Document:

Exhibit 4.1

 

FORM OF

 

SECOND SUPPLEMENTAL INDENTURE

 

by and among

 

GLOBALSTAR, INC.

AS ISSUER,

 

 

AND

 

 

U.S. BANK, NATIONAL ASSOCIATION

AS TRUSTEE

 

 

8.00% Convertible Senior Unsecured Notes

 

 

 

Dated as of June [·], 2009

 

 

 

Supplemental To Indenture For Senior Debt Securities

 

 

Dated as of April 15,
2008

 

 

	
  ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  2

  
	
  Section 1.01. Scope of
  Second Supplemental Indenture

  	
  2

  
	
  Section 1.02. Definitions

  	
  2

  
	
  Section 1.03. Other
  Definitions

  	
  8

  
	
  Section 1.04. Rules of
  Construction

  	
  8

  
	
  ARTICLE 2 THE SECURITIES

  	
  8

  
	
  Section 2.01. Title; Amount
  and Issue of Securities; Principal and Interest

  	
  8

  
	
  Section 2.02. Form of
  Securities

  	
  9

  
	
  Section 2.03. Legends

  	
  10

  
	
  Section 2.04. Registrar and
  Paying Agent

  	
  10

  
	
  Section 2.05. General Provisions
  Relating to Transfer and Exchange

  	
  11

  
	
  Section 2.06. Book-Entry
  Provisions for the Global Securities

  	
  11

  
	
  ARTICLE 3 COVENANTS

  	
  12

  
	
  Section 3.01. Payment of
  Securities

  	
  12

  
	
  Section 3.02. Further
  Instruments and Acts

  	
  13

  
	
  Section 3.03. Statement by
  Officer as to Default

  	
  13

  
	
  Section 3.04. Special
  Interest

  	
  13

  
	
  Section 3.05. Reports by
  Company

  	
  13

  
	
  Section 3.06. Shareholder
  Approval

  	
  14

  
	
  Section 3.07. Usury Laws

  	
  14

  
	
  ARTICLE 4 REDEMPTION OF SECURITIES

  	
  14

  
	
  Section 4.01. Mandatory
  Redemption

  	
  14

  
	
  Section 4.02. Notice of
  Redemption

  	
  15

  
	
  ARTICLE 5 DEFAULTS AND REMEDIES

  	
  15

  
	
  Section 5.01. Additional
  Events of Default

  	
  15

  
	
  Section 5.02. Sole Remedy
  for Failure to Report

  	
  16

  
	
  ARTICLE 6 DISCHARGE OF INDENTURE

  	
  17

  
	
  Section 6.01. Discharge of
  Liability on Securities

  	
  17

  
	
  Section 6.02. Reinstatement

  	
  18

  
	
  Section 6.03. Officer’s
  Certificate; Opinion of Counsel

  	
  18

  
	
  ARTICLE 7 AMENDMENTS

  	
  18

  
	
  Section 7.01. With Consent
  of Holders

  	
  18

  
	
  Section 7.02. Without
  Consent of Holders

  	
  19

  
	
  ARTICLE 8 PURCHASE AT THE OPTION OF HOLDERS UPON A
  FUNDAMENTAL CHANGE

  	
  20

  
	
  Section 8.01. Purchase at
  the Option of the Holders Upon a Fundamental Change

  	
  20

  
	
  Section 8.02. Further
  Conditions and Procedures for Purchase at the Option of the Holder Upon a
  Fundamental Change

  	
  22

  
	
  Section 8.03. Purchase of
  Securities in Open Market

  	
  24

  
	
  ARTICLE 9 CONVERSION

  	
  24

  
	
  Section 9.01. Conversion of
  Securities

  	
  24

  
	
  Section 9.02. Conversion
  Procedures

  	
  25

  
	
  Section 9.03. Settlement
  Upon Conversion

  	
  25

  
	
  Section 9.04. Adjustments to
  Base Conversion Rate

  	
  26

  
	
  Section 9.05. Make-Whole
  Adjustment to Common Stock Delivered Upon Conversion

  	
  33

  
	
  Section 9.06. Fractional
  Shares

  	
  34

  
	
  Section 9.07. Notice of
  Adjustment

  	
  34

  

 

i

 

	
  Section 9.08. Notice of
  Certain Transactions

  	
  34

  
	
  Section 9.09. Effect of
  Recapitalizations, Reclassifications, and Changes of Common Stock

  	
  34

  
	
  Section 9.10. Responsibility
  of Trustee

  	
  36

  
	
  Section 9.11. Stockholder
  Rights Plan

  	
  36

  
	
  Section 9.12. Taxes on
  Conversion

  	
  36

  
	
  Section 9.13. Certain
  Covenants of the Company

  	
  37

  
	
  Section 9.14. Automatic
  Conversion

  	
  37

  
	
  Section 9.15. Limitation on
  Conversion Prior to Shareholder Approval

  	
  39

  
	
  ARTICLE 10 MISCELLANEOUS

  	
  39

  
	
  Section 10.01. No Defeasance

  	
  39

  
	
  Section 10.02. Notices,
  Etc., to Trustee and Company

  	
  39

  
	
  Section 10.03. Communication
  by Holders with other Holders

  	
  40

  
	
  Section 10.04. Rules by
  Trustee, Paying Agent and Registrar

  	
  40

  
	
  Section 10.05. Legal
  Holidays

  	
  40

  
	
  Section 10.06. Governing Law

  	
  40

  
	
  Section 10.07.
  Incorporators, Shareholders, Officers and Directors of the Company Exempt
  from Individual Liability

  	
  40

  
	
  Section 10.08. Successors
  and Assigns

  	
  41

  
	
  Section 10.09. Multiple
  Originals

  	
  41

  
	
  Section 10.10. Conflict with
  Trust Indenture Act

  	
  41

  
	
  Section 10.11. Effect of
  Headings and Table of Contents

  	
  41

  
	
  Section 10.12. Separability
  Clause

  	
  41

  
	
  Section 10.13. Benefits of
  the Second Supplemental Indenture

  	
  41

  
	
  Section 10.14. Calculations

  	
  41

  
	
  Section 10.15. Ratification
  and Incorporation of Original Indenture

  	
  41

  
	
  ARTICLE 11 SUBORDINATION OF SECURITIES

  	
  42

  
	
  Section 11.01. Securities
  Subordinated to Senior Debt

  	
  42

  
	
  Section 11.02. No Payment on
  Securities in Certain Circumstances

  	
  42

  
	
  Section 11.03. Payment over
  of Proceeds upon Dissolution, Etc.

  	
  42

  
	
  Section 11.04. Payment Over
  of Other Proceeds

  	
  44

  
	
  Section 11.05. Subrogation

  	
  44

  
	
  Section 11.06. Obligations
  of Company Unconditional

  	
  45

  
	
  Section 11.07. Notice to
  Trustee

  	
  45

  
	
  Section 11.08. Reliance on
  Judicial Order or Certificate of Liquidating Agent

  	
  46

  
	
  Section 11.09. Trustee’s
  Relation to Senior Debt

  	
  46

  
	
  Section 11.10. Subordination
  Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior
  Debt

  	
  46

  
	
  Section 11.11. Holders
  Authorize Trustee to Effectuate Subordination of Securities

  	
  46

  
	
  Section 11.12. Not to
  Prevent Events of Default

  	
  47

  
	
  Section 11.13. Trustee’s
  Compensation Not Prejudiced

  	
  47

  
	
  Section 11.14. No Waiver of
  Subordination Provisions

  	
  47

  
	
  Section 11.15. Limitations
  on Enforcement

  	
  47

  
	
  Section 11.16. Trust Monies
  Not Subordinated

  	
  48

  
	
  Section 11.17.
  Non-competition

  	
  48

  
	
  Section 11.18. Filing of Claims Upon an
  Insolvency Event

  	
  48

  

 

ii

 

SECOND SUPPLEMENTAL INDENTURE dated as of June [·], 2009, between Globalstar, Inc., a Delaware
corporation (the “Company”) and
U.S. Bank National Association, as Trustee (the “Trustee”).

 

Each party agrees as follows for the benefit
of the other parties and for the equal and ratable benefit of the Holders of
the Company’s 8.00% Convertible Senior Unsecured Notes (the “Securities”) on
the date hereof.

 

W I T N E S S E T H:

 

WHEREAS, this Second Supplemental Indenture
is supplemental to the Original Indenture; and

 

WHEREAS, for its lawful corporate purposes,
the Company has duly authorized the issue of the Securities which comprise (i) Original
Securities (as defined herein) in the aggregate principal amount of $55,000,000
and (ii) Additional Securities (as defined herein) issued in accordance
with the terms hereof, and in order to provide the terms and conditions upon
which the Securities are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Second Supplemental
Indenture; and

 

WHEREAS, pursuant to Section 3.1 of the
Original Indenture, the Company may establish one or more series of Securities
(as such term is defined in the Original Indenture) from time to time as authorized
by a supplemental indenture, of which the Securities shall be one such series;
and

 

WHEREAS, the Form of Security, the
certificate of authentication to be borne by each Security, the Assignment
Form, the Form of Conversion Notice, and the Form of Fundamental
Change Purchase Notice to be borne by the Securities are to be substantially in
the forms hereinafter provided for; and

 

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

 

NOW, THEREFORE, THIS SECOND SUPPLEMENTAL
INDENTURE WITNESSETH:

 

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

 

1

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Scope of Second Supplemental Indenture.  The changes, modifications and supplements to the Original Indenture
affected by this Second Supplemental Indenture shall be applicable only with
respect to, and shall only govern the terms of, the Securities, which comprise (i) Original
Securities in the aggregate principal amount of $55,000,000 and (ii) Additional
Securities issued in accordance with the terms hereof, which in each case may
be issued from time to time, and shall not apply to any other securities that
may be issued under the Original Indenture unless a supplemental indenture with
respect to such other securities specifically incorporates such changes,
modifications and supplements.  The
provisions of the Second Supplemental Indenture shall supersede any
corresponding or inconsistent provisions in the Original Indenture.

 

Section 1.02.  Definitions.  The terms defined in this Section 1.02
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Second Supplemental Indenture and for
purposes of the Original Indenture as it relates to the Securities shall have
the respective meanings specified in this Section 1.02.  Except as otherwise provided in this Second
Supplemental Indenture, all words, terms and phrases defined in the Original
Indenture (but not otherwise defined herein) shall have the same meaning herein
as in the Original Indenture. All other terms used in this Second Supplemental
Indenture that are defined in the Trust Indenture Act or that are by reference
therein defined in the Securities Act (except as herein otherwise expressly
provided or unless the context otherwise requires) shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act
as in force at the date of the execution of this Second Supplemental
Indenture.  The words “herein,” “hereof,”
“hereunder,” and words of similar import refer to this Second Supplemental
Indenture as a whole and not to any particular Article, Section or other subdivision.

 

“Additional
Interest” has the meaning specified in Section 5.01(f).

 

“Additional
Securities” means additional Securities issued under this Second
Supplemental Indenture in accordance with Sections 2.01 and 3.01 hereof, as
part of the same series as the Initial Securities.

 

“Base
Conversion Price” at any time means a dollar amount equal to $1,000
divided by the Base Conversion Rate at such time, rounded to the nearest cent.

 

“Base
Conversion Rate” shall initially be 555.6 shares of Common Stock per
$1,000 principal amount of Securities, subject to adjustment as provided in Article 9.

 

“Beneficial
Owner” shall mean, with respect to any security, any Person who is
considered a “beneficial owner” of such security in accordance with Rule 13d-3
promulgated by the SEC under the Exchange Act.

 

“Business
Day” means any day other than a Saturday, a Sunday or a day on which
banking institutions in The City of New York are authorized or required by law,
regulation or executive order to close.

 

2

 

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

 

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

 

(1)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a Person shall be deemed to have
beneficial ownership of all shares that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of Voting Stock representing 50% or more (or, if
such person is Thermo Capital Partners LLC, 70% or more) of the total voting
power of all outstanding Voting Stock of the Company; or

 

(2)           the
Company consolidates with, or merges with or into, another Person or the
Company sells, assigns, conveys, transfers, leases or otherwise disposes of all
or substantially all of its assets to any Person; provided, however, that any
such transaction will not be a Change of Control if immediately after such
transaction the Person or Persons that “beneficially owned” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act) immediately prior to the transaction,
directly or indirectly, Voting Stock representing a majority of the total
voting power of all outstanding Voting Stock of the Company, “beneficially own
or owns” (as so determined), directly or indirectly, Voting Stock representing
a majority of the total voting power of the outstanding Voting Stock of the
surviving or transferee person; or

 

(3)           the
first day on which the Continuing Directors cease for any reason to constitute
a majority of the Board of Directors (defined without regard to the words “or
any duly authorized committee of that board to which the powers of that board
have been lawfully delegated” in such definition); or

 

(4)           the
adoption of a plan of liquidation or dissolution of the Company.

 

The number of shares of “outstanding Voting
Stock of the Company” for purposes of clause (1) of the definition of
Change of Control, shall include (without duplication) all shares of Common
Stock that any Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time.

 

“Close of Business” means 5:00 p.m. New York City time.

 

“Closing
Sale Price” of the Common Stock (or any other securities on any
date) means the last reported sale price per share (or if no last reported sale
price is reported, the average of the bid and ask prices or, if more than one
in either case, the average of the average bid and the average ask prices) on
that date as reported in composite transactions for the principal United States
national or regional securities exchange on which the Common Stock or such
securities, as applicable, are listed for trading. If the Common Stock or the
other security, as applicable, is not listed for trading on a United States
national or regional securities exchange on the relevant date, the Closing Sale
Price will be the last quoted bid price for Common Stock or the other security,
as applicable, in the over-the-counter market on the relevant date as reported
by Pink Sheets LLC or similar organization. If Common Stock or the other
security, as applicable, is not so quoted 

 

3

 

the Closing Sale Price will
be the average of the mid-point of the last bid and ask prices for Common Stock
or the other security, as applicable, on the relevant date from each of three
nationally recognized independent investment banking firms selected by the
Company for this purpose (which determination shall be conclusive and shall be
evidenced by an Officer’s Certificate delivered to the Trustee).

 

“COFACE
Agent” means BNP Paribas, as COFACE Agent under the COFACE Facility
Agreement.

 

“COFACE
Facility Agreement” means the COFACE Facility Agreement dated as of June 5,
2009 between the Company, BNP Paribas, Société Général, Natixis, Calyon, Crédit
Industriel et Commercial as mandated lead arrangers, the COFACE Agent, BNP
Paribas as security agent and the lenders party thereto.

 

“COFACE
Final Maturity Date” means the earlier to occur of (i) December 15,
2019 and (ii) the date that is 104 months after the final “Launch” as such
term is defined in the COFACE Facility Agreement.

 

“COFACE
Finance Documents” means the “Finance Documents” as such term is
defined in the COFACE Facility Agreement.

 

“COFACE
Finance Parties” means the “Finance Parties” as such term is defined
in the COFACE Facility Agreement.

 

“COFACE
Security Agent” means BNP Paribas, as Security Agent under the
COFACE Facility Agreement.

 

“Common
Stock” means the Company’s common stock, par value $0.0001 per share
at the date of this Second Supplemental Indenture or, subject to Section 9.09,
shares of any class or classes resulting from any reclassification or
reclassifications thereof and that have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and that are not subject to redemption
by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.

 

“Continuing
Directors” means, as of any date of determination, any member of the
Board of Directors who was (a) a member of the Board of Directors on the
date of the Original Indenture or (b) nominated for election or elected to
the Board of Directors with the approval of a majority of the Continuing
Directors who were members of the Board of Directors at the time of such
nomination or election.  Solely for
purposes of this definition, the term “Board of Directors” shall be defined
without regard to the words “or any duly authorized committee of that board to
which the powers of that board have been lawfully delegated” in such
definition.

 

“Conversion
Agent” means the office or agency appointed by the Company where
Securities may be presented for conversion. 
The Conversion Agent appointed by the Company shall initially be the
Trustee.

 

4

 

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

 

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

 

“Fair
Market Value” means the amount that a willing buyer would pay a
willing seller in an arm’s length transaction.

 

“Final
Discharge Date” means the date on which all the Senior Debt has been
unconditionally and irrevocably paid and discharged in full and none of the
COFACE Finance Parties is under any obligation (whether actual or contingent)
to make advances or provide other financial accommodation to the Issuer under
the COFACE Finance Documents.

 

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

 

“Initial
Securities” means the first $55,000,000 of aggregate principal
amount of Securities issued under this Second Supplemental Indenture on the
date hereof.

 

“Indenture”
means the Original Indenture, as amended and supplemented by this Second
Supplemental Indenture and, if further amended or supplemented as herein
provided, as so amended or supplemented.

 

“Insolvency Event” means a
situation where any of the following occurs in respect of the Issuer:  (a) the commencement of a voluntary case
(or analogous motion) under the US federal bankruptcy laws or under other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding-up or adjustment of debts or analogous proceedings; (b) the Issuer’s
filing of a petition (or analogous motion) seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, composition for adjustment of debts or analogous
proceedings; (c) the Issuer’s consent to, or failure to contest, in a
timely and appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws; (d) any application for or
consent to, or failure to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator or of a substantial part of its property, domestic or foreign; (e) any
admission in writing by the Issuer of its inability to pay its debts as they
become due; (f) any general assignment for the benefit of creditors; (g) the
taking of any corporate action for the purpose of authorizing any of the
foregoing; or (h) any suspension or threat to suspend making payment on
any of the Issuer’s debts or, by reason of actual or anticipated financial
difficulties, commencement of negotiations with one (1) or more
creditors with a view to rescheduling any of the Issuer’s indebtedness (other
than the COFACE Finance Parties in connection with the COFACE Finance
Documents).

 

“Intercreditor
Agreement” means the Subordination Deed between the Company, the
Trustee and BNP Paribas as COFACE Agent under the COFACE Facility Agreement
providing for the subordination of the Company’s obligations under this
Indenture for the benefit of the COFACE Finance Parties.

 

5

 

“Interest
Payment Date” means June [15] and December [15] of each
calendar year, beginning with, and including, December [15], 2009.

 

“Issue Date”
means June [·], 2009.

 

“Market
Disruption Event” means the occurrence or existence for more than
one half hour period in the aggregate on any Scheduled Trading Day for the
Common Stock of any suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by NASDAQ or otherwise) in the
Common Stock or in any options, contracts or futures contracts relating to the
Common Stock, and the suspension or limitation occurs or exists at any time
before 1:00 p.m. (New York City time) on such Scheduled Trading Day.

 

“NASDAQ” means The NASDAQ Global Select Market.

 

“Officer”
means, with respect to any Person, the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer or any Vice President of such Person.

 

“Opening of
Business” means 9:00 a.m. New York City time.

 

“Original
Indenture” means the indenture for Senior Debt Securities dated as
of April 15, 2008 by and between the Company and the Trustee.

 

“Original
Securities” means the $55,000,000 aggregate principal amount of
Securities issued on the date hereof.

 

“Permitted
Payment” means (a) any payment made in the form of Additional
Securities or PIK Interest Shares in respect of interest and other amounts due
on the Securities or (b) payments made at any time that “Shareholder
Distributions” are permitted under Clause 22.6 of the COFACE Facility
Agreement.

 

“Person”
means an individual, partnership, corporation, business trust, limited
liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity, or a governmental
body.

 

“PIK
Interest Shares” means shares of Common Stock issued in payment of
interest on Securities in accordance with Section 3.01 hereof.

 

“Placement
Agent” means Lazard Capital Markets LLC.

 

“Placement
Agent Agreement” means the Placement Agent Agreement dated June [16],
2009 between the Company and the Placement Agent related to the initial
placement of the Securities.

 

“Prospectus
Supplement” means the final prospectus supplement, dated June [16],
2009, relating to the offering by the Company of the Securities.

 

6

 

“Regular
Record Date” for the payment of interest on the Securities, means the
May 31 (whether or not a Business Day) immediately preceding an Interest
Payment Date on June 15 and the November 30 (whether or not a
Business Day) immediately preceding an Interest Payment Date on December 15.

 

“Scheduled
Trading Day” means a day that is scheduled to be a Trading Day.

 

“Securities”
has the meaning ascribed to it in the second introductory paragraph of this
Second Supplemental Indenture.

 

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

 

“Securities
Custodian” means the custodian with respect to the Global Security
(as appointed by DTC), or any successor Person thereto and shall initially be
the Trustee.

 

“Senior
Debt” means all Debt of the Company, whether currently outstanding
or hereafter issued, owed to any COFACE Finance Party under or in connection
with the COFACE Finance Documents, including any amendment thereto or
refinancing thereof, provided that the aggregate amount of Senior Debt at any
time outstanding shall not exceed $886 million.

 

“Shareholder
Approval” means the approval by the Company’s shareholders of the
issuance of all shares of Common Stock issuable upon conversion of the
Securities and exercise of the Warrants in accordance with the requirements of
Listing Rule 5635(d) of NASDAQ.

 

“Special
Interest” has the meaning specified in Section 5.02.

 

“Stated
Maturity” means, with respect to the payment of principal of the
Securities, the later to occur of (i)  June [·], 2019 and (ii) the date that is six months
after COFACE Final Maturity Date.

 

“Termination
of Trading” will be deemed to have occurred if the Common Stock (or
other common stock into which the Securities are then convertible) is not
listed on a United States national securities exchange or approved for
quotation and trading on a national automated dealer quotation system or
established automated over-the-counter trading market in the United States.

 

“Trading
Day” means any day on which (i) there is no Market Disruption
Event and (ii) NASDAQ is open for trading, or, if the Common Stock is not
listed on NASDAQ, any day on which the principal national securities exchange
on which the Common Stock is listed is open for trading, or, if the Common
Stock is not listed on a national securities exchange, any Business Day.  A “Trading
Day” only includes those days that have a scheduled closing time of
4:00 p.m. (New York City time) or the then standard closing time for
regular trading on the relevant exchange or trading system.

 

“UCC”
means the Uniform Commercial Code as in effect in the State of New York.

 

7

 

“Voting
Stock” of any Person means all classes of the Capital Stock of such
Person entitled to vote generally in the election of the board of directors,
managers or trustees of such Person.

 

“Warrants”
means the warrants to purchase shares of the Common Stock issued on the date
hereof in connection with the sale of the Securities.

 

Section 1.03.  Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Additional
  Shares”

  	
   

  	
  9.05(a)

  
	
  “Agent
  Members”

  	
   

  	
  2.06(a)

  
	
  “Business
  Combination”

  	
   

  	
  9.09(a)

  
	
  “Company
  Notice”

  	
   

  	
  8.02

  
	
  “Company
  Notice Date”

  	
   

  	
  8.02

  
	
  “Conversion
  Date”

  	
   

  	
  9.02(a)

  
	
  “Conversion
  Shares”

  	
   

  	
  9.03(a)

  
	
  “Effective
  Date”

  	
   

  	
  9.05(a)

  
	
  “Fundamental
  Change Purchase Date”

  	
   

  	
  8.01(a)

  
	
  “Fundamental
  Change Purchase Notice”

  	
   

  	
  8.01(c)

  
	
  “Fundamental
  Change Purchase Price”

  	
   

  	
  8.01(a)

  
	
  “Global
  Security Legend”

  	
   

  	
  2.03

  
	
  “Make
  Whole Fundamental Change”

  	
   

  	
  9.05(a)

  
	
  “Make
  Whole Fundamental Change Notice”

  	
   

  	
  9.05(a)

  
	
  “Make
  Whole Premium”

  	
   

  	
  9.05(a)

  
	
  “Paying
  Agent”

  	
   

  	
  2.04

  
	
  “Registrar”

  	
   

  	
  2.04

  
	
  “Settlement
  Date”

  	
   

  	
  9.03(b)

  
	
  “Spin-Off”

  	
   

  	
  9.04(d)

  
	
  “Stock
  Price”

  	
   

  	
  9.05(b)

  
	
  “Valuation
  Period”

  	
   

  	
  9.04(d)

  

 

Section 1.04.  Rules of Construction.  In
addition to the rules of construction set forth in Section 1.1 of the
Original Indenture, unless the context otherwise requires:

 

(a)           “or”
is not exclusive; and

 

(b)           the
principal amount of any non-interest bearing or other discount security at any
date shall be the principal amount thereof that would be shown on a balance
sheet of the issuer dated such date prepared in accordance with GAAP.

 

ARTICLE 2

THE SECURITIES

 

Section 2.01.  Title; Amount and Issue of
Securities; Principal and Interest.  (a) The Securities shall
be known and designated as the “8.00% Convertible Senior Unsecured Notes” of 

 

8

 

the Company.  The aggregate principal amount of Securities
that may be authenticated and delivered under this Second Supplemental
Indenture is initially limited to (i) $55,000,000 in Original Securities
and (ii) such Additional Securities as shall be issued from time to time
in accordance with the terms hereof, except for Securities authenticated and
delivered upon registration of, transfer of, or in exchange for or in lieu of
other Securities pursuant to the terms hereof.

 

(b)           Subject
to Section 5.2 of the Original Indenture, the Securities shall mature on
the Stated Maturity unless earlier converted, redeemed or purchased in
accordance with the provisions hereof.

 

(c)           Interest
on the Securities shall accrue from and including the date specified on the
face of such Securities until the principal thereof is paid or made available
for payment.  Interest shall be payable
semiannually in arrears on June 15 and December 15 in each year,
commencing December 15, 2009.  The
interest so payable on any Security shall be paid to the Person in whose name
such Security is registered at the close of business on the Regular Record Date
for such Interest Payment Date.  Interest
on the Securities will be payable solely in the form of (a) Additional
Securities in the aggregate principal amount equal to the amount of the
interest due on the applicable Interest Payment Date or (b) PIK Interest
Shares in accordance with Section 3.01 hereof.  For purposes of this Second Supplemental
Indenture and the Securities, unless the context clearly requires otherwise,
references to “interest” shall include Additional Interest and Special
Interest.

 

(d)           Principal
on Global Securities shall be payable to DTC in immediately available funds.

 

(e)           Principal
of Definitive Securities shall be payable at the office of the Paying Agent,
which initially will be an office or agency of the Trustee, or an office or
agency maintained for such purpose, in the Borough of Manhattan, The City of
New York.

 

Section 2.02.  Form of Securities.  (a) Except
as otherwise provided pursuant to this Section 2.02, the Securities are
issuable in fully registered form without coupons in substantially the form of Exhibit A
hereto, with such applicable legends as are provided for in Section 2.03.  The Securities are not issuable in bearer
form.  The terms and provisions contained
in the form of Security shall constitute, and are hereby expressly made, a part
of this Second Supplemental Indenture and to the extent applicable, the Company
and the Trustee, by their execution and delivery of this Second Supplemental
Indenture, expressly agree to such terms and provisions and to be bound
thereby.

 

(b)           The
Securities shall be issued initially in the form of one or more permanent
Global Securities, with the applicable legends as provided in Section 2.03.  Each Global Security shall be duly executed
by the Company and authenticated and delivered by the Trustee, and shall be
registered in the name of DTC or its nominee and retained by the Trustee, as
Securities Custodian, at its corporate trust office, for credit to the accounts
of the Agent Members holding the Securities evidenced thereby.  The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as Securities Custodian, and of DTC or its
nominee, as hereinafter provided.

 

9

 

Section 2.03.  Legends.  (a) Global
Security Legend.  Notwithstanding
anything to the contrary provided in Article Two the Original Indenture
each Global Security shall bear the following legend (the “Global Security Legend”) on the face
thereof:

 

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

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC 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 THE INDENTURE REFERRED TO IN THE TERMS OF SECURITIES
ATTACHED HERETO.”

 

(b)           Legend
for Definitive Securities. 
Notwithstanding anything to the contrary provided in Article Two of
the Original Indenture each Definitive Security shall bear a legend
substantially in the following form:

 

“THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE
FOR A BENEFICIAL INTEREST IN A GLOBAL SECURITY UNLESS THE HOLDER OF THIS
SECURITY, SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO SECURITIES.”

 

Section 2.04.  Registrar and Paying Agent.  The
Company shall maintain an office or agency where Securities may be presented
for registration of transfer or for exchange (the “Registrar”), which Registrar shall constitute a Security
Register (as such term is defined in the Original Indenture) and an office or
agency where Securities may be presented for payment (the “Paying Agent”).  The Company may have one or more
co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any
additional paying agent and the term “Registrar” includes any co-registrar.

 

The Company shall enter into an appropriate
agency agreement with any Registrar or Paying Agent not a party to this Second
Supplemental Indenture, which shall incorporate the terms of the Trust
Indenture Act.  The agreement shall
implement the provisions of this Second Supplemental Indenture that relate to
such agent.  The Company shall notify the
Trustee of the name and address of each such agent.  If the Company fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor 

 

10

 

pursuant to Section 6.7
of the Original Indenture.  The Company
or any of its domestically organized, wholly owned Subsidiaries may act as
Paying Agent, Registrar or transfer agent.

 

The Company initially appoints the Trustee as
Registrar and Paying Agent for the Securities. 
The Company may remove any Registrar or Paying Agent upon written notice
to such Registrar or Paying Agent and to the Trustee; provided, however, that
no such removal shall become effective until (i) acceptance of any
appointment by a successor as evidenced by an appropriate agreement entered
into by the Company and such successor Registrar or successor Paying Agent, as
the case may be, and delivered to the Trustee or (ii) notification to the
Trustee that the Trustee shall serve as Registrar or Paying Agent until the
appointment of a successor in accordance with clause (i) above.  The Registrar or Paying Agent may resign at
any time upon written notice to the Company and the Trustee.

 

Section 2.05.  General Provisions Relating
to Transfer and Exchange.  A Holder may transfer a Security only by
written application to the Registrar stating the name of the proposed
transferee and otherwise complying with the terms of the Indenture.  No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Securities
Register.

 

In addition to the matters described in the 7th
paragraph of Section 3.5 of the Original Indenture, neither the Company
nor the Registrar shall be required to exchange or register a transfer of any
Securities surrendered for conversion or, if a portion of any Security is
surrendered for conversion, the portion thereof surrendered for conversion.

 

Section 2.06.  Book-Entry Provisions for
the Global Securities.  (a)  The Global Securities initially
shall:

 

(i)                                     be registered
in the name of DTC (or a nominee thereof);

 

(ii)                                  be delivered to
the Trustee as Securities Custodian; and

 

(iii)                               bear the Global
Security Legend set forth in Section 2.03(a).

 

Members of, or participants in, DTC (“Agent Members”) shall have no rights under
this Second Supplemental Indenture with respect to any Global Security held on their
behalf by DTC, or the Trustee as its custodian, or under such Global Security,
and DTC may be treated by the Company, the Trustee and any agent of the Company
or the Trustee as the absolute owner of such Global Security for all purposes
whatsoever.  Notwithstanding the
foregoing, nothing contained 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 DTC or impair, as
between DTC and the Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.

 

(b)           The
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Second Supplemental Indenture or the Securities.

 

11

 

ARTICLE 3

COVENANTS

 

Section 3.01.  Payment of Securities. 
(a)  The Company will pay or cause to be paid the principal of and
interest and Special Interest, if any, on the Securities on the dates and in
the manner provided in the Securities. 
Principal will be considered paid on the date due if the Paying Agent,
if other than the Company or a Subsidiary thereof, holds as of 11:00 a.m.
New York City time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal and interest then due or, in the case of interest and Special
Interest and Additional Interest, if any, paid on or before the Stated Maturity
of any Security, in (i) Additional Securities in an aggregate principal
amount equal to the amount of such interest and Special Interest and Additional
Interest, if any, then due, or (ii) in the case of Holders for which a
Common Stock Election is effective, in PIK Interest Shares in an amount
calculated in accordance with paragraph (b) of this Section 3.01.  Additional Securities shall automatically be
deemed to have been issued to each Holder of record in an aggregate principal
amount equal to the amount of interest and Special Interest and Additional
Interest, if any, due to such Holder on the applicable Interest Payment Date, and
the Company shall thereafter promptly cause to be executed and authenticated
such Additional Securities in accordance with Section 2.3 of the Original
Indenture and deliver such Additional Securities to each Holder of record (or
to the Trustee or the authenticating agent in custody for such Person).  Subject to Section 3.01(b)(iv), PIK
Interest Shares, if any, shall automatically be deemed to have been issued to
each applicable Holder of record in an amount determined as set forth in Section 3.01(b),
and the Company shall thereafter deliver such PIK Interest Shares as set forth
in Section 3.01(b). Such Paying Agent shall return to the Company
promptly, and in any event, no later than three Business Days following the
date of payment, any money (including accrued interest) that exceeds such
amount of principal and interest paid on the Securities or, in the case of
interest and Special Interest and Additional Interest, if any, paid on or
before the Stated Maturity, any Additional Securities or Additional Shares
outstanding in connection with the payment of such interest.

 

The Company will pay interest on overdue
principal at the rate specified in the Securities in Additional Securities or
PIK Interest Shares, as applicable, and it will pay interest  on overdue installments of interest and
Special Interest and Additional Interest, if any, in Additional Securities or
PIK Interest Shares, as applicable, at the same rate.

 

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

 

(b)  Subject to the procedures set forth
in this paragraph, a Holder of Securities may, in its sole discretion, elect to
receive interest and Special Interest and Additional Interest, if any, in
respect of the Securities held by it in the form of Common Stock in lieu of
Additional Shares.

 

(i)            Such Holder must complete
and manually sign the interest election notice on the back of the Security
(which shall be substantially in the form set forth in the form of Security
attached as Exhibit  A (an “Interest Election
Notice”) and deliver such notice to the Trustee at least 5 Business
Days prior to the first Interest Payment Date for which such election will be 

 

12

 

effective.  Such Interest Election Notice shall remain
effective and apply to all subsequent Interest Payment Dates unless and until
such Holder revokes it by delivering written notice to the Trustee as set forth
on the Interest Election Notice.

 

(ii)           On each Interest Payment
Date, a Holder for which an Interest Election Notice is in effect shall be
entitled to receive, in lieu of Additional Securities, a number of PIK Interest Shares equal to the quotient
of (x) the aggregate amount of interest and Special Interest and
Additional Interest, if any, payable on the applicable Securities on such
Interest Payment Date, divided  by (y) 95% of the
volume-weighted average Closing Price of the Common Stock for the 10 Trading
Days immediately preceding the Interest Payment Date.

 

(iii)          The Company shall deliver
the PIK Interest Shares as soon as practicable, and in no event later than the
third Business Day following the applicable Interest Payment Date.

 

(iv)          Notwithstanding anything to
the contrary herein, all interest and Special Interest and Additional Interest,
if any, will be payable solely in the form of Additional Securities (and not in
PIK Interest Shares) at any time that the volume-weighted average Closing Price
of the Common Stock for the 10 Trading Days immediately preceding the
applicable Interest Payment Date is less than $0.25 per share.

 

Section 3.02.  Further Instruments and Acts.  Upon
request of the Trustee, the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Second Supplemental
Indenture.

 

Section 3.03.  Statement by Officer as to
Default.  The Company shall deliver to the Trustee,
within 30 days after the Company becomes aware of the occurrence of any Event
of Default or Default, an Officer’s Certificate setting forth the details of
such events which would constitute an Event of Default or Default, its status
and the action which the Company proposes to take with respect thereto.

 

Section 3.04.  Special Interest.  If Special
Interest is payable by the Company pursuant to Section 5.02 the Company
shall deliver to the Trustee an Officer’s Certificate to that effect stating (i) the
amount of such Special Interest that is payable and (ii) the date on which
such Special Interest is payable.  Unless
and until a Responsible Officer of the Trustee receives such a certificate, the
Trustee may assume without inquiry that no Special Interest is payable.  If the Company has paid Special Interest
directly to the persons entitled to it, the Company shall deliver to the
Trustee an Officer’s Certificate setting forth the particulars of such payment.

 

Section 3.05.  Reports by Company.  (a) In
addition to and notwithstanding the Company’s reporting obligations set forth
in Section 7.4 of the Original Indenture, the Company shall deliver to the
Trustee electronically (or otherwise in conformity with Section 1.6 of the

 

13

 

Original
Indenture), within 15 days after it is required to file the same with the SEC,
copies of all annual reports 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) that the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. In the event the
Company at any time is no longer subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall file with the Trustee all
reports, if any, as may be required by the provisions of Section 314(a) of
the Trust Indenture Act.

 

(b)           Delivery
of such reports 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 compliance by the Company with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s
Certificates).

 

Section 3.06.  Shareholder Approval.  The
Company shall obtain Shareholder Approval within 60 days of the date hereof.

 

Section 3.07.  Usury Laws.  The Company covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury law
wherever enacted, now or at any time hereafter in force, that 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 will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.

 

ARTICLE 4

REDEMPTION OF SECURITIES

 

Section 4.01.  Mandatory Redemption.

 

(a)           On
the Stated Maturity, the Company shall redeem for cash all Outstanding
Securities, at a price (the “Redemption Price”)
equal to 100% of the principal amount of Securities to be redeemed, plus
accrued and unpaid interest to, but excluding, the Redemption Date; provided
that if the Redemption Date falls after a Regular Record Date and on or prior
to the corresponding Interest Payment Date, the Redemption Price shall be 100%
of the principal amount of the Securities redeemed but shall not include
accrued and unpaid interest, if any. Instead, the Company shall pay such
accrued and unpaid interest, if any, on the Interest Payment Date to the Holder
of record at the Close of Business on the corresponding Regular Record Date. If
the Company is required to redeem Securities pursuant to this Section 4.01,
it shall notify the Trustee in writing of such redemption together with the
Redemption Date, the Base Conversion Rate, the principal amount of Securities
to be redeemed and the Redemption Price.

 

(b)           The
Company shall not redeem any of the Securities on any date if the principal
amount of the Securities has been accelerated, and the acceleration has not
been rescinded on or prior to such date.

 

14

 

(c)                                  Except as provided in
paragraph (a) of this Section 4.01, the Company shall not be required
to make any mandatory redemption of the Securities.  The Securities are not subject to redemption
through the operation of any sinking fund.

 

Section 4.02.  Notice of Redemption.  The
Company shall notify each Holder of Securities to be redeemed in the manner
provided in Section 11.4 of the Original Indenture.  In addition to those matters set forth in
Section 11.4 of the Original Indenture, a notice of redemption sent to the
Holder shall state:

 

(a)                                  the then current Base
Conversion Rate and provide a statement that the Securities called for
redemption may be converted at any time before the Close of Business on the
Business Day immediately prior to the Redemption Date, and that Holders who
wish to convert Securities must comply with the relevant procedures;

 

(b)                                 that Securities called for
redemption and not converted shall be redeemed on the Redemption Date;

 

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

 

(d)                                 that Securities called for
redemption must be surrendered to the Paying Agent to collect the Redemption
Price; and

 

(e)                                  the CUSIP or ISIN number of
the Securities.

 

ARTICLE 5

DEFAULTS AND REMEDIES

 

Section 5.01.  Additional Events of Default.  In
addition to those Events of Default set forth in Section 5.1 of the
Original Indenture, the following events shall also be Events of Default with
respect to the Securities:

 

(a)                                  failure by the Company to
pay on interest on the Securities within five Business Days of the applicable
Interest Payment Date;

 

(b)                                 failure by the Company to
comply with its obligation to convert the Securities into shares of Common
Stock upon exercise of a Holder’s conversion right in accordance with
Article 9 and, if applicable, failure by the Company to deliver any
Make-Whole Premium pursuant to Section 9.05;

 

(c)                                  failure by the Company to
provide to the Holders Company Notice of a Fundamental Change pursuant to
Section 8.01;

 

(d)                                 default by the Company or
any Subsidiary in the payment of principal or interest on any mortgage,
agreement or other instrument under which there may be outstanding, or by which
there may be secured or evidenced, any indebtedness of the Company or
indebtedness of any Subsidiary for money borrowed in excess of $5.0 million in
the aggregate, whether the indebtedness exists or shall hereafter be created,
resulting in the indebtedness becoming or being declared due and payable, and
the acceleration shall not have been rescinded or annulled within 

 

15

 

30 days after written notice
of the acceleration has been received by the Company or the Subsidiary from the
Trustee (or has been received by the Company or the Subsidiary, as the case may
be, and the Trustee from Holders of at least 25% in principal amount of
Outstanding Securities);

 

(e)                                  default in the performance,
or breach, of any covenant in this Indenture (other than the covenant in
Section 8.1 of the Original Indenture or any other covenant a default in
whose performance or whose breach is elsewhere in this
Section specifically dealt with) and continuance of such default or breach
for a period of 45 days after there has been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied; and

 

(f)                                    failure by the Company or
any Subsidiary to pay final and non-appealable judgments, the aggregate
uninsured portion of which is at least $10.0 million, if the judgments are not
paid, discharged or fully bonded against within 60 days.

 

The foregoing will constitute Events of
Default whatever the reason for any such Event of Default and whether it is
voluntary or involuntary or is affected 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.

 

Prior to the declaration of the acceleration
of the Securities, the Holders of two-thirds of the aggregate principal amount
of the Outstanding Securities may waive, on behalf of all of the Holders of the
Securities, any Event of Default set forth in this Section 5.01 and its
consequences except an Event of Default under clause (a) and clause
(b) of this Section 5.01.

 

The Company will deliver to the Trustee
promptly, and in no case more than 3 Business Days, after becoming aware of the
occurrence of an Event of Default, written notice thereof.

 

(g)                                 At any time that an Event of
Default (other than an Event of Default arising solely from the Company’s
failure to comply with the reporting obligations under
Section 3.05(a) hereof) has occurred and is continuing, additional
interest shall accrue on the Securities at a rate equal to 2.50% per annum of
the principal amount of the Securities (the “Additional
Interest”).  The Additional
Interest shall be paid semi-annually in arrears, with the first semi-annual
payment due on the first regular Interest Payment Date following the date on
which the Additional Interest began to accrue on the Securities. The Additional
Interest shall accrue on all Outstanding Securities from and including the date
on which an Event of Default shall first occur to, but not including, the date
on which the Event of Default shall have been cured or waived.

 

Section 5.02.  Sole Remedy for Failure to Report. 
Notwithstanding any other provision of the Indenture, to the extent
elected by the Company, the sole remedy for an Event of Default relating to the
failure to comply with the reporting obligations under
Section 3.05(a) and for any failure to comply with the requirements
of Section 314(a)(1) of the Trust Indenture Act, will for the first
45 days after the occurrence of the Event of Default consist exclusively of the
right to receive special interest on the Securities at a rate equal to 0.50%
per annum of the principal amount of the Securities (the “Special Interest”).  The Special Interest shall be paid semi-

 

16

 

annually
in arrears, with the first semi-annual payment due on the first regular
Interest Payment Date following the date on which the Special Interest began to
accrue on any Securities. The Special Interest shall accrue on all Outstanding
Securities from and including the date on which an Event of Default relating to
a failure to comply with the provisions of Section 3.05(a) or a
failure to comply with Section 314(a)(1) of the Trust Indenture Act
shall first occur to, but not including, the 45th day thereafter (or any
earlier date on which the Event of Default shall have been cured or waived). On
such 45th day (or earlier, if the Event of Default relating to the failure to
comply with Section 3.05(a) and failure to comply with Section 314(a)(1) of
the Trust Indenture Act is cured or waived prior to such 45th day), the Special
Interest shall cease to accrue and, if the Event of Default relating to the
failure to comply with Section 3.05(a) and failure to comply with
Section 314(a)(1) of the Trust Indenture Act shall not have been
cured or waived prior to the 45th day, the Securities shall be subject to
acceleration as provided in Section 5.2 of the Original Indenture. The
provisions of this paragraph shall not affect the rights of Holders in the
event of the occurrence of any other Event of Default. If the Company shall not
elect to pay Special Interest upon an Event of Default resulting from the
failure of the Company to comply with the provisions of
Section 3.05(a) and for any failure by it to comply with
Section 314(a)(1) of the Trust Indenture Act, the Securities shall be
subject to acceleration as provided in Section 5.2 of the Original
Indenture.

 

If the Company shall elect to pay Special
Interest in connection with an Event of Default relating to its failure to
comply with the requirements of Section 3.05(a) and for any failure
by it to comply with Section 314(a)(1) of the Trust Indenture Act,
(1) the Company shall notify all Holders and the Trustee and Paying Agent
of the election on or before the Close of Business on the date on which the
Event of Default shall first occur, and (2) all references herein to
interest accrued or payable as of any date shall include any Special Interest
accrued or payable as of such date as provided in this Section 5.02.

 

ARTICLE 6

DISCHARGE OF INDENTURE

 

Section 6.01.  Discharge of Liability on Securities. 
Article 4 of the Original Indenture shall not apply to the
Securities.  When (1) the Company
shall deliver to the Registrar for cancellation all Securities theretofore
authenticated (other than any Securities which have been mutilated, destroyed,
lost or wrongfully taken and in lieu of or in substitution for which other
Securities shall have been authenticated and delivered) and not theretofore
canceled, or (2) all the Securities not theretofore canceled or delivered
to the Registrar for cancellation shall have (a) been deposited for
conversion and the Company shall deliver to the Holders shares of Common Stock
or a combination of cash and shares of Common Stock, as applicable, sufficient
to pay all amounts owing in respect of all Securities (other than any
Securities which shall have been mutilated, destroyed, lost or wrongfully taken
and in lieu of or in substitution for which other Securities shall have been
authenticated and delivered) not theretofore canceled or delivered to the
Registrar for cancellation or (b) become due and payable on the Stated
Maturity for the payment of principal of the Securities or Redemption Date or
Fundamental Change Purchase Date, as applicable, and the Company shall deposit
with the Trustee cash and shares of Common Stock, if any, as applicable,
sufficient to pay all amounts owing in respect of all Securities (other than
any Securities which shall have been mutilated, destroyed, lost or wrongfully
taken and in lieu of or in substitution for which other Securities shall have
been authenticated and delivered) 

 

17

 

not
theretofore canceled or delivered to the Registrar for cancellation, including
the principal amount and interest accrued and unpaid to such Stated Maturity
for the payment of principal of the Securities or Redemption Date or
Fundamental Change Purchase Date, as the case may be, and if in either case
(1) or (2) the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then this Second Supplemental Indenture
with respect to the Securities shall cease to be of further effect (except as
to (i) remaining rights of registration of transfer, substitution and
exchange and conversion of Securities; (ii) rights hereunder of Holders to
receive from the Trustee payments of the amounts then due, including interest
with respect to the Securities and the other rights, duties and obligations of
Holders, as beneficiaries hereof solely with respect to the amounts, if any, so
deposited with the Trustee; and (iii) the rights, obligations and
immunities of the Trustee, Authenticating Agent, Paying Agent, Conversion Agent
and Registrar under this Second Supplemental Indenture with respect to the
Securities), and the Trustee, on demand of the Company accompanied by an
Officer’s Certificate and an Opinion of Counsel as required by
Section 6.03 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Second
Supplemental Indenture with respect to the Securities; however, the Company
hereby agrees to reimburse the Trustee, Authenticating Agent, Paying Agent,
Conversion Agent and Registrar for any costs or expenses thereafter reasonably
and properly incurred by the Trustee, Authenticating Agent, Paying Agent,
Conversion Agent and Registrar and to compensate the Trustee, Authenticating
Agent, Paying Agent, Conversion Agent and Registrar for any services thereafter
reasonably and properly rendered by the Trustee, Authenticating Agent, Paying
Agent, Conversion Agent and Registrar in connection with this Second
Supplemental Indenture with respect to the Securities.

 

Section 6.02.  Reinstatement.  If the Trustee or the Paying
Agent is unable to apply any money to the Holders entitled thereto by reason of
any order or judgment of any court of governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company’s obligations
under the Indenture with respect to the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 6.01
until such time as the Trustee or the Paying Agent is permitted to apply all
such money in accordance with the Indenture and the Securities to the Holders
entitled thereto; provided, however, that if the Company make any payment of
principal amount of or interest on any Security following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money held by the Trustee
or Paying Agent.

 

Section 6.03.  Officer’s Certificate; Opinion of Counsel.  Upon any
application or demand by the Company to the Trustee to take any action under
Section 6.01, the Company shall furnish to the Trustee an Officer’s
Certificate or Opinion of Counsel stating that all conditions precedent, if
any, provided for in this Second Supplemental Indenture relating to the
proposed action have been complied with.

 

ARTICLE 7

AMENDMENTS

 

Section 7.01.  With Consent of Holders.  In
addition to the matters described in Section 9.2 of the Original
Indenture, the Company and the Trustee may not, without the consent of each 

 

18

 

Holder
of Outstanding Securities affected, amend or waive any portion of the Indenture
or the Securities for one or more of the following purposes:

 

(a)                                  to reduce the Fundamental
Change Purchase Price or the Redemption Price payable with respect to any of
the Securities;

 

(b)                                 to change the principal
amount, rate of interest or Stated Maturity of any Security;

 

(c)                                  to change the Company’s
obligation to redeem the Securities on a Redemption Date in a manner adverse to
the Holder;

 

(d)                                 to change the Company’s
obligation to purchase any Security upon a Fundamental Change pursuant to
Section 8.01 in a manner adverse to the Holder;

 

(e)                                  to reduce the Make Whole
Premium or otherwise modify the provisions of Section 9.05 in a manner
adverse to the Holder;

 

(f)                                    to reduce the Fundamental
Change Make-Whole Amount or otherwise modify the provisions of
Section 8.01 in a manner adverse to any Holder; and

 

(g)                                 to impair the right of a
Holder to convert any Security or reduce the amount of cash or the number of
shares of Common Stock (or any other property) receivable upon conversion.

 

Section 7.02.  Without Consent of Holders.  In
addition to the matters described in Section 9.1 of the Original
Indenture, the Company and the Trustee may amend or supplement the Indenture or
the Securities without notice to or consent of any Holder of an Outstanding
Security for one or more of the following purposes:

 

(a)                                  to cure any ambiguity,
omission, defect or inconsistency in the Indenture, to correct or supplement
any provision in the Indenture, or to make any other provisions with respect to
matters or questions arising under the Indenture, so long as the interests of
Holders of Securities are not adversely affected in any respect under the
Indenture; provided that such amendment made solely to conform the provisions
of the Indenture to the corresponding description of the Securities contained
in the Prospectus Supplement shall not be deemed to adversely affect the
interests of the Holders of Securities; and

 

(b)                                 to provide for conversion
rights of Holders if any reclassification or change of Common Stock or any
consolidation, merger or sale of all or substantially all of the Company’s
property and assets occurs or otherwise comply with the provisions of the
Indenture in the event of a merger, consolidation or transfer, sale,
conveyance, lease or other disposition of all or substantially all of the
Company’s property and assets (including the provisions of Section 9.09
hereof and Article 8 of the Original Indenture).

 

19

 

ARTICLE 8

PURCHASE AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE

 

Section 8.01.  Purchase at the Option of the Holders 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 purchase any or all of such Holder’s Securities on a date specified
by the Company that is no later than 35 days, and no earlier than 20 days,
after the date of the Company Notice of the occurrence of such Fundamental
Change (the “Fundamental Change Purchase Date”).
The Company shall purchase such Securities at a price (the “Fundamental Change Purchase Price”), which
shall be paid in cash, equal to 100% of the principal amount of the Securities
to be purchased plus (i) the applicable Fundamental Change Make-Whole
Amount, if any, and (ii) any accrued and unpaid interest to, but
excluding, the Fundamental Change Purchase Date, unless the Fundamental Change
Purchase Date is between a Regular Record Date and the Interest Payment Date to
which it relates, in which case the Fundamental Change Purchase Price shall
equal 100% of the principal amount of Securities to be purchased plus the
applicable Fundamental Change Make-Whole Amount, if any, and accrued and unpaid
interest shall be paid to the Holder of record on the Regular Record Date.  For any Fundamental Change Purchase Date, the
“Fundamental Change Make-Whole Amount”
shall mean the amount corresponding to such date in Schedule A to this Second
Supplemental Indenture.

 

(b)                                 The Company shall mail to
all Holders a Company Notice upon the occurrence of a Fundamental Change and of
the purchase right arising as a result thereof, including the information
required by Section 8.02 hereof, on or before the 10th Business Day after
the occurrence of such Fundamental Change.

 

(c)                                  For a Security to be so
purchased at the option of the Holder pursuant to this Section 8.01, such
Holder must (i) deliver to the Paying Agent a written notice of purchase
(a “Fundamental Change Purchase Notice”)
in the form entitled “Form of Fundamental Change Purchase Notice” attached
to the Security duly completed, on or before the Close of Business on the
Business Day immediately preceding the Fundamental Change Purchase Date, stating:

 

(A)                              if the Securities are in the form of
Definitive Securities, the certificate numbers of the Securities which the
Holder shall deliver to be purchased;

 

(B)                                the portion of the principal amount of the
Securities that the Holder shall deliver to be purchased, which portion must be
$1,000 in principal amount or an integral multiple thereof; and

 

(C)                                that such Securities shall be purchased as of
the Fundamental Change Purchase Date pursuant to the terms and conditions
specified in Section 8.01 of this Second Supplemental Indenture, and

 

(ii)                                  deliver or book-entry
transfer such Securities to the Paying Agent (together with all necessary
endorsements) at the offices of the Paying Agent after delivery of the Purchase
Notice, such delivery or transfer being a condition to receipt by the Holder of
the Fundamental Change Purchase Price therefor; provided, however, that such
Fundamental Change Purchase Price shall be so paid pursuant to this
Section 8.01 only if the Securities so delivered or 

 

20

 

transferred to the Paying
Agent shall conform in all respects to the description thereof in the related
Fundamental Change Purchase Notice.

 

If the Securities are in the form of Global
Securities, the Fundamental Change Purchase Notice must comply with the
appropriate Depositary procedures.

 

The Paying Agent shall promptly return to the
respective Holders thereof any Securities (x) with respect to which a
Fundamental Change Purchase Notice has been withdrawn in compliance with this
Second Supplemental Indenture, or (y) held by it during the continuance of
an acceleration of the principal amount of the Securities (other than an
acceleration in connection with an Event of Default resulting from a failure by
the Company to pay the Fundamental Change Purchase Price with respect to such
Securities) in which case, upon such return, the Fundamental Change Purchase
Notice with respect thereto shall be deemed to have been withdrawn.

 

(d)                                 The Company shall purchase
from a Holder, pursuant to this Section 8.01, Securities if the principal
amount of such Securities is $1,000 or an integral multiple of $1,000 if so
requested by such Holder.

 

Notwithstanding anything herein to the
contrary, any Holder delivering to the Paying Agent the Fundamental Change
Purchase Notice contemplated by this Section 8.01 shall have the right at
any time prior to the Close of Business on the Business Day immediately prior
to the Fundamental Change Purchase Date to withdraw such Fundamental Change
Purchase Notice (in whole or in part) by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 8.02(b).

 

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

 

At or before 11:00 a.m. (New York City
time) on the Fundamental Change Purchase Date, the Company shall deposit with
the Paying Agent (or if the Company or an affiliate of the Company is acting as
the Paying Agent, shall segregate and hold in trust as provided in
Section 10.3 of the Original Indenture) cash sufficient to pay the
aggregate Fundamental Change Purchase Price of the Securities to be purchased
pursuant to this Section 8.01. 
Payment by the Paying Agent of the Fundamental Change Purchase Price for
such Securities shall be made promptly following the later of the Fundamental
Change Purchase Date or the time of book-entry transfer or delivery of such
Securities, together with necessary endorsements.  If the Paying Agent holds, in accordance with
the terms of this Second Supplemental Indenture, cash sufficient to pay the
Fundamental Change Purchase Price of such Securities on the Fundamental Change
Purchase Date, then, on and after such date, such Securities shall cease to be
outstanding and interest on such Securities shall cease to accrue, whether or
not book-entry transfer of such Securities is made or such Securities are
delivered to the Paying Agent, and all other rights of the Holder shall
terminate (other than the right to receive the Fundamental Change Purchase
Price upon delivery or transfer of the Securities).

 

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 Holders or the Trustee all cash held by 

 

21

 

the Paying Agent for the
payment of the Fundamental Change Purchase Price and shall notify the Trustee
of any Default by the Company in making any such payment.  If the Company or an affiliate of the Company
acts as Paying Agent, it shall segregate the cash 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 deliver all cash
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon doing so, the Paying Agent shall have no further liability for the
cash delivered to the Trustee.

 

Notwithstanding anything to the contrary no
Securities may be purchased by the Company pursuant to this Section 8.01
if the principal amount of the Securities has been accelerated (except in the
case of an acceleration in connection with an Event of Default resulting from a
failure by the Company to pay the Fundamental Change Purchase Price with respect
to such Securities), and the acceleration has not been rescinded, on or prior
to the relevant Fundamental Change Purchase Date.

 

Section 8.02.  Further Conditions and Procedures for
Purchase at the Option of the Holder Upon a Fundamental Change.  (a) Notice
of Fundamental Change. The Company shall send notices (each, a “Company Notice”) to the Holders, beneficial
owners of the Securities as required by applicable law, the Trustee and the
Paying Agent, on or before the 10th Business Day after the occurrence of the
Fundamental Change, as the case may be (each such date of delivery, a “Company Notice Date”). Each Company Notice
shall include a form of Fundamental Change Purchase Notice, as the case may be,
to be completed by a Holder and shall state:

 

	
  (i)

  	
   

  	
  the
  applicable Fundamental Change Purchase Price;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  the
  Base Conversion Rate at the time of such notice and any expected adjustments
  to the Base Conversion Rate;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  the
  applicable Fundamental Change Purchase Date, as the case may be, and the last
  date on which a Holder may exercise its repurchase rights under
  Section 8.01;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  the
  name and address of the Paying Agent and the Conversion Agent;

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  that
  Securities must be surrendered to the Paying Agent to collect payment of the
  Fundamental Change Purchase Price;

  
	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  that
  Securities as to which a Fundamental Change Purchase Notice has been
  delivered may be surrendered for conversion only if the applicable
  Fundamental Change Purchase Notice has been withdrawn in accordance with the
  terms of this Second Supplemental Indenture;

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

  	
  that the Fundamental
  Change Purchase Price for any Securities as to which a Fundamental Change
  Purchase Notice has been given and not withdrawn shall be paid by the Paying
  Agent promptly following the later of (1) the Fundamental Change
  Purchase Date and (2) the time of book-entry transfer or delivery of
  such Securities;

  

 

22

 

	
  (viii)

  	
   

  	
  the
  procedures the Holder must follow under Section 8.01 and Section 8.02;

  
	
   

  	
   

  	
   

  
	
  (ix)

  	
   

  	
  that,
  unless the Company defaults in making payment of such Fundamental Change
  Purchase Price on Securities for which any Fundamental Change Purchase Notice
  has been submitted, interest will cease to accrue on and after the Fundamental
  Change Purchase Date;

  
	
   

  	
   

  	
   

  
	
  (x)

  	
   

  	
  the
  CUSIP or ISIN number of the Securities;

  
	
   

  	
   

  	
   

  
	
  (xi)

  	
   

  	
  the
  procedures for withdrawing a Fundamental Change Purchase Notice; and

  
	
   

  	
   

  	
   

  
	
  (xii)

  	
   

  	
  the
  events causing a Fundamental Change and the effective date of the Fundamental
  Change.

  

 

Simultaneously with providing such Company
Notice, the Company will publish a notice containing the information in such
Company Notice in a newspaper of general circulation in The City of New York or
publish such information on its then existing website or through such other
public medium as it may use at the time.

 

At the Company’s request, made at least five
Business Days prior to the date upon which such notice is to be mailed, and at
the Company’s expense, the Paying Agent shall give the Company Notice in the
Company’s name; provided, however, that, in all cases, the text of the Company
Notice shall be prepared by the Company.

 

(b)                                 Upon receipt by the Company
of the Fundamental Change Purchase Notice specified in
Section 8.01(c) the Holder of the Securities in respect of which such
Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn as specified in the following two
paragraphs) thereafter be entitled to receive solely the Fundamental Change
Purchase Price with respect to such Securities. Such Fundamental Change
Purchase Price shall be paid by the Paying Agent to such Holder  promptly following the later of (1) the
Fundamental Change Purchase Date with respect to such Securities (provided the
conditions in this Article 8 have been satisfied) and (2) the time of
delivery or book-entry transfer of such Securities to the Paying Agent by the
Holder thereof in the manner required by Section 8.01. Securities in
respect of which a Fundamental Change Purchase Notice has been given by the
Holder thereof may not be converted on or after the date of the delivery of
such Fundamental Change Purchase Notice unless such Fundamental Change Purchase
Notice has first been validly withdrawn as specified in the following two
paragraphs.

 

A Fundamental Change Purchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Paying Agent at any time prior to the Close of Business on the Business Day
immediately prior to the Fundamental Change Purchase Date to which it relates,
specifying:

 

(i)                                     the principal amount of the Securities with
respect to which such notice of withdrawal is being submitted, which must be
$1,000 or an integral multiple thereof;

 

23

 

(ii)                                  if the Securities are in the form of
Definitive Securities, the certificate numbers of the Securities in respect of
which such notice of withdrawal is being submitted; and

 

(iii)                               the principal amount, if any, of any Securities
that remain subject to the original Fundamental Change Purchase Notice and
which has been or shall be delivered for purchase by the Company.

 

If the Securities are in the form of Global
Securities, the Fundamental Change Purchase Notice must comply with the
appropriate Depositary procedures.

 

(c)                                  Any Securities that are to
be purchased only in part shall be surrendered at the office of the Paying
Agent (with, if the Company or the Trustee so requires, due endorsement by, or
a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee or the
Authenticating Agent shall authenticate and deliver to the Holder of such
Securities, 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 Securities so surrendered which is not purchased.

 

(d)                                 In connection with any offer
to purchase Securities under Section 8.01, the Company shall, to the
extent applicable, (a) comply with Rules 13e-4 and 14e-1 (and any
successor provisions thereto) under the Exchange Act, if applicable;
(b) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act, if applicable; and (c) otherwise comply
with all applicable federal and state securities laws so as to permit the rights
and obligations under Section 8.01 to be exercised in the time and in the
manner specified in Section 8.01. 
To the extent any other provision of this Second Supplemental Indenture
conflicts with any of the foregoing, the foregoing shall govern.

 

(e)                                  At least five Business Days
before the Company Notice Date, the Company shall deliver an Officer’s
Certificate to the Trustee specifying whether the Company desires the Trustee
to give the Company Notice required by Section 8.02 hereof.

 

Section 8.03.  Purchase of Securities in Open Market.  The
Company may purchase any or all of the Securities in the open market or by
tender at any price or pursuant to private agreements. The Company shall
surrender any Security purchased by the Company pursuant to this Article 8
to the Trustee for cancellation. Any Securities surrendered to the Trustee for
cancellation may not be reissued or resold by the Company and will be canceled
promptly in accordance with Section 3.9 of the Original Indenture.

 

ARTICLE 9

CONVERSION

 

Section 9.01.  Conversion of Securities. 
(a) Subject to the procedures for conversion set forth in this
Article 9, a Holder may convert its Securities, in whole or in part
(provided that the total principal amount of Securities converted is an integral
multiple of $1,000), during the period beginning on, and including, the date of
this Second Supplemental Indenture and ending

 

24

 

at the Close of Business on the Business Day
immediately preceding the Stated Maturity for the payment of principal of the
Securities into the consideration described in Section 9.03.

 

(b)                                 Securities in respect of which a
Fundamental Change Purchase Notice has been delivered may not be surrendered
for conversion pursuant to this Article 9 prior to a valid withdrawal of
such Fundamental Change Purchase Notice in accordance with the provisions of Article 8.

 

(c)                                  Provisions of this Second Supplemental
Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.

 

(d)                                 The Base Conversion Rate shall be
adjusted in certain instances as described in Section 9.04 and Section 9.05.

 

Section 9.02.  Conversion Procedures.  (a) To convert a
Security, a Holder must (i) complete and manually sign the conversion
notice on the back of the Security (which shall be substantially in the form
set forth in the form of Security attached as Exhibit A under the heading
“Conversion Notice”) and deliver
such notice to the Conversion Agent, (ii) surrender the Security to the
Conversion Agent, (iii) if required by the Conversion Agent, furnish
appropriate endorsements and transfer documents, (iv) if and as required
by Section 9.03(d), pay an amount equal to the interest payable on the
next Interest Payment Date and (v) if required pursuant to Section 9.13,
pay any applicable transfer or similar taxes. The “Conversion Date” with respect to a Security means the date on
which the Holder of the Security has complied with all of the foregoing
requirements to convert such Security. Anything herein to the contrary
notwithstanding, in the case of Global Securities, Securities may be
surrendered in accordance with the rules and procedures of the Depositary,
to the extent applicable, as in effect from time to time.

 

The Conversion
Agent will, on the Holder’s behalf, convert the Securities into the
consideration described in Section 9.03. The Holder may obtain additional
copies of the required form of the Conversion Notice from the Conversion Agent.

 

(b)                                 In the case of any Security which is
converted in part only, upon such conversion the Company shall execute and the
Trustee shall upon receipt of a Company Order (which the Company agrees to
deliver promptly) authenticate and deliver to the Holder thereof, without
service charge, a new Security or Securities of authorized denominations in an
aggregate principal amount equal to, and in exchange for, the unconverted
portion of the principal amount of such Security.

 

Section 9.03.  Settlement Upon Conversion.  (a) Holders surrendering
Securities for conversion shall be entitled to receive (i) a number of
shares of Common Stock (the “Conversion
Shares”) equal to the quotient of (x) the aggregate principal
amount of Securities surrendered plus any interest accrued and unpaid thereon divided
by (y) the Base Conversion Price, and (ii) any Additional Shares
required pursuant to Section 9.05.

 

(b)                                 Upon the conversion of a Security, the
Company shall deliver the Conversion Shares and the Additional Shares, if any,
as soon as practicable and in no event later than the 

 

25

 

third
Business Day following the Conversion Date (each such delivery date, a “Settlement Date”).

 

(c)                                  A Holder shall not be entitled to any
rights of a holder of Common Stock until such Holder has converted its
Securities.  The Person in whose name any
certificate or certificates evidencing shares of Common Stock, if any, issuable
upon conversion shall become, at the Close of Business on such Conversion Date,
the holder of record of the shares of Common Stock represented thereby.  Except as set forth in this Second
Supplemental Indenture, no payment or adjustment will be made for dividends or
distributions declared or made on shares of Common Stock issued upon conversion
of a Security prior to the issuance of such shares of Common Stock.

 

(d)                                 Upon conversion of a Security, a Holder
will not receive any cash payment representing any accrued and unpaid interest
through the Conversion Date.  Instead,
accrued and unpaid interest will be converted into Common Stock as set forth in
Paragraph (a) of this Section 9.03. 
The payment and delivery to the Holder of Common Stock (if any) into
which the Holder’s Securities and all accrued and unpaid interest thereon are
convertible will be deemed to satisfy the Company’s obligation to pay the
principal amount of the Securities and the Company’s obligation to pay accrued
but unpaid interest attributable to the period from the most recent Interest
Payment Date through the Conversion Date.

 

(e)                                  The Base Conversion Rate will not be
adjusted for accrued and unpaid interest.

 

Section 9.04.  Adjustments to Base Conversion Rate.  The Base Conversion Rate shall
be adjusted from time to time as follows:

 

(a)                                  Subject to Section 9.15, if the
Company issues shares of Common Stock as a dividend or distribution on shares
of the Common Stock to all or substantially all holders of the Common Stock, or
if the Company effects a share split or share combination, the Base Conversion
Rate will be adjusted based on the following formula:

 

	
  CR1 = CR0 ×

  	
  OS1

  	
   

  
	
  OS0

  	
   

  

 

	
  where

  	
   

  	
   

  	
   

  
	
  CR0

  	
  =

  	
   

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

  
	
  CR1

  	
  =

  	
   

  	
  the
  new Base Conversion Rate in effect immediately after the Opening of Business
  on such Ex-Dividend Date or such effective date, as applicable;

  
	
  OS0

  	
  =

  	
   

  	
  the
  number of shares of Common Stock outstanding immediately prior to Opening of
  Business on such Ex-Dividend Date or such effective date, as applicable; and

  

 

26

 

	
  OS1

  	
  =

  	
   

  	
  the number of shares of
  Common Stock that would be outstanding immediately after, and solely as a
  result of, such dividend, distribution, share split or combination, as
  applicable.

  

 

Such adjustment
shall become effective immediately following the Opening of Business on (i) the
Ex-Dividend Date for the dividend or distribution or (ii) the effective
date of the share split or combination, as the case may be.  If any dividend or distribution of the type
described in this Section 9.04(a) is declared but not so paid or
made, the new Base Conversion Rate shall be readjusted to the Base Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared. Except in the case of a share combination or a reverse split, in no
event shall the Base Conversion Rate be decreased pursuant to this Section 9.04(a).

 

(b)                                 Subject to Section 9.15, if the
Company issues or sells shares of Common Stock at a price per share less than
the Base Conversion Price on the Trading Day immediately preceding such
issuance or sale, the Base Conversion Rate will be adjusted based on the
following formula:

 

	
  CR1 = CR0 ×

  	
  OS0 + X

  	
   

  
	
  OS0 + Y

  	
   

  

 

	
  where

  	
   

  	
   

  	
   

  
	
  CR0

  	
  =

  	
   

  	
  the
  Base Conversion Rate in effect immediately prior to the Opening of Business
  on the date of such issuance or sale;

  
	
  CR1

  	
  =

  	
   

  	
  the
  new Base Conversion Rate in effect immediately after the Opening of Business
  on the date of such issuance or sale;

  
	
  OS0

  	
  =

  	
   

  	
  the
  number of shares of Common Stock outstanding immediately prior to the Opening
  of Business on the date of such issuance or sale;

  
	
  X

  	
  =

  	
   

  	
  the
  total number of shares of Common Stock issued or sold on such date; and

  
	
  Y

  	
  =

  	
   

  	
  the
  number of shares of Common Stock equal to the quotient of (A) the
  aggregate purchase price of the Common Stock issued or sold and (B) the
  Base Conversion Price on the Trading Day immediately preceding such issuance
  or sale.

  

 

Any adjustment
made pursuant to this Section 9.04(b) shall become effective
immediately following the Opening of Business on the date of such issuance or
sale. In no event shall the Base Conversion Rate be decreased pursuant to this Section 9.04(b).

 

(c)                                  Subject to Section 9.15, if the
Company distributes to all or substantially all holders of its Common Stock any
rights, options or warrants entitling them to purchase, for a period expiring
within 45 days of distribution, shares of Common Stock at a price per share
less than the Closing Sale Prices of the Common Stock on the Business Day
immediately preceding the declaration date for such distribution, the Base
Conversion Rate shall be adjusted based on the following formula:

 

	
  CR1 = CR0 ×

  	
  OS0 + X

  	
   

  
	
  OS0 + Y

  	
   

  

 

27

 

	
  where

  	
   

  	
   

  	
   

  
	
  CR0

  	
  =

  	
   

  	
  the
  Base Conversion Rate in effect immediately prior to the Opening of Business
  on the Ex-Dividend Date for such distribution;

  
	
  CR1

  	
  =

  	
   

  	
  the
  new Base Conversion Rate in effect immediately after the Opening of Business
  on the Ex-Dividend Date for such distribution;

  
	
  OS0

  	
  =

  	
   

  	
  the
  number of shares of Common Stock outstanding immediately prior to the Opening
  of Business on the Ex-Dividend Date for such distribution;

  
	
  X

  	
  =

  	
   

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

  
	
  Y

  	
  =

  	
   

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

  

 

For purposes of
this Section 9.04(c) in determining whether any rights, options or
warrants entitle the Holders to purchase shares of Common Stock at less than
the applicable Closing Sale Price immediately preceding the declaration date
for such distribution, and in determining the aggregate exercise or conversion
price payable for the shares of Common Stock, there shall be taken into account
any consideration received by the Company for such rights, options or warrants
and any amount payable on exercise thereof, with the value of such
consideration, if other than cash, to be determined by the Board of Directors.
If any right, option or warrant described in this Section 9.04(c) is
not exercised or converted prior to the expiration of the exercisability or
convertibility thereof, the new Base Conversion Rate shall be readjusted to the
Base Conversion Rate that would then be in effect if the right, option or
warrant had not been so issued.  Any adjustment
made pursuant to this Section 9.04(c) shall become effective
immediately following the Opening of Business on the Ex-Dividend Date for the
distribution of rights, options or warrants, as applicable. In no event shall
the Base Conversion Rate be decreased pursuant to Section 9.04(c).

 

(d)                                 Subject to Section 9.15, if the
Company distributes shares of Capital Stock, evidences of its indebtedness or
other assets or property of the Company or rights or warrants to acquire
Capital Stock of the Company to all or substantially all holders of the Common
Stock, excluding:

 

(i)                                     dividends, distributions, share splits or share combinations as to which
an adjustment applies under Section 9.04(a) or
Section 9.04(c) above;

 

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

 

(iii)                               Spin-Offs to which the provisions set forth below in this
Section 9.04(d)  shall apply;

 

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

 

28

 

	
  CR1 = CR0 ×

  	
  SP0

  	
   

  
	
  SP0 – FMV

  	
   

  

 

	
  where

  	
   

  	
   

  	
   

  
	
  CR0

  	
  =

  	
   

  	
  the
  Base Conversion Rate in effect immediately prior to the Opening of Business
  on the Ex-Dividend Date for such distribution;

  
	
  CR1

  	
  =

  	
   

  	
  the
  new Base Conversion Rate in effect immediately after the Opening of Business
  on the Ex-Dividend Date for such distribution;

  
	
  SP0

  	
  =

  	
   

  	
  the
  average of the Closing Sale Prices of the Common Stock over the 10
  consecutive Trading Days ending on the Business 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 shares of Capital Stock, evidences of indebtedness, assets, property,
  rights or warrants distributed with respect to each outstanding share of
  Common Stock at the Opening of Business on the Ex-Dividend Date for such
  distribution.

  

 

Such adjustment
shall become effective immediately following the Opening of Business on the
Ex-Dividend Date for such distribution of the Capital Stock, evidences of
indebtedness or other assets or property of the Company or rights or warrants
to acquire Capital Stock of the Company.

 

With respect to
an adjustment pursuant to this Section 9.04(d) 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 of the Company (a “Spin-Off”), the Base Conversion Rate will
be adjusted based on the following formula:

 

	
  CR1 = CR0 ×

  	
  FMV0 + MP0

  	
   

  
	
  MP0

  	
   

  

 

	
  where

  	
   

  	
   

  	
   

  
	
  CR0

  	
  =

  	
   

  	
  the
  Base Conversion Rate in effect immediately prior to Close of Business on the
  last Trading Day of the Valuation Period;

  
	
  CR1

  	
  =

  	
   

  	
  the
  new Base Conversion Rate in effect immediately after the Close of Business on
  the last Trading Day of the Valuation Period;

  
	
  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 (determined for the purposes of the definition of Closing Sale
  Price as if the Capital Stock or similar equity interest were Common Stock)
  over the 10 consecutive Trading-Day period beginning on, and including, the
  effective date of the Spin-Off (the “Valuation Period”);
  and

  
	
  MP0

  	
  =

  	
   

  	
  the
  average of the Closing Sale Prices of Common Stock over the Valuation Period.

  

 

29

 

Such adjustment
shall occur immediately after the Close of Business on the last Trading Day of
the Valuation Period; provided that in respect of any Conversion Date occurring
during the Valuation Period, references to 10 Trading Days within the portion
of this Section 9.04(d) related to “Spin-Offs” shall be deemed
replaced with the lesser number of Trading Days as have elapsed between the
effective date of such Spin-Off and the relevant Conversion Date in determining
the adjustment to the applicable Base Conversion Rate.

 

If any such
dividend or distribution described in this Section 9.04(d) is
declared but not paid or made, the new Base Conversion Rate shall be readjusted
to be the Base Conversion Rate that would be in effect if the dividend or
distribution had not been declared. In no event shall the Base Conversion Rate
be decreased pursuant to this Section 9.04(d).

 

(e)                                  Subject to Section 9.15, if the
Company pays or makes any dividend or distribution consisting exclusively of
cash to all or substantially all holders of Common Stock, the Base Conversion
Rate will be adjusted based on the following formula:

 

	
  CR1 = CR0 ×

  	
  SP0

  	
   

  
	
  SP0 — C

  	
   

  

 

	
  where

  	
   

  	
   

  	
   

  
	
  CR0

  	
  =

  	
   

  	
  the
  Base Conversion Rate in effect immediately prior to the Opening of Business
  on the Ex-Dividend Date for such dividend or distribution, as applicable;

  
	
  CR1

  	
  =

  	
   

  	
  the
  new Base Conversion Rate in effect immediately after the Opening of Business
  on the Ex-Dividend Date for such dividend or distribution, as applicable;

  
	
  SP0

  	
  =

  	
   

  	
  the
  average of the Closing Sale Prices of the Common Stock over the 10
  consecutive Trading Days ending on the Business Day immediately preceding the
  Ex-Dividend Date for such dividend or distribution, as applicable; and

  
	
  C

  	
  =

  	
   

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

  

 

Any adjustment
to the Base Conversion Rate made pursuant to this Section 9.04(e) shall
become effective immediately following the Opening of Business on the
Ex-Dividend Date for the dividend or distribution. If any dividend or
distribution described in this Section 9.04(e) is declared but not so
paid or made, the new Base Conversion Rate shall be readjusted to the Base
Conversion Rate that would then be in effect if the dividend or distribution
had not been declared. In no event shall the Base Conversion Rate be decreased
pursuant to this Section 9.04(e).

 

(f)                                    Subject to Section 9.15, if the
Company or any of its Subsidiaries makes a payment in respect of a tender offer
or exchange offer for Common Stock, to the extent that the cash and value of
any other consideration included in the payment per share of Common Stock
exceeds the average of the Closing Sale Prices of the Common Stock over the 10
consecutive Trading-Day period commencing on, and including, the Trading Day
next succeeding the last 

 

30

 

date
on which tenders or exchanges may be made pursuant to such tender or exchange
offer, the Base Conversion Rate will be adjusted based on the following
formula:

 

	
  CR1 = CR0 ×

  	
  AC + (SP1 × OS1)

  	
   

  
	
  OS0 × SP1

  	
   

  

 

	
  where

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CR0

  	
  =

  	
   

  	
  the
  Base Conversion Rate in effect at the Close of Business on the last Trading
  Day of the 10 consecutive Trading-Day period commencing on, and including,
  the Trading Day next succeeding the date such tender or exchange offer
  expires;

  
	
   

  	
   

  	
   

  	
   

  
	
  CR1

  	
  =

  	
   

  	
  the
  new Base Conversion Rate in effect at the Opening of Business on the first
  day following the last Trading Day of the 10 consecutive Trading-Day period
  commencing on, and including, the Trading Day next succeeding the date such
  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 of Common Stock purchased in
  such tender or exchange offer;

  
	
   

  	
   

  	
   

  	
   

  
	
  OS0

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
  OS1

  	
  =

  	
   

  	
  the
  number of shares of Common Stock outstanding immediately after the date such
  tender or exchange offer expires (after giving effect to the purchase or
  exchange of all shares accepted for purchase or exchange in the offer); and

  
	
   

  	
   

  	
   

  	
   

  
	
  SP1

  	
  =

  	
   

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

  

 

The adjustment
to the Base Conversion Rate under this Section 9.04(f) shall become
effective immediately following the Opening of Business on first day following
the last Trading Day of the 10 consecutive Trading-Day period commencing on,
and including, the Trading Day next succeeding the date the tender or exchange
offer expires; provided that, in respect of any Conversion Date occurring
during the 10 Trading Days following the date that any tender or exchange offer
expires, references within this Section 9.04(f)  to 10 Trading Days
shall be deemed replaced with such lesser number of Trading Days as have elapsed
between the date such tender or exchange offer expires and the relevant
Conversion Date in determining the adjustment to the applicable Base Conversion
Rate.  If the Company or one of its
Subsidiaries is obligated to purchase Common Stock pursuant to any tender or
exchange offer but are permanently prevented by applicable law from effecting a
purchase or all purchases are rescinded, the new Base Conversion Rate shall be
readjusted to be the Base Conversion Rate that 

 

31

 

would be in
effect if the tender or exchange offer had not been made. In no event shall the
Base Conversion Rate be decreased pursuant to this Section 9.04(f).

 

(g)                                 Subject to Section 9.15, if, on the
fifteen month anniversary of the date hereof (the “Reset Day”), the volume-weighted average of the Closing Sales
Prices for one share of Common Stock on its primary Trading Market (the “Reset Day Price”) for the fifteen Trading
Days immediately prior to such anniversary is less than the Base Conversion
Price then in effect, the Base Conversion Rate shall be adjusted on such Reset
Day so that the Base Conversion Price shall be equal to the Reset Day Price.

 

(h)                                 Notwithstanding the foregoing provisions
of this Section 9.04, no adjustment will be made thereunder, nor shall an
adjustment be made to the ability of a Holder to convert, for any distribution
described therein if each Holder will otherwise participate in the distribution
on the same terms and at the same time as holders of Common Stock, without
having to convert its Securities, as if such Holder held a number of shares of
Common Stock equal to the Base Conversion Rate in effect on the Ex-Dividend
Date or effective date, as the case may be, for such transaction multiplied by
the principal amount (expressed in thousands) of the Securities held by such
Holder.

 

(i)                                     No adjustment to the Base Conversion Rate
will be made unless as specifically set forth in this Section 9.04 and Section 9.05.

 

(j)                                     Without limiting the foregoing, the
applicable Base Conversion Rate will not be adjusted upon certain events,
including but not limited to:

 

(i)                                     the issuance of shares of Common Stock or options (a) to
employees, officers or directors of the Company pursuant to any stock or option
plan duly adopted and in effect as of the date hereof or (b) duly adopted
after the date hereof by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of non-employee directors
established for such purpose;

 

(ii)                                  the issuance of any shares of Common Stock pursuant to any option,
warrant, right, or exercisable, exchangeable or convertible security
outstanding as of the Issue Date, provided that the exercise price or
conversion rate of such security has not been reduced since the Issue Date;

 

(iii)                               a change in the par value of the Common Stock; or

 

(iv)                              dividends or distributions accumulated and unpaid as of the date hereof.

 

(k)                                  No adjustment to the Base Conversion Rate
will be required unless the adjustment would require an increase or decrease of
at least 1% of the Base Conversion Rate. If the adjustment is not made because
the adjustment does not change the Base Conversion Rate by at least 1%, then
the adjustment that is not made will be carried forward and taken into account
in any future adjustment. All required calculations will be made to the nearest
cent or 1/1000th of a share, as the case may be.  Notwithstanding the foregoing, (i) upon
any conversion of Securities (solely with respect to Securities to be
converted), (ii) on every one year anniversary from the 

 

32

 

Issue
Date of the Securities and (iii) on the Stated Maturity for the payment of
principal of the Securities, the Company will give effect to all adjustments
that have been otherwise deferred, and those adjustments will no longer be
carried forward and taken into account in any future adjustment.

 

(l)                                     Whenever the Base Conversion Rate is
adjusted as herein provided, the Company shall promptly file with the Trustee
and any Conversion Agent other than the Trustee an Officer’s Certificate
setting forth the Base 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 Base Conversion Rate and
may assume that the last Base 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 Base Conversion Rate setting forth the adjusted Base Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Base Conversion Rate to the Holder of each Security
at such Holder’s last address appearing on the Securities Register provided for
in Section 2.04 of this Second Supplemental Indenture within 20 days after
execution thereof.  Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.

 

(m)                               For purposes of this Section 9.04,
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock.  If the Company pays any dividend
or makes any distribution on, or issues any rights, options or warrants in
respect of, shares of Common Stock held in treasury by the Company, the Company
shall not issue, transfer or convey such shares of Common Stock in a manner
that would have the effect of circumventing the provisions of this Section 9.04.

 

(n)                                 In addition to the adjustments described
in this Section 9.04, the Company may increase the Base Conversion Rate as
the Board of Directors deems advisable to avoid or diminish any income tax to
Holders of the Company’s Capital Stock resulting from any dividend or
distribution of Capital Stock (or rights to acquire Capital Stock) or from any
event treated as a dividend or distribution of Capital Stock or rights to
acquire Capital Stock for income tax purposes. The Company may also, from time
to time, to the extent permitted by applicable law, increase the Base
Conversion Rate by any amount for any period of at least 20 Business Days if
the Board of Directors has determined that an increase would be in the
Company’s best interests. If the Board of Directors makes a determination to
increase the Base Conversion Rate, it will be conclusive. The Company shall
give Holders of Securities at least 15 days’ notice of an increase in the Base
Conversion Rate.

 

(o)                                 Notwithstanding anything to the contrary
herein, no adjustment to the Base Conversion Rate shall be made if it would
cause the Base Conversion Price to be less than $1.00.

 

Section 9.05.  Make-Whole Adjustment to Common Stock
Delivered Upon Conversion. 
(a) Upon any conversion of the Securities, the Company shall pay a
“Make-Whole Premium” by delivering
a number of additional shares of Common Stock as provided in Section 9.05(b) (the
“Additional Shares”).

 

33

 

(b)                                 Subject to Section 9.15, the number
of Additional Shares per $1,000 principal amount of Securities constituting the
Make-Whole Premium shall be equal to the quotient of (i) the aggregate
principal amount of the Securities so converted multiplied by 32.00%, less
the aggregate interest paid on such Securities prior to the applicable
Conversion Date divided  by (ii) 95% of the volume-weighted
average Closing Price of the Common Stock for the 10 Trading Days immediately
preceding the Conversion Date.

 

Section 9.06.  Fractional Shares.  The Company will not issue fractional shares
of Common Stock upon conversion of Securities. 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 that shall be issuable upon conversion shall be
computed on the basis of the aggregate principal amount of the Securities (or
specified portions thereof to the extent permitted hereby) so surrendered. In
lieu of any fractional shares of Common Stock, the number of shares of Common
Stock delivered by the Company shall be rounded up to the nearest whole share.

 

Section 9.07.  Notice of Adjustment.  Whenever the Base Conversion
Rate is adjusted as herein provided, the Company shall promptly file with the
Trustee and any Conversion Agent other than the Trustee, an Officer’s
Certificate setting forth the Base Conversion Rate after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. Unless
and until a Trust 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 Base Conversion Rate and may assume that the last Base
Conversion Rate of which it has knowledge is still in effect. Promptly after
delivery of such Officer’s Certificate, the Company shall prepare a notice of
such adjustment of the Base Conversion Rate setting forth the adjusted Base
Conversion Rate and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Base Conversion Rate to
Holders within 20 Business Days of the effective date of such adjustment.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.

 

Section 9.08.  Notice of Certain Transactions.  In the event that the Company
takes any action which would require an adjustment to the Base Conversion Rate,
the Company takes any action that requires the execution of a supplemental
indenture in accordance with the provisions of Section 9.09 or if there is
a dissolution or liquidation of the Company, the Company shall mail to Holders
and file with the Trustee a notice stating the proposed record or effective
date, as the case may be. The Company shall mail such notice at least 20 days
before such proposed effective date. Failure to mail such notice or any defect
therein shall not affect the validity of any transaction referred to in this Section 9.09.

 

Section 9.09.  Effect of Recapitalizations,
Reclassifications, and Changes of Common Stock.  (a) In the case of the following events
(each, a “Business Combination”):

 

(i)                                     any recapitalization, reclassification or change of the Common Stock,
other than (A) a change in par value, or from par value to no par value,
or from no par value to par value, or (B) as a result of a subdivision or
a combination of the Common Stock;

any consolidation, merger or combination to which
the Company is a party;

 

34

 

(ii)                                 any sale, lease
or other transfer to a third party of all or substantially all of the
consolidated assets of the Company and its Subsidiaries; or

 

(iii)                               any statutory
share exchange;

 

in each case as a result of which holders of
Common Stock are entitled to receive stock, other securities, other property or
assets (including cash or any combination thereof) with respect to or in
exchange for Common Stock, the Company or the successor or purchasing
corporation, 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 if such supplemental indenture
is then required to so comply) providing that from and after the effective date
of the Business Combination, the settlement of the Company’s obligations to
convert Securities in accordance with the provisions of Section 9.03 shall
be based on, and each share of Common Stock deliverable in respect of any such
settlement shall consist of, the kind and amount of shares of stock, other
securities or other property or assets (including cash or any combination
thereof) which holders of Common Stock are entitled to receive in respect of
each share of Common Stock upon the Business Combination. For purposes of the
foregoing, where a Business Combination involves a transaction that causes the
Common Stock to be converted into the right to receive more than a single type
of consideration based upon any form of stockholder election, the consideration
will be deemed to be the weighted average of the types and amounts of
consideration received by the holders of Common Stock that affirmatively make
such an election. If, in the case of any such Business Combination, the stock
or other securities and assets receivable thereupon by a holder of shares of
Common Stock includes shares of stock or other securities and assets of a
Person other than the successor or purchasing Person, as the case may be, in
the Business Combination, then such supplemental indenture shall also be
executed by such other Person 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, including
to the extent practicable the provisions providing for the purchase rights set
forth in Article 8 hereof. The Company shall not become a party to any
Business Combination unless its terms are materially consistent with the
provisions of this Section 9.09. The above provisions of this Section 9.09
shall similarly apply to successive Business Combinations. None of the
provisions of this Section 9.09 shall affect the right of a Holder of
Securities to convert its Securities in accordance with the provisions of this Article 9
prior to the effective date of a Business Combination.

 

If this Section 9.09 applies to any
event or occurrence, Section 9.04 hereof shall not apply.

 

(b)           In
the event the Company shall execute a supplemental indenture pursuant to this Section 9.09,
the Company shall promptly file with the Trustee (i) an Officer’s
Certificate briefly stating the reasons therefor and that all conditions
precedent have been complied with and (ii) an Opinion of Counsel to the
effect that all conditions precedent thereto and hereunder have been complied
with, and shall promptly mail notice of the execution of such supplemental
indenture to 

 

35

 

all Holders. Failure to mail
such notice or any defect therein shall not affect the validity of such
transaction and such supplemental indenture.

 

Section 9.10.  Responsibility of Trustee.  (a) The
Trustee shall have no duty to calculate the Base Conversion Rate or to make any
computation or determination in connection therewith or to determine when an
adjustment under this Article 9 should be made, how it should be made or
what such adjustment should be, but may accept as conclusive evidence of the
same or the correctness of any such adjustment, and shall be protected in
relying upon, an Officer’s Certificate and Opinion of Counsel, including the
Officer’s Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 9.07. The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities, and the Trustee shall not be responsible for the
Company’s failure to comply with any provisions of this Article 9,
including, without limitation, whether or not a supplemental indenture is
required to be executed.

 

(b)           The
Trustee shall not be under any responsibility to determine the correctness of
any provisions contained in any supplemental indenture executed pursuant to Section 9.09,
but may accept as conclusive evidence of the correctness thereof, and shall be
fully protected in relying upon, the Officer’s Certificate and Opinion of
Counsel, with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 9.09.

 

(c)           Neither
the Trustee nor any Conversion Agent or any other Agent shall be responsible
for determining whether any event contemplated by this Article 9 has
occurred which makes the Securities eligible for conversion until the Company
has delivered to the Trustee and any Conversion Agent and each other Agent an
Officer’s Certificate stating that such event has occurred, on which Officer’s
Certificate the Trustee and any such Conversion Agent and other Agent may
conclusively rely, and the Company agrees to deliver such Officer’s Certificate
to the Trustee and any such Conversion Agent and each other Agent promptly
after the occurrence of any such event.

 

Section 9.11.  Stockholder Rights Plan.  To the
extent that the Company has a rights plan in effect upon conversion of the
Securities into Common Stock, the Holder will receive upon conversion of the
Securities in respect of which the Company has elected to deliver, in whole or
in part, Common Stock, if applicable, the rights under the rights plan unless,
prior to the conversion, the rights have expired, terminated or been redeemed
or unless the rights have separated from the Common Stock, in which case, and
only in such case, the Base Conversion Rate will be adjusted at the time of
separation as if the Company distributed to all holders of Common Stock shares
of the Company’s Capital Stock, evidences of indebtedness, other assets or
property or rights or warrants to acquire Common Stock as described in Section 9.04(d),
subject to readjustment upon the subsequent expiration, termination or redemption
of the rights.

 

Section 9.12.  Taxes on Conversion.  The issue
of stock certificates, if any, in respect of shares of Common Stock deliverable
on conversion of Securities shall be made without charge to the converting
Holder for any documentary, stamp or similar issue or transfer tax in respect
of the issue thereof. The Company shall not, however, be required to pay any
such tax which may be payable in respect of any transfer involved in the issue
and delivery of Common Stock in any name other than that of the Holder of any
Security converted, and the Company shall not be 

 

36

 

required
to issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

 

Section 9.13.  Certain Covenants of the Company.  (a) The
Company shall, prior to issuance of any Securities hereunder, and from time to
time as may be necessary, reserve out of its authorized but unissued Common
Stock or shares of Common Stock held in treasury, a sufficient number of shares
of Common Stock, free of preemptive rights, to permit the conversion of all
Outstanding Securities in accordance with the provisions of this Second
Supplemental Indenture (such number calculated, solely for purposes of this Section 9.13(a),
assuming the Company has elected or will elect to deliver solely shares of
Common Stock in respect of the Conversion Obligation).

 

(b)           All
shares of Common Stock delivered upon conversion of the Securities and all PIK
Interest Shares, if any, shall be newly issued shares or treasury shares, shall
be duly authorized, validly issued and fully paid and nonassessable and shall
be free from preemptive or similar rights and free of any lien or adverse
claim.

 

(c)           The
Company shall endeavor promptly to comply with all federal and state securities
laws regulating the issuance and delivery of shares of Common Stock upon the
conversion of Securities or the delivery of PIK Interest Shares, if any, and
shall cause to have listed or quoted all such shares of Common Stock on NASDAQ,
or each United States national securities exchange or over-the-counter or other
domestic market on which the Common Stock is then listed or quoted.

 

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

 

Section 9.14.  Automatic Conversion.

 

(a)           Subject
to Section 9.15, if at any time on or prior to Stated Maturity, the
Closing Price of the Common Stock has exceeded two hundred percent (200%) of
the Conversion Price then in effect for at least thirty (30) consecutive
Trading Days, all Securities then Outstanding shall automatically convert as
provided herein (an “Automatic Conversion”);
provided, however, that such Automatic Conversion shall be subject to Section 9.02
and Section 9.15 hereof.  Such
Securities shall be converted as soon as practicable, but in no event later
than the third Business Day following the Trading Day upon which this Automatic
Conversion requirement is triggered (the date of such conversion, the “Automatic Conversion Date”).

 

(b)           The
shares of Common Stock that the Holders shall receive upon Automatic Conversion
shall include any shares of Common Stock required to be delivered in respect of
a Make-Whole Premium in accordance with Section 9.05 hereof.

 

37

 

(c)           At
the request and expense of the Company, the Trustee shall mail or cause to be
mailed to each Holder notice (the “Automatic
Conversion Notice”) of an Automatic Conversion as soon as
practicable and no later than the first Business Day following Automatic
Conversion. If the Company gives such notice, it shall also deliver a copy of
such Automatic Conversion Notice to the Trustee. Such mailing shall be by first
class mail. Such notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Security shall not affect the
validity of the proceedings for the Automatic Conversion of any other Security.

 

(d)           Each
Automatic Conversion Notice shall state:

 

(1)                                the aggregate
principal amount of Securities to be automatically converted,

 

(2)                                the CUSIP, ISIN
or similar number or numbers of the Securities being automatically converted,

 

(3)                                the Automatic
Conversion Date,

 

(4)                                that on and
after said date Interest thereon will cease to accrue,

 

(5)                                the number of
shares of Common Stock, if any, to be delivered in respect of a Make-Whole
Premium pursuant Section 9.05 hereof,

 

(6)                                the place or
places where the Securities are to be surrendered for conversion, and

 

(7)                                the Conversion
Price then in effect.

 

(e)           Prior
to or contemporaneous with the mailing of an Automatic Conversion Notice to the
Holders, the Company shall issue a press release containing the information
contained in the Automatic Conversion Notice.

 

(f)            In
the event of an Automatic Conversion, the Company shall issue and deliver a
certificate or certificates for the number of Conversion Shares and any shares
of Common Stock required to be delivered in respect of a Make-Whole Premium for
delivery to the Holders as promptly after the Automatic Conversion Date as
practicable in accordance with the provisions of this Article 9, but in no
event later than the close of business on the third next succeeding Business
Day following such Automatic Conversion Date.

 

(g)           All
Securities subject to an Automatic Conversion shall be delivered to the Trustee
or its agent to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 3.9 of the Original Indenture.

 

(h)           Upon
Automatic Conversion, Interest on the Securities shall cease to accrue and shall
cease to be entitled to any benefit or security hereunder, and the holders
thereof shall have 

 

38

 

no right in respect of such
Securities except the right to receive the Common Stock and cash, if any, to
which they are entitled pursuant to this Section 9.14.

 

(i)            If
any of the provisions of this Section 9.14 are inconsistent with
applicable law at the time of such Automatic Conversion, such law shall govern.

 

Section 9.15.  Limitation on Conversion Prior to Shareholder
Approval.  Notwithstanding anything to the contrary
contained herein, the aggregate number of shares of Common Stock issued (i) upon
conversion of the Securities and (ii) as PIK Interest Shares shall not
exceed 19.9% of either (x) the total number of shares of Common Stock
outstanding on the date hereof or (y) the total voting power of the
Company’s securities outstanding on the date hereof that are entitled to vote
on a matter being voted on by holders of the Common Stock unless and until the
Company has obtained Shareholder Approval. 
Pursuant to Section 3.06 hereof, the Company has agreed to obtain
Shareholder Approval within 60 days hereof.

 

ARTICLE 10

MISCELLANEOUS

 

Section 10.01.  No Defeasance.  The provisions of Article Thirteen
of the Original Indenture shall not apply to any Securities issued under this
Second Supplemental Indenture.

 

Section 10.02.  Notices,
Etc., to Trustee and Company. 
(a) Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others’ address:

 

If to the Company:

 

c/o Globalstar, Inc.

461 So. Milpitas Blvd

Milpitas, CA 95035

Facsimile: 
408-933-4949

Attention: 
Chief Financial Officer

 

If to the Trustee:

 

U.S. Bank National Association, as Trustee

Corporate Trust Dept. CN-OH-W6CT

425 Walnut Street

Cincinnati, OH 45202

Facsimile: 
513-632-5511

 

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

 

(c)           All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; three 

 

39

 

Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.

 

Section 10.03.  Communication by Holders with other Holders.  Holders
may communicate pursuant to Section 312(b) of the Trust Indenture Act
with other Holders with respect to their rights under this Second Supplemental
Indenture or the Securities.  The
Company, the Trustee, the Registrar and anyone else shall have the protection
of Section 312(c) of the Trust Indenture Act.

 

Section 10.04.  Rules by Trustee, Paying Agent and
Registrar.  The Trustee may make reasonable rules for
action by, or a meeting of, Holders.  The
Registrar and the Paying Agent may make reasonable rules for their
functions.

 

Section 10.05.  Legal Holidays.  In addition to and
notwithstanding Section 1.14 of the Original Indenture if Interest Payment
Date (other than an Interest Payment Date coinciding with the Stated Maturity
for the payment of principal of the Securities or earlier Redemption Date or
Fundamental Change Purchase Date) of any Security falls on a day that is not a
Business Day, then (notwithstanding any other provision of the Indenture or of
the Securities) such Interest Payment Date shall be postponed to the next
succeeding Business Day; provided that, if such Business Day falls in the next
succeeding calendar month, the Interest Payment Date will be brought back to
the immediately preceding Business Day. If the Stated Maturity for the payment
of principal of the Securities or Redemption Date to Fundamental Change
Purchase Date of a Security would fall on a day that is not a Business Day, the
required payment of interest, if any, and principal shall be made on the next
succeeding Business Day and no interest on such payment shall accrue for the
period from and after the Stated Maturity for the payment of principal of the
Securities or Redemption Date or Fundamental Change Purchase Date, as the case
may be, to the next succeeding Business Day.

 

Section 10.06.  Governing Law.  THIS SECOND SUPPLEMENTAL
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 10.07.  Incorporators, Shareholders, Officers and
Directors of the Company Exempt from Individual Liability.  No
recourse under or upon any obligation, covenant or agreement of or contained in
this Second Supplemental Indenture or of or contained in the Securities or for
any claim based thereon or otherwise in respect thereof, or in the Securities
or because of the creation of any indebtedness represented thereby, shall be
had against any incorporator, stockholder, member, officer, manager or
director, as such, past, present or future, of the Company or any successor
Person, either directly or through the Company or any successor Person, whether
by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a part of the consideration for, the execution of this
Second Supplemental Indenture and the issue of the Securities.

 

40

 

Section 10.08.  Successors and Assigns.  All
covenants and agreements of the Company in this Second Supplemental Indenture
and the Securities shall bind its successors and assigns, whether so expressed
or not.  All covenants and agreements of
the Trustee in this Second Supplemental Indenture shall bind its successors and
assigns, whether so expressed or not.

 

Section 10.09.  Multiple Originals.  The parties may sign any
number of copies of this Second Supplemental 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
Second Supplemental Indenture.

 

Section 10.10.  Conflict with Trust Indenture Act.  If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under the Trust Indenture Act to be a part of
and govern this Second Supplemental Indenture, the latter provision shall
control.  If any provision of this Second
Supplemental Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Second Supplemental Indenture as so modified or
excluded, as the case may be.

 

Section 10.11.  Effect of Headings and Table of Contents.  The Article and
Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

 

Section 10.12.  Separability Clause.  In case
any provision in this Second Supplemental 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 10.13.  Benefits of the Second Supplemental Indenture.  Nothing in
this Second Supplemental Indenture or in the Securities express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Second Supplemental Indenture.

 

Section 10.14.  Calculations.  Except as otherwise provided
herein, the Company will be responsible for making all calculations called for
under the Indenture and the Securities. The Company will make all such
calculations in good faith and, absent manifest error, its calculations will be
final and binding on Holders. The Company will provide a schedule of its
calculations to each of the Trustee and the Conversion Agent, and each of the
Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy
of the Company’s calculations without independent verification. The Trustee
will deliver a copy of such schedule to any Holder upon the request of such
Holder.

 

Section 10.15.  Ratification and Incorporation of Original
Indenture.  As supplemented hereby, the Original
Indenture is in all respects ratified and confirmed, and the Original Indenture
and this Second Supplemental Indenture shall be read, taken and construed as
one and the same instrument.

 

41

 

ARTICLE 11

SUBORDINATION OF SECURITIES

 

Section 11.01.  Securities Subordinated to Senior Debt.  The
Company covenants and agrees, and each Holder, by its acceptance of a Security,
likewise covenants and agrees that all Securities shall be issued subject to
the provisions of this Article Eleven; and each Person holding any
Security, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of the principal of, interest and
premium, if any, on each and all of the Securities shall, to the extent and in
the manner set forth in this Article Eleven and in the Intercreditor
Agreement, be subordinated in right of payment to the prior payment in full, in
cash or cash equivalents, of all existing and future Senior Debt.

 

Section 11.02.  No Payment on Securities in
Certain Circumstances.

 

(a)           The
Company shall not make or cause or permit to be made any direct or indirect
payment by or on behalf of the Company of the principal of, interest and
premium, if any, on each and all of the Securities, whether pursuant to the
terms of the Securities or upon acceleration or otherwise shall be made unless
such payment is a Permitted Payment.

 

(b)           Notwithstanding
anything contained herein to the contrary, the Trustee shall not be required to
make any payment on the Securities in the form of cash unless the Trustee has
received a certificate from the Issuer, in form and substance reasonably
satisfactory to the Trustee, that such payment is a Permitted Payment.

 

(c)           For
the avoidance of doubt, nothing in this Section 11.02 shall prevent (i) a
Holder from converting its Securities into Common Stock in accordance with Section 9.01
hereof, or (ii) an Automatic Conversion of the Securities.

 

Section 11.03.  Payment over of Proceeds
upon Dissolution, Etc.

 

(a)           Upon  any payment or distribution of assets or securities of the Company of
any kind or character, whether in cash, property or securities, in connection
with any dissolution or winding up or total or partial liquidation or
reorganization of the Company, whether voluntary or involuntary, or in bankruptcy,
insolvency, receivership or other proceedings or other marshalling of assets
for the benefit of creditors, all amounts due or to become due upon all Senior
Debt shall first be paid in full, in cash or cash equivalents, before the
Holders or the Trustee on their behalf shall be entitled to receive any payment
by (or on behalf of) the Company on account of the Securities, or any payment
to acquire any of the Securities for cash, property or securities, or any
distribution with respect to the Securities of any cash, property or
securities. Before any payment may be made by, or on behalf of, the Company on
any Security, in connection with any such dissolution, winding up, liquidation
or reorganization, any payment or distribution of assets or securities for the
Company of any kind or character, whether in cash, property or securities, to
which the Holders or the Trustee on their behalf would be entitled, but for the
provisions of this Article Eleven, shall be made by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
Person making such payment or distribution or by the Holders or the Trustee if
received by them or it, directly to the COFACE Agent for the benefit of the
holders of Senior Debt, to the extent necessary to pay all such Senior Debt in
full, in cash or 

 

42

 

cash equivalents, after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Senior Debt.

 

(b)           To
the extent any payment of Senior Debt (whether by or on behalf of the Company,
as proceeds of security or enforcement of any right of setoff or otherwise) is
declared to be fraudulent or preferential, set aside or required to be paid to
any receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee or other similar
Person from the holders of the Senior Debt, the Senior Debt or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent the obligation
to repay any Senior Debt is declared to be fraudulent, invalid, or otherwise
set aside under any bankruptcy, insolvency, receivership, fraudulent conveyance
or similar law, then the obligation so declared fraudulent, invalid or
otherwise set aside (and all other amounts that would come due with respect
thereto had such obligation not been so affected) shall be deemed to be
reinstated and outstanding as Senior Debt for all purposes hereof as if such
declaration, invalidity or setting aside had not occurred.

 

(c)           In
the event that, notwithstanding the provision in clause (a) above
prohibiting such payment or
distribution, any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities,
shall be received by the Trustee or any Holder at a time when such payment or
distribution is prohibited by clause (a) above and before all obligations
in respect of Senior Debt are paid in full, in cash or cash equivalents, such
payment or distribution shall be received and held in trust for the benefit of,
and shall be paid over or delivered to, the COFACE Agent for the benefit of the
holders of Senior Debt, for application to the payment of all such Senior Debt
remaining unpaid, in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Debt.

 

(d)           For
purposes of this Section 11.03, the words “cash, property or securities”
shall not be deemed to include (so long as the effect of this clause is not to
cause the Securities to be treated in any case or proceeding or similar event
described in this Section 11.03 as part of the same class of claims as the
Senior Debt or any class of claims pari passu with, or senior to) the Senior
Debt for any payment or distribution, securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment that are
subordinated, at least to the extent that the Securities are subordinated, to
the payment of all Senior Debt then outstanding; provided that (i) if a
new corporation results from such reorganization or readjustment, such
corporation assumes the Senior Debt and (ii) the rights of the holders of
the Senior Debt are not, without the consent of the COFACE Agent, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company with or into, another corporation or the liquidation
or dissolution of the Company following the sale, conveyance, transfer, lease
or other disposition of all or substantially all of its property and assets to
another corporation upon the terms and conditions provided in Section 8.1
of the Original Indenture shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section 11.3 if
such other corporation shall, as a part of such consolidation, merger, sale,
conveyance, transfer, lease or other disposition, comply (to the extent
required) with the conditions stated in Section 8.1 of the Original
Indenture.

 

43

 

Section 11.04.  Payment Over of Other
Proceeds.

 

(a)           If
at any time prior to the Final Discharge Date, the Trustee or any Holder
receives or recovers:

 

(i)                                     any payment or
distribution of, or on account of or in relation to, the Securities which is a
Permitted Payment, except the distribution of shares of Common Stock upon
conversion of the Securities in accordance with the terms of this Indenture;

 

(ii)                                  any amount by
way of set-off in respect of the Securities owed to them which does not give
effect to a Permitted Payment; or

 

(iii)                               any
distribution in cash or in kind made as a result of the occurrence of an
Insolvency Event, the Trustee shall or such Holder shall hold that amount for
the Security Agent and inform the Security Agent and as soon as reasonably
practicable (and in any event, within five (5) Business Days) pay that
amount or an amount equal to that receipt or recovery to the Security Agent, to
be held on trust by the Security Agent for application in accordance with the
terms of the COFACE Finance Documents.

 

(b)           If
the Issuer receives or recovers any sum which, under the terms of any of the
COFACE Finance Documents, should have been paid to the Security Agent, the
Issuer shall hold that amount on trust for the Security Agent and promptly pay
that amount to the Security Agent, or, if this trust cannot be given effect to,
the Issuer will promptly pay an amount equal to that receipt or recovery to the
Security Agent for application in accordance with the terms of the COFACE
Finance Documents.

 

Section 11.05.  Subrogation.

 

(a)           Upon
the Final Discharge Date, the Holders shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of cash, property
or securities of the Company made on such Senior Debt until the principal of,
premium, if any, and interest on the Securities shall be paid in full; and, for
the purposes of such subrogation, no payments or distributions to the holders
of the Senior Debt of any cash, property or securities to which the Holders or
the Trustee on their behalf would be entitled except for the provisions of this
Article Eleven, and no payment pursuant to the provisions of this Article Eleven
to the holders of Senior Debt by the Holders or the Trustee on their behalf
shall, as between the Company, its creditors other than holders of Senior Debt,
and the Holders, be deemed to be a payment by the Company to or on account of
the Senior Debt. It is understood that the provisions of this Article Eleven
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of the Senior Debt, on the other
hand.

 

(b)           If
any payment or distribution to which the Holders would otherwise have been
entitled but for the provisions of this Article Eleven shall have been
applied, pursuant to the provisions of this Article Eleven, to the payment
of all amounts payable under Senior Debt, then, and in such case, the Holders
shall be entitled to receive from the holders of such Senior Debt any payments
or distributions received by such holders of Senior Debt in excess of the
amount

 

44

 

required to make payment in
full, in cash or cash equivalents, of such Senior Debt of such holders.

 

Section 11.06.  Obligations of Company Unconditional.  Nothing
contained in this Article Eleven or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior Debt,
nor shall anything herein or therein prevent the Holders or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights of the holders of the
Senior Debt pursuant to Section 11.15 hereof and otherwise pursuant to
this Article Eleven.

 

Section 11.07.  Notice to Trustee.

 

(a)           The
Company shall give prompt written notice to the Trustee of any fact known to
the Company that would prohibit the making of any payment to or by the Trustee
in respect of the Securities pursuant to the provisions of this Article Eleven.
The Trustee shall not be charged with the knowledge of the existence of any
default or event of default with respect to any Senior Debt or of any other
facts that would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received notice in writing at its Corporate
Trust Office to that effect signed by an Officer of the Company, or by a holder
of Senior Debt or trustee or agent thereof; and prior to the receipt of any
such written notice, the Trustee shall, subject to Article Six of the
Original Indenture, be entitled to assume that no such facts exist; provided
that, if the Trustee shall not have received the notice provided for in this Section 11.06
at least two Business Days prior to the date upon which, by the terms of this
Indenture, any monies shall become payable for any purpose (including, without
limitation, the payment of the principal of, premium, if any, or interest on
any Security), then, notwithstanding anything herein to the contrary, the
Trustee shall have full power and authority to receive any monies from the
Company and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
on or after such prior date except for an acceleration of the Securities prior
to such application. Nothing contained in this Section 11.06 shall limit
the right of the holders of Senior Debt to recover payments as contemplated by
this Article Eleven. The foregoing shall not apply if the Paying Agent is
the Company. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Debt (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Debt or a trustee or representative on behalf of any such holder.

 

(b)           In
the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article Eleven,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Eleven and, if such evidence is not furnished to
the Trustee or if the Trustee otherwise determines in the 

 

45

 

reasonable exercise of its
discretion to do so, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.

 

Section 11.08.  Reliance on Judicial Order or Certificate of
Liquidating Agent.  Upon any payment or distribution of assets or
securities referred to in this Article Eleven, the Trustee and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which bankruptcy, dissolution, winding up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person making such payment or distribution, delivered to the Trustee or
to the Holders for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Debt and other Debt
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article Eleven.

 

Section 11.09.  Trustee’s Relation to Senior
Debt.

 

(a)           The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article Eleven with respect to any Senior Debt that may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Debt and nothing in this Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder.

 

(b)           With
respect to the holders of Senior Debt, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set
forth in this Article Eleven, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article Eleven or otherwise.

 

Section 11.10.  Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.  No right of any present or
future holders of any Senior Debt to enforce subordination as provided in this Article Eleven
will at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms of
this Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with. The provisions of this Article Eleven
are intended to be for the benefit of, and shall be enforceable directly by,
the holders of Senior Debt.

 

Section 11.11.  Holders Authorize Trustee to Effectuate
Subordination of Securities.

 

(a)           Each
Holder by its acceptance of any Securities authorizes and expressly directs the
Trustee on its behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article Eleven and the
Intercreditor Agreement, and appoints the Trustee its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding up, liquidation
or reorganization of the Company (whether in bankruptcy, insolvency, 

 

46

 

receivership, reorganization
or similar proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the property and assets of the
Company, the filing of a claim for the unpaid balance of its Securities in the
form required in those proceedings.

 

(b)           Each
Holder by its acceptance of any Securities authorizes and expressly directs the
Trustee on its behalf to execute and deliver the Intercreditor Agreement and
appoints the Trustee its attorney-in-fact for such purposes.  To the extent there is any inconsistency
between the terms and conditions of this Indenture and the Intercreditor
Agreement, the Intercreditor Agreement shall prevail.

 

Section 11.12.  Not to Prevent Events of Default.  The
failure to make a payment on account of principal of, premium, if any, or
interest on the Securities by reason of any provision of this Article Eleven
will not be construed as preventing the occurrence of an Event of Default.

 

Section 11.13.  Trustee’s Compensation Not Prejudiced.  Nothing in
this Article Eleven will apply to amounts due to the Trustee pursuant to
other sections of this Indenture, including Section 6.7 of the Original
Indenture.

 

Section 11.14.  No Waiver of Subordination Provisions.  Without in
any way limiting the generality of Section 11.09, the holders of Senior
Debt may, at any time and from time to time, without the consent of or notice
to the Trustee or the Holders, without incurring responsibility to the Holders
and without impairing or releasing the subordination provided in this Article Eleven
or the obligations hereunder of the Holders to the holders of Senior Debt, do
any one or more of the following: (a) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Debt; (c) release
any Person liable in any manner for the collection of Senior Debt; and (d) exercise
or refrain from exercising any rights against the Company and any other Person.

 

Section 11.15.  Limitations on Enforcement.

 

Notwithstanding anything to the contrary
contained in Article 5 of this Second Supplemental Indenture or Article 6
of the Original Indenture, except as permitted by Section 11.02(a) of
this Second Supplemental Indenture, no Holder shall or shall cause the Trustee
to:

 

(a)           Seek
direct or indirect recovery, payment or repayment of, nor permit direct or
indirect payment or repayment of any of the Securities or other amounts payable
by the Company in respect thereof;

 

(b)           demand,
sue for or accept from the Company any payment in respect of the Securities or
take any other action to enforce its rights or to exercise any remedies in
respect of any Securities (whether upon the occurrence or during the occurrence
of an Event of Default or otherwise) unless requested to do so by the COFACE
Agent;

 

(c)           assign,
transfer or otherwise dispose of, or make demand for or accept, receive or
permit to subsist any lien in respect of, all or any Securities or any
interests therein or any rights 

 

47

 

which it may have against
the Issuer in respect of all or any part of the Securities to or in favor of
any person;

 

(d)           file
or join in any petition to commence any winding-up proceedings or an order
seeking reorganization or liquidation of the Company, or take any other action
for the winding-up, dissolution or administration of the Company or take, or
agree to, any other action which could or might lead to the bankruptcy, insolvency
or similar process of the Company unless requested to do so by the COFACE
Agent;

 

(e)           claim,
rank or prove as a creditor of the Company in competition with any COFACE
Finance Party in connection with the Company’s obligations under the
Securities; and/or

 

(f)            otherwise
exercise or pursue any remedy for the recovery of any Securities or in respect
of any rights arising in connection with such Securities.

 

Section 11.16.  Trust Monies Not Subordinated. 
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of U.S. Government Obligations held in trust under Article Four
of the Original Indenture by the Trustee for the payment of principal of,
premium, if any, and interest on the Securities shall not be subordinated to
the prior payment of any Senior Debt (provided that, at the time deposited,
such deposit did not violate any then outstanding Senior Debt), and none of the
Holders shall be obligated to pay over any such amount to any holder of Senior
Debt.

 

Section 11.17.  Non-competition.

 

Until the Final Discharge Date, neither the
Issuer nor the Trustee on behalf of any Holder will by virtue of any payment or
performance by it under this Agreement or by virtue of the operation of any
provision of this Indenture:

 

(a)                                  be
subrogated to any rights, security or moneys held, received or receivable by
any Finance Party (or the COFACE Agent or Security Agent or any trustee or
agent on their behalf) or be entitled to any right of contribution or
indemnity;

 

(b)                                 claim,
rank, prove or vote as a creditor of the Issuer or its estate in competition
with any Finance Party (or the COFACE Agent or the Security Agent or any  trustee or agent on their behalf); or

 

(c)                                  receive,
claim or have the benefit of any payment, distribution or security from or on
account of the Issuer or other person (but without prejudice to any right to
the benefit of any Permitted Payments).

 

Section 11.18.  Filing of Claims Upon an
Insolvency Event.

 

After the occurrence of an Insolvency Event,
each Holder, by virtue of its acceptance of a Security irrevocably authorizes
the Security Agent to take any of the following actions, in accordance with the
terms of this Indenture:

 

48

 

(a)                                  accelerate
repayment of any Securities or otherwise declare any Securities prematurely due
and payable or payable on demand;

 

(b)                                 enforce,
sue or prove for any claim for repayment of any Securities by execution or
otherwise or institute any creditor’s process whether before or after judgment,
or any equivalent or like process in any jurisdiction;

 

(c)                                  in
respect of any Securities, take, or permit to be taken, any action or step, or
petition, apply or vote for, initiate or support any step (including the
appointment of any liquidator, receiver, administrator or similar officer), to
commence or continue any proceedings against the Issuer or in relation to the
bankruptcy, insolvency, winding-up, liquidation, receivership, administration,
reorganisation, dissolution or similar proceedings of the Issuer or any
suspension of payments or moratorium of any indebtedness of the Issuer, or any
analogous procedure or step in any jurisdiction;

 

(d)                                 commence
or join any legal or arbitration action or proceedings against the Issuer to
recover in respect of any Securities;

 

(e)                                  make
any demand against the Issuer in relation to any guarantee, indemnity or other
assurance against loss in respect of the Securities or exercise any right to
require the Issuer to acquire the Securities (including exercising any put or
call option against the Issuer for the redemption or purchase of the
Securities);

 

(f)                                    exercise
any right of set-off against the Issuer in respect of the Securities;

 

(g)                                 enter
into any composition, assignment or arrangement with the Issuer in order to
effect or protect its rights under this Indenture or any COFACE Finance
Document;

 

(h)                                 collect
and receive all distributions on, or on account of, any or all of the
Securities; or

 

(i)                                     otherwise
exercise or pursue any remedy and do all other things the Security Agent
considers reasonably necessary for the recovery of any Securities or in respect
of any rights arising in connection with such Securities.

 

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

 

	
   

  	
  GLOBALSTAR,
  INC.

  
	
   

  	
  By:

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

49

 

	
   

  	
  U.S. BANK, NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
  By:

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

50

 

Schedule A

 

[Fundamental Change Make Whole]

 

	
  Effective Date

  	
   

  	
  Amount
  Per $1,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

1Exhibit
4.3

 

BROADWIND
ENERGY, INC.

2007 EQUITY INCENTIVE PLAN

(AS AMENDED THROUGH JUNE 9,
2009)

 

SECTION 1.

DEFINITIONS

 

As used herein, the following terms shall have the meanings indicated
below:

 

(a)           “Administrator”  shall mean the Board of Directors of the
Company (herein after referred to as the “Board”), or one or more Committees
appointed by the Board, as the case may be.

 

(b)           “Affiliate(s)” shall
mean a Parent or Subsidiary of the Company.

 

(c)           “Award” shall mean any grant of an
Option, Restricted Stock or Restricted Stock Unit Award, Stock Appreciation
Right or Performance Award.

 

(d)           “Committee” shall mean a Committee of
two or more directors who shall be appointed by and serve at the pleasure of
the Board.  To the extent necessary for
compliance with Rule 16b-3, or any successor provision, each of the
members of the Committee shall be a “non-employee director.”  Solely for purposes of this Section 1(d),
“non-employee director” shall have the same meaning as set forth in Rule 16b-3,
or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.

 

(e)           The “Company” shall mean Broadwind
Energy, Inc., a Delaware corporation.

 

(f)            “Fair Market Value”
as of any date shall mean (i) if such stock is listed on the Nasdaq Global
Market, Nasdaq Capital Market, or an established stock exchange, the price of
such stock at the close of the regular trading session of such market or
exchange on such date, as reported by The Wall Street Journal or a
comparable reporting service, or, if no sale of such stock shall have occurred
on such date, on the next date on which there was a sale of stock; (ii) if
such stock is not so listed on the Nasdaq Global Market, Nasdaq Capital Market,
or an established stock exchange, the average of the closing “bid” and “asked”
prices quoted by the OTC Bulletin Board, the National Quotation Bureau, or any
comparable reporting service on such date or, if there are no quoted “bid” and “asked”
prices on such date, on the next date for which there are such quotes; or (iii) if
such stock is not publicly traded as of such date, the per share value as
determined by the Board, or the Committee, in its sole discretion by applying
principles of valuation with respect to the Company’s Common Stock.

 

(g)           The “Internal
Revenue Code” or “Code” is the Internal Revenue Code of 1986, as amended from
time to time.

 

(h)           “Option” means an
incentive stock option or nonqualified stock option granted pursuant to the
Plan.

 

(i)            “Parent” shall mean
any corporation which owns, directly or indirectly in an unbroken chain, fifty
percent (50%) or more of the total voting power of the Company’s outstanding
stock.

 

(j)            The “Participant”
means (i) a key employee or officer of the Company or any Affiliate to
whom an incentive stock option has been granted pursuant to Section 9; (ii) a
consultant or advisor to, or director, key employee or officer, of the Company
or any Affiliate to whom a nonqualified stock option has been granted pursuant
to Section 10; (iii) a consultant or advisor to, or director, key
employee or

 

 

officer,
of the Company or any Affiliate to whom a Restricted Stock or Restricted Stock
Unit Award has been granted pursuant to Section 11; (iv) a consultant
or advisor to, or director, key employee or officer, of the Company or any
Affiliate to whom a Performance Award has been granted pursuant to Section 12;
or (v) a consultant or advisor to, or director, key employee or officer,
of the Company or any Affiliate to whom a Stock Appreciation Right has been
granted pursuant to Section 13.

 

(k)           “Performance Award”
shall mean any Performance Shares or Performance Units granted pursuant to Section 12
hereof.

 

(l)            “Performance Objective(s)” shall
mean one or more performance objectives established by the Administrator, in
its sole discretion, for Awards granted under this Plan.  Performance Objectives may include, but shall
not be limited to, any one, or a combination of, (i) revenue, (ii) net
income, (iii) earnings per share, (iv) return on equity, (v) return
on assets, (vi) increase in revenue, (vii) increase in share price or
earnings, (viii) return on investment, or (ix) increase in market
share, in all cases including, if selected by the Administrator, threshold,
target and maximum levels.

 

(m)          “Performance Period”
shall mean the period, established at the time any Performance Award is granted
or at any time thereafter, during which any Performance Objectives specified by
the Administrator with respect to such Performance Award are to be measured.

 

(n)           “Performance Share”
shall mean any grant pursuant to Section 12 hereof of an Award, which
value, if any, shall be paid to a Participant by delivery of shares of Common
Stock of the Company upon achievement of such Performance Objectives during the
Performance Period as the Administrator shall establish at the time of such
grant or thereafter.

 

(o)           “Performance Unit”
shall mean any grant pursuant to Section 12 hereof of an Award, which
value, if any, shall be paid to a Participant by delivery of cash upon
achievement of such Performance Objectives during the Performance Period as the
Administrator shall establish at the time of such grant or thereafter.

 

(p)           The “Plan” means the
Broadwind Energy, Inc. 2007 Equity Incentive Plan, as amended hereafter
from time to time, including the form of Agreements as they may be modified by
the Administrator from time to time.

 

(q)           “Restricted Stock
Award” shall mean any grant of restricted shares of Stock of the Company
pursuant to Section 11 hereof.

 

(r)            “Restricted Stock
Unit Award” shall mean any grant of restricted stock units pursuant to Section 11
hereof.

 

(s)           “Stock,” “Option
Stock” or “Common Stock” shall mean the common stock, $0.001 par value of the
Company reserved for Options and Awards pursuant to this Plan.

 

(t)            “Stock Appreciation
Right” shall mean a grant pursuant to Section 13 hereof.

 

(u)           A “Subsidiary” shall
mean any corporation of which fifty percent (50%) or more of the total voting
power of the Company’s outstanding Stock is owned, directly or indirectly in an
unbroken chain, by the Company.

 

2

 

SECTION 2.

PURPOSE

 

The purpose of the Plan is to promote the success of the Company and
its Affiliates by facilitating the employment and retention of competent
personnel and by furnishing incentive to officers, directors, employees,
consultants, and advisors upon whose efforts the success of the Company and its
Affiliates will depend to a large degree.

 

It is the intention of the Company to carry out the Plan through the
granting of Options which will qualify as “incentive stock options” under the
provisions of Section 422 of the Internal Revenue Code, or any successor
provision, pursuant to Section 9 of this Plan; through the granting of “nonqualified
stock options” pursuant to Section 10 of this Plan; through the granting
of Restricted Stock or Restricted Stock Unit Awards pursuant to Section 11
of this Plan; through the granting of Performance Awards pursuant to Section 12
of this Plan; and through the granting of Stock Appreciation Rights pursuant to
Section 13 of this Plan.  Adoption
of this Plan shall be and is expressly subject to the condition of approval by
the stockholders of the Company within twelve (12) months before or after the
adoption of the Plan by the Board.  Any
incentive stock options granted after adoption of the Plan by the Board shall
be treated as nonqualified stock options if stockholder approval is not
obtained within such twelve-month period.

 

SECTION 3.

EFFECTIVE DATE OF PLAN

 

The Plan shall be effective as of the date of adoption by the Board,
subject to approval by the stockholders of the Company as required in Section 2.

 

SECTION 4.

ADMINISTRATION

 

The Plan shall be administered by the Board or by a Committee which may
be appointed by the Board from time to time to administer the Plan (hereinafter
collectively referred to as the “Administrator”).  Except as otherwise provided herein, the
Administrator shall have all of the powers vested in it under the provisions of
the Plan, including but not limited to exclusive authority to determine, in its
sole discretion, whether an Award shall be granted; the individuals to whom,
and the time or times at which, Awards shall be granted; the number of shares
subject to each Award; the option price, if any; and the performance criteria,
if any, and any other terms and conditions of each Award.  The Administrator shall have full power and
authority to administer and interpret the Plan, to make and amend rules,
regulations and guidelines for administering the Plan, to prescribe the form
and conditions of the respective agreements evidencing each Award (which may
vary from Participant to Participant), and to make all other determinations
necessary or advisable for the administration of the Plan.  The Administrator’s interpretation of the
Plan, and all actions taken and determinations made by the Administrator
pursuant to the power vested in it hereunder, shall be conclusive and binding
on all parties concerned.

 

No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith in connection with the administration
of the Plan.  In the event the Board
appoints a Committee as provided hereunder, any action of the Committee with
respect to the administration of the Plan shall be taken pursuant to a majority
vote of the Committee members or pursuant to the written resolution of all
Committee members.

 

3

 

SECTION 5.

PARTICIPANTS

 

The Administrator shall from time to time, at its discretion and
without approval of the stockholders, designate those employees, officers,
directors, consultants, and advisors of the Company or of any Affiliate to whom
Awards shall be granted under this Plan; provided, however, that consultants or
advisors shall not be eligible to receive Awards hereunder unless such
consultant or advisor renders bona fide services to the Company or any
Affiliate and such services are not in connection with the offer or sale of
securities in a capital raising transaction and do not directly or indirectly
promote or maintain a market for the Company’s securities.  The Administrator may grant additional Awards
under this Plan to some or all Participants then holding Awards, or may grant
Awards solely or partially to new Participants. In designating Participants,
the Administrator shall also determine the number of shares to be optioned or
awarded to each such Participant and the performance criteria applicable to
each Performance Award. The Administrator may from time to time designate
individuals as being ineligible to participate in the Plan.

 

SECTION 6.

STOCK

 

The Stock to be issued under this Plan shall consist of authorized but
unissued shares of Common Stock.  Five
million five hundred thousand (5,500,000) shares of Common Stock shall be
reserved and available for Awards under the Plan; provided, however, that the
total number of shares reserved for Awards under this Plan shall be subject to
adjustment as provided in Section 14 of the Plan; and provided, further,
that all shares reserved and available under the Plan shall constitute the
maximum aggregate number of shares of Stock that may be issued through
incentive stock options.  The following
shares of Stock shall continue to be reserved and available for Awards granted
pursuant to the Plan: (i) any outstanding Award that expires for any
reason, (ii) any portion of an outstanding Option or Stock Appreciation
Right that is terminated prior to exercise, (iii) any portion of an Award
that is terminated prior to the lapsing of the risks of forfeiture on such
Award, (iv) shares of Common Stock used to pay the exercise price under
any Award, (v) shares of Common Stock used to satisfy any tax withholding
obligation attributable to any Award, whether such shares are withheld by the
Company or tendered by the Participant, and (vi) shares of Stock covered
by an Award to the extent the Award is settled in cash.

 

SECTION 7.

DURATION OF PLAN

 

Incentive stock options may be granted pursuant to the Plan from time
to time during a period of ten (10) years from the effective date as
defined in Section 3.  Other Awards
may be granted pursuant to the Plan from time to time after the effective date
of the Plan and until the Plan is discontinued or terminated by the Administrator.

 

SECTION 8.

PAYMENT

 

Participants may pay for shares upon exercise of Options granted
pursuant to this Plan with cash, personal check, certified check or, if
approved by the Administrator in its sole discretion, previously-owned shares
of the Company’s Common Stock, or any combination thereof.  Any stock so tendered as part of such payment
shall be valued at such stock’s then Fair Market Value, or such other form of
payment as may be authorized by the Administrator.  The Administrator may, in its sole
discretion, limit the forms of payment available to the Participant and may
exercise such discretion any time prior to the termination of the Option
granted to the Participant or upon any exercise of the Option by the
Participant.  “Previously-owned shares”
means shares of the Company’s Common Stock which the Participant has owned for
at least six (6) months prior to the exercise of the Option, or for such
other period of time as may be required by generally accepted accounting
principles.

 

4

 

With respect to payment in the form of Common Stock of the Company, the
Administrator may require advance approval or adopt such rules as it deems
necessary to assure compliance with Rule 16b-3, or any successor provision,
as then in effect, of the General Rules and Regulations under the
Securities Exchange Act of 1934, if applicable.

 

SECTION 9.

TERMS AND CONDITIONS OF
INCENTIVE STOCK OPTIONS

 

Each incentive stock option granted pursuant to this Section 9
shall be evidenced by a written incentive stock option agreement (the “Option
Agreement”).  The Option Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each Participant
and each Option Agreement shall comply with and be subject to the following
terms and conditions:

 

(a)           Number of Shares
and Option Price.  The Option
Agreement shall state the total number of shares covered by the incentive stock
option.  Except as permitted by Code Section 424(a),
or any successor provision, the option price per share shall not be less than
one hundred percent (100%) of the per share Fair Market Value of the Common
Stock on the date the Administrator grants the Option; provided, however, that
if a Participant owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of its Parent
or any Subsidiary, the option price per share of an incentive stock option
granted to such Participant shall not be less than one hundred ten percent
(110%) of the per share Fair Market Value of the Company’s Common Stock on the
date of the grant of the Option.  The
Administrator shall have full authority and discretion in establishing the
option price and shall be fully protected in so doing.

 

(b)           Term and
Exercisability of Incentive Stock Option. 
The term during which any incentive stock option granted under the Plan
may be exercised shall be established in each case by the Administrator.  Except as permitted by Code Section 424(a),
in no event shall any incentive stock option be exercisable during a term of
more than ten (10) years after the date on which it is granted; provided,
however, that if a Participant owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of its Parent or any Subsidiary, the incentive stock option granted to such
Participant shall be exercisable during a term of not more than five (5) years
after the date on which it is granted.

 

The
Option Agreement shall state when the incentive stock option becomes
exercisable and shall also state the maximum term during which the Option may
be exercised.  In the event an incentive
stock option is exercisable immediately, the manner of exercise of the Option
in the event it is not exercised in full immediately shall be specified in the
Option Agreement.  The Administrator may
accelerate the exercisability of any incentive stock option granted hereunder
which is not immediately exercisable as of the date of grant.

 

(c)           Nontransferability.  No incentive stock option shall be
transferable, in whole or in part, by the Participant other than by will or by
the laws of descent and distribution. 
During the Participant’s lifetime, the incentive stock option may be
exercised only by the Participant.  If
the Participant shall attempt any transfer of any incentive stock option
granted under the Plan during the Participant’s lifetime, such transfer shall
be void and the incentive stock option, to the extent not fully exercised,
shall terminate.

 

(d)           No Rights as Stockholder.  A Participant (or the Participant’s successor
or successors) shall have no rights as a stockholder with respect to any shares
covered by an incentive stock option until the date the Participant is recorded
on the stock transfer books of the Company as the owner of the Stock.

 

5

 

No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which
the record date is prior to the date such transfer is actually recorded (except
as otherwise provided in Section 14 of the Plan).

 

(e)           Withholding.  The Company or its Affiliate shall be
entitled to withhold and deduct from future wages of the Participant all
legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant’s exercise of an
incentive stock option or a “disqualifying disposition” of shares acquired
through the exercise of an incentive stock option as defined in Code Section 421(b).  In the event the Participant is required
under the Option Agreement to pay the Company, or make arrangements satisfactory
to the Company respecting payment of, such withholding and employment-related
taxes, the Administrator may, in its discretion and pursuant to such rules as
it may adopt, require the Participant to satisfy such obligation, in whole or
in part, by delivering shares of the Company’s Common Stock or by electing to
have the Company withhold Common Stock otherwise issuable to the Participant as
a result of the exercise of the incentive stock option.  Such shares shall have a Fair Market Value
equal to the minimum required tax withholding, based on the minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes,
that are applicable to the supplemental income resulting from such
exercise.  In no event may the Company or
any Affiliate withhold shares having a Fair Market Value in excess of such
statutory minimum required tax withholding. 
The Participant’s election to deliver shares or to have shares withheld
for this purpose shall be made on or before the date the incentive stock option
is exercised or, if later, the date that the amount of tax to be withheld is
determined under applicable tax law. 
Such election shall be approved by the Administrator and otherwise
comply with such rules as the Administrator may adopt to assure compliance
with Rule 16b-3, or any successor provision, as then in effect, of the
General Rules and Regulations under the Securities Exchange Act of 1934,
if applicable.

 

(f)            Other Provisions.  The Option Agreement authorized under this Section 9
shall contain such other provisions as the Administrator shall deem
advisable.  Any such Option Agreement
shall contain such limitations and restrictions upon the exercise of the Option
as shall be necessary to ensure that such Option will be considered an “incentive
stock option” as defined in Section 422 of the Internal Revenue Code or to
conform to any change therein.

 

SECTION 10.

TERMS AND CONDITIONS OF
NONQUALIFIED STOCK OPTIONS

 

Each nonqualified stock option granted pursuant to this Section 10
shall be evidenced by a written nonqualified stock option agreement (the “Option
Agreement”).  The Option Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each
Participant and each Option Agreement shall comply with and be subject to the
following terms and conditions:

 

(a)           Number of Shares
and Option Price.  The Option
Agreement shall state the total number of shares covered by the nonqualified
stock option.  Unless otherwise
determined by the Administrator, the option price per share shall be one
hundred percent (100%) of the per share Fair Market Value of the Common Stock
on the date the Administrator grants the Option.

 

(b)           Term and Exercisability of
Nonqualified Stock Option.  The term
during which any nonqualified stock option granted under the Plan may be
exercised shall be established in each case by the Administrator.  The Option Agreement shall state when the
nonqualified stock option becomes exercisable and shall also state the maximum
term during which the Option may be exercised. 
In the event a nonqualified stock option is exercisable immediately, the
manner of exercise of the Option in the event it is not exercised in full
immediately shall be specified in the Option Agreement.   The

 

6

 

Administrator
may accelerate the exercisability of any nonqualified stock option granted
hereunder which is not immediately exercisable as of the date of grant.

 

(c)           Transferability.  A nonqualified stock option shall be
transferable, in whole or in part, by the Participant by will or by the laws of
descent and distribution.  In addition,
the Administrator may, in its sole discretion, permit the Participant to
transfer any or all nonqualified stock options to any member of the Participant’s
“immediate family” as such term is defined in Rule 16a-1(e) promulgated
under the Securities Exchange Act of 1934, or any successor provision, or to
one or more trusts whose beneficiaries are members of such Participant’s “immediate
family” or partnerships in which such family members are the only partners;
provided, however, that the Participant cannot receive any consideration for
the transfer and such transferred nonqualified stock option shall continue to
be subject to the same terms and conditions as were applicable to such
nonqualified stock option immediately prior to its transfer.

 

(d)           No Rights as Stockholder.  A Participant (or the Participant’s successor
or successors) shall have no rights as a stockholder with respect to any shares
covered by a nonqualified stock option until the date the Participant is
recorded on the stock transfer books of the Company as the owner of the
Stock.  No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such transfer is actually recorded (except as otherwise provided in Section 14
of the Plan).

 

(e)           Withholding.  The Company or its Affiliate shall be
entitled to withhold and deduct from future wages of the Participant all
legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant’s exercise of a
nonqualified stock option.  In the event
the Participant is required under the Option Agreement to pay the Company, or
make arrangements satisfactory to the Company respecting payment of, such
withholding and employment-related taxes, the Administrator may, in its
discretion and pursuant to such rules as it may adopt, require the
Participant to satisfy such obligation, in whole or in part, by delivering
shares of the Company’s Common Stock or by electing to have the Company
withhold Common Stock otherwise issuable to the Participant as a result of the
exercise of the nonqualified stock option. 
Such shares shall have a Fair Market Value equal to the minimum required
tax withholding, based on the minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes, that are applicable to the supplemental
income resulting from such exercise.  In
no event may the Company or any Affiliate withhold shares having a Fair Market
Value in excess of such statutory minimum required tax withholding.  The Participant’s election to deliver shares
or to have shares withheld for this purpose shall be made on or before the date
the nonqualified stock option is exercised or, if later, the date that the
amount of tax to be withheld is determined under applicable tax law.  Such election shall be approved by the
Administrator and otherwise comply with such rules as the Administrator
may adopt to assure compliance with Rule 16b-3, or any successor
provision, as then in effect, of the General Rules and Regulations under
the Securities Exchange Act of 1934, if applicable.

 

(f)            Other Provisions.  The Option Agreement authorized under this Section 10
shall contain such other provisions as the Administrator shall deem advisable.

 

SECTION 11.

RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS

 

Each Restricted Stock Award or Restricted Stock Unit Award granted
pursuant to the Plan shall be evidenced by a written restricted
stock/restricted stock unit agreement (the “Restricted Stock Agreement” or “Restricted
Stock Unit Agreement,” as the case may be). 
The Restricted Stock Agreement or Restricted Stock Unit Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each
Participant and

 

7

 

each
Restricted Stock Agreement or Restricted Stock Unit Agreement shall comply with
and be subject to the following terms and conditions:

 

(a)           Number of Shares.  The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall state the total number of shares of Stock covered by
the Restricted Stock/Restricted Stock Unit Award.

 

(b)           Risks of
Forfeiture.  The Restricted Stock
Agreement or Restricted Stock Unit Agreement shall set forth the risks of
forfeiture or vesting conditions, if any, including risks of forfeiture or
vesting conditions based on Performance Objectives, which shall apply to the
shares of Stock covered by the Restricted Stock/Restricted Stock Unit Award, and
shall specify the manner in which such risks of forfeiture shall lapse or
vesting conditions shall vest.  The
Administrator may, in its sole discretion and to the extent permitted by
applicable tax and securities laws and regulations, accelerate the date on
which the risks of forfeiture shall lapse or vesting conditions shall vest, but
only with respect to those shares of Stock which are restricted as of the
effective date of the acceleration.

 

(c)           Issuance of
Shares; Rights as Stockholder.

 

(i)            With respect to a Restricted Stock Award, the Company
shall cause to be issued a stock certificate representing such shares of Stock
in the Participant’s name, and shall deliver such certificate to the
Participant; provided, however, that the Company shall place a legend on such
certificate describing the risks of forfeiture and other transfer restrictions
set forth in the Participant’s Restricted Stock Agreement and providing for the
cancellation and return of such certificate if the shares of Stock subject to
the Restricted Stock Award are forfeited. 
Until the risks of forfeiture have lapsed or the shares subject to such
Restricted Stock Award have been forfeited, the Participant shall be entitled
to vote the shares of Stock represented by such stock certificate and shall
receive all dividends attributable to such shares, but the Participant shall
not have any other rights as a stockholder with respect to such shares.

 

(ii)           With respect to a Restricted Stock Unit Award, as the
vesting conditions on the Restricted Stock Units are satisfied, the
Administrator shall cause to be issued one or more stock certificates in the
Participant’s name and shall deliver such certificates to the Participant in
satisfaction of such Restricted Stock Units. 
Until the vesting conditions on the Restricted Stock Units are
satisfied, the Participant shall not be entitled to vote any shares of stock
which may be acquired through the Restricted Stock Units, shall not receive any
dividends attributable to such shares, and shall not have any other rights as a
stockholder with respect to such shares.

 

(d)           Withholding Taxes.  The Company or its Affiliate shall be
entitled to withhold and deduct from future wages of the Participant all
legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant’s Restricted
Stock/Restricted Stock Unit Award.  In
the event the Participant is required under the Restricted Stock Agreement or
Restricted Stock Unit Agreement to pay the Company or its Affiliate, or make
arrangements satisfactory to the Company or its Affiliate respecting payment
of, such withholding and employment-related taxes, the Administrator may, in
its discretion and pursuant to such rules as it may adopt, permit the
Participant to satisfy such obligations, in whole or in part, by delivering
shares of Common Stock, including shares of Stock received pursuant to the
Restricted Stock/Restricted Stock Unit Award on which the risks of forfeiture
have lapsed.  Such shares shall have a
Fair Market Value equal to the minimum required tax withholding, based on the
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to the supplemental income
resulting from the lapsing of the

 

8

 

risks
of forfeiture on such Restricted Stock/Restricted Stock Unit.  In no event may the Participant deliver
shares having a Fair Market Value in excess of such statutory minimum required
tax withholding.  The Participant’s
election to deliver shares of Common Stock for this purpose shall be made on or
before the date that the amount of tax to be withheld is determined under
applicable tax law.  Such election shall
be approved by the Administrator and otherwise comply with such rules as
the Administrator may adopt to assure compliance with Rule 16b-3, or any
successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, if applicable.

 

(e)           Nontransferability.  No Restricted Stock/Restricted Stock Unit
Award shall be transferable, in whole or in part, by the Participant, other
than by will or by the laws of descent and distribution, prior to the date the
risks of forfeiture described in the Restricted Stock Agreement or Restricted
Stock Unit Agreement have lapsed.  If the
Participant shall attempt any transfer of any Restricted Stock/Restricted Stock
Unit Award granted under the Plan prior to such date, such transfer shall be
void and the Restricted Stock/Restricted Stock Unit Award shall terminate.

 

(f)            Other Provisions.  The Restricted Stock Agreement or Restricted
Stock Unit Agreement authorized under this Section 11 shall contain such
other provisions as the Administrator shall deem advisable.

 

SECTION 12.

PERFORMANCE AWARDS

 

Each
Performance Award granted pursuant to this Section 12 shall be evidenced
by a written performance award agreement (the “Performance Award Agreement”).  The Performance Award Agreement shall be in
such form as may be approved from time to time by the Administrator and may
vary from Participant to Participant; provided, however, that each Participant
and each Performance Award Agreement shall comply with and be subject to the
following terms and conditions:

 

(a)           Awards.  Performance Awards in the form of Performance
Units or Performance Shares may be granted to any Participant in the Plan.
Performance Units shall consist of monetary awards which may be earned or
become vested in whole or in part if the Company or the Participant achieves
certain Performance Objectives established by the Administrator over a
specified Performance Period. 
Performance Shares shall consist of shares of Stock or other Awards
denominated in shares of Stock that may be earned or become vested in whole or
in part if the Company or the Participant achieves certain Performance
Objectives established by the Administrator over a specified Performance
Period.

 

(b)           Performance Objectives,
Performance Period and Payment.  The
Performance Award Agreement shall set forth:

 

(i)            the number of Performance Units or
Performance Shares subject to the Performance Award, and the dollar value of
each Performance Unit;

 

(ii)           one or more Performance Objectives
established by the Administrator;

 

(iii)          the Performance Period over which
Performance Units or Performance Shares may be earned or may become vested;

 

(iv)          the extent to which partial
achievement of the Performance Objectives may result in a payment or vesting of
the Performance Award, as determined by the Administrator; and

 

9

 

(v)           the date upon which payment of
Performance Units will be made or Performance Shares will be issued, as the
case may be, and the extent to which such payment or the receipt of such
Performance Shares may be deferred.

 

(c)           Withholding Taxes.  The Company or its Affiliates shall be
entitled to withhold and deduct from future wages of the Participant all
legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant’s Performance
Award.  In the event the Participant is
required under the Performance Award Agreement to pay the Company or its
Affiliates, or make arrangements satisfactory to the Company or its Affiliates
respecting payment of, such withholding and employment-related taxes, the
Administrator may, in its discretion and pursuant to such rules as it may
adopt, require the Participant to satisfy such obligations, in whole or in
part, by delivering shares of the Company’s Common Stock or by electing to have
the Company withhold shares of Common Stock otherwise issuable to Participant
as a result of the grant of Performance Shares. 
Such shares shall have a Fair Market Value equal to the minimum required
tax withholding, based on the minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes.  In no event may the Participant deliver
shares having a Fair Market Value in excess of such statutory minimum required
tax withholding.  The Participant’s
election to deliver shares or to have shares withheld for this purpose shall be
made on or before the date that the amount of tax to be withheld is determined
under applicable tax law.  Such election
shall be approved by the Administrator and otherwise comply with such rules as
the Administrator may adopt to assure compliance with Rule 16b-3, or any
successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, if applicable.

 

(d)           Nontransferability.  No Performance Award shall be transferable,
in whole or in part, by the Participant, other than by will or by the laws of
descent and distribution.  If the
Participant shall attempt any transfer of any Performance Award granted under
the Plan, such transfer shall be void and the Performance Award shall terminate.

 

(e)           No Rights as Stockholder.  A Participant (or the Participant’s successor
or successors) shall have no rights as a stockholder with respect to any shares
covered by a Performance Award until the date Participant is recorded on the
stock transfer books of the Company as the owners of the shares.  No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such transfer is actually recorded (except as otherwise provided in Section 14
of the Plan).

 

(f)            Other Provisions.  The Performance Award Agreement authorized
under this Section 12 shall contain such other provisions as the
Administrator shall deem advisable.

 

SECTION 13.

STOCK APPRECIATION RIGHTS

 

Each
Stock Appreciation Right granted pursuant to this Section 13 shall be
evidenced by a written stock appreciation right agreement (the “Stock
Appreciation Right Agreement”).  The
Stock Appreciation Right Agreement shall be in such form as may be approved
from time to time by the Administrator and may vary from Participant to
Participant; provided, however, that each Participant and each Stock
Appreciation Right Agreement shall comply with and be subject to the following terms
and conditions:

 

(a)           Awards.  A Stock Appreciation Right shall entitle the
Participant to receive, upon exercise, cash, shares of Stock, or any
combination thereof, having a value equal to the excess of (i) the Fair
Market Value of a specified number of shares of Stock on the date of such
exercise, over (ii) a

 

10

 

specified
exercise price.  Unless otherwise
determined by the Administrator, the specified exercise price shall not be less
than 100% of the Fair Market Value of such shares of Stock on the date of grant
of the Stock Appreciation Right.  A Stock
Appreciation Right may be granted independent of or in tandem with a previously
or contemporaneously granted Option.

 

(b)           Term and Exercisability.  The term during which any Stock Appreciation
Right granted under the Plan may be exercised shall be established in each case
by the Administrator.  The Stock
Appreciation Right Agreement shall state when the Stock Appreciation Right
becomes exercisable and shall also state the maximum term during which such
Stock Appreciation Right may be exercised. 
In the event a Stock Appreciation Right is exercisable immediately, the
manner of exercise of such Stock Appreciation Right in the event it is not
exercised in full immediately shall be specified in the Stock Appreciation
Right Agreement.  The Administrator may
accelerate the exercisability of any Stock Appreciation Right granted hereunder
which is not immediately exercisable as of the date of grant.

 

(c)           Withholding Taxes.  The Company or its Affiliate shall be
entitled to withhold and deduct from future wages of the Participant all
legally required amounts necessary to satisfy any and all withholding and
employment-related taxes attributable to the Participant’s Stock Appreciation
Right.  In the event the Participant is
required under the Stock Appreciation Right to pay the Company or its
Affiliate, or make arrangements satisfactory to the Company or its Affiliate
respecting payment of, such withholding and employment-related taxes, the
Administrator may, in its discretion and pursuant to such rules as it may
adopt, permit the Participant to satisfy such obligations, in whole or in part,
by delivering shares of Common Stock or by electing to have the Company withhold
Common Stock issuable to Participant as a result of the exercise of the Stock
Appreciation Right.  Such shares shall
have a Fair Market Value equal to the minimum required tax withholding, based
on the minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes.  In no event may
the Participant deliver shares having a Fair Market Value in excess of such
statutory minimum required tax withholding. 
The Participant’s election to deliver shares of Common Stock for this
purpose shall be made on or before the date that the amount of tax to be
withheld is determined under applicable tax law.  Such election shall be approved by the
Administrator and otherwise comply with such rules as the Administrator
may adopt to assure compliance with Rule 16b-3, or any successor
provision, as then in effect, of the General Rules and Regulations under
the Securities Exchange Act of 1934, if applicable.

 

(d)           Nontransferability.  No Stock Appreciation Right shall be
transferable, in whole or in part, by the Participant, other than by will or by
the laws of descent and distribution.  If
the Participant shall attempt any transfer of any Stock Appreciation Right
granted under the Plan, such transfer shall be void and the Stock Appreciation
Right shall terminate.

 

(e)           No Rights as Stockholder.  A Participant (or the Participant’s successor
or successors) shall have no rights as a stockholder with respect to any shares
covered by a Stock Appreciation Right until the date of the issuance of a stock
certificate evidencing such shares.  No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which
the record date is prior to the date such stock certificate is actually issued
(except as otherwise provided in Section 14 of the Plan).

 

(f)            Other Provisions.  The Stock Appreciation Right Agreement
authorized under this Section 13 shall contain such other provisions as
the Administrator shall deem advisable, including but not limited to any
restrictions on the exercise of the Stock Appreciation Right which may be
necessary to comply with Rule 16b-3 of the Securities Exchange Act of
1934, as amended.

 

11

 

SECTION 14.

RECAPITALIZATION, SALE,
MERGER, EXCHANGE OR LIQUIDATION

 

In
the event of an increase or decrease in the number of shares of Common Stock
resulting from a stock dividend, stock split, reverse split, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company, the Administrator may, in its sole discretion,
adjust the number of shares of Stock reserved under Section 6 hereof, the
number of shares of Stock covered by each outstanding Award, and, if
applicable, the price per share thereof to reflect such change.  Additional shares which may become covered by
the Award pursuant to such adjustment shall be subject to the same restrictions
as are applicable to the shares with respect to which the adjustment relates.

 

Unless
otherwise provided in the agreement evidencing an Award, in the event of an
acquisition of the Company through: the sale of substantially all of the
Company’s assets and the consequent discontinuance of its business; an
acquisition of 50% or more of the total combined voting power of all classes of
securities of the Company; or a merger, consolidation, exchange,
reorganization, reclassification, extraordinary dividend, divestiture
(including a spin-off), liquidation, recapitalization, stock split, stock
dividend or otherwise (collectively referred to as a “transaction”), the
Administrator may provide for one or more of the following:

 

(a)           the equitable acceleration of the
exercisability of any outstanding Options or Stock Appreciation Rights, the
vesting and payment of any Performance Awards, or the lapsing of the risks of
forfeiture on any Restricted Stock Awards;

 

(b)           the complete termination of this
Plan, the cancellation of outstanding Options or Stock Appreciation Rights not
exercised prior to a date specified by the Board (which date shall give
Participants a reasonable period of time in which to exercise such Option or
Stock Appreciation Right prior to the effectiveness of such transaction), the
cancellation of any Performance Award and the cancellation of any Restricted
Stock Awards for which the risks of forfeiture have not lapsed;

 

(c)           that Participants holding outstanding
Options and Stock Appreciation Rights shall receive, with respect to each share
of Stock subject to such Option or Stock Appreciation Right, as of the
effective date of any such transaction, cash in an amount equal to the excess
of the Fair Market Value of such Stock on the date immediately preceding the
effective date of such transaction over the price per share of such Options or
Stock Appreciation Rights; provided that the Board may, in lieu of such cash
payment, distribute to such Participants shares of Common Stock of the Company
or shares of stock of any corporation succeeding the Company by reason of such
transaction, such shares having a value equal to the cash payment herein;

 

(d)           that Participants holding outstanding
Restricted Stock Awards and Performance Share Awards shall receive, with
respect to each share of Stock subject to such Awards, as of the effective date
of any such transaction, cash in an amount equal to the Fair Market Value of
such Stock on the date immediately preceding the effective date of such
transaction; provided that the Board may, in lieu of such cash payment,
distribute to such Participants shares of Common Stock of the Company or shares
of stock of any corporation succeeding the Company by reason of such
transaction, such shares having a value equal to the cash payment herein;

 

(e)           the continuance of the Plan with
respect to the exercise of Options or Stock Appreciation Rights which were
outstanding as of the date of adoption by the Board of such plan for such
transaction and the right to exercise such Options and Stock Appreciation
Rights as to an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction;

 

12

 

(f)            the continuance of the Plan with
respect to Restricted Stock Awards for which the risks of forfeiture have not
lapsed as of the date of adoption by the Board of such plan for such
transaction and the right to receive an equivalent number of shares of stock of
the corporation succeeding the Company by reason of such transaction; and

 

(g)           the continuance of the Plan with
respect to Performance Awards and, to the extent applicable, the right to
receive an equivalent number of shares of stock of the corporation succeeding
the Company by reason for such transaction.

 

The
Administrator may condition any acceleration of exercisability or other right
to which Participant is not entitled upon any additional agreements from
Participant, including, without limitation, a Participant agreeing to
additional restrictive covenants (e.g., confidentiality, noncompetition,
non-solicitation, non-circumvention, etc.) and Participant agreeing to continue
to perform services for the Company, a successor or purchaser of all or any
portion of the Company’s business or related assets for substantially the same
base salary for a period of up to six months.

 

The
Administrator may restrict the rights of or the applicability of this Section 14
to the extent necessary to comply with Section 16(b) of the
Securities Exchange Act of 1934, the Internal Revenue Code or any other
applicable law or regulation.  The grant
of an Award pursuant to the Plan shall not limit in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, exchange or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

 

SECTION 15.

INVESTMENT PURPOSE

 

No shares of Stock shall be issued pursuant to the Plan unless and
until there has been compliance, in the opinion of Company’s counsel, with all
applicable legal requirements, including without limitation, those relating to
securities laws and stock exchange listing requirements.  As a condition to the issuance of Stock to
Participant, the Administrator may require Participant to (a) represent
that the shares of Stock are being acquired for investment and not resale and
to make such other representations as the Administrator shall deem necessary or
appropriate to qualify the issuance of the shares as exempt from the Securities
Act of 1933 and any other applicable securities laws, and (b) represent
that Participant shall not dispose of the shares of Stock in violation of the
Securities Act of 1933 or any other applicable securities laws.

 

As
a further condition to the grant of any Option or the issuance of Stock to
Participant, Participant agrees to the following:

 

(a)           In the event the Company advises
Participant that it plans an underwritten public offering of its Common Stock
in compliance with the Securities Act of 1933, as amended, and the underwriter(s) seek
to impose restrictions under which certain stockholders may not sell or
contract to sell or grant any option to buy or otherwise dispose of part or all
of their stock purchase rights of the Common Stock underlying Awards,
Participant will not, for a period not to exceed 180 days from the prospectus,
sell or contract to sell or grant an option to buy or otherwise dispose of any
Option granted to Participant pursuant to the Plan or any of the underlying
shares of Common Stock without the prior written consent of the underwriter(s) or
its representative(s).

 

(b)           In the event the Company makes any
public offering of its securities and determines in its sole discretion that it
is necessary to reduce the number of issued but unexercised stock purchase
rights so

 

13

 

as
to comply with any state’s securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall have the right (i) to
accelerate the exercisability of any Option and the date on which such Option
must be exercised, provided that the Company gives Participant prior written
notice of such acceleration, and (ii) to cancel any Options or portions
thereof which Participant does not exercise prior to or contemporaneously with
such public offering.

 

(c)           In the event of a transaction (as
defined in Section 14 of the Plan), Participant will comply with Rule 145
of the Securities Act of 1933 and any other restrictions imposed under other
applicable legal or accounting principles if Participant is an “affiliate” (as
defined in such applicable legal and accounting principles) at the time of the
transaction, and Participant will execute any documents necessary to ensure
compliance with such rules.

 

The
Company reserves the right to place a legend on any stock certificate issued in
connection with an Award pursuant to the Plan to assure compliance with this Section 15.

 

SECTION 16.

AMENDMENT OF THE PLAN

 

The Administrator may from time to time, insofar as permitted by law,
suspend or discontinue the Plan or revise or amend it in any respect; provided,
however, that no such revision or amendment, except as is authorized in Section 14,
shall impair the terms and conditions of any Award which is outstanding on the
date of such revision or amendment to the material detriment of the Participant
without the consent of the Participant. 
Notwithstanding the foregoing, no such revision or amendment shall (i) materially
increase the number of shares subject to the Plan except as provided in Section 14
hereof, (ii) change the designation of the class of employees eligible to
receive Awards, (iii) decrease the price at which Options may be granted,
or (iv) materially increase the benefits accruing to Participants under
the Plan without the approval of the stockholders of the Company if such
approval is required for compliance with the requirements of any applicable law
or regulation.  Furthermore, the Plan may
not, without the approval of the stockholders, be amended in any manner that
will cause incentive stock options to fail to meet the requirements of Section 422
of the Internal Revenue Code.

 

SECTION 17.

NO OBLIGATION TO EXERCISE OPTION

 

The
granting of an Option shall impose no obligation upon the Participant to
exercise such Option.  Further, the
granting of an Award hereunder shall not impose upon the Company or any
Affiliate any obligation to retain the Participant in its employ for any
period.

 

14

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