effective registration statement under the
Securities Act.

 

o                                    Such Security
is being acquired for the Transferor’s own account, without transfer.

 

o                                    Such Security
is being transferred to the Company or a Subsidiary (as defined in the
Indenture) of the Company.

 

o                                    Such Security
is being transferred to a person the Transferor reasonably believes is a
“qualified institutional buyer” (as defined in Rule 144A or any successor
provision thereto (“Rule 144A”)
under the Securities Act) that is purchasing for its own account or for the
account of a “qualified institutional buyer,” in each case to whom notice has
been given that the transfer is being made in reliance on such Rule 144A,
and in each case in reliance on Rule 144A.

 

o                                    Such Security
is being transferred pursuant to and in compliance with an exemption from the
registration requirements under the Securities Act in accordance with Rule 144
(or any successor thereto) (“Rule 144”)
under the Securities Act.

 

The Transferor acknowledges
and agrees that, if the transferee will hold any such Securities in the form of
beneficial interests in a global Security which is a “restricted security”
within the meaning of Rule 144 under the Securities Act, then such
transfer can only be made pursuant to Rule 144A under the Securities Act and
such transferee must be a “qualified institutional buyer” (as defined in Rule 144A).

 

	
  Date:

  	
   

  	
   

  
	
   

  	
  (Insert Name of Transferor)

  	
   

  

 

B-1

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