Document:

Exhibit 10.1

SEVERANCE AGREEMENT

THIS AGREEMENT, dated as of May 1st, 2006, is
made by and between ADESA Inc., a Delaware corporation (the “Company”), and
Angel R. Sales (the “Executive”).

WHEREAS, the Company considers it essential to the
best interests of its stockholders to employ the Executive.

NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the Company and the Executive hereby
agree as follows:

1.             Terms. The definitions of capitalized
terms used in this Agreement are provided in the last Section hereof.

2.             Term of Agreement. The Term of this
Agreement shall commence on the date hereof and shall continue in effect
through December 31, 2010.

3.             Company’s Covenants Summarized. In order
to induce the Executive to agree to employment with the Company and in
consideration of the Executive’s covenants set forth in Sections 4 and 7
hereof, the Company agrees, under the conditions described herein, to pay the
Executive the Severance Payments. This Agreement shall not be construed as
creating an express or implied contract of employment and, except as otherwise
agreed in writing between the Executive and the Company, the Executive shall
not have any right to be retained in the employ of the Company.

4.             The Executive’s Covenants. The Executive
agrees to abide by and perform the covenants set forth in Section 7 below.

5.             Severance Payments.

5.1           If
the Executive’s employment is terminated during the Term by the Company without
Cause:

(a)       All outstanding stock options and restricted
stock units awarded previously to the Executive shall vest immediately upon the
Date of Termination, subject to the satisfactory achievement of the performance
goals set for the Executive (prior to the Date of Termination) as determined in
the reasonable judgment of the Compensation Committee of the Board of
Directors.

(b)       Until the Executive reaches the age of
65, the Company shall arrange to provide the Executive and his dependents
health insurance benefits substantially similar to those provided to the
Executive and his dependents immediately prior to the Date of Termination or,
if more favorable to the Executive, those provided to the Executive and his
dependents immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, at an after-tax cost to the Executive
which shall not exceed the lower of: (1) an amount calculated by
multiplying the percentage share of the Company’s health insurance costs paid
by employees at such time (e.g., 

 

25%) by the monthly cost to the Company of obtaining
health care insurance coverage for the Executive and his dependents
substantially similar to the health care insurance provided to the Executive
prior to the Date of Termination, or (2) $1,000 per month.

5.2           If
the Executive’s employment is terminated during the Term by the Executive with
Good Reason or by the Company without Cause AND David Gartzke is no longer the
Chief Executive Officer of the Company, then the Company shall pay the
Executive the amounts, and provide the Executive the benefits, described below
(“Severance Payments”):

(a)       In lieu of any further salary payments to
the Executive for periods subsequent to the Date of Termination and in lieu of
any severance benefit otherwise payable to the Executive, the Company shall pay
to the Executive a lump sum severance payment, in cash (“Cash Severance Payment”),
equal to two times the sum of (i) the Executive’s base salary as in effect
immediately prior to the Date of Termination or, if higher, in effect
immediately prior to the first occurrence of an event or circumstance
constituting Good Reason, and (ii) the Executive’s target annual bonus
under any annual bonus or annual incentive plan maintained by the Company in
respect of the fiscal year in which occurs the Date of Termination or, if
higher, the fiscal year in which occurs the first event or circumstance
constituting Good Reason.

(b)       Until the Executive reaches the age of
65, health insurance benefits as set forth in section 5.1(b) hereof.

(c)       Notwithstanding the foregoing provisions
of this Section 5, the Company shall not be obligated to pay the Severance
Payments to the Executive unless the Executive shall have signed a release of
claims (other than with respect to claims arising under this Agreement, that
certain letter agreement between the Executive and the Company dated as of May 1,
2006 (the “Offer Letter”) or any documents evidencing grants or awards of
equity based compensation, existing rights to indemnification or coverage under
the Company’s liability insurance policies, and rights under the Company’s
benefits plans not inconsistent with the terms of this Agreement) in favor of
the Company in a form to be prescribed by the Board, and all applicable
rescission periods provided by law shall have expired. The Company shall pay
the Cash Severance Payment to the Executive on or before the thirtieth day
after the later of (i) the Date of Termination, (ii) the date of the
Notice of Termination, and (iii) the date upon which the conditions set
forth in this Section 5.2(C) are satisfied.

5.3           If the Executive’s employment is
terminated during the Term by the Executive without Good Reason and the
Executive is between the age of 62 and 65 on the Date of Termination, then in
such event, until the Executive reaches the age of 65, the Company shall
arrange to provide health insurance benefits as set forth in section 5.1(b) hereof.

5.4           If the Executive’s employment is
terminated during the Term by reason of death or Disability, then there shall
be no payments under this Agreement.

 

6.             Termination
Procedures.

6.1           Notice of Termination. During
the Term, any purported termination of the Executive’s employment (other than
by reason of death) shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.

6.2           Date of Termination. “Date of Termination,”
with respect to any purported termination of the Executive’s employment during
the Term shall mean (i) if the Executive’s employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided
that the Executive shall not have returned to the full-time performance of the
Executive’s duties during such thirty (30) day period), and (ii) if the
Executive’s employment is terminated for any other reason, the date specified
in the Notice of Termination (which, in the case of a termination by the
Executive, shall not be less than fifteen (15) days from the date such Notice
of Termination is given).

7.             Covenants.

7.1           Nondisclosure. The
Executive acknowledges that he has received and will continue to receive and/or
contribute to the production of confidential and proprietary information
relating to the Company and its business, including but not limited to
information regarding the Company’s organization, finances, strategies,
business or other plans, operations, advertising, marketing, product
development, costs and pricing, employees, trade practices, research data,
reports or records, and financial or other business information and information
regarding the Company’s past, current or potential customers, providers and
suppliers, the use or disclosure of which might reasonably be construed to be
contrary to the interests of the Company, or to place it at a competitive
disadvantage (“Confidential Information”). The Company considers the
Confidential Information to be integral to the operations and success of the
Company, and the Executive understands and agrees that the Confidential
Information is and shall remain the sole and exclusive property of the Company.
During the Term and at all times thereafter, the Executive shall not use
Confidential Information on his own behalf, or on behalf of any third party, or
disclose any Confidential Information to other persons or entities except as is
necessary for the performance of the Executive’s duties with the Company or has
been expressly permitted in writing by the Company; provided, however, the
foregoing shall not apply to any information which is in or has entered the
public domain (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). Upon termination of Executive’s
employment with the Company, Executive shall return to the Company all records,
correspondence, compositions, articles, writing, programs, codes, devices,
equipment, prototypes and other materials or documents (electronic, paper or
otherwise) which incorporate, embody or disclose any Confidential Information
(whether written, prepared or made by Executive or others) including all copies
or memorializations thereof.

7.2           Injunctive Relief. The Executive agrees that any breach of
the foregoing Section 7(A) would result in immediate and irreparable
injury to the Company. By reason thereof, the Executive agrees that if he were
to breach, or threaten to breach, the foregoing Section 7(A), the Company
shall be entitled to seek injunctive relief from any court of competent
jurisdiction restraining the Executive from committing or continuing any such
breach.

 

7.3           Nondisparagement. Each of Executive and the Company (for
purposes hereof, the Company shall mean only the executive officers and
directors thereof and not any other employees) agrees not to make any public
statements that disparage or damage the business or reputation of the other
party or, in the case of the Company, its respective affiliates, employees,
officers, directors, products or services. Nothing in this Section 7(C) is
intended to: (1) undermine obligations the Executive or the Company may
have to comply with applicable laws, rules and/or regulations, or (2) prohibit
the Executive or the Company from providing truthful testimony or truthfully
responding to lawful inquiries by any governmental or regulatory entity (in
which event, in the case of any such inquiry directed to a party, the party
shall notify the other party as promptly as practicable after receiving any
such request and, to the extent possible, prior to providing any such
testimony).

8.             No Mitigation. The Company agrees that, if
the Executive’s employment with the Company terminates during the Term, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section 5
hereof. Further, except as specifically provided in Section 5.1 (b) hereof,
the amount of any payment or benefit provided for in this Agreement shall not
be reduced by any compensation earned by the Executive as the result of
employment by another employer or by retirement benefits.

9.             Successors; Binding Agreement.

9.1           In
addition to any obligations imposed by law upon any successor to the Company,
the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place. Failure
of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to hereunder if the
Executive were to terminate the Executive’s employment for Good Reason.

9.2           This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Executive shall die while
any amount would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the Executive) if
the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to the executors, personal representatives or administrators of the Executive’s
estate.

10.           Notices. For the purpose of this
Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States registered mail, return receipt requested, postage
prepaid, addressed, if to the Executive, to the address inserted below the
Executive’s signature on the final page hereof and, if to the Company, to
the address set forth below, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:

 

To the Company:

ADESA Inc.

13085 Hamilton Crossing Boulevard

Carmel, IN 46032

Attention: Chief Executive Officer

11.           Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Executive
and such officer as may be specifically designated by the Board. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
of any lack of compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. This Agreement supersedes any other agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof
which have been made by either party; except the Offer Letter. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Indiana. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the Executive under
this Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 6 and 7 hereof) shall survive such expiration.

12.           Validity. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

13.           Counterparts. This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same instrument.

14.           Settlement of Disputes; Arbitration. Any
dispute or controversy arising under or in connection with the entitlement to
or the payment of Severance Payment under this Agreement shall be settled
exclusively by arbitration in Indianapolis, Indiana in accordance with the rules of
the American Arbitration Association then in effect; provided, however, that
the evidentiary standards set forth in this Agreement shall apply. Judgment may
be entered on the arbitrator’s award in any court having jurisdiction. In any
such arbitration proceeding in which it is determined that the Executive has
established a reasonable basis for entitlement to or the payment of the
disputed Severance Payments, the Company shall bear the actual out of pocket
costs and expenses of the Executive with respect to such arbitration
proceeding, including without limitation, the reasonable attorneys’ fees of the
Executive.

15. Definitions. For
purposes of this Agreement, the following terms shall have the meanings
indicated below:

(A)          “Board” shall mean the Board of
Directors of the Company.

(B)           “Cause” for termination by the
Company of the Executive’s employment shall mean (i) the willful and
continued failure by the Executive to substantially 

 

perform the Executive’s duties with the Company (other
than any such failure resulting from the Executive’s incapacity due to physical
or mental illness or any such failure after the issuance of a Notice of
Termination for Good Reason by the Executive pursuant to Section 6.1
hereof) that has not been cured within 30 days after a written demand for
substantial performance is delivered to the Executive by the Chief Executive
Officer of the Company, which demand specifically identifies the manner in
which the Chief Executive Officer believes that the Executive has not
substantially performed the Executive’s duties, (ii) the willful engaging
by the Executive in wrongful conduct which is demonstrably and materially
injurious to the Company or its subsidiaries, monetarily or otherwise, or (iii) conviction
of or entrance of a plea of guilty or nolo
contendere to a felony. For purposes of clauses (i) and (ii) of
this definition, no act, or failure to act, on the Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive’s act, or failure
to act, was in the best interest of the Company. For purposes of the preceding
sentence, 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 Company shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and in the best interests of the Company.

(C)           “Company” shall mean ADESA Inc. and
shall include any successor to its business and/or assets which assumes and
agrees to perform this Agreement by operation of law, or otherwise.

(D)          “Date of Termination” shall have the
meaning set forth in Section 6.2 hereof.

(E)           “Disability” shall be deemed the
reason for the termination by the Company of the Executive’s employment, if, as
a result of the Executive’s incapacity due to physical or mental illness, the
Executive shall have been absent from the full-time performance of the
Executive’s duties with the Company for a period of six (6) consecutive
months, the Company shall have given the Executive a Notice of Termination for
Disability, and, within thirty (30) days after such Notice of Termination is
given, the Executive shall not have returned to the full-time performance of
the Executive’s duties.

(F)           “Executive” shall mean the individual
named in the first paragraph of this Agreement.

(G)           “Good Reason” for termination by the
Executive of the Executive’s employment shall mean that David G. Gartzke is no
longer the Company’s Chief Executive Officer AND the occurrence (without the
Executive’s express written consent) of any one of the following acts by the
Company, or failures by the Company to act, unless such act or failure to act
is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:

(i)            a substantial adverse alteration in
the nature or status of the Executive’s duties or responsibilities, including,
without limitation, that the

 

Executive shall no longer report to the Chief
Executive Officer of the Company or that the Executive shall no longer be the
President of the Company;

(ii)           a substantial reduction in the
Executive’s compensation or benefits, other than pursuant to an
across-the-board reduction similarly affecting the compensation and benefits of
all of the Company’s executive officers;

(iii)          any requirement that the Executive be
based anywhere more than 50 miles from Indianapolis, Indiana; or

(iv)          any purported termination of the Executive’s
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 6.1 hereof; for purposes of this Agreement, no
such purported termination shall be effective.

The Executive’s right to terminate the Executive’s
employment for Good Reason shall not be affected by the Executive’s incapacity
due to physical or mental illness. The Executive’s continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.

(H)          “Notice of Termination” shall have the
meaning set forth in Section 6.1 hereof.

(I)            “Severance Payments” shall have the
meaning set forth in Section 5 hereof.

(J)            “Term” shall mean the period of time
described in Section 2 hereof (including any extension, continuation or
termination described therein).

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.

	
  

  	
  ADESA, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David G. Gartzke

  
	
   

  	
   

  	
  David G. Gartzke

  
	
   

  	
   

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Angel R. Sales

  
	
   

  	
   

  	
  Angel R. SalesExhibit 4.12

 

AXCELIS TECHNOLOGIES, INC.

 

To

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

 

INDENTURE

 

Dated as of

 

May 2, 2006

 

 

41⁄4% Convertible Senior
Subordinated Notes Due 2009

 

 

TABLE OF CONTENTS

 

	
   

  	
  PAGE

  
	
  ARTICLE 1

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01. Definitions

  	
  1

  
	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
   

  	
   

  
	
  Issue, Description, Execution, Registration and Exchange of Notes

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01.  Designation, Amount and
  Issue of Notes

  	
  12

  
	
  SECTION 2.02.  Form of Notes

  	
  12

  
	
  SECTION 2.03.  Date and Denomination of
  Notes, Payments of Interest

  	
  13

  
	
  SECTION 2.04.  Execution of Notes

  	
  14

  
	
  SECTION 2.05.  Exchange and
  Registration of Transfer of Notes; Restrictions on Transfer,Depositary

  	
  15

  
	
  SECTION 2.06.  Mutilated, Destroyed,
  Lost or Stolen Notes

  	
  20

  
	
  SECTION 2.07.  Temporary Notes

  	
  21

  
	
  SECTION 2.08.  Cancellation of Notes
  Paid, Etc

  	
  22

  
	
  SECTION 2.09.  CUSIP Numbers

  	
  22

  
	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
   

  	
   

  
	
  REDEMPTION OF NOTES

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01.  Redemption of Notes

  	
  22

  
	
  SECTION 3.02.  Notice of Redemptions,
  Selection of Notes

  	
  22

  
	
  SECTION 3.03.  Payment of Notes Called
  for Redemption

  	
  24

  
	
  SECTION 3.04.  Conversion Arrangement
  on Call for Redemption

  	
  25

  
	
  SECTION 3.05.  Redemption at Option of
  Holders

  	
  25

  
	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
   

  	
   

  
	
  SUBORDINATION OF NOTES

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01.  Agreement of
  Subordination

  	
  27

  
	
  SECTION 4.02.  Payments to Noteholders

  	
  28

  
	
  SECTION 4.03.  Subrogation of Notes

  	
  30

  
	
  SECTION 4.04.  Authorization to Effect
  Subordination

  	
  31

  
	
  SECTION 4.05.  Notice to Trustee

  	
  31

  
	
  SECTION 4.06.  Trustee’s Relation to
  Senior Indebtedness

  	
  32

  
	
  SECTION 4.07.  No Impairment of
  Subordination

  	
  32

  
	
  SECTION 4.08.  Certain Conversions Not
  Deemed Payment

  	
  33

  

 

i

 

	
  SECTION 4.09.  Article Applicable to
  Paying Agents

  	
  33

  
	
  SECTION 4.10.  Designated Senior
  Indebtedness Entitled to Rely

  	
  33

  
	
  SECTION 4.11.  Reliance on Judicial
  Order or Certificate of Liquidating Agent

  	
  33

  
	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
   

  	
   

  
	
  PARTICULAR COVENANTS OF THE COMPANY

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01.  Payment of Principal,
  Premium, Repurchase Value and Interest

  	
  34

  
	
  SECTION 5.02.  Maintenance of Office or
  Agency

  	
  34

  
	
  SECTION 5.03.  Appointments to Fill
  Vacancies in Trustee’s Office

  	
  35

  
	
  SECTION 5.04.  Provisions as to Paying
  Agent

  	
  35

  
	
  SECTION 5.05.  Existence

  	
  36

  
	
  SECTION 5.06.  Maintenance of
  Properties

  	
  36

  
	
  SECTION 5.07.  Payment of Taxes and
  Other Claims

  	
  36

  
	
  SECTION 5.08.  Rule 144A Information
  Requirement

  	
  36

  
	
  SECTION 5.09.  Stay, Extension and
  Usury Laws

  	
  37

  
	
  SECTION 5.10.  Compliance Certificate

  	
  37

  
	
  SECTION 5.11.  Liquidated Damages
  Notice

  	
  38

  
	
  SECTION 5.12.  Limitation on Additional
  Senior Indebtedness and Pari Passu Indebtedness

  	
  38

  
	
  SECTION 5.13.  Limitation on Subsidiary
  and Intercompany Debt

  	
  38

  
	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
   

  	
   

  
	
  NOTEHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01.  Noteholders’ Lists

  	
  39

  
	
  SECTION 6.02.  Preservation and
  Disclosure of Lists

  	
  40

  
	
  SECTION 6.03.  Reports by Trustee

  	
  40

  
	
  SECTION 6.04.  Reports by Company

  	
  40

  
	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
   

  	
   

  
	
  REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01.  Events of Default

  	
  41

  
	
  SECTION 7.02.  Payments of Notes on
  Default; Suit Therefor

  	
  43

  
	
  SECTION 7.03.  Application of Monies
  Collected by Trustee

  	
  44

  
	
  SECTION 7.04.  Proceedings by
  Noteholder

  	
  45

  
	
  SECTION 7.05.  Proceedings by Trustee

  	
  46

  
	
  SECTION 7.06.  Remedies Cumulative and
  Continuing

  	
  46

  
	
  SECTION 7.07.  Direction of Proceedings
  and Waiver of Defaults by Majority of Noteholders

  	
  46

  
	
  SECTION 7.08.  Notice of Defaults

  	
  47

  
	
  SECTION 7.09.  Undertaking to Pay Costs

  	
  47

  

 

ii

 

	
  ARTICLE 8

  	
   

  
	
   

  	
   

  
	
  THE TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 8.01.  Duties and Responsibilities
  of Trustee

  	
  48

  
	
  SECTION 8.02.  Reliance on Documents,
  Opinions, Etc

  	
  49

  
	
  SECTION 8.03.  No Responsibility for
  Recitals, Etc

  	
  50

  
	
  SECTION 8.04.  Trustee, Paying Agents,
  Conversion Agents or Registrar May Own Notes

  	
  50

  
	
  SECTION 8.05.  Monies to Be Held in
  Trust

  	
  50

  
	
  SECTION 8.06.  Compensation and
  Expenses of Trustee

  	
  50

  
	
  SECTION 8.07.  Officers’ Certificate as
  Evidence

  	
  51

  
	
  SECTION 8.08.  Conflicting Interests of
  Trustee

  	
  51

  
	
  SECTION 8.09.  Eligibility of Trustee

  	
  51

  
	
  SECTION 8.10.  Resignation or Removal
  of Trustee

  	
  52

  
	
  SECTION 8.11.  Acceptance by Successor
  Trustee

  	
  53

  
	
  SECTION 8.12.  Succession by Merger,
  Etc

  	
  53

  
	
  SECTION 8.13.  Preferential Collection
  of Claims

  	
  54

  
	
  SECTION 8.14.  Trustee’s Application
  for Instructions from the Company

  	
  54

  
	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
   

  	
   

  
	
  THE NOTEHOLDERS

  	
   

  
	
   

  	
   

  
	
  SECTION 9.01.  ACTION BY NOTEHOLDERS

  	
  54

  
	
  SECTION 9.02.  Proof of Execution by
  Noteholders

  	
  55

  
	
  SECTION 9.03.  Who Are Deemed Absolute
  Owners

  	
  55

  
	
  SECTION 9.04.  Company-owned Notes
  Disregarded

  	
  55

  
	
  SECTION 9.05.  Revocation of Consents,
  Future Holders Bound

  	
  56

  
	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
   

  	
   

  
	
  MEETINGS OF NOTEHOLDERS

  	
   

  
	
   

  	
   

  
	
  SECTION 10.01.  Purpose of Meetings

  	
  56

  
	
  SECTION 10.02.  Call of Meetings by
  Trustee

  	
  56

  
	
  SECTION 10.03.  Call of Meetings by
  Company or Noteholders

  	
  57

  
	
  SECTION 10.04.  Qualifications for Voting

  	
  57

  
	
  SECTION 10.05.  Regulations

  	
  57

  
	
  SECTION 10.06.  Voting

  	
  58

  
	
  SECTION 10.07.  No Delay of Rights by
  Meeting

  	
  58

  

 

iii

 

	
  ARTICLE 11

  	
   

  
	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  	
   

  
	
   

  	
   

  
	
  SECTION 11.01.  Supplemental Indentures Without
  Consent of Noteholders

  	
  58

  
	
  SECTION 11.02.  Supplemental Indenture
  with Consent of Noteholders

  	
  60

  
	
  SECTION 11.03.  Effect of Supplemental
  Indenture

  	
  61

  
	
  SECTION 11.04.  Notation on Notes

  	
  61

  
	
  SECTION 11.05.  Evidence of Compliance
  of Supplemental Indenture to be Furnished to Trustee

  	
  61

  
	
   

  	
   

  
	
  ARTICLE 12

  	
   

  
	
   

  	
   

  
	
  CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

  	
   

  
	
   

  	
   

  
	
  SECTION 12.01.  Company May Consolidate
  on Certain Terms

  	
  61

  
	
  SECTION 12.02.  Successor Corporation to
  Be Substituted

  	
  62

  
	
  SECTION 12.03.  Opinion of Counsel to Be
  Given Trustee

  	
  62

  
	
   

  	
   

  
	
  ARTICLE 13

  	
   

  
	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  
	
  SECTION 13.01.  Discharge of Indenture

  	
  63

  
	
  SECTION 13.02.  Deposited Monies to Be
  Held in Trust by Trustee

  	
  63

  
	
  SECTION 13.03.  Paying Agent to Repay
  Monies Held

  	
  63

  
	
  SECTION 13.04.  Return of Unclaimed
  Monies

  	
  64

  
	
  SECTION 13.05.  Reinstatement

  	
  64

  
	
   

  	
   

  
	
  ARTICLE 14

  	
   

  
	
   

  	
   

  
	
  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

  	
   

  
	
   

  	
   

  
	
  SECTION 14.01.  Indenture and Notes
  Solely Corporate Obligations

  	
  64

  
	
   

  	
   

  
	
  ARTICLE 15

  	
   

  
	
   

  	
   

  
	
  CONVERSION OF NOTES

  	
   

  
	
   

  	
   

  
	
  SECTION 15.01.  Right to Convert

  	
  65

  
	
  SECTION 15.02.  Exercise of Conversion
  Privilege; Issuance of Common Stock on Conversion, No Adjustment for Interest
  or Dividends

  	
  65

  
	
  SECTION 15.03.  Cash Payments in Lieu of
  Fractional Shares

  	
  67

  
	
  SECTION 15.04.  Conversion Rate

  	
  67

  
	
  SECTION 15.05.  Adjustment of Conversion
  Rate

  	
  67

  
	
  SECTION 15.06.  Effect of
  Reclassification, Consolidation, Merger or Sale

  	
  76

  
	
  SECTION 15.07.  Taxes on Shares Issued

  	
  77

  

 

iv

 

	
  SECTION 15.08.  Reservation of Shares,
  Shares to Be Fully Paid; Compliance with Governmental Requirements; Listing
  of Common Stock

  	
  77

  
	
  SECTION 15.09.  Responsibility of
  Trustee

  	
  78

  
	
  SECTION 15.10.  Notice to Holders Prior
  to Certain Actions

  	
  78

  
	
  SECTION 15.11.  Rights Issued under the
  Outstanding Rights Agreement; Future Stockholder Rights Plans

  	
  79

  
	
   

  	
   

  
	
  ARTICLE 16

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 16.01.  Provisions Binding on
  Company’s Successors

  	
  80

  
	
  SECTION 16.02.  Official Acts by Successor
  Corporation

  	
  80

  
	
  SECTION 16.03.  Addresses for Notices,
  Etc

  	
  80

  
	
  SECTION 16.04.  Governing Law

  	
  80

  
	
  SECTION 16.05.  Evidence of Compliance
  with Conditions Precedent, Certificates to Trustee

  	
  80

  
	
  SECTION 16.06.  Legal Holidays

  	
  81

  
	
  SECTION 16.07.  Trust Indenture Act

  	
  81

  
	
  SECTION 16.08.  No Security Interest
  Created

  	
  81

  
	
  SECTION 16.09.  Benefits of Indenture

  	
  81

  
	
  SECTION 16.10.  Table of Contents,
  Headings, Etc

  	
  81

  
	
  SECTION 16.11.  Authenticating Agent

  	
  81

  
	
  SECTION 16.12.  Execution in
  Counterparts

  	
  82

  
	
  SECTION 16.13.  Severability

  	
  82

  
	
  SECTION 16.14.  Improper Payments

  	
  82

  
	
  SECTION 16.15.  Subordination Agreements

  	
  82

  

 

v

 

INDENTURE

 

INDENTURE dated as of May 2, 2006 between Axcelis
Technologies, Inc., a Delaware corporation (hereinafter called the “Company”), having its principal office at 108 Cherry Hill
Drive, Beverly, Massachusetts 01915 and U.S. Bank National Association, a
national banking association, as trustee hereunder (hereinafter called the “Trustee”), having its principal corporate trust office at
One Federal Street, 3rd Floor, Boston, Massachusetts 02110.

 

WITNESSETH:

 

WHEREAS, for its lawful corporate purposes, the
Company has duly authorized the issue of its 41⁄4% Convertible Senior
Subordinated Notes Due 2009 (hereinafter called the “Notes”),
in an aggregate principal amount not to exceed $75,000,000 and, to provide the
terms and conditions upon which the Notes are to be authenticated, issued and
delivered, the Company has duly authorized the execution and delivery of this
Indenture; and

 

WHEREAS, the Notes, the certificate of authentication
to be borne by the Notes, a form of assignment, a form of option to elect
repayment upon a Fundamental Change, and a form of conversion notice to be
borne by the Notes are to be substantially in the forms hereinafter provided
for; and

 

WHEREAS, all acts and things necessary to make the
Notes, when executed by the Company and authenticated and delivered by the
Trustee or a duly authorized authenticating agent, as in this Indenture
provided, the valid, binding and legal obligations of the Company, and to
constitute this Indenture a valid agreement according to its terms, have been
done and performed, and the execution of this Indenture and the issue hereunder
of the Notes have in all respects been duly authorized,

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

That in order to declare the terms and conditions upon
which the Notes are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the Notes
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to time
of the Notes (except as otherwise provided below), as follows:

 

ARTICLE 1

 

DEFINITIONS

 

SECTION
1.01.
Definitions. The
terms defined in this Section 1.01 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.01 All other terms used in this Indenture that are
defined in the Trust Indenture Act or which are by reference therein defined in
the Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires) shall have the meanings assigned to 

 

 

such terms in said Trust Indenture Act and in said Securities Act as in
force at the date of the execution of this Indenture. The words “herein”, “hereof”,
“hereunder”, and words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other Subdivision. The terms defined
in this Article include the plural as well as the singular.

 

“Accepted Purchased Shares”
has the meaning specified in Section 15.05(g).

 

“Accrual Date”
has the meaning specified in the definition of “Repurchase Value”.

 

“Acquired
Indebtedness” means, with respect to any specified Person, Indebtedness
of any other Person existing at the time such other Person is merged or
consolidated with or becomes a Subsidiary of such specified Person or is
assumed in connection with the acquisition of assets from such other Person.

 

“Adjustment Event”
has the meaning specified in Section 15.05(l).

 

“Affiliate” of
any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person. For the purposes of this definition, “control”,
when used with respect to any specified Person means the power to direct or
cause the direction of 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.

 

“Applicable Premium”
means, as of any date (the “Specified Premium
Date”), the amount provided for below expressed as a percentage of
the principal amount of the Notes:

 

(1)           if
the Specified Premium Date occurs on one of the following dates (each, a “Premium Accrual Date”),
the Applicable Premium will equal the amount set forth below for such Premium
Accrual Date

 

	
  Premium Accrual Date

  	
   

  	
  Applicable Premium

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 2, 2006

  	
   

  	
  0.850

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  July 15, 2006

  	
   

  	
  0.850

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  January 15, 2007

  	
   

  	
  2.685

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  July 15, 2007

  	
   

  	
  4.670

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  January 15, 2008

  	
   

  	
  6.750

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  July 15, 2008

  	
   

  	
  8.900

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  January 15, 2009

  	
   

  	
  11.125

  	
  %

  

 

2

 

(2)           provided that, if the Specified Premium Date occurs between
two Premium Accrual Dates, the Applicable Premium will equal the sum of (A) the
Applicable Premium for the Premium Accrual Date immediately preceding such
Specified Premium Date and (B) an amount equal to the product of (x) the
Applicable Premium for the immediately following Premium Accrual Date less the
Applicable Premium for the Premium Accrual Date immediately preceding such
Specified Premium Date multiplied by (y) a fraction, the numerator of which is
the number of days from the immediately preceding Premium Accrual Date to (and
including) the Specified Premium Date, using a 360-day year of twelve 30-day
months, and the denominator of which is the number of days from the immediately
preceding Premium Accrual Date to (and including) the immediately following
Premium Accrual Date, using a 360-day year of twelve 30-day months. For the
avoidance of doubt, by way of example only, if the Specified Premium Date were
June 1, 2007, the Applicable Premium would be 4.18% and if $1,000 of principal amount of Notes were converted
into shares of Common Stock as of such date, such principal amount would
convert into (assuming no adjustment to the Conversion Rate) 52 shares of
Common Stock plus a fracitonal share equal to 9/100 of a share.

 

“Board of Directors”
means the Board of Directors of the Company or a committee of such Board duly
authorized to act for it hereunder.

 

“Business Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which the banking institutions in The City of New York or the city in which
the Corporate Trust Office is located are authorized or obligated by law or
executive order to close or be closed.

 

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

 

“Closing Price”
has the meaning specified in Section 15.05(h)(1).

 

“Commission”
means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this
Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

 

“Common Stock”
means any stock of any class of the Company which has no preference in respect
of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject
to redemption by the Company. Subject to the provisions of Section 15.06, however, shares issuable on conversion of Notes
shall include only shares of the class designated as common stock of the
Company at the date of this Indenture (namely, the Common Stock, $0.001 par
value) or shares of any class 

 

3

 

or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable on conversion shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.

 

“Company” means
the corporation named as the “Company” in the first paragraph of this
Indenture, and, subject to the provisions of Article 12,
shall include its successors and assigns.

 

“Company Notice”
has the meaning specified in Section 3.05(b).

 

“Conversion Price”
as of any day will equal $1,000 divided by the Conversion Rate as of such date.

 

“Conversion Rate”
has the meaning specified in Section 15.04.

 

“Corporate Trust Office”
or other similar term, means the principal office of the Trustee at which at
any particular time its corporate trust business as it relates to this
Indenture shall be administered, which office is, at the date as of which this
Indenture is dated, located at One Federal Street, 3rd Floor,
Boston, Massachusetts 02110.

 

“Credit Agreement”
means that certain Revolving Credit Agreement dated as of October 3, 2003, as
amended, by and among the Company, the Lenders identified therein and ABN AMRO
Bank N.V., as Agent for such Lenders, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, in each case as amended (including any amendment and restatement
thereof), modified, renewed, refunded, replaced or refinanced from time to
time, including any agreement extending the maturity, consolidating or
otherwise restructuring (including adding Subsidiaries of the Company as
additional guarantors thereunder) all or any portion of the Indebtedness under
such agreement or successor or replacement agreement or whether by the same or
any other agent, lender or group and whether or not increasing the amount of
the Indebtedness that may be incurred thereunder, provided
that the aggregate principal amount of such Indebtedness may not exceed the
principal amount provided for in clause (i) of the definition of “Permitted
Senior and Pari Passu Debt.”

 

“Current Market Price”
has the meaning specified in Section 15.05(h)(2).

 

“Custodian”
means U.S. Bank National Association, as custodian with respect to the Notes in
global form, or any successor entity thereto.

 

“default” means
any event that is, or after notice or passage of time, or both, would be, an
Event of Default.

 

“Defaulted Interest”
has the meaning specified in Section 2.03.

 

4

 

“Depositary”
means, with respect to the Notes issuable or issued in whole or in part in
global form, the Person specified in Section 2.05(d)
as the Depositary with respect to such Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

“Designated Senior
Indebtedness” means any Senior Indebtedness under or in respect of (a)
the Credit Agreement, (b) the Line of Credit Agreement or (c) the Indebtedness
described in clause (iii) of the definition of “Permitted Senior and Pari Passu
Debt.”  If any payment made to any holder
of any Designated Senior Indebtedness or its Representative with respect to
such Designated Senior Indebtedness is rescinded or must otherwise be returned
by such holder or Representative upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, the reinstated Indebtedness of the
Company arising as a result of such rescission or return shall constitute
Designated Senior Indebtedness effective as of the date of such rescission or
return.

 

“Determination Date”
has the meaning specified in Section 15.05(l).

 

“Event of Default”
means any event specified in Section 7.01(a), (b),
(c), (d) or (e).

 

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

 

“Expiration Time”
has the meaning specified in Section 15.05(f).

 

“Fair Market Value”
has the meaning specified in Section 15.05(h)(3).

 

“Fundamental Change”
means the occurrence of any transaction or event in connection with which all
or substantially all of the Common Stock shall be exchanged for, converted
into, acquired for or constitute solely the right to receive, consideration
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or otherwise)
which is not all or substantially all common stock that is (or, upon
consummation of or immediately following such transaction or event, which will
be) listed on a United States national securities exchange or approved (or,
upon consummation of or immediately following such transaction or event, which
will be approved) for quotation on the NASDAQ National Market or any similar
United States system of automated dissemination of quotations of securities
prices.

 

“Fundamental Change
Expiration Time” has the meaning specified in Section 3.05(b).

 

“Global Note”
has the meaning set forth in Section 2.05(b).

 

“Indebtedness”
means, with respect to any Person, and without duplication, (a) all
indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person for borrowed money (including obligations of such Person in respect
of overdrafts, foreign exchange contracts, currency exchange agreements,
interest rate protection agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account 

 

5

 

payable or other accrued current liability or obligation incurred in
the ordinary course of business in connection with the obtaining of materials
or services; (b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of credit,
bank guarantees or bankers’ acceptances; (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of such Person required, in
conformity with generally accepted accounting principles, to be accounted for
as capitalized lease obligations on the balance sheet of such Person and all
obligations and other liabilities (contingent or otherwise) under any lease or
related document (including a purchase agreement) in connection with the lease
of real property which provides that such Person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor and the
obligations of such Person under such lease or related document to purchase or
to cause a third party to purchase such leased property; (d) all obligations of
such Person (contingent or otherwise) with respect to an interest rate or other
swap, cap or collar agreement or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument or agreement;
(e) all direct or indirect guaranties or similar agreements by such Person in
respect of, and obligations or liabilities (contingent or otherwise) of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another Person
of the kind described in clauses (a) through (d); (f) any indebtedness or other
obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held
by such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).

 

“Indenture”
means this instrument as originally executed or, if amended or supplemented as
herein provided, as so amended or supplemented.

 

“interest” means,
when used with reference to the Notes, any interest payable under the terms of
the Notes and Liquidated Damages, if any, payable under the terms of the
Registration Rights Agreement.

 

“junior securities”
has the meaning specified in Section 4.08.

 

“Line of Credit
Agreement” means that certain Master Letter of Credit Agreement
dated as of July 24, 2003, as amended, by and between the Company and ABN AMRO
Bank N.V., including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, in each case as
amended (including any amendment and restatement thereof), modified, renewed,
refunded, replaced or refinanced from time to time, including any agreement
extending the maturity, consolidating or otherwise restructuring (including
adding Subsidiaries of the Company as additional guarantors thereunder) all or
any portion of the Indebtedness under such agreement or successor or
replacement agreement or whether by the same or any other agent, lender or
group and whether or not increasing the amount of the Indebtedness that may be
incurred thereunder, provided that
the aggregate principal amount of such Indebtedness may not exceed the
principal amount provided for in clause (ii) of the definition of “Permitted
Senior and Pari Passu Debt.”

 

6

 

“Liquidated Damages”
has the meaning specified for “Liquidated Damages Amount” in Section 2(e) of
the Registration Rights Agreement.

 

“Liquidated Damages Notice”
has the meaning specified in Section 5.11.

 

“nonelecting share”
has the meaning specified in Section 15.06.

 

“Non-Payment Default”
has the meaning specified in Section 4.02(ii).

 

“Note” or “Notes” means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including the Global Note.

 

“Note Guarantee”
has the meaning specified in Section 5.13(a).

 

“Note register”
has the meaning specified in Section 2.05(a).

 

“Note registrar”
has the meaning specified in Section 2.05(a).

 

“Noteholder” or “holder” as applied to any Note, or other similar terms (but
excluding the term “beneficial holder”), means any Person in whose name at the
time a particular Note is registered on the Note registrar’s books.

 

“Notice Date”
means the date of mailing of the notice of redemption pursuant to Section 3.02.

 

“Offer Expiration Time”
has the meaning specified in Section 15.05(g).

 

“Officers’ Certificate”,
when used with respect to the Company, means a certificate signed by both (a)
the Chairman of the Board, the Chief Executive Officer, the President or any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title “Vice President”) and (b) the Treasurer
or any Assistant Treasurer, the Controller or any Assistant Controller, or the
Secretary or any Assistant Secretary of the Company.

 

“Opinion of Counsel”
means an opinion in writing signed by legal counsel, who may be an employee of
or counsel to the Company, or other counsel reasonably acceptable to the
Trustee.

 

“outstanding”,
when used with reference to Notes and subject to the provisions of Section 9.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:

 

(a)           Notes
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

7

 

(b)           Notes,
or portions thereof, (i) for the redemption of which monies in the necessary
amount shall have been deposited in trust with the Trustee or with any paying
agent (other than the Company) or (ii) which shall have been otherwise defeased
in accordance with Article 13;

 

(c)           Notes
in lieu of which, or in substitution for which, other Notes shall have been
authenticated and delivered pursuant to the terms of Section 2.06; and

 

(d)           Notes
converted into Common Stock pursuant to Article 15
and Notes deemed not outstanding pursuant to Article 3.

 

“Pari Passu Indebtedness”
means Indebtedness that is both (i) subordinate in right of payment to any Designated
Senior Indebtedness of the Company and (ii) “pari passu” in right of payment with
the Notes.

 

“Payment Blockage Notice”
has the meaning specified in Section 4.02(ii).

 

“Payment Default”
has the meaning specified in Section 4.02(i).

 

“Permitted Senior
and Pari Passu Debt” has the meaning specified in Section 5.12.

 

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

 

“Portal Market”
means The Portal Market operated by the National Association of Securities
Dealers, Inc. or any successor thereto.

 

“Predecessor Note”
of any particular Note means every previous Note evidencing all or a portion of
the same debt as that evidenced by such particular Note, and, for the purposes
of this definition, any Note authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or stolen Note shall
be deemed to evidence the same debt as the lost, destroyed or stolen Note that
it replaces.

 

“premium” means
any premium payable under the terms of the Notes or this Indenture, including,
without limitation, the Applicable Premium.

 

“Purchase Money Indebtedness” means any Indebtedness incurred
by a Person to finance the cost (including the cost of construction or improvement
and in the case of any Capitalized Lease Obligation, the lease) of any real or
personal property, the principal amount of which Indebtedness does not exceed
the sum of (i) 100% of such cost and (ii) reasonable fees and expenses of such
Person incurred in connection therewith.

 

“Purchased Shares”
has the meaning specified in Section 15.05(f).

 

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

 

“Record Date”
has the meaning specified in Section 15.05(h)(4).

 

8

 

“Refinancing Indebtedness”
means, with respect to the Indebtedness described in clauses (iii) and (iv) of
the definition of “Permitted Senior and Pari Passu Debt,” Indebtedness that
refunds, refinances or extends any such Indebtedness, but only to the extent
that:

 

(i)            the
Refinancing Indebtedness is scheduled to mature or is redeemable at the sole
option of the holder thereof, in whole or in part, in each case either (a) no
earlier than the Indebtedness being refunded, refinanced or extended, or (b)
after the maturity date of the Notes,

 

(ii)           the
portion of the Refinancing Indebtedness that is scheduled to mature or is
redeemable at the sole option of the holder thereof, in whole or in part, in
each case on or prior to the maturity date of the Notes has a weighted average
life to maturity at the time such Refinancing Indebtedness is incurred that is
equal to or greater than the weighted average life to maturity of the portion
of the Indebtedness being refunded, refinanced or extended that is scheduled to
mature on or prior to the maturity date of the Notes;

 

(iii)          such
Refinancing Indebtedness is in an aggregate principal amount that is equal to
or less than the sum of (a) the aggregate principal amount then outstanding
under the Indebtedness being refunded, refinanced or extended, (b) the amount
of any premium required to be paid in connection with such refunding,
refinancing or extension pursuant to the terms of such Indebtedness or the
amount of any premium reasonably determined by the Board of Directors of the
Company as necessary to accomplish such refunding, refinancing or extension by
means of a tender offer or privately negotiated purchase and (c) the
amount of customary fees, expenses and costs related to the incurrence of such
Refinancing Indebtedness; and

 

(iv)          such
Refinancing Indebtedness is incurred by the same Person that initially incurred
the Indebtedness being refunded, refinanced or extended, except that the
Company may incur Refinancing Indebtedness to refund, refinance or extend
Indebtedness of any Wholly-Owned Subsidiary.

 

“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of May 2,
2006, between the Company and Quantum Partners LDC, as amended from time to
time in accordance with its terms.

 

“Representative”
means the (a) indenture trustee or other trustee, agent or representative for
any Designated Senior Indebtedness or (b) with respect to any Designated Senior
Indebtedness that does not have any such trustee, agent or other representative,
(i) in the case of such Designated Senior Indebtedness issued pursuant to an
agreement providing for voting arrangements as among the holders or owners of
such Designated Senior Indebtedness, any holder or owner of such Designated
Senior Indebtedness acting with the consent of the required Persons necessary
to bind such holders or owners of such Designated Senior Indebtedness and (ii)
in the case of all other such Designated Senior Indebtedness, the holder or
owner of such Designated Senior Indebtedness.

 

9

 

“Repurchase Date”
has the meaning specified in Section 3.05(a).

 

“Repurchase Value”
means, as of any date (the “Specified Date”),
the amount provided for below expressed as a percentage of the principal amount
of the Notes:

 

(1)           if
the Specified Date occurs on one of the following dates (each, an “Accrual Date”), the Repurchase Value will
equal the amount set forth below for such Accrual Date

 

	
  Accrual Date

  	
   

  	
  Repurchase Value

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  May 2, 2006

  	
   

  	
  100.85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  July 15, 2006

  	
   

  	
  101.21

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  January 15, 2007

  	
   

  	
  104.12

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  July 15, 2007

  	
   

  	
  107.2

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  January 15, 2008

  	
   

  	
  110.45

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  July 15, 2008

  	
   

  	
  113.85

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  January 14, 2009

  	
   

  	
  117.4

  	
  %

  

 

(2)           provided that, if the Specified Date occurs between two
Accrual Dates, the Repurchase Value will equal the sum of (A) the Repurchase
Value for the Accrual Date immediately preceding such Specified Date and (B) an
amount equal to the product of (x) the Repurchase Value for the immediately
following Accrual Date less the Repurchase Value for the Accrual Date
immediately preceding such Specified Date multiplied by (y) a fraction, the
numerator of which is the number of days from the immediately preceding Accrual
Date to (and including) the Specified Date, using a 360-day year of twelve
30-day months, and the denominator of which is the number of days from the
immediately preceding Accrual Date to (and including) the immediately following
Accrual Date, using a 360-day year of twelve 30-day months. For the avoidance
of doubt, by way of example only, if the Specified Date were June 1, 2007, the
Repurchase Value would be 106.45%.

 

“Responsible Officer”,
when used with respect to the Trustee, means an officer of the Trustee in the
Corporate Trust Office assigned and duly authorized by the Trustee to
administer this Indenture.

 

“Restricted Securities”
has the meaning specified in Section 2.05(d).

 

10

 

“Rights” has the
meaning specified in Section 15.11(a).

 

“Rights Agreement”
has the meaning specified in Section 15.11(a).

 

“Rule 144A”
means Rule 144A as promulgated under the Securities Act.

 

“Securities” has
the meaning specified in Section 15.05(d).

 

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

 

“Senior Indebtedness”
means the principal of, premium, if any, interest (including all interest
accruing subsequent to the commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowable as a claim in
any such proceeding) and rent payable on or in connection with, and all fees,
costs, expenses and other amounts accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date of this Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing), unless in the case
of any particular Indebtedness the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes or expressly
provides that such Indebtedness is “pari passu” with or “ junior” to the Notes.
Notwithstanding the foregoing, the term Senior Indebtedness shall not include
any Indebtedness of the Company to any Subsidiary of the Company.

 

“Significant Subsidiary”
means, as of any date of determination, a Subsidiary of the Company that would
constitute a “significant subsidiary” as such term is defined under Rule 1-02
of Regulation S-X of the Commission as in effect on the date of this Indenture.

 

“Specified Date”
has the meaning specified in the definition of “Repurchase Value”.

 

“Subsidiary”
means, with respect to any Person, (i) any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
capital stock or other equity interest entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
managing general partner of which is such Person or a subsidiary of such Person
or (b) the only general partners of which are such Person or of one or more
subsidiaries of such Person (or any combination thereof).

 

“Trading Day”
has the meaning specified in Section 15.05(h)(5).

 

“transfer” has
the meaning specified in Section 2.05(d).

 

“Trigger Event”
has the meaning specified in Section 15.05(d).

 

11

 

“Trust Indenture Act”
means the Trust Indenture Act of 1939, as amended, as it was in force at the
date of this Indenture, except as provided in Sections 11.03
and 15.06; provided that,
in the event the Trust Indenture Act of 1939 is amended after the date hereof,
the term “Trust Indenture Act” shall mean, to the extent required by such
amendment, the Trust Indenture Act of 1939 as so amended.

 

“Trustee” means
U.S. Bank National Association and its successors and any corporation resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee at the time serving as successor trustee
hereunder.

 

“Wholly-Owned Subsidiary” means any Subsidiary, all of the
outstanding voting stock and other equity interests (other than directors’
qualifying shares), as applicable, of which is owned, directly or indirectly,
by the Company.

 

The definitions of certain other terms are as
specified in Sections 2.05 and 3.05 and Article 15.

 

ARTICLE 2

 

ISSUE, DESCRIPTION,
EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

 

SECTION
2.01.
Designation, Amount and Issue of Notes. The Notes shall be designated as “41⁄4%
Convertible Senior Subordinated Notes Due 2009”. Notes not to exceed the
aggregate principal amount of $75,000,000 (except pursuant to Sections 2.05, 2.06, 3.03, 3.05 and 15.02 hereof) upon the execution of this Indenture, or
from time to time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Notes to or upon the written order of the Company, signed by (a) its Chairman of the Board, Chief Executive
Officer, President or any Vice President (whether or not designated by a number
or numbers or word or words added before or after the title “Vice President”)
and (b) its Treasurer or any Assistant
Treasurer, its Controller or any Assistant Controller or its Secretary or any
Assistant Secretary, without any further action by the Company hereunder.

 

SECTION
2.02.
Form of Notes. The
Notes and the Trustee’s certificate of authentication to be borne by such Notes
shall be substantially in the form set forth in Exhibit A, which is
incorporated in and made a part of this Indenture.

 

Any of the Notes may have such letters, numbers or
other marks of identification and such notations, legends and endorsements as
the officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.

 

Any Global Note shall represent such of the
outstanding Notes as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Notes from 

 

12

 

time to time endorsed thereon and that the aggregate amount of
outstanding Notes represented thereby may from time to time be increased or
reduced to reflect transfers or exchanges permitted hereby. Any endorsement of
a Global Note to reflect the amount of any increase or decrease in the amount
of outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Note shall be made to the holder of such Note.

 

The terms and provisions contained in the form of Note
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.

 

SECTION
2.03.
Date and Denomination of Notes, Payments of Interest. The Notes shall be issuable in
registered form without coupons in denominations of $1,000 principal amount and
integral multiples thereof. Every Note shall be dated the date of its
authentication and shall bear interest from the applicable date in each case as
specified on the face of the form of Note attached as Exhibit A hereto.
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve (12) 30-day months.

 

The Person in whose name any Note (or its Predecessor
Note) is registered on the Note register at the close of business on any record
date with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date, except that the interest
payable upon redemption will be payable to the Person to whom principal is
payable pursuant to such redemption (unless the date of redemption is an
interest payment date, in which case the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such Notes
registered as such on the applicable record date). Notwithstanding the
foregoing, if any Note (or portion thereof) is converted into Common Stock
during the period after a record date for the payment of interest to (but
excluding) the next succeeding interest payment date and such Note (or portion
thereof) has been called for redemption on a redemption date or Repurchase Date
which occurs during such period, the Company shall not be required to pay
interest on such interest payment date in respect of any such Note (or portion
thereof). Interest shall be payable at the office of the paying agent which
shall initially be the Corporate Trust Office and may, as the Company shall
specify to the paying agent in writing by each record date, be paid either (i)
by check mailed to the address of the Person entitled thereto as it appears in
the Note register (provided that
any holder of Notes with an aggregate principal amount in excess of $2,000,000
shall, at the written election of such holder, be paid by wire transfer in
immediately available funds) or (ii) by transfer to an account maintained by
such Person located in the United States; provided that
payments to the Depositary will be made by wire transfer of immediately available
funds to the account of the Depositary or its nominee. The term “record date” with respect to any interest payment date shall
mean the January 1 or July 1 preceding the relevant January 15 or July 15,
respectively.

 

Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any January 15 or July 15 (herein
called “Defaulted Interest”) shall forthwith
cease to be payable to the Noteholder on the relevant record date by virtue of
his having been such 

 

13

 

Noteholder, and such Defaulted Interest shall be paid by the Company,
at its election in each case, as provided in clause (1) or (2) below:

 

(1)           The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Notes (or their respective Predecessor Notes) are registered at
the close of business on a special record date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest to be
paid on each Note and the date of the payment (which shall be not less than
twenty-five (25) days after the receipt by the Trustee of such notice, unless
the Trustee shall consent to an earlier date), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Person entitled to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less than ten
(10) days prior to the date of the proposed payment, and not less than ten (10)
days after the receipt by the Trustee of the notice of the proposed payment,
the Trustee shall promptly notify the Company of such special record date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record date
therefor to be mailed, first-class postage prepaid, to each Noteholder at his
address as it appears in the Note register, not less than ten (10) days prior
to such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Notes (or their
respective Predecessor Notes) were registered at the close of business on such
special record date and shall no longer be payable pursuant to the following
clause (2) of this Section 2.03.

 

(2)           The
Company may make payment of any Defaulted Interest in any other lawful manner
not inconsistent with the requirements of any securities exchange or automated
quotation system on which the Notes may be listed or designated for issuance,
and upon such notice as may be required by such exchange or automated quotation
system, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.

 

SECTION
2.04.
Execution of Notes. The Notes shall be signed in the
name and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, Chief Executive Officer, President or any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title “Vice President”) and attested by the manual or facsimile
signature of its Secretary or any of its Assistant Secretaries or its Treasurer
or any of its Assistant Treasurers (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by Section 16.11), shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee (or such an authenticating agent) upon any Note executed by the Company
shall be conclusive evidence that the Note so authenticated 

 

14

 

has been duly authenticated and delivered hereunder and that the holder
is entitled to the benefits of this Indenture.

 

In case any officer of the Company who shall have
signed any of the Notes shall cease to be such officer before the Notes so
signed shall have been authenticated and delivered by the Trustee, or disposed
of by the Company, such Notes nevertheless may be authenticated and delivered
or disposed of as though the person who signed such Notes had not ceased to be
such officer of the Company, and any Note may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such Note,
shall be the proper officers of the Company, although at the date of the
execution of this Indenture any such person was not such an officer.

 

SECTION
2.05.
Exchange and Registration of Transfer of Notes; Restrictions
on Transfer, Depositary. (a)  The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and
in any other office or agency of the Company designated pursuant to Section 5.02 being herein sometimes collectively referred to as
the “Note register”) in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes. The Note register shall be
in written form or in any form capable of being converted into written form
within a reasonably prompt period of time. The Trustee is hereby appointed “Note registrar” for the purpose of registering Notes and
transfers of Notes as herein provided. The Company may appoint one or more
co-registrars in accordance with Section 5.02.

 

Upon surrender for registration of transfer of any
Note to the Note registrar or any co-registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.05,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes of
any authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture.

 

Notes may be exchanged for other Notes of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at any such office or agency maintained
by the Company pursuant to Section 5.02. Whenever
any Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Noteholder making
the exchange is entitled to receive bearing registration numbers not
contemporaneously outstanding.

 

All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.

 

All Notes presented or surrendered for registration of
transfer or for exchange, redemption or conversion shall (if so required by the
Company or the Note registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Notes shall be duly executed by the Noteholder thereof or his attorney duly
authorized in writing.

 

15

 

No service charge shall be made to any holder for any
registration of transfer or exchange of Notes, but the Company may require
payment by the holder of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Notes.

 

Neither the Company nor the Trustee nor any Note
registrar shall be required to exchange or register a transfer of (a) any Notes
for a period of fifteen (15) days next preceding any selection of Notes to be
redeemed, (b) any Notes or portions thereof called for redemption pursuant to
Section 3.02, (c) any Notes or portions thereof
surrendered for conversion pursuant to Article 15
or (d) any Notes or portions thereof tendered for redemption (and not
withdrawn) pursuant to Section 3.05.

 

(b)           So
long as the Notes are eligible for book-entry settlement with the Depositary,
or unless otherwise required by law, all of the Notes will be represented by
one or more Notes in global form registered in the name of the Depositary or
the nominee of the Depositary (the “Global Note”),
except as otherwise specified below. The transfer and exchange of beneficial
interests in any such Global Note shall be effected through the Depositary in
accordance with this Indenture and the procedures of the Depositary therefor. Except
as provided below, beneficial owners of a Global Note shall not be entitled to
have certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form and will not be
considered holders of such Global Note.

 

(c)           Any
Global Note may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Indenture as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be tradeable
on The Portal Market or as may be required for the Notes to be tradeable on any
other market developed for trading of securities pursuant to Rule 144A or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange or automated quotation
system upon which the Notes may be listed or traded or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Notes are subject.

 

(d)           Every
Note that bears or is required under this Section 2.05(d)
to bear the legend set forth in this Section (together with any Common Stock
issued upon conversion of the Notes and required to bear the legend set forth
in Section 2.05(e), collectively, the “Restricted Securities”) shall be subject to the restrictions
on transfer set forth in this Section 2.05(d)
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the holder of each such Restricted Security, by such Noteholder’s acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.05(d) and 2.05(e),
the term “transfer” encompasses any sale, pledge,
loan, transfer or other disposition whatsoever of any Restricted Security.

 

Until the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), any certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof, other than Common Stock, if any,
issued upon conversion thereof, which shall bear the legend set forth in
Section 2.05(e), if 

 

16

 

applicable) shall bear a legend in substantially the following form,
unless such Note has been sold pursuant to a registration statement that has
been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer), or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE
144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE
EXCEPT (A) TO AXCELIS TECHNOLOGIES, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, INCLUDING THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (2)(D) ABOVE), IT WILL FURNISH TO U.S. BANK NATIONAL
ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THIS NOTE PURSUANT TO CLAUSE (2)(D) ABOVE OR UPON ANY TRANSFER OF THIS NOTE
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.

 

Any Note (or security issued in exchange or
substitution therefor) as to which such restrictions on transfer shall have
expired in accordance with their terms or as to conditions for 

 

17

 

removal of the foregoing legend set forth therein have been satisfied
may, upon surrender of such Note for exchange to the Note registrar in
accordance with the provisions of this Section 2.05,
be exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this Section 2.05(d). Any Person having a beneficial interest in a
Note that is a Restricted Security may upon request, subject to the rules and
procedures of the Depositary that are applicable to such transfer, transfer
such beneficial interest to a Person who is permitted to take delivery thereof
in the form of a Note that does bear the legend set forth in this Section
2.05(d). Upon receipt by the Trustee of written instructions and, if the
Company or the Trustee so requests, an opinion of counsel, certificates or
other information reasonably acceptable to the Company and the Trustee to the
effect that such transfer will result in such note ceasing to be a “restricted
security” within the meaning of Rule 144 under the Securities Act, the Trustee,
as registrar and custodian shall reduce or cause to be reduced the aggregate
principal amount of the Global Note that is a Restricted Security by the
appropriate principal amount and shall increase or cause to be increased the
aggregate principal amount of a Global Note that does bear the legend set forth
in this Section 2.05(d) by a like principal amount
or issue a Note that is not a Global Note in a like principal amount. If the
transfer is to be effected through an unlegended Global Note and no unlegended
Global Note is then outstanding, the Company shall execute and the Trustee
shall, upon receipt of a Company order (which the Company agrees to deliver
promptly), authenticate and deliver an unlegended Global Note.

 

Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in this Section 2.05(d)),
a Global Note may not be transferred as a whole or in part except 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 Depositary shall be a clearing agency registered
under the Exchange Act. The Company initially appoints The Depository Trust
Company to act as Depositary with respect to the Notes in global form.
Initially, the Global Note shall be issued to the Depositary, registered in the
name of Cede & Co., as the nominee of the Depositary, and deposited with
the Custodian for Cede & Co.

 

If at any time the Depositary for a Global Note
notifies the Company that it is unwilling or unable to continue as Depositary
for such Note, the Company may appoint a successor Depositary with respect to such
Note. If a successor Depositary is not appointed by the Company within ninety
(90) days after the Company receives such notice, the Company will execute, and
the Trustee, upon receipt of an Officers’ Certificate for the authentication
and delivery of Notes, will authenticate and deliver, Notes in certificated
form, in aggregate principal amount equal to the principal amount of such
Global Note, in exchange for such Global Note.

 

Notes in certificated form issued in exchange for a
Global Note pursuant to this Section 2.05 shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. Upon execution and authentication,
the Trustee shall deliver such Notes in certificated form to the Persons in
whose names such Notes in certificated form are so registered.

 

18

 

At such time as all interests in a Global Note have
been redeemed, converted, canceled or the Global Note is exchanged for Notes in
certificated form, such Global Note shall, upon receipt thereof, be canceled by
the Trustee in accordance with standing procedures and instructions existing
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Global Note is redeemed, converted,
repurchased or canceled, the principal amount of such Global Note shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the Custodian, be appropriately reduced or increased, as the
case may be, and an endorsement shall be made on such Global Note, by the
Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.

 

(e)           Until
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), any stock
certificate representing Common Stock issued upon conversion of any Note shall
bear a legend in substantially the following form, unless such Common Stock has
been sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer) or such Common Stock has been issued upon conversion of Notes
that have been transferred pursuant to a registration statement that has been
declared effective under the Securities Act, or unless otherwise agreed by the
Company in writing with written notice thereof to the transfer agent:

 

THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES
THAT, UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
COMMON STOCK EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO AXCELIS TECHNOLOGIES, INC. OR TO
ANY SUBSIDIARY THEREOF, (B) TO A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) PURSUANT
TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, INCUDING THE
EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
(1)(D) ABOVE), IT WILL FURNISH TO REGISTRAR & TRANSFER COMPANY, AS TRANSFER
AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A 

 

19

 

TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON TO
WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (1)(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE (1)(D) ABOVE OR UPON ANY
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

 

Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms or as to which the
conditions for removal of the foregoing legend set forth therein have been
satisfied may, upon surrender of the certificates representing such shares of
Common Stock for exchange in accordance with the procedures of the transfer
agent for the Common Stock, be exchanged for a new certificate or certificates
for a like number of shares of Common Stock, which shall not bear the
restrictive legend required by this Section 2.05(e).

 

(f)            Any Note or Common
Stock issued upon the conversion or exchange of a Note that, prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), is purchased or owned by
the Company or any Affiliate thereof may not be resold by the Company or such
Affiliate unless registered under the Securities Act or resold pursuant to an
exemption from the registration requirements of the Securities Act in a
transaction which results in such Notes or Common Stock, as the case may be, no
longer being “restricted securities” (as defined under Rule 144).

 

(g)           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 Note
(including any transfers between or among beneficial owners of interest in any
Global Note) 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. The Trustee shall have no responsibility for the actions
or omissions of the Depositary, or for the accuracy of the books or records of
the Depositary.

 

SECTION
2.06.
Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become
mutilated or be destroyed, lost or stolen, the Company in its discretion may
execute, and upon its written request the Trustee or an authenticating agent
appointed by the Trustee shall authenticate and make available for delivery, a
new Note, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for the
Note so destroyed, lost or stolen. In every case the applicant for a
substituted Note shall furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them 

 

20

 

harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.

 

Following receipt by the Trustee or such
authenticating agent, as the case may be, of satisfactory security or indemnity
and evidence, as described in the preceding paragraph, the Trustee or such
authenticating agent may authenticate any such substituted Note and make
available for delivery such Note. Upon the issuance of any substituted Note,
the Company may require the payment by the holder of a sum sufficient to cover
any tax, assessment or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any Note
which has matured or is about to mature or has been called for redemption or
has been tendered for redemption (and not withdrawn) or is to be converted into
Common Stock shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Note, pay or authorize the payment
of or convert or authorize the conversion of the same (without surrender
thereof except in the case of a mutilated Note), as the case may be, if the
applicant for such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any
loss, liability, cost or expense caused by or connected with such substitution,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, the Trustee and, if applicable, any paying agent or
conversion agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.

 

Every substitute Note issued pursuant to the
provisions of this Section 2.06 by virtue of the
fact that any Note is destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be found at any time, and shall be entitled to all the
benefits of (but shall be subject to all the limitations set forth in) this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder. To the extent permitted by law, all Notes shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment or conversion of mutilated, destroyed,
lost or stolen Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.

 

SECTION
2.07.
Temporary Notes. Pending the preparation of Notes
in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request
of the Company, authenticate and deliver temporary Notes (printed or
lithographed). Temporary Notes shall be issuable in any authorized
denomination, and substantially in the form of the Notes in certificated form,
but with such omissions, insertions and variations as may be appropriate for
temporary Notes, all as may be determined by the Company. Every such temporary
Note shall be executed by the Company and authenticated by the Trustee or such
authenticating agent upon the same conditions and in substantially the same
manner, and with the same effect, as the Notes in certificated form. Without
unreasonable delay the Company will execute and deliver to the Trustee or such
authenticating agent Notes in 

 

21

 

certificated form and thereupon any or all temporary Notes may be surrendered
in exchange therefor, at each office or agency maintained by the Company
pursuant to Section 5.02 and the Trustee or such
authenticating agent shall authenticate and make available for delivery in
exchange for such temporary Notes an equal aggregate principal amount of Notes
in certificated form. Such exchange shall be made by the Company at its own
expense and without any charge therefor. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits and subject to the
same limitations under this Indenture as Notes in certificated form
authenticated and delivered hereunder.

 

SECTION
2.08.
Cancellation of Notes Paid, Etc. All Notes surrendered for the
purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled
by it, and no Notes shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee shall dispose
of such canceled Notes in accordance with its customary procedures. If the
Company shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Notes unless
and until the same are delivered to the Trustee for cancellation.

 

SECTION
2.09.
CUSIP Numbers. The
Company in issuing the Notes may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices of
redemption as a convenience to Noteholders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption 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.

 

ARTICLE 3

 

REDEMPTION OF NOTES

 

SECTION
3.01.
Redemption of Notes. The Notes may be redeemed at the
option of the Company, in whole or in part, upon notice as set forth in Section
3.02, at the Repurchase Value, together with
accrued and unpaid interest, if any, to, but excluding, the date fixed for
redemption.

 

SECTION
3.02.
Notice of Redemptions, Selection of Notes. In case the Company shall desire
to exercise the right to redeem all or, as the case may be, any part of the
Notes pursuant to Section 3.01, it shall fix a
date for redemption and it or, at its written request received by the Trustee
not fewer than forty-five (45) days prior (or such shorter period of time as
may be acceptable to the Trustee) to the date fixed for redemption, the Trustee
in the name of and at the expense of the Company, shall mail or cause to be
mailed a notice of such redemption not fewer than thirty (30) nor more than
sixty (60) days prior to the date fixed for redemption to the holders of Notes
so to be redeemed as a whole or in part at their last addresses as the same
appear on the Note register; provided that
if the Company shall give such notice, it shall also give written notice, and
written notice of the Notes to be redeemed, to the Trustee. Such mailing shall
be by 

 

22

 

first class mail. The notice if mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice. In any case, failure to give such notice by mail
or any defect in the notice to the holder of any Note designated for redemption
as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note. Concurrently with the mailing of any such notice
of redemption, the Company shall issue a press release announcing such
redemption, the form and content of which press release shall be determined by
the Company in its sole discretion. The failure to issue any such press release
or any defect therein shall not affect the validity of the redemption notice or
any of the proceedings for the redemption of any Note called for redemption.

 

Each such notice of redemption shall specify the
aggregate principal amount of Notes to be redeemed, the CUSIP number or numbers
of the Notes being redeemed, the date fixed for redemption (which shall be a
Business Day), the Repurchase Value at which Notes are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Notes, that interest accrued to the date fixed for redemption
will be paid as specified in said notice, and that on and after said date
interest thereon or on the portion thereof to be redeemed will cease to accrue.
Such notice shall also state the current Conversion Rate (as determined by the
Company and certified to the Trustee in writing) and the date on which the
right to convert such Notes or portions thereof into Common Stock will expire.
If fewer than all the Notes are to be redeemed, the notice of redemption shall
identify the Notes to be redeemed (including CUSIP numbers, if any). In case
any Note is to be redeemed in part only, the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state
that, on and after the date fixed for redemption, upon surrender of such Note,
a new Note or Notes in principal amount equal to the unredeemed portion thereof
will be issued.

 

On or prior to the redemption date specified in the
notice of redemption given as provided in this Section 3.02,
the Company will deposit with the Trustee or with one or more paying agents
(or, if the Company is acting as its own paying agent, set aside, segregate and
hold in trust as provided in Section 5.04) an
amount of money in immediately available funds sufficient to redeem on the
redemption date all the Notes (or portions thereof) so called for redemption
(other than those theretofore surrendered for conversion into Common Stock) at
the appropriate Repurchase Value together with accrued interest to, but
excluding, the date fixed for redemption; provided that
if such payment is made on the redemption date it must be received by the
Trustee or paying agent, as the case may be, by 10:00 a.m. New York City time
on such date. The Company shall be entitled to retain any interest, yield or
gain on amounts deposited with the Trustee or any paying agent pursuant to this
Section 3.02 in excess of amounts required hereunder
to pay the Repurchase Value, and accrued interest to, but excluding, the date
fixed for redemption. If any Note called for redemption is converted pursuant
hereto prior to such redemption, any money deposited with the Trustee or any
paying agent or so segregated and held in trust for the redemption of such Note
shall be paid to the Company upon its written request, or, if then held by the
Company, shall be discharged from such trust. Whenever any Notes are to be
redeemed, the Company will give the Trustee written notice in the form of an
Officers’ Certificate not fewer than forty-five (45) days (or such shorter
period of time as may be acceptable to the Trustee) prior to the redemption
date as to the aggregate principal amount of Notes to be redeemed.

 

23

 

If less than all of the outstanding Notes are to be
redeemed, the Trustee shall select the Notes or portions thereof of the Global
Note or the Notes in certificated form to be redeemed (in principal amounts of
$1,000 or integral multiples thereof) by lot, on a pro rata basis or by another
method the Trustee deems fair and appropriate. If any Note selected for partial
redemption is submitted for conversion in part after such selection, the
portion of such Note submitted for conversion shall be deemed (so far as may
be) to be the portion to be selected for redemption. The Notes (or portions
thereof) so selected shall be deemed duly selected for redemption for all
purposes hereof, notwithstanding that any such Note is submitted for conversion
in part before the mailing of the notice of redemption.

 

Upon any redemption of less than all of the
outstanding Notes, the Company and the Trustee may (but need not), solely for
purposes of determining the pro rata allocation among such Notes as are
unconverted and outstanding at the time of redemption, treat as outstanding any
Notes surrendered for conversion during the period of fifteen (15) days next
preceding the mailing of a notice of redemption and may (but need not) treat as
outstanding any Note authenticated and delivered during such period in exchange
for the unconverted portion of any Note converted in part during such period.

 

SECTION
3.03.
Payment of Notes Called for Redemption. If notice of redemption has been
given as above provided, the Notes or portion of Notes with respect to which
such notice has been given shall, unless converted into Common Stock pursuant
to the terms hereof, become due and payable on the date fixed for redemption
and at the place or places stated in such notice at the applicable Repurchase
Value together with interest accrued to (but excluding) the date fixed for
redemption, and on and after said date (unless the Company shall default in the
payment of such Notes at the Repurchase Value together with interest accrued to
said date) interest on the Notes or portion of Notes so called for redemption
shall cease to accrue and, after the close of business on the Business Day next
preceding the date fixed for redemption, such Notes shall cease to be
convertible into Common Stock and, except as provided in Sections 8.05 and 13.04, to be
entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Notes except the right to
receive the Repurchase Value thereof, and, unpaid interest to, but excluding,
the date fixed for redemption. On presentation and surrender of such Notes at a
place of payment in said notice specified, the said Notes or the specified
portions thereof shall be paid and redeemed by the Company at the applicable Repurchase
Value together with interest accrued thereon to (but excluding) the date fixed
for redemption; provided that if the applicable
redemption date is an interest payment date, the interest payable on such
interest payment date shall be payable to the holders of record of such Notes
on the applicable record date instead of the holders surrendering such Notes
for redemption on such date.

 

Upon presentation of any Note redeemed in part only,
the Company shall execute and the Trustee shall authenticate and make available
for delivery to the holder thereof, at the expense of the Company, a new Note
or Notes, of authorized denominations, in principal amount equal to the
unredeemed portion of the Notes so presented.

 

Notwithstanding the foregoing, the Trustee shall not redeem
any Notes or mail any notice of redemption during the continuance of a default
in payment of interest or premium, if any, on the Notes. If any Note called for
redemption shall not be so paid upon surrender thereof for 

 

24

 

redemption, the then applicable Repurchase Value shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
borne by the Note and such Note shall remain convertible into Common Stock
until the then applicable Repurchase Value and interest shall have been paid or
duly provided for.

 

SECTION
3.04.
Conversion Arrangement on Call for Redemption. In connection with any redemption
of Notes, the Company may arrange for the purchase and conversion of any Notes
by an agreement with one or more investment bankers or other purchasers to
purchase such Notes by paying to the Trustee in trust for the Noteholders, on
or before the date fixed for redemption, an amount not less than the applicable
Repurchase Value together with interest accrued to (but excluding) the date
fixed for redemption, of such Notes. Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the
Company to pay the Repurchase Value of such Notes together with interest
accrued to (but excluding) the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 15) surrendered by such
purchasers for conversion, all as of immediately prior to the close of business
on the date fixed for redemption (and the right to convert any such Notes shall
be extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Notes. Without the Trustee’s prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities or obligations of the Trustee as set forth
in this Indenture.

 

SECTION
3.05.
Redemption at Option of Holders. (a)
If there shall occur a Fundamental Change at any time prior to maturity of the
Notes, then each Noteholder shall have the right, at such holder’s option, to
require the Company to redeem all of such holder’s Notes, or any portion
thereof that is an integral multiple of $1,000 principal amount, on the date
(the “Repurchase Date”) that is thirty (30)
days after the date of the Company Notice (as defined in Section 3.05(b) below) of such Fundamental Change (or, if such
30th day is not a Business Day, the next succeeding Business Day) at the
Repurchase Value (expressed as a percentage of the principal amount), together
with accrued interest to, but excluding, the Repurchase Date; provided that, if such Repurchase Date is an interest
payment date, then the interest payable on such interest payment date shall be
paid to the holders of record of the Notes on the applicable record date
instead of the holders surrendering the Notes for redemption on such date.

 

Upon presentation of any Note redeemed in part only,
the Company shall execute and, upon the Company’s written direction to the
Trustee, the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations,
in principal amount equal to the unredeemed portion of the Notes so presented.

 

25

 

(b)           On or before the tenth
day after the occurrence of a Fundamental Change, the Company or at its written
request (which must be received by the Trustee at least five (5) Business Days
prior to the date the Trustee is requested to give notice as described below,
unless the Trustee shall agree in writing to a shorter period), the Trustee, in
the name of and at the expense of the Company, shall mail or cause to be mailed
to all holders of record on the date of the Fundamental Change a notice (the “Company Notice”) of the occurrence of such Fundamental
Change and of the redemption right at the option of the holders arising as a
result thereof. Such notice shall be mailed in the manner and with the effect
set forth in the first paragraph of Section 3.02
(without regard for the time limits set forth therein). If the Company shall
give such notice, the Company shall also deliver a copy of the Company Notice
to the Trustee at such time as it is mailed to Noteholders. Concurrently with
the mailing of any Company Notice, the Company shall issue a press release
announcing such Fundamental Change referred to in the Company Notice, the form
and content of which press release shall be determined by the Company in its
sole discretion. The failure to issue any such press release or any defect
therein shall not affect the validity of the Company Notice or any proceedings
for the redemption of any Note which any Noteholder may elect to have the
Company redeem as provided in this Section 3.05.

 

Each Company Notice shall specify the circumstances
constituting the Fundamental Change, the Repurchase Date, the price at which
the Company shall be obligated to redeem Notes, that the holder must exercise
the redemption right on or prior to the close of business on the Repurchase
Date (the “Fundamental Change Expiration Time”),
that the holder shall have the right to withdraw any Notes surrendered prior to
the Fundamental Change Expiration Time, a description of the procedure which a
Noteholder must follow to exercise such redemption right and to withdraw any
surrendered Notes, the place or places where the holder is to surrender such
holder’s Notes, the amount of interest accrued on each $1,000 principal amount
of the Notes to the Repurchase Date and the “CUSIP” number or numbers of the
Notes (if then generally in use).

 

No failure of the Company to give the foregoing
notices and no defect therein shall limit the Noteholders’ redemption rights or
affect the validity of the proceedings for the redemption of the Notes pursuant
to this Section 3.05.

 

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

 

(d)           On or prior to the
Repurchase Date, the Company will deposit with the Trustee or with one or more
paying agents (or, if the Company is acting as its own paying agent, set aside,
segregate and hold in trust as provided in Section 5.04)
an amount of money sufficient to redeem on the Repurchase Date all the Notes to
be redeemed on such date at the appropriate Repurchase Value, together with
accrued interest to, but excluding, the Repurchase Date; provided
that if 

 

26

 

such payment is made on the Repurchase Date it must be
received by the Trustee or paying agent, as the case may be, by 10:00 a.m. New
York City time, on such date. Payment for Notes surrendered for redemption (and
not withdrawn) prior to the Fundamental Change Expiration Time will be made
promptly (but in no event more than five (5) Business Days) following the
Repurchase Date by mailing checks for the amount payable to the holders of such
Notes entitled thereto as they shall appear on the registry books of the
Company.

 

(e)           In the case of a
reclassification, change, consolidation, merger, combination, sale or
conveyance to which Section 15.06 applies, in
which the Common Stock of the Company is changed or exchanged as a result into
the right to receive stock, securities or other property or assets (including
cash), which includes shares of Common Stock of the Company or shares of common
stock of another Person that are, or upon issuance will be, traded on a United
States national securities exchange or approved for trading on an established
automated over-the-counter trading market in the United States and such shares
constitute at the time such change or exchange becomes effective in excess of
50% of the aggregate fair market value of such stock, securities or other
property or assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (accompanied by an Opinion of Counsel that such supplemental
indenture complies with the Trust Indenture Act as in force at the date of
execution of such supplemental indenture) modifying the provisions of this
Indenture relating to the right of holders of the Notes to cause the Company to
repurchase the Notes following a Fundamental Change, including without
limitation the applicable provisions of this Section 3.05
and the definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company (which determination shall be
conclusive and binding), to make such provisions apply to such other Person if
different from the Company and the common stock issued by such Person (in lieu
of the Company and the Common Stock of the Company).

 

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

 

ARTICLE
4

 

SUBORDINATION
OF NOTES

 

SECTION
4.01.
Agreement of Subordination. The Company covenants and agrees,
and each holder of Notes issued hereunder by its acceptance thereof likewise
covenants and agrees, that all Notes shall be issued subject to the provisions
of this Article 4, and each Person holding any
Note, whether upon original issue or upon registration of transfer, assignment
or exchange thereof, accepts and agrees to be bound by such provisions.

 

The payment of the principal of, and premium and
interest on, all Notes (including, but not limited to, the Repurchase Value payable
with respect to the Notes called for redemption in accordance with Section 3.02 or submitted for redemption in accordance with
Section 3.05, as the case may be, as provided in
this Indenture) issued hereunder shall, to the extent and in the 

 

27

 

manner hereinafter set forth, be subordinated and subject in right of
payment to the prior payment in full of all Designated Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred.

 

No provision of this Article 4
shall prevent the occurrence of any default or Event of Default hereunder.

 

SECTION
4.02.
Payments to Noteholders. No payment shall be made with
respect to the principal of, and premium or interest on, the Notes (including,
but not limited to, the Repurchase Value payable with respect to the Notes to
be called for redemption in accordance with Section 3.02
or submitted for redemption in accordance with Section 3.05,
as the case may be, as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 4.05, if:

 

(i)            a
default in the payment of principal, premium, if any, interest, or other
obligations in respect of Designated Senior Indebtedness occurs and is
continuing (or, in the case of Designated Senior Indebtedness for which there
is a period of grace, in the event of such a default that continues beyond the
period of grace, if any, specified in the instrument or lease evidencing such Designated
Senior Indebtedness) (a “Payment Default”),
unless and until such Payment Default shall have been cured or waived or shall
have ceased to exist; or

 

(ii)           a
default, other than a Payment Default, on any Designated Senior Indebtedness
occurs and is continuing that then permits holders of such Designated Senior
Indebtedness to accelerate its maturity and the Trustee receives a notice of
the default (a “Payment Blockage Notice”) from a
holder of Designated Senior Indebtedness, a Representative of Designated Senior
Indebtedness or the Company (a “Non-Payment Default”).

 

If the Trustee receives any Payment Blockage Notice
pursuant to clause (ii) above, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section 4.02 unless
and until at least 365 days shall have elapsed since the initial effectiveness
of the immediately prior Payment Blockage Notice. No  Non-Payment Default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice.

 

The Company may and shall resume payments on and
distributions in respect of the Notes upon the earlier of:

 

(1)           the
date upon which any such Payment Default is cured or waived or ceases to exist,
or

 

(2)           in
the case of a Non-Payment Default, the earlier of (a) the date upon which such
default is cured or waived or ceases to exist or (b) 179 days after the
applicable Payment Blockage Notice is received by the Trustee if the maturity
of such Designated 

 

28

 

Senior Indebtedness has not been accelerated, unless
this Article 4 otherwise prohibits the payment or
distribution at the time of such payment or distribution.

 

Upon any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding up or liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or
to become due upon all Designated Senior Indebtedness shall first be paid in
full in cash or other payment satisfactory to the holders of such Designated
Senior Indebtedness, or payment thereof in accordance with its terms shall be
provided for in cash or other payment satisfactory to the holders of such Designated
Senior Indebtedness before any payment is made on account of the principal or
Repurchase Value of, premium, if any, or interest on the Notes (except payments
made pursuant to Article 13 from monies deposited
with the Trustee pursuant thereto prior to commencement of proceedings for such
dissolution, winding up, liquidation or reorganization), and upon any such dissolution
or winding up or liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other similar proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Notes or
the Trustee would be entitled, except for the provisions of this Article 4, shall (except as aforesaid) be paid by the Company or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the holders of the Notes or
by the Trustee under this Indenture if received by them or it, directly to the
holders of Designated Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Designated Senior Indebtedness held by such
holders, or as otherwise required by law or a court order) or their
Representative or Representatives, as their respective interests may appear, to
the extent necessary to pay all Designated Senior Indebtedness in full, in cash
or other payment satisfactory to the holders of such Designated Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Designated Senior Indebtedness, before any payment or
distribution is made to the holders of the Notes or to the Trustee.

 

For purposes of this Article 4,
the words, “cash, property or securities” shall not be deemed to include shares
of stock of the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinated at least to the extent
provided in this Article 4 with respect to the
Notes to the payment of all Designated Senior Indebtedness which may at the
time be outstanding, provided that
(i) the Designated Senior Indebtedness is assumed by the new corporation, if
any, resulting from any reorganization or readjustment, and (ii) the rights of
the holders of Designated Senior Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or the merger of the Company into, another corporation or
the liquidation or dissolution of the Company following the conveyance or
transfer of its property as an entirety, or substantially as an entirety, to
another Person upon the terms and conditions provided for in Article 12 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.02 if such other Person shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article 12.

 

29

 

In the event of the acceleration of the Notes because
of an Event of Default, no payment or distribution shall be made to the Trustee
or any holder of Notes in respect of the principal of, and premium or interest
on, the Notes (including, but not limited to, the Repurchase Value payable with
respect to the Notes called for redemption in accordance with Section 3.02 or submitted for redemption in accordance with
Section 3.05, as the case may be, as provided in this Indenture), except
payments and distributions made by the Trustee as permitted by the first or
second paragraph of Section 4.05, until all Designated
Senior Indebtedness has been paid in full in cash or other payment satisfactory
to the holders of Designated Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Indenture. If payment of the
Notes is accelerated because of an Event of Default, the Company or the Trustee
shall promptly notify holders of Designated Senior Indebtedness of the
acceleration.

 

If, notwithstanding the foregoing provisions, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (including, without limitation, by way of setoff
or otherwise), prohibited by the foregoing provisions in this Section 4.02, shall be received by the Trustee or the holders of
the Notes before all Designated Senior Indebtedness is paid in full in cash or
other payment satisfactory to the holders of such Designated Senior
Indebtedness, or provision is made for such payment thereof in accordance with
its terms in cash or other payment satisfactory to the holders of such Designated
Senior Indebtedness, such payment or distribution shall be held in trust for
the benefit of and shall be paid over or delivered to the holders of Designated
Senior Indebtedness or their Representative or Representatives, as their
respective interests may appear, as calculated by the Company, for application
to the payment of any Designated Senior Indebtedness remaining unpaid to the
extent necessary to pay all Designated Senior Indebtedness in full in cash or
other payment satisfactory to the holders of such Designated Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of such Designated Senior Indebtedness.

 

Nothing in this Section 4.02
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 8.06. This Section 4.02 shall be subject
to the further provisions of Section 4.05.

 

SECTION
4.03.
Subrogation of Notes. Subject to the payment in full of
all Designated Senior Indebtedness, the rights of the holders of the Notes
shall be subrogated to the extent of the payments or distributions made to the
holders of such Designated Senior Indebtedness pursuant to the provisions of
this Article 4 (equally and ratably with the
holders of all Indebtedness of the Company which by its express terms is
subordinated to other indebtedness of the Company to substantially the same
extent as the Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Designated Senior Indebtedness to
receive payments or distributions of cash, property or securities of the
Company applicable to the Designated Senior Indebtedness until the principal,
premium, Repurchase Value, if any, and interest on the Notes shall be paid in
full, and, for the purposes of such subrogation, no payments or distributions
to the holders of the Designated Senior Indebtedness of any cash, property or
securities to which the holders of the Notes or the Trustee would be entitled
except for the provisions of this Article 4, and
no payment pursuant to the provisions of this Article 4,
to or for the benefit of the holders of Designated Senior Indebtedness by
holders of the Notes or the Trustee, shall, as among the Company, its creditors
other than holders of Designated Senior 

 

30

 

Indebtedness, and the holders of the Notes, be deemed to be a payment
by the Company to or on account of the Designated Senior Indebtedness, and no
payments or distributions of cash, property or securities to or for the benefit
of the holders of the Notes pursuant to the subrogation provisions of this
Article 4, which would otherwise have been paid to
the holders of Designated Senior Indebtedness, shall be deemed to be a payment
by the Company to or for the account of the Notes. It is understood that the
provisions of this Article 4 are intended solely
for the purposes of defining the relative rights of the holders of the Notes,
on the one hand, and the holders of the Designated Senior Indebtedness, on the
other hand.

 

Nothing contained in this Article 4 or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company, its creditors other than the
holders of Designated Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of, premium on, or Repurchase Value of, and
interest on the Notes as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Notes and creditors of the Company other than the
holders of the Designated Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the holder of any Note from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 4 of the holders of Designated Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.

 

SECTION
4.04.
Authorization to Effect Subordination. Each holder of a Note by the
holder’s acceptance thereof authorizes and directs the Trustee on the holder’s
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 4 and
appoints the Trustee to act as the holder’s attorney-in-fact for any and all
such purposes. If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in the third paragraph
of Section 7.02 hereof at least thirty (30) days
before the expiration of the time to file such claim, the holders of any Designated
Senior Indebtedness or their Representatives are hereby authorized to file an
appropriate claim for and on behalf of the holders of the Notes.

 

SECTION
4.05.
Notice to Trustee. The Company shall give prompt
written notice in the form of an Officers’ Certificate to a Responsible Officer
of the Trustee and to any paying agent of any fact known to the Company that
would prohibit the making of any payment of monies to or by the Trustee or any
paying agent in respect of the Notes pursuant to the provisions of this Article
4. Notwithstanding the provisions of this Article 4 or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment of monies to or by the Trustee in respect of
the Notes pursuant to the provisions of this Article 4,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers’ Certificate) or a Representative or a holder or holders of
Designated Senior Indebtedness, and before the receipt of any such written
notice, the Trustee, subject to the provisions of Section 8.01, shall be entitled in all respects to assume that
no such facts exist; provided that
if on a date not less than three Business Days prior to the date upon which by
the terms hereof any such monies may become payable for any purpose (including,
without 

 

31

 

limitation, the payment of the principal of, premium on, or Repurchase
Value of, and interest on any Note) the Trustee shall not have received, with
respect to such monies, the notice provided for in this Section 4.05, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to apply
monies received to the purpose for which they were received, and shall not be
affected by any notice to the contrary that may be received by it on or after
such prior date.

 

Notwithstanding anything in this Article 4 to the contrary, nothing shall prevent any payment by
the Trustee to the Noteholders of monies deposited with it pursuant to Section 13.01, if a Responsible Officer of the Trustee shall not
have received written notice at the Corporate Trust Office on or before one
Business Day prior to the date such payment is due that such payment is not
permitted under Section 4.01 or 4.02.

 

The Trustee, subject to the provisions of Section 8.01, shall be entitled to rely on the delivery to it of
a written notice by a Representative or a person representing himself to be a
holder of Designated Senior Indebtedness to establish that such notice has been
given by a Representative or a holder of Designated Senior Indebtedness. The
Trustee shall not be required to make any payment or distribution to or on
behalf of a holder of Designated Senior Indebtedness pursuant to this Article 4 unless it has received satisfactory evidence as to the
amount of Designated Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article 4.

 

SECTION
4.06.
Trustee’s Relation to Designated Senior Indebtedness. The Trustee, in its individual
capacity, shall be entitled to all the rights set forth in this Article 4 in respect of any Designated Senior Indebtedness at
any time held by it, to the same extent as any other holder of Designated
Senior Indebtedness, and nothing in Section 8.13
or elsewhere in this Indenture shall deprive the Trustee of any of its rights
as such holder.

 

With respect to the holders of Designated Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article 4, and no implied covenants or obligations with respect
to the holders of Designated Senior Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Designated Senior Indebtedness and, subject to
the provisions of Section 8.01, the Trustee shall
not be liable to any holder of Designated Senior Indebtedness (i) for any
failure to make any payments or distributions to such holder or (ii) if it
shall pay over or deliver to holders of Notes, the Company or any other Person
money in compliance with this Article 4.

 

SECTION
4.07.
No Impairment of Subordination. No right of any present or future
holder of any Designated Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. Designated
Senior Indebtedness may be created, renewed or extended and holders of Designated
Senior 

 

32

 

Indebtedness may exercise any rights under any instrument creating or
evidencing such Designated Senior Indebtedness, including, without limitation,
any waiver of default thereunder, without any notice to or consent from the
holders of the Notes or the Trustee. No compromise, alteration, amendment,
modification, extension, renewal or other change of, or waiver, consent or
other action in respect of, any liability or obligation under or in respect of
the Designated Senior Indebtedness or any terms or conditions of any instrument
creating or evidencing such Designated Senior Indebtedness shall in any way
alter or affect any of the provisions of this Article 4
or the subordination of the Notes provided thereby.

 

SECTION
4.08.
Certain Conversions Not Deemed Payment. For the purposes of this Article 4 only, (1) the issuance and delivery of junior
securities upon conversion of Notes in accordance with Article 15 shall not be deemed to constitute a payment or
distribution on account of the principal of, and premium on, or Repurchase
Value of, and interest on Notes or on account of the purchase or other
acquisition of Notes, and (2) the payment, issuance or delivery of cash (except
in satisfaction of fractional shares pursuant to Section 15.03),
property or securities (other than junior securities) upon conversion of a Note
shall be deemed to constitute payment on account of the principal of, and
premium on, or Repuchase Value of, or interest on such Note. For the purposes
of this Section 4.08,  the term “junior
securities” means (a) shares of any stock of any class of the
Company or (b) securities of the Company that are subordinated in right of
payment to all Designated Senior Indebtedness that may be outstanding at the
time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Notes are so subordinated as
provided in this Article 4. Nothing contained in
this Article 4 or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its
creditors (other than holders of Designated Senior Indebtedness) and the
Noteholders, the right, which is absolute and unconditional, of the Holder of
any Note to convert such Note in accordance with Article 15.

 

SECTION
4.09.
Article Applicable to Paying Agents. If at any time any paying agent
other than the Trustee shall have been appointed by the Company and be then
acting hereunder, the term “Trustee” as
used in this Article 4 shall (unless the context
otherwise requires) be construed as extending to and including such paying
agent within its meaning as fully for all intents and purposes as if such
paying agent were named in this Article 4 in
addition to or in place of the Trustee; provided that
the first paragraph of Section 4.05 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as paying agent.

 

The Trustee shall not be responsible for the actions
or inactions of any other paying agents (including the Company if acting as its
own paying agent) and shall have no control of any funds held by such other
paying agents.

 

SECTION
4.10.
Designated Senior Indebtedness Entitled to Rely. The holders of Designated Senior
Indebtedness shall have the right to rely upon this Article 4, and no amendment or modification of the provisions
contained herein shall diminish the rights of such holders unless such holders
shall have agreed in writing thereto.

 

SECTION
4.11.
Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon
any payment or distribution of assets of the Company referred to in this
Article 4, the Trustee and the 

 

33

 

Noteholders shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Noteholders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Designated Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 4.

 

ARTICLE
5

 

PARTICULAR
COVENANTS OF THE COMPANY

 

SECTION
5.01.
Payment of Principal, Premium, Repurchase Value and Interest. The Company covenants and agrees
that it will duly and punctually pay or cause to be paid the principal of, and
premium on, or the Repurchase Value of, and interest on each of the Notes at
the places, at the respective times and in the manner provided herein and in
the Notes. The Company covenants and agrees to pay interest on overdue
principal, Repurchase Value, premium, if any, or (to the extent that payment of
such interest is enforceable under applicable law) interest at the rate per
annum specified in the Notes.

 

SECTION
5.02.
Maintenance of Office or Agency. The Company will maintain an
office or agency in the Borough of Manhattan, The City of New York, where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office or the office of
the agency of the Trustee in The Borough of Manhattan, The City of New York
(which shall initially be U.S. Bank Trust National Association, Corporate Trust
Services, 100 Wall Street, Suite 1600, New York, New York 10005).

 

The Company may also from time to time designate
co-registrars and one or more offices or agencies where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations. The Company will give prompt written notice of any
such designation or rescission and of any change in the location of any such
other office or agency.

 

The Company hereby initially designates the Trustee as
paying agent, Note registrar, Custodian and conversion agent and each of the
Corporate Trust Office and the office of agency of the Trustee in the Borough
of Manhattan, initially U.S. Bank Trust National Association, Corporate Trust
Services, 100 Wall Street, Suite 1600, New York, New York 10005, shall be
considered as one such office or agency of the Company for each of the
aforesaid purposes.

 

34

 

So long as the Trustee is the Note registrar, the
Trustee agrees to mail, or cause to be mailed, the notices set forth in Section
8.10(a) and the third paragraph of Section 8.11. If co-registrars have been appointed in accordance
with this Section, the Trustee shall mail such notices only to the Company and
the holders of Notes it can identify from its records.

 

SECTION
5.03.
Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary
to avoid or fill a vacancy in the office of Trustee, will appoint, in the
manner provided in Section 8.10, a Trustee, so
that there shall at all times be a Trustee hereunder.

 

SECTION
5.04.
Provisions as to Paying Agent. (a)
If the Company shall appoint a paying agent other than the Trustee, or if the
Trustee shall appoint such a paying agent, the Company will cause such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 5.04:

 

(1)           that
it will hold all sums held by it as such agent for the payment of the principal
of, and premium on, or Repurchase Value of, and interest on the Notes (whether
such sums have been paid to it by the Company or by any other obligor on the
Notes) in trust for the benefit of the holders of the Notes;

 

(2)           that
it will give the Trustee notice of any failure by the Company (or by any other
obligor on the Notes) to make any payment of the principal of and premium on,
or Repurchase Value of, and interest on the Notes when the same shall be due
and payable; and

 

(3)           that
at any time during the continuance of an Event of Default, upon request of the
Trustee, it will forthwith pay to the Trustee all sums so held in trust.

 

The Company shall, on or before each due date of the
principal of, and premium on, or Repurchase Value of, or interest on the Notes,
deposit with the paying agent a sum (in funds which are immediately available
on the due date for such payment) sufficient to pay such principal, premium, Repurchase
Value, if any, or interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee of any failure to take such action; provided that if such deposit is made on the due date, such
deposit shall be received by the paying agent by 10:00 a.m. New York City time,
on such date.

 

(b)           If the Company shall
act as its own paying agent, it will, on or before each due date of the
principal of, and premium on, or Repurchase Value of, and interest on the Notes,
set aside, segregate and hold in trust for the benefit of the holders of the
Notes a sum sufficient to pay such principal, premium, Repurchase Value, if
any, or interest so becoming due and will promptly notify the Trustee of any
failure to take such action and of any failure by the Company (or any other
obligor under the Notes) to make any payment of the principal of, and premium
on, or Repurchase Value of, and interest on the Notes when the same shall
become due and payable.

 

(c)           Anything in this Section
5.04 to the contrary notwithstanding, the Company
may, at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by the Company or any 

 

35

 

paying agent hereunder as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying
agent to the Trustee, the Company or such paying agent shall be released from
all further liability with respect to such sums.

 

(d)           Anything in this
Section 5.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.04 is subject to Sections 13.03
and 13.04.

 

The Trustee shall not be responsible for the actions
of any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.

 

SECTION
5.05.
Existence. Subject
to Article 12, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and rights (charter and statutory); provided
that the Company shall not be required to preserve any such right if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company.

 

SECTION
5.06.
Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is,
in the judgment of the Company, desirable in the conduct of its business or the
business of any subsidiary and not disadvantageous in any material respect to
the Noteholders.

 

SECTION
5.07.
Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become
a lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamp and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection
with the issuance, transfer, exchange or conversion of any Notes or with
respect to this Indenture; provided that,
in the case of clauses (i) and (ii), the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim (A) if the failure to do so will not, in the aggregate, have a
material adverse impact on the Company, or (B) if the amount, applicability or
validity is being contested in good faith by appropriate proceedings.

 

SECTION
5.08.
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, 

 

36

 

during any period in which it is not subject to Section 13 or 15(d)
under the Exchange Act, make available to any holder or beneficial holder of
Notes or any Common Stock issued upon conversion thereof which continue to be
Restricted Securities in connection with any sale thereof and any prospective
purchaser of Notes or such Common Stock designated by such holder or beneficial
holder, the information required pursuant to Rule 144A(d)(4) under the
Securities Act upon the request of any holder or beneficial holder of the Notes
or such Common Stock and it will take such further action as any holder or
beneficial holder of such Notes 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 Notes 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 Notes or such Common Stock, the Company
will deliver to such holder a written statement as to whether it has complied
with such requirements.

 

SECTION
5.09.
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 on the Notes 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.

 

SECTION
5.10.
Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.

 

The Company will deliver to the Trustee, forthwith
upon becoming aware of (i) any default in the performance or observance of any
covenant, agreement or condition contained in this Indenture, or (ii) any Event
of Default, an Officers’ Certificate specifying with particularity such default
or Event of Default and further stating what action the Company has taken, is
taking or proposes to take with respect thereto.

 

Any notice required to be given under this Section 5.10 or Section 4.05 shall
be delivered to a Responsible Officer of the Trustee at its Corporate Trust
Office. In the event that the payment of the Notes is accelerated because of an
Event of Default, the Company shall promptly provide written notice to the
Trustee specifying the names and addresses of the holders of Designated Senior
Indebtedness if the Trustee (and not the Company) is to provide holders of Designated
Senior Indebtedness notice of such acceleration.

 

37

 

SECTION
5.11.
Liquidated Damages Notice. In the event that the Company is
required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice (“Liquidated Damages Notice”) to the Trustee of its obligation
to pay Liquidated Damages no later than fifteen days prior to the proposed
payment date for the Liquidated Damages, and the Liquidated Damages Notice
shall set forth the amount of Liquidated Damages to be paid by the Company on
such payment date. The Trustee shall not at any time be under any duty to
responsibility to any holder of Notes to determine the Liquidated Damages, or
with respect to the nature, extent or calculation of the amount of Liquidated
Damages when made, or with respect to the method employed in such calculation
of the Liquidated Damages.

 

SECTION
5.12.
Limitation on Additional Senior Indebtedness and Pari Passu
Indebtedness. The Company will
not, directly or indirectly, create, incur, assume, guarantee or suffer to
exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, any Senior Indebtedness (including
Acquired Indebtedness) or Pari Passu Indebtedness (including Acquired
Indebtedness). The provisions of the foregoing sentence of this Section 5.12
will not prohibit incurrence of any of the following Indebtedness
(collectively, “Permitted Senior and Pari Passu Debt”):

 

(i)            the incurrence by the Company of Indebtedness (and the
guaranty by any Subsidiary of the Company of such Indebtedness), including
letters of credit, under the Credit Agreement in an aggregate principal amount
at any one time outstanding under this clause (i) (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of
the Company thereunder) not to exceed $50,000,000;

 

(ii)           the incurrence by the Company of Indebtedness,
consisting solely of letters of credit under the Line of Credit Agreement in an
aggregate principal amount of any one time outstanding under this clause (ii)
(with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company thereunder) not to exceed
$15,000,000;

 

(iii)          the incurrence by the Company of Indebtedness with
respect to the Company’s guaranty of Indebtedness of Axcelis Technologies, GmbH
related to letters of credit, bank guarantees and similar instruments obtained
by Axcelis Technologies, GmbH in conjunction with value added tax recovery
initiatives in an aggregate principal amount at any one time outstanding under
this clause (iii) (with letters of credit, bank guarantees and such similar
instruments being deemed to have a principal amount equal to the maximum
potential liability of Axcelis Technologies, GmbH or the Company thereunder)
not to exceed $10,000,000;

 

(iv)          the
incurrence by the Company of Indebtedness represented by the Notes to be issued
on the date of this Indenture;

 

(v)           Indebtedness
of any Subsidiary of the Company to the Company or another Subsidiary of the
Company;

 

38

 

(vi)          Purchase
Money Indebtedness and Capitalized Lease Obligations incurred by the Company or
any Subsidiary to acquire or lease property in the ordinary course of business;
provided, however, that (a) the
aggregate amount of such Purchase Money Indebtedness and Capitalized Lease
Obligations outstanding at any time shall not exceed $200,000;

 

(vii)         Indebtedness
outstanding on the date hereof of Axcelis Technologies, GmbH to the Company’s
Subsidiaries organized under the laws of Singapore and Taiwan in the aggregate
principal amount of $14,000,000, and the Company’s guarantees of such
Indebtedness;

 

(viii)        Indebtedness
of a Subsidiary of the Company to any other person other than the Company,
provided that the aggregate principal amount of all such Indebtedness under
this Section 5.12(viii) does not exceed $2,000,000 outstanding at any time; and

 

(viii)        Refinancing
Indebtedness.

 

SECTION
5.13.
Limitation on Subsidiary and Intercompany Debt. (a)
The Company will not permit any of its Subsidiaries to create, incur, assume,
guarantee or suffer to exist, or otherwise become or remain liable for, any
Indebtedness other than the Indebtedness described in the definition of “Permitted
Senior and Pari Passu Debt” (other than clause (ii) thereof), unless (i) within
10 days thereof, such Subsidiary becomes a guarantor with respect to the Notes
by executing a supplemental indenture substantially in the form of Exhibit B
hereto (each, a “Note Guarantee”) and delivering it
to the Trustee and (ii) such Indebtedness is subordinated in right of payment
to the Notes substantially to the same extent as the obligations in respect of
the Notes are subordinated to Designated Senior Indebtedness under this
Indenture.

 

(b)           The
Company will not, directly or indirectly, create, incur, assume, guarantee or
suffer to exist, or otherwise become or remain liable for, any Indebtedness of
the Company to any Subsidiary of the Company. The provisions of the foregoing
sentence will not prohibit the incurrence of any Indebtedness of the Company to
any domestic Wholly-Owned Subsidiary of the Company; provided that (i) within
10 days thereof, such domestic Wholly-Owned Subsidiary becomes a guarantor with
respect to the Notes by executing a Note Guarantee and delivering it to the
Trustee and (ii) such Indebtedness is subordinated in right of payment to the
Notes substantially to the same extent as the obligations in respect of the
Notes are subordinated to Designated Senior Indebtedness under this Indenture.

 

ARTICLE
6

 

NOTEHOLDERS’
LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

 

SECTION
6.01.
Noteholders’ Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each June 1 and December 1 in each year
beginning with June 1, 2006, and at such other times as the Trustee may request
in writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable 

 

39

 

it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses
of the holders of Notes as of a date not more than fifteen (15) days (or such
other date as the Trustee may reasonably request in order to so provide any
such notices) prior to the time such information is furnished, except that no
such list need be furnished by the Company to the Trustee so long as the
Trustee is acting as the sole Note registrar.

 

SECTION
6.02.
Preservation and Disclosure of Lists. (a)
The Trustee shall preserve, in as current a form as is reasonably practicable,
all information as to the names and addresses of the holders of Notes contained
in the most recent list furnished to it as provided in Section 6.01 or maintained by the Trustee in its capacity as
Note registrar or co-registrar in respect of the Notes, if so acting. The
Trustee may destroy any list furnished to it as provided in Section 6.01 upon receipt of a new list so furnished.

 

(b)           The rights of
Noteholders to communicate with other holders of Notes with respect to their
rights under this Indenture or under the Notes, and the corresponding rights
and duties of the Trustee, shall be as provided by the Trust Indenture Act.

 

(c)           Every Noteholder, by
receiving and holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any agent of either of them shall be
held accountable by reason of any disclosure of information as to names and
addresses of holders of Notes made pursuant to the Trust Indenture Act.

 

SECTION
6.03.
Reports by Trustee. (a)
Within sixty (60) days after December 1 of each year commencing with the year
2006, the Trustee shall transmit to holders of Notes such reports dated as of
December 1 of the year in which such reports are made concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

 

(b)           A copy of such report
shall, at the time of such transmission to holders of Notes, be filed by the
Trustee with each stock exchange and automated quotation system upon which the
Notes are listed and with the Company. The Company will promptly notify the
Trustee in writing when the Notes are listed on any stock exchange or automated
quotation system or delisted therefrom.

 

SECTION
6.04.
Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after this Indenture becomes
qualified under the Trust Indenture Act), and transmit to holders of Notes,
such information, documents and other reports and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act, whether or not the Notes are governed by
such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
fifteen (15) days after the same is so required to be filed with the
Commission. 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 

 

40

 

compliance with any of its covenants hereunder (as to which the Trustee
is entitled to rely exclusively on Officers’ Certificates). The Trustee shall
not be under a duty to review or evaluate such reports or information available
to it and to holders of Notes who may request such information.

 

ARTICLE
7

 

REMEDIES
OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

 

SECTION
7.01.
Events of Default. In case one or more of the
following Events of Default (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:

 

(a)           default in the payment
of any installment of interest upon any of the Notes as and when the same shall
become due and payable, and continuance of such default for a period of thirty
(30) days, whether or not such payment is permitted under Article 4 hereof; or

 

(b)           default in the payment
of the principal of, and premium on, or Repurchase Value of, any of the Notes
as and when the same shall become due and payable either at maturity or in
connection with any redemption pursuant to Article 3,
by acceleration or otherwise, whether or not such payment is permitted under
Article 4 hereof; or

 

(c)           failure on the part of
the Company duly to observe or perform any other of the covenants or agreements
on the part of the Company in the Notes or in this Indenture (other than a
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section 7.01 specifically dealt
with) continued for a period of sixty (60) days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.04; or

 

(d)           the Company shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to the Company or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of the Company or any substantial part of the property of the
Company, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against the Company, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due; or

 

(e)           an involuntary case or
other proceeding shall be commenced against the Company seeking liquidation,
reorganization or other relief with respect to the Company or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of the Company 

 

41

 

or any substantial part of the property of the
Company, and such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of ninety (90) consecutive days; or

 

(f)            default under any
Designated Senior Indebtedness, whether such Indebtedness now exists or is
created after the date of this Indenture, or default under any other
agreement(s) with respect to other Indebtedness of the Company or any of its Subsidiaries
in an amount in excess of $5,000,000 in the aggregate, in each case if that
default results in the acceleration of such Indebtedness prior to its express
maturity;

 

then, and in each and every such case (other than an Event of Default
specified in Section 7.01(d) or 7.01(e)), unless the principal of (or, in the case of a
redemption pursuant to Article 3, the Repurchase Value of) all of the Notes
shall have already become due and payable, either the Trustee or the holders of
not less than twenty-five percent (25%) in aggregate principal amount of the
Notes then outstanding hereunder determined in accordance with Section 9.04, by notice in writing to the Company (and to the
Trustee if given by Noteholders), may declare the principal and the Applicable
Premium (except in the case of any Notes being redeemed pursuant to Article 3,
for which the Repurchase Value shall be due and payable) on all the Notes and
the interest accrued thereon to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Notes contained to the contrary
notwithstanding. For the avoidance of doubt, upon such acceleration, the
Applicable Premium on the outstanding principal amount of the Notes accelerated
shall become due and payable (except in the case of any Notes being redeemed
pursuant to Article 3, for which the Repurchase Value shall be due and
payable), together with accrued interest, and the Specified Premium Date for
such purpose shall be the effective date of such acceleration. If an Event of
Default specified in Section 7.01(d) or 7.01(e) occurs, the principal and the Applicable Premium
(except in the case of any Notes being redeemed pursuant to Article 3, for
which the Repurchase Value shall be due and payable) on all the Notes and the
interest accrued thereon shall be immediately and automatically due and payable
without necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes shall have
been so declared due and payable, and before any judgment or decree for the
payment of the monies due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all Notes and the
principal and Applicable Premium (or Repurchase Value, as applicable), of, any
and all Notes, in each case which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest (to the extent
that payment of such interest is enforceable under applicable law) and on such
principal and Applicable Premium (or Repurchase Value, as applicable), at the
rate borne by the Notes, to the date of such payment or deposit) and amounts
due to the Trustee pursuant to Section 8.06, and
if any and all defaults under this Indenture, other than the nonpayment of
principal of and the Applicable Premium (or Repurchase Value, as applicable) on
and any accrued interest on Notes which shall have become solely due by
acceleration, shall have been cured or waived pursuant to Section 7.07, then and in every such case the holders of a
majority in aggregate principal amount of the Notes then outstanding, by
written notice to the Company and to the Trustee, may waive all defaults or
Events of Default and rescind and annul such declaration and its consequences;
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or Event of Default, or shall 

 

42

 

impair any right consequent thereon. The Company shall notify in
writing a Responsible Officer of the Trustee, promptly upon becoming aware
thereof, of any Event of Default.

 

In case the Trustee shall have proceeded to enforce
any right under this Indenture and such proceedings shall have been discontinued
or abandoned because of such waiver or rescission and annulment or for any
other reason or shall have been determined adversely to the Trustee, then and
in every such case the Company, the holders of Notes, and the Trustee shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the Company, the holders of Notes, and the
Trustee shall continue as though no such proceeding had been taken.

 

SECTION
7.02.
Payments of Notes on Default; Suit Therefor. The Company covenants that (a) in case default shall be made in the payment
of any installment of interest upon any of the Notes as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default
shall be made in the payment of the principal or Repurchase Value, as
applicable, of or premium, if any, on any of the Notes as and when the same
shall have become due and payable, whether at maturity of the Notes or in
connection with any redemption, by or under this Indenture declaration or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Notes, the whole amount that
then shall have become due and payable on all such Notes for principal of, and
premium on, or Repurchase Value of, or interest, as the case may be, with
interest upon the overdue principal and Applicable Premium, or Repurchase
Value, as applicable, and (to the extent that payment of such interest is enforceable
under applicable law) upon the overdue installments of interest, in each case at
the rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other amounts due the Trustee under Section 8.06.
Until such demand by the Trustee, the Company may pay the principal or
Repurchase Value, as applicable, of and premium, if any, and interest on the
Notes to the registered holders, whether or not the Notes are overdue.

 

In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company
or any other obligor on the Notes and collect in the manner provided by law out
of the property of the Company or any other obligor on the Notes wherever
situated the monies adjudged or decreed to be payable.

 

In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other obligor on the
Notes under Title 11 of the United States Code, or any other applicable law, or
in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or such other obligor, the property of the
Company or such other obligor, or in the case of any other judicial proceedings
relative to the Company or such other obligor upon the Notes, or to the
creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal or Repurchase Value, as applicable, of
the Notes shall then 

 

43

 

be due and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any demand pursuant to
the provisions of this Section 7.02, shall be
entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal of, and
premium on, or Repurchase Value, and interest owing and unpaid in respect of
the Notes, and, in case of any judicial proceedings, to 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 and of the Noteholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Notes, its or
their creditors, or its or their property, to collect and receive any monies or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due the Trustee under Section 8.06, and to take any other action with respect to such
claims, including participating as a member of any official committee of
creditors, as it deems necessary or advisable, and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders 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 Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including counsel fees incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate 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, monies, securities and other
property which the holders of the Notes may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.

 

All rights of action and of asserting claims under
this Indenture, or under any of the Notes, may be enforced by the Trustee
without the possession of any of the Notes, or the production thereof at any
trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the holders
of the Notes.

 

In any proceedings brought by the Trustee (and in any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Notes, and it shall not be necessary to make any holders of
the Notes parties to any such proceedings.

 

SECTION
7.03.
Application of Monies Collected by Trustee. Any monies collected by the
Trustee pursuant to this Article 7 shall be
applied in the order following, at the date or dates fixed by the Trustee for
the distribution of such monies, upon presentation of the several Notes, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:

 

FIRST: To the payment of
all amounts due the Trustee under Section 8.06;

 

SECOND: Subject to the
provisions of Article 4, in case the principal of
the outstanding Notes shall not have become due and be unpaid, to the payment of

 

44

 

interest on the Notes in default in the order of the
maturity of the installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Notes, such payments to be
made ratably to the Persons entitled thereto;

 

THIRD: Subject to the
provisions of Article 4, in case the principal of,
and premium on, or Repurchase Value of, the outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid to the payment of the whole
amount then owing and unpaid upon the Notes for such principal of, and premium
on, or Repurchase Value, as applicable, and interest, with interest on the
overdue principal or Repurchase Value, as applicable, and premium, if any, and
(to the extent that such interest has been collected by the Trustee) upon overdue
installments of interest, in each case at the rate borne by the Notes, and in
case such monies shall be insufficient to pay in full the whole amounts so due
and unpaid upon the Notes, then to the payment of such principal of, and
premium on, or Repurchase Value, as applicable, and interest without preference
or priority of principal of, and premium on, or Repurchase Value, as
applicable, over interest, or of interest over principal of, and premium on, or
Repurchase Value, as applicable, or of any installment of interest over any
other installment of interest, or of any Note over any other Note, ratably to
the aggregate of such principal of, and premium on, or Repurchase Value, as
applicable, and accrued and unpaid interest; and

 

FOURTH: Subject to the
provisions of Article 4, to the payment of the
remainder, if any, to the Company or any other Person lawfully entitled
thereto.

 

SECTION
7.04.
Proceedings by Noteholder. No holder of any Note shall have
any right by virtue of or by reference to any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Notes then outstanding shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for sixty
(60) days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 7.07;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Note with every other taker and holder and the Trustee,
that no one or more holders of Notes shall have any right in any manner
whatever by virtue of or by reference to any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of Notes, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of Notes
(except as otherwise provided herein). For the 

 

45

 

protection and enforcement of this Section 7.04,
each and every Noteholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.

 

Notwithstanding any other provision of this Indenture
and any provision of any Note, the right of any holder of any Note to receive
payment of the principal of, and premium on, or Repurchase Value, as
applicable, and accrued interest on such Note, on or after the respective due
dates expressed in such Note, upon acceleration or in the event of redemption,
or to institute suit for the enforcement of any such payment on or after such
respective dates against the Company shall not be impaired or affected without
the consent of such holder.

 

Anything in this Indenture or the Notes to the
contrary notwithstanding, the holder of any Note, without the consent of either
the Trustee or the holder of any other Note, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

 

SECTION
7.05.
Proceedings by Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity
or by action at law or by proceeding in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.

 

SECTION
7.06.
Remedies Cumulative and Continuing. Except as provided in Section 2.06, all powers and remedies given by this Article 7 to the Trustee or to the Noteholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of any thereof
or of any other powers and remedies available to the Trustee or the holders of
the Notes, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture, and no
delay or omission of the Trustee or of any holder of any of the Notes to
exercise any right or power accruing upon any default or Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or any acquiescence
therein, and, subject to the provisions of Section 7.04,
every power and remedy given by this Article 7 or
by law to the Trustee or to the Noteholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Noteholders.

 

SECTION
7.07.
Direction of Proceedings and Waiver of Defaults by Majority
of Noteholders. The
holders of a majority in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 9.04
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided that
(a) such direction shall not be in conflict with any rule of law or with this
Indenture, (b) the Trustee may take any other action which is not inconsistent
with such direction and (c) the Trustee may decline to take any action that
would benefit some Noteholder to the detriment of other Noteholders. The
holders of a majority in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 9.04
may, on behalf of the holders of all of the Notes, waive any past 

 

46

 

default or Event of Default hereunder and its consequences except (i) a
default in the payment of interest or premium, if any, on, or the principal of,
the Notes, (ii) a failure by the Company to convert any Notes into Common
Stock, (iii) a default in the payment of the Repurchase Value payable pursuant
to Article 3 or (iv) a default in respect of a
covenant or provisions hereof which under Article 11
cannot be modified or amended without the consent of the holders of each or all
Notes then outstanding or affected thereby. Upon any such waiver, the Company,
the Trustee and the holders of the Notes shall be restored to their former
positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 7.07, said
default or Event of Default shall for all purposes of the Notes and this
Indenture be deemed to have been cured and to be not continuing; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.

 

SECTION
7.08.
Notice of Defaults. The Trustee shall, within ninety
(90) days after a Responsible Officer of the Trustee has knowledge of the occurrence
and continuance of a default, or Event of Default, mail to all Noteholders, as
the names and addresses of such holders appear upon the Note register, notice
of all defaults known to a Responsible Officer, unless such defaults shall have
been cured or waived before the giving of such notice; provided that except in
the case of default in the payment of the principal or Repurchase Value, as
applicable, of, or premium, if any, or interest on any of the Notes, the
Trustee shall be protected in withholding such notice if and so long as a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Noteholders.

 

SECTION
7.09.
Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that
the provisions of this Section 7.09 (to the extent
permitted by law) shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Noteholder, or group of Noteholders, holding in the
aggregate more than ten percent in principal amount of the Notes at the time
outstanding determined in accordance with Section 9.04,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal or Repurchase Value, as applicable, of or premium, if any, or
interest on any Note on or after the due date expressed in such Note or to any
suit for the enforcement of the right to convert any Note in accordance with
the provisions of Article 15.

 

47

 

ARTICLE
8

 

THE
TRUSTEE

 

SECTION
8.01.
Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his own affairs.

 

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

 

(a)           prior to the occurrence
of an Event of Default and after the curing or waiving of all Events of Default
which may have occurred:

 

(i)            the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Indenture and the Trust Indenture Act, and the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture and the Trust Indenture Act
against the Trustee; and

 

(ii)           in the absence of bad
faith and willful misconduct on the part of the Trustee, the Trustee may
conclusively rely as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but, in the case
of any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Indenture;

 

(b)           the Trustee shall not
be liable for any error of judgment made in good faith by a Responsible Officer
or Officers of the Trustee, unless the Trustee was negligent in ascertaining
the pertinent facts;

 

(c)           the Trustee shall not
be liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the written direction of the holders of not less than
a majority in principal amount of the Notes at the time outstanding determined
as provided in Section 9.04 relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture;

 

48

 

(d)           whether or not therein
provided, every provision of this Indenture relating to the conduct or
affecting the liability of, or affording protection to, the Trustee shall be
subject to the provisions of this Section;

 

(e)           the Trustee shall not
be liable in respect of any payment (as to the correctness of amount,
entitlement to receive or any other matters relating to payment) or notice
effected by the Company or any paying agent or any records maintained by any
co-registrar with respect to the Notes;

 

(f)            if any party fails to
deliver a notice relating to an event the fact of which, pursuant to this
Indenture, requires notice to be sent to the Trustee, the Trustee may
conclusively rely on its failure to receive such notice as reason to act as if
no such event occurred; and

 

(g)           the Trustee shall not
be deemed to have knowledge of any default or Event of Default hereunder unless
a Responsible Officer of the Trustee has actual knowledge thereof or written
notice of any event which is in fact such a default or Event of Default has
been received by the Trustee at the Corporate Trust Office, and such notice
specifically references the Notes.

 

None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.

 

SECTION
8.02.
Reliance on Documents, Opinions, Etc. Except as otherwise provided in
Section 8.01:

 

(a)           the Trustee may rely
and shall be protected in acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture,
note, coupon or other paper or document (whether in its original or facsimile
form) believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;

 

(b)           any request, direction,
order or demand of the Company mentioned herein shall be sufficiently evidenced
by an Officers’ Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors may be
evidenced to the Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;

 

(c)           the Trustee may consult
with counsel of its own selection and any advice or Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken
or omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;

 

(d)           the Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of any of the Noteholders
pursuant to the provisions of this Indenture, unless such Noteholders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;

 

49

 

(e)           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 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;

 

(f)            the Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder;

 

(g)           the rights, privileges,
immunities and benefits given to the Trustee hereunder, including without
limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and to each
agent, custodian and other Person employed by the Trustee consistent with the
terms of this Indenture to act hereunder; and

 

(h)           any permissive right or
authority granted to the Trustee shall not be construed as a mandatory duty.

 

SECTION
8.03.
No Responsibility for Recitals, Etc. The recitals contained herein and
in the Notes (except in the Trustee’s certificate of authentication) shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered
by the Trustee in conformity with the provisions of this Indenture.

 

SECTION
8.04.
Trustee, Paying Agents, Conversion Agents or Registrar May
Own Notes. The
Trustee, any paying agent, any conversion agent or Note registrar, in its
individual or any other capacity, may become the owner or pledgee of Notes with
the same rights it would have if it were not Trustee, paying agent, conversion
agent or Note registrar.

 

SECTION
8.05.
Monies to Be Held in Trust. Subject to the provisions of
Section 13.04 and Section 4.02, all monies
received by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received. Money held by the
Trustee in trust hereunder need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for
interest on any money received by it hereunder except as may be agreed in
writing from time to time by the Company and the Trustee.

 

SECTION
8.06.
Compensation and Expenses of Trustee. The Company covenants and agrees
to pay to the Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation for all services rendered by it hereunder in any
capacity (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as mutually agreed to from time
to time in writing between the Company and the Trustee, and the Company 

 

50

 

will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence, willful misconduct or
bad faith. The Company also covenants to indemnify the Trustee (or any officer,
director or employee of the Trustee), in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any and all loss, liability, claim or expense incurred without negligence,
willful misconduct or bad faith on the part of the Trustee or such officers,
directors, employees and agent or authenticating agent, as the case may be, and
arising out of or in connection with the acceptance or administration of this
trust or in any other capacity hereunder, including the costs and expenses of
defending themselves against any claim of liability in the premises. The
obligations of the Company under this Section 8.06
to compensate or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a lien prior to that
of the Notes upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the holders of particular
Notes. The obligation of the Company under this Section shall survive the
satisfaction and discharge of this Indenture.

 

When the Trustee and its agents and any authenticating
agent incur expenses or render services after an Event of Default specified in
Section 7.01(d) or 7.01(e)
with respect to the Company occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.

 

SECTION
8.07.
Officers’ Certificate as Evidence. Except as otherwise provided in
Section 8.01, whenever in the administration of
the provisions of this Indenture the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or omitting
any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of bad faith or willful
misconduct on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers’ Certificate delivered to the Trustee.

 

SECTION
8.08.
Conflicting Interests of Trustee. If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.

 

SECTION
8.09.
Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000 (or if such Person is a member of a bank holding company
system, its bank holding company shall have a combined capital and surplus of
at least $50,000,000). If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of any supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.09, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.

 

51

 

SECTION
8.10.
Resignation or Removal of Trustee.

 

(a)           The Trustee may at any
time resign by giving written notice of such resignation to the Company and to
the holders of Notes. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
sixty (60) days after the mailing of such notice of resignation to the
Noteholders, the resigning Trustee may, upon ten (10) business days’ notice to
the Company and the Noteholders, appoint a successor identified in such notice
or may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor trustee, or, if any Noteholder
who has been a bona fide holder of a Note or Notes for at least six (6) months
may, subject to the provisions of Section 7.09, on
behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

 

(b)           In case at any time any
of the following shall occur:

 

(i)            the Trustee shall fail
to comply with Section 8.08 after written request
therefor by the Company or by any Noteholder who has been a bona fide holder of
a Note or Notes for at least six (6) months; or

 

(ii)           the Trustee shall cease
to be eligible in accordance with the provisions of Section 8.09 and shall fail to resign after written request
therefor by the Company or by any such Noteholder; or

 

(iii)          the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;

 

then, in any such case, the Company may remove the Trustee and appoint
a successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Noteholder who has
been a bona fide holder of a Note or Notes for at least six (6) months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee; provided that
if no successor Trustee shall have been appointed and have accepted appointment
sixty (60) days after either the Company or the Noteholders has removed the
Trustee, the Trustee so removed may petition, at the expense of the Company,
any court of competent jurisdiction for an appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.

 

52

 

(c)           So long as no default
or Event of Default has occurred and is continuing, the Company may, in its sole
discretion, elect to remove the Trustee and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the Trustee so removed and
copy to the successor trustee.

 

(d)           The holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
at any time remove the Trustee and nominate a successor trustee which shall be
deemed appointed as successor trustee unless, within ten (10) days after notice
to the Company of such nomination, the Company objects thereto, in which case
the Trustee so removed or any Noteholder, or if such Trustee so removed or any
Noteholder fails to act, the Company, upon the terms and conditions and
otherwise as in Section 8.10(a) provided, may
petition any court of competent jurisdiction for an appointment of a successor
trustee.

 

(e)           Any resignation or
removal of the Trustee and appointment of a successor trustee pursuant to any
of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.

 

SECTION
8.11.
Acceptance by Successor Trustee. Any successor trustee appointed
as provided in Section 8.10 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as trustee herein; but, nevertheless,
on the written request of the Company or of the successor trustee, the trustee
ceasing to act shall, upon payment of any amount then due it pursuant to the
provisions of Section 8.06, execute and deliver an
instrument transferring to such successor trustee all the rights and powers of
the trustee so ceasing to act. Upon request of any such successor trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon
all property and funds held or collected by such trustee as such, except for
funds held in trust for the benefit of holders of particular Notes, to secure
any amounts then due it pursuant to the provisions of Section 8.06.

 

No successor trustee shall accept appointment as
provided in this Section 8.11 unless, at the time
of such acceptance, such successor trustee shall be qualified under the
provisions of Section 8.08 and be eligible under
the provisions of Section 8.09.

 

Upon acceptance of appointment by a successor trustee
as provided in this Section 8.11, the Company (or
the former trustee, at the written direction of the Company) shall mail or
cause to be mailed notice of the succession of such trustee hereunder to the
holders of Notes at their addresses as they shall appear on the Note register.
If the Company fails to mail such notice within ten (10) days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.

 

SECTION
8.12.
Succession by Merger, Etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from

 

53

 

any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee (including any trust created by this Indenture), shall be the successor
to the Trustee hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided
that in the case of any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, such corporation shall be
qualified under the provisions of Section 8.08 and
eligible under the provisions of Section 8.09.

 

In case at the time such successor to the Trustee
shall succeed to the trusts created by this Indenture, any of the Notes shall
have been authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor trustee or
authenticating agent appointed by such predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Trustee or any authenticating
agent appointed by such successor trustee may authenticate such Notes in the
name of the successor trustee; and in all such cases such certificates shall
have the full force that is provided in the Notes or in this Indenture; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or authenticate Notes in the name of
any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.

 

SECTION
8.13.
Preferential Collection of Claims. If and when the Trustee shall be
or become a creditor of the Company (or any other obligor upon the Notes), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of the claims against the Company (or any such other obligor).

 

SECTION
8.14.
Trustee’s Application for Instructions from the Company. Any application by the Trustee
for written instructions from the Company (other than with regard to any action
proposed to be taken or omitted to be taken by the Trustee that affects the
rights of the holders of the Notes or holders of Designated Senior Indebtedness
under this Indenture, including, without limitation, under Article 4 hereof) may, at the option of the Trustee, set forth
in writing any action proposed to be taken or omitted by the Trustee under this
Indenture and the date on and/or after which such action shall be taken or such
omission shall be effective. The Trustee shall not be liable for any action
taken by, or omission of, the Trustee in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than three (3) Business Days after the date any officer of
the Company actually receives such application, unless any such officer shall
have consented in writing to any earlier date) unless prior to taking any such
action (or the effective date in the case of an omission), the Trustee shall
have received written instructions in response to such application specifying
the action to be taken or omitted.

 

ARTICLE
9

 

THE NOTEHOLDERS

 

SECTION
9.01.
Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action

 

54

 

(including the making of
any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such
action, the holders of such specified percentage have joined therein may be
evidenced (a) by any instrument or any number of instruments of similar tenor
executed by Noteholders in person or by agent or proxy appointed in writing, or
(b) by the record of the holders of Notes voting in favor thereof at any
meeting of Noteholders duly called and held in accordance with the provisions
of Article 10, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of Noteholders.
Whenever the Company or the Trustee solicits the taking of any action by the
holders of the Notes, the Company or the Trustee may fix in advance of such
solicitation, a date as the record date for determining holders entitled to
take such action. The record date shall be not more than fifteen (15) days
prior to the date of commencement of solicitation of such action.

 

SECTION
9.02.
Proof of Execution by Noteholders. Subject to the provisions of
Sections 8.01, 8.02
and 10.05, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.

 

The record of any Noteholders’ meeting shall be proved
in the manner provided in Section 10.06.

 

SECTION
9.03.
Who Are Deemed Absolute Owners. The Company, the Trustee, any
paying agent, any conversion agent and any Note registrar may deem the Person
in whose name such Note shall be registered upon the Note register to be, and
may treat it as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by any Person other than the Company or any Note registrar) for
the purpose of receiving payment of or on account of the principal of, premium,
if any, and interest on such Note, for conversion of such Note and for all
other purposes; and neither the Company nor the Trustee nor any paying agent
nor any conversion agent nor any Note registrar shall be affected by any notice
to the contrary. All such payments so made to any holder for the time being, or
upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.

 

SECTION
9.04.
Company-owned Notes Disregarded. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination; provided that, for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent, waiver or
other action, only Notes which a Responsible Officer knows are so owned shall
be so disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.04
if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s
right to vote such Notes and that the pledgee is not the Company, any other
obligor on the Notes or any Affiliate of the Company or any such other obligor.
In the case of a dispute as to such right, any decision by the Trustee taken

 

55

 

upon the advice of
counsel shall be full protection to the Trustee. Upon request of the Trustee,
the Company shall furnish to the Trustee promptly an Officers’ Certificate
listing and identifying all Notes, if any, known by the Company to be owned or
held by or for the account of any of the above described Persons, and, subject
to Section 8.01, the Trustee shall be entitled to
accept such Officers’ Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Notes not listed therein are outstanding for
the purpose of any such determination.

 

SECTION
9.05.
Revocation of Consents, Future Holders Bound. At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 9.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any holder of a Note which is shown
by the evidence to be included in the Notes the holders of which have consented
to such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.02, revoke such action so far as concerns such Note.
Except as aforesaid, any such action taken by the holder of any Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Note and of any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such Note
or any Note issued in exchange or substitution therefor.

 

ARTICLE
10

 

MEETINGS OF NOTEHOLDERS

 

SECTION
10.01.
Purpose of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article 10 for any of the following purposes:

 

(1)           to
give any notice to the Company or to the Trustee or to give any directions to
the Trustee permitted under this Indenture, or to consent to the waiving of any
default or Event of Default hereunder and its consequences, or to take any
other action authorized to be taken by Noteholders pursuant to any of the provisions
of Article 7;

 

(2)           to
remove the Trustee and nominate a successor trustee pursuant to the provisions
of Article 8;

 

(3)           to
consent to the execution of an indenture or indentures supplemental hereto
pursuant to the provisions of Section 11.02; or

 

(4)           to
take any other action authorized to be taken by or on behalf of the holders of
any specified aggregate principal amount of the Notes under any other provision
of this Indenture or under applicable law.

 

SECTION
10.02.
Call of Meetings by Trustee. The Trustee may at any time call
a meeting of Noteholders to take any action specified in Section 10.01, to be held at such time and at such place as the
Trustee shall determine. Notice of every meeting of the Noteholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such

 

56

 

meeting and the
establishment of any record date pursuant to Section 9.01,
shall be mailed to holders of Notes at their addresses as they shall appear on
the Note register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90)
days prior to the date fixed for the meeting.

 

Any meeting of Noteholders shall be valid without
notice if the holders of all Notes then outstanding are present in person or by
proxy or if notice is waived before or after the meeting by the holders of all
Notes outstanding, and if the Company and the Trustee are either present by
duly authorized representatives or have, before or after the meeting, waived
notice.

 

SECTION
10.03.
Call of Meetings by Company or Noteholders. In case at any time the Company,
pursuant to a resolution of its Board of Directors, or the holders of at least
ten percent (10%) in aggregate principal amount of the Notes then outstanding,
shall have requested the Trustee to call a meeting of Noteholders, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within twenty (20) days after receipt of such request, then the Company or such
Noteholders may determine the time and the place for such meeting and may call
such meeting to take any action authorized in Section 10.01,
by mailing notice thereof as provided in Section 10.02.

 

SECTION
10.04.
Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

 

SECTION
10.05.
Regulations. Notwithstanding
any other provisions of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Noteholders, in regard
to proof of the holding of Notes and of the appointment of proxies, and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall think
fit.

 

The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Noteholders as provided in Section 10.03, in which case the Company or the Noteholders
calling the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall
be elected by vote of the holders of a majority in principal amount of the
Notes represented at the meeting and entitled to vote at the meeting.

 

Subject to the provisions of Section 9.04, at any meeting each Noteholder or proxyholder
shall be entitled to one vote for each $1,000 principal amount of Notes held or
represented by him; provided that
no vote shall be cast or counted at any meeting in respect of any Note
challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding.

 

57

 

The chairman of the
meeting shall have no right to vote other than by virtue of Notes held by him
or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.02 or 10.03 may be adjourned from time to time by the holders
of a majority of the aggregate principal amount of Notes represented at the
meeting, whether or not constituting a quorum, and the meeting may be held as
so adjourned without further notice.

 

SECTION
10.06.
Voting. The
vote upon any resolution submitted to any meeting of Noteholders shall be by
written ballot on which shall be subscribed the signatures of the holders of
Notes or of their representatives by proxy and the outstanding principal amount
of the Notes held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was mailed as provided in Section 10.02. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.

 

Any record so signed and verified shall be conclusive
evidence of the matters therein stated.

 

SECTION
10.07.
No Delay of Rights by Meeting. Nothing contained in this Article
10 shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Noteholders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Noteholders under any of the provisions of this Indenture or
of the Notes.

 

ARTICLE
11

 

SUPPLEMENTAL INDENTURES

 

SECTION
11.01.
Supplemental Indentures Without Consent of Noteholders. The Company, when authorized by
the resolutions of the Board of Directors, and the Trustee may, from time to
time, and at any time enter into an indenture or indentures supplemental hereto
for one or more of the following purposes:

 

(a)           make provision with
respect to the conversion rights of the holders of Notes pursuant to the
requirements of Section 15.06 and the redemption
obligations of the Company pursuant to the requirements of Section 3.05(e);

 

58

 

(b)           subject to Article 4, to convey, transfer, assign, mortgage or pledge to
the Trustee as security for the Notes, any property or assets;

 

(c)           to evidence the
succession of another Person to the Company, or successive successions, and the
assumption by the successor Person of the covenants, agreements and obligations
of the Company pursuant to Article 12;

 

(d)           to add to the covenants
of the Company such further covenants, restrictions or conditions as the Board
of Directors and the Trustee shall consider to be for the benefit of the holders
of Notes, and to make the occurrence, or the occurrence and continuance, of a
default in any such additional covenants, restrictions or conditions a default
or an Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided
that in respect of any such additional covenant, restriction or condition, such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default
or may limit the remedies available to the Trustee upon such default;

 

(e)           to provide for the
issuance under this Indenture of Notes in coupon form (including Notes
registrable as to principal only) and to provide for exchangeability of such
Notes with the Notes issued hereunder in fully registered form and to make all
appropriate changes for such purpose;

 

(f)            to cure any ambiguity
or to correct or supplement any provision contained herein or in any
supplemental indenture that may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture, or to make such
other provisions in regard to matters or questions arising under this Indenture
that shall not materially adversely affect the interests of the holders of the
Notes;

 

(g)           to evidence and provide
for the acceptance of appointment hereunder by a successor Trustee with respect
to the Notes;

 

(h)           to modify, eliminate or
add to the provisions of this Indenture to such extent as shall be necessary to
effect the qualifications of this Indenture under the Trust Indenture Act, or
under any similar federal statute hereafter enacted; or

 

(i)            to allow any Subsidiary
of the Company to execute a Note Guarantee with respect to the Notes pursuant
to the terms of this Indenture.

 

Upon the written request of the Company, accompanied
by a copy of the resolutions of the Board of Directors certified by its
Secretary or Assistant Secretary authorizing the execution of any supplemental
indenture, the Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations that may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion,

 

59

 

enter into any supplemental indenture that affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the
provisions of this Section 11.01 may be executed
by the Company and the Trustee without the consent of the holders of any of the
Notes at the time outstanding, notwithstanding any of the provisions of Section
11.02.

 

Notwithstanding any other provision of this Indenture
or the Notes, the Registration Rights Agreement and the obligation to pay
Liquidated Damages thereunder may be amended, modified or waived in accordance
with the provisions of the Registration Rights Agreement.

 

SECTION
11.02.
Supplemental Indenture with Consent of Noteholders. With the consent (evidenced as
provided in Article 9) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; provided that
no such supplemental indenture shall (i) extend the fixed maturity of any Note,
or reduce the rate or extend the time for payment of interest thereon, or
reduce the principal amount thereof or premium, if any, thereon, or reduce any
amount payable on redemption or repurchase thereof, or impair the right of any
Noteholder to institute suit for the payment thereof, or make the principal or
Repurchase Value thereof or interest or premium, if any, thereon payable in any
coin or currency other than that provided in the Notes, or modify the
provisions of this Indenture with respect to the subordination of the Notes in
a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to redeem any Note upon the happening of a
Fundamental Change in a manner adverse to the holder of Notes, or impair the
right to convert the Notes into Common Stock subject to the terms set forth
herein, including Section 15.06, in each case,
without the consent of the holder of each Note so affected, or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to consent to
any such supplemental indenture or reduce the quorum or voting requirements of
this Indenture, without the consent of the holders of all Notes then outstanding.

 

Upon the written request of the Company, accompanied
by a copy of the resolutions of the Board of Directors certified by its
Secretary or Assistant Secretary authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of Noteholders as aforesaid, the Trustee shall join with the Company in
the execution of such supplemental indenture unless such supplemental indenture
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.

 

It shall not be necessary for the consent of the
Noteholders under this Section 11.02 to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.

 

60

 

SECTION
11.03.
Effect of Supplemental Indenture. Any supplemental indenture executed
pursuant to the provisions of this Article 11
shall comply with the Trust Indenture Act, as then in effect, provided that this Section 11.03
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 11,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Notes shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

 

SECTION
11.04.
Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article 11 may bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company or the Trustee shall so determine, new Notes so
modified as to conform, in the opinion of the Trustee and the Board of Directors,
to any modification of this Indenture contained in any such supplemental
indenture may, at the Company’s expense, be prepared and executed by the
Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 16.10)
and delivered in exchange for the Notes then outstanding, upon surrender of
such Notes then outstanding.

 

SECTION
11.05.
Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee. Prior
to entering into any supplemental indenture, the Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto is authorized or permitted by
this Indenture.

 

ARTICLE
12

 

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

SECTION
12.01.
Company May Consolidate on Certain Terms. Subject to the provisions of
Section 12.02, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of the Company
with or into any other Person or Persons (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other corporation
(whether or not affiliated with the Company), authorized to acquire and operate
the same and that shall be organized under the laws of the United States of
America, any state thereof or the District of Columbia; provided
that upon any such

 

61

 

consolidation, merger,
sale, conveyance or lease, the due and punctual payment of the principal of and
premium, if any, and interest on all of the Notes, according to their tenor and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company, shall be expressly
assumed, by supplemental indenture satisfactory in form to the Trustee,
executed and delivered to the Trustee by the corporation (if other than the
Company) formed by such consolidation, or into which the Company shall have
been merged, or by the corporation that shall have acquired or leased such
property, and such supplemental indenture shall provide for the applicable
conversion rights set forth in Section 15.06.

 

SECTION
12.02.
Successor Corporation to Be Substituted. In case of any such
consolidation, merger, sale, conveyance or lease and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal or Repurchase Value, as applicable, of and premium, if
any, and interest on all of the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Company, such successor corporation shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the party of
this first part. Such successor corporation thereupon may cause to be signed,
and may issue either in its own name or in the name of Axcelis Technologies,
Inc. any or all of the Notes, issuable hereunder that theretofore shall not
have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor corporation instead of the Company and subject to all
the terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes that previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication, and any Notes
that such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution
hereof. In the event of any such consolidation, merger, sale, conveyance or
lease, the corporation named as the “Company” in the first paragraph of this
Indenture or any successor that shall thereafter have become such in the manner
prescribed in this Article 12 may be dissolved,
wound up and liquidated at any time thereafter and such corporation shall be
released from its liabilities as obligor and maker of the Notes and from its
obligations under this Indenture.

 

In case of any such consolidation, merger, sale,
conveyance or lease, such changes in phraseology and form (but not in
substance) may be made in the Notes thereafter to be issued as may be
appropriate.

 

SECTION
12.03.
Opinion of Counsel to Be Given Trustee. The Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article 12.

 

62

 

ARTICLE
13

 

SATISFACTION AND DISCHARGE OF INDENTURE

 

SECTION
13.01.
Discharge of Indenture. When (a) the Company shall deliver to the Trustee for cancellation all
Notes theretofore authenticated (other than any Notes that have been destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company shall deposit
with the Trustee, in trust, funds sufficient to pay at maturity the principal
of and Applicable Premium on, or upon redemption the Repurchase Value of all of
the Notes (other than any Notes that shall have been mutilated, destroyed, lost
or stolen and in lieu of or in substitution for which other Notes shall have
been authenticated and delivered) not theretofore canceled or delivered to the
Trustee for cancellation, calculated as of such date of maturity or redemption
date, as applicable, and interest due or to become due to such date of maturity
or redemption date, as applicable, accompanied by a verification report, as to
the sufficiency of the deposited amount, from an independent certified
accountant or other financial professional satisfactory to the Trustee, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
by the Company, then this Indenture shall cease to be of further effect (except
as to (i) remaining rights of registration of transfer, substitution and
exchange and conversion of Notes, (ii) rights hereunder of Noteholders to
receive payments of the principal of, and premium on, or the Repurchase Value
(which, for clarification, includes principal) of, as applicable, and interest
on, the Notes and the other rights, duties and obligations of Noteholders, as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and (iii) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on written demand of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel as required by Section 16.05 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agrees to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred by the Trustee
and to compensate the Trustee for any services thereafter reasonably and
properly rendered by the Trustee in connection with this Indenture or the
Notes.

 

SECTION
13.02.
Deposited Monies to Be Held in Trust by Trustee . Subject to Section 13.04, all monies deposited with the Trustee pursuant to
Section 13.01, provided such deposit was not in
violation of Article 4, shall be held in trust for
the sole benefit of the Noteholders and not to be subject to the subordination
provisions of Article 4, and such monies shall be
applied by the Trustee to the payment, either directly or through any paying
agent (including the Company if acting as its own paying agent), to the holders
of the particular Notes for the payment or redemption of which such monies have
been deposited with the Trustee, of all sums due and to become due thereon for
principal of, and premium on, or Repurchase Value of, and interest.

 

SECTION
13.03.
Paying Agent to Repay Monies Held. Upon the satisfaction and
discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and

 

63

 

thereupon such paying
agent shall be released from all further liability with respect to such monies.

 

SECTION
13.04.
Return of Unclaimed Monies. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by
the Trustee on demand and all liability of the Trustee shall thereupon cease
with respect to such monies; and the holder of any of the Notes shall
thereafter look only to the Company for any payment that such holder may be
entitled to collect unless an applicable abandoned property law designates
another Person.

 

SECTION
13.05.
Reinstatement. If
the Trustee or the paying agent is unable to apply any money in accordance with
Section 13.02 by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company’s obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 13.01 until such time as the
Trustee or the paying agent is permitted to apply all such money in accordance
with Section 13.02; provided
that if the Company makes any payment of interest or premium on or principal or
Repurchase Value, as applicable, of any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the money held by the Trustee or paying
agent.

 

ARTICLE
14

 

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

SECTION
14.01.
Indenture and Notes Solely Corporate Obligations. No recourse for the payment of
the principal or Repurchase Value of or premium, if any, or interest on any
Note, or for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and
as a consideration for, the execution of this Indenture and the issue of the
Notes.

 

64

 

ARTICLE
15

 

CONVERSION OF NOTES

 

SECTION
15.01.
Right to Convert. Subject to and upon compliance
with the provisions of this Indenture, including, without limitation, Article 4, the holder of any Note shall have the right, at its
option, at any time after the original issuance of the Notes hereunder through
the close of business on the final maturity date of the Notes (except that,
with respect to any Note or portion of a Note that shall be called for
redemption, such right shall terminate, except as provided in Section 15.02, Section 3.02 or
Section 3.04, at the close of business on the
Business Day next preceding the date fixed for redemption of such Note or
portion of a Note unless the Company shall default in payment due upon
redemption thereof) to convert the principal amount, plus the Applicable
Premium on such principal amount as of the conversion date, of the Note, or any
portion of such principal amount, plus the Applicable Premium on such principal
amount as of the conversion date, which is an integral multiple of $1,000 into
fully paid and non-assessable shares of Common Stock (as such shares shall then
be constituted) at the Conversion Rate in effect at such time, by surrender of
the Note so to be converted in whole or in part in the manner provided,
together with any required funds, in Section 15.02.
A Note in respect of which a holder is exercising its option to require
redemption upon a Fundamental Change pursuant to Section 3.05(a)
may be converted only if such holder withdraws its election to exercise in
accordance with Section 3.05(b). A holder of Notes
is not entitled to any rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article 15.

 

SECTION
15.02.
Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion, No Adjustment for Interest or Dividends. In order to exercise the
conversion privilege with respect to any Note in certificated form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company for such purpose
pursuant to Section 5.02, accompanied by the
funds, if any, required by the penultimate paragraph of this Section 15.02, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
the portion thereof specified in said notice. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer taxes, if
required pursuant to Section 15.07. Each such Note
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Note, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or his duly authorized attorney.

 

In order to exercise the conversion privilege with
respect to any interest in a Global Note, the beneficial holder must complete,
or cause to be completed, the appropriate instruction form for conversion
pursuant to the Depositary’s book-entry conversion program, deliver, or cause
to be delivered, by book-entry delivery an interest in such Global Note,
furnish appropriate endorsements and transfer documents if required by the
Company or the Trustee or conversion

 

65

 

agent, and pay the funds,
if any, required by this Section 15.02 and any
transfer taxes if required pursuant to Section 15.07.

 

As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to compliance with any
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Noteholder (as if such transfer were a transfer of
the Note or Notes (or portion thereof) so converted), the Company shall issue
and shall deliver to such Noteholder at the office or agency maintained by the
Company for such purpose pursuant to Section 5.02,
a certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Note or portion thereof as determined by
the Company in accordance with the provisions of this Article 15 and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion,
calculated by the Company as provided in Section 15.03.
In case any Note of a denomination greater than $1,000 shall be surrendered for
partial conversion, and subject to Section 2.03,
the Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Note so surrendered, without charge to him, a new Note or Notes
in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.

 

Each conversion shall be deemed to have been effected
as to any such Note (or portion thereof) on the date on which the requirements
set forth above in this Section 15.02 have been
satisfied as to such Note (or portion thereof), and the Person in whose name
any certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become on said date the holder of
record of the shares represented thereby; provided that
any such surrender on any date when the stock transfer books of the Company
shall be closed shall constitute the Person in whose name the certificates are
to be issued as the record holder thereof for all purposes on the next
succeeding day on which such stock transfer books are open, but such conversion
shall be at the Conversion Rate in effect on the date upon which such Note
shall be surrendered.

 

Any Note or portion thereof surrendered for conversion
during the period from the close of business on the record date for any
interest payment date to the close of business on the Business Day preceding
the following interest payment date that has not been called for redemption during
such period shall be accompanied by payment, in immediately available funds or
other funds acceptable to the Company, of an amount equal to the interest
otherwise payable on such interest payment date on the principal amount being
converted; provided that no such payment need be
made if there shall exist at the time of conversion a default in the payment of
interest on the Notes. Except as provided above in this Section 15.01, no payment or other adjustment shall be made for
interest accrued on any Note converted or for dividends on any shares issued
upon the conversion of such Note as provided in this Article.

 

Upon the conversion of an interest in a Global Note,
the Trustee (or other conversion agent appointed by the Company), or the
Custodian at the direction of the Trustee (or other conversion agent appointed
by the Company), shall make a notation on such Global Note as to the reduction
in the principal amount represented thereby. The Company shall notify the
Trustee in writing of any conversions of Notes effected through any conversion
agent other than the Trustee.

 

66

 

SECTION
15.03.
Cash Payments in Lieu of Fractional Shares. No fractional shares of Common
Stock or scrip representing fractional shares shall be issued upon conversion
of Notes. If more than one Note shall be surrendered for conversion at one time
by the same holder, the number of full shares that shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Notes (or specified portions thereof to the extent permitted hereby) so
surrendered. If any fractional share of stock would be issuable upon the
conversion of any Note or Notes, the Company shall make an adjustment and
payment therefor in cash at the current market price thereof to the holder of
Notes. The current market price of a share of Common Stock shall be the Closing
Price on the last Business Day immediately preceding the day on which the Notes
(or specified portions thereof) are deemed to have been converted.

 

SECTION
15.04.
Conversion Rate. Each $1,000 of principal amount
of the Notes, together with the Applicable Premium on such principal amount as
of the date of conversion, shall be convertible into the number of shares of
Common Stock specified in the form of Note (herein called the “Conversion Rate”) attached as Exhibit A hereto, subject to
adjustment as provided in this Article 15.

 

SECTION
15.05.
Adjustment of Conversion Rate. The Conversion Rate shall be
adjusted from time to time by the Company as follows:

 

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

 

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

 

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

 

such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purpose of this paragraph (a), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.05(a) is
declared but not so paid or made, the Conversion Rate shall again be adjusted
to the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.

 

(b)           In case the Company
shall issue rights or warrants to all holders of its outstanding shares of
Common Stock entitling them (for a period expiring within forty-five (45) days
after

 

67

 

the date fixed for
determination of stockholders entitled to receive such rights or warrants) to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price (as defined below) on the date fixed for determination
of stockholders entitled to receive such rights or warrants, the Conversion
Rate shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants
by a fraction,

 

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

 

(ii)           the denominator of which
shall be the sum of the number of shares of Common Stock outstanding at the
close of business on the date fixed for determination of stockholders entitled
to receive such rights or warrants plus the number of shares that the aggregate
offering price of the total number of shares so offered would purchase at such
Current Market Price.

 

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

 

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

 

68

 

(d)           In case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
shares of any class of capital stock of the Company or evidences of its
indebtedness or assets (including securities, but excluding any rights or
warrants referred to in Section 15.05(b), and
excluding any dividend or distribution (x) paid exclusively in cash or (y)
referred to in Section 15.05(a) (any of the
foregoing hereinafter in this Section 15.05(d)
called the “Securities”)), then, in each such
case (unless the Company elects to reserve such Securities for distribution to
the Noteholders upon the conversion of the Notes so that any such holder
converting Notes will receive upon such conversion, in addition to the shares
of Common Stock to which such holder is entitled, the amount and kind of such
Securities which such holder would have received if such holder had converted
its Notes into Common Stock immediately prior to the Record Date (as defined in
Section 15.05(h)(4)) for such distribution of the
Securities), the Conversion Rate shall be increased so that the same shall be
equal to the rate determined by multiplying the Conversion Rate in effect on
the Record Date with respect to such distribution by a fraction,

 

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

 

(ii)           the denominator of
which shall be the Current Market Price on such Record Date less 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 portion of the Securities so distributed applicable
to one share of Common Stock,

 

such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided
that if the then fair market value (as so determined) of the portion of the
Securities so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Noteholder
shall have the right to receive upon conversion the amount of Securities such
holder would have received had such holder converted each Note on the Record Date.
If such dividend or distribution is not so paid or made, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect
if such dividend or distribution had not been declared. If the Board of
Directors determines the fair market value of any distribution for purposes of
this Section 15.05(d) by reference to the actual
or when issued trading market for any securities, it must in doing so consider
the prices in such market over the same period used in computing the Current
Market Price on the applicable Record Date.

 

Rights or warrants distributed by the Company to all
holders of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company’s capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events (“Trigger Event”):
(i) are deemed to be transferred with such shares of Common Stock; (ii) are not
exercisable; and (iii) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this
Section 15.05 (and no adjustment to the Conversion
Rate under this Section 15.05 will be required)
until the occurrence of the earliest Trigger Event, whereupon such rights and
warrants shall be deemed to

 

69

 

have been distributed and
an appropriate adjustment (if any is required) to the Conversion Rate shall be
made under this Section 15.05(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 Conversion Rate under this Section 15.05 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 Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights 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 by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.

 

No adjustment of the Conversion Rate shall be made
pursuant to this Section 15.05(d) in respect of
rights or warrants distributed or deemed distributed on any Trigger Event to
the extent that such rights or warrants are actually distributed, or reserved
by the Company for distribution to holders of Notes upon conversion by such
holders of Notes to Common Stock.

 

For purposes of this Section 15.05(d)
and Sections 15.05(a) and (b), any dividend or
distribution to which this Section 15.05(d) is
applicable that also includes shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock (or both), shall be deemed
instead to be (1) a dividend or distribution of the evidences of indebtedness,
assets or shares of capital stock other than such shares of Common Stock or
rights or warrants (and any Conversion Rate adjustment required by this Section
15.05(d) with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants (and any
further Conversion Rate adjustment required by Sections 15.05(a)
and (b) with respect to such dividend or distribution shall then be made),
except (A) the Record Date of such dividend or distribution shall be
substituted as “the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution”, “the date fixed for the
determination of stockholders entitled to receive such rights or warrants” and “the
date fixed for such determination” within the meaning of Sections 15.05(a) and (b), and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed “outstanding at
the close of business on the date fixed for such determination” within the
meaning of Section 15.05(a).

 

(e)           In case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
cash (excluding (x) any quarterly cash dividend on the Common Stock to the
extent the aggregate cash dividend per share of Common Stock in any fiscal
quarter does not

 

70

 

exceed the greater
of (A) the amount per share of Common Stock of the next preceding quarterly
cash dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require any adjustment of the Conversion Rate pursuant to this
Section 15.05(e) (as adjusted to reflect
subdivisions, or combinations of the Common Stock), and (B) 3.75% of the
arithmetic average of the Closing Price (determined as set forth in Section 15.05(h)) during the ten Trading Days (as defined in
Section 15.05(h)) immediately prior to the date of
declaration of such dividend, and (y) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, the Conversion Rate
shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the close of
business on such record date by a fraction,

 

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

 

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

 

such adjustment to be effective immediately prior to the opening of
business on the day following the record date; provided
that if the portion of the cash so distributed applicable to one share of
Common Stock is equal to or greater than the Current Market Price on the record
date, in lieu of the foregoing adjustment, adequate provision shall be made so
that each Noteholder shall have the right to receive upon conversion the amount
of cash such holder would have received had such holder converted each Note on
the record date. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared. If
any adjustment is required to be made as set forth in this Section 15.05(e) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by which
such distribution exceeds the amount of the quarterly cash dividend permitted
to be excluded pursuant hereto. If an adjustment is required to be made as set
forth in this Section 15.05(e) above as a result
of a distribution that is not a quarterly dividend, such adjustment shall be
based upon the full amount of the distribution.

 

(f)            In case a tender or
exchange offer made by the Company or any Subsidiary for all or any portion of
the Common Stock shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to stockholders of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors) that as of the last
time (the “Expiration Time”) tenders or
exchanges may be made pursuant to such tender or exchange offer (as it may be
amended) exceeds the Closing Price of a share of Common Stock on the Trading
Day next succeeding the Expiration Time, the Conversion Rate shall be increased
so that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the Expiration Time by a fraction

 

71

 

(i)            the numerator of which
shall be the sum of (x) the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the acceptance (up
to any maximum 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

 

(ii)           the denominator of
which shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the Closing
Price of a share of Common Stock on the Trading Day next succeeding the
Expiration Time

 

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

 

(g)           In case of a tender or
exchange offer made by a Person other than the Company or any Subsidiary for an
amount that increases the offeror’s ownership of Common Stock to more than
twenty-five percent (25%) of the Common Stock outstanding and shall involve the
payment by such Person 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 “Offer Expiration Time”)
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Closing Price of a share of Common
Stock on the Trading Day next succeeding the Offer Expiration Time, and in
which, as of the Offer Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Rate shall be increased so
that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the Offer Expiration Time by a fraction

 

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

 

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

 

72

 

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

 

such adjustment to become effective immediately prior to the opening of
business on the day following the Offer Expiration Time. If such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 15.05(g)
shall not be made if, as of the Offer Expiration Time, the offering documents
with respect to such offer disclose a plan or intention to cause the Company to
engage in any transaction described in Article 12.

 

(h)           For purposes of this
Section 15.05, the following terms shall have the
meaning indicated:

 

(1)           “Closing Price” with respect to any security on any day shall
mean the last sale price, regular way, on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way as of 4:00 p.m. (New York City time), in each case as
quoted on the NASDAQ National Market or, if such security is not quoted or
listed or admitted to trading on such NASDAQ National Market, on the principal
national securities exchange or quotation system on which such security is
quoted or listed or admitted to trading or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation system, the average
of the closing bid and asked prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not so
available, in such manner as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose, or
a price determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.

 

(2)           “Current Market Price” shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive Trading Days
selected by the Company commencing no more than 30 Trading Days before and
ending not later than the earlier of such date of determination and the day
before the “ex” date with respect to the issuance, distribution, subdivision or
combination requiring such computation immediately prior to the date in
question. For purpose of this paragraph, the term “ex” date, (1) when used with
respect to any issuance or distribution, means the first date on which the
Common Stock trades, regular way, on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to receive
such issuance or distribution, and (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades, regular way, on such exchange or in such market
after the time at which such subdivision or combination becomes effective.

 

73

 

If another issuance, distribution, subdivision or
combination to which Section 15.05 applies occurs
during the period applicable for calculating “Current Market Price” pursuant to
the definition in the preceding paragraph, “Current Market Price” shall be
calculated for such period in a manner determined by the Board of Directors to
reflect the impact of such issuance, distribution, subdivision or combination
on the Closing Price of the Common Stock during such period.

 

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

 

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

 

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

 

(i)            The Company may make
such increases in the Conversion Rate, in addition to those required by
Sections 15.05(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

 

To the extent permitted by applicable law, the Company
from time to time may increase the Conversion Rate by any amount for any period
of time if the period is at least twenty (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 Conversion Rate is increased
pursuant to the preceding sentence, the Company shall mail to holders of record
of the Notes a notice of the increase at least fifteen (15) days prior to the
date the increased Conversion Rate takes effect, and such notice shall state
the increased Conversion Rate and the period during which it will be in effect.

 

(j)            No adjustment in the
Conversion Rate 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
15.05) are not required to be made shall be
carried

 

74

 

forward and taken
into account in any subsequent adjustment. All calculations under this Article 15 shall be made by the Company and shall be made to the
nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the
case may be. No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest. To the
extent the Notes become convertible into cash, assets, property or securities
(other than capital stock of the Company), no adjustment need be made
thereafter as to the cash, assets, property or such securities. Interest will
not accrue on any cash into which the Notes are convertible.

 

(k)           Whenever the Conversion
Rate is adjusted as herein provided, the Company shall promptly file with the
Trustee and any conversion agent other than the Trustee an Officers’
Certificate setting forth the Conversion Rate after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. Unless and
until a Responsible Officer of the Trustee shall have received such Officers’
Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume that the last Conversion Rate
of which it has knowledge is still in effect. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Rate setting forth the adjusted Conversion Rate and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Rate to the holder of each Note at his last
address appearing on the Note register provided for in Section 2.05 of this Indenture, within twenty (20) days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of any such adjustment.

 

(l)            In any case in which
this Section 15.05 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for
an event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 15.05(a),
(3) a date fixed for the determination of stockholders entitled to receive
rights or warrants pursuant to Section 15.05(b),
(4) the Expiration Time for any tender or exchange offer pursuant to Section 15.05(f), or (5) the Offer Expiration Time for a tender
or exchange offer pursuant to Section 15.05(g)
(each a “Determination Date”), the Company may
elect to defer until the occurrence of the applicable Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any Note converted after such
Determination Date and before the occurrence of such Adjustment Event, the
additional shares of Common Stock or other securities issuable upon such
conversion by reason of the adjustment required by such Adjustment Event over
and above the Common Stock issuable upon such conversion before giving effect
to such adjustment and (y) paying to such holder any amount in cash in lieu of
any fraction pursuant to Section 15.03. For
purposes of this Section 15.05(l), the term “Adjustment Event” shall mean:

 

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

 

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

 

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

 

75

 

(iv)          in any case referred to
in clause (4) or clause (5) hereof, the date a sale or exchange of Common Stock
pursuant to such tender or exchange offer is consummated and becomes
irrevocable.

 

(m)          For purposes of this
Section 15.05, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

 

SECTION
15.06.
Effect of Reclassification, Consolidation, Merger or Sale. If any of the following events
occur, namely (i) any reclassification or change of the outstanding shares of
Common Stock (other than a subdivision or combination to which Section 15.05(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of
the properties and assets of the Company to any other Person as a result of
which holders of Common Stock shall be entitled to receive stock, other
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, then the Company or the successor or purchasing
Person, as the case may be, shall execute with the Trustee a supplemental
indenture (which shall comply with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) providing that each Note
shall be convertible into the kind and amount of shares of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance (provided that, if the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised (“nonelecting
share”), then for the purposes of this Section 15.06 the kind and amount of stock, other securities or
other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article 15.

 

The Company shall cause notice of the execution of
such supplemental indenture to be mailed to each holder of Notes, at its
address appearing on the Note register provided for in Section 2.05 of this Indenture, within twenty (20) days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of such supplemental indenture.

 

76

 

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

 

If this Section 15.06
applies to any event or occurrence, Section 15.05
shall not apply.

 

SECTION
15.07.
Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. 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 and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting
the issue thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.

 

SECTION
15.08.
Reservation of Shares, Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock. The Company shall provide, free
from preemptive rights, out of its authorized but unissued shares or shares
held in treasury, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion.

 

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

 

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

 

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

 

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

 

77

 

Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.

 

SECTION
15.09.
Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Rate or whether any facts exist
which may require any adjustment of the Conversion Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article 15. Without
limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 15.06 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to
in such Section 15.06 or to any adjustment to be
made with respect thereto, but, subject to the provisions of Section 8.01, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, the
Officers’ Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.

 

SECTION
15.10.
Notice to Holders Prior to Certain Actions. In case:

 

(a)           the Company shall
declare a dividend (or any other distribution) on its Common Stock that would
require an adjustment in the Conversion Rate pursuant to Section 15.05; or

 

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

 

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

 

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

 

78

 

the Company shall cause to be filed with the Trustee and to be mailed
to each holder of Notes at his address appearing on the Note register provided
for in Section 2.05 of this Indenture, as promptly
as possible but in any event at least ten (10) days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution or
rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution, liquidation
or winding up.

 

SECTION
15.11.
Rights Issued under the Outstanding Rights Agreement; Future
Stockholder Rights Plans. (a) The Company has entered into a Rights
Agreement dated as of June 30, 2000 (the “Rights Agreement”)
with Equiserve Trust Company, N.A. Under the Rights Agreement, preferred share
purchase rights (the “Rights”) have
been, and may in the future be, issued in respect of shares of Common Stock. Each
share of Common Stock issued upon conversion of any Note pursuant to this
Article 15 shall be entitled to receive the appropriate number of Rights, if
any, and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as provided by and
subject to the terms of the Rights Agreement as in effect at the time of such
conversion. If hereafter the Rights separate from the Common Stock in
accordance with the provisions of the Rights Agreement so that a Noteholder
would thereafter not be entitled to receive any Rights in respect of the Common
Stock issuable upon conversion of such Note, the Conversion Rate will be
adjusted as provided in Section 15.05(d) on the separation date. In lieu of any
such adjustment, the Company may amend the Rights Agreement to provide that
upon conversion Noteholders will receive, in addition to the Common Stock
issuable upon such conversion, the Rights which would have attached to such
shares of Common Stock if the Rights had not become separated from the Common
Stock pursuant to the provisions of the Rights Agreement.

 

(b)           If the Company
hereafter adopts any stockholder rights plan similar to the Rights Agreement, a
Noteholder shall be entitled to receive upon conversion of their Notes in
addition to the shares of Common Stock issuable upon conversion the related rights
for the Common Stock whether or not the rights under the future stockholder
rights plan have separated from the Common Stock at the time of conversion but
otherwise subject to the generally applicable terms of such plan and no
additional adjustment to the Conversion Rate shall be made for the future
stockholder rights plan under Section 15.05(d).

 

79

 

ARTICLE
16

 

MISCELLANEOUS PROVISIONS

 

SECTION
16.01.
Provisions Binding on Company’s Successors. All the covenants, stipulations,
promises and agreements by the Company contained in this Indenture shall bind
its successors and assigns whether so expressed or not.

 

SECTION
16.02.
Official Acts by Successor Corporation. Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by
any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee or officer of
any Person that shall at the time be the lawful sole successor of the Company.

 

SECTION
16.03.
Addresses for Notices, Etc. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Axcelis Technologies, Inc., 108 Cherry Hill Road, Beverly,
Massachusetts 01915, Attention: Chief Financial Officer. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited, postage prepaid, by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the
date as of which this Indenture is dated, located at One Federal Street, 3rd
Floor, Boston, Massachusetts 02109.

 

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

 

Any notice or communication mailed to a Noteholder
shall be mailed to him by first class mail, postage prepaid, at his address as
it appears on the Note register and shall be sufficiently given to him if so mailed
within the time prescribed.

 

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

 

SECTION
16.04.
Governing Law. This
Indenture and each Note shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with the laws of the State of New York.

 

SECTION
16.05.
Evidence of Compliance with Conditions Precedent,
Certificates to Trustee. Upon
any application or demand by the Company to the Trustee to take any action
under any of the provisions of this Indenture, the Company shall furnish to the
Trustee an Officers’ Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.

 

Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall

 

80

 

include: (1) a statement
that the person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in such
certificate or opinion is based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.

 

SECTION
16.06.
Legal Holidays. In
any case in which the date of maturity of interest on or principal of the Notes
or the date fixed for redemption of any Note will not be a Business Day, then
payment of such interest on or principal of the Notes need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period from and after such date.

 

SECTION
16.07.
Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that this Section 16.07 shall not require this Indenture or the Trustee to
be qualified under the Trust Indenture Act prior to the time such qualification
is in fact required under the terms of the Trust Indenture Act, nor shall it
constitute any admission or acknowledgment by any party to the Indenture that
any such qualification is required prior to the time such qualification is in
fact required under the terms of the Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in an indenture qualified under the Trust Indenture
Act, such required provision shall control.

 

SECTION
16.08.
No Security Interest Created. Nothing in this Indenture or in
the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction in which property of the
Company or its subsidiaries is located.

 

SECTION
16.09.
Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and
their successors hereunder, the holders of Notes and the holders of Designated
Senior Indebtedness, any benefit or any legal or equitable right, remedy or
claim under this Indenture.

 

SECTION
16.10.
Table of Contents, Headings, Etc. The table of contents and the
titles 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.

 

SECTION
16.11.
Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection
with the original issuance thereof and transfers and exchanges of Notes
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as fully to all

 

81

 

intents and purposes as
though the authenticating agent had been expressly authorized by this Indenture
and those Sections to authenticate and deliver Notes. For all purposes of this
Indenture, the authentication and delivery of Notes by the authenticating agent
shall be deemed to be authentication and delivery of such Notes “by the Trustee”
and a certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Notes for the Trustee’s certificate of authentication. Such authenticating
agent shall at all times be a Person eligible to serve as trustee hereunder
pursuant to Section 8.09.

 

Any corporation into which any authenticating agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to which any
authenticating agent shall be a party, or any corporation succeeding to the
corporate trust business of any authenticating agent, shall be the successor of
the authenticating agent hereunder, if such successor corporation is otherwise
eligible under this Section 16.11, without the
execution or filing of any paper or any further act on the part of the parties
hereto or the authenticating agent or such successor corporation.

 

Any authenticating agent may at any time resign by
giving written notice of resignation to the Trustee and to the Company. The
Trustee may at any time terminate the agency of any authenticating agent by
giving written notice of termination to such authenticating agent and to the
Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any authenticating agent shall cease to be
eligible under this Section, the Trustee shall either promptly appoint a
successor authenticating agent or itself assume the duties and obligations of
the former authenticating agent under this Indenture and, upon such appointment
of a successor authenticating agent, if made, shall give written notice of such
appointment of a successor authenticating agent to the Company and shall mail
notice of such appointment of a successor authenticating agent to all holders
of Notes as the names and addresses of such holders appear on the Note
register.

 

The Company agrees to pay to the authenticating agent
from time to time such reasonable compensation for its services as shall be
agreed upon in writing between the Company and the authenticating agent.

 

The provisions of Sections 8.02,
8.03, 8.04, 9.03 and this Section 16.11
shall be applicable to any authenticating agent.

 

SECTION
16.12.
Execution in Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

 

SECTION
16.13.
Severability. In
case any provision in this Indenture or in the Notes shall be invalid, illegal
or unenforceable, then (to the extent permitted by law) the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

SECTION
16.14.
Improper Payments. Each holder, by acceptance of its
Note, agrees with the Company and with each other holder that if
notwithstanding the provisions of this Indenture,

 

82

 

it receives any payment
or distribution in respect of its Note contrary to the provisions of this
Indenture, such payment or distribution shall be received and held in trust for
the benefit of, and shall upon demand of the Company or the Trustee be
forthwith paid over and delivered to, the Trustee, which shall pay and deliver
such amount to the Persons then entitled thereto in accordance with this
Indenture.

 

SECTION
16.15.
Subordination Agreements. The Company agrees, represents and warrants that
the respective subordination provisions of the Company’s 4 1⁄4% Convertible
Subordinated Notes due 2007 (the “2007 Notes”)
contained in the Indenture, dated as of January 15, 2002, as amended, governing
the 2007 Notes (the “2007 Note Indenture”)
are and will be enforceable against the holders of the “Notes” (as defined in
the 2007 Note Indenture) thereunder to the holders of any “Senior Indebtedness”
(as defined in the 2007 Note Indenture) and “Designated Senior Indebtedness” (
as defined in the 2007 Note Indenture) which have not effectively waived the
benefits thereof, in accordance with the terms of the 2007 Note Indenture. All
obligations in respect of the Notes issued under this Indenture shall constitute
“Senior Indebtedness” (as defined in the 2007 Note Indenture) and, following
the earlier of (i) the “Revolving Loan Commitment Maturity Date” under the
Credit Agreement in effect as of the date of this Indenture (and without giving
effect to any amendment, modification, renewal, replacement or refinancing of
the Credit Agreement after the date of this Indenture), which, for purposes of
clarity, is October 11, 2006, and (ii) the date on which such Credit Agreement
is terminated (the earlier of such dates, the “Credit
Agreement Termination Date”), “Designated Senior Indebtedness” ( as
defined in the 2007 Note Indenture), for purposes of the 2007 Indenture and all
such obligations in respect of the Notes are (or in the case of “Designated
Senior Indebtedness,” following the Credit Agreement Termination Date will be)
entitled to the benefits of the subordination created thereunder. Nothing
herein is intended, and nothing herein shall be construed, to amend, modify or
otherwise alter the terms of the 2007 Indenture.

 

U.S. Bank National Association hereby accepts the
trusts in this Indenture declared and provided, upon the terms and conditions
herein above set forth.

 

83

 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed.

 

 

	
   

  	
  AXCELIS TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary G. Puma

  
	
   

  	
   

  	
  Name:  Mary G. Puma

  
	
   

  	
   

  	
  Title:  Chairman, CEO, and President

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Brennan

  
	
   

  	
   

  	
  Name:

  	
  John A. Brennan

  
	
   

  	
   

  	
  Title:  

  	
  Officer

  

 

84

 

EXHIBIT A

 

[Include only for Global Notes:]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (THE “DEPOSITARY”, WHICH TERM INCLUDES
ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES) 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 REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

[Include only for Notes that are Restricted
Securities]

 

[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS NOTE EXCEPT (A) TO AXCELIS TECHNOLOGIES, INC. OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, INCLUDING THE EXEMPTION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE (2)(D) ABOVE), IT WILL FURNISH TO U.S. BANK
NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THIS NOTE PURSUANT

 

A-1

 

TO CLAUSE (2)(D) ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER
OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.]

 

A-2

 

AXCELIS TECHNOLOGIES,
INC.

 

41⁄4% CONVERTIBLE SENIOR
SUBORDINATED NOTE DUE 2009

 

	
   

  	
  CUSIP:        

  
	
   

  	
   

  
	
  No.

  	
  $

  

 

Axcelis Technologies, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware (herein
called the “Company”, which term includes any
successor corporation under the Indenture referred to on the reverse hereof),
for value received hereby promises to pay to [CEDE & Co.]* or its
registered assigns, [the principal sum set forth on Schedule I hereto]* [the
principal sum of                                 DOLLARS]
on January 15, 2009, plus the Applicable Premium (as defined and provided for
in the Indenture defined below) on such principal sum as of such maturity date,
at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, in such coin or currency of the
United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay interest, semiannually on
January 15 and July 15 of each year, commencing July 15, 2006, on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum of 41⁄4%, from the January 15 or July 15, as the case may be, next
preceding the date of this Note to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Note, or unless no
interest has been paid or duly provided for on the Notes, in which case from
May 2, 2006, until payment of said principal sum has been made or duly provided
for. Notwithstanding the foregoing, if the date hereof is after any January 1
or July 1, as the case may be, and before the following January 15 or July 15,
this Note shall bear interest from such January 15 or July 15; provided that if the Company shall default in the payment of
interest due on such January 15 or July 15, then this Note shall bear interest
from the next preceding January 15 or July 15 to which interest has been paid
or duly provided for or, if no interest has been paid or duly provided for on
such Note, from May 2, 2006. Except as otherwise provided in the Indenture, the
interest payable on the Note pursuant to the Indenture on any January 15 or
July 15 will be paid to the Person entitled thereto as it appears in the Note
register at the close of business on the record date, which shall be the
January 1 or July 1 (whether or not a Business Day) next preceding such January
15 or July 15, as provided in the Indenture; provided
that any such interest not punctually paid or duly provided for shall be
payable as provided in the Indenture. Interest may, at the option of the
Company, be paid either (i) by check mailed to the registered address of such
Person (provided that the holder of Notes with
an aggregate principal amount in excess of $2,000,000 shall, at the written
election of such holder, be paid by wire transfer of immediately available
funds) or (ii) by transfer to an account maintained by such Person located in
the United States; provided that
payments to the Depositary will be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.

 

*For Global Notes only.

 

A-3

 

The Company promises to pay interest on overdue
principal and Applicable Premium, or Repurchase Value (as defined in the
Indenture), as applicable, and (to the extent that payment of such interest is
enforceable under applicable law) interest, in each case, at the rate of 8.0%
per annum.

 

Reference is made to the further provisions of this
Note set forth on the reverse hereof, including, without limitation, provisions
subordinating the payment of principal of and premium, if any, on, or
Repurchase Value, as applicable, of and interest on the Notes to the prior
payment in full of all Designated Senior Indebtedness, as defined in the
Indenture, and provisions giving the holder of this Note the right to convert
this Note into Common Stock of the Company on the terms and subject to the
limitations referred to on the reverse hereof and as more fully specified in
the Indenture. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.

 

This Note shall be deemed to be a contract made under
the laws of the State of New York, and for all purposes shall be construed in
accordance with and governed by the laws of the State of New York.

 

This Note shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee or a duly authorized authenticating agent under
the Indenture.

 

A-4

 

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

 

	
   

  	
  AXCELIS TECHNOLOGIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
  Date:

  	
   

  
	
   

  	
   

  
	
  This is one of the Notes described in the
  within-named Indenture.

  	
   

  
	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Authorized
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  , or

  	
   

  
	
   

  	
   

  
	
  [AUTHENTICATING AGENT], as Authenticating Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Authorized
  Officer

  	
   

  
	
   

  	
   

  
									

 

A-5

 

FORM OF REVERSE OF NOTE

 

AXCELIS TECHNOLOGIES,
INC.

 

41⁄4% CONVERTIBLE SENIOR
SUBORDINATED NOTE DUE 2009

 

This Note is one of a duly authorized issue of Notes
of the Company, designated as its 41⁄4% Convertible Senior Subordinated Notes due
2009 (herein called the “Notes”),
limited to the aggregate principal amount of $75,000,000, all issued or to be
issued under and pursuant to an Indenture dated as of May 2, 2006 (herein called
the “Indenture”), between the Company and
U.S. Bank National Association, as trustee (herein called the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.

 

In case an Event of Default (as defined in the
Indenture) shall have occurred and be continuing, the principal of and Applicable
Premium (as defined in the Indenture) (except in the case of any Notes being
redeemed pursuant to Article 3 of the Indenture, for which the Repurchase Value
shall be due and payable) on, and accrued interest on all Notes may be declared
by either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding, and upon said declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

 

The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, to
execute supplemental indentures adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Notes; provided that no such supplemental indenture shall (i)
extend the fixed maturity of any Note, or reduce the rate or extend the time
for payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable upon redemption or
repurchase thereof, or impair the right of any Noteholder to institute suit for
the payment thereof, or make the principal thereof or interest or premium, if
any, thereon payable in any coin or currency other than that provided in the
Notes, or modify the provisions of the Indenture with respect to the
subordination of the Notes in a manner adverse to the Noteholders in any
material respect, or change the obligation of the Company to redeem any Note
upon the happening of a Fundamental Change (as defined in the Indenture) in a
manner adverse to the holder of the Notes, or impair the right to convert the
Notes into Common Stock subject to the terms set forth in the Indenture,
including Section 15.06 thereof, without the
consent of the holder of each Note so affected or (ii) reduce the aforesaid
percentage of Notes, the holders of which are required to consent to any such
supplemental indenture, or reduce the quorum or voting requirements of the
Indenture, without the consent of the holders of all Notes then outstanding.
Subject to the provisions of the Indenture, the holders of a majority in
aggregate principal amount of the Notes at the time outstanding may on behalf
of the holders of all of the Notes waive any past default or Event of Default
under the Indenture and its consequences except a default in the payment of
interest or any premium on, or the principal of, any of the Notes, or a failure
by the Company to convert any

 

A-6

 

Notes into Common Stock
of the Company, or a default in the payment of the Repurchase Value pursuant to
Article 3 of the Indenture, or a default in
respect of a covenant or provisions of the Indenture which under Article 11 of the Indenture cannot be modified or amended
without the consent of the holders of each or all Notes then outstanding or
affected thereby. Any such consent or waiver by the holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders and owners of this Note and any Notes which
may be issued in exchange or substitution hereof, irrespective of whether or
not any notation thereof is made upon this Note or such other Notes.

 

The indebtedness evidenced by the Notes is, to the
extent and in the manner provided in the Indenture, expressly subordinated and
subject in right of payment to the prior payment in full of all Designated
Senior Indebtedness of the Company, whether outstanding at the date of the
Indenture or thereafter incurred, and this Note is issued subject to the
provisions of the Indenture with respect to such subordination. Each holder of
this Note, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee on its behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney-in-fact for such purpose.

 

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

 

Interest on the Notes shall be computed on the basis
of a 360-day year of twelve 30-day months.

 

The Notes are issuable in fully registered form,
without coupons, in denominations of $1,000 principal amount and any integral
multiple of $1,000. At the office or agency of the Company referred to on the
face hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may
be imposed in connection with any registration or exchange of Notes, Notes may
be exchanged for a like aggregate principal amount of Notes of any other
authorized denominations.

 

At any time prior to maturity, the Notes may be
redeemed at the option of the Company, in whole or in part, upon mailing a
notice of such redemption not less than 30 days but not more than 60 days
before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the Repurchase Value
(as defined in the Indenture) (expressed as a percentage of the principal
amount), together in each case with accrued and unpaid interest to, but
excluding, the date fixed for redemption; provided that
if the date fixed for redemption is on a January 15 or July 15, then the
interest payable on such date shall be paid to the holder of record on the
preceding January 1 or July 1, respectively.

 

The Company may not give notice of any redemption of
the Notes if a default in the payment of interest or premium, if any, on the
Notes has occurred and is continuing.

 

A-7

 

The Notes are not subject to redemption through the
operation of any sinking fund.

 

If a Fundamental Change occurs at any time prior to
maturity of the Notes, the Notes will be redeemable on the 30th day after notice
thereof (the “Repurchase Date”) at the option of
the holder of the Notes at a redemption price equal to the applicable Repurchase
Value thereof, together with accrued interest to, but excluding, the date of
redemption; provided that, if such Repurchase Date
is a January 15 or July 15, the interest payable on such date shall be paid to
the holder of record of the Notes on the preceding January 1 or July 1,
respectively. The Notes will be redeemable in multiples of $1,000 principal
amount. The Company shall mail to all holders of record of the Notes a notice
of the occurrence of a Fundamental Change and of the redemption right arising
as a result thereof on or before the 10th day after the occurrence of such
Fundamental Change. For a Note to be so redeemed at the option of the holder,
the Company must receive at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, such Note with the
form entitled “Option to Elect Repayment Upon a Fundamental Change” on the
reverse thereof duly completed, together with such Note, duly endorsed for
transfer, on or before the 30th day after the date of such notice of a
Fundamental Change (or if such 30th day is not a Business Day, the immediately
succeeding Business Day).

 

Subject to the provisions of the Indenture, the holder
hereof has the right, at its option, at any time after the original issuance of
any Notes through the close of business on the final maturity date of the
Notes, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Business Day immediately preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert each $1,000 of principal amount of the Notes into the
number of shares of the Company’s Common Stock equal to (i) the sum of (x) such
principal amount of the Notes to be converted plus (y) the Applicable Premium
on such principal amount as of the date of conversion, divided by (ii) $20.00 (such
rate, the “Conversion Rate”), as such shares
shall be constituted at the date of conversion and subject to further adjustment
from time to time as provided in the Indenture, upon surrender of this Note,
together with a conversion notice as provided in the Indenture (the form
entitled “Conversion Notice” on the reverse
hereof), to the Company at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, or at the option of
such holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Note, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or by his duly authorized attorney.

 

No adjustment in respect of interest on any Note
converted or dividends on any shares issued upon conversion of such Note will
be made upon any conversion except as set forth in the next sentence. If this
Note (or portion hereof) is surrendered for conversion during the period after
the close of business on any record date for the payment of interest to the
close of business on the Business Day preceding the following interest payment
date and has not been called for redemption by the Company on a redemption date
that occurs during such period, this Note (or portion hereof being converted)
must be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the interest payable on such
interest payment date on the principal amount being converted; provided that no such

 

A-8

 

payment shall be required
if there shall exist at the time of conversion a default in the payment of
interest on the Notes.

 

No fractional shares will be issued upon any
conversion, but an adjustment and payment in cash will be made, as provided in
the Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion.

 

A Note in respect of which a holder is exercising its
right to require redemption upon a Fundamental Change may be converted only if
such holder withdraws its election to exercise such right in accordance with
the terms of the Indenture. Any Notes called for redemption, unless surrendered
for conversion by the holders thereof on or before the close of business on the
Business Day preceding the date fixed for redemption, may be deemed to be
redeemed from the holders of such Notes for an amount equal to the applicable Repurchase
Value together with accrued but unpaid interest to, but excluding, the date
fixed for redemption, by one or more investment banks or other purchasers who
may agree with the Company (i) to purchase such Notes from the holders thereof
and convert them into shares of the Company’s Common Stock and (ii) to make
payment for such Notes as aforesaid to the Trustee in trust for the holders.

 

Upon due presentment for registration of transfer of
this Note at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof; subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.

 

The Company, the Trustee, any authenticating agent,
any paying agent, any conversion agent and any Note registrar may deem and treat
the registered holder hereof as the absolute owner of this Note (whether or not
this Note shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Note
registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor
other conversion agent nor any Note registrar shall be affected by any notice
to the contrary. All payments made to or upon the order of such registered
holder shall, to the extent of the sum or sums paid, satisfy and discharge
liability for monies payable on this Note.

 

No recourse for the payment of the principal of, and
premium on, or Repurchase Value of, and interest on this Note, or for any claim
based hereon or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture or any supplemental
indenture or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.

 

A-9

 

This Note shall be deemed to be a contract made under
the laws of New York, and for all purposes shall be construed in accordance
with the laws of New York.

 

Terms used in this Note and defined in the Indenture
are used herein as therein defined.

 

A-10

 

ABBREVIATIONS

 

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

 

	
  TEN COM -

  	
  as tenants in common

  	
  UNIF GIFT MIN ACT -        
  Custodian          

  	
   

  
	
  TEN ENT -

  	
  as tenant by the entireties

  	
  (Cust)

  	
  (Minor)

  
	
  JT TEN -

  	
  as joint tenants with right

  	
   

  	
   

  
	
   

  	
  of survivorship and not as under Uniform Gifts to
  Minors Act

  tenants in common

  	
   

  
	
   

  	
   

  	
  (State)

  	
   

  
								

 

Additional abbreviations
may also be used though not in the above list.

 

A-11

 

CONVERSION NOTICE

 

TO:         AXCELIS
TECHNOLOGIES, INC.

U.S. BANK NATIONAL ASSOCIATION

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
  Signature(s) must be guaranteed by an “eligible
  guarantor institution” meeting the requirements of the Note registrar, which
  requirements include membership or participation in the Security Transfer
  Agent Medallion Program (“STAMP”) or
  such other “signature guarantee program” as may be determined by the Note
  registrar in addition to, or in substitution for, STAMP, all in accordance
  with the Securities Exchange Act of 1934, as amended.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee

  

 

A-12

 

Fill in the registration of shares of Common Stock if
to be issued, and Notes if to be delivered, other than to and in the name of
the registered holder:

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City, State and Zip Code)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Please print name and address

  	
   

  
	
   

  	
   

  
	
  Principal amount to be converted

  	
   

  
	
  (if less than all):

  	
   

  
	
   

  	
   

  
	
  $

  	
   

  
	
   

  	
   

  
	
  Social Security or Other Taxpayer

  	
   

  
	
  Identification Number:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

A-13

 

OPTION TO ELECT REPAYMENT

UPON A FUNDAMENTAL CHANGE

 

TO:         AXCELIS
TECHNOLOGIES, INC.

U.S. BANK NATIONAL ASSOCIATION

 

The undersigned registered owner of this Note hereby
irrevocably acknowledges receipt of a notice from Axcelis Technologies, Inc.
(the “Company”) as to the occurrence of a
Fundamental Change with respect to the Company and requests and instructs the
Company to repay the entire principal amount of this Note, or the portion
thereof (which is $1,000 or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note at the then
applicable Repurchase Value, together with accrued interest to, but excluding,
such repayment date, to the registered holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
  NOTICE: The above signatures of the holder(s) hereof
  must correspond with the name as written upon the face of the Note in every
  particular without alteration or enlargement or any change whatever.

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  $

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social
  Security or Other Taxpayer

  
	
   

  	
  Identification Number

  

 

A-14

 

ASSIGNMENT

 

For value received                                                              hereby
sell(s) assign(s) and transfer(s) unto                                                                
(Please insert social security or other Taxpayer Identification Number of assignee)
the within Note, and hereby irrevocably constitutes and appoints                                                                     
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises.

 

In connection with any transfer of the Note prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act of 1933 (or any successor provision) (other
than any transfer pursuant to a registration statement that has been declared
effective under the Securities Act of 1933), the undersigned confirms that such
Note is being transferred:

 

o        To Axcelis Technologies,
Inc. or a subsidiary thereof; or

 

o        To a “qualified
institutional buyer” in compliance with Rule 144A under the Securities Act of
1933, as amended; or

 

o        Pursuant to and in
compliance with Rule 144 under the Securities Act of 1933, as amended; or

 

o    Pursuant to a Registration
Statement which has been declared effective under the Securities Act of 1933, as
amended, and which continues to be effective at the time of transfer; or

 

o    Pursuant to “Rule 4(11⁄2)” under
the Securities Act of 1933, as amended;

 

and unless the Note has been transferred to Axcelis Technologies, Inc.
or a subsidiary thereof, the undersigned confirms that such Note is not being
transferred to an “affiliate” of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended (an “Affiliate”).

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  

 

A-15

 

	
   

  	
  Signature(s) must be guaranteed by an “eligible
  guarantor institution” meeting the requirements of the Note registrar, which
  requirements include membership or participation in the Security Transfer
  Agent Medallion Program (“STAMP”) or
  such other “signature guarantee program” as may be determined by the Note
  registrar in addition to, or in substitution for, STAMP, all in accordance
  with the Securities Exchange Act of 1934, as amended.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee

  

 

NOTICE: The signature of the conversion notice, the option to elect
repayment upon a Fundamental Change or the assignment must correspond with the
name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.

 

A-16

 

SCHEDULE I*

AXCELIS TECHNOLOGIES, INC.

41⁄4% Convertible Senior Subordinated Note Due 2009

 

	
  Date

  	
   

  	
  Principal
  Amount

  	
   

  	
  Notation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

* Include Schedule For Global Notes only.

 

A-17

 

EXHIBIT B

 

FORM OF SUPPLEMENTAL
INDENTURE

 

This Supplemental Indenture, dated as of                               
(this “Supplemental Indenture” or “Note Guarantee”), among [name of future
Guarantor] (the “Guarantor”), Axcelis Technologies, Inc. (together with its
successors and assigns, the “Company”) and U.S. Bank National Association, as
Trustee under the Indenture referred to below.

 

W I T N E S S E T H:

 

WHEREAS, the Company and the Trustee have heretofore
executed and delivered an Indenture, dated as of May 2, 2006 (as amended,
supplemented, waived or otherwise modified, the “Indenture”), providing for the
initial issuance of an aggregate principal amount of $75,000,000 of 4 1⁄4% Senior
Subordinated Notes due 2009 of the Company (the “Notes”);

 

WHEREAS, Section 5.13 of the Indenture provides
that the Company is required to cause Subsidiaries, to the extent set forth in
the Indenture, to execute and deliver to the Trustee a Note Guarantee pursuant
to which such Subsidiary will unconditionally guarantee, on a joint and several
basis, the full and prompt payment of the principal or Repurchase Value, as
applicable, of, Applicable Premium, any other premium and interest on the Notes
on a senior basis; and

 

WHEREAS, pursuant to Section 11.01 of the Indenture,
the Trustee and the Company are authorized to execute and deliver this
Supplemental Indenture to amend the Indenture, without the consent of any
Holder;

 

NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor, the Company and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.1         Defined
Terms. Capitalized terms used but not defined herein shall have the respective
meanings ascribed to such terms in the Indenture. The words “herein,” “hereof”
and “hereby” and other words of similar import used in this Supplemental
Indenture refer to this Supplemental Indenture as a whole and not to any
particular section hereof.

 

ARTICLE II

 

Agreement to be Bound,
Note Guarantee

 

SECTION 2.1         Agreement
to be Bound. The Guarantor hereby becomes a party to the Indenture as a
Guarantor and as such will have all of the rights and be subject to all of the

 

B-1

 

obligations and
agreements of a Guarantor under the Indenture. The Guarantor agrees to be bound
by all of the provisions of the Indenture applicable to a Guarantor and to
perform all of the obligations and agreements of a Guarantor under the
Indenture.

 

SECTION 2.2         Note
Guarantee. The Guarantor hereby fully, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, jointly and severally
with each other Person that guarantees the Notes, to each Holder of the Notes
and the Trustee the full and punctual payment when due, whether at maturity, by
acceleration, by redemption or otherwise, of the principal or Repurchase Value,
as applicable, of, premium, if any, interest and Liquidated Damages, if any, on
the Notes and all other monetary obligations of the Company under the Indenture.
The Guarantor further agrees (to the extent permitted by law) that the
obligations in respect of the Notes may be extended or renewed, in whole or in
part, without notice or further assent from it, and that it will remain bound
under this Note Guarantee notwithstanding any extension or renewal of any
obligation in respect of the Notes.

 

The Guarantor waives presentation to, demand of
payment from and protest to the Company of any of the obligations in respect of
the Notes and also waives notice of protest for nonpayment. The Guarantor
waives notice of any default under the Notes or the obligations in respect of
the Notes. The obligations of the Guarantor hereunder shall not be affected by
(a) the failure of any Holder to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under the Indenture,
the Notes or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of the Indenture, the Notes or any other agreement; (d)
the release of any Note held by any Holder or the Trustee for the liabilities
or obligations of any of them; (e) the failure of any Holder to exercise any
right or remedy against any other Guarantor; or (f) any change in the ownership
of the Company.

 

The Guarantor further agrees that its Note Guarantee
herein constitutes a guarantee of payment when due (and not a guarantee of
collection) and waives any right to require that any resort be had by any
Holder to any Note held for payment of the obligations in respect of the Notes.

 

Except as expressly set forth in Section 2.3 hereof,
the obligations of the Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than
payment of the obligations in respect of the Notes in full), including any claim
of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of
the obligations in respect of the Notes or otherwise. Without limiting the
generality of the foregoing, the obligations of the Guarantor herein shall not
be discharged or impaired or otherwise affected by the failure of the Trustee
or any Holder to assert any claim or demand or to enforce any remedy under the
Indenture, the Notes or any other agreement, by any waiver or modification of
any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations in respect of the Notes, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Guarantor or would otherwise
operate as a discharge of the Guarantor as a matter of law or equity.

 

B-2

 

The Guarantor further agrees that its Note Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal or Repurchase Value, as
applicable, of or the Applicable Premium, any other premium or interest on any
of the Notes is rescinded or must otherwise be restored by any Holder upon the
bankruptcy or reorganization of the Company or otherwise.

 

In furtherance of the foregoing and not in limitation
of any other right which any Holder has at law or in equity against the
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
obligations in respect of the Notes when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, the Guarantor
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders an amount equal to
the sum of (i) the unpaid amount of such obligations in respect of the Notes
then due and owing and (ii) accrued and unpaid interest on such obligations in
respect of the Notes then due and owing (but only to the extent not prohibited
by law) and except as provided in Section 2.3 hereof.

 

The Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders, on the other hand, (x) the
maturity of the obligations in respect of the Notes guaranteed hereby may be
accelerated as provided in the Indenture for the purposes of its Note Guarantee
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations in respect of the Notes
guaranteed hereby and (y) in the event of any such declaration of acceleration
of such obligations, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of this Note
Guarantee.

 

The Guarantor also agrees to pay any and all
reasonable costs and expenses (including reasonable attorneys’ fees) incurred
by the Trustee or the Holders in enforcing any rights under this Note
Guarantee.

 

SECTION 2.2         Limitation
on Liability; Termination, Release and Discharge. (a) The obligations of the
Guarantor hereunder will be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor
(including, but not limited to, Permitted Senior and Pari Passu Debt of a
Guarantor) and after giving effect to any collections from or payments made by
or on behalf of any other guarantor in respect of the obligations of such other
guarantor under its Note Guarantee or pursuant to its contribution obligations
under this Note Guarantee, result in the obligations of such Guarantor under
its Note Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law.

 

(b)           The Note
Guarantee of the Guarantor will be deemed released and the Guarantor will be
relieved of its obligations under the Indenture and this Note Guarantee without
any further action required on the part of the Company or such Guarantor:

 

(i)            in
connection with any sale or other disposition of all or substantially all of
the assets of the Guarantor (including by way of merger, amalgamation or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) the

 

B-3

 

Company or a Subsidiary
of the Company;

 

(ii)           in
connection with any sale or other disposition of all of the capital stock of
the Guarantor to a Person that is not (either before or after giving effect to
such transaction) the Company or a Subsidiary of the Company;

 

(iv)          upon
satisfaction and discharge of the Indenture as provided in Article 13 of the
Indenture;

 

(v)           upon the
liquidation or dissolution of the Guarantor provided no Default or Event of
Default has occurred or is continuing; or

 

(vi)          upon the
Guarantor consolidating or amalgamating with, merging into or transferring all
of its properties or assets to the Company or another Person that is a
guarantor of the Notes, and as a result of, or in connection with, such
transaction the Guarantor dissolving or otherwise ceasing to exist.

 

SECTION 2.3         Limitation
of Guarantor’s Liability. The Guarantor, and by its acceptance hereof each
Holder, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to this Note Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal, state or foreign law. To effectuate the foregoing
intention, the Holders and the Guarantor hereby irrevocably agree that the
obligations of such Guarantor under this Note Guarantee will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities (including, but not limited to, Permitted Senior and Pari Passu
Debt of the Guarantor) of such Guarantor and after giving effect to any collections
from or payments made by or on behalf of any other guarantor in respect of the
obligations of such other guarantor under its Note Guarantee or pursuant to
Section 2.4 hereof, result in the obligations of such Guarantor under this Note
Guarantee not constituting such a fraudulent conveyance or fraudulent transfer.
This Section 2.3 is for the benefit of the creditors of the Guarantor.

 

SECTION 2.4         Contribution.
In order to provide for just and equitable contribution among the Guarantor and
each other guarantor of the Notes, the Guarantor agrees that in the event any
payment or distribution is made by the Guarantor or any other guarantor of the
Notes (a “Funding Guarantor”) under its Note
Guarantee, such Funding Guarantor will be entitled to a contribution from each
other guarantor (if any) in a pro rata amount based on the Adjusted Net Assets
(as defined below) of each guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company’s obligations with respect to the Notes or any other
guarantor’s obligations with respect to its Note Guarantee. “Adjusted Net Assets”
of a guarantor at any date means the amount by which the fair value of the
properties and assets of such guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date), but excluding liabilities under its Note Guarantee, of such
guarantor at such date.

 

B-4

 

ARTICLE III

 

Miscellaneous

 

SECTION 3.1         Notices.
All notices and other communications to the Guarantor shall be given as
provided in the Indenture to the Guarantor, at its address set forth below,
with a copy to the Company as provided in the Indenture for notices to the
Company.

 

SECTION 3.2         Parties.
Nothing expressed or mentioned herein is intended or shall be construed to give
any Person, firm or corporation, other than the Holders and the Trustee, any
legal or equitable right, remedy or claim under or in respect of this
Supplemental Indenture or the Indenture or any provision herein or therein
contained.

 

SECTION 3.3         Governing
Law. This Supplemental Indenture shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

SECTION 3.4         Severability
Clause. In case any provision in this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby and
such provision shall be ineffective only to the extent of such invalidity,
illegality or unenforceability.

 

SECTION 3.5         Ratification
of Indenture; Supplemental Indenture Part of Indenture. Except as expressly
amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and
effect. This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every Holder of Notes heretofore or hereafter authenticated and
delivered shall be bound hereby. The Trustee makes no representation or
warranty as to the validity or sufficiency of this Supplemental Indenture.

 

SECTION 3.6         Counterparts.
The parties hereto may sign one or more copies of this Supplemental Indenture
in counterparts, all of which together shall constitute one and the same
agreement.

 

SECTION 3.7         Headings.
The headings of the Articles and the sections in this Note Guarantee are for
convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.

 

B-5

 

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

 

	
   

  	
  [GUARANTOR],

  	
   

  
	
   

  	
  as a Guarantor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AXCELIS
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

A-6

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