Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.1

Employment Agreement

This employment agreement (“Agreement”) is effective as of April 28, 2007 (“Effective Date”),
by and between Kreido Biofuels, Inc., a Nevada corporation located at 1140 Avenida Acaso,
Camarillo, California 93012 and Kreido’s wholly-owned subsidiary, Kreido Laboratories, Inc.
(collectively “Kreido” or the “Company”) and Larry Sullivan, an individual (“Executive”).

Recitals

Whereas Kreido wishes to employ Executive as its Chief Technology Officer and Executive wishes
to be so employed;

Now, therefore, in consideration of the foregoing and good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

Terms and Conditions

			
	1	 	Executive’s Duties; Title; Location. As of the Effective Date, Executive is
employed as Kreido’s Chief Technology Officer under the terms and conditions below. Executive
will report to the Company’s CEO. Executive’s duties include, without limitation, managing
commercial development of the Company’s STT® technology, including both biofuel and
specialty chemical applications. Executive shall also participate in the Company’s
technology licensing and oversee the Company’s research and development programs, including
the expanded Cooperative Research and Development Agreement (“CRADA”) with the United States
Environmental Protection Agency (“EPA”), utilization of outside scientific advisors, and such
other matters that are reasonably within the scope of Executive’s expertise. Executive shall
dedicate his full-time and efforts to Kreido’s business and shall travel on business to
various work locations including future locations of Kreido’s biodiesel plants within the U.S.
and around the world, the EPA’s Ohio laboratory and other EPA facilities, biofuel sites
selected by Kreido’s international licensees, the Company’s Camarillo, California corporate
office and such other locations as Kreido deems appropriate. In addition, upon request,
Executive shall participate in investor relations meetings, seminars and conferences on behalf
of the Company.

			
	2	 	Term, Termination and Renewal.

2.1 Term and Termination. The Term of this Agreement shall commence on April 30, 2007. The
Term shall continue for two (2) years (“Initial Term”) unless it is terminated earlier as provided
hereinbelow or renewed by the mutual agreement of the parties pursuant to this Section 2.

2.2 Renewal. Provided that by ninety (90) days before the end of the Initial Term the
Agreement has not been terminated as provided hereinbelow, the parties shall inform each other of
their interest or lack of interest in renewing the Agreement. In the event that both parties wish
to renew the Agreement, they will enter into good faith negotiations to achieve that result prior
to the end of the Initial Term. If the Agreement is renewed for one or more additional terms (each
such additional term a “Renewal Term”), then ninety (90) days prior to the end of each such Renewal
Term, the parties will enter into good faith negotiations over whether to further renew the
Agreement.

 

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	3	 	Hours. The Executive’s normal days and hours of
work shall coincide with the Company’s regular business
hours. The nature of the Executive’s duties requires
flexibility in the days and hours that the Executive must
work, and is likely to require the Executive to work on
other and additional days and hours.

			
	4	 	Compensation.

	 	4.1	 	Cash Compensation.

4.1.1 Base Salary. Executive shall receive a base salary of $150,000 in accordance with
Kreido’s regular payroll practices.

4.1.2 Bonus. So long as Executive is employed hereunder, Executive shall be entitled to
participate in a performance-based executive bonus plan (“Bonus Plan”) that shall be
promulgated by the Compensation Committee of the Company’s board of directors each
fiscal year. The Bonus Plan will set forth three levels of target performance goals
“TPGs” which, if achieved, will entitled the Executive to a bonus of either 20%, 35% or
50% of the Executive’s Base Salary. The TPGs will consist of a combination of goals for
the Executive’s individual performance and the Company’s overall performance in a ratio
of 75% Company performance and 25% individual Executive performance. Bonuses paid under
the Bonus Plan, if any, will be paid annually within 60 days after the end of the fiscal
year.

4.1.3. Stock Options. Upon the execution of this Agreement, Executive shall be entitled
to participate in the Kreido Biofuels 2006 Equity Incentive Plan (“Plan”). Executive’s
participation in the Plan shall be governed by the terms and conditions set forth in the
applicable Plan documents. Capitalized words not defined in this Agreement but used in
this Section shall have the meanings ascribed to them in the Plan.

	 	4.1.3	 	(a) Grant of Options. On April 27, 2007, the Company
granted Executive an option to purchase 175,000 shares of the Company’s
common voting stock under the Plan (the “Options”). Executive shall be
eligible for a grant of an additional 75,000 options upon the closing of a
sale or license of the Company’s STT ® biodiesel processing and/or
process intensification technology, if all of the following conditions are
met: (1) Executive is primarily responsible for finding the party to whom the
sale or license is made; (2) Executive is the Company’s primary negotiator of
the sale and/or license; (3) the sale and/or license agreement is fully
executed on or before April 30, 2008; and (4) the gross revenues generated by
the sale or license meet a threshold level that will be set forth by the
Kreido Board of Directors Compensation Committee no later than May 15, 2007.
Other grants of options under the Plan shall be determined in the absolute
discretion of the Compensation Committee of the board of directors of the
Company.

	 	4.1.3	 	(b) Option Exercise Price; Term. The per share
exercise price of the Option is $1.00, the closing bid price per share of the
Company’s common stock on April 27, 2007. The Term of the Option shall be
ten years from the date of grant.

 

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	 	4.1.3	 	(c) Vesting and Exercise. The Options shall vest and be exercisable
as follows: 175,000 options shall vest in eight equal installments of 21,875 options
per calendar quarter beginning with the quarter that ends on June 30, 2007 (“Quarterly
Grant(s)”). If granted, the 75,000 incentive options will also vest in eight equal,
quarterly installments. Each such Quarterly Grant shall remain exercisable for a
period of ten years from the date of grant, subject to vesting and Section 4.1.3(e).
	 
	 	4.1.3	 	(d) Lock-Up Agreement. The Executive shall enter
into a Lock-Up Agreement with the Company in the form attached hereto as
Exhibit B. During any period that Executive is precluded by the
Lock-Up Agreement from exercising the Option granted to Executive in Section
4.1.3(a), then the exercise period in Section 4.1.3(b) will be extended by
the amount of time during which Executive could not exercise the Option, but
in no event beyond ten years from the date of grant.
	 
	 	4.1.3	 	(e) Termination of Service; Accelerated Vesting.

(i) If the Executive’s employment is terminated by the Company for Cause as
such term is defined below in Sections 7.1.1 (A), (B) or (C), (1) all
unvested Quarterly Grants shall expire immediately effective the date of
termination, and (2) all vested Quarterly Grants shall expire thirty days
following the date of such termination unless and to the extent that within
said 30-day period Executive shall exercise any or all such vested Quarterly
Grants and pay the full exercise price of such shares as provided for in
4.1.3(f).

(ii) If the Executive’s employment is terminated voluntarily by the Executive
without Good Reason as such term is defined below, all unvested Quarterly
Grants shall immediately expire effective the date of termination of
employment. Vested Quarterly Grants, to the extent unexercised, shall expire
on the later of five years after the date of grant or the expiration of the
contractual Lock-Up Agreement.

(iii) If the Executive’s employment terminates on account of death or
Disability, as defined below, all unvested Quarterly Grants shall immediately
expire effective the date of death or termination of employment and all
vested Quarterly Grants to the extent unexercised, shall expire one year
after the date of death or Disability.

(iv) If the Executive’s employment is terminated (A) in connection with a
Change of Control as defined below, (B) by the Company without Cause, or (C)
by the Executive for Good Reason, one-half of all unvested Quarterly Grants
shall immediately vest and become exercisable effective the date of
termination of employment, and, to the extent unexercised, shall expire five
years from the date of termination of employment, but in no event beyond ten
years from the date of grant.

 

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	 	4.1.3	 	(f) Payment. The full consideration for shares purchased by the
Executive upon exercise of the Option shall be paid: (a) by delivery of a certified
check payable to the order of the Company; (b) by delivery and attestation of Mature
Shares (valued at their Fair Market Value on the date of delivery) or (c) by delivery
of a properly executed exercise notice with irrevocable instructions to a broker to
deliver to the Company the amount necessary to pay the exercise price from the sale
of proceeds of a loan from the broker with respect to the sale of such award or a
broker loan secured by Mature Shares.

	 	4.2	 	Additional Benefits.

	 	4.2.1	 	Welfare Benefit Plans. Executive shall at all times be entitled to
participate in all benefit, 401(k) and other ERISA-qualified plans made available
to senior management executives of Kreido under the same terms offered to other
senior management executives, including without limitation, health benefit coverage
for Executive’s spouse and dependant children, if any.
	 
	 	4.2.2	 	Expense Reimbursement. Kreido shall reimburse Executive for all
ordinary and necessary expenses reasonably incurred by Executive on Kreido’s behalf
(“Business Expenses”). Business Expenses (including travel costs) in excess of
$100.00 individually or $5,000.00 in the aggregate shall be approved in advance
except in case of emergency. Executive shall provide Kreido with documentation for
all Business Expenses at the time reimbursement is requested. In the event it is
necessary for Executive to travel on Kreido’s behalf, Executive shall be entitled
to fly and have travel accommodations on the same level as Kreido’s other most
senior management Executives.
	 
	 	4.2.3	 	Discretionary Time Off. During his employment hereunder, Executive
shall be entitled to accrue Paid Time Off (“PTO”) in accordance with Kreido’s
regular PTO policy for all employees, but in any case not less than 15 days per
calendar year.

			
	5	 	Proprietary Covenants of Executive.

	 	5.1	 	No Conflicts Of Interest. Executive acknowledges that he is bound to use good
judgment, to adhere to the highest ethical standards, and to avoid situations that create
an actual, potential, or apparent conflict of interest. Executive warrants and represents
to Kreido that he is currently unaware of any actual, potential, or apparent conflicts of
interest. He also agrees to immediately disclose to the CEO or Chairperson of Kreido any
and all actual, potential, or apparent conflicts of interest, should they later arise. In
addition, Executive further represents and warrants to Kreido that for so long as he is
employed by the Company, he shall inform the Company of each and every business opportunity
presented to the Executive that arises that could be feasible for the Company to undertake,
and that he will not, directly or indirectly, exploit any such opportunity for his own
account or the account of any third party.

 

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	 	5.2	 	Covenant Not to Use or Disclose Confidential Information.

	 	5.2.1	 	Definition of Confidential Information. For purposes of this Agreement, the
term Confidential Information means all and any confidential information and/or trade
secrets of Kreido, including without limitation, scientific discoveries, recipes,
formulations, information encompassed in all advertising and marketing plans, customer
lists, costs, pricing information, information concerning software and all concepts or
ideas, in or reasonably related to the business of Kreido. Confidential Information
shall not include any Kreido information that has been voluntarily disclosed to the
public by Kreido, independently developed and disclosed by others, or otherwise enters
the public domain through lawful means.
	 
	 	5.2.2	 	Non-disclosure of Confidential Information. Executive expressly
acknowledges that in the performance of his duties and responsibilities with the
Company prior to the execution of this Agreement, he has been exposed to the trade
secrets, recipes, formulations, business and/or financial secrets and confidential
and proprietary information of the Company, its affiliates and/or its clients,
business partners or customers (“Confidential Information”) and that he
will continue to be exposed to the Confidential Information after the execution of
this Agreement. During his employment and after the termination of his
employment, Executive shall regard and preserve as confidential all Confidential
Information pertaining to Kreido and its affiliates that have been or may be
obtained by Executive in any way by reason of Executive’s employment by Kreido.
Executive shall not, without the prior and specific written consent of Kreido, or
unless ordered to do so by court order or subpoena (i) use, publicize, release or
disclose to others, either during or after the period of employment, Confidential
Information or (ii) take, retain or copy any Kreido executive compensation plans,
Executive benefit plans, business plans, customer lists, costs, pricing
information, documents, reports, information encompassed in advertising and
marketing plans, or other concepts or ideas, in or reasonably related to the
business of Kreido. Executive agrees to notify Kreido’s CEO within two (2)
business days of receipt of any court order or subpoena to his or any individual
which calls for information deemed Confidential under this Agreement and to give
Kreido reasonable opportunity to contest the subpoena.

	 	5.3	 	Covenant Not to Interfere With Kreido’s Business Relationships. During his
employment and for a period of three (3) years after the termination of his employment,
executive shall not, whether for Executive’s own account or for the account of a
third-party, solicit or endeavor to entice any Executive, client, customer or vendor of
Kreido to end any business and/or contractual relationship with Kreido.
	 
	 	5.4	 	Ownership and Use of Materials.

	 	5.4.1	 	Kreido Materials. Executive agrees that all information encompassed
in all executive compensation plans, Executive benefit plans, business plans,
advertising plans and marketing materials and other Confidential Information
concerning Kreido, its Executives and shareholders, customer lists, costs, pricing
information, documents, reports, plans, proposals or other items made or created by
Executive or that come into Executive’s possession during the Term are the property
of Kreido
and shall not be used by Executive in any way after the Term. Executive shall
not deliver, reproduce or in any way allow such documents, or things to be
delivered to be used by any third party without specific written direction or
consent of a duly authorized representative of Kreido.

 

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	 	5.4.2	 	Delivery of Materials. Upon termination of this Agreement, Executive
shall promptly deliver to Kreido all of its executive compensation plans, Executive
benefit plans, business plans, advertising plans and marketing materials and other
Confidential Information concerning Kreido, its Executives and shareholders,
customer lists, costs, pricing information, documents, reports, plans, proposals or
other items made or created by Executive during the period of employment.

	6.	 	Termination Due to Death or Disability. If Executive dies during the employment,
Executive’s employment shall automatically cease and terminate as of the date of Executive’s
death. In the event of Executive’s disability for a period of 120 consecutive days during any
365-day period, Company shall thereafter have the right, upon written notice to Executive, to
terminate this Agreement, in which case the date of termination shall be the date of such
written notice to Executive. As used herein, “disability” means a physical and/or mental
disability of Executive that prevents Executive from substantially performing the essential
functions of his position even with reasonable accommodation (“Disability”). In the event of
the termination of Executive’s employment due to his death or Disability, Executive’s estate
and/or Executive shall be entitled to receive: (i) a lump sum cash payment, payable within ten
(10) business days after the date of death equal to the sum of any accrued but unpaid salary
and bonus as of the date of death; and (ii) earned Executive benefits, perquisites and
reimbursements described in Section 4 inclusive, if any, as to which Executive may be entitled
hereunder or under Executive benefit plans, programs and arrangements of Kreido through the
date of death. In the event of the termination of Executive’s employment due to Disability,
Executive shall not be entitled to any severance pay.
	 
	7.	 	Termination by Kreido.

	 	7.1	 	Termination for Cause.

	 	7.1.1	 	Definition of Cause. The term “Cause” for purposes of this Agreement
means all of the following, any one of which will constitute a material breach of
this Agreement unless cured pursuant to Section 7.1.2 (“Material Breach”): (A) Any
willful act by Executive that causes the Company materially to violate any
applicable law; (B) Executive’s commission of any material act of dishonesty in
connection with his employment; (C) Executive’s conviction of or plea of nolo
contendere to any felony or any offense involving moral turpitude ; (D) Executive’s
being intoxicated by alcohol or his use of or being under the influence of illegal
drugs during working time; provided, however, that Executive’s mere use of alcohol
in connection wit his business entertainment duties shall not be construed as
intoxication; (E) Executive’s breach of his fiduciary duties to the Company; (F)
Executive’s unjustifiable failure to comply with the reasonable and legal
directives of the Company that are communicated to him in writing; (G) Executive’s
unjustifiable failure to disclose to Kreido any and all actual, potential, or
apparent conflicts of interest that may later arise; (H) The willful or gross
failure of Executive substantially to perform the duties of his employment
hereunder; and (I) A breach by Executive of any material provision of this
Agreement.

 

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	 	7.1.2	 	The foregoing notwithstanding, if a Material Breach is susceptible of
being cured, Kreido shall provide Executive with written notice of such Curable
Breach within five business days after Kreido first learns of the Curable Breach.
Executive will then have fifteen business days in which to cure the breach. Should
Executive fail to cure a Curable Breach to Kreido’s reasonable satisfaction by the
end of the 15-business day cure period, Kreido may terminate his employment
immediately upon written notice to Executive. If a Material Breach is not
susceptible of being cured, Kreido may terminate Executive’s employment immediately
upon written notice to Executive.
	 
	 	7.1.3	 	Entitlements Upon a Termination for Cause. In the event of the
termination of the Executive’s employment hereunder due to a termination by the
Company for Cause, Executive shall be entitled to receive: (i) a lump sum cash
payment, payable immediately upon the termination of Executive’s employment, equal
to the sum of any accrued but unpaid base salary as of the date of such
termination; and (ii) earned Executive benefits, if any, as to which Executive may
be entitled hereunder or under Executive benefit plans, programs and arrangements
of Kreido.

	 	7.2	 	Termination Without Cause. Kreido may terminate Executive’s employment
hereunder without Cause at any time by providing Executive written notice of such
termination. If Executive’s employment is terminated without Cause, the termination
shall take effect on the effective date of written notice (pursuant to Section 11.11)
of such termination to Executive. In the event of the termination of Executive’s
employment hereunder due to a termination by Kreido without Cause (other than due to
Executive’s death), Executive shall be entitled to: (i) a lump sum cash payment,
payable immediately upon the termination of Executive’s employment, equal to the sum of
any accrued but unpaid base salary as of the date of such termination; (ii) earned
Executive benefits, if any, as to which Executive may be entitled hereunder or under
Executive benefit plans, programs and arrangements of Kreido through the date of his
termination; and (iii) severance pay on the date of the Termination without Cause equal
to the following amounts: (A) If Executive’s employment is terminated on or before
April 1, 2008, six (6) months’ pay; (B) If Executive’s employment is terminated after
April 1, 2008, but less than 5 full years after he becomes employed hereunder,
Executive shall be entitled to severance pay in the amount of nine (9) months’ pay; (C)
If Executive is employed hereunder by Kreido for 5 years or more, Executive shall be
entitled to severance pay in the amount of twelve (12) months’ pay. Severance pay
under this Section 7.2 shall include Executive’s salary (at its then current rate),
earned bonus, and expense reimbursement, if applicable).

	8.	 	Termination by Executive.

	 	8.1	 	Termination Without Good Reason. Executive shall have the right to terminate
Executive’s employment hereunder at any time without Good Reason (as defined below)
upon written notice of such termination to Kreido. A voluntary termination by
Executive in accordance with this Section 8.1 shall not be deemed a breach of this
Agreement. Upon any voluntary termination of employment by Executive pursuant to this
Section 8.1, he shall have the same entitlements as provided in Section 7.1.3 in the
case of a termination by Kreido for Cause.

 

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	 	8.2	 	Termination With Good Reason. The following events constitute grounds for
Executive to terminate his employment for good reason (“Good Reason”):

	 	(i)	 	the removal of Executive from the position specified in
Section 1 without Cause;
	 
	 	(ii)	 	a material diminution in Executive’s salary, duties or title;
	 
	 	(iii)	 	the assignment to Executive of duties which are materially
inconsistent with his position or which materially impair his ability to
perform his duties;
	 
	 	(iv)	 	any termination of the Executive’s employment by the
Company, other than a termination for Cause, within 12 months after a Change
of Control. For purposes of this Agreement, “Change of Control” means the
occurrence of, or the Company’s Board votes to approve: (A) any
consolidation or merger of the Company pursuant to which the stockholders of
the Company immediately before the transaction do not retain immediately
after the transaction, in substantially the same proportions as their
ownership of shares of the Company’s voting stock immediately before the
transaction, direct or indirect beneficial ownership of more than 50% of the
total combined voting power of the outstanding voting securities of the
surviving business entity; (B) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company other than any sale, lease,
exchange or other transfer to any company where the Company owns, directly or
indirectly, 100% of the outstanding voting securities of such company after
any such transfer; (C) the direct or indirect sale or exchange in a single or
series of related transactions by the stockholders of the Company of more
than 50% of the voting stock of the Company.
	 
	 	(v)	 	the foregoing notwithstanding, i, ii, and iii above will
not constitute Good Reason unless Executive first notifies Kreido in writing
describing the event(s) that constitutes Good Reason (Executive’s Notice of
Good Reason ) and unless Kreido thereafter fails to cure such event(s) within
fifteen business days after Executive delivers Executive’s Notice of Good
Reason to Kreido (“Kreido’s Cure Period”). It will be incumbent upon
Executive to deliver Executive’s Notice of Good Reason to Kreido within
fifteen business days after making a good faith determination that an event
constituting Good Reason has occurred.

	 	8.2.1	 	Entitlements Upon a Termination for Good Reason. Upon Executive’s
termination of his full-time employment for Good Reason in accordance with Section
8.2 hereof, Executive shall have the same entitlements as provided under Section 7.2
for a termination by Kreido without Cause.

	9.	 	Right to Assign. This Agreement shall be assignable only by Kreido.

 

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	10.	 	Miscellaneous Terms.

	 	10.1	 	Post-Termination Defense of Claims. In the event that Executive and/or Kreido
are named as defendants in any legal proceeding arising from the operation of Kreido’s
business, Kreido shall defend, indemnify and hold Executive harmless to the full extent
required by law. Kreido shall provide Executive with defense counsel of Kreido’s
choosing, but who is also reasonably acceptable to Executive. In the event Executive’s
interests in the proceeding are adverse to Kreido’s interests, Kreido shall provide
Executive with the reasonable costs and fees of an attorney of Executive’s choosing.
	 
	 	10.2	 	Alternative Dispute Resolution; Mediation Before Arbitration.

	 	10.2.1	 	Arbitrable Disputes. To the fullest extent allowed by law, any controversy,
claim, or dispute between Executive and Kreido (and/or any of its directors,
shareholders, officers, Executives, representatives or agents) relating to or
arising out of his employment or the termination of that employment
(“Arbitrable Dispute”) will be submitted to final and binding arbitration in
Los Angeles County, California. Executive agrees to execute the Mutual
Agreement to Arbitrate attached hereto as Exhibit “A” and incorporated herein
by reference.
	 
	 	10.2.2	 	Mediation Before Arbitration. The foregoing provisions regarding
Arbitration notwithstanding, before any Arbitrable Dispute is submitted to
arbitration, the Parties agree to mediate such dispute in good faith with a
professional mediator who is also a licensed attorney experienced in the area
of employment law. If the parties cannot agree on the choice of a mediator,
each party shall select a mediator, the two of whom will then select a third
mediator who alone will conduct the mediation. In the event one party makes a
demand on the other for mediation to which such party fails to respond for a
period of thirty days, the party demanding mediation may then submit the
dispute directly to Arbitration pursuant to the Mutual Agreement to Arbitrate.

	11.	 	General Terms and Conditions.

	 	11.1	 	Waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any prior or subsequent
breach; provided, however, that either party to this Agreement may waive any obligation
owed to such party, if such waiver is in writing signed by an authorized signer.
	 
	 	11.2	 	Integration; Modification. This Agreement constitutes the entire understanding
and agreement between Kreido and Executive regarding its subject-matter and supersedes
all prior negotiations and agreements between them with respect to its subject-matter
whether oral or written. This Agreement may not be modified except by a writing signed
by Executive and a duly authorized officer of Kreido.
	 
	 	11.3	 	Enforceability; Severability. If any provision of this Agreement shall be
deemed invalid or unenforceable in whole or in part, such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render the same
valid and enforceable, or shall be deemed excised from this Agreement, as the case
may require, and this Agreement shall be construed and enforced to the maximum
extent permitted by law as if such provision had been originally incorporated herein
as so modified or restricted, or as if such provision had not been originally
incorporated herein, as the case may be.

 

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	 	11.4	 	Binding Effect. All the terms and conditions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
	 
	 	11.5	 	Interest and Costs; Attorneys’ Fees. In the event of any legal proceeding,
litigation or alternative dispute resolution process (including arbitration and
mediation as specified in Section 10) between the Parties respecting or arising out of
this Agreement, the substantially prevailing party shall be entitled to recover its
reasonable attorneys’ fees and other costs in connection therewith, including, without
limitation, any attorneys’ fees incurred after a judgment has been entered by an
arbitrator or court of competent jurisdiction; provided, however, that if a party files
any legal proceeding, litigation or demand for arbitration other than for equitable
relief without first making a request for mediation pursuant to Section 10.3.2, that
party shall not be entitled to Attorney’s Fees and other costs regardless whether such
party would have been entitled to those Attorney’s Fees and costs hereunder or by
operation of law.
	 
	 	11.6	 	Descriptive Headings. The paragraph and section headings in this Agreement are
for convenience only and shall not control or affect the meaning or construction of any
provision of this Agreement.
	 
	 	11.7	 	Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all such counterparts together shall
constitute but one agreement.
	 
	 	11.8	 	Third-Party Beneficiaries. No person shall be a third-party beneficiary of
this Agreement and no person other than the parties hereto and their permitted
successors and assigns shall receive any of the benefits of this Agreement.
	 
	 	11.9	 	Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard to
conflicts of laws principles.
	 
	 	11.10	 	Arms Length Agreement. This Agreement has been negotiated at arms length
between persons knowledgeable in the matters dealt with herein. Accordingly, any rule
of law or any statute, legal decision, or common law principle of similar effect that
would require interpretation of any ambiguity in this Agreement against the party that
drafted it is of no application and is hereby expressly waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the intentions of the
Parties hereto.

 

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	 	11.11	 	Notices. All notices, statements and other documents that any party is
required or desires to give to the other party hereunder shall be given in writing and
shall be served in person, by express mail, by certified mail, by overnight delivery or
by facsimile at the respective addresses of the parties as set forth below, or at such
other addresses as may be designated in writing by such party in accordance with the
terms of this Section 11.11.

	 	 	 	 	 
	 

	 	If to Kreido:
	 	Kreido Biofuels, Inc.
	 

	 	 	 	1140 Avenida Acaso,
	 

	 	 	 	Camarillo, California 93012 
	 

	 	 	 	Attention: Joel Balbien, Ph.D., CEO
	 

	 	 	 	Telephone: (805) 389-3499 
	 

	 	 	 	Fax: (805) 384-0989
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Susan Keenberg, Esq.
	 

	 	 	 	1217 Acacia Avenue
	 

	 	 	 	Torrance, California 90501
	 

	 	 	 	Telephone: (310) 783-0999
	 

	 	 	 	Fax: (310) 783-0111
	 
	 	 	 	 
	 

	 	If to Executive:
	 	Larry Sullivan
	 

	 	 	 	On file

Delivery shall be deemed conclusively made (I) at the time of service, if personally
served, (ii) when deposited in the United States mail, properly addressed and
postage prepaid, if delivered by express mail or certified mail, (iii) upon deposit
with the private overnight deliverer, if served by overnight delivery, and (iv) at
the time of electronic facsimile transmission (as confirmed in writing), provided a
copy is mailed within twenty-four (24) hours after such transmission.

In Witness Whereof, Kreido and Executive have executed this Agreement this 28th day of
April, 2007.

This Agreement is subject to an arbitration agreement, which is attached hereto and
incorporated herein by reference.

	 	 	 	 	 	 	 
	Kreido Biofuels, Inc.	 	 	 	Executive
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Joel Balbien, Ph.D. Chief Executive Officer
	 	 	 	Larry Sullivan

 

 11 of 15

 

EXHIBIT A

MUTUAL AGREEMENT

TO

ARBITRATE CLAIMS

This Agreement is between Kreido Biofuels, Inc. (“Company”) and Larry Sullivan (referred to as
“I” or “me”). While I am employed by the Company or thereafter, disputes may arise between the
Company and me related to my employment. By entering into this Agreement, both the Company and I
anticipate that we will benefit by resolving these disputes through binding arbitration.

Arbitration is a fair and impartial procedure that in most cases is faster and less expensive
than civil litigation. References to “the Company” in this Agreement include Kreido Biofuels,
Inc., its parents, subsidiaries, shareholders, partners, directors, and all affiliates of Kreido
Biofuels, Inc., together with all benefit plans of Kreido Biofuels, Inc. and the sponsors,
fiduciaries and administrators of such benefit plans.

1. Claims Covered by This Agreement: Except as described in the next paragraph, this Agreement
applies to all disputes between the Company and me, all claims the Company may have against me, and
all claims I may have against the Company or its agents, arising out of my employment with the
Company or the termination of my employment (referred to as Claims). This Agreement will apply to
Claims asserted during my employment with the Company or after it has ended. Claims covered by
this Agreement include but are not limited to: claims for breach of express or implied contract or
covenant; claims for the commission of any intentional or negligent tort; claims for violation of
any federal, state or local law, ordinance, regulation or rule; claims for wages, benefits or other
compensation due; claims for wrongful termination, demotion or disciplinary action; and claims of
discrimination or harassment under the Fair Employment and Housing Act and Title VII of the Civil
Rights Act, as amended.

2. Claims Not Covered by This Agreement: This Agreement does not apply to the following
claims: Claims for worker’s compensation or unemployment compensation benefits; Claims or charges
before any administrative agency having jurisdiction of the Claim, if private dispute resolution
procedures cannot be compelled as to such Claim; or Claims for benefits under a benefit plan which
has a claim procedure inconsistent with this Agreement.

3. Exclusive Remedy: All Claims must be resolved according to the procedures in this
Agreement, and not otherwise except for the provision for Mediation before Arbitration as provide
in the Employment Agreement between me and the Company of even date herewith (the “Employment
Agreement”). Neither the Company nor I will file or prosecute any lawsuit or administrative action
in any way related to any Claim, except as expressly permitted by this Agreement and the Employment
Agreement. Either the Company or I may
bring an action in any court of competent jurisdiction to compel arbitration under this
Agreement. The parties understand and agree that they are waiving any right to a jury trial by
entering into this Agreement.

 

 12 of 15

 

4. Arbitration: All Claims must be resolved through final and binding arbitration. The
arbitrator must be a neutral arbitrator chosen by the parties. Arbitration will take place at a
location determined by the arbitrator in Ventura County or Los Angeles County, California. The
arbitration will be administered in compliance with (a) the Federal Arbitration Act, U.S. Code,
Tit. 9, § 1 et seq., California Arbitration Act, or such other state or federal law as may be
adopted, (b) the procedures set forth below and, (c) to the extent not inconsistent with such
procedures, the then existing AAA California Employment Dispute Resolution Rules. Any dispute
about the interpretation, applicability, enforceability or validity of this Agreement, or whether
any issue is subject to arbitration under this Agreement, will be determined by the arbitrator.

5. Arbitration Procedures; Discovery:

5.1 A deposition is a chance for each party to ask questions of a witness, and the witness
must answer the questions under oath, with a court reporter present. Each party may take the
deposition of the opposing party (which, with respect to the Company, means the Company’s CEO or
CFO or one other person under such party’s control, and any expert witness(es) designated by the
opposing party. Additional depositions may be ordered by the arbitrator. At or before the final
Arbitration Management Conference, each party will provide the other with copies of all
non-privileged documents in their possession or control which they intend to introduce as exhibits
at the hearing or on which they rely to support their positions.

5.2 Interrogatories, Requests to Produce, and Requests to Admit are written methods that the
parties may use to learn about the other party’s case. These discovery methods will be allowed in
the manner permitted under California Arbitration Act, Calif. Code of Civil Proc. § 1283.05.

5.3 The arbitrator may rule on pre-hearing disputes and hold such pre-hearing conferences by
telephone or in person as he or she may determine. Either party may make motions to dismiss, for
summary judgment and/or for summary adjudication of issues.

5.4 Either party may submit, or the arbitrator may order either or both parties to submit, a
brief before the arbitration hearing. Either party, at its own expense, may arrange for a court
reporter to provide a stenographic record of proceedings at the hearing. The arbitrator will apply
the substantive law and the law of remedies of the State of California or the United States, as
applicable to the Claims.

5.5 After the end of the arbitration hearing, either party may file a post-hearing brief
within a time set by the arbitrator.

 

 13 of 15

 

5.6 The arbitrator shall issue a written award, which shall include a statement of the
essential findings and conclusions on which the award is based. The award will be final and
binding on the parties to the arbitration. The arbitrator’s award may be reviewed by a court of
competent jurisdiction.

6. Arbitration Costs: the Company will pay the costs of arbitration, including reasonable
fees imposed by the AAA and the arbitrator. I will be responsible for the costs of discovery
initiated by me or on my behalf, any depositions noticed by me or on my behalf, expert witnesses
retained by me or on my behalf and for any out-of-pocket expenses incurred by me or on my behalf.

7. Legal Representation: In any arbitration under this Agreement, both the Company and I may
be represented by legal counsel of our own choosing. Each of us will be responsible for the fees
of our own counsel, provided that an arbitrator may award attorneys’ fees to the prevailing party
under any applicable statute or written agreement to the same extent that attorneys’ fees could be
awarded in standard civil litigation. This provision for the award of attorneys’ fees is subject
to the provisions of the Employment Agreement requiring Mediation before Arbitration.

8. Integrated Agreement; Amendment: This Agreement contains the final and complete expression
and understanding between the Company and me with respect to the subjects covered hereby. This
Agreement cannot be amended or modified except in writing, signed by an authorized representative
of Kreido Biofuels, Inc. and by me.

9. Severability: If any provision of this Agreement is held invalid, in whole or part, such
invalidity will not affect the remainder of such provision or the remaining provisions of this
Agreement.

10. Headings: The headings in this Agreement are inserted for convenience only and do not
affect the meaning or interpretation of this Agreement or any provision hereof.

11. Successors and Assigns: This Agreement will be binding upon, and inure to the benefit of,
the Company, me and our respective heirs, executors, administrators, representatives, successors
and assigns.

12. Governing Law: I acknowledge that the Company is engaged in interstate commerce and that
this Agreement is covered by the provisions of the Federal Arbitration Act. This Agreement is to
be construed, and the rights and obligations of the parties hereunder determined, in accordance
with the laws of the United States and the State of California.

 

 14 of 15

 

IMPORTANT

I agree that I have been given a reasonable opportunity to read this Agreement carefully, I have
read it, I understand it and I am signing it voluntarily. I have not been promised anything for
signing it that is not described in the Agreement and the Employment Agreement. The Company
encourages me to discuss this Agreement with my legal advisor if I wish before signing it.

	 	 	 	 	 	 	 
	 

	 	Kreido Biofuels, Inc.
	 	 	 	Employee
	 
	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 
	 
	 	 	 	 	 	 
	Print Name:

	 	Joel Balbien, Ph.D.
	 	Print Name:
	 	Larry Sullivan
	 
	 	 	 	 	 	 
	Print Title:

	 	CEO
	 	Date:	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 

 

 15 of 15

 

EXHIBIT B

LOCK-UP AGREEMENT

THIS LOCK-UP AGREEMENT (the “Agreement”) is made and entered into as of the date indicated below, by and between
the officer named in the space provided below (the “Officer”) and KREIDO BIOFUELS, INC., a Nevada corporation (the
“Company”).

RECITALS:

WHEREAS, the Officer in the future may be owner of shares of Common Stock of the Company either pursuant to the
exercise of stock purchase options or otherwise (such shares owned or to be owned by the Officer, the “Shares”); and

WHEREAS, in order to facilitate certain transactions consummated by the Company the Officer desire to enter into
this Agreement and restrict the sale, assignment, transfer, conveyance, hypothecation or alienation of the Shares,
all on the terms set forth below.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, contained herein, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. The Officer hereby agrees to not sell, assign, transfer, pledge, convey, hypothecate or otherwise alienate any
Shares at any time beginning the date of this Agreement indicated in the space provided below and the expiration date
of this Agreement indicated in the space provided below except as otherwise permitted in this Agreement.

2. Notwithstanding anything contained in this Agreement, Officer may transfer Shares to his or her spouse or
lineal descendants or to trusts established solely for the benefit of Officer, his or her spouse or lineal descendants,
for estate planning purposes provided that the transferee (or the legal representative of the transferee) executes an
agreement to be bound by all of the terms of this Agreement.

3. Notwithstanding anything to the contrary set forth herein, the Company may, at any time and from time to time,
waive in writing any of the conditions or restrictions contained herein.

4. In the event of a tender offer to purchase all or substantially all of the Company’s issued and outstanding
securities, or a merger, consolidation or other reorganization with or into an unaffiliated entity, this Agreement
shall terminate and the Shares restricted pursuant hereto shall be released from such restrictions if the requisite
number of the record and beneficial owners of the Company’s securities then outstanding are voted in favor of such
tender offer, merger, consolidation or reorganization.

5. Except as otherwise provided in this Agreement, Officer shall be entitled to his or her beneficial rights of
ownership of the Shares, including the right to vote the Shares for any and all purposes.

6. This Agreement may be executed in any number of counterparts with the same force and effect as if all parties
had executed the same document.

1

 

1

 

7. All notices, instructions or other communications required or permitted to be given pursuant to this Agreement
shall be given in writing and delivered by certified mail, return receipt requested, overnight delivery or
hand-delivered to all parties to this Agreement at the principal office of the Company, Attention: President and CEO,
in the case of notice to the Company, or to the principal office of Officer or his or her residence address indicated
in the employment records of the Company, whichever the Company may elect, in the case of notice to Officer.. All
notices shall be deemed to be given on the same day if delivered by hand or on the following business day if sent by
overnight delivery or the second business day following the date of mailing.

8. The execution and delivery of this Agreement, although a condition of employment of Officer, shall not be
interpreted as an employment agreement or a guaranty or assurance of employment. This Agreement shall survive the
expiration or termination of any employment agreement between the Company and Officer and the termination of Officer as
an employee of the Company.

9. This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter
hereof, and may not be amended except by a written instrument executed by the parties hereto. This Agreement shall be
governed by the laws of the State of California.

	 	 	 
	DATE OF AGREEMENT:

	 	April 28, 2007

	EXPIRATION DATE:

	 	January 12, 2008

	OFFICER:

	 	Larry Sullivan

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement in Camirillo, California.

KREIDO BIOFUELS, INC.

OFFICER:

By: /s/ Joel Balbien                                          

/s/ Larry Sullivan                                              

Name: Joel Balbien                                          

Signature

Its: President & CEO                                        

2

 

2Indenture

    EXHIBIT
      4.1

     

    

      CHARMING
        SHOPPES, INC.

       

      1.125%
        Senior Convertible Notes Due 2014

       

      __________________________________________________________

       

      INDENTURE

       

      Dated
        as
        of April 30, 2007

       

      __________________________________________________________

       

      WELLS
        FARGO BANK, NATIONAL ASSOCIATION

       

      TRUSTEE

       

      __________________________________________________________

       

      

      

      
        
          
             

             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      Cross-Reference
        Table1 

       

      Trust
        Indenture Act Section Indenture
        Section

       

      
        	
                310

              	
                (a)(1)

              	
                7.10

              
	 	
                (a)(2)

              	
                7.10

              
	 	
                (a)(3)

              	
                N.A.

              
	 	
                (a)(4)

              	
                N.A.

              
	 	
                (a)(5)

              	
                N.A.

              
	 	
                (b)

              	
                7.08,7.10

              
	 	
                (c)

              	
                N.A.

              
	
                311

              	
                (a)

              	
                7.11

              
	 	
                (b)

              	
                7.11

              
	 	
                (c)

              	
                N.A.

              
	
                312

              	
                (a)

              	
                2.05

              
	 	
                (b)

              	
                11.03

              
	 	
                (c)

              	
                11.03

              
	
                313

              	
                (a)

              	
                7.06

              
	 	
                (b)(1)

              	
                7.06

              
	 	
                (b)(2)

              	
                7.06

              
	 	
                (c)

              	
                7.06,11.02

              
	 	
                (d)

              	
                7.06

              
	
                314

              	
                (a)

              	
                4.02

              
	 	
                (b)

              	
                N.A.

              
	 	
                (c)(1)

              	
                11.04

              
	 	
                (c)(2)

              	
                11.04

              
	 	
                (c)(3)

              	
                N.A.

              
	 	
                (d)

              	
                N.A.

              
	 	
                (e)

              	
                11.05

              
	 	
                (f)

              	
                4.04

              
	
                315

              	
                (a)

              	
                7.01(b)

              
	 	
                (b)

              	
                7.05

              
	 	
                (c)

              	
                7.01(a)

              
	 	
                (d)

              	
                7.01(c)

              
	 	
                (e)

              	
                6.11

              
	
                316

              	
                (a)(1)(A)

              	
                6.05

              
	 	
                (a)(1)(B)

              	
                6.04

              
	 	
                (a)(2)

              	
                N.A.

              
	 	
                (b)

              	
                6.07

              
	 	
                (c)

              	
                1.05(e)

              
	
                317

              	
                (a)(1)

              	
                6.08

              
	 	
                (a)(2)

              	
                6.09

              
	 	
                (b)

              	
                2.04

              
	
                318

              	
                (a)

              	
                11.01

              

      

      ___________

      N.A.
        means not applicable.

      

      

      

        

        
          1
            This
            Cross-Reference Table is not part of the Indenture.

        

      

      
        
          
             

             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            

             

          

        

      

      TABLE
        OF CONTENTS

       

      

      

      
        	
                ARTICLE
                  1

              
	
                DEFINITIONS
                  AND INCORPORATION BY REFERENCE

              
	 	 	 
	
                Section
                  1.01.

              	
                Definitions.

              	
                1

              
	
                Section
                  1.02.

              	
                Other
                  Definitions.

              	
                10

              
	
                Section
                  1.03.

              	
                Incorporation
                  by Reference of Trust Indenture Act

              	
                11

              
	
                Section
                  1.04.

              	
                Rules
                  of Construction

              	
                11

              
	
                Section
                  1.05.

              	
                Acts
                  of Holders.

              	
                11

              
	 	 	 
	
                ARTICLE
                  2

              
	
                THE
                  SECURITIES

              
	 	 	 
	
                Section
                  2.01.

              	
                Form
                  and Dating

              	
                13

              
	
                Section
                  2.02.

              	
                Execution
                  and Authentication

              	
                14

              
	
                Section
                  2.03.

              	
                Registrar,
                  Paying Agent, Bid Solicitation Agent and Conversion
                  Agent.

              	
                14

              
	
                Section
                  2.04.

              	
                Paying
                  Agent to Hold Money and Securities in Trust

              	
                15

              
	
                Section
                  2.05.

              	
                Securityholder
                  Lists

              	
                15

              
	
                Section
                  2.06.

              	
                Transfer
                  and Exchange

              	
                15

              
	
                Section
                  2.07.

              	
                Replacement
                  Securities

              	
                17

              
	
                Section
                  2.08.

              	
                Outstanding
                  Securities; Determinations of Holders’ Action

              	
                18

              
	
                Section
                  2.09.

              	
                Temporary
                  Securities

              	
                19

              
	
                Section
                  2.10.

              	
                Cancellation

              	
                19

              
	
                Section
                  2.11.

              	
                Persons
                  Deemed Owners

              	
                19

              
	
                Section
                  2.12.

              	
                Global
                  Securities

              	
                20

              
	
                Section
                  2.13.

              	
                CUSIP
                  Numbers

              	
                26

              
	
                Section
                  2.14.

              	
                Payment

              	
                27

              
	 	 	 
	
                ARTICLE
                  3

              
	
                REPURCHASES

              
	 	 	 
	
                Section
                  3.01.

              	
                Company’s
                  Right to Redeem

              	
                28

              
	
                Section
                  3.02.

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

              	
                28

              
	
                Section
                  3.03.

              	
                Effect
                  of Fundamental Change Repurchase Notice.

              	
                31

              
	
                Section
                  3.04.

              	
                Deposit
                  of Fundamental Change Repurchase Price

              	
                32

              
	
                Section
                  3.05.

              	
                Securities
                  Purchased in Part

              	
                32

              
	
                Section
                  3.06.

              	
                Covenant
                  to Comply with Securities Laws upon Purchase of
                  Securities

              	
                32

              
	
                Section
                  3.07.

              	
                Repayment
                  to the Company

              	
                32

              
	
                 

              	 	 
	
                ARTICLE
                  4

              
	
                COVENANTS

              
	 	 	 
	
                Section
                  4.01.

              	
                Payment
                  of Securities

              	
                33

              
	
                Section
                  4.02.

              	
                SEC
                  and Other Reports

              	
                33

              
	
                Section
                  4.03.

              	
                Compliance
                  Certificate

              	
                33

              
	
                Section
                  4.04.

              	
                Further
                  Instruments and Acts

              	
                34

              
	
                Section
                  4.05.

              	
                Maintenance
                  of Office or Agency

              	
                34

              
	
                Section
                  4.06.

              	
                Delivery
                  of Certain Information

              	
                34

              
	
                Section
                  4.07.

              	
                Additional
                  Amounts Notice

              	
                35

              
	
                Section
                  4.08.

              	
                Resale
                  of the Securities

              	
                35

              
	 	 	 
	
                ARTICLE
                  5

              
	
                SUCCESSOR
                  COMPANY

              
	 	 	 
	
                Section
                  5.01.

              	
                When
                  Company May Merge or Transfer Assets

              	
                35

              
	 	 	 
	
                ARTICLE
                  6

              
	
                DEFAULTS
                  AND REMEDIES

              
	 	 	 
	
                Section
                  6.01.

              	
                Events
                  of Default

              	
                36

              
	
                Section
                  6.02.

              	
                Acceleration

              	
                39

              
	
                Section
                  6.03.

              	
                Other
                  Remedies

              	
                40

              
	
                Section
                  6.04.

              	
                Waiver
                  of Past Defaults

              	
                40

              
	
                Section
                  6.05.

              	
                Control
                  by Majority

              	
                40

              
	
                Section
                  6.06.

              	
                Limitation
                  on Suits

              	
                40

              
	
                Section
                  6.07.

              	
                Rights
                  of Holders to Receive Payment

              	
                41

              
	
                Section
                  6.08.

              	
                Collection
                  Suit by Trustee

              	
                41

              
	
                Section
                  6.09.

              	
                Trustee
                  May File Proofs of Claim

              	
                41

              
	
                Section
                  6.10.

              	
                Priorities

              	
                42

              
	
                Section
                  6.11.

              	
                Undertaking
                  for Costs

              	
                43

              
	
                Section
                  6.12.

              	
                Waiver
                  of Stay, Extension or Usury Laws

              	
                43

              
	 	 	 
	
                ARTICLE
                  7

              
	
                TRUSTEE

              
	 	 	 
	
                Section
                  7.01.

              	
                Duties
                  of Trustee.

              	
                43

              
	
                Section
                  7.02.

              	
                Rights
                  of Trustee

              	
                45

              
	
                Section
                  7.03.

              	
                Individual
                  Rights of Trustee

              	
                46

              
	
                Section
                  7.04.

              	
                Trustee’s
                  Disclaimer

              	
                47

              
	
                Section
                  7.05.

              	
                Notice
                  of Defaults

              	
                47

              
	
                Section
                  7.06.

              	
                Reports
                  by Trustee to Holders

              	
                47

              
	
                Section
                  7.07.

              	
                Compensation
                  and Indemnity

              	
                47

              
	
                Section
                  7.08.

              	
                Replacement
                  of Trustee

              	
                49

              
	
                Section
                  7.09.

              	
                Successor
                  Trustee by Merger

              	
                50

              
	
                Section
                  7.10.

              	
                Eligibility;
                  Disqualification

              	
                50

              
	
                Section
                  7.11.

              	
                Preferential
                  Collection of Claims Against Company

              	
                50

              
	
                 

              	 	 
	
                ARTICLE
                  8

              
	
                DISCHARGE
                  OF INDENTURE

              
	 	 	 
	
                Section
                  8.01.

              	
                Discharge
                  of Liability on Securities

              	
                50

              
	
                Section
                  8.02.

              	
                Repayment
                  to the Company

              	
                50

              
	
                Section
                  8.03.

              	
                Application
                  of Trust Money

              	
                51

              
	 	 	 
	
                ARTICLE
                  9

              
	
                AMENDMENTS

              
	 	 	 
	
                Section
                  9.01.

              	
                Without
                  Consent of Holders

              	
                51

              
	
                Section
                  9.02.

              	
                With
                  Consent of Holders

              	
                52

              
	
                Section
                  9.03.

              	
                Compliance
                  With Trust Indenture Act

              	
                53

              
	
                Section
                  9.04.

              	
                Revocation
                  and Effect of Consents, Waivers and Actions

              	
                53

              
	
                Section
                  9.05.

              	
                Notice
                  of Amendments, Notation on or Exchange of Securities

              	
                53

              
	
                Section
                  9.06.

              	
                Trustee
                  to Sign Supplemental Indentures

              	
                54

              
	
                Section
                  9.07.

              	
                Effect
                  of Supplemental Indentures

              	
                54

              
	 	 	 
	
                ARTICLE
                  10

              
	
                CONVERSIONS

              
	 	 	 
	
                Section
                  10.01.

              	
                Conversion
                  Privilege

              	
                54

              
	
                Section
                  10.02.

              	
                Conversion
                  Procedure; Applicable Conversion Rate; Fractional
                  Shares

              	
                58

              
	
                Section
                  10.03.

              	
                Payment
                  Upon Conversion

              	
                60

              
	
                Section
                  10.04.

              	
                Adjustment
                  of Applicable Conversion Rate

              	
                61

              
	
                Section
                  10.05.

              	
                Reserved.

              	
                70

              
	
                Section
                  10.06.

              	
                Effect
                  of Reclassification, Consolidation, Merger or Sale

              	
                70

              
	
                Section
                  10.07.

              	
                Taxes
                  on Shares Issued

              	
                72

              
	
                Section
                  10.08.

              	
                Reservation
                  of Shares, Shares to Be Fully Paid; Compliance with Governmental
                  Requirements

              	
                73

              
	
                Section
                  10.09.

              	
                Responsibility
                  of Trustee

              	
                73

              
	 	 	 
	
                ARTICLE
                  11

              
	
                MISCELLANEOUS

              
	 	 	 
	
                Section
                  11.01.

              	
                Trust
                  Indenture Act Controls.

              	
                74

              
	
                Section
                  11.02.

              	
                Notices

              	
                74

              
	
                Section
                  11.03.

              	
                Communication
                  by Holders with Other Holders.

              	
                75

              
	
                Section
                  11.04.

              	
                Certificate
                  and Opinion as to Conditions Precedent

              	
                75

              
	
                Section
                  11.05.

              	
                Statements
                  Required in Certificate or Opinion

              	
                75

              
	
                Section
                  11.06.

              	
                Separability
                  Clause

              	
                76

              
	
                Section
                  11.07.

              	
                Rules
                  by Trustee, Paying Agent, Conversion Agent and
                  Registrar

              	
                76

              
	
                Section
                  11.08.

              	
                Legal
                  Holidays

              	
                76

              
	
                Section
                  11.09.

              	
                Governing
                  Law.

              	
                76

              
	
                Section
                  11.10.

              	
                No
                  Recourse Against Others

              	
                76

              
	
                Section
                  11.11.

              	
                Successors

              	
                76

              
	
                Section
                  11.12.

              	
                Multiple
                  Originals

              	
                77

              

      

      

       

      EXHIBIT
        A  Form
        of
        Global Security

      EXHIBIT
        B  Form
        of
        Certificated Security

      EXHIBIT
        C  Transfer
        Certificate

      EXHIBIT
        D  Notice
        of
        Occurrence of Fundamental Change

      

      SCHEDULE
        I  Number
        of
        Additional Shares

      

      

       

      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            

             

          

        

      

      INDENTURE
        dated as of April 30, 2007 between CHARMING SHOPPES, INC., a Pennsylvania
        corporation (“Company”),
        and
        WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
        (“Trustee”).

       

      Each
        party agrees as follows for the benefit of the other party and for the equal
        and
        ratable benefit of the Holders of the Company’s 1.125% Senior Convertible Notes
        Due 2014:

       

       

      ARTICLE
        1

      Definitions
        and Incorporation by Reference

       

      Section
        1.01.
        Definitions. 

       

      “144A
        Global Security”
means
        a
        permanent Global Security in the form of the Security attached hereto as
        Exhibit
        A, and that is deposited with and registered in the name of the Depositary,
        representing Securities sold in reliance on Rule 144A under the Securities
        Act.

       

      “Additional
        Amounts”
means
        the interest that is payable by the Company (i) pursuant to the Registration
        Rights Agreement upon a Registration Default (as defined in such agreement)
        and
        (ii) as additional interest pursuant to Section 6.01(j).

       

      “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
        Conversion Price”
means,
        at any given time, $1,000 divided by the Applicable Conversion Rate at such
        time.

       

      “Applicable
        Procedures”
means,
        with respect to any transfer or transaction involving a Global Security or
        beneficial interest therein, the rules and procedures of the Depositary for
        such
        Security, in each case to the extent applicable to such transaction and as
        in
        effect from time to time.

       

      “Bid
        Solicitation Agent”
means
        the agent of the Company appointed to obtain quotations for the Securities
        as
        set forth under the definition of Trading Price, which agent shall be appointed
        no later than May 7, 2007 and shall at no time be an Affiliate of the Company.
        The Company may, from time to time, change the Bid Solicitation
        Agent.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      “Board
        of Directors”
means
        either the board of directors of the Company or any duly authorized committee
        of
        such board.

       

      “Board
        Resolution”
means
        a
        resolution of the Board of Directors.

       

      “Business
        Day”
means,
        with respect to any Security, any day, other than a Saturday or Sunday, that
        is
        neither a legal holiday nor a day on which commercial banks are authorized
        or
        required by law, regulation or executive order to close in the City of New
        York.

       

      “Capital
        Stock”
for
        any
        corporation means any and all shares, interests, rights to purchase, warrants,
        options, participations or other equivalents of or interests in (however
        designated) stock issued by that corporation.

       

      “cash”
means
        U.S. legal tender.

       

      “Cash
        Settlement Averaging Period”
with
        respect to any Security means the 50 consecutive Trading Days beginning on
        the
        second Trading Day after the Conversion Date for such Security, except that
        with
        respect to any Security with a Conversion Date occurring on or after November
        15, 2013, the “Cash Settlement Averaging Period” means the 50 consecutive
        Trading Days beginning on, and including, the 52nd Scheduled Trading Day
        before
        Stated Maturity.

       

      “Certificated
        Securities”
means
        Securities that are in the form of the Securities attached hereto as Exhibit
        B.

       

      “close
        of business”
means
        5:00 p.m. (New York City time).

       

      “Closing
        Sale Price”
of
        the
        Common Stock on any date means the closing sale price per share (or, if no
        closing sale price is reported, the average of the bid and asked prices or,
        if
        more than one in either case, the average of the average bid and the average
        asked prices) on such date as reported by NASDAQ or, if the Common Stock
        is not
        reported by NASDAQ, in composite transactions for the principal U.S. national
        or
        regional securities exchange on which the Common Stock is traded. If the
        Common
        Stock is not listed for trading on a U.S. national or regional securities
        exchange, the Closing Sale Price will be the last quoted bid price for the
        Common Stock in the over-the-counter market on the relevant date as reported
        by
        the National Quotation Bureau Incorporated or similar organization. If the
        Common Stock is not so quoted, the Closing Sale Price will be the average
        of the
        mid-point of the last bid and asked prices for the Common Stock on the relevant
        date from each of at least three independent nationally recognized investment
        banking firms selected by the Company for this purpose.

       

      “Code”
means
        the Internal Revenue Code of 1986, as amended from time to time. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      “Common
        Stock”
means
        the common stock, par value $0.10 per share, of the Company existing on the
        date
        of this Indenture or any other shares of Capital Stock of the Company into
        which
        such Common Stock shall be reclassified or changed, including, subject to
        Section 1.06 below, in the event of a merger, consolidation or other similar
        transaction involving the Company that is otherwise permitted hereunder in
        which
        the Company is not the surviving person, the common stock of such surviving
        corporation.

       

      “Company”
means
        the party named as the “Company” in the preamble of this Indenture until a
        successor replaces it pursuant to the applicable provisions of this Indenture
        and, thereafter, shall mean such successor. The foregoing sentence shall
        likewise apply to any subsequent such successor or successors.

       

      “Company
        Notice”
means
        a
        notice to Holders delivered pursuant to Section 3.02.

       

      “Company
        Request”
or
        “Company
        Order”
means
        a
        written request or order signed in the name of the Company by any
        Officer.

       

      “Continuing
        Director”
means
        a
        director who either was a member of the Board of Directors on the date of
        original issuance of the Securities or who becomes a member of the Board
        of
        Directors subsequent to that date and whose appointment, election or nomination
        for election by the Company’s shareholders is duly approved by a majority of the
        Continuing Directors on the Board of Directors at the time of such approval,
        either by specific vote or by approval of the proxy statement issued by the
        Company on behalf of the Board of Directors in which such individual is named
        as
        nominee for director, it being understood that any director appointed or
        nominated to fill a vacancy on the Board of Directors (without regard to
        the
        cause of such vacancy) by any Continuing Director shall be deemed a Continuing
        Director until the next annual meeting of the Company’s shareholders at which
        directors are elected.

       

      “Conversion
        Settlement Date”
means
        (A) in the event the Company has not validly made a Physical Settlement
        Election, with respect to the Settlement Amount owing by the Company as set
        forth in Section 1.03(a), the third Business Day immediately following the
        date
        that the Settlement Amount is determined and (B) with respect to Settlement
        Shares owing by the Company in the event the Company has validly made a Physical
        Settlement Election as set forth in Section 10.03(b), the third Business
        Day
        immediately following the Conversion Date for such Securities, except that
        (i)
        in respect of Securities with a Conversion Date on or after November 15,
        2013,
        the Conversion Settlement Date shall be on Stated Maturity and (ii) in respect
        of Securities as to which Additional Shares will be added to the Applicable
        Conversion Rate pursuant to Section 10.01(c) with a Conversion Date prior
        to
        November 15, 2013, the Conversion Settlement Date for the Settlement Shares
        (other than the Additional Shares) shall be the third Business Day following
        the
        Conversion Date, and the Conversion Settlement Date for the

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      Additional
        Shares shall be the later of (x) the third Business Day following the Conversion
        Date and (y) the relevant effective date described in Section 10.01(c) on
        which
        the number of Additional Shares is determined.

       

      “Corporate
        Trust Office”
means
        the designated office of the Trustee at which at any time its corporate trust
        business shall be principally administered, which office at the date hereof
        is
        located at 1600 JFK Boulevard, Suite 810, Philadelphia, Pennsylvania 19103,
        Attention: Corporate Trust Services, or such other address as the Trustee
        may
        designate from time to time by notice to the Holders and the Company, or
        the
        principal corporate trust office of any successor Trustee (or such other
        address
        as a successor Trustee may designate from time to time by notice to the Holders
        and the Company).

       

      “Daily
        Conversion Value”
means,
        for each of the 50 consecutive Trading Days during the Cash Settlement Averaging
        Period, one-fiftieth (1/50) of the product of (1) the Applicable Conversion
        Rate
        on such Trading Day and (2) the Daily VWAP on such Trading Day.

       

      “Daily
        VWAP”
means,
        for each of the 50 consecutive Trading Days during the Cash Settlement Averaging
        Period, the per share volume-weighted average price as displayed under the
        heading “Bloomberg VWAP” on Bloomberg page “CHRS.UQ <equity> AQR” (or its
        equivalent successor if such page is not available) in respect of the period
        from scheduled open of trading until the scheduled close of trading of the
        primary trading session on that Trading Day (or if such volume-weighted average
        price is unavailable, the market value of one share of the Company’s Common
        Stock on that Trading Day determined, using a volume-weighted average method,
        by
        a nationally recognized independent investment banking firm retained for
        this
        purpose by the Company). The Daily VWAP will be determined without regard
        to
        after hours trading or any other trading outside of the regular trading session
        trading hours.

       

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

       

      “DTC”
means
        The Depository Trust Company.

       

      “Ex-Dividend
        Date”
        means
        the
        first date upon which a sale of the Common Stock, regular way on the relevant
        exchange or in the relevant market for the Common Stock, does not automatically
        transfer the right to receive the relevant distribution from the seller of
        the
        Common Stock to its buyer.

       

      “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended, and the rules and regulations
        of the SEC promulgated thereunder. 

       

      “Fair
        Market Value”
or
        “fair
        market value”
means
        the amount which a willing buyer would pay a willing seller in an arm’s-length
        transaction.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      “Fundamental
        Change”
means
        the occurrence at such time after the original issuance of the Securities
        when
        any of the following has occurred:

       

      (1) a
        “person” or “group” within the meaning of Section 13(d)(3) of the Exchange Act
        files a Schedule TO or any schedule, form or report under the Exchange Act
        disclosing that such person or group has become the direct or indirect
“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of shares
        of Common Stock representing more than 50% of the Voting Stock; or

       

      (2) the
        first
        day on which a majority of the members of the Board of Directors does not
        consist of Continuing Directors; or

       

      (3) 
        a
        consolidation, merger or binding share exchange, or any conveyance, transfer,
        sale, lease or other disposition of all or substantially all of the Company’s
        properties and assets to another person, other than:

       

      (a) any
        transaction (i) that does not result in any reclassification, conversion,
        exchange or cancellation of outstanding shares of the Company’s Capital Stock or
        (ii) pursuant to which holders of the Company’s Capital Stock immediately prior
        to such transaction have the entitlement to exercise, directly or indirectly,
        50% or more of the total Voting Stock of the continuing or surviving or
        successor person immediately after giving effect to such issuance;
        or

       

      (b) any
        merger, share exchange, transfer of assets or similar transaction solely
        for the
        purpose of changing the Company’s jurisdiction of incorporation and resulting in
        a reclassification, conversion or exchange of outstanding shares of Common
        Stock, if at all, solely into shares of common stock, ordinary shares or
        American Depositary Shares of the surviving entity or a direct or indirect
        parent of the surviving corporation; or

       

      (c) any
        consolidation or merger with or into any Subsidiary, so long as such merger
        or
        consolidation is not part of a plan or a series of transactions designed
        to or
        having the effect of merging or consolidating with any other person;
        or

       

      (4) a
        Termination of Trading.

       

      The
        term
“person” as used in this definition includes any syndicate or group that would
        be deemed to be a “person” under Section 13(d)(3) of the Exchange
        Act.

       

      “Global
        Securities”
means
        Securities that are in the form of the Securities attached hereto as Exhibit
        A,
        and that are registered in the register of Securities in the name of a
        Depositary or a nominee thereof, and to the extent that such Securities are
        required to bear the Legend required by Section 2.06(g), such Securities
        shall
        be in the form of a 144A Global Security.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

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

       

      “Indenture”
means
        this Indenture, as amended or supplemented from time to time in accordance
        with
        the terms hereof, including the provisions of the TIA that are deemed to
        be a
        part hereof.

       

      “Interest”
means
        interest payable on each Security pursuant to Section 1 of the
        Securities.

       

      “Interest
        Payment Date”
means
        May 1 and November 1 of each year, commencing November 1, 2007.

       

      “Interest
        Record Date”
means
        April 15 and October 15 of each year.

       

      “Issue
        Date”
of
        any
        Security means the date on which the Security was originally issued or deemed
        issued as set forth on the face of the Security.

       

      “Market
        Disruption Event”
means,
        for the purposes of determining the Settlement Amount, (i) a failure by NASDAQ
        or, if the Common Stock is not then listed on NASDAQ, by the principal other
        U.S. national or regional securities exchange on which the Common Stock is
        then
        listed or, if the Common Stock is not then listed on a U.S. national or regional
        securities exchange, by the principal other market on which the Common Stock
        is
        then traded, to open for trading during its regular trading session, or (ii)
        the
        occurrence or existence before 1:00 p.m., New York City time, on any Trading
        Day
        for the Common Stock for an aggregate one half hour period of any suspension
        or
        limitation imposed on trading (by reason of movements in price exceeding
        limits
        permitted by the stock exchange or otherwise) in the Common Stock or in any
        options, contracts or future contracts relating to the Common
        Stock.

       

      “NASDAQ”
means
        the NASDAQ Global Select Market.

       

      “Offering
        Memorandum”
means
        the offering memorandum of the Company dated April 24, 2007 relating to the
        offering of the Securities.

       

      “Officer”
means
        the Chairman of the Board, the President, any Senior Vice President, Executive
        Vice President or Vice President, the Chief Financial Officer, the Treasurer
        or
        the Secretary of the Company.

       

      “Officer’s
        Certificate”
means
        a
        written certificate containing the information specified in Sections 11.04
        and
        11.05, signed in the name of the Company by any Officer (solely in his or
        her
        capacity as such), and delivered to the Trustee. An Officer’s Certificate given
        pursuant to Section 4.03 shall be signed by the principal executive officer,
        principal financial officer or principal accounting officer of the Company
        but
        need not contain the information specified in Sections 11.04 and
        11.05.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      “opening
        of business”
means
        9:00 a.m. (New York City time).

       

      “Opinion
        of Counsel”
means
        a
        written opinion containing the information specified in Sections 11.04 and
        11.05, from legal counsel. The counsel may be an employee of, or counsel
        to, the
        Company who is reasonably acceptable to the Trustee.

       

      “Physical
        Settlement Election”
means
        the irrevocable election by the Company prior to November 15, 2013, to satisfy
        its Conversion Obligation in respect of conversions of Securities with a
        Conversion Date after the Physical Election Date solely in shares of Common
        Stock (plus cash in lieu of fractional shares) in accordance with Section
        10.03(b) hereof.

       

      “Physical
        Settlement Election Date”
means
        the date on which a Physical Settlement Election Notice is delivered to the
        Trustee and Holders.

       

      “Physical
        Settlement Election Notice”
means
        a
        written notice of a Physical Settlement Election provided by the Company
        to the
        Trustee and each Holder of Securities.

       

      “Purchase
        Agreement”
means
        the Purchase Agreement dated April 24, 2007 among the Company, on the one
        hand,
        and Banc of America Securities LLC and J.P. Morgan Securities Inc., as
        representatives of the several initial purchasers, on the other, relating
        to the
        Securities.

       

      “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).

       

      “Registration
        Rights Agreement”
means
        the Registration Rights Agreement, dated the date hereof, among the Company,
        on
        the one hand, and Banc of America Securities LLC and J.P. Morgan Securities
        Inc., on the other.

       

      “Responsible
        Officer”
means,
        when used with respect to the Trustee, any officer of the Trustee within
        the
        Corporate Trust Office of the Trustee who has direct responsibility for the
        administration of this Indenture and, for the purposes of Section 7.01(c)(2)
        and
        7.05 shall also mean any other officer of the Trustee to whom any corporate
        trust matter is referred because of such person’s knowledge of and familiarity
        with the particular subject matter.

       

      “Restricted
        Security”
means
        a
        Security required to bear the Legend.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      “Rule
        144A”
means
        Rule 144A under the Securities Act (or any successor provision), as it may
        be
        amended from time to time.

       

      “Scheduled
        Trading Day”
means
        a
        day that is scheduled to be a Trading Day on the primary U.S. national or
        regional securities exchange or market on which the Common Stock is listed
        or
        admitted to trading.

       

      “SEC”
means
        the Securities and Exchange Commission. 

       

      “Securities
        Act”
means
        the Securities Act of 1933, as amended, and the rules and regulations of
        the SEC
        promulgated thereunder.

       

      “Security”
means
        any of the Company’s 1.125% Senior Convertible Notes Due 2014, as amended or
        supplemented from time to time, issued under this Indenture.

       

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

       

      “Significant
        Subsidiary”
means
        any subsidiary of the Company that is a significant subsidiary at any
        determination date pursuant to Regulation S-X, Rule 1-02(w)(1) or
        (2).

       

      “Stated
        Maturity”,
        when
        used with respect to any Security, means May 1, 2014.

       

      “Stock
        Price”
means
        the price per share of Common Stock paid in connection with a Fundamental
        Change
        transaction pursuant to which Additional Shares will be added to the Applicable
        Conversion Rate as set forth in Section 10.01(c) hereof, which shall be equal
        to
        (i) if Holders of Common Stock receive only cash in such Fundamental Change
        transaction, the cash amount paid per share of Common Stock and (ii) in all
        other cases, the average of the Closing Sale Prices of the Common Stock on
        the
        five Trading Days immediately before, but not including, the effective date
        of
        such Fundamental Change transaction.

       

      “Subsidiary”
means
        any person of which at least a majority of the outstanding Voting Stock shall
        at
        the time directly or indirectly be owned or controlled by the Company or
        by one
        or more Subsidiaries or by the Company and one or more
        Subsidiaries.

       

      “Termination
        of Trading”
means
        the
        occurrence, at any time, of the Common Stock of the Company (or other common
        stock into which the Securities are then convertible) not being listed for
        trading on a U.S. national or regional securities exchange.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      “TIA”
means
        the Trust Indenture Act of 1939 as in effect on the date of this Indenture,
        provided,
        however,
        that in
        the event the TIA is amended after such date, TIA means, to the extent required
        by any such amendment, the TIA as so amended.

       

      “Trading
        Day”
means
        a
        day on which (i) trading in securities generally occurs on NASDAQ or, if
        the
        Common Stock is not then listed on NASDAQ, on the principal other U.S. national
        or regional securities exchange on which the Common Stock is then listed
        or, if
        the Common Stock is not then listed on a U.S. national or regional securities
        exchange, in the principal other market on which the Common Stock is then
        traded
        and (ii) a Closing Sale Price for the Common Stock is available on such
        securities exchange or market; provided
        that
        for
        the purposes of determining the amount of payment upon conversion only, “Trading
        Day” means a day on which (i) there is no Market Disruption Event and (ii)
        trading generally in the Common Stock occurs on NASDAQ or, if the Common
        Stock
        is not then listed on NASDAQ, on the principal other U.S. national or regional
        securities exchange on which the Common Stock is then listed or, if the Common
        Stock is not then listed on a U.S. national or regional securities exchange,
        in
        the principal other market on which the Common Stock is then traded. If the
        Common Stock (or other security for which a Closing Sale Price or Daily VWAP,
        as
        applicable, must be determined) is not so traded, “Trading Day” means a Business
        Day.

       

      “Trading
        Price”
of
        the
        Securities on any date of determination means the average of the secondary
        market bid quotations per $1,000 principal amount of the Securities obtained
        by
        the Bid Solicitation Agent for $5,000,000 aggregate principal amount of the
        Securities at approximately 3:30 p.m., New York City time, on such determination
        date from three independent nationally recognized securities dealers the
        Company
        selects, provided
        that if
        three such bids cannot reasonably be obtained by the Bid Solicitation Agent,
        but
        two such bids are obtained, then the average of the two bids shall be used,
        and
        if only one such bid can reasonably be obtained by the Bid Solicitation Agent,
        that one bid shall be used, provided
        further
        that if
        no bids can reasonably be obtained, then for purposes of determining whether
        the
        condition to conversion of the Securities set forth in Section 10.01(a)(2)
        has
        been satisfied, the Trading Price per $1,000 principal amount of the Securities
        will be deemed to be less than 98% of the product of the Closing Sale Price
        of
        the Common Stock and the Applicable Conversion Rate on such date.

       

      “Trustee”
means
        the party named as the “Trustee” in the preamble of this Indenture unless and
        until a successor replaces it pursuant to the applicable provisions of this
        Indenture and, thereafter, shall mean such successor. The foregoing sentence
        shall likewise apply to any subsequent such successor or
        successors.

       

      “Voting
        Stock”
of
        a
        person means Capital Stock of such person of the class or classes pursuant
        to
        which the holders thereof have the general voting power under ordinary
        circumstances to elect at least a majority of the board of
        directors,

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      managers
        or trustees of such person (irrespective of whether or not at the time Capital
        Stock of any other class or classes shall have or might have voting power
        by
        reason of the happening of any contingency).

       

      Section
        1.02.
        Other Definitions.

       

      
        	
                Terms:

              	
                Defined
                  in Section:

              
	
                “Act”

              	
                1.05(a)

              
	
                “Additional
                  Amounts Notice”

              	
                4.07

              
	
                “additional
                  interest”

              	
                6.01(j)

              
	
                “Additional
                  Shares

              	
                10.01(c)

              
	
                “Agent
                  Members”

              	
                2.12(e)(v)

              
	
                “Applicable
                  Conversion Rate”

              	
                10.02(a)

              
	
                “Bankruptcy
                  Law”

              	
                6.01(h)

              
	
                “Conversion
                  Agent”

              	
                2.03

              
	
                “Conversion
                  Date”

              	
                10.02(d)

              
	
                “Conversion
                  Notice”

              	
                10.02(c)

              
	
                “Conversion
                  Obligation”

              	
                10.03(a)

              
	
                “Daily
                  Excess Amount”

              	
                10.03(a)(i)(B)

              
	
                “Daily
                  Settlement Amount”

              	
                10.03(a)(i)

              
	
                “Depositary”

              	
                2.01(b)

              
	
                “DTC”

              	
                2.01(b)

              
	
                “effective
                  date”

              	
                10.01(c)

              
	
                “Event
                  of Default”

              	
                6.01

              
	
                “Exchange
                  Property”

              	
                10.06(a)

              
	
                “Fiscal
                  Quarter”

              	
                10.01(a)(1)

              
	
                “Fundamental
                  Change Repurchase Date”

              	
                3.02(a)

              
	
                “Fundamental
                  Change Repurchase Notice”

              	
                3.02(c)

              
	
                “Fundamental
                  Change Repurchase Price”

              	
                3.02(a)

              
	
                “Indemnitees”

              	
                7.07(c)

              
	
                “legal
                  holiday”

              	
                11.08

              
	
                “Legend”
                  

              	
                2.06(g)

              
	
                “Losses”

              	
                7.07(c)

              
	
                “Measurement
                  Period”

              	
                10.01(a)(2)

              
	
                “Notice
                  of Default”

              	
                6.01

              
	
                “Paying
                  Agent”

              	
                2.03

              
	
                “QIBs”

              	
                2.01(b)

              
	
                “Registrar”

              	
                2.03

              
	
                “Rule
                  144A Information”

              	
                4.06

              
	
                “Settlement
                  Amount”

              	
                10.03(a)

              
	
                “Settlement
                  Shares”

              	
                10.03(b)

              
	
                “Spin
                  Off”

              	
                10.04(c)

              
	
                “successor
                  company”

              	
                5.01(a)

              
	
                “Trigger
                  Event”

              	
                10.04(c)

              

      

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Section
        1.03.
        Incorporation by Reference of Trust Indenture Act. Whenever
        this Indenture refers to a provision of the TIA, the provision is incorporated
        by reference in and made a part of this Indenture. The following TIA terms
        used
        in this Indenture have the following meanings:

       

      “Commission”
means
        the SEC.

       

      “indenture
        securities”
means
        the Securities.

       

      “indenture
        security holder”
means
        a
        Securityholder.

       

      “indenture
        to be qualified”
means
        this Indenture.

       

      “indenture
        trustee”
or
        “institutional
        trustee”
means
        the Trustee.

       

      “obligor”
on
        the
        indenture securities means the Company.

       

      All
        other
        TIA terms used in this Indenture that are defined by the TIA, defined by
        TIA
        reference to another statute or defined by SEC rules have the meanings assigned
        to them by such definitions.

       

      Section
        1.04.
        Rules of Construction.
        Unless
        the context otherwise requires:

       

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

       

      (2) an
        accounting term not otherwise defined has the meaning assigned to it in
        accordance with generally accepted accounting principles as in effect from
        time
        to time;

       

      (3) “or”
is
        not exclusive;

       

      (4) “including”
        means including, without limitation;

       

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

       

      (6) references
        to Sections and Articles are to references to Sections and Articles of this
        Indenture.

       

      Section
        1.05.
        Acts of Holders.(a)
         Any
        request, demand, authorization, direction, notice, consent, waiver or other
        action provided by this Indenture to be given or taken by Holders may be
        embodied in and evidenced by one or more instruments of substantially similar
        tenor signed by such Holders in person or by an agent duly appointed in writing;
        and, except as herein otherwise expressly provided, such action shall become
        effective when such instrument or instruments are delivered to the Trustee
        and,
        where it is hereby expressly required, to the Company, as described in Section
        11.02. Such instrument or instruments (and the action embodied therein and
        evidenced thereby) are herein sometimes

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      referred
        to as the “Act”
of
        Holders signing such instrument or instruments. Proof of execution of any
        such
        instrument or of a writing appointing any such agent shall be sufficient
        for any
        purpose of this Indenture and conclusive in favor of the Trustee and the
        Company, if made in the manner provided in this Section.

       

      (b) The
        fact
        and date of the execution by any person of any such instrument or writing
        may be
        proved by the affidavit of a witness of such execution or by a certificate
        of a
        notary public or other officer authorized by law to take acknowledgments
        of
        deeds, certifying that the individual signing such instrument or writing
        acknowledged to such officer the execution thereof. Where such execution
        is by a
        signer acting in a capacity other than such signer’s individual capacity, such
        certificate or affidavit shall also constitute sufficient proof of such signer’s
        authority. The fact and date of the execution of any such instrument or writing,
        or the authority of the person executing the same, may also be proved in
        any
        other manner which the Trustee deems sufficient.

       

      (c) The
        principal amount and serial number of any Security and the ownership of
        Securities shall be proved by the register for the Securities.

       

      (d) Any
        request, demand, authorization, direction, notice, consent, waiver or other
        Act
        of the Holder of any Security shall bind every future Holder of the same
        Security and the Holder of every Security issued upon the registration of
        transfer thereof or in exchange therefor or in lieu thereof in respect of
        anything done, omitted or suffered to be done by the Trustee or the Company
        in
        reliance thereon, whether or not notation of such action is made upon such
        Security.

       

      (e) If
        the
        Company shall solicit from the Holders any request, demand, authorization,
        direction, notice, consent, waiver or other Act, the Company may, at its
        option,
        by or pursuant to a Board Resolution, fix in advance a record date for the
        determination of Holders entitled to give such request, demand, authorization,
        direction, notice, consent, waiver or other Act, but the Company shall have
        no
        obligation to do so. If such a record date is fixed, such request, demand,
        authorization, direction, notice, consent, waiver or other Act may be given
        before or after such record date, but only the Holders of record at the close
        of
        business on such record date shall be deemed to be Holders for the purposes
        of
        determining whether Holders of the requisite proportion of outstanding
        Securities have authorized or agreed or consented to such request, demand,
        authorization, direction, notice, consent, waiver or other Act, and for that
        purpose the outstanding Securities shall be computed as of such record date;
        provided
        that no
        such authorization, agreement or consent by the Holders on such record date
        shall be deemed effective unless it shall become effective pursuant to the
        provisions of this Indenture not later than six months after the record
        date.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      ARTICLE
        2

      The
        Securities

       

      Section
        2.01.
        Form and Dating.
        (a)
        The
        Securities and the Trustee’s certificate of authentication shall be
        substantially in the form of Exhibits A and B, which are a part of this
        Indenture. The Securities may have notations, legends or endorsements required
        by law, stock exchange rule or usage (provided that any such notation, legend
        or
        endorsement required by usage is in a form acceptable to the Company). The
        Company shall provide any such notations, legends or endorsements to the
        Trustee
        in writing. Each Security shall be dated the date of its
        authentication.
        The
        Securities may, but need not, have the corporate seal of the Company or a
        facsimile thereof affixed thereto or imprinted thereon.

       

      (b) 144A
        Global Securities. Securities
        offered and sold within the United States to qualified institutional buyers
        as
        defined in Rule 144A (“QIBs”)
        in
        reliance on Rule 144A shall be issued initially in the form of a 144A Global
        Security, which shall be deposited with the Trustee at its Corporate Trust
        Office, as custodian for the Depositary (as defined below) and registered
        in the
        name of The Depository Trust Company (“DTC”)
        or the
        nominee thereof (DTC, or any successor thereto, and any such nominee being
        hereinafter referred to as the “Depositary”),
        duly
        executed by the Company and authenticated by the Trustee as hereinafter
        provided. The aggregate principal amount of the 144A Global Securities may
        from
        time to time be increased or decreased by adjustments made on the records
        of the
        Trustee and the Depositary as hereinafter provided.

       

      (c) Global
        Securities in General.
        Each
        Global Security shall represent such of the outstanding Securities as shall
        be
        specified therein and each shall provide that it shall represent the aggregate
        amount of outstanding Securities from time to time endorsed in the Schedule
        of
        Increases and Decreases of Global Security attached thereto and that the
        aggregate amount of outstanding Securities represented thereby may from time
        to
        time be reduced or increased, as appropriate, to reflect exchanges, repurchases
        and conversions.

       

      Any
        adjustment of the aggregate principal amount of a Global Security to reflect
        the
        amount of any increase or decrease in the amount of outstanding Securities
        represented thereby shall be made by the Trustee in accordance with instructions
        given by the Holder thereof as required by Section 2.12 hereof, and shall
        be
        made on the records of the Trustee and the Depositary.

       

      (d) Book-Entry
        Provisions.
        This
        Section 2.01(d) shall apply only to Global Securities deposited with or on
        behalf of the Depositary.

       

      The
        Company shall execute and the Trustee shall, in accordance with this Section
        2.01(d), authenticate and deliver initially one or more Global Securities
        that
        (a) shall be registered in the name of the Depositary or a nominee thereof,
        (b)
        shall be delivered by the Trustee to the Depositary or held by the Trustee
        pursuant to the

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      Depositary’s
        instructions and (c) shall be substantially in the form of Exhibit A attached
        hereto.

       

      (e) Certificated
        Securities. Securities
        not issued as interests in the Global Securities shall be registered in the
        name
        of the Holder and issued in certificated form substantially in the form of
        Exhibit B attached hereto.

       

      Section
        2.02.
        Execution and Authentication.
        The
        Securities shall be executed on behalf of the Company by one Officer. The
        signature of such Officer on the Securities may be manual or
        facsimile.

       

      Securities
        bearing the manual or facsimile signature of an individual who was, at the
        time
        of the execution of the Securities, an Officer shall bind the Company,
        notwithstanding that such individual has ceased to hold such office prior
        to the
        authentication and delivery of such Securities or did not hold such office
        at
        the date of authentication of such Securities.

       

      No
        Security shall be entitled to any benefit under this Indenture or be valid
        or
        obligatory for any purpose unless there appears on such Security a certificate
        of authentication substantially in the form provided for herein duly executed
        by
        the Trustee by manual signature of an authorized signatory, and such certificate
        upon any Security shall be conclusive evidence, and the only evidence, that
        such
        Security has been duly authenticated and delivered hereunder.

       

      The
        Trustee shall authenticate and deliver the Securities for original issue
        in an
        aggregate principal amount of up to $250,000,000 (plus up to an additional
        $25,000,000 upon exercise of the initial purchasers’ option to purchase
        additional Securities pursuant to the Purchase Agreement) upon one or more
        Company Orders without any further action by the Company. The aggregate
        principal amount of the Securities due at the Stated Maturity thereof
        outstanding at any time may not exceed the amount set forth in the foregoing
        sentence.

       

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

       

      Section
        2.03.
        Registrar, Paying Agent, Bid Solicitation Agent and Conversion
        Agent.
        The
        Company shall maintain an office or agency where Securities may be presented
        for
        registration of transfer or for exchange (“Registrar”),
        an
        office or agency where Securities may be presented for purchase or payment
        (“Paying
        Agent”)
        and an
        office or agency where Securities may be presented for conversion (“Conversion
        Agent”).
        The
        Registrar shall keep a register of the Securities and of their transfer and
        exchange. The Company may have one or more co-registrars, one or more additional
        paying agents, one or more additional bid solicitation agents and one or
        more
        additional conversion agents. The term Paying Agent includes any additional
        paying agent, including any named

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      pursuant
        to Section 4.05. The term Conversion Agent includes any additional conversion
        agent, including any named pursuant to Section 4.05.

       

      The
        Company shall enter into an appropriate agency agreement with any Registrar,
        Paying Agent, Conversion Agent, Bid Solicitation Agent or co-registrar (in
        each
        case, if such Registrar, agent or co-registrar is a person other than the
        Trustee). The agreement shall implement the provisions of this Indenture
        that
        relate to such agent. The Company shall promptly notify the Trustee of the
        name
        and address of any such agent. If the Company fails to maintain a Registrar,
        Paying Agent, or Conversion Agent, the Trustee shall act as such and shall
        be
        entitled to appropriate compensation therefor pursuant to Section 7.07. The
        Company or any Subsidiary or an Affiliate of either of them may act as Paying
        Agent, Registrar, Conversion Agent or co-registrar.

       

      The
        Company initially appoints the Trustee as Registrar, Conversion Agent and
        Paying
        Agent in connection with the Securities.

       

      Section
        2.04.
        Paying Agent to Hold Money and Securities in Trust.
        Except
        as
        otherwise provided herein, on or prior to each due date of payments in respect
        of any Security, the Company shall deposit with the Paying Agent a sum of
        money
        (in immediately available funds if deposited on the due date) or shares of
        Common Stock sufficient to make such payments when so becoming due. The Company
        shall require each Paying Agent (other than the Trustee) to agree in writing
        that the Paying Agent shall hold in trust for the benefit of Securityholders
        or
        the Trustee all money and shares of Common Stock held by the Paying Agent
        for
        the making of payments in respect of the Securities and shall promptly notify
        the Trustee of any Default by the Company in making any such payment. At
        any
        time during the continuance of any such Default, the Paying Agent shall,
        upon
        the written request of the Trustee, forthwith pay to the Trustee all money
        and
        shares of Common Stock so held in trust. If the Company, a Subsidiary or
        an
        Affiliate of either of them acts as Paying Agent, it shall segregate the
        money
        and shares of Common Stock held by it as Paying Agent and hold it as a separate
        trust fund. The Company at any time may require a Paying Agent to pay all
        money
        and shares of Common Stock held by it to the Trustee and to account for any
        funds and Common Stock disbursed by it. Upon doing so, the Paying Agent shall
        have no further liability for the money or shares of Common Stock.

       

      Section
        2.05.
        Securityholder Lists.
        The
        Trustee shall preserve the most recent list available to it of the names
        and
        addresses of Securityholders. If the Trustee is not the Registrar, the Company
        shall cause to be furnished to the Trustee at least semiannually on April
        15 and
        October 15 a listing of Securityholders dated within 15 days of the date
        on
        which the list is furnished and at such other times as the Trustee may request
        in writing a list in such form and as of such date as the Trustee may reasonably
        require of the names and addresses of Securityholders.

       

      Section
        2.06.
        Transfer and Exchange.
        (a)
        Subject to Section 2.12 hereof, upon surrender for registration of transfer
        of
        any Security, together with a

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      written
        instrument of transfer satisfactory to the Registrar duly executed by the
        Securityholder or such Securityholder’s attorney duly authorized in writing, at
        the office or agency of the Company designated as Registrar or co-registrar
        pursuant to Section 2.03, the Company shall execute, and the Trustee shall
        authenticate and deliver, in the name of the designated transferee or
        transferees, one or more new Securities of any authorized denomination or
        denominations, of a like aggregate principal amount. The Company shall not
        charge a service charge for any registration of transfer or exchange, but
        the
        Company may require payment of a sum sufficient to pay all taxes, assessments
        or
        other governmental charges that may be imposed in connection with the transfer
        or exchange of the Securities from the Securityholder requesting such transfer
        or exchange.

       

      At
        the
        option of the Holder, Securities may be exchanged for other Securities of
        any
        authorized denomination or denominations, of a like aggregate principal amount
        upon surrender of the Securities to be exchanged, together with a written
        instrument of transfer satisfactory to the Registrar duly executed by the
        Securityholder or such Securityholder’s attorney duly authorized in writing, at
        such office or agency. Whenever any Securities are so surrendered for exchange,
        the Company shall execute, and the Trustee shall authenticate and deliver,
        the
        Securities which the Holder making the exchange is entitled to
        receive.

       

      The
        Company shall not be required to make, and the Registrar need not register,
        transfers or exchanges of Securities in respect of which a Fundamental Change
        Repurchase Notice has been given and not withdrawn by the Holder thereof
        in
        accordance with the terms of this Indenture (except, in the case of Securities
        to be purchased in part, the portion thereof not to be purchased).

       

      (b) Notwithstanding
        any provision to the contrary herein, so long as a Global Security remains
        outstanding and is held by or on behalf of the Depositary, transfers of a
        Global
        Security, in whole or in part, shall be made only in accordance with Section
        2.12 and this Section 2.06(b). Transfers of a Global Security shall, except
        as
        set forth in Section 2.12, be limited to transfers of such Global Security
        in
        whole or in part, to the Depositary, to nominees of the Depositary or to
        a
        successor of the Depositary or such successor’s nominee.

       

      (c) Successive
        registrations and registrations of transfers and exchanges as aforesaid may
        be
        made from time to time as desired, and each such registration shall be noted
        on
        the register for the Securities.

       

      (d) Except
        as
        otherwise set forth in this Indenture, any such action taken by a Holder
        shall
        be conclusive and binding upon such Holder and upon all future Holders and
        owners of such Security and of any Securities issued in exchange or substitution
        therefor, irrespective of whether any notation in regard thereto is made
        upon
        such Security or any Security issued in exchange or substitution
        therefor.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      (e) Any
        Registrar appointed pursuant to Section 2.03 hereof shall provide to the
        Trustee
        such information as the Trustee may reasonably require in connection with
        the
        delivery by such Registrar of Securities upon transfer or exchange of
        Securities.

       

      (f) No
        Registrar shall be required to make registrations of transfer or exchange
        of
        Securities during any periods designated in the text of the Securities or
        in
        this Indenture as periods during which such registration of transfers and
        exchanges need not be made.

       

      (g) If
        Securities are issued upon the transfer, exchange or replacement of Securities
        subject to restrictions on transfer and bearing the legends relating to such
        restrictions imposed by the securities laws set forth on the forms of Security
        attached hereto as Exhibits A and B setting forth such restrictions
        (collectively, the “Legend”),
        or if
        a request is made to remove the Legend on a Security, the Securities so issued
        shall bear the Legend, or the Legend shall not be removed, as the case may
        be,
        unless there is delivered to the Company and the Registrar and the Trustee
        (if
        not the same person as the Registrar) such satisfactory evidence, which shall
        include an opinion of counsel, as may be reasonably required by the Company
        and
        the Registrar and the Trustee (if not the same person as the Registrar),
        that
        neither the Legend nor the restrictions on transfer set forth therein are
        required to ensure that transfers thereof comply with the provisions of Rule
        144
        under the Securities Act or that such Securities are not “restricted” within the
        meaning of Rule 144 under the Securities Act. Upon (i) provision of such
        satisfactory evidence, or (ii) notification by the Company to the Trustee
        and
        Registrar of the sale of such Security pursuant to a registration statement
        that
        is effective at the time of such sale, the Trustee, at the written direction
        of
        the Company, shall authenticate and deliver a Security that does not bear
        the
        Legend. If the Legend is removed from the face of a Security and the Security
        is
        subsequently held by the Company or an Affiliate of the Company, the Legend
        shall be reinstated.

       

      Section
        2.07.
        Replacement Securities.
        If
        (a)
        any mutilated Security is surrendered to the Trustee, or (b) the Company
        and the
        Trustee receive evidence to their satisfaction of the destruction, loss or
        theft
        of any Security, and there is delivered to the Company and the Trustee such
        security and/or indemnity as may be required by them to save each of them
        harmless, then, in the absence of notice to the Company or the Trustee that
        such
        Security has been acquired by a bona fide purchaser, the Company shall execute
        and upon its written request the Trustee shall authenticate and deliver,
        in
        exchange for any such mutilated Security or in lieu of any such destroyed,
        lost
        or stolen Security, a new Security of like tenor and principal amount, bearing
        a
        certificate number not contemporaneously outstanding.

       

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

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      Upon
        the
        issuance of any new Securities under this Section 2.07, the Company may require
        the payment of a sum sufficient to cover any tax or other governmental charge
        that may be imposed in relation thereto and any other expenses (including
        the
        fees and expenses of the Trustee) connected therewith.

       

      Every
        new
        Security issued pursuant to this Section 2.07 in lieu of any mutilated,
        destroyed, lost or stolen Security shall constitute an additional obligation
        of
        the Company and shall be entitled to all benefits of this Indenture equally
        and
        proportionately with any and all other Securities duly issued
        hereunder.

       

      The
        provisions of this Section 2.07 are exclusive and shall preclude (to the
        extent
        lawful) all other rights and remedies with respect to the replacement or
        payment
        of mutilated, destroyed, lost or stolen Securities.

       

      Section
        2.08.
        Outstanding Securities; Determinations of Holders’ Action.
        Securities
        outstanding at any time are all the Securities authenticated by the Trustee
        except for those cancelled by it, those purchased pursuant to Section 2.07,
        those delivered to it for cancellation and those described in this Section
        2.08
        as not outstanding. A Security does not cease to be outstanding because the
        Company or an Affiliate thereof holds the Security; provided,
        however,
        that in
        determining whether the Holders of the requisite principal amount of Securities
        have given or concurred in any request, demand, authorization, direction,
        notice, consent, waiver, or other Act hereunder, Securities owned by the
        Company
        or any other obligor upon the Securities or any Affiliate of the Company
        or such
        other obligor shall be disregarded and deemed not to be outstanding, except
        that, in determining whether the Trustee shall be protected in relying upon
        any
        such request, demand, authorization, direction, notice, consent, waiver or
        other
        act, only Securities which a Responsible Officer of the Trustee actually
        knows
        to be so owned shall be so disregarded. Subject to the foregoing, only
        Securities outstanding at the time of such determination shall be considered
        in
        any such determination (including, without limitation, determinations pursuant
        to Article 6 and Article 9).

       

      If
        a
        Security is replaced pursuant to Section 2.07, it ceases to be outstanding
        unless the Trustee receives proof satisfactory to it that the replaced Security
        is held by a bona fide purchaser.

       

      If
        the
        Paying Agent holds, in accordance with this Indenture, on the Business Day
        immediately following a Fundamental Change Repurchase Date, or on Stated
        Maturity, money or securities, if permitted hereunder, sufficient to pay
        Securities payable on that date, then from and after such Fundamental Change
        Repurchase Date or Stated Maturity, as the case may be, such Securities shall
        cease to be outstanding and Interest and Additional Amounts, if any, on such
        Securities shall cease to accrue.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      If
        a
        Security is converted in accordance with Article 10, then from and after
        the
        date of conversion, such Security shall cease to be outstanding, and Interest
        and Additional Amounts, if any, shall cease to accrue and the rights of the
        Holders therein shall terminate (other than the right to receive the Settlement
        Amount).

       

      Section
        2.09.
        Temporary Securities.
        Pending
        the preparation of Certificated Securities, the Company may execute, and
        upon
        Company Order the Trustee shall authenticate and deliver, temporary Securities
        which are printed, lithographed, typewritten, mimeographed or otherwise
        produced, in any authorized denomination, substantially of the tenor of the
        Certificated Securities in lieu of which they are issued and with such
        appropriate insertions, omissions, substitutions and other variations as
        the
        Officers executing such Securities may determine, as conclusively evidenced
        by
        their execution of such Securities.

       

      If
        temporary Securities are issued, the Company shall cause Certificated Securities
        to be prepared without unreasonable delay. After the preparation of Certificated
        Securities, the temporary Securities shall be exchangeable for Certificated
        Securities upon surrender of the temporary Securities at the office or agency
        of
        the Company designated for such purpose pursuant to Section 2.03, without
        charge
        to the Holder. Upon surrender for cancellation of any one or more temporary
        Securities the Company shall execute and the Trustee shall authenticate and
        deliver in exchange therefor a like principal amount of Certificated Securities
        of authorized denominations. Until so exchanged the temporary Securities
        shall
        in all respects be entitled to the same benefits under this Indenture as
        Certificated Securities.

       

      Section
        2.10.
        Cancellation.
        All
        Securities surrendered for payment, purchase by the Company pursuant to Article
        3, conversion or registration of transfer or exchange shall, if surrendered
        to
        any person other than the Trustee, be delivered to the Trustee and shall
        be
        promptly cancelled by it. The Company may at any time deliver to the Trustee
        for
        cancellation any Securities previously authenticated and delivered hereunder
        which the Company may have acquired in any manner whatsoever, and all Securities
        so delivered shall be promptly cancelled by the Trustee. The Company may
        not
        issue new Securities to replace Securities it has paid or delivered to the
        Trustee for cancellation other than in connection with registrations of transfer
        or exchange or that any Holder has converted pursuant to Article 10. No
        Securities shall be authenticated in lieu of or in exchange for any Securities
        cancelled as provided in this Section, except as expressly permitted by this
        Indenture. All cancelled Securities held by the Trustee shall be disposed
        of by
        the Trustee in accordance with the Trustee’s customary procedure.

       

      Section
        2.11.
        Persons Deemed Owners.
        Prior
        to
        due presentment of a Security for registration of transfer, the Company,
        the
        Trustee and any agent of the Company or the Trustee may treat the person
        in
        whose name such Security is registered as the owner of such Security for
        the
        purpose of receiving payment of the principal amount of the Security or any
        portion thereof, or the payment of any Fundamental Change Repurchase Price
        in
        respect thereof, and Interest or 

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      Additional
        Amounts thereon, for the purpose of conversion and for all other purposes
        whatsoever, whether or not such Security be overdue, and neither the Company,
        the Trustee nor any agent of the Company or the Trustee shall be affected
        by
        notice to the contrary.

       

      Section
        2.12.
        Global Securities. (a)
        Notwithstanding
        any other provisions of this Indenture or the Securities, (A) transfers of
        a
        Global Security, in whole or in part, shall be made only in accordance with
        Section 2.06 and Section 2.12(a)(i) below, (B) transfers of a beneficial
        interest in a Global Security for a Certificated Security shall comply with
        Section 2.069 and Section 2.12(a)(ii) below and Section 2.12(c) below, and
        (C)
        transfers of a Certificated Security shall comply with Section 2.06, Section
        2.12(a)(iii) and Section 2.12(a)(iv) below, as applicable.

       

      (i) Transfer
        of Global Security.
        A
        Global Security may not be transferred, in whole or in part, to any person
        other
        than the Depositary or a nominee or any successor thereof, and no such transfer
        to any such other person may be registered; provided
        that
        this
        Section 2.12(a)(i) shall not prohibit any transfer of a Security that is
        issued
        in exchange for a Global Security but is not itself a Global Security. No
        transfer of a Security to any person shall be effective under this Indenture
        or
        the Securities unless and until such Security has been registered in the
        name of
        such person. Nothing in this Section 2.12(a)(i) shall prohibit or render
        ineffective any transfer of a beneficial interest in a Global Security effected
        in accordance with the other provisions of this Section 2.12.

       

      (ii) Restrictions
        on Transfer of a Beneficial Interest in a Global Security for a Certificated
        Security.
        A
        beneficial interest in a Global Security may not be exchanged for a Certificated
        Security except upon satisfaction of the requirements set forth in this clause
        (ii) below and in Section 2.12(e) below. Upon receipt by the Trustee of a
        request to transfer a beneficial interest in a Global Security in accordance
        with Applicable Procedures for a Certificated Security in the form satisfactory
        to the Trustee, together with:

       

      (A) so
        long
        as the Securities are Restricted Securities, a certification, in the form
        set
        forth in Exhibit C, that such beneficial interest in a Global Security (1)
        is
        being transferred to a QIB in accordance with Rule 144A or (2) is being
        transferred pursuant to and in compliance with Rule 144 under the Securities
        Act
        or another exemption from the securities laws (which is documented to the
        Company’s satisfaction);

       

      
        
          
          

        

        
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      (B) written
        instructions from the Holder to the Trustee to make, or direct the Registrar
        to
        make, an adjustment on its books and records with respect to such Global
        Security to reflect a decrease in the aggregate principal amount of the
        Securities represented by the Global Security, such instructions to contain
        information regarding the Depositary account to be decreased; and

       

      (C) if
        the
        Company or the Trustee so requests, an opinion of counsel or other evidence
        reasonably satisfactory to it as to the compliance with the restrictions
        set
        forth in the Legend, 

       

      then
        the
        Trustee shall cause, or direct the Registrar to cause, in accordance with
        the
        standing instructions and procedures existing between the Depositary and
        the
        Registrar, the aggregate principal amount of the Securities represented by
        the
        Global Security to be decreased by the aggregate principal amount of the
        Certificated Security to be issued, shall issue such Certificated Security
        and
        shall debit or cause to be debited to the account of the person specified
        in
        such instructions a beneficial interest in the Global Security equal to the
        principal amount of the Certificated Security so issued.

       

      (iii) Transfer
        and Exchange of Certificated Securities.
        When
        Certificated Securities are presented to the Registrar with a
        request:

       

      (A) to
        register the transfer of such Certificated Securities; or

       

      (B) to
        exchange such Certificated Securities for an equal principal amount of
        Certificated Securities of other authorized denominations,

       

      the
        Registrar shall register the transfer or make the exchange as requested if
        its
        reasonable requirements for such transaction are met; provided,
        however, that the Certificated Securities surrendered for transfer or
        exchange:

       

      (1) shall
        be
        duly endorsed or accompanied by a written instrument of transfer reasonably
        satisfactory to the Company and the Registrar, duly executed by the Holder
        thereof or his attorney duly authorized in writing; and

       

      (2) so
        long
        as such Securities are Restricted Securities, such Securities are being
        transferred or exchanged pursuant to an effective registration statement
        under
        the Securities Act or pursuant to clause (x), (y) or (z) below, and are
        accompanied by the following additional information and documents, as
        applicable:

       

      
        
          
          

        

        
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      (x) if
        such
        Certificated Securities are being delivered to the Registrar by a Holder
        for
        registration in the name of such Holder, without transfer, a certification
        from
        such Holder to that effect; or

       

      (y) if
        such
        Certificated Securities are being transferred to the Company, a certification
        to
        that effect (in the form set forth in Exhibit C); or

       

      (z) if
        such
        Certificated Securities are being transferred pursuant to an exemption from
        registration under the Securities Act, (i) a certification to that effect
        (in
        the form set forth in Exhibit C, if applicable) and (ii) if the Company or
        the
        Trustee so requests, an opinion of counsel or other evidence reasonably
        satisfactory to it as to the compliance with the restrictions set forth in
        the
        Legend.

       

      (iv) Restrictions
        on Transfer or Exchange of a Certificated Security for a Beneficial Interest
        in
        a Global Security.
        A
        Certificated Security may not be transferred or exchanged for a beneficial
        interest in a Global Security except upon satisfaction of the requirements
        set
        forth below.

       

      Upon
        receipt by the Trustee of a Certificated Security, duly endorsed or accompanied
        by appropriate instruments of transfer, in form satisfactory to the Trustee,
        together with:

       

      (A) so
        long
        as the Securities are Restricted Securities, a certification, in the form
        set
        forth in Exhibit C, that such Certificated Security (1) is being transferred
        to
        the Company, (2) is being transferred to a QIB in accordance with Rule 144A
        or
        (3) is being transferred pursuant to and in compliance with Rule 144 under
        the
        Securities Act or another exemption from the securities laws (which is
        documented to the Company’s satisfaction); 

       

      (B) written
        instructions from the Holder directing the Trustee to make, or to direct
        the
        Registrar to make, an adjustment on its books and records with respect to
        such
        Global Security to reflect an increase in the aggregate principal amount
        of the
        Securities represented by the Global Security, such instructions to contain
        information regarding the Depositary account to be credited with such increase;
        and

       

      (C) if
        the
        Company, or the Trustee so requests, an opinion of counsel or other evidence
        reasonably satisfactory to it as to the compliance with the restrictions
        set
        forth in the Legend, 

       

      
        
          
          

        

        
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      then
        the
        Trustee shall cancel such Certificated Security and cause, or direct the
        Registrar to cause, in accordance with the standing instructions and procedures
        existing between the Depositary and the Registrar, the aggregate principal
        amount of Securities represented by the Global Security to be increased by
        the
        aggregate principal amount of the Certificated Security to be exchanged,
        and
        shall credit or cause to be credited to the account of the person specified
        in
        such instructions a beneficial interest in the Global Security equal to the
        principal amount of the Certificated Security so cancelled. If no Global
        Securities are then outstanding, the Company shall issue and the Trustee
        shall
        authenticate, upon written order of the Company in the form of an Officer’s
        Certificate, a new Global Security in the appropriate principal
        amount.

       

      (b) Subject
        to the succeeding Section 2.12(c), every Security shall be subject to the
        restrictions on transfer provided in the Legend including the delivery of
        an
        opinion of counsel, if so required. Whenever any Restricted Security is
        presented or surrendered for registration of transfer or for exchange for
        a
        Security registered in a name other than that of the Holder, such Security
        must
        be accompanied by a certificate in substantially the form set forth in Exhibit
        C, dated the date of such surrender and signed by the Holder of such Security,
        as to compliance with such restrictions on transfer. The Registrar shall
        not be
        required to accept for such registration of transfer or exchange any Security
        not so accompanied by a properly completed certificate.

       

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

       

      
        
          
          

        

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

       

      (e) The
        provisions of clauses (i), (ii), (iii), (iv) and (v) below shall apply only
        to
        Global Securities:

       

      (i) Notwithstanding
        any other provisions of this Indenture or the Securities, a Global Security
        shall not be exchanged in whole or in part for a Security registered in the
        name
        of any person other than the Depositary or one or more nominees thereof,
        provided
        that
        a
        Global Security may be exchanged for Securities registered in the names of
        any
        person designated by the Depositary in the event that (i)
        the
        Depositary has notified the Company that it is unwilling or unable to continue
        as Depositary for such Global Security or such Depositary has ceased to be
        a
“clearing agency” registered under the Exchange Act, and a successor Depositary
        is not appointed by the Company within 90 days (ii)
        the
        Company determines at any time that the Securities shall no longer be
        represented by Global Securities and shall inform such Depositary of such
        determination in writing and participants in such Depositary elect to withdraw
        their beneficial interests in the Global Securities from such Depositary,
        following notification by the Depositary of their right to do so or (iii)
        an Event
        of Default has occurred and is continuing. Any Global Security exchanged
        pursuant to clause (i) above shall be so exchanged in whole and not in part,
        and
        any Global Security exchanged pursuant to clauses (ii) or (iii) above may
        be
        exchanged in whole or from time to time in part as directed by the Depositary.
        Any Security issued in exchange for a Global Security or any portion thereof
        shall be a Global Security; provided
        that
        any
        such Security so issued that is registered in the name of a person other
        than
        the Depositary or a nominee thereof or any successor of either of the foregoing
        pursuant to this paragraph shall not be a Global Security.

       

      (ii) Securities
        issued in exchange for a Global Security or any portion thereof shall be
        issued
        in definitive, fully registered form, shall have an aggregate principal amount
        equal to that of such Global Security or portion thereof to be so exchanged,
        shall be registered in such names and be in such authorized denominations
        as the
        Depositary shall designate and shall bear the applicable legends provided
        for
        herein. Any Global Security to be exchanged in whole shall be surrendered
        by the
        Depositary to the Registrar. With regard to any Global Security to be exchanged
        in part, either such Global Security shall be so surrendered for exchange
        or, if
        the Trustee is acting as custodian for the Depositary or its nominee with
        respect to such Global Security, the principal amount thereof shall be reduced
        by an amount equal to the portion thereof to be so exchanged, by means of
        an
        appropriate adjustment made on the records of the Trustee. Upon any such
        surrender or adjustment, the Trustee shall authenticate and deliver the

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      Security
        issuable on such exchange to or upon the order of the Depositary or an
        authorized representative thereof.

       

      (iii) Subject
        to the provisions of clause 0 below, the registered Holder may grant proxies
        and
        otherwise authorize any person, including Agent Members (as defined below)
        and
        persons that may hold interests through Agent Members, to take any action
        which
        a Holder is entitled to take under this Indenture or the
        Securities.

       

      (iv) In
        the
        event of the occurrence of any of the events specified in clause (i) above,
        the
        Company shall promptly make available to the Trustee a reasonable supply
        of
        Certificated Securities in definitive, fully registered form.

       

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

       

      (vi) Except
        as
        expressly set forth in this Indenture, including Sections 2.12(a)(ii) and
        2.12(e), none of the Trustee, any Paying Agent, Conversion Agent, the Company
        or
        the Registrar shall have any responsibility or obligation to any beneficial
        owner in the Global Securities, a member of, or a participant in the Depositary
        or other person with respect to the accuracy of the records of the Depositary
        or
        its nominee or of any participant or member thereof, with respect to any
        ownership interest in the Global Securities or with respect to the delivery
        to
        any participant, member, beneficial owner or other person (other than the
        Depositary) of any notice or the payment of any amount, under or with respect
        to
        such Global Securities. All notices and communications to be given to the
        Holders and all payments to be made to Holders under the Securities shall
        be
        given or made only to or upon the order of the registered Holders (which
        shall
        be, in the case of a Global Security, the Depositary or its nominee). The
        rights
        of beneficial owners in the Global Securities shall be exercised only through
        the Depositary subject to the applicable rules and procedures of the Depositary.
        

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      Other
        than as set forth in this Indenture, the Trustee, any Paying Agent, the
        Conversion Agent, the Company and the Registrar may rely and shall be fully
        protected in relying upon information furnished by the Depositary with respect
        to its members, participants and any beneficial owners. Except as expressly
        set
        forth in this Indenture, including Sections 2.12(a)(ii) and 2.12(e), the
        Trustee, each Paying Agent, the Conversion Agent, the Company and the Registrar
        shall be entitled to deal with any depositary (including the Depositary),
        and
        any nominee thereof, that is the Holder of any Global Securities as a Holder
        for
        all purposes of this Indenture relating to such Global Securities (including
        the
        payment of principal, Interest and Additional Amounts, if any, and the giving
        of
        instructions or directions by or to the owner or Holder of a beneficial
        ownership interest in such Global Securities) as the sole Holder of such
        Global
        Securities and shall have no obligations to the beneficial owners thereof.
        None
        of the Trustee, any Paying Agent, the Conversion Agent, the Company or the
        Registrar shall have any responsibility or liability for any acts or omissions
        of any such depositary with respect to such Global Securities, for the records
        of any such depositary, including records in respect of beneficial ownership
        interests in respect of any such Global Securities, for any transactions
        between
        such depositary and any participant in such depositary or between or among
        any
        such depositary, any such participant and/or any holder or owner of a beneficial
        interest in such Global Securities or for any transfers of beneficial interests
        in any such Global Securities.

       

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

       

      The
        Trustee shall have no responsibility for the actions or omissions of the
        Depositary, or the accuracy of the books and records of the
        Depositary.

       

      Section
        2.13.
        CUSIP Numbers.
        The
        Company may issue the Securities with one or more “CUSIP,” “ISIN” or other
        similar numbers (if then generally in use), and, if so, the Trustee shall
        use
“CUSIP,” “ISIN” or other similar numbers in notices as a convenience to Holders;
provided
        that any
        such notice may state that no representation is made as to the correctness
        of
        such numbers either as printed on the Securities or as contained in any notice
        of a purchase and that reliance may be placed only on the other identification
        numbers printed on the Securities. The Company shall promptly notify the
        Trustee
        of any change in the CUSIP, ISIN or other similar numbers.

       

       

      
        
          
          

        

        
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      Section
        2.14.
        Payment. If
        any
        Interest Payment Date, Stated Maturity, Fundamental Change Repurchase Date,
        Conversion Settlement Date or other date when payment is required to be made
        under this Indenture falls on a day that is not a Business Day, then the
        required payment will be made on the next succeeding Business Day with the
        same
        force and effect as if made on the date that the payment was due, and no
        additional Interest will accrue on that payment for the period from and after
        the Interest Payment Date, Stated Maturity, Fundamental Change Repurchase
        Date,
        Conversion Settlement Date or other payment date, as the case may be, to
        that
        next succeeding Business Day. 

       

      
        
          
          

        

        
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      ARTICLE
        3

      Repurchases

       

      Section
        3.01.
        Company’s Right to Redeem.
        The
        Securities shall not be redeemable at the option of the Company prior to
        their
        Stated Maturity. 

       

      Section
        3.02.
        Repurchase of Securities at Option of the Holder Upon a Fundamental
        Change. (a)
        If a
        Fundamental Change occurs, each Holder shall have the right, at such Holder’s
        option, to require the Company to repurchase for cash all of such Holder’s
        Securities, or any portion thereof that is equal to or an integral multiple
        of
        $1,000 principal amount, at a repurchase price equal to 100% of the principal
        amount of the Securities repurchased, plus accrued and unpaid Interest and
        accrued and unpaid Additional Amounts, if any, on those Securities (the
“Fundamental
        Change Repurchase Price”)
        to,
        but not including, the date that is 30 calendar days following the date of
        the
        notice of a Fundamental Change mailed by the Company pursuant to Section
        3.02(b)
        (the “Fundamental
        Change Repurchase Date”),
        subject to satisfaction by or on behalf of the Holder of the requirements
        set
        forth in Section 3.02(c). If the Fundamental Change Repurchase Date is on
        a date
        that is after an Interest Record Date and on or prior to the corresponding
        Interest Payment Date, the Fundamental Change Repurchase Price shall be 100%
        of
        the principal amount of the Securities repurchased and shall include accrued
        and
        unpaid Interest and accrued and unpaid Additional Amounts, if any, to, but
        not
        including, the Fundamental Change Repurchase Date.

       

      (b) No
        later
        than 15 calendar days after the occurrence of a Fundamental Change, the Company
        shall mail a Company Notice of the Fundamental Change (substantially in the
        form
        of Exhibit D) by mail to the Trustee and to each Holder (and to beneficial
        owners if required by applicable law). Simultaneously with providing such
        notice, the Company will issue a press release. The Company Notice shall
        include
        a form of Fundamental Change Repurchase Notice to be completed by the Holder
        and
        shall state:

       

      (i) briefly,
        the events causing a Fundamental Change and the date of such Fundamental
        Change;

       

      (ii) the
        date
        by which the Fundamental Change Repurchase Notice pursuant to this Section
        3.02
        must be delivered to the Paying Agent in order for a Holder to exercise the
        repurchase rights;

       

      (iii) the
        Fundamental Change Repurchase Date;

       

      (iv) the
        Fundamental Change Repurchase Price;

       

      (v) the
        name
        and address of the Paying Agent and the Conversion Agent;

       

      (vi) the
        Applicable Conversion Rate;

       

      
        
          
          

        

        
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      (vii) that
        the
        Securities as to which a Fundamental Change Repurchase Notice has been given
        may
        be converted if they are otherwise convertible pursuant to Article 10 hereof
        only if the Fundamental Change Repurchase Notice has been withdrawn in
        accordance with the terms of this Indenture; 

       

      (viii) that
        the
        Securities must be surrendered to the Paying Agent (by effecting book entry
        transfer of the Securities or delivering Certificated Securities, together
        with
        necessary endorsements, as the case may be) to collect payment;

       

      (ix) that
        the
        Fundamental Change Repurchase Price for any Security as to which a Fundamental
        Change Repurchase Notice has been duly given and not withdrawn shall be paid
        promptly following the later of the Business Day immediately following the
        Fundamental Change Repurchase Date and the time of surrender of such Security
        as
        described in clause (viii);

       

      (x) briefly,
        the procedures the Holder must follow to exercise rights under this Section
        3.02;

       

      (xi) briefly,
        the conversion rights, if any, that exist on the Securities at the date of
        the
        Company Notice and as a result of such Fundamental Change;

       

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

       

      (xiii) that,
        unless the Company defaults in making payment of such Fundamental Change
        Repurchase Price on Securities for which a Fundamental Change Repurchase
        Notice
        is submitted, Interest and Additional Amounts, if any, on Securities surrendered
        for purchase by the Company shall cease to accrue from and after the Fundamental
        Change Repurchase Date; and

       

      (xiv) the
        CUSIP, “ISIN” or other similar number(s), as the case may be, of the
        Securities.

       

      At
        the
        Company’s request, the Trustee shall give such Company Notice to each Holder in
        the Company’s name and at the Company’s expense; provided,
        however,
        that,
        in all cases, the text of such Company Notice shall be prepared by the
        Company.

       

      (c) A
        Holder
        may exercise its rights specified in this Section 3.02 upon delivery of a
        written notice of repurchase (a “Fundamental
        Change Repurchase Notice”)
        to the
        Paying Agent at any time on or prior to the close of business on
        the

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      Business
        Day immediately preceding the Fundamental Change Repurchase Date,
        stating:

       

      (i) if
        Certificated Securities have been issued, the certificate number(s) of the
        Securities which the Holder shall deliver to be repurchased or, if Certificated
        Securities have not been issued, the Fundamental Change Repurchase Notice
        shall
        comply with the appropriate Depositary procedures for book-entry
        transfer;

       

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

       

      (iii) that
        such
        Security shall be repurchased pursuant to the terms and conditions specified
        in
        Section 4 of the Securities and in this Indenture.

       

      The
        delivery of such Security (together with all necessary endorsements) and
        the
        Fundamental Change Repurchase Notice to the Paying Agent at the offices of
        the
        Paying Agent shall be a condition to the receipt by the Holder of the
        Fundamental Change Repurchase Price therefor; provided,
        however,
        that
        such Fundamental Change Repurchase Price shall be so paid pursuant to this
        Section 3.02 only if the Security (together with all necessary endorsements)
        so
        delivered to the Paying Agent shall conform in all respects to the description
        thereof set forth in the related Fundamental Change Repurchase
        Notice.

       

      The
        Company shall repurchase from the Holder thereof, pursuant to this Section
        3.02,
        a portion of a Security if the principal amount of such portion is $1,000
        or an
        integral multiple of $1,000. Provisions of this Indenture that apply to the
        repurchase of all of a Security also apply to the repurchase of such portion
        of
        such Security.

       

      Any
        repurchase by the Company contemplated pursuant to the provisions of this
        Section 3.02 shall be consummated by the delivery of the Fundamental Change
        Repurchase Price promptly following the later of the Business Day following
        the
        Fundamental Change Repurchase Date or the time of delivery of such Security
        (together with all necessary endorsements or notifications of book-entry
        transfer).

       

      Notwithstanding
        the foregoing, Holders shall not have the right to require the Company to
        repurchase the Securities upon a Fundamental Change described in clause (3)
        of
        the definition thereof if more than 90% of the consideration in the transaction
        or transactions constituting such Fundamental Change consists of shares of
        common stock traded or to be traded immediately following such Fundamental
        Change on a U.S. national or regional securities exchange, and, as a result
        of
        such transaction or transactions, the Securities become convertible into
        such
        common stock (and any rights attached thereto) subject to the settlement
        provisions of Section 10.03.

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      Notwithstanding
        anything herein to the contrary, any Holder delivering to the Paying Agent
        the
        Fundamental Change Repurchase Notice contemplated by this Section 3.02(c)
        shall
        have the right to withdraw such Fundamental Change Repurchase Notice by delivery
        of a written notice of withdrawal to the Paying Agent in accordance with
        Section
        3.03(b) at any time prior to the close of business on the Business Day
        immediately preceding the Fundamental Change Repurchase Date.

       

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

       

      Section
        3.03.
        Effect of Fundamental Change Repurchase Notice. (a)
         Upon
        receipt by the Paying Agent of the Fundamental Change Repurchase Notice
        specified in Section 3.02, the Holder of the Security in respect of which
        such
        Fundamental Change Repurchase Notice was given shall (unless such Fundamental
        Change Repurchase Notice is withdrawn as specified in Section 3.03(b))
        thereafter be entitled solely to receive the Fundamental Change Repurchase
        Price
        with respect to such Security whether or not the Security is, in fact, properly
        delivered. Such Fundamental Change Repurchase Price shall be paid to such
        Holder, subject to receipt of funds and/or securities by the Paying Agent,
        promptly following the later of (x) the Business Day following the Fundamental
        Change Repurchase Date with respect to such Security (provided the conditions
        in
        Section 3.02 have been satisfied) and (y) the time of delivery of such Security
        to the Paying Agent by the Holder thereof in the manner required by Section
        3.02. Securities in respect of which a Fundamental Change Repurchase Notice
        has
        been given by the Holder thereof may not be converted pursuant to and to
        the
        extent permitted by Article 10 hereof on or after the date of the delivery
        of
        such Fundamental Change Repurchase Notice unless such Fundamental Change
        Repurchase Notice has first been validly withdrawn as specified in Section
        3.03(b).

       

      (b) A
        Fundamental Change Repurchase Notice may be withdrawn by means of a written
        notice of withdrawal delivered to the office of the Paying Agent at any time,
        if
        received by the Paying Agent prior to the close of business on the Business
        Day
        immediately preceding the Fundamental Change Repurchase Date
        specifying:

       

      (1) the
        principal amount, if any, of such Security which remains subject to the original
        Fundamental Change Repurchase Notice and which has been or shall be delivered
        for purchase by the Company,

       

      (2) if
        Certificated Securities have been issued, the certificate number, if any,
        of the
        Security in respect of which such notice of withdrawal is being submitted
        (or,
        if Certificated Securities have not been issued, that such withdrawal notice
        shall comply with the appropriate Depositary procedures), and

       

      
        
          
          

        

        
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      (3) the
        principal amount of the Security with respect to which such notice of withdrawal
        is being submitted.

       

      Section
        3.04.
        Deposit of Fundamental Change Repurchase Price.
        Prior
        to
        11:00 a.m. (local time in the City of New York) on the Business Day following
        the Fundamental Change Repurchase Date the Company shall deposit with the
        Paying
        Agent (or, if the Company or a Subsidiary or an Affiliate of either of them
        is
        acting as the Paying Agent, shall segregate and hold in trust as provided
        in
        Section 2.04) an amount of cash in immediately available funds sufficient
        to pay
        the aggregate Fundamental Change Repurchase Price of all the Securities or
        portions thereof which are to be purchased as of the Fundamental Change
        Repurchase Date.

       

      Section
        3.05.
        Securities Purchased in Part.
        Any
        Certificated Security which is to be purchased only in part (but any such
        partial purchase shall be in minimum principal amounts equal to $1,000 or
        an
        integral multiple of $1,000) shall be surrendered at the office of the Paying
        Agent (with, if the Company or the Trustee so requires, due endorsement by,
        or a
        written instrument of transfer satisfactory to the Company and the Trustee
        duly
        executed by, the Holder thereof or such Holder’s attorney duly authorized in
        writing) and the Company shall execute and the Trustee shall authenticate
        and
        deliver to the Holder of such Security, without service charge, a new Security
        or Securities, of any authorized denomination as requested by such Holder
        in
        aggregate principal amount equal to, and in exchange for, the portion of
        the
        principal amount of the Security so surrendered which is not
        purchased.

       

      Section
        3.06.
        Covenant to Comply with Securities Laws upon Purchase of
        Securities.
        When
        complying with the provisions of Section 3.02 hereof (provided that such
        offer
        or purchase constitutes an “issuer tender offer” for purposes of Rule 13e-4
        (which term, as used herein, includes any successor provision thereto) under
        the
        Exchange Act at the time of such offer or purchase), and subject to any
        exemptions available under applicable law, the Company shall, if then
        applicable, (i) comply with Rule 13e-4 and Rule 14e-1 (or any successor
        provision) and any other applicable tender offer rules under the Exchange
        Act,
        (ii) file the related Schedule TO (or any successor schedule, form or report)
        under the Exchange Act, and (iii) otherwise comply with all Federal and state
        securities laws so as to permit the rights and obligations under Section
        3.02 to
        be exercised in the time and in the manner specified in Section
        3.02.

       

      Section
        3.07.
        Repayment to the Company.
        The
        Trustee and the Paying Agent shall return to the Company any cash that remains
        unclaimed as provided in Section 12 of the Securities, together with interest,
        if any, thereon (subject to the provisions of Section 7.01(f)), held by them
        for
        the payment of the Fundamental Change Repurchase Price. 

       

      
        
          
          

        

        
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      ARTICLE
        4

      Covenants

       

      Section
        4.01.
        Payment of Securities.
        The
        Company shall make all payments in respect of the Securities on the dates
        and in
        the manner provided in the Securities or pursuant to this Indenture. Any
        amounts
        of cash in immediately available funds or shares of Common Stock to be given
        to
        the Trustee or Paying Agent shall be deposited with the Trustee or Paying
        Agent
        by 11:00 a.m., New York City time, by the Company on the applicable payment
        date. The principal amount of, and Interest and Additional Amounts, if any,
        on
        the Securities, and the Fundamental Change Repurchase Price and amounts payable
        on conversion shall be considered paid on the applicable date due if on such
        date (which, in the case of a Fundamental Change Repurchase Price, shall
        be on
        the Business Day immediately following the applicable Fundamental Change
        Repurchase Date) the Trustee or the Paying Agent holds, in accordance with
        this
        Indenture, cash or securities, if permitted hereunder, sufficient to pay
        all
        such amounts then due.

       

      Section
        4.02.
        SEC
        and Other Reports.
        The
        Company shall deliver to the Trustee, within 15 days after it is required
        to
        file such annual and quarterly reports, information, documents and other
        reports
        with the SEC, copies of its annual report and of the information, documents
        and
        other reports (or copies of such portions of any of the foregoing as the
        SEC may
        by rules and regulations prescribe) which the Company is required to file
        with
        the SEC pursuant to Section 13 or 15(d) of the Exchange Act; provided,
        however,
        that,
        to the extent permitted by law, any such document, information and other
        reports
        filed and publicly available through the SEC’s EDGAR filing system shall be
        deemed to have been received by the Trustee. The Company shall also comply
        with
        the other provisions of TIA Section 314(a). Delivery of such reports,
        information and documents to the Trustee is for informational purposes only
        and
        the Trustee’s receipt of such shall not constitute constructive notice of any
        information contained therein or determinable from information contained
        therein, including the Company’s compliance with any of its covenants hereunder
        (as to which the Trustee is entitled to rely exclusively on Officer’s
        Certificates).

       

      Section
        4.03.
        Compliance Certificate.
        The
        Company shall deliver to the Trustee within 120 days after the end of each
        fiscal year of the Company (beginning with the fiscal year ending February
        2,
        2008) an Officer’s Certificate, stating whether or not to the 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
        status thereof of which such Officer may have knowledge and otherwise comply
        with Section 314(a)(4) of the TIA.

       

      The
        Company shall, so long as any of the Securities are outstanding, deliver
        to the
        Trustee, within 30 days of any executive officer of the Company
        becoming

       

      
        
          
          

        

        
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      aware
        of
        any Default or Event of Default, an Officer’s Certificate specifying such
        Default or Event of Default and what action the Company is taking or proposes
        to
        take with respect thereto.

       

      Section
        4.04.
        Further Instruments and Acts.
        The
        Company shall execute and deliver such further instruments and do such further
        acts as may be reasonably necessary or proper to carry out more effectively
        the
        purposes of this Indenture.

       

      Section
        4.05.
        Maintenance of Office or Agency.
        The
        Company shall maintain in the Borough of Manhattan, the City of New York,
        an
        office or agency of the Trustee, Registrar, Paying Agent and Conversion Agent
        where Securities may be presented or surrendered for payment, where Securities
        may be surrendered for registration of transfer, exchange, purchase or
        conversion and where notices and demands to or upon the Company in respect
        of
        the Securities and this Indenture may be served. The office of the Trustee,
        located at 45 Broadway, 14th Floor, New York, New York 10006, shall initially
        be
        such office or agency for all of the aforesaid purposes. Such office or agency
        need not be the principal securities clearance or processing office of the
        Trustee. The Company shall give prompt written notice to the Trustee of the
        location, and of any change in the location, of any such office or agency
        (other
        than a change in the location of the office of 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 address of the Trustee set
        forth in Section 11.02.

       

      The
        Company may also from time to time designate one or more other offices or
        agencies where the Securities may be presented or surrendered for any or
        all
        such purposes and may from time to time rescind such designations; provided,
        however,
        that no
        such designation or rescission shall in any manner relieve the Company of
        its
        obligation to maintain an office or agency in the Borough of Manhattan, the
        City
        of New York, for such purposes.

       

      Section
        4.06.
        Delivery of Certain Information. At
        any
        time when the Company is not subject to Section 13 or 15(d) of the Exchange
        Act
        until such time as neither the Securities nor any shares of Common Stock
        issued
        upon conversion of the Securities are “restricted securities” within the meaning
        of Rule 144 of the Securities Act, upon the request of a Holder or any
        beneficial owner of Securities or Holder or beneficial owner of shares of
        Common
        Stock issued upon conversion thereof, the Company shall promptly furnish
        or
        cause to be furnished Rule 144A Information (as defined below) to such Holder
        or
        any beneficial owner of Securities or Holder or beneficial owner of shares
        of
        Common Stock issued upon conversion thereof, or to a prospective purchaser
        of
        any such security designated by any such Holder or beneficial owner, as the
        case
        may be, to the extent required to permit compliance by such Holder or beneficial
        owner with Rule 144A in connection with the resale of any such security.
        “Rule
        144A Information”
shall
        be such information as is specified pursuant to Rule 144A(d)(4) under the
        Securities Act. 

       

      
        
          
          

        

        
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      Whether
        a
        person is a beneficial owner shall be determined by the Company to the Company’s
        reasonable satisfaction.

       

      Section
        4.07.
        Additional Amounts Notice.
        In
        the
        event that the Company is required to pay Additional Amounts to Holders of
        Securities pursuant to the Registration Rights Agreement, the Company shall
        provide written notice (“Additional
        Amounts Notice”)
        to the
        Trustee of its obligation to pay Additional Amounts prior to the required
        payment date for the Additional Amounts, and the Additional Amounts Notice
        shall
        set forth the amount of Additional Amounts to be paid by the Company on such
        payment date. The Trustee shall not at any time be under any duty to any
        Holder
        of Securities to determine the Additional Amounts, or with respect to the
        nature, extent or calculation of the amount of Additional Amounts when made,
        or
        with respect to the method employed in such calculation of the Additional
        Amounts.

       

      Section
        4.08.
        Resale of the Securities. During
        the period of two years after the last date of original issuance of the
        Securities, the Company shall not, and shall not permit any of its Affiliates
        to, resell any of the Securities that constitute “restricted securities” under
        Rule 144 under the Securities Act that have been reacquired by any of
        them.

       

       

      ARTICLE
        5

      Successor
        Company

       

      Section
        5.01.
        When Company May Merge or Transfer Assets.
        The
        Company shall not consolidate with or merge with or into any other person
        or
        convey, transfer or lease all or substantially all its assets to another
        person,
        unless:

       

      (a) the
        resulting, surviving or transferee person (the “successor
        company”)
        shall
        be a corporation organized and existing under (i) the laws of the United
        States
        of America, any state thereof or the District of Columbia, or (ii) any other
        jurisdiction so long as the successor company agrees to submit to service
        of
        process in any state in the United States of America or the District of Columbia
        and, in the case of clause (ii) above, the successor company provides a full
        and
        unconditional indemnity and provision for additional amounts for any incremental
        amounts required to be withheld from payments or deliveries to Holders or
        beneficial owners of the Securities under applicable United States or foreign
        laws, rules, regulations or authorities, and any other incremental tax
        liabilities or costs of such Holders or beneficial owners as a result of
        such
        merger or other transaction, and in each case the successor company (if not
        the
        Company) will expressly assume, by a supplemental indenture, executed and
        delivered to the Trustee, in form reasonably satisfactory to the Trustee,
        all of
        the Company’s obligations under the Securities and this Indenture;

       

      
        
          
          

        

        
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      (b) immediately
        after giving effect to such transaction, no Default or Event of Default shall
        have occurred and be continuing; 

       

      (c) the
        Company shall have delivered to the Trustee an Officer’s Certificate and an
        Opinion of Counsel, each stating that such consolidation, merger or transfer
        and, if a supplemental indenture is required in connection with such
        transaction, such supplemental indenture, comply with this Article 5;
        and

       

      (d) 
        the
        Company shall have delivered to the Trustee an Opinion of Counsel to the
        effect
        that the Holders or beneficial owners of the Securities will not recognize
        income, gain or loss for U.S. federal income tax purposes as a result of
        such
        transaction and will be subject to U.S. federal income tax in no greater
        amount,
        in substantially the same manner and at no earlier times as would have been
        the
        case if the transaction had not occurred, except where any of the foregoing
        are
        subject to the indemnification provided for in Section 5.01(a)
        above.

       

      For
        purposes of the foregoing, the transfer (by lease, assignment, sale or
        otherwise) of the properties and assets of one or more Subsidiaries (other
        than
        to the Company or another Subsidiary), which, if such assets were owned by
        the
        Company, would constitute all or substantially all of the properties and
        assets
        of the Company and its Subsidiaries, taken as a whole, shall be deemed to
        be the
        transfer of all or substantially all of the properties and assets of the
        Company.

       

      The
        successor company formed by such consolidation or into which the Company
        is
        merged or the successor company to which such conveyance, transfer, lease
        or
        other disposition is made shall succeed to, and be substituted for, and may
        exercise every right and power of, the Company under this Indenture with
        the
        same effect as if such successor had been named as the Company herein; and
        thereafter, except in the case of a conveyance, transfer or lease of all
        or
        substantially all the Company’s assets (in which case the Company will not be
        discharged from the obligation to pay the principal amount of the Securities
        and
        Interest, including Additional Amounts, if any) and except for obligations,
        if
        any, that the Company may have under a supplemental indenture, the Company
        shall
        be discharged from all obligations and covenants under this Indenture and
        the
        Securities. Subject to Section 9.06, the Company, the Trustee and the successor
        company shall enter into a supplemental indenture to evidence the succession
        and
        substitution of such successor company and such discharge and release of
        the
        Company.

       

       

      ARTICLE
        6

      Defaults
        and Remedies

       

      Section
        6.01.
        Events of Default.
        So
        long
        as any Securities are outstanding, each of the following shall be an
“Event
        of Default”:

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

        (a) following
        the exercise by the Holder of the right to convert a Security in accordance
        with
        Article 10 hereof, the Company fails to comply with its obligations to deliver
        the cash or shares of Common Stock, if any, required to be delivered as part
        of
        the applicable Settlement Shares or Settlement Amount on the applicable
        Conversion Settlement Date;

       

      (b) the
        Company defaults in its obligation to provide timely notice of a Fundamental
        Change to the Trustee and each Holder as required under Section
        3.02(b);

       

      (c) the
        Company defaults in the payment of the principal amount of any Security when
        due
        at maturity, upon repurchase or otherwise (including, without limitation,
        upon
        the exercise by a Holder of its right to require the Company to repurchase
        such
        Securities pursuant to and in accordance with Section 3.02 hereof);

       

      (d) the
        Company defaults in the payment of any Interest, including Additional Amounts,
        if any, when due and payable, and continuance of such default for a period
        of 30
        days past the applicable due date;

       

      (e) the
        Company fails to perform or observe any term, covenant or warranty or agreement
        in the Securities or this Indenture (other than those referred to in clause
        (a)
        through clause (d) above) and such failure continues for 60 days after receipt
        by the Company of a Notice of Default;

       

      (f) the
        Company fails to make any payment by the end of any applicable grace period
        after maturity or acceleration of indebtedness for borrowed money of the
        Company
        or its Subsidiaries in an amount in excess of $40,000,000 and continuance
        of
        such failure;

       

      (g) the
        Company or any of its Significant Subsidiaries fails to pay final judgments
        aggregating in excess of $40,000,000, which judgments are not paid, discharged
        or stayed for a period of 60 days; 

       

      (h) the
        entry
        by a court having jurisdiction in the premises of (i) a decree or order for
        relief in respect of the Company or any of its Significant Subsidiaries,
        in an
        involuntary case or proceeding under any applicable bankruptcy, insolvency,
        reorganization or other similar law (any “Bankruptcy
        Law”)
        or
        (ii) a decree or order adjudging the Company or any Significant Subsidiary,
        a
        bankrupt or insolvent, or approving as properly filed a petition seeking
        reorganization, arrangement, adjustment or composition of or in respect of
        the
        Company or any Significant Subsidiary, under any applicable Bankruptcy Law,
        or
        appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
        or
        other similar official of the Company or any Significant Subsidiary or of
        any
        substantial part of any of their property, or ordering the winding up or
        liquidation of its affairs, and the continuance of any such decree or order
        for
        relief or any such other decree or order described in clause (i) or (ii)
        above
        is unstayed and in effect for a period of 60 consecutive days; and

       

      
        
          
          

        

        
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      (i) (i)
        the
        commencement by the Company or any Significant Subsidiary, of a voluntary
        case
        or proceeding under any applicable Bankruptcy Law or of any other case or
        proceeding to be adjudicated a bankrupt or insolvent, or (iv)
        the
        consent by the Company or any Significant Subsidiary, to the entry of a decree
        or order for relief in respect of the Company or any Significant Subsidiary,
        in
        an involuntary case or proceeding under any applicable Bankruptcy Law or
        to the
        commencement of any bankruptcy or insolvency case or proceeding against the
        Company or any Significant Subsidiary, or (v)
        the
        filing by the Company or any Significant Subsidiary, of a petition or answer
        or
        consent seeking reorganization or relief under any applicable Bankruptcy
        Law, or
(vi)
        the
        consent by the Company or any Significant Subsidiary to the filing of such
        petition or to the appointment of or the taking possession by a custodian,
        receiver, liquidator, assignee, trustee, sequestrator or other similar official
        of the Company or any Significant Subsidiary or of any substantial part of
        any
        of their property, or (vii)
        the
        making by the Company or any Significant Subsidiary, of a general assignment
        for
        the benefit of creditors, or the admission by the Company or any Significant
        Subsidiary, in writing of its inability to pay its debts generally as they
        become due.

       

      The
        foregoing shall constitute Events of Default whatever the reason for any
        such
        Event of Default and whether it is voluntary or involuntary or is effected
        by
        operation of law or pursuant to any judgment, decree or order of any court
        or
        any order, rule or regulation of any administrative or governmental
        body.

       

      For
        the
        avoidance of doubt, clause (e) above shall not constitute an Event of Default
        until the Trustee notifies the Company, or the Holders of at least 25% in
        aggregate principal amount of the Securities at the time outstanding notify
        the
        Company and the Trustee, of such default and the Company does not cure such
        default (and such default is not waived) within the time specified in clause
        (e)
        above (subject to the provisions of Section 6.01(j) below) after actual receipt
        of such notice. Any such notice must specify the default, demand that it
        be
        remedied and state that such notice is a “Notice
        of Default.”

       

      (j) Notwithstanding
        anything to the contrary in this Indenture, to the extent elected by the
        Company
        in its sole discretion, the sole remedy for an Event of Default described
        in
        clause (e) above relating to the failure to comply with Section 4.02 hereof
        or
        the failure to comply with Section 314(a)(1) of the TIA, if applicable, will
        for
        the first 60 days after the occurrence of such an Event of Default consist
        exclusively of the right to receive additional interest on the Securities
        at an
        annual rate equal to 0.25% of the principal amount of the Securities (the
        “additional
        interest”).
        This
        additional interest will be in addition to any Additional Amounts on the
        Securities that may accrue as a result of a Registration Default (as defined
        in
        the Registration Rights Agreement) and will be payable on the same dates
        and in
        the same manner as Interest accruing on the Securities. The additional interest
        will accrue on all outstanding Securities from and including the date on
        which
        an Event of Default relating to the failure to comply with Section 4.02 hereof
        or the failure to comply with Section 314(a)(1) of the TIA first
        occurs

       

      
        
          
          

        

        
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      to,
        but
        not including, the 60th day thereafter (or such earlier date on which the
        Event
        of Default relating to the failure to comply with Section 4.02 or the failure
        to
        comply with Section 314(a)(1) of the TIA shall have been cured or waived).
        On
        such 60th day (or earlier, if the Event of Default relating to the failure
        to
        comply with Section 4.02 or the failure to comply with Section 314(a)(1)
        of the
        TIA is cured or waived prior to such 60th day), such additional interest
        will
        cease to accrue and, if the Event of Default relating to the failure to comply
        with Section 4.02 or the failure to comply with Section 314(a)(1) of the
        TIA has
        not been cured or waived prior to such 60th day, the Securities will be subject
        to acceleration as provided in Section 6.02 hereof. The provisions of this
        paragraph will not affect the rights of Holders of Securities in the event
        of
        the occurrence of any other Event of Default. In the event the Company does
        not
        timely elect to pay the additional interest upon an Event of Default relating
        to
        the failure to comply with Section 4.02 or the failure to comply with Section
        314(a)(1) of the TIA in accordance with this paragraph, the Securities will
        be
        subject to acceleration as provided in Section 6.02 hereof. To make such
        election, the Company must notify the Holders, the Trustee and the Paying
        Agent
        of such election on or prior to the date such failure to comply with Section
        4.02 or the failure to comply with Section 314(a)(1) of the TIA becomes an
        Event
        of Default.

       

      Section
        6.02.
        Acceleration.
        Subject
        to Section 6.01(j), if an Event of Default (other than an Event of Default
        specified in Section 6.01(h) or Section 6.01(i) with respect to the Company)
        occurs and is continuing (the Event of Default not having been cured or waived),
        the Trustee by notice to the Company, or the Holders of at least 25% in
        aggregate principal amount of the Securities at the time outstanding by notice
        to the Company and the Trustee, may declare the principal amount of the
        Securities and any accrued and unpaid Interest and any accrued and unpaid
        Additional Amounts, if any, on all the Securities to be immediately due and
        payable. Upon such a declaration, such accelerated amount shall be due and
        payable immediately. If an Event of Default specified in Section 6.01(h)or
        Section 6.01(i) with respect to the Company occurs and is continuing, the
        principal amount of the Securities and any accrued and unpaid Interest and
        accrued and unpaid Additional Amounts, if any, on all the Securities shall
        become and be immediately due and payable without any declaration or other
        act
        on the part of the Trustee or any Securityholders. The Holders of a majority
        in
        aggregate principal amount of the Securities at the time outstanding, by
        notice
        to the Trustee and the Company (and without notice to any other Securityholder)
        may rescind an acceleration and its consequences, and thereby waive the Events
        of Default giving rise to such acceleration, if the rescission would not
        conflict with any judgment or decree and if all existing Events of Default
        have
        been cured or waived except nonpayment of the principal amount of the Securities
        and any accrued and unpaid Interest and any accrued and unpaid Additional
        Amounts, if any, that have become due solely as a result of acceleration,
        which
        amounts, if such rescission is effective, shall no longer be payable as a
        result
        of acceleration. No such rescission shall affect any subsequent Event of
        Default
        or impair any right consequent thereto.

       

      
        
          
          

        

        
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      Section
        6.03.
        Other Remedies.
        If
        an
        Event of Default occurs and is continuing, the Trustee may pursue any available
        remedy to collect the payment of the principal amount of the Securities and
        any
        accrued and unpaid Interest and accrued and unpaid Additional Amounts, if
        any,
        on the Securities or to enforce the performance of any provision of the
        Securities or this Indenture.

       

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

       

      Section
        6.04.
        Waiver of Past Defaults.
        The
        Holders of a majority in aggregate principal amount of the Securities at
        the
        time outstanding, by notice to the Trustee (and without notice to any other
        Securityholder), may waive any existing or past Default and its consequences
        except (1) an Event of Default described in clauses (a), (b), (c) and (d)
        of
        Section 6.01 or (2) an Event of Default in respect of a provision that under
        Section 9.02 cannot be amended without the consent of each Securityholder
        affected, which, in each case may be waived only upon the written consent
        of
        each affected Holder. When a Default is waived, it is deemed cured, but no
        such
        waiver shall extend to any subsequent or other Default or impair any consequent
        right. This Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the
        TIA and
        such Section 316(a)(1)(B) is hereby expressly excluded from this Indenture,
        as
        permitted by the TIA.

       

      Section
        6.05.
        Control by Majority.
        The
        Holders of a majority in aggregate principal amount of the Securities at
        the
        time outstanding may direct the time, method and place of conducting any
        proceeding for any remedy available to the Trustee or of exercising any trust
        or
        power conferred on the Trustee. However, the Trustee may refuse to follow
        any
        direction that conflicts with law or this Indenture or that the Trustee
        determines is unduly prejudicial to the rights of other Securityholders or
        would
        involve the Trustee in personal liability; provided,
        that
        the Trustee may take any other action deemed proper by the Trustee which
        is not
        inconsistent with such direction or this Indenture. Prior to taking any action
        under this Indenture, the Trustee may require indemnity satisfactory to it
        in
        its sole discretion against all losses and expenses caused by taking or not
        taking such action. 

       

      Section
        6.06.
        Limitation on Suits.
        A
        Securityholder may not pursue any remedy with respect to this Indenture or
        the
        Securities, except in the case of a Default due to the non-payment of the
        principal amount of the Securities, any accrued and unpaid Interest, any
        accrued
        and unpaid Additional Amounts or any unpaid Settlement Amounts or Settlement
        Shares, unless:

       

      
        
          
          

        

        
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      (1) the
        Holder gives to the Trustee written notice stating that a Default is
        continuing;

       

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

       

      (3) the
        Trustee does not comply with the request within 60 days after receipt of
        such
        notice, request and offer of security or indemnity; and 

       

      (4) the
        Holders of a majority in aggregate principal amount of the Securities at
        the
        time outstanding do not give the Trustee a direction inconsistent with the
        request during such 60-day period.

       

      A
        Securityholder may not use this Indenture to prejudice the rights of any
        other
        Securityholder or to obtain a preference or priority over any other
        Securityholder.

       

      Section
        6.07.
        Rights of Holders to Receive Payment.
        Notwithstanding
        any other provision of this Indenture, the right of any Holder to receive
        payment of the principal amount of the Securities and any accrued and unpaid
        Interest and any accrued and unpaid Additional Amounts, if any, in respect
        of
        the Securities held by such Holder, on or after the respective due dates
        expressed in the Securities or any Fundamental Change Repurchase Date, and
        to
        convert the Securities in accordance with Article 10, or to bring suit for
        the
        enforcement of any such payment or the right to convert on or after such
        respective dates, shall not be impaired or affected adversely without the
        consent of such Holder.

       

      Section
        6.08.
        Collection Suit by Trustee.
        If
        an
        Event of Default described in Section 6.01 clauses (a) through (d) (other
        than
        (b)) occurs and is continuing, the Trustee may recover judgment in its own
        name
        and as trustee of an express trust against the Company for the whole amount
        owing with respect to the Securities and the amounts provided for in Section
        7.07.

       

      Section
        6.09.
        Trustee May File Proofs of Claim.
        In
        case
        of the pendency of any receivership, insolvency, liquidation, bankruptcy,
        reorganization, arrangement, adjustment, composition or other judicial
        proceeding relative to the Company or any other obligor upon the Securities
        or
        the property of the Company or of such other obligor or their creditors,
        the
        Trustee (irrespective of whether the principal amount of the Securities and
        any
        accrued and unpaid Interest and accrued and unpaid Additional Amounts, if
        any,
        in respect of the Securities shall then be due and payable as therein expressed
        or by declaration or otherwise and irrespective of whether the Trustee shall
        have made any demand on the Company for the payment of any such amount) shall
        be
        entitled and empowered, by intervention in such proceeding or
        otherwise:

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      (a) to
        file
        and prove a claim for the whole principal amount of the Securities and any
        accrued and unpaid Interest and accrued and unpaid Additional Amounts, if
        any,
        and to file such other papers or documents as may be necessary or advisable
        in
        order to have the claims of the Trustee (including any claim for the reasonable
        compensation, expenses, disbursements and advances of the Trustee, its agents
        and counsel or any other amounts due the Trustee under 0) and of the Holders
        allowed in such judicial proceeding, and

       

      (b) to
        collect and receive any moneys or other property payable or deliverable on
        any
        such claims and to distribute the same; and any custodian, receiver, assignee,
        trustee, liquidator, sequestrator or similar official in any such judicial
        proceeding is hereby authorized by each Holder to make such payments to the
        Trustee and, in the event that the Trustee shall consent to the making of
        such
        payments directly to the Holders, to pay the Trustee any amount due it for
        the
        reasonable compensation, expenses, disbursements and advances of the Trustee,
        its agents and counsel, and any other amounts due the Trustee under Section
        7.07.

       

      Nothing
        herein contained shall be deemed to authorize the Trustee to authorize or
        consent to or accept or adopt on behalf of any Holder any plan of
        reorganization, arrangement, adjustment or composition affecting the Securities
        or the rights of any Holder thereof, or to authorize the Trustee to vote
        in
        respect of the claim of any Holder in any such proceeding.

       

      The
        Company agrees not to object to the Trustee participating as a member of
        any
        official committee of creditors of the Company as it deems necessary or
        advisable.

       

      Section
        6.10.
        Priorities.
        Any
        money
        collected by the Trustee pursuant to this Article 6 and, after an Event of
        Default, any money or other property distributable in respect of the Company’s
        obligations under this Indenture, shall be paid out in the following
        order:

       

      FIRST:
        to
        the Trustee (including any predecessor Trustee) for amounts due under Section
        7.07;

       

      SECOND:
        to Securityholders for amounts due and unpaid on the Securities for the
        principal amount of the Securities and any accrued and unpaid Interest and
        accrued and unpaid Additional Amounts, if any, as the case may be, ratably,
        without preference or priority of any kind, according to such amounts due
        and
        payable on the Securities; and

       

      THIRD:
        the balance, if any, to the Company.

       

      The
        Trustee may fix a record date and payment date for any payment to
        Securityholders pursuant to this Section 6.10. At least 15 days before such
        record

       

      
        
          
          

        

        
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      date,
        the
        Trustee shall mail to each Securityholder and the Company a notice that states
        the record date, the payment date and the amount to be paid.

       

      Section
        6.11.
        Undertaking for Costs.
        In
        any
        suit for the enforcement of any right or remedy under this Indenture or in
        any
        suit against the Trustee for any action taken or omitted by it as Trustee,
        a
        court in its discretion may require the filing by any party litigant (other
        than
        the Trustee) in the suit of an undertaking to pay the costs of the suit,
        and the
        court in its discretion may assess reasonable costs, including reasonable
        attorneys’ fees and expenses, against any party litigant in the suit, having due
        regard to the merits and good faith of the claims or defenses made by the
        party
        litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit
        by a
        Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
        aggregate principal amount of the Securities at the time outstanding. This
        Section 6.11 shall be in lieu of Section 315(e) of the TIA and such Section
        315(e) is hereby expressly excluded from this Indenture, as permitted by
        the
        TIA.

       

      Section
        6.12.
        Waiver of Stay, Extension or Usury Laws.
        The
        Company covenants (to the extent that it may lawfully do so) that it shall
        not
        at any time insist upon, or plead, or in any manner whatsoever claim or take
        the
        benefit or advantage of, any stay or extension law or any usury or other
        law
        wherever enacted, now or at any time hereafter in force, which would prohibit
        or
        forgive the Company from paying all or any portion of the principal amount
        of
        the Securities and any accrued and unpaid Interest and accrued and unpaid
        Additional Amounts, if any, on Securities, as contemplated herein, or which
        may
        affect the covenants or the performance of this Indenture; and the Company
        (to
        the extent that it may lawfully do so) hereby expressly waives all benefit
        or
        advantage of any such law, and covenants that it shall not hinder, delay
        or
        impede the execution of any power herein granted to the Trustee, but shall
        suffer and permit the execution of every such power as though no such law
        had
        been enacted.

       

       

      ARTICLE
        7

      Trustee

       

      Section
        7.01.
        Duties of Trustee.

       

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

       

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

       

      
        	 	
                (1)

              	
                the
                  Trustee need perform only those duties that are specifically set
                  forth in
                  this Indenture and no others, and no implied duties shall be read
                  into
                  this Indenture against the Trustee;
                  and

              

      

       

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      
        	 	
                (2)

              	
                in
                  the absence of bad faith on its part, the Trustee may conclusively
                  rely,
                  as to the truth of the statements and the correctness of the opinions
                  expressed therein, upon certificates or opinions furnished to the
                  Trustee
                  and conforming to the requirements of this Indenture, but in the
                  case of
                  any such certificates or opinions which by any provision hereof
                  are
                  specifically required to be furnished to the Trustee, the Trustee
                  shall be
                  under a duty to examine such certificates and opinions to determine
                  whether or not they conform to the requirements of this Indenture,
                  but
                  need not confirm or investigate the accuracy of mathematical calculations
                  or other facts stated therein. This Section 7.01(b) shall be in
                  lieu of
                  Section 315(a) of the TIA and such Section 315(a) is hereby expressly
                  excluded from this Indenture, as permitted by the
                  TIA.

              

      

       

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

       

      
        	 	
                (1)

              	
                this
                  Section 7.01(c) does not limit the effect of Sections 7.01(b) and
                  7.01(g);

              

      

       

      
        	 	
                (2)

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

              

      

       

      
        	 	
                (3)

              	
                the
                  Trustee shall not be liable with respect to any action it takes
                  or omits
                  to take in good faith in accordance with a direction received by
                  it
                  pursuant to Section 6.05.

              

      

       

      Subparagraphs
        (c)0, 0 and 0 shall be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3)
        of
        the TIA and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby
        expressly excluded from this Indenture, as permitted by the TIA.

       

      (d) Every
        provision of this Indenture that in any way relates to the Trustee is subject
        to
        this 0.

       

      (e) The
        Trustee may refuse to perform any duty or exercise any right or power unless
        it
        receives indemnity satisfactory to it against any loss, liability or
        expense.

       

      (f) Money
        held by the Trustee in trust hereunder need not be segregated from other
        funds
        except to the extent required by law. The Trustee (acting in any capacity
        hereunder) shall be under no liability for interest on any money received
        by it
        hereunder unless otherwise agreed in writing with the Company (provided that
        any
        interest earned on money held by the Trustee in trust hereunder shall be
        the
        property of the Company).

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

      (g) No
        provision of this Indenture shall require the Trustee to expend or risk its
        own
        funds or otherwise incur any financial liability in the performance of any
        of
        its duties hereunder, or in the exercise of any of its rights or powers,
        if it
        shall have reasonable grounds for believing that repayment of such funds
        or
        adequate indemnity against such risk or liability is not reasonably assured
        to
        it.

       

      Section
        7.02.
        Rights of Trustee.
        Subject
        to the
        provisions of Section 7.01:

       

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

       

      (b) whenever
        in the administration of this Indenture the Trustee shall deem it desirable
        that
        a matter be proved or established prior to taking, suffering or omitting
        any
        action hereunder, the Trustee (unless other evidence be herein specifically
        prescribed) may, in the absence of bad faith on its part, conclusively rely
        upon
        an Officer’s Certificate;

       

      (c) 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 with due care by it hereunder;

       

      (d) the
        Trustee shall not be liable for any action taken, suffered, or omitted to
        be
        taken by it in good faith which it believes to be authorized or within its
        rights or powers conferred under this Indenture;

       

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

       

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

       

      (g) any
        request or direction of the Company mentioned herein shall be sufficiently
        evidenced by a Company Request or Company Order

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

      and
        any
        resolution of the Board of Directors may be sufficiently evidenced by a Board
        Resolution;

       

      (h) 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, note, other
        evidence of indebtedness or other paper or document, but the Trustee, in
        its
        discretion, may make such further inquiry or investigation into such facts
        or
        matters as it may see fit, and, if the Trustee shall determine to make such
        further inquiry or investigation, it shall be entitled to, during regular
        business hours, examine the books, records and premises of the Company,
        personally or by agent or attorney at the sole cost of the Company and shall
        incur no liability or additional liability of any kind by reason of such
        inquiry
        or investigation;

       

      (i) Except
        with respect to Section 4.01, the Trustee shall have no duty to inquire as
        to
        the performance of the Company with respect to the covenants contained in
        Article 4. In addition, the Trustee shall not be deemed to have knowledge
        of an
        Event of Default except (i) any Default or Event of Default occurring pursuant
        to Section
        6.01(a),
        6.01(c)
        or 6.01(d) or (ii) any Default or Event of Default of which the Trustee shall
        have received written notification from the Company or the Holders of at
        least
        25% in aggregate principal amount of the Securities or obtained actual
        knowledge;

       

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

       

      (k) the
        Trustee may request that the Company deliver an Officer’s Certificate setting
        forth the names of individuals and/or titles of officers authorized at such
        time
        to take specified actions pursuant to this Indenture, which Officer’s
        Certificate may be signed by any person authorized to sign an Officer’s
        Certificate, including any person specified as so authorized in any such
        certificate previously delivered and not superseded; and

       

      (l) the
        permissive rights of the Trustee to take certain actions under this Indenture
        shall not be construed as a duty unless so specified herein. 

       

      Section
        7.03.
        Individual Rights of Trustee.
        The
        Trustee in its individual or any other capacity may become the owner or pledgee
        of Securities and may otherwise deal with the Company or its Affiliates with
        the
        same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
        Conversion Agent, Bid

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

      Solicitation
        Agent or co-registrar may do the same with like rights. However, the Trustee
        must comply with Section 7.10 and Section 7.11.

       

      Section
        7.04.
        Trustee’s Disclaimer.
        The
        Trustee makes no representation as to, and shall have no responsibility for,
        the
        validity or adequacy of this Indenture or the Securities, it shall not be
        accountable for the Company’s use or application by the Company of the
        Securities or of the proceeds from the Securities, it shall not be responsible
        for the correctness of any statement in the registration statement for the
        Securities under the Securities Act or in any offering document for the
        Securities, the Indenture or the Securities (other than its certificate of
        authentication), or the determination as to which beneficial owners are entitled
        to receive any notices hereunder.

       

      Section
        7.05.
        Notice of Defaults.
        If
        a
        Default or Event of Default occurs and if it is known to the Trustee, the
        Trustee shall give to each Securityholder notice of the Default or Event
        of
        Default within 90 days after it occurs, unless such Default or Event of Default
        shall have been cured or waived before the giving of such notice.
        Notwithstanding the preceding sentence, except in the case of a Default or
        Event
        of Default described in clauses (c) and (d) of Section 6.01, the Trustee
        may
        withhold the notice if and so long as a committee of its Responsible Officers
        in
        good faith determines that withholding the notice is in the interest of the
        Securityholders. The preceding sentence shall be in lieu of the proviso to
        Section 315(b) of the TIA and such proviso is hereby expressly excluded from
        this Indenture, as permitted by the TIA. The Trustee shall not be deemed
        to have
        knowledge of a Default or Event of Default unless a Responsible Officer of
        the
        Trustee has received written notice of such Default or Event of Default,
        which
        notice specifically references this Indenture and the Securities.

       

      Section
        7.06.
        Reports by Trustee to Holders.
        Within
        60
        days after each December 31 beginning with December 31, 2007, the Trustee
        shall
        mail to each Securityholder a brief report dated as of such December 31 that
        complies with TIA Section 313(a), if required by such Section 313(a). The
        Trustee also shall comply with TIA Section 313(b).
        Any
        reports required by this Section 7.06 shall be transmitted by mail to
        Securityholders pursuant to TIA Section 313(c).

       

      A
        copy of
        each report at the time of its mailing to Securityholders shall be filed
        with
        the SEC and each securities exchange, if any, on which the Securities are
        listed. The Company agrees to notify the Trustee promptly whenever the
        Securities become listed on any securities exchange and of any delisting
        thereof.

       

      Section
        7.07. Compensation
        and Indemnity.
        The
        Company agrees:

       

      (a) to
        pay to
        the Trustee from time to time such compensation as the Company and the Trustee
        shall from time to time agree in writing for all services rendered by it
        hereunder (which compensation shall not be limited (to the extent permitted
        by
        law) by any provision of law in regard to the compensation of a trustee of
        an
        express trust);

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

      (b) to
        reimburse the Trustee upon its request for all reasonable expenses,
        disbursements and advances incurred or made by the Trustee in accordance
        with
        any provision of this Indenture (including the reasonable compensation and
        the
        expenses, advances and disbursements of its agents and counsel), except any
        such
        expense, disbursement or advance as may be attributable to its own negligence,
        willful misconduct or bad faith; and

       

      (c) to
        indemnify and hold the Trustee and its directors, officers, agents and employees
        (collectively, the “Indemnitees”)
        harmless from and against any and all claims, liabilities, losses, damages,
        fines, penalties and expenses, including out-of-pocket, incidental expenses,
        legal fees and expenses and the allocated costs and expenses of in-house
        counsel
        and legal staff (“Losses”)
        that
        may be imposed on, incurred by or asserted against the Indemnitees or any
        of
        them for following any instruction or other direction upon which the Trustee
        is
        authorized to rely pursuant to the terms of this Indenture. In addition to
        and
        not in limitation of the immediately preceding sentence, the Company also
        agrees
        to indemnify and hold the Indemnitees and each of them harmless from and
        against
        any and all Losses that may be imposed on, incurred by or asserted against
        the
        Indemnitees or any of them in connection with or arising out of the Trustee’s
        performance under this Indenture, provided
        the
        Trustee has not acted with negligence or engaged in willful
        misconduct.

       

      To
        secure
        the Company’s payment obligations in this Section 7.07, the Trustee shall have a
        lien prior to the Securities on all money or property held or collected by
        the
        Trustee, except that held in trust to pay the principal amount of, or the
        Fundamental Change Repurchase Price, Interest or Additional Amounts, if any,
        as
        the case may be, on particular Securities.

       

      The
        Company’s payment, reimbursement and indemnity obligations pursuant to this
        Section 7.07 shall survive the satisfaction and discharge of this Indenture,
        the
        resignation or removal of the Trustee and the termination of this Indenture
        for
        any reason. In addition to and without prejudice to its rights hereunder,
        when
        the Trustee incurs expenses or renders services in connection with an Event
        of
        Default specified in Section 6.01(h) or Section 6.01(i), the expenses, including
        the reasonable charges and expenses of its counsel and the compensation for
        services payable pursuant to Section 7.07(a), are intended to constitute
        expenses of administration under any applicable federal or state bankruptcy,
        insolvency or similar laws.

       

      For
        the
        purposes of this Section 7.07, the “Trustee” shall include any predecessor
        Trustee; provided, however, that except as may be otherwise agreed among
        the
        parties, the negligence, willful misconduct or bad faith of any Trustee
        hereunder shall not affect the rights of any other Trustee
        hereunder.

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

      Section
        7.08.
        Replacement of Trustee.
        The
        Trustee may resign at any time by so notifying the Company; provided,
        however,
        that no
        such resignation shall be effective until a successor Trustee has accepted
        its
        appointment pursuant to this Section 7.08. The Holders of a majority in
        aggregate principal amount of the Securities at the time outstanding may
        remove
        the Trustee by so notifying the Trustee and the Company in writing. The Company
        shall remove the Trustee if:

       

      (1) the
        Trustee fails to comply with Section 7.10;

       

      (2) the
        Trustee is adjudged bankrupt or insolvent;

       

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

       

      (4) the
        Trustee otherwise becomes incapable of acting.

       

      If
        the
        Trustee resigns or is removed or if a vacancy exists in the office of Trustee
        for any reason, the Company shall promptly appoint, by resolution of its
        Board
        of Directors, a successor Trustee.

       

      A
        successor Trustee shall deliver a written acceptance of its appointment to
        the
        retiring Trustee and to the Company satisfactory in form and substance to
        the
        retiring Trustee and the Company. Thereupon the resignation or removal of
        the
        retiring Trustee shall become effective, and the successor Trustee shall
        have
        all the rights, powers and duties of the Trustee under this Indenture. The
        successor Trustee shall mail a notice of its succession to Securityholders.
        The
        retiring Trustee shall promptly transfer all property held by it as Trustee
        to
        the successor Trustee, subject to the lien provided for in Section
        7.07.

       

      If
        a
        successor Trustee does not take office within 30 days after the retiring
        Trustee
        resigns or is removed, the retiring Trustee, the Company or the Holders of
        a
        majority in aggregate principal amount of the Securities at the time outstanding
        may petition any court of competent jurisdiction at the expense of the Company
        for the appointment of a successor Trustee.

       

      If
        the
        Trustee fails to comply with Section 7.10, any Securityholder may petition
        any
        court of competent jurisdiction for the removal of the Trustee and the
        appointment of a successor Trustee.

       

      So
        long
        as no Default or Event of Default shall have occurred and be continuing,
        if the
        Company shall have delivered to the Trustee (i) a Board Resolution appointing
        a
        successor Trustee, effective as of a date at least 30 days after delivery
        of
        such Resolution to the Trustee, and (ii) an instrument of acceptance of such
        appointment, effective as of such date, by such successor Trustee in accordance
        with this Indenture, the Trustee shall be deemed to have resigned as
        contemplated in this Section 7.08, the successor Trustee shall be deemed
        to have
        been accepted as contemplated in this Indenture, all as of such
        date,

       

      
        
          
          

        

        
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      and
        all
        other provisions of this Indenture shall be applicable to such resignation,
        appointment and acceptance.

       

      Section
        7.09.
        Successor Trustee by Merger.
        Any
        corporation or association into which the Trustee in its individual capacity
        may
        be merged or converted or with which it may be consolidated or to which it
        transfers all or substantially all of its corporate trust business or assets,
        or
        any corporation or association resulting from any merger, conversion or
        consolidation to which the Trustee in its individual capacity may be sold
        or
        otherwise transferred, shall be the Trustee hereunder without further
        act.

       

      Section
        7.10.
        Eligibility; Disqualification.
        The
        Trustee shall at all times satisfy the requirements of TIA Sections 310(a)(1)
        and 310(b). The Trustee (or any parent holding company) shall have a combined
        capital and surplus of at least $50,000,000 as set forth in its most recent
        published annual report of condition. Nothing herein contained shall prevent
        the
        Trustee from filing with the Commission the application referred to in the
        penultimate paragraph of TIA Section 310(b).

       

      Section
        7.11.
        Preferential Collection of Claims Against Company.
        The
        Trustee shall comply with TIA Section 311(a), excluding any creditor
        relationship listed in TIA Section 311(b). A Trustee who has resigned or
        been
        removed shall be subject to TIA Section 311(a) to the extent indicated
        therein.

       

       

      ARTICLE
        8

      Discharge
        of Indenture

       

      Section
        8.01.
        Discharge of Liability on Securities.
        When
        (i)
        the Company causes to be delivered to the Trustee all outstanding Securities
        (other than Securities replaced or repaid pursuant to Section 2.07) for
        cancellation or (ii) all outstanding Securities have become due and payable
        (whether on conversion, maturity, repurchase or otherwise) and the Company
        deposits with the Trustee cash and, if applicable, shares of Common Stock
        sufficient to pay all amounts due and owing on all outstanding Securities
        (other
        than Securities replaced pursuant to Section 2.07), and if in either case
        the
        Company pays all other sums payable hereunder by the Company, then this
        Indenture shall, subject to Section 7.07, cease to be of further effect.
        The
        Trustee shall join in the execution of a document prepared by the Company
        acknowledging satisfaction and discharge of this Indenture on demand of the
        Company accompanied by an Officer’s Certificate and Opinion of Counsel and at
        the cost and expense of the Company.

       

      Section
        8.02.
        Repayment to the Company.
        The
        Trustee and the Paying Agent shall return to the Company upon written request
        any money or securities held by them for the payment of any amount with respect
        to the Securities that remains unclaimed for one year, subject to applicable
        abandoned property law. 

       

      
        
          
          

        

        
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      After
        return to the Company, Holders entitled to the money or securities must look
        to
        the Company for payment as general creditors unless an applicable abandoned
        property law designates another person and the Trustee and the Paying Agent
        shall have no further liability to the Securityholders with respect to such
        money or securities for that period commencing after the return
        thereof.

       

      Section
        8.03.
        Application of Trust Money. The
        Trustee shall hold in trust all money and other consideration deposited with
        it
        pursuant to Section 8.01 and shall apply such deposited money and other
        consideration through the Paying Agent and in accordance with this Indenture
        to
        the payment of amounts due on the Securities. Money and other consideration
        so
        held in trust is subject to the Trustee’s rights under Section
        7.07.

       

       

      ARTICLE
        9

      Amendments

       

      Section
        9.01.
        Without Consent of Holders.
        The
        Company and the Trustee may modify or amend this Indenture or the Securities
        without the consent of any Securityholder to:

       

      (a) add
        guarantees with respect to the Securities or secure the Securities;

       

      (b) conform,
        as necessary, this Indenture and the Securities to the “Description of Notes” as
        set forth in the Offering Memorandum;

       

      (c) add
        to
        the covenants of the Company or Events of Default for the benefit of the
        Holders
        of Securities; 

       

      (d) surrender
        any right or power herein conferred upon the Company; 

       

      (e) provide
        for the assumption by a successor company of the Company’s obligations to the
        Holders of Securities in the case of a merger, consolidation, conveyance,
        transfer, sale or lease pursuant to Article 5 or Section 10.06 hereof;

       

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

       

      (g) cure
        any
        ambiguity or to correct or supplement any provision herein which may be
        inconsistent with any other provision herein; 

       

      (h) make
        other changes to this Indenture or forms or terms of the Securities so long
        as
        no such change individually or in the aggregate with

       

      
        
          
          

        

        
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      all
        other
        such changes has or will have a material adverse effect on the interests
        of the
        Holders of the Securities; 

       

      (i) establish
        the form of Securities (substantially in the form of Exhibit B);

       

      (j) evidence
        and provide for the acceptance of the appointment under this Indenture of
        a
        successor Trustee in accordance with the terms of this Indenture;
        or

       

      (k) provide
        for uncertificated Securities in addition to or in place of certificated
        Securities; provided,
        however,
        that
        the uncertificated Securities are issued in registered form for purposes
        of
        Section 163(f) of the Code, or in a manner such that the uncertificated
        Securities are described in Section 163(f)(2)(B) of the Code.

       

      Section
        9.02.
        With Consent of Holders.
        Except
        as
        provided below in this Section 9.02 and in Section 9.01, this Indenture or
        the
        Securities may be amended, modified or supplemented, and noncompliance in
        any
        particular instance with any provision of this Indenture or the Securities
        may
        be waived, in each case with the written consent of the Holders of at least
        a
        majority of the principal amount of the Securities at the time
        outstanding.

       

      Without
        the written consent or the affirmative vote of each Holder of Securities
        affected thereby, an amendment, supplement or waiver under this Section 9.02
        may
        not:

       

      (a) reduce
        the principal amount of or change the Stated Maturity of any
        Security;

       

      (b) reduce
        the Fundamental Change Repurchase Price or change the time at which or
        circumstances under which the Securities may or shall be repurchased;

       

      (c) change
        the currency in which any Security or Interest, including Additional Amounts,
        if
        any, thereon, or the Fundamental Change Repurchase Price thereof is payable;
        

       

      (d) reduce
        the rate of accrual for, or extend the time for payment of Interest, including
        Additional Amounts, if any, on any Security; 

       

      (e) impair
        the right of any Holder to institute suit for the enforcement of any payment
        on
        or with respect to any Security;

       

      (f) impair
        the right of the Holders of the Securities to convert any Security as provided
        in Article 10 or reduce the number of shares or

       

      
        
          
          

        

        
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      other
        consideration due upon conversion, except as otherwise permitted pursuant
        to
        Article 5 or Section 10.06 hereof;

       

      (g) change
        the Company’s obligation to maintain an office or agency in the places and for
        the purposes specified in this Indenture;

       

      (h) amend
        or
        modify any of the provisions of this Section, or reduce the percentage of
        the
        aggregate principal amount of outstanding Securities required to amend, modify,
        supplement or waive a provision of the Indenture or the Securities, except
        to
        provide that certain other provisions of this Indenture cannot be modified
        or
        waived without the consent of the Holder of each outstanding Security affected
        thereby; or

       

      (i) reduce
        the percentage of the aggregate principal amount of the outstanding Securities
        the consent of whose Holders is required for any such supplemental indenture
        entered into in accordance with this Section 9.02 or the consent of whose
        Holders is required for any waiver provided for in this Indenture.

       

      It
        shall
        not be necessary for the consent of the Holders under this Section 9.02 to
        approve the particular form of any proposed amendment, but it shall be
        sufficient if such consent approves the substance thereof.

       

      After
        an
        amendment under this Section 9.02 becomes effective, the Company shall mail
        to
        each Holder a notice briefly describing the amendment.

       

      Section
        9.03.
        Compliance With Trust Indenture Act.
        Every
        supplemental indenture executed pursuant to this Article shall comply with
        the
        TIA as then in effect.

       

      Section
        9.04.
        Revocation and Effect of Consents, Waivers and Actions.
        Until
        an
        amendment, waiver or other action by Holders becomes effective, a consent
        thereto by a Holder of a Security hereunder is a continuing consent by the
        Holder and every subsequent Holder of that Security or portion of the Security
        that evidences the same obligation as the consenting Holder’s Security, even if
        notation of the consent, waiver or action is not made on the Security. However,
        any such Holder or subsequent Holder may revoke the consent, waiver or action
        as
        to such Holder’s Security or portion of the Security if the Trustee receives the
        notice of revocation before the date the amendment, waiver or action becomes
        effective. After an amendment, waiver or action becomes effective, it shall
        bind
        every Securityholder.

       

      Section
        9.05.
        Notice of Amendments, Notation on or Exchange of Securities.
        Securities
        authenticated and delivered after the execution of any supplemental indenture
        pursuant to this Article 9 may, and shall if required by the Company, bear
        a
        notation in form approved by the Company as to any matter provided for in
        such
        supplemental indenture. If the Company shall so determine,

       

      
        
          
          

        

        
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      new
        Securities so modified as to conform, in the opinion of the Trustee and the
        Board of Directors, to any such supplemental indenture may be prepared and
        executed by the Company and authenticated and delivered by the Trustee in
        exchange for outstanding Securities.

       

      Section
        9.06.
        Trustee to Sign Supplemental Indentures.
        The
        Trustee shall sign any supplemental indenture authorized pursuant to this
        Article 9 if the amendment contained therein does not affect the rights,
        duties,
        liabilities or immunities of the Trustee. If it does, the Trustee may, but
        need
        not, sign such supplemental indenture. In signing such supplemental indenture
        the Trustee shall receive, and (subject to the provisions of Section 7.01)
        shall
        be fully protected in relying upon, an Officer’s Certificate and an Opinion of
        Counsel stating that such amendment is authorized or permitted by this
        Indenture.

       

      Section
        9.07.
        Effect of Supplemental Indentures.
        Upon
        the
        execution of any supplemental indenture under this Article, this Indenture
        shall
        be modified in accordance therewith, and such supplemental indenture shall
        form
        a part of this Indenture for all purposes; and every Holder of Securities
        theretofore or thereafter authenticated and delivered hereunder shall be
        bound
        thereby.

       

       

      ARTICLE
        10

      Conversions

       

      Section
        10.01.
        Conversion Privilege. (a)
        Subject to and upon compliance with the provisions of this Article 10, a
        Holder
        of a Security shall have the right, at such Holder’s option, to convert all or
        any portion (if the portion to be converted is $1,000 principal amount or
        an
        integral multiple thereof) of such Security prior to the close of business
        on
        the second Business Day immediately preceding Stated Maturity into cash and
        shares of Common Stock, if applicable, based on the Applicable Conversion
        Rate
        only as follows:

       

      (1) before
        November 15, 2013, during any fiscal quarter of the Company (a “Fiscal
        Quarter”)
        commencing after May 5, 2007 (and only during such Fiscal Quarter), if the
        Closing Sale Price of the Common Stock for at least 20 Trading Days during
        the
        period of 30 consecutive Trading Days ending on the last Trading Day of the
        immediately preceding Fiscal Quarter is more than 130% of the Applicable
        Conversion Price in effect on such last Trading Day;

       

      (2) during
        the five Business Days immediately following any five consecutive Trading
        Day
        period (the “Measurement
        Period”)
        in
        which the Trading Price per $1,000 original principal amount of the Securities
        (as determined following a request by a Holder of the Securities in accordance
        with the procedures described below) for each day of such Measurement Period
        was
        less than 98% of the

       

      
        
          
          

        

        
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      product
        of the Closing Sale Price of the Common Stock and the Applicable Conversion
        Rate
        on each such day. The Trustee or another party appointed by the Trustee will,
        on
        the Company’s behalf, determine if the Securities are convertible as a result of
        the Trading Price of the Securities and notify the Company and the Trustee
        if
        the Trustee has appointed another party to determine if the Securities are
        convertible pursuant to this clause (2); provided,
        that
        the Trustee or such other person appointed by the Trustee shall have no
        obligation to determine the Trading Price of the Securities unless the Company
        has requested such determination and the Company shall have no obligation
        to
        make such request unless requested to do so in writing by a Holder of the
        Security. Upon making any such request, any such requesting Holder shall
        provide
        reasonable evidence that (A) such requesting Holder is a Holder of the Security
        as of the date of such notice, and (B) the Trading Price per $1,000 principal
        amount of Securities would be less than 98% of the product of the Closing
        Sale
        Price of the Common Stock and the Applicable Conversion Rate on that day.
        At
        such time, the Company shall instruct the Trustee to determine the Trading
        Price
        of the Securities beginning on the next Trading Day and on each successive
        Trading Day until the Trading Price per $1,000 original principal amount
        of the
        Securities is greater than or equal to 98% of the product of the Closing
        Sale
        Price of the Common Stock and the Applicable Conversion Rate; 

       

      (3) any
        time
        on or after November 15, 2013 and prior to the close of business on the second
        Business Day immediately preceding Stated Maturity;

       

      (4) as
        provided in clause (b) of this Section 10.01.

       

      The
        Company or, if applicable, the Conversion Agent (in the case of a conversion
        pursuant to clause (1) above) or the Trustee (in the case of a conversion
        pursuant to clause (2) above) on behalf of the Company, shall determine on
        a
        daily basis during the time periods specified in Section 10.01(a)(1) or,
        following a request by a Holder of Securities in accordance with the procedures
        specified in Section 10.01(a)(2), whether the Securities shall be convertible
        as
        a result of the occurrence of an event specified in such Sections and, if
        the
        Securities shall be so convertible, the Company, the Conversion Agent or
        the
        Trustee, as applicable, shall promptly deliver to the Conversion Agent, the
        Trustee or the Company, as applicable, written notice thereof. Whenever the
        Securities shall become convertible pursuant to this Section 10.01 (as
        determined in accordance with this Section 10.01), the Company or, at the
        Company’s request, the Trustee in the name and at the expense of the Company,
        shall promptly notify the Holders of the event triggering such convertibility
        in
        the manner provided in Section 11.02, or the Company shall promptly disseminate
        a press release and use its reasonable efforts

       

      
        
          
          

        

        
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      to
        post
        the information on its website or otherwise publicly disclose the information.
        Any notice so given shall be conclusively presumed to have been duly given,
        whether or not the Holder receives such notice. 

       

      (b) In
        the
        event that:

       

      (1) (A)
        the
        Company distributes to all or substantially all holders of Common Stock rights
        or warrants entitling them to purchase, for a period expiring within 60 days
        after the date of such distribution, Common Stock at less than the average
        of
        the Closing Sale Prices of the Common Stock for the five consecutive Trading
        Days ending on the Trading Day immediately preceding the public announcement
        date for such distribution; or (B) the Company distributes to all or
        substantially all holders of Common Stock cash, debt securities, rights or
        warrants to purchase the Company’s securities, or other assets (excluding
        dividends or distributions described in Section 10.04(a)), which distribution
        has a per share value as determined by the Board of Directors exceeding 10%
        of
        the average of the Closing Sale Prices of the Common Stock for the five
        consecutive Trading Days ending on the Trading Day immediately preceding
        the
        public announcement date of such distribution, then, in either case, the
        Securities may be surrendered for conversion at any time on and after the
        date
        that the Company gives notice to the Holders of such distribution, which
        shall
        be not less than 30 calendar days prior to the Ex-Dividend Date for such
        distribution, until the earlier of the close of business on the Business
        Day
        immediately preceding the Ex-Dividend Date for such distribution or the date
        on
        which the Company announces that such distribution shall not take place,
        even if
        the Securities are not otherwise convertible at such time; provided
        that no
        Holder of a Security shall have the right to convert its Securities if the
        Holder is entitled to participate in such distribution (based on the Applicable
        Conversion Rate) without conversion; or 

       

      (2) a
        Fundamental Change occurs prior to Stated Maturity (regardless of whether
        Holders have a right to require the Company to repurchase the Securities
        upon
        such Fundamental Change as set forth in Article 3), then the Securities may
        be
        surrendered for conversion at any time from and after the date that is 30
        calendar days prior to the anticipated effective date of such transaction
        until
        and including the date that is 30 calendar days after the actual effective
        date
        of such transaction (or, if such transaction also constitutes a Fundamental
        Change pursuant to which Holders have a right to require the Company to
        repurchase the Securities pursuant to Section 3.02, until the close of business
        on the Business Day immediately preceding the applicable Fundamental Change
        Repurchase Date). The Company

       

      
        
          
          

        

        
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      shall
        notify Holders and the Trustee as promptly as practicable following the date
        that it publicly announces the Fundamental Change transaction giving rise
        to the
        above conversion right (but in no event less than 30 calendar days prior
        to the
        anticipated effective date of such transaction).

       

      (c) If
        a
        Fundamental Change occurs prior to Stated Maturity and a Holder elects to
        convert its Securities in connection with such Fundamental Change (regardless
        of
        whether such Holder has the right to require the Company to repurchase its
        Securities as set forth in Article 3), the Applicable Conversion Rate shall
        be
        increased by an additional number of shares of Common Stock (the “Additional
        Shares”)
        as
        described below; provided
        that if
        the Stock Price paid in connection with such Fundamental Change is greater
        than
        $45.00 or less than $12.71 (subject in each case to adjustment as described
        below), no Additional Shares shall be added to the Applicable Conversion
        Rate. A
        conversion of the Securities will be deemed for these purposes to be “in
        connection with” a Fundamental Change if the Conversion Notice is received by
        the Conversion Agent from and including the date that is 30 calendar days
        prior
        to the anticipated effective date of the Fundamental Change to the close
        of
        business on the date that is 30 calendar days after the actual effective
        date of
        the Fundamental Change (or, if such transaction also constitutes a Fundamental
        Change pursuant to which Holders have a right to require the Company to
        repurchase the Securities pursuant to Section 3.02, until the close of business
        on the Business Day immediately preceding the applicable Fundamental Change
        Repurchase Date).

       

      The
        number of Additional Shares to be added to the Applicable Conversion Rate
        as
        described in the immediately preceding paragraph shall be determined by
        reference to the table attached as Schedule I hereto, based on the effective
        date of such Fundamental Change transaction and the Stock Price paid in
        connection with such transaction; provided
        that if
        the Stock Price is between two Stock Price amounts in the table or such
        effective date is between two effective dates in the table, the number of
        Additional Shares shall be determined by a straight-line interpolation between
        the number of Additional Shares set forth for the higher and lower Stock
        Price
        amounts and the two dates, as applicable, based on a 365-day year. The
“effective
        date”
with
        respect to a Fundamental Change transaction means the date that a Fundamental
        Change becomes effective.

       

      The
        Stock
        Prices set forth in the first row of the table in Schedule I hereto shall
        be
        adjusted as of any date on which the Applicable Conversion Rate of the
        Securities is adjusted pursuant to Section 10.04. The adjusted Stock Prices
        shall equal the Stock Prices applicable immediately prior to such adjustment,
        multiplied by a fraction, the numerator of which is the Applicable Conversion
        Rate immediately prior to the adjustment giving rise to the Stock Price
        adjustment and the denominator of which is the Applicable Conversion Rate
        as so
        adjusted. The number of Additional Shares shall be adjusted in the same manner
        as the Applicable Conversion Rate as set forth in Section 10.04.

       

      
        
          
          

        

        
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      Notwithstanding
        the foregoing, in no event shall the total number of shares of Common Stock
        issuable upon conversion of the Securities pursuant to this clause (c) exceed
        78.6782 per $1,000 principal amount of Securities, nor shall the amount of
        Additional Shares exceed 13.6549 per $1,000 principal amount of Securities,
        in
        each case, subject to adjustments in the same manner as the Applicable
        Conversion Rate as set forth in Section 10.04.

       

      Section
        10.02.
        Conversion Procedure; Applicable Conversion Rate; Fractional
        Shares. (a)
        Subject
        to the Company’s rights under Section 10.01 and Section 10.03, each Security
        shall be convertible at the office of the Conversion Agent into a combination
        of
        cash and fully paid and nonassessable shares (calculated to the nearest
        1/10,000th of a share) of Common Stock, if any, at a rate (the “Applicable
        Conversion Rate”)
        equal
        to, initially, 65.0233 shares of Common Stock for each $1,000 principal amount
        of Securities. The Applicable Conversion Rate shall be adjusted in certain
        instances as provided in Section 10.04 hereof, but shall not be adjusted
        for any
        accrued and unpaid Interest or Additional Amounts, if any. Upon conversion,
        no
        payment shall be made by the Company with respect to any accrued and unpaid
        Interest, including Additional Amounts, if any, unless, as described below,
        such
        conversion occurs between an Interest Record Date and the Interest Payment
        Date
        to which such Interest Record Date relates, in which case the Holders of
        the
        Securities on the Interest Record Date shall receive accrued and unpaid
        interest, including Additional Amounts, if any, payable on the Securities
        on the
        applicable Interest Payment Date. Instead, such amount shall be deemed paid
        by
        the applicable Settlement Amount or Settlement Shares, as applicable, delivered
        upon conversion of any Security. In addition, no payment shall be made in
        respect of dividends on the Common Stock with a record date prior to the
        Conversion Date. The Company shall not issue any fraction of a share of Common
        Stock in connection with any conversion of Securities, but instead shall,
        subject to Section 10.03 hereof, make a cash payment (calculated to the nearest
        cent) equal to such fraction multiplied by the Daily VWAP on the final Trading
        Day of the Cash Settlement Averaging Period or, if the Company has made a
        valid
        Physical Settlement Election, on the third Scheduled Trading Day before the
        Conversion Settlement Date.

       

      (b) At
        any
        time before November 15, 2013, the Company may irrevocably make a Physical
        Settlement Election as set forth in Section 10.03(b). 

       

      (c) Before
        any Holder of a Security shall be entitled to convert the same, such Holder
        shall (1) in the case of Global Securities, comply with the procedures of
        the
        Depositary in effect at that time for converting a beneficial interest in
        a
        Global Security, and in the case of Certificated Securities, surrender such
        Securities, duly endorsed to the Company or in blank, at the office of the
        Conversion Agent, and (2) give written notice to the Company in the form
        on the
        reverse of such Certificated Security (the “Conversion
        Notice”)
        at
        said office or place that such Holder elects to convert the same and shall
        state
        in writing therein the principal amount of Securities to be converted (which
        shall be equal to or an

       

      
        
          
          

        

        
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      integral
        multiple of $1,000 principal amount) and the name or names (with addresses)
        in
        which such Holder wishes the certificate or certificates for Common Stock
        included in the Settlement Amount, if any, or Settlement Shares, as applicable,
        to be registered. 

       

      Before
        any such conversion, a Holder also shall pay all taxes or duties, if any,
        as
        provided in Section 10.07 and any amount payable pursuant to Section
        10.02(h).

       

      If
        more
        than one Security shall be surrendered for conversion at one time by the
        same
        Holder, the number of full shares of Common Stock, if any, that shall be
        deliverable upon conversion shall be computed on the basis of the aggregate
        principal amount of the Securities (or specified portions thereof to the
        extent
        permitted thereby) so surrendered. 

       

      (d) A
        Security shall be deemed to have been converted as of the close of business
        on
        the date (the “Conversion
        Date”)
        that
        the Holder has complied with Section 10.02(c).

       

      (e) The
        Company shall, on the Conversion Settlement Date, to the extent applicable
        as
        set forth in Section 10.03, (i) pay the cash component (including cash in
        lieu
        of any fraction of a share to which such Holder would otherwise be entitled)
        of
        the Conversion Obligation determined pursuant to Section 10.03 to the Holder
        of
        a Security surrendered for conversion, or such Holder’s nominee or nominees, and
        (ii) issue, or cause to be issued, and deliver to the Conversion Agent or
        to
        such Holder, or such Holder’s nominee or nominees, certificates for the number
        of full shares of Common Stock, if any, to which such Holder shall be entitled
        as part of such Conversion Obligation. The Company shall not be required
        to
        deliver certificates for shares of Common Stock while the stock transfer
        books
        for such stock or the security register are duly closed for any purpose,
        but
        certificates for shares of Common Stock shall be issued and delivered as
        soon as
        practicable after the opening of such books or security register, and the
        person
        or persons entitled to receive the Common Stock as part of the applicable
        Settlement Amount or Settlement Shares, as applicable, upon such conversion
        shall be treated for all purposes as the record holder or holders of such
        Common
        Stock, as of the close of business on the applicable Conversion Settlement
        Date.

       

      (f) In
        case
        any Security shall be surrendered for partial conversion, the Company shall
        execute and the Trustee shall authenticate and deliver to or upon the written
        order of the Holder of the Security so surrendered, without charge to such
        Holder (subject to the provisions of Section 10.07 hereof), a new Security
        or
        Securities in authorized denominations in an aggregate principal amount equal
        to
        the unconverted portion of the surrendered Securities.

       

      (g) By
        delivering the combination of cash and shares of Common Stock, if any, together
        with a cash payment in lieu of any fractional shares to the Conversion Agent
        or
        to the Holder or such Holder’s nominee or nominees, the

       

      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

      

      Company
        shall have satisfied in full its Conversion Obligation with respect to such
        Security, and upon such delivery, accrued and unpaid Interest, if any, and
        Additional Amounts, if any, with respect to such Security shall be deemed
        to be
        paid in full rather than canceled, extinguished or forfeited, and such amounts
        shall no longer accrue.

       

      (h) If
        a
        Securityholder delivers a Conversion Notice after the Interest Record Date
        for a
        payment of Interest (including Additional Amounts, if any) but prior to the
        corresponding Interest Payment Date, such Securityholder must pay to the
        Company, at the time such Securityholder surrenders Securities for conversion,
        an amount equal to the Interest (including Additional Amounts, if any), that
        has
        accrued and shall be paid on the related Interest Payment Date. The preceding
        sentence shall not apply if (1) the Company has specified a Fundamental Change
        Repurchase Date that is after the close of business on an Interest Record
        Date
        but on or prior to the corresponding Interest Payment Date, (2) to the extent
        of
        overdue Interest (and any overdue Additional Amounts), if any overdue Interest
        (and any overdue Additional Amounts) exists at the time of conversion with
        respect to the Securities converted or (3) if a Holder converts its Securities
        after the close of business on or after November 15, 2013. 

       

      Section
        10.03.
        Payment Upon Conversion. (a)
        In
        the event that the Company has not made a Physical Settlement Election as
        set
        forth in clause (b) below, upon conversion of Securities, the Company shall
        satisfy its obligation to convert the Securities (the “Conversion
        Obligation”)
        by
        delivering to Holders surrendering Securities for conversion, for each $1,000
        principal amount of Securities, a settlement amount (the “Settlement
        Amount”)
        equal
        to the sum of the Daily Settlement Amounts for each of the 50 consecutive
        Trading days of the related Cash Settlement Averaging Period.

       

      (i) The
        “Daily
        Settlement Amount”
for
        each of the 50 consecutive Trading Days of the related Cash Settlement Averaging
        Period, shall consist of:

       

      (A) cash
        equal to the lesser of $20 and the Daily Conversion Value on such Trading
        Day;
        and

       

      (B) to
        the
        extent the Daily Conversion Value on such Trading Day exceeds $20, a number
        of
        shares of Common Stock equal to (x) the difference between such Daily Conversion
        Value and $20 (such difference being referred to as the “Daily
        Excess Amount”),
        divided by (y) the Daily VWAP for such day (or the consideration into which
        the
        Common Stock has been converted as described in
        Section
        10.06); provided
        that
        no
        fractional shares shall be issued, and in lieu thereof, the Company shall
        pay an
        amount in cash as set forth in Section 10.02 above.

       

      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

      

      (ii) 
        The
        Settlement Amount will be delivered on the Conversion Settlement
        Date.

       

      (b) At
        any
        time before November 15, 2013, the Company may irrevocably make a Physical
        Settlement Election, in its sole discretion and without the consent of the
        Holders, by valid delivery of a Physical Settlement Notice, to satisfy all
        Conversion Obligations arising out of conversions of Securities after the
        Physical Settlement Election Date. In addition to the giving of such Physical
        Settlement Election Notice, the Company shall disseminate a press release
        through Dow Jones & Company, Inc. or Bloomberg Business News or another
        newswire service announcing such Physical Settlement Election or publish
        such
        information in The Wall Street Journal or another newspaper of general
        circulation in the City of New York or on the Company’s website. Upon any such
        conversion following a valid Physical Settlement Election and the related
        Physical Settlement Date, the Company shall, subject to the provisions of
        this
        Article 10, satisfy its Conversion Obligation by delivering to converting
        Holders on the Conversion Settlement Date
        a number
        of shares of Common Stock (the “Settlement
        Shares”)
        equal
        to the aggregate principal amount of Securities to be converted divided by
        $1,000 and multiplied by the Applicable Conversion Rate on the Conversion
        Date
        (which will include any increases to reflect any Additional Shares as described
        under Section 10.01(c) above); provided
        that
        no
        fractional shares shall be issued, and in lieu thereof, the Company shall
        pay an
        amount in cash as set forth in Section 10.02 above.

       

      Section
        10.04.
        Adjustment of Applicable Conversion Rate. The
        Applicable Conversion Rate shall be adjusted, without duplication, from time
        to
        time by the Company in accordance with this Section
        10.04, except that the Company will not make any adjustment if Holders of
        Securities are entitled to participate on the relevant distribution or payment
        date, as a result of holding the Securities, in the transactions described
        in
        Sections Section 10.04(b), Section 10.04(c) and Section 10.04(d) below without
        having to convert their Securities (based on the Applicable Conversion Rate
        in
        effect immediately before the relevant Ex-Dividend Date):

       

      (a) If
        the
        Company, at any time or from time to time while any of the Securities are
        outstanding, issues shares of Common Stock as a dividend or distribution
        on
        shares of Common Stock, or if the Company effects a share split or share
        combination, then the Applicable Conversion Rate will be adjusted based on
        the
        following formula:

       

      

      
 

      
        
          
            
            

          

          
            61

            
              

            

          

          
            
            

          

        

      

      

      where

       

      
        	
                CR0

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately prior to the Ex-Dividend
                  Date of such dividend or distribution, or the effective date of
                  such share
                  split or share combination, as applicable;

                 

              
	
                CR'

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately after such Ex-Dividend
                  Date or effective date of such share split or combination, as
                  applicable;

                 

              
	
                OS0

                 

              	
                =

                 

              	
                the
                  number of shares of Common Stock outstanding immediately before
                  such
                  Ex-Dividend Date or effective date; and

                 

              
	
                OS'

                 

              	
                =

                 

              	
                the
                  number of shares of Common Stock outstanding immediately before
                  such
                  Ex-Dividend Date or effective date, but after giving effect to
                  such
                  dividend, distribution, share split or combination, as
                  applicable.

                 

              

      

      Such
        adjustment shall become effective immediately after the Ex-Dividend Date
        for
        such dividend or distribution, or the effective date for such share split
        or
        share combination. If any dividend or distribution of the type described
        in this
        Section 10.04(a) is declared but not so paid or made, the Applicable Conversion
        Rate shall again be adjusted, as of the date that is the earlier of (i) the
        public announcement of the non-payment of the dividend or distribution and
        (ii)
        the date that the dividend or distribution was to be paid, to the Applicable
        Conversion Rate which would then be in effect if such dividend or distribution
        had not been declared.

       

      (b) If
        the
        Company, at any time or from time to time while any of the Securities are
        outstanding, issues to all holders of Common Stock any rights, warrants or
        options entitling them for a period of not more than 60 calendar days from
        the
        date of issuance of such rights, warrants or options to subscribe for or
        purchase shares of Common Stock at an exercise price per share of Common
        Stock
        less than the average of the Closing Sales Prices of Common Stock for the
        10
        consecutive Trading Day period ending on the Business Day immediately preceding
        the date of announcement of such issuance, the Applicable Conversion Rate
        shall
        be adjusted based on the following formula:

       

      

       

      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

      

      where

       

      
        	
                CR0

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately prior to the Ex-Dividend
                  Date for such issuance;

                 

              
	
                CR'

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately after such Ex-Dividend
                  Date;

                 

              
	
                OS0

                 

              	
                =

                 

              	
                the
                  number of shares of Common Stock outstanding immediately before
                  such
                  Ex-Dividend Date for such issuance;

                 

              
	
                X

                 

              	
                =

                 

              	
                the
                  total number of shares of Common Stock issuable pursuant to such
                  rights,
                  warrants or options; and

                 

              
	
                Y

                 

              	
                =

                 

              	
                the
                  number of shares of Common Stock equal to the quotient of (A) the
                  aggregate price payable to exercise such rights, warrants or options
                  divided by (B) the average of the Closing Sale Prices of Common
                  Stock for
                  the 10 consecutive Trading Day period ending on the Trading Day
                  immediately preceding the date of announcement of the issuance
                  of such
                  rights, warrants or options.

                 

              

      

      To
        the
        extent such rights, warrants or options are not exercised or converted prior
        to
        the expiration of the exercisability or convertability thereof, the Applicable
        Conversion Rate shall be readjusted, as of such expiration date, to the
        Applicable Conversion Rate which would then be in effect had the adjustments
        made upon the issuance of such rights, warrants or options been made on the
        basis of the delivery of only the number of shares of Common Stock actually
        delivered. In the event that such rights, warrants or options are not so
        issued,
        the Conversion Rate shall again be adjusted to be the Applicable Conversion Rate
        which would then be in effect if such rights, warrants or options had not
        been
        issued. In determining whether any rights, warrants or options entitle the
        Holders to subscribe for or purchase shares of Common Stock at less than
        the
        average of the Closing Sale Prices of Common Stock for the 10 consecutive
        Trading Day period ending on the Business Day immediately preceding the date
        of
        announcement of such issuance, and in determining the aggregate offering
        price
        of such shares of Common Stock, there shall be taken into account any
        consideration received for such rights or warrants and the value of such
        consideration, if other than cash, as shall be determined in good faith by
        the
        Board of Directors of the Company.

       

      (c) If
        the
        Company, at any time or from time to time while the Securities are outstanding,
        distributes shares of any class of Capital Stock of the Company, evidences
        of
        indebtedness or other assets or property of the Company to all, or substantially
        all, holders of its Common Stock, excluding:

       

      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

      

      (i) dividends
        or distributions referred to in Section 10.04(a);

       

      (ii) rights,
        warrants or options referred to in Section 10.04(b);

       

      (iii) dividends
        or distributions paid exclusively in cash; and

       

      (iv) Spin-Offs
        (as defined below) to which the provisions set forth below in this Section
        10.04(c) shall apply;

       

      then
        the
        Conversion Rate will be adjusted based on the following formula:

       

      

       

      where

       

      
        	
                CR0

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately prior to the Ex-Dividend
                  Date for such distribution;

                 

              
	
                CR'

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately after such Ex-Dividend
                  Date for such distribution;

                 

              
	
                SP0

                 

              	
                =

                 

              	
                the
                  average of the Closing Sale Prices of the Common Stock over the
                  10
                  consecutive Trading Day period ending on the Trading Day immediately
                  preceding the Ex-Dividend Date for such distribution; and

                 

              
	
                FMV

                 

              	
                =

                 

              	
                the
                  Fair Market Value (as determined in good faith by the Board of
                  Directors
                  of the Company) of the shares of Capital Stock, evidences of indebtedness,
                  assets or property distributed with respect to each outstanding
                  share of
                  the Common Stock on the earlier of the Record Date or the Ex-Dividend
                  Date
                  for such distribution.

                 

              

      

      Such
        adjustment shall become effective immediately prior to the opening of business
        on the day following the Ex-Dividend Date for such distribution.

       

      Where
        there has been a payment of a dividend or other distribution on the Common
        Stock
        of shares of Capital Stock of any class or series, or similar equity interest,
        of or relating to a Subsidiary or other business unit (a “Spin-Off”),
        the
        Applicable Conversion Rate in effect immediately before 5:00 p.m., New York
        City
        time, on the 10th Trading Day immediately following the effective date of
        the
        Spin-Off shall be increased based on the following formula:

       

      
        
          
          

        

        
          64

          
            

          

        

        
          
          

        

      

      

       

      

       

      where

       

      
        	
                CR0

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect on the 10th Trading Day immediately
                  following, and including, the effective date of the Spin-Off;

                 

              
	
                CR'

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately after the 10th
                  Trading
                  Day immediately following, and including, the effective date of
                  the
                  Spin-Off;

                 

              
	
                FMV0

                 

              	
                =

                 

              	
                the
                  average of the Closing Sale Prices of the Capital Stock or similar
                  equity
                  interest distributed to holders of Common Stock applicable to one
                  share of
                  Common Stock over the first 10 consecutive Trading Day period after,
                  and
                  including, the effective date of the Spin-Off; and

                 

              
	
                MP0

                 

              	
                =

                 

              	
                the
                  average of the Closing Sale Prices of Common Stock over the first
                  10
                  consecutive Trading Day period after the effective date of the
                  Spin-Off.

                 

              

      

      The
        adjustment to the Applicable Conversion Rate under the preceding paragraph
        will
        occur on the 10th Trading Day from, and including, the effective date of
        the
        Spin-Off; provided
        that in
        respect of any conversion within the 10 Trading Days following the effective
        date of any Spin-Off, references within this Section 10.04(c) to “10 Trading
        Days” shall be deemed replaced with such lesser number of Trading Days as have
        elapsed between the effective date of such Spin-Off and the Conversion Date
        in
        determining the Applicable Conversion Rate.

       

      If
        any
        dividend or distribution described in this Section 10.04(c) is declared but
        not
        paid or made, the Applicable Conversion Rate shall be readjusted, as of the
        date
        that is the earlier of (i) the public announcement of the non-payment of
        the
        dividend or distribution and (ii) the date that the dividend or distribution
        was
        to have been paid, in which case, the Applicable Conversion Rate will be
        the
        Applicable Conversion Rate that would then be in effect if such dividend
        or
        distribution had not been declared.

       

      For
        the
        purposes of this Section 10.04(c), rights, warrants or options distributed
        by
        the Company to all holders of Common Stock entitling them to subscribe for
        or
        purchase shares of the Company’s capital stock (either initially or under
        certain circumstances), which rights, warrants or options until the occurrence
        of a specified event or events (a “Trigger
        Event”):
        (1)
        are deemed to be transferred with such shares of Common Stock; (2) are not
        

       

      
        
          
          

        

        
          65

          
            

          

        

        
          
          

        

      

      exercisable;
        and (3) are also issued in respect of future issuances of Common Stock, shall
        be
        deemed not to have been distributed for purposes of this Section 10.04(c),
        (and
        no adjustment to the Conversion Rate under this Section 10.04(c) will be
        required) until the occurrence of the earliest Trigger Event, whereupon such
        rights and warrants shall be deemed to have been distributed and an appropriate
        adjustment (if any is required) to the Conversion Rate shall be made under
        this
        Section 10.04(c). If any such right, warrant or option, including any such
        existing rights, warrants or options distributed prior to the date of this
        Indenture, are subject to events, upon the occurrence of which such rights,
        warrants or options 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, warrants or options with such rights
        (and a termination or expiration of the existing rights, warrants or options
        without exercise by any of the holders thereof). In addition, in the event
        of
        any distribution (or deemed distribution) of rights, warrants or options
        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 Applicable Conversion Rate under this
        Section 10.04(c) was made, (1) in the case of any such rights, warrants or
        options which shall all have been redeemed or purchased without exercise
        by any
        Holders thereof, the Applicable Conversion Rate shall be readjusted upon
        such
        final purchase 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 purchase price received by a holder of Common Stock with respect to such
        rights, warrants or options (assuming such holder had retained such rights,
        warrants or options), made to all applicable holders of Common Stock as of
        the
        date of such redemption or purchase, and (2) in the case of such rights,
        warrants or options which shall have expired or been terminated without exercise
        by any holders thereof, the Applicable Conversion Rate shall be readjusted
        as if
        such rights, warrants or options had not been issued.

       

      (d) If
        any
        cash dividend or other distribution is made to all, or substantially all,
        holders of Common Stock, the Applicable Conversion Rate shall be adjusted
        based
        on the following formula:

       

      

       

      where

       

      
        	
                CR0

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately prior to the Ex-Dividend
                  Date for such distribution;

                 

              
	
                CR'

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately after the Ex-Dividend
                  Date for such distribution;

                 

              

      

      

      
        
          
          

        

        
          66

          
            

          

        

        
          
          

        

      

      

      
        	
                SP0

                 

              	
                =

                 

              	
                the
                  Closing Sale Price of a share of Common Stock on the Trading Day
                  immediately preceding the earlier of the Record Date and the day
                  immediately preceding the Ex-Dividend Date for such distribution;
                  and

                 

              
	
                C

                 

              	
                =

                 

              	
                the
                  amount in cash per share the Company distributes to holders of
                  Common
                  Stock.

                 

              

      

      If
        any
        dividend or distribution described in this Section 10.04(d) is declared but
        not
        so paid or made, the new Applicable Conversion Rate shall be adjusted, as
        of the
        date that is the earlier of (i) the public announcement of the non-payment
        of
        the dividend or distribution and (ii) the date that the dividend or distribution
        was to be paid, to the Applicable Conversion Rate that would then be in effect
        if such dividend or distribution had not been declared.

       

      (e) If
        the
        Company or any Subsidiary makes a payment in respect of a tender offer or
        exchange offer for Common Stock, to the extent that the cash and value (which
        will be, except for the value of traded securities, determined by the Board
        of
        Directors) of any other consideration included in the payment per share of
        Common Stock exceeds the Closing Sale Price per share of Common Stock on
        the
        Trading Day next succeeding the last date on which tenders or exchanges may
        be
        made pursuant to such tender or exchange offer, the Applicable Conversion
        Rate
        shall be adjusted as of the 10th Trading Day following the date the tender
        or
        exchange offer expires based on the following formula:

       

      

       

      where

       

      
        	
                CR0

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect on the 10th day immediately
                  following, and including, the date such tender or exchange offer
                  expires;

                 

              
	
                CR'

                 

              	
                =

                 

              	
                the
                  Applicable Conversion Rate in effect immediately after the 10th
                  Trading
                  Day immediately following, and including, the date the tender or
                  exchange
                  offer expires;

                 

              
	
                AC

                 

              	
                =

                 

              	
                the
                  aggregate value of all cash and any other consideration (as determined
                  by
                  the Board of Directors) paid or payable for shares purchased in
                  such
                  tender or exchange offer;

                 

              
	
                OS0

                 

              	
                =

                 

              	
                the
                  number of shares of Common Stock outstanding on the Trading Day
                  immediately prior to the date such tender or exchange offer
                  expires;

                 

              

      

      
        
          
          

        

        
          67

          
            

          

        

        
          
          

        

      

      

      
        	
                OS'

                 

              	
                =

                 

              	
                the
                  number of shares of Common Stock outstanding on the Trading Day
                  immediately after the date such tender or exchange offer expires
                  (after
                  giving effect to the purchase or exchange of shares pursuant to
                  such
                  tender or exchange offer); and

                 

              
	
                SP'

                 

              	
                =

                 

              	
                the
                  average of the Closing Sale Prices of Common Stock over the 10
                  consecutive
                  Trading Day period commencing on the Trading Day next succeeding
                  the date
                  such tender or exchange offer expires.

                 

              

      

      The
        adjustment to the Applicable Conversion Rate under this Section 10.04(e)
        shall
        occur on the 10th Trading Day from, and including, the Trading Day next
        succeeding the date such tender or exchange offer expires; provided that
        in
        respect of any conversion within the 10 Trading Days immediately following,
        and
        including, the expiration date of any tender or exchange offer, references
        within this Section 10.04(e) to “10 Trading Days” shall be deemed replaced with
        such lesser number of Trading Days as have elapsed between the expiration
        date
        of such tender or exchange offer and the Conversion Date in determining the
        Applicable Conversion Rate.

       

      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 Applicable
        Conversion Rate shall again be adjusted to be the Applicable Conversion Rate
        that would then be in effect if such tender or exchange had not been
        made.

       

      (f) No
        adjustment to the Applicable Conversion Rate will be required unless the
        adjustment would require an increase or decrease of at least 1% of the
        Applicable Conversion Rate. If the adjustment is not made because the adjustment
        does not change the Applicable Conversion Rate by at least 1%, then the
        adjustment that is not made will be carried forward and taken into account
        in
        any future adjustments. In addition, the Company will make any carry forward
        adjustments not otherwise effected upon required purchases of the Securities
        in
        connection with a Fundamental Change, upon any conversion of the Securities,
        on
        every one year anniversary from the original issue date and on the Record
        Date
        immediately prior to Stated Maturity of the Securities. Adjustments to the
        Applicable Conversion Rate will be rounded to the nearest ten-thousandth,
        with
        five one-hundred-thousandths rounded upward (e.g.,
        0.76545
        would be rounded up to 0.7655).

       

       

      
        
          
          

        

        
          68

          
            

          

        

        
          
          

        

      

      (g) The
        Company from time to time may, to the extent permitted by applicable law,
        increase the Applicable Conversion Rate by any amount for a period of at
        least
        20 days if the Board of Directors shall have made a determination that such
        increase would be in the best interests of the Company, which determination
        shall be conclusive. Whenever the Applicable Conversion Rate is increased
        pursuant to this Section 10.04(g) or Section 10.04(h) below, the Company
        shall
        mail to Holders of record of the Securities a notice of the increase at least
        15
        days prior to the date the increased Applicable Conversion Rate takes effect,
        and such notice shall state the increased Applicable Conversion Rate and
        the
        period during which it will be in effect.

       

      (h) The
        Company may (but is not required to) make such increases in the Applicable
        Conversion Rate, in addition to any adjustments required by Section 10.04(a),
        Section 10.04(b), Section 10.04(c), Section 10.04(d), Section 10.04(e) or
        Section 10.04(g), as the Board of Directors considers to be advisable to
        avoid
        or diminish income tax to Holders resulting from any dividend or distribution
        of
        Capital Stock issuable on conversion of the Securities (or rights to acquire
        shares) or from any event treated as such for income tax purposes. 

       

      (i) Except
        as
        otherwise provided in this Indenture, all calculations under this Article
        10
        shall be made by the Company. No adjustment shall be made for the Company’s
        issuance of Common Stock or securities convertible into or exchangeable for
        shares of Common Stock or rights to purchase Common Stock or convertible
        or
        exchangeable securities, other than as provided in this Section 10.04. The
        Company shall make such calculations in good faith and, absent manifest error,
        such calculations shall be binding on the Holders.

       

      (j) Whenever
        the Applicable Conversion Rate is adjusted as herein provided, the Company
        shall
        promptly file with the Trustee and any Conversion Agent an Officer’s Certificate
        setting forth the Applicable 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 Officer’s
        Certificate, the Trustee shall not be deemed to have knowledge of any adjustment
        of the Applicable Conversion Rate and may assume without inquiry that the
        last
        Applicable 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 Applicable Conversion Rate setting forth the adjusted
        Applicable Conversion Rate, a brief statement of the facts requiring such
        adjustment and the date on which each adjustment becomes effective and shall
        mail such notice of such adjustment of the Applicable Conversion Rate to
        each
        Securityholder at such Holder’s last address appearing on the list of
        Securityholders provided for in Section 2.05, within 20 days after execution
        thereof. Failure to deliver such notice shall not affect the legality or
        validity of any such adjustment.

       

      
        
          
          

        

        
          69

          
            

          

        

        
          
          

        

      

      (k) For
        purposes of this Section 10.04, the number of shares of Common Stock at any
        time
        outstanding shall not include shares held in the treasury of the Company
        so long
        as the Company does not pay any dividend or make any distribution on shares
        of
        Common Stock 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.

       

      (l) Notwithstanding
        anything to the contrary in this Article 10, no adjustment to the Applicable
        Conversion Rate shall be made:

       

      (i) upon
        the
        issuance of any shares of Common Stock pursuant to any present or future
        plan
        providing for the reinvestment of dividends or

       

      Interest
        payable on the Company’s Securities and the investment of additional optional
        amounts in shares of Common Stock under any plan; 

       

      (ii) upon
        the
        issuance of any shares of Common Stock or options or rights to purchase those
        shares pursuant to any present or future employee, director or consultant
        benefit plan or program of or assumed by the Company or any Subsidiary;

       

      (iii) upon
        the
        issuance of any shares of Common Stock pursuant to any option, warrant, right
        or
        exercisable, exchangeable or convertible security not described in (ii) above
        outstanding as of the date the Securities were first issued; 

       

      (iv) for
        a
        change in the par value of the Common Stock; 

       

      (v) for
        accrued and unpaid Interest, including Additional Amounts, if any;
        or

       

      (vi) for
        the
        avoidance of doubt, for the issuance of Common Stock by the Company (other
        than
        to all or substantially all holders of Common Stock) or the payment of cash
        by
        the Company upon conversion or repurchase of Securities.

       

      Section
        10.05.
        Reserved. 

       

      Section
        10.06.
        Effect
        of Reclassification, Consolidation, Merger or Sale.
        (a) If
        any of the following events occur, namely (i) any reclassification of the
        outstanding shares of Common Stock (other than a subdivision or combination
        to
        which Section 10.04(c) applies or a change in par value) as a result of which
        holders of Common Stock shall be entitled to receive cash, securities or
        other
        property (such property, the “Exchange
        Property”)
        with
        respect to or in exchange for such Common Stock, (ii) any consolidation,
        merger,
        binding share exchange or combination of the Company with another person
        as a
        result of which holders of Common Stock shall be entitled to receive Exchange
        Property with respect to or in exchange for such Common Stock, or (iii) any
        sale
        or conveyance of all or 

       

      
        
          
          

        

        
          70

          
            

          

        

        
          
          

        

      

      substantially
        all 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 Exchange Property
        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 for the conversion and settlement of the Securities as set forth
        in
        this Indenture. 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 10. If, in the case of any such reclassification, change,
        consolidation, merger, binding share exchange, combination, sale or conveyance,
        the Exchange Property receivable thereupon by a holder of Common Stock includes
        shares of stock or other securities and assets of a corporation other than
        the
        successor or purchasing corporation, as the case may be, in such
        reclassification, change, consolidation, merger, binding share exchange,
        combination, sale or conveyance, then such supplemental indenture shall also
        be
        executed by such other corporation and shall contain such additional provisions
        to protect the interests of the Holders of the Securities as the Board of
        Directors shall reasonably consider necessary by reason of the
        foregoing.

       

      (b) The
        Conversion Obligation with respect to each $1,000 principal amount of Securities
        converted following the effective date of any such transaction, shall be
        calculated (as provided in clause (c) below) based on the Exchange Property.
        In
        the event holders of the Common Stock have the opportunity to elect the form
        of
        consideration to be received in such transaction, the Company shall make
        adequate provision whereby the Holders of the Securities shall have a reasonable
        opportunity to determine the form of consideration, consistent with the election
        rights and restrictions applicable to holders of Common Stock, into which
        all of
        the Securities, treated as a single class, shall be convertible from and
        after
        the effective date of such transaction. Such determination shall be made
        pursuant to Section 1.05 and shall be subject to any limitations to which
        all of
        the holders of the Common Stock are subject, such as pro-rata reductions
        applicable to any portion of the consideration payable in such event and
        shall
        be conducted in such a manner as to be completed by the date which is the
        earliest of (a) the deadline for elections to be made by holders of the Common
        Stock in connection with such transaction, and (b) two Trading Days prior
        to the
        anticipated effective date of such event. The Company shall provide notice
        of
        the opportunity to determine the form of such consideration, as well as notice
        of the determination made by Holders of the Securities by issuing a press
        release and providing a copy of such notice to the Trustee. The Company shall
        not become a party to any such transaction unless its terms are consistent
        with
        the preceding.

       

       

      
        
          
          

        

        
          71

          
            

          

        

        
          
          

        

      

      (c) The
        Conversion Obligation in respect of any Securities converted following the
        effective date of any such transaction shall be computed in the same manner
        as
        set forth in Section 10.03(a) except that (1) if the Securities become
        convertible into Exchange Property, the Daily VWAP of the Common Stock shall
        be
        deemed to equal the sum of (A) 100% of the value of any Exchange Property
        consisting of cash received per share of Common Stock, (B) the Daily VWAP
        of any
        Exchange Property received per share of Common Stock consisting of securities
        that are traded on a U.S. national securities exchange and (2) the Fair Market
        Value of any other Exchange Property received per share, as determined by
        an
        independent nationally recognized investment bank selected by the Company
        for
        this purpose. Settlement (in cash and/or shares) shall occur on the Conversion
        Settlement Date, provided,
        that any
        amount of the Settlement Amount or Settlement Shares, as applicable, to be
        delivered in shares of Common Stock shall be paid in Exchange Property rather
        than shares of Common Stock. If the Exchange Property includes more than
        one
        kind of property, the amount of Exchange Property of each kind to be delivered
        shall be in the proportion that the value of the Exchange Property (as
        calculated pursuant to Section 10.03) of such kind bears to the value of
        all
        such Exchange Property. If the foregoing calculations would require the Company
        to deliver a fractional share or unit of Exchange Property to a Holder of
        Securities being converted, the Company shall deliver cash in lieu of such
        fractional share or unit based on the value of the Exchange
        Property.

       

      (d) The
        Company shall cause notice of the execution of such supplemental indenture
        to be
        mailed to each Holder of Securities, at its address appearing on the Security
        register provided for in Section 10.03 of this Indenture, within 20 days
        after
        execution thereof. Failure to deliver such notice shall not affect the legality
        or validity of such supplemental indenture.

       

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

       

      If
        this
        Section 10.06 applies to any event or occurrence, Section 10.04 shall
        not
        apply to such event or occurrence.

       

      Section
        10.07.
        Taxes
        on Shares Issued.
        The
        issue of stock certificates on conversions of Securities shall be made without
        charge to the converting Holder for any tax in respect of the issue thereof,
        except for applicable withholding, if any. The Company shall not, however,
        be
        required to pay any tax or duty 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 or beneficial owner of any Securities 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 or that none is due. 

       

       

      
        
          
          

        

        
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      Section
        10.08.
        Reservation
        of Shares, Shares to Be Fully Paid; Compliance with Governmental
        Requirements.
        (a) 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
        for the conversion of the Securities from time to time as such Securities
        are
        presented for conversion.

       

      (b) Before
        taking any action which would cause an adjustment increasing the Applicable
        Conversion Rate to an amount that would cause the Applicable Conversion Price
        to
        be reduced below the then par value, if any, of the shares of Common Stock
        issuable upon conversion of the Securities, the Company shall 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 Applicable Conversion Rate.

       

      (c) (i)
        The
        Company covenants that all shares of Common Stock which may be issued upon
        conversion of Securities shall 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. 

       

      (ii) The
        Company covenants that, if any shares of Common Stock to be provided for
        the
        purpose of conversion of Securities 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 shall in good
        faith and as expeditiously as possible, to the extent then permitted by the
        rules and interpretations of the SEC (or any successor thereto), endeavor
        to
        secure such registration or approval, as the case may be.

       

      Section
        10.09.
        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 Securities to determine the Applicable
        Conversion Rate or whether any facts exist which may require any adjustment
        of
        the Applicable 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 Security; and the Trustee
        and
        any other Conversion Agent make no representations with respect thereto.
        Neither
        the Trustee nor any Conversion Agent shall be responsible for any failure
        of the
        Company to issue, transfer or deliver any shares of Common Stock or stock
        certificates or other securities or property or cash upon the surrender of
        any
        Security for the purpose of conversion or to comply with any of the duties,
        responsibilities or covenants of the Company contained in this Article 10.
        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 

       

      
        
          
          

        

        
          73

          
            

          

        

        
          
          

        

      

      Section
        10.06 relating either to the kind or amount of shares of stock or securities
        or
        property (including cash) receivable by Holders upon the conversion of their
        Securities after any event referred to in such Section 10.06 or to any
        adjustment to be made with respect thereto, but, subject to the provisions
        of
        Section 7.01, may accept as conclusive evidence of the correctness of any
        such
        provisions, and shall be protected in relying upon the Officer’s Certificate
        (which the Company shall be obligated to file with the Trustee prior to the
        execution of any such supplemental indenture) with respect thereto.

       

       

      ARTICLE
        11

      Miscellaneous

       

      Section
        11.01.
        Trust Indenture Act Controls.
        If
        any
        provision of this Indenture limits, qualifies, or conflicts with another
        provision which is required to be included in this Indenture by the TIA,
        the
        required provision shall control.

       

      Section
        11.02.
        Notices.
        Any
        request, demand, authorization, notice, waiver, consent or communication
        by the
        Company or the Trustee to the other is duly given if in writing and delivered
        in
        person or mailed by first-class mail, postage prepaid, addressed as follows
        or
        transmitted by facsimile transmission to the following facsimile
        numbers:

       

      if
        to the
        Company:

       

      Charming
        Shoppes, Inc.

       

      450
        Winks
        Lane

       

      Bensalem,
        Pennsylvania 19020

       

      Attn:
        Colin D. Stern

       

      Facsimile:
        (215) 633-4737

       

      With
        a
        copy to (which shall not constitute notice):

       

      Drinker
        Biddle & Reath LLP

       

      One
        Logan
        Square

       

      18th
        and
        Cherry Streets

       

      Philadelphia,
        Pennsylvania 19103

       

      Attn:
        F.
        Douglas Raymond III

       

      Facsimile:
        (215) 988-2757

       

      if
        to the
        Trustee:

       

      Wells
        Fargo Bank, National Association

       

      1600
        JFK
        Boulevard, Suite 810

       

      Philadelphia,
        Pennsylvania 19103

       

      Attn:
        Corporate Trust Services

       

      Facsimile:
        (215) 861-9460

       

      
        
          
          

        

        
          74

          
            

          

        

        
          
          

        

      

      The
        Company or the Trustee by notice given to the other in the manner provided
        above
        may designate additional or different addresses for subsequent notices or
        communications.

       

      Any
        notice or communication given to a Securityholder shall be delivered to the
        Securityholder, in accordance with the procedures of the Registrar or by
        first-class mail, postage prepaid, at the Securityholder’s address as it appears
        on the registration books of the Registrar and shall be sufficiently given
        if so
        mailed within the time prescribed.

       

      Failure
        to mail a notice or communication to a Securityholder or any defect in it
        shall
        not affect its sufficiency with respect to other Securityholders. If a notice
        or
        communication is mailed in the manner provided above, it is duly given, whether
        or not received by the addressee; provided,
        however,
        that no
        notice to the Trustee shall be deemed to be duly given unless and until the
        Trustee actually receives same at the address given above.

       

      If
        the
        Company mails a notice or communication to the Securityholders, it shall
        mail a
        copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
        co-registrar.

       

      Section
        11.03.
        Communication by Holders with Other Holders.
        Securityholders
        may communicate pursuant to TIA Section 312(b) with other Securityholders
        with
        respect to their rights under this Indenture or the Securities. The Company,
        the
        Trustee, the Registrar, the Paying Agent, the Conversion Agent and anyone
        else
        shall have the protection of TIA Section 312(c).

       

      Section
        11.04.
        Certificate and Opinion as to Conditions Precedent.
        Upon
        any
        request or application by the Company to the Trustee to take any action under
        this Indenture (other than to authenticate the Securities under Section 2.02),
        the Company shall furnish to the Trustee:

       

      (1) an
        Officer’s Certificate stating that, in the opinion of the signer, all conditions
        precedent, if any, provided for in this Indenture relating to the proposed
        action have been complied with; and

       

      (2) an
        Opinion of Counsel stating that, in the opinion of such counsel, all such
        conditions precedent, if any, have been complied with.

       

      Section
        11.05.
        Statements Required in Certificate or Opinion.
        Each
        Officer’s Certificate or Opinion of Counsel delivered pursuant to Section 11.04
        with respect to compliance with a covenant or condition provided for in this
        Indenture shall include:

       

      (1) a
        statement that each person making such Officer’s Certificate or Opinion of
        Counsel has read such covenant or condition;

       

      
        
          
          

        

        
          75

          
            

          

        

        
          
          

        

      

      (2) a
        brief
        statement as to the nature and scope of the examination or investigation
        upon
        which the statements or opinions contained in such Officer’s Certificate or
        Opinion of Counsel are based;

       

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

       

      (4) a
        statement that, in the opinion of such person, such covenant or condition
        has
        been complied with.

       

      Section
        11.06.
        Separability Clause.
        In
        case
        any provision in this Indenture or in the Securities shall be invalid, illegal
        or unenforceable, the validity, legality and enforceability of the remaining
        provisions shall not in any way be affected or impaired thereby.

       

      Section
        11.07.
        Rules by Trustee, Paying Agent, Conversion Agent and Registrar.
        The
        Trustee may make reasonable rules for action by or a meeting of Securityholders.
        The Registrar, the Conversion Agent, the Bid Solicitation Agent and the Paying
        Agent may make reasonable rules for their functions.

       

      Section
        11.08.
        Legal Holidays.
        A
        “legal
        holiday”
is
        any
        day other than a Business Day. If any specified date (including a date for
        giving notice) is a legal holiday, the action shall be taken on the next
        succeeding day that is not a legal holiday, and, if the action to be taken
        on
        such date is a payment in respect of the Securities, no interest shall accrue
        with respect to such payment for the intervening period.

       

      Section
        11.09.
        Governing Law.
        THIS
        INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
        OF
        THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES
        THEREOF.

       

      Section
        11.10.
        No
        Recourse Against Others.
        A
        director, officer, employee or stockholder, as such, of the Company shall
        not
        have any liability for any obligations of the Company under the Securities
        or
        this Indenture or for any claim based on, in respect of or by reason of such
        obligations or their creation. By accepting a Security, each Securityholder
        shall waive and release all such liability. The waiver and release shall
        be part
        of the consideration for the issue of the Securities.

       

      Section
        11.11.
        Successors.
        All
        agreements of the Company in this Indenture and the Securities shall bind
        its
        successor. All agreements of the Trustee in this Indenture shall bind its
        successor.

       

       

      
        
          
          

        

        
          76

          
            

          

        

        
          
          

        

      

      Section
        11.12.
        Multiple Originals.
        The
        parties may sign any number of copies of this Indenture. Each signed copy
        shall
        be an original, but all of them together represent the same agreement. One
        signed copy is enough to prove this Indenture.

       

      

       

      
        
          
            77

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            

             

          

        

      

      IN
        WITNESS WHEREOF, the undersigned, being duly authorized, have executed this
        Indenture on behalf of the respective parties hereto as of the date first
        above
        written.

       

      
        	
                CHARMING
                  SHOPPES, INC.

                 

              
	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      

      
        	
                  WELLS
                  FARGO BANK,
                  NATIONAL 

                      ASSOCIATION,
                  as
                  Trustee 

                 

              
	
                  By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
             

          

          
          

        

        
          2

          
            

          

        

        
          
          

          
            

             

          

        

      

      EXHIBIT
        A

       

      [FORM
        OF
        FACE OF GLOBAL SECURITY]

       

      UNLESS
        THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
        TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
        OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
&
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
        OF THE
        DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
        SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
        DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
        OR
        OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
        CEDE & CO., HAS AN INTEREST HEREIN.

       

      TRANSFERS
        OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE
        DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE
        AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
        MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE
        INDENTURE REFERRED TO ON THE REVERSE HEREOF.

       

      NEITHER
        THIS SECURITY NOR ANY SHARES OF COMMON STOCK ISSUABLE ON CONVERSION OF THIS
        SECURITY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
        NEITHER THIS SECURITY NOR ANY SHARES OF COMMON STOCK ISSUABLE ON CONVERSION
        OF
        THIS SECURITY, NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE
        REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
        DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
        IS
        EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
        BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL
        BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE
        144A”)) (A
        “QUALIFIED INSTITUTIONAL BUYER”);
        (2)
        AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH
        IT HAS
        PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
        OR ANY
        COMMON STOCK ISSUABLE ON CONVERSION OF THIS SECURITY, PRIOR TO THE EXPIRATION
        OF
        THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k)
        UNDER
        THE SECURITIES ACT (OR ANY SUCCESSOR

       

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      PROVISION),
        ONLY (A) TO CHARMING SHOPPES, INC. (THE “ISSUER”) OR A SUBSIDIARY THEREOF, (B)
        UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
        SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
        TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE UNDER
        RULE
        144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT REASONABLY BELIEVES IS
        A
        QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
        ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
        TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D) UNDER ANOTHER AVAILABLE
        EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
        TO
        THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
        UNDER CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
        AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT
        IT
        WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
        SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED ON
        THE
        EARLIER OF THE TRANSFER OF THIS SECURITY UNDER CLAUSE 2(B) ABOVE OR ON ANY
        TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
        SUCCESSOR PROVISION).

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      CHARMING
        SHOPPES, INC.

       

      

       

      1.125%
        Senior Convertible Notes Due 2014

       

      CUSIP:
        161133AD5

      
        	
                ISSUE
                  DATE: April 30, 2007

              	
                Principal
                  Amount: $250,000,000

              

      

      No.
        

       

      CHARMING
        SHOPPES, INC., a Pennsylvania corporation, promises to pay to Cede & Co. or
        registered assigns, the principal amount of Two Hundred Fifty Million Dollars,
        on May 1, 2014.

       

      Interest
        Rate: 1.125% per year.

       

      Interest
        Payment Dates: May 1 and November 1 of each year, commencing November 1,
        2007.

       

      Interest
        Record Date: April 15 and October 15 of each year.

       

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

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

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

       

      
        	
                Dated:
                  April ___, 2007

                 

              	
                CHARMING
                  SHOPPES, INC.

                 

              
	 	
                By:___________________________

              
	 	
                Name:

              
	 	
                Title:

                 

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

      TRUSTEE’S
        CERTIFICATE OF AUTHENTICATION

      WELLS
        FARGO BANK, NATIONAL ASSOCIATION, 

      as
        Trustee, certifies that this is one 

      of
        the
        Securities referred to in the 

      within-mentioned
        Indenture.

       

      By__________________________________

      Authorized
        Officer

      

      Dated:
        April ___, 2007

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

      [FORM
        OF
        REVERSE OF GLOBAL SECURITY]

       

      1.125%
        Senior Convertible Notes Due 2014

       

      This
        Security is one of a duly authorized issue of 1.125% Senior Convertible Notes
        Due 2014 (the “Securities”)
        of
        Charming Shoppes, Inc., a Pennsylvania corporation (including any successor
        corporation under the Indenture hereinafter referred to, the “Company”),
        issued under an Indenture, dated as of April 30, 2007 (the “Indenture”),
        between the Company and Wells Fargo Bank, National Association, as trustee
        (the
“Trustee”).
        The
        terms of the Security include those stated in the Indenture, those made part
        of
        the Indenture by reference to the Trust Indenture Act of 1939, as amended
        (“TIA”),
        and
        those set forth in this Security. This Security is subject to all such terms,
        and Holders are referred to the Indenture and the TIA for a statement of
        all
        such terms. To the extent permitted by applicable law, in the event of any
        inconsistency between the terms of this Security and the terms of the Indenture,
        the terms of the Indenture shall control. Capitalized terms used but not
        defined
        herein have the meanings assigned to them in the Indenture unless otherwise
        indicated.

       

      1. Interest.

       

      The
        Securities shall bear Interest on the principal amount thereof at a rate
        of
        1.125% per year. The Company shall also pay Additional Amounts, if any, as
        set
        forth in the Indenture and the Registration Rights Agreement. 

       

      Interest
        shall be payable semi-annually in arrears on each Interest Payment Date to
        Holders at the close of business on the preceding Interest Record Date. Interest
        shall be computed on the basis of a 360-day year comprised of twelve 30 day
        months and will accrue from April 30, 2007 or from the most recent date to
        which
        Interest has been paid or duly provided for.

       

      The
        Company shall pay Interest to the Securityholder of record on the Interest
        Record Date, except that if a Securityholder elects to require the Company
        to
        repurchase Securities on a date that is after an Interest Record Date but
        on or
        prior to the corresponding Interest Payment Date, the Company shall pay accrued
        and unpaid Interest on the Securities being repurchased to, but not including,
        the Fundamental Change Repurchase Date to the Securityholder of record on
        the
        Fundamental Change Repurchase Date. 

       

      If
        the
        principal amount of any Security, or any accrued and unpaid Interest or
        Additional Amounts, if any, are not paid when due (whether upon acceleration
        pursuant to Section 6.02 of the Indenture, upon the date set for payment
        of the
        Fundamental Change Repurchase Price pursuant to Section 4 hereof, upon the
        Stated Maturity of the Securities, upon the Interest Payment Dates or upon
        the
        Additional Amounts Payment Dates (as defined in the Registration Rights
        Agreement)), then in each such case the overdue amount shall, to the
        extent

       

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

      permitted
        by law, bear cash interest at the rate of 1.125% per annum, compounded
        semi-annually, which interest shall accrue from the date such overdue amount
        was
        originally due to the date payment of such amount, including interest thereon,
        has been made or duly provided for. All such interest shall be payable in
        cash
        on demand but if not so demanded shall be paid quarterly to the Holders on
        the
        last day of each quarter. 

       

      2. Method
        of Payment.

       

      Except
        as
        provided below, the Company shall pay Interest, including Additional Amounts,
        if
        any, on (i) Global Securities, to DTC in immediately available funds, (ii)
        any
        Certificated Security having an aggregate principal amount of $2,000,000
        or
        less, by check mailed to the Holder of such Security and (iii) any Certificated
        Security having an aggregate principal amount of more than $2,000,000, by
        wire
        transfer in immediately available funds if requested by the Holder of any
        such
        Security as least five business days prior to the relevant Interest Payment
        Date.

       

      At
        Stated
        Maturity, the Company shall pay Interest on Certificated Securities at the
        Company’s office or agency maintained for that purpose, which initially shall be
        the office or agency of the Trustee located at 6th and Marquette Ave.,
        N9303-121, Minneapolis, Minnesota 55479.

       

      Subject
        to the terms and conditions of the Indenture, the Company shall make payments
        in
        cash in respect of Fundamental Change Repurchase Prices and at Stated Maturity
        to Holders who surrender Securities to a Paying Agent to collect such payments
        in respect of the Securities. The Company shall pay cash amounts in money
        of the
        United States that at the time of payment is legal tender for payment of
        public
        and private debts. However, the Company may make such cash payments by check
        payable in such money. 

       

      3. Indenture.

       

      The
        Securities are general unsecured obligations of the Company limited to
        $250,000,000 aggregate principal amount (or, to the extent the Initial
        Purchasers exercise their over-allotment option, $275,000,000) aggregate
        principal amount. The Indenture does not limit other indebtedness of the
        Company, secured or unsecured.

       

      4. Purchase
        By the Company at the Option of the Holder.

       

      At
        the
        option of any Holder and subject to the terms and conditions of the Indenture,
        the Company shall become obligated to repurchase the Securities held by such
        Holder after the occurrence of a Fundamental Change for a Fundamental Change
        Repurchase Price equal to 100% of the principal amount of those Securities
        plus
        accrued and unpaid Interest and accrued and unpaid Additional Amounts, if
        any,
        on those Securities up to, but not including, the Fundamental

       

      
        
          
          

        

        
          A-7

          
            

          

        

        
          
          

        

      

      Change
        Repurchase Date. To exercise such right, a Holder shall deliver to the Paying
        Agent a Fundamental Change Repurchase Notice containing the information set
        forth in the Indenture at any time on or prior to the close of business on
        the
        Business Day immediately preceding the Fundamental Change Repurchase Date
        and
        shall deliver the Securities to the Paying Agent as set forth in the
        Indenture.

       

      Holders
        have the right to withdraw any Fundamental Change Repurchase Notice by
        delivering to the Paying Agent a written notice of withdrawal in accordance
        with
        the provisions of the Indenture.

       

      If
        cash
        sufficient to pay the Fundamental Change Repurchase Price of all Securities
        or
        portions thereof to be purchased as of the Fundamental Change Repurchase
        Date is
        deposited with the Paying Agent, prior to or on the Business Day following
        the
        Fundamental Change Repurchase Date, Interest and Additional Amounts, if any,
        shall cease to accrue on such Securities (or portions thereof) on and following
        such Fundamental Change Repurchase Date, and the Holder thereof shall have
        no
        other rights as such other than the right to receive the Fundamental Change
        Repurchase Price upon surrender of such Security.

       

      5. Conversion.

       

      Subject
        to the occurrence of certain events and in compliance with the provisions
        of the
        Indenture (including, without limitation, the conditions to conversion of
        this
        Security set forth in Section 10.01 thereof), a Holder is entitled, at such
        Holder’s option, to convert the Holder’s Security (or any portion of the
        principal amount thereof that is $1,000 or an integral multiple of $1,000)
        at
        the Applicable Conversion Rate in effect at the time of conversion.

       

      The
        Company shall notify Holders of any event triggering the right to convert
        the
        Securities as specified in the Indenture.

       

      A
        Security in respect of which a Holder has delivered a Fundamental Change
        Repurchase Notice exercising the option of such Holder to require the Company
        to
        purchase such Security, may be converted only if such Fundamental Change
        Repurchase Notice is withdrawn in accordance with the terms of the
        Indenture.

       

      The
        initial Applicable Conversion Rate is 65.0233 shares of Common Stock per
        $1,000
        principal amount, subject to adjustment in certain events described in the
        Indenture. The Applicable Conversion Rate shall not be adjusted for any accrued
        and unpaid Interest or accrued and unpaid Additional Amounts, if any. Upon
        conversion, no payment shall be made by the Company with respect to accrued
        and
        unpaid Interest and accrued and unpaid Additional Amounts, if any. Instead,
        such
        amount shall be deemed paid by the cash and shares of Common Stock, if any,
        delivered upon conversion of any Security. In addition, no payment

       

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

      or
        adjustment shall be made in respect of dividends on the Common Stock, except
        as
        set forth in the Indenture.

       

      In
        addition, following certain corporate transactions as set forth in Section
        10.01(b) of the Indenture that constitute a Fundamental Change, a Holder
        who
        elects to convert its Securities in connection with such corporate transaction
        shall be entitled to receive Additional Shares of Common Stock upon conversion,
        subject to the terms and conditions set forth in Section 10.01(c) of the
        Indenture. 

       

      To
        surrender a Security for conversion, a Holder must (1) complete and manually
        sign the Conversion Notice attached hereto (or complete and manually sign
        a
        facsimile of such notice) and deliver such notice to the Conversion Agent,
        (2)
        surrender the Security to the Conversion Agent, (3) if required, furnish
        appropriate endorsements and transfer documents, (4) if required by Section
        10.02(h)of the Indenture, pay Interest and (5) pay any transfer or similar
        tax,
        if required.

       

      No
        fractional shares of Common Stock shall be issued upon conversion of any
        Security. Instead of any fractional share of Common Stock that would otherwise
        be issued upon conversion of such Security, the Company shall pay a cash
        adjustment as provided in the Indenture.

       

      If
        the
        Company engages in any reclassification of the Common Stock (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
        is party to a consolidation, merger, binding share exchange or transfer of
        all
        or substantially all of its assets, and as a result of any such event the
        Holders of Common Stock would be entitled to receive Exchange Property for
        their
        Common Stock, upon conversion of the Securities after the effective date
        of such
        event, the Conversion Obligation and the Settlement Amount shall be based
        on the
        Applicable Conversion Rate and the Exchange Property, in each case in accordance
        with the Indenture. If the transaction also constitutes a Fundamental Change
        that would lead to the issuance of Additional Shares as set forth in Section
        10.01(c) of the Indenture, if a Holder elects to convert all or a portion
        of its
        Securities, such Holder shall receive Additional Shares upon conversion pursuant
        to Section 10.01(c) of the Indenture, subject to the terms and conditions
        set
        forth in such Section.

       

      6. Paying
        Agent, Conversion Agent, Bid Solicitation Agent and
        Registrar.

       

      Initially,
        the Trustee shall act as Paying Agent, Conversion Agent and Registrar. The
        Company may appoint and change any Paying Agent, Conversion Agent, Bid
        Solicitation Agent or Registrar without notice, other than notice to the
        Trustee. The Company or any of its Subsidiaries or any of their Affiliates
        may
        act as Paying Agent, Conversion Agent or Registrar.

       

      
        
          
          

        

        
          A-9

          
            

          

        

        
          
          

        

      

      7. Denominations;
        Transfer; Exchange.

       

      The
        Securities are in fully registered form, without coupons, in denominations
        of
        $1,000 of principal amount and integral multiples of $1,000. A Holder may
        transfer or exchange Securities in accordance with the Indenture. The Registrar
        may require a Holder, among other things, to furnish appropriate endorsements
        and transfer documents and to pay any taxes and fees required by law or
        permitted by the Indenture. The Registrar need not transfer or exchange any
        Securities in respect of which a Fundamental Change Repurchase Notice has
        been
        given and not withdrawn (except, in the case of a Security to be purchased
        in
        part, the portion of the Security not to be purchased). 

       

      8. Persons
        Deemed Owners.

       

      Except
        as
        otherwise provided in the Indenture, the registered Holder of this Security
        will
        be treated as the owner of this Security for all purposes.

       

      9. Unclaimed
        Money or Securities.
        

       

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

       

      10. Amendment;
        Waiver.

       

      Subject
        to certain exceptions set forth in the Indenture, (i) the Indenture or the
        Securities may be amended with the written consent of the Holders of at least
        a
        majority in aggregate principal amount of the outstanding Securities and
        (ii)
        certain Events of Defaults may be waived with the written consent of the
        Holders
        of a majority in aggregate principal amount of the outstanding Securities.
        Subject to certain exceptions set forth in the Indenture, without the consent
        of
        any Securityholder, the Company and the Trustee may amend the Indenture or
        the
        Securities (i) to add guarantees with respect to the Securities or secure
        the
        Securities, (ii) to conform as necessary, the Indenture and this Security
        to the
“Description of the Debentures” as set forth in the Offering Memorandum, (iii)
        to add to the covenants of the Company or Events of Default for the benefit
        of
        the Holders of Securities, (iv) to surrender any right or power conferred
        upon
        the Company in the Indenture, (v) to provide for the assumption by a successor
        company of the Company’s obligations to the Holders of Securities in the case of
        a merger, consolidation, sale conveyance, transfer, sale or lease as provided
        under the Indenture, (vi) to comply with the requirements of the SEC in order
        to
        effect or maintain the qualification of the Indenture under the TIA, (vii)
        to
        cure any ambiguity or to correct or supplement any provision in the Indenture
        which may

       

      
        
          
          

        

        
          A-10

          
            

          

        

        
          
          

        

      

      be
        inconsistent with any other provision in the Indenture, (viii) to make other
        changes to the Indenture or forms or terms of the Securities so long as no
        such
        change individually or in the aggregate with all other such changes has or
        will
        have a material adverse effect on the interests of the Holders of the
        Securities, (ix) to establish the form of Securities substantially in the
        form
        of Exhibit B to the Indenture, (x) to evidence and provide for the acceptance
        of
        the appointment under the Indenture of a successor Trustee in accordance
        with
        the terms of the Indenture and (xi) to provide for uncertificated Securities
        in
        addition to or in place of certificated Securities; provided,
        however,
        that
        the uncertificated Securities are issued in registered form for purposes
        of
        Section 163(f) of the Code, or in a manner such that the uncertificated
        Securities are described in Section 163(f)(2)(B) of the Code.

       

      11. Defaults
        and Remedies.

       

      As
        set
        forth in the Indenture, subject to certain exceptions, if any Event of Default
        with respect to Securities shall occur and be continuing, the principal amount
        of the Securities and any accrued and unpaid Interest and accrued and unpaid
        Additional Amounts, if any, on all the Securities may be declared due and
        payable in the manner and with the effect provided in the
        Indenture.

       

      12. Trustee
        Dealings with the Company.

       

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

       

      13. Calculations
        in Respect of Securities.

       

      Except
        as
        otherwise provided in the Indenture, the Company or its agents shall be
        responsible for making all calculations called for under the Securities
        including, but not limited to, determination of the market prices for the
        Securities and of the Common Stock and the Additional Amounts, if any, accrued
        on the Securities. Any calculations made in good faith and without manifest
        error shall be final and binding on Holders of the Securities. The Company
        or
        its agents shall be required to deliver to the Trustee a schedule of its
        calculations and the Trustee shall be entitled to conclusively rely upon
        the
        accuracy of such calculations without independent verification.

       

      14. No
        Recourse Against Others.

       

      A
        director, officer, employee or shareholder, as such, of the Company shall
        not
        have any liability for any obligations of the Company under the Securities
        or
        the Indenture or for any claim based on, in respect of or by reason of such
        obligations or their creation. By accepting a Security, each
        Securityholder

       

      
        
          
          

        

        
          A-11

          
            

          

        

        
          
          

        

      

      waives
        and releases all such liability. The waiver and release are part of the
        consideration for the issue of the Securities.

       

      15. Authentication.

       

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

       

      16. Abbreviations.

       

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

       

      17. Governing
        Law.

       

      THE
        LAWS
        OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY, WITHOUT
        GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.

       

      18. Copy
        of Indenture.

       

      The
        Company shall furnish to any Securityholder upon written request and without
        charge a copy of the Indenture which has in it the text of this Security
        in
        larger type. Requests may be made to:

       

      Charming
        Shoppes, Inc.

      450
        Winks
        Lane

      Bensalem,
        Pennsylvania 19020

      Attn:
        Colin D. Stern

      Facsimile:
        (215) 633-4737

       

      19. Registration
        Rights.

       

      The
        Holders of the Securities are entitled to the benefits of a Registration
        Rights
        Agreement, dated April 30, 2007, among the Company and Banc of America
        Securities LLC and J.P. Morgan Securities Inc., as representatives of the
        initial purchasers, including the right to receive Additional Amounts upon
        a
        Registration Default (as defined in such agreement). The Company shall make
        payments of Additional Amounts on the Additional Amounts Payment Dates (as
        defined in the Registration Rights Agreement), but otherwise in accordance
        with
        the provisions set forth herein for the payment of Interest.

       

      

      
        
          
          

        

        
          A-12

          
            

          

        

        
          
          

        

      

      

      
        	
                ASSIGNMENT
                  FORM

              	 	
                CONVERSION
                  NOTICE

              
	
                To
                  assign this Security, fill in the form below:

              	 	
                To
                  convert this Security, check the box [ ]

              
	
                 

                I
                  or we assign and transfer this Security to
                  _____________________________

                _____________________________

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

                _____________________________

                _____________________________

                _____________________________

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

                 

                and
                  irrevocably appoint

                 

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

              	 	
                 

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

                 

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

                _____________________________

                _____________________________

                (Insert
                  the other person’s soc. sec. tax ID no.)

                _____________________________

                _____________________________

                _____________________________

                _____________________________

                _____________________________

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

              

      

      

      Date:
        __________ Your Signature: _________________________________

       

      ______________________________________________________________

       

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

       

      Signature
        Guaranteed

       

      ________________________________

       

      Participant
        in a Recognized Signature

       

      Guarantee
        Medallion Program

       

      By:_____________________________

      Authorized
        Signatory

       

      
        
          
          

        

        
          A-13

          
            

          

        

        
          
          

        

      

      SCHEDULE
        OF INCREASES AND DECREASES

      OF
        GLOBAL
        SECURITY

      

      Initial
        Principal Amount of Global Security: ______________________________
        ($_________________).

       

      
        	
                Date

              	
                Amount
                  of Increase in Principal Amount of Global Security

              	
                Amount
                  of Decrease in Principal Amount of Global Security

              	
                Principal
                  Amount of Global Security After Increase or Decrease

              	
                Notation
                  by Registrar or Security Custodian

              
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
             

          

          
          

        

        
          A-14

          
            

          

        

        
          
          

          
            

             

          

        

      

      EXHIBIT
        B

       

      [FORM
        OF
        FACE OF CERTIFICATED SECURITY]

       

      NEITHER
        THIS SECURITY NOR ANY SHARES OF COMMON STOCK ISSUABLE ON CONVERSION OF THIS
        SECURITY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
        NEITHER THIS SECURITY NOR ANY SHARES OF COMMON STOCK ISSUABLE ON CONVERSION
        OF
        THIS SECURITY, NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE
        REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
        DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
        IS
        EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
        BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL
        BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE
        144A”)) (A
        “QUALIFIED INSTITUTIONAL BUYER”);
        (2)
        AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH
        IT HAS
        PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
        OR ANY
        COMMON STOCK ISSUABLE ON CONVERSION OF THIS SECURITY, PRIOR TO THE EXPIRATION
        OF
        THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k)
        UNDER
        THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO CHARMING SHOPPES,
        INC. (THE “ISSUER”) OR A SUBSIDIARY THEREOF, (B) UNDER A REGISTRATION STATEMENT
        THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
        TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES
        ARE ELIGIBLE FOR RESALE UNDER RULE 144A, IN COMPLIANCE WITH RULE 144A TO
        A
        PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES
        FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
        TO
        WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
        144A OR
        (D) UNDER ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
        OF THE
        SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
        SUCH OFFER, SALE OR TRANSFER UNDER CLAUSE (D) TO REQUIRE THE DELIVERY OF
        AN
        OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
        EACH
        OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
        SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
        THIS LEGEND WILL BE REMOVED ON THE EARLIER OF THE TRANSFER OF THIS SECURITY
        UNDER CLAUSE 2(B) ABOVE OR ON

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

      ANY
        TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
        SUCCESSOR PROVISION).

      

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      
        
          
          

        

        
          B-2

          
            

          

        

        
          
          

        

      

      CHARMING
        SHOPPES, INC.

       

      

       

      1.125%
        Senior Convertible Notes Due 2014

       

      CUSIP:
        161133AD5

      
        	
                ISSUE
                  DATE: April 30, 2007

              	
                Principal
                  Amount: $250,000,000

              

      

      No.
        

       

      CHARMING
        SHOPPES, INC., a Pennsylvania corporation, promises to pay to __________
        or
        registered assigns, the principal amount of _____________________, on May
        1,
        2014.

       

      Interest
        Rate: 1.125% per year.

       

      Interest
        Payment Dates: May 1 and November 1 of each year, commencing November 1,
        2007.

       

      Interest
        Record Date: April 15 and October 15 of each year. 

       

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

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      
        
          
          

        

        
          B-3

          
            

          

        

        
          
          

        

      

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

       

      
        	
                Dated:
                  ________

                 

              	
                CHARMING
                  SHOPPES, INC.

                 

              
	 	
                By:
                  __________________________

                 

              
	 	
                Title:
                  _________________________

                 

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          B-4

          
            

          

        

        
          
          

        

      

      TRUSTEE’S
        CERTIFICATE OF AUTHENTICATION

      ____________________________,
        

      Wells
        Fargo Bank, National Association

      as
        Trustee, certifies that this is one 

      of
        the
        Securities referred to in the 

      within-mentioned
        Indenture.

      

      

      By__________________________________

      Authorized
        Signatory

       

      Dated:
        ____________

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          B-5

          
            

          

        

        
          
          

        

      

      [FORM
        OF
        REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
             

          

          
          

        

        
          B-6

          
            

          

        

        
          
          

          
            

             

          

        

      

      EXHIBIT
        C

       

      CHARMING
        SHOPPES, INC.

       

      1.125%
        Convertible Senior Subordinated Notes due 2014

       

      Transfer
        Certificate

       

      In
        connection with any transfer of any of the Securities within the period prior
        to
        the expiration of the holding period applicable to the sales thereof under
        Rule
        144(k) under the Securities Act of 1933, as amended (the “Securities
        Act”)
        (or
        any successor provision), the undersigned registered owner of this Security
        hereby certifies with respect to $____________ principal amount of the
        above-captioned Securities presented or surrendered on the date hereof (the
        “Surrendered
        Securities”)
        for
        registration of transfer, or for exchange or conversion where the securities
        issuable upon such exchange or conversion are to be registered in a name
        other
        than that of the undersigned registered owner (each such transaction being
        a
“transfer”),
        that
        such transfer complies with the restrictive legend set forth on the face
        of the
        Surrendered Securities for the reason checked below:

       

      
        	
                [_]
                  

                 

              	
                A
                  transfer of the Surrendered Securities is made to the Company or
                  any
                  subsidiaries; or

                 

              
	
                [_]
                  

                 

              	
                The
                  transfer of the Surrendered Securities is pursuant to an effective
                  registration statement under the Securities Act; or

                 

              
	
                [_]
                  

                 

              	
                The
                  transfer of the Surrendered Securities complies with Rule 144A
                  under the
                  Securities Act; or

                 

              
	
                [_]
                  

                 

              	
                The
                  transfer of the Surrendered Securities is pursuant to Rule 144
                  under the
                  Securities Act and each of the conditions set forth in such rule
                  have been
                  met;

                 

              

      

      and
        unless the box below is checked, the undersigned confirms that, to the
        undersigned’s knowledge, such Securities are not being transferred to an
“affiliate” of the Company as defined in Rule 144 under the Securities Act (an
“Affiliate”).

       

      

       

      

       

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

      

       

      
        	
                [_]
                  

                 

              	
                The
                  transferee is an Affiliate of the Company.

                 

              

      

      

      
        	
                DATE:

              	
                __________________________

              
	 	
                Signature(s)

                 

              

      

      (If
        the
        registered owner is a corporation, partnership or fiduciary, the title of
        the
        person signing on behalf of such registered owner must be stated.)

       

      Signature
        Guaranteed

      

      

      _______________________________

      Participant
        in a Recognized Signature

      

      Name:

      

      Address:
        

      

      Tax
        I.D.:

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

       

      
        
          
             

          

          
          

        

        
          C-2

          
            

          

        

        
          
          

          
            

             

          

        

      

      EXHIBIT
        D

       

      CHARMING
        SHOPPES, INC.

      NOTICE
        OF OCCURRENCE

      OF
        FUNDAMENTAL CHANGE

       

      [DATE]

       

      To
        the
        Holders of the 1.125% Senior Convertible Notes Due 2014

       

      (the
        “Securities”) issued by Charming Shoppes, Inc.:

       

      Charming
        Shoppes, Inc. (the “Company”) by this written notice hereby notifies you,
        pursuant to Section 3.02 of that certain Indenture (the “Indenture”), dated as
        of April 30, 2007, between the Company and Wells Fargo Bank, National
        Association, that a Fundamental Change (as such term and other capitalized
        terms
        used herein and not otherwise defined herein is defined in the Indenture)
        as
        described below has occurred. Included herewith is the form of Fundamental
        Change Repurchase Notice to be completed by you if you wish to have your
        Securities repurchased by the Company.

       

      1. Fundamental
        Change: [Insert
        brief description of the Fundamental Change and the date of the occurrence
        thereof]. 

       

      2. Date
        by
        which Fundamental Change Repurchase Notice must be delivered by you to Paying
        Agent in order to have your Securities repurchased:

       

      3. Fundamental
        Change Repurchase Date:

       

      4. Fundamental
        Change Repurchase Price:

       

      5. Paying
        Agent and Conversion Agent: [NAME] [ADDRESS]

       

      6. Applicable
        Conversion Rate: To
        the
        extent described in Item 7 below, each $1,000 principal amount of the Securities
        is convertible into [insert number of shares] shares of the Company’s common
        stock, par
        value
        $0.10 per share
        (the
“Common Stock”), subject to adjustment.

       

      7. The
        Securities as to which you have delivered a Fundamental Change Repurchase
        Notice
        to the Paying Agent may be converted if they are otherwise convertible pursuant
        to Article 10 of the Indenture and the terms of the Securities only if you
        withdraw such Fundamental Change Repurchase Notice pursuant to the terms
        of the
        Indenture. Subject to Section 10.01 of the Indenture, you may be entitled
        to
        have your Securities converted into cash and shares of the Company’s common
        stock, if any:

       

      (i)
        during any fiscal quarter of the Company commencing after May 5, 2007 (and
        only
        during such fiscal quarter), if the Closing Sale Price (as defined in the
        Indenture) of the Company’s common stock for at least 20

       

      
        
          
          

        

        
          D-1

          
            

          

        

        
          
          

        

      

      Trading
        Days during the period of 30 consecutive Trading Days ending on the last
        Trading
        Day (as defined in the Indenture) of the immediately preceding fiscal quarter
        was more than 130% of the Applicable Conversion Price (as defined in the
        Indenture) on such last Trading Day; 

       

      (ii)
        during the five business days immediately following any five consecutive
        Trading-Day period in which the Trading Price (as defined in the Indenture)
        per
        $1,000 principal amount of the Securities for each day of that period was
        less
        than 98% of the product of the Closing Sale Price of the Common Stock and
        the
        Applicable Conversion Rate (as defined in the Indenture) of the Securities
        on
        each such day;

       

      (iii)
        on
        or after November 15, 2013; or

       

      (iv)
        upon
        the occurrence of certain specified corporate transactions described in the
        Indenture.

       

      8. The
        Securities as to which you have delivered a Fundamental Change Repurchase
        Notice
        must be surrendered by you (by effecting book entry transfer of the Securities
        or delivering Certificated Securities, together with necessary endorsements,
        as
        the case may be) to [Name of Paying Agent] at [insert address] in order for
        you
        to collect the Fundamental Change Repurchase Price.

       

      9. The
        Fundamental Change Repurchase Price for the Securities as to which you have
        delivered a Fundamental Change Repurchase Notice and not withdrawn such Notice
        shall be paid, subject to receipt of funds and/or securities by the Paying
        Agent, promptly following the later of the Business Day immediately following
        such Fundamental Change Repurchase Date and the date you deliver such Securities
        to [Name of Paying Agent].

       

      10. In
        order
        to have the Company repurchase your Securities, you must deliver the Fundamental
        Change Repurchase Notice, duly completed by you with the information required
        by
        such Fundamental Change Repurchase Notice (as specified in Section 3.02 of
        the
        Indenture) and deliver such Fundamental Change Repurchase Notice to the Paying
        Agent at any time until 5:00 p.m. (New York City Time) on the Business Day
        immediately preceding the Fundamental Change Repurchase Date.

       

      11. In
        order
        to withdraw any Fundamental Change Repurchase Notice previously delivered
        by you
        to the Paying Agent, you must deliver to the Paying Agent, by 5:00 p.m. (New
        York City time) on the Business Day immediately preceding the Fundamental
        Change
        Repurchase Date, a written notice of withdrawal specifying (i) the certificate
        number, if any, of the Securities in respect of which such notice of withdrawal
        is being submitted, (ii) the principal

       

      
        
          
          

        

        
          D-2

          
            

          

        

        
          
          

        

      

      amount
        of
        the Securities in respect of which such notice of withdrawal is being submitted,
        and (iii) if you are not withdrawing your Fundamental Change Repurchase Notice
        for all of your Securities, the principal amount of the Securities which
        still
        remain subject to the original Fundamental Change Repurchase
        Notice.

       

      12. Unless
        the Company defaults in making the payment of the Fundamental Change Repurchase
        Price owed to you, Interest and Additional Amounts, if any, on your Securities
        as to which you have delivered a Fundamental Change Repurchase Notice shall
        cease to accrue on and after the Fundamental Change Repurchase
        Date.

       

      13. CUSIP
        Number: 161133AD5

       

      

       

      CHARMING
        SHOPPES, INC.

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
             

          

          
          

        

        
          D-3

          
            

          

        

        
          
          

          
            

             

          

        

      

      

      SCHEDULE
        I

       

      The
        following table sets forth the Stock Prices and the number of Additional
        Shares
        per $1,000 principal amount of Securities.

       

      
        	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                Effective
                  Date 

              	 	
                 

              	
                $12.71

              	 	
                 

              	
                $15.00

              	 	
                 

              	
                $18.00

              	 	
                 

              	
                $21.00

              	 	
                 

              	
                $24.00

              	 	
                 

              	
                $27.00

              	 	
                 

              	
                $30.00

              	 	
                 

              	
                $33.00

              	 	
                 

              	
                $36.00

              	 	
                 

              	
                $39.00

              	 	
                 

              	
                $42.00

              	 	
                 

              	
                $45.00

              	 
	
                April
                  30, 2007

              	 	 	
                13.6549

              	 	 	
                10.5034

              	 	 	
                6.9294

              	 	 	
                4.7851

              	 	 	
                3.4082

              	 	 	
                2.4837

              	 	 	
                1.8404

              	 	 	
                1.3799

              	 	 	
                1.0423

              	 	 	
                0.7901

              	 	 	
                0.5989

              	 	 	
                0.4521

              	 
	
                May
                  1, 2008

              	 	 	
                13.6549

              	 	 	
                10.4900

              	 	 	
                6.8105

              	 	 	
                4.6103

              	 	 	
                3.2232

              	 	 	
                2.3085

              	 	 	
                1.6829

              	 	 	
                1.2423

              	 	 	
                0.9242

              	 	 	
                0.6900

              	 	 	
                0.5147

              	 	 	
                0.3819

              	 
	
                May
                  1, 2009

              	 	 	
                13.6549

              	 	 	
                10.4370

              	 	 	
                6.5813

              	 	 	
                4.3379

              	 	 	
                2.9575

              	 	 	
                2.0690

              	 	 	
                1.4754

              	 	 	
                1.0663

              	 	 	
                0.7770

              	 	 	
                0.5680

              	 	 	
                0.4144

              	 	 	
                0.2999

              	 
	
                May
                  1, 2010

              	 	 	
                13.6549

              	 	 	
                10.1862

              	 	 	
                6.1762

              	 	 	
                3.9177

              	 	 	
                2.5757

              	 	 	
                1.7415

              	 	 	
                1.2029

              	 	 	
                0.8435

              	 	 	
                0.5967

              	 	 	
                0.4233

              	 	 	
                0.2990

              	 	 	
                0.2084

              	 
	
                May
                  1, 2011

              	 	 	
                13.6549

              	 	 	
                9.7072

              	 	 	
                5.5454

              	 	 	
                3.3137

              	 	 	
                2.0574

              	 	 	
                1.3191

              	 	 	
                0.8676

              	 	 	
                0.5812

              	 	 	
                0.3936

              	 	 	
                0.2669

              	 	 	
                0.1793

              	 	 	
                0.1174

              	 
	
                May
                  1, 2012

              	 	 	
                13.6549

              	 	 	
                8.8074

              	 	 	
                4.5288

              	 	 	
                2.4245

              	 	 	
                1.3539

              	 	 	
                0.7884

              	 	 	
                0.4770

              	 	 	
                0.2974

              	 	 	
                0.1888

              	 	 	
                0.1199

              	 	 	
                0.0742

              	 	 	
                0.0427

              	 
	
                May
                  1, 2013

              	 	 	
                13.6549

              	 	 	
                7.1555

              	 	 	
                2.8498

              	 	 	
                1.1341

              	 	 	
                0.4693

              	 	 	
                0.2115

              	 	 	
                0.1074

              	 	 	
                0.0610

              	 	 	
                0.0367

              	 	 	
                0.0213

              	 	 	
                0.0101

              	 	 	
                0.0016

              	 
	
                May
                  1, 2014

              	 	 	
                13.6549

              	 	 	
                2.0349

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

              	 	 	
                0.0000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00122-of-00352.parquet"}]]