Document:

Exhibit
10.1

 

 

UNITED INDUSTRIAL
CORPORATION

 

3.75% CONVERTIBLE
SENIOR NOTES DUE 2024

 

 

INDENTURE

 

DATED AS OF
SEPTEMBER 15, 2004

 

 

U.S. BANK NATIONAL
ASSOCIATION

 

AS TRUSTEE

 

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1

  	
  DEFINITIONS AND
  INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.2.

  	
  Other Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.3.

  	
  Trust Indenture Act Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.4.

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  THE SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Form and Dating

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.2.

  	
  Execution and Authentication

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.3.

  	
  Registrar, Paying Agent and Conversion
  Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.4.

  	
  Paying Agent to Hold Money in Trust

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.5.

  	
  Securityholder Lists

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.6.

  	
  Transfer and Exchange

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.7.

  	
  Replacement Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.8.

  	
  Outstanding Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.9.

  	
  Treasury Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.10.

  	
  Temporary Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.11.

  	
  Cancellation

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.12.

  	
  Legend; Additional Transfer and
  Exchange Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.13.

  	
  CUSIP Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.14.

  	
  Senior Unsecured Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.15.

  	
  Calculations Regarding the Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.16.

  	
  Conversion Arrangement on Call for
  Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  REDEMPTION, PURCHASES AND
  REPURCHASES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Optional Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.2.

  	
  Purchase of Securities at the Option
  of Holders on Specific Dates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.3.

  	
  Repurchase of Securities at Option of
  the Holder Upon Repurchase Event

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.4.

  	
  Company Purchases of Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.5.

  	
  Repayment to the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  CONVERSION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Conversion Privilege

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.2.

  	
  Right to Receive Repurchase Event
  Make-Whole Premium

  	
   

  

 

i

 

	
  Section 4.3.

  	
  Conversion Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.4.

  	
  Adjustment of Conversion Rate

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.5.

  	
  No Adjustment

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.6.

  	
  Notice of Adjustment

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.7.

  	
  Consolidation or Merger of the
  Company.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.8.

  	
  Company to Reserve Stock;
  Registration; Listing

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.9.

  	
  Taxes on Conversion

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.10.

  	
  Conversion after Record Date

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.11.

  	
  Company Determination Final

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.12.

  	
  Responsibility of Trustee for
  Conversion Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.13.

  	
  Automatic Conversion by the Company.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.14.

  	
  Notification to Trustee.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.15.

  	
  Unconditional Right of Holders to
  Convert

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.16.

  	
  Repayment to the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  SUBSIDIARY
  GUARANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Guarantee.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.2.

  	
  Limitation on Guarantor Liability.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.3.

  	
  Execution and Delivery of Subsidiary
  Guarantee.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Payment of Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.2.

  	
  SEC Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.3.

  	
  Compliance Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.4.

  	
  Further Instruments and Acts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.5.

  	
  Maintenance of Corporate Existence

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.6.

  	
  Rule144A Information Requirement

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.7.

  	
  Stay, Extension and Usury Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.8.

  	
  Payment of Special Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.9.

  	
  Payment of Contingent Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Company and Guarantor May Consolidate,
  Etc, Only On Certain Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.2.

  	
  Successor Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  DEFAULT
  AND REMEDIES

  	
   

  

 

ii

 

	
  Section 8.1.

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.2.

  	
  Acceleration

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.3.

  	
  Other Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.4.

  	
  Waiver of Defaults and Events of
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.5.

  	
  Waiver of Compliance

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.6.

  	
  Control by Majority

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.7.

  	
  Limitations on Suits

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.8.

  	
  Rights of Holders to Receive Payment
  and to Convert

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.9.

  	
  Collection Suit by Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.10.

  	
  Trustee May File Proofs of Claim

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.11.

  	
  Priorities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.12.

  	
  Undertaking for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Duties of Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.2.

  	
  Rights of Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.3.

  	
  Individual Rights of Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.4.

  	
  Trustee’s Disclaimer

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.5.

  	
  Notice of Default or Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.6.

  	
  Reports by Trustee to Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.7.

  	
  Compensation and Indemnity

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.8.

  	
  Replacement of Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.9.

  	
  Successor Trustee by Merger, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.10.

  	
  Eligibility; Disqualification

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.11.

  	
  Preferential Collection of Claims
  Against Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  SATISFACTION AND DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Satisfaction and Discharge of
  Indenture

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.2.

  	
  Application of Trust Money

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.3.

  	
  Repayment to Company

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.4.

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
  Without Consent of Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.2.

  	
  With Consent of Holders

  	
   

  

 

iii

 

	
  Section 11.3.

  	
  Compliance with Trust Indenture Act

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.4.

  	
  Revocation and Effect of Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.5.

  	
  Notation on or Exchange of Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.6.

  	
  Trustee to Sign Amendments, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.7.

  	
  Effect of Supplemental Indentures

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  TAX
  TREATMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
  Tax Treatment

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.2.

  	
  Comparable Yield and Projected
  Payment Schedule.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
  Trust Indenture Act Controls

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.2.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.3.

  	
  Communications by Holders with Other
  Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.4.

  	
  Certificate and Opinion as to
  Conditions Precedent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.5.

  	
  Record Date for Vote or Consent of
  Securityholders

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.6.

  	
  Rules by Trustee, Paying Agent,
  Registrar and Conversion Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.7.

  	
  Legal Holidays

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.8.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.9.

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.10.

  	
  No Recourse Against Others

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.11.

  	
  Successors

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.12.

  	
  Multiple Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.13.

  	
  Separability

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.14.

  	
  Table of Contents, Headings, Etc.

  	
   

  

 

iv

 

CROSS-REFERENCE
TABLE*

 

	
  TIA
  SECTION

  	
   

  	
  INDENTURE

  SECTION

  
	
  Section 310(a)(1)

  	
   

  	
  9.10

  
	
  (a)(2)

  	
   

  	
  9.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  9.10

  
	
  (b)

  	
   

  	
  9.8; 9.10; 13.2

  
	
  (c)

  	
   

  	
  N.A.

  
	
  Section 311(a)

  	
   

  	
  9.11

  
	
  (b)

  	
   

  	
  9.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  Section 312(a)

  	
   

  	
  2.5

  
	
  (b)

  	
   

  	
  13.3

  
	
  (c)

  	
   

  	
  13.2

  
	
  Section 313(a)

  	
   

  	
  9.6

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  9.6

  
	
  (c)

  	
   

  	
  9.6; 13.2

  
	
  (d)

  	
   

  	
  9.6

  
	
  Section 314(a)

  	
   

  	
  6.2; 6.4; 13.2

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  13.4(a)

  
	
  (c)(2)

  	
   

  	
  13.4(a)

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  13.4(b)

  
	
  (f)

  	
   

  	
  N.A.

  
	
  Section 315(a)

  	
   

  	
  9.1(b)

  
	
  (b)

  	
   

  	
  9.5; 13.2

  
	
  (c)

  	
   

  	
  9.1(a)

  
	
  (d)

  	
   

  	
  9.1(c)

  
	
  (e)

  	
   

  	
  8.12

  
	
  Section 316(a)
  (last sentence)

  	
   

  	
  2.9

  
	
  (a)(1)(A)

  	
   

  	
  8.6

  
	
  (a)(1)(B)

  	
   

  	
  8.4

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  8.8

  
	
  (c)

  	
   

  	
  13.5

  
	
  Section 317(a)(1)

  	
   

  	
  8.9

  
	
  (a)(2)

  	
   

  	
  8.10

  
	
  (b)

  	
   

  	
  2.4

  

 

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

 

v

 

THIS INDENTURE dated as of September 15, 2004 is among United
Industrial Corporation, a Delaware Corporation (the “Company”), AAI
Corporation, a Maryland corporation (the “Guarantor”), and U.S. Bank
National Association, a national banking association organized and existing
under the laws of the United States, as Trustee (the “Trustee”).

 

In consideration of the premises herein and the purchase of the
Securities by the Holders thereof, the parties agree as follows for their
mutual benefit and for the equal and ratable benefit of the registered Holders
of the Company’s 3.75% Convertible Senior Securities due 2024.

 

ARTICLE 1

 

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

Section 1.1.                                Definitions.

 

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

 

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

 

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

 

“Bid Solicitation Agent” means, initially, the Trustee.

 

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

 

“Business Day” means each day that is not a Legal Holiday.

 

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

 

“Cash” means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.

 

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

 

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

 

(i)                                     any
“person” or “group,” within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act or any successor provision to either of the foregoing, including
any group acting for the purpose of acquiring, holding or disposing of
securities

 

 

within the meaning of Rule 13d-5(b)(1) under the Exchange Act, becomes
the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of 50% or more of the total voting power of all classes
of the Company’s Voting Stock entitled to vote generally in the election of
directors;

 

(ii)                                  the
sale, transfer, lease, conveyance or other disposition, in one or a series of
related transactions, of all or substantially all of the properties or assets
of the Company to any “person” or “group” (as such terms are defined above);

 

(iii)                               any consolidation or
merger of the Company with or into another Person (or vice versa) except
pursuant to a transaction in which the persons that “beneficially owned,” directly
or indirectly, the shares of the Company’s Voting Stock immediately prior to
such transaction “beneficially own” immediately after such transaction,
directly or indirectly, shares of the continuing or surviving corporation’s
Voting Stock representing at least a majority of the total voting power of all
outstanding classes of Voting Stock of the continuing or surviving corporation
in substantially the same proportion as such ownership prior to the
transaction;

 

(iv)                              the
following persons cease for any reason to constitute a majority of the board of
directors of the Company;

 

(A) 
individuals who on the first issue date of the Securities constituted
the Board of Directors; and

 

(B)  any new
directors whose election to the Board of Directors or whose nomination for
election by the Company’s shareholders was approved by at least a majority of
the directors of the Company then still in office who were either directors on
such first issue date of the Securities or whose election or nomination for
election was previously so approved;

 

(v)                                 the
Company distributes to all or substantially all holders of shares of its Common
Stock its assets, cash, debt securities or certain rights to purchase its
securities, which distribution has a per share value exceeding 10% of the
closing price of the Common Stock on the day preceding the declaration date for
such distribution; or

 

(vi)                              the
Company is liquidated or dissolved or holders of the Common Stock approve any
plan or proposal for the liquidation or dissolution of the Company.

 

A “Change of Control” shall not be deemed to have occurred if in the
case of a merger or consolidation, all of the consideration (other than Cash
payments for fractional shares or pursuant to statutory appraisal rights) in
the merger or consolidation constituting the Change in Control consists of
common stock and any associated rights traded on a US national securities
exchange or quoted on The Nasdaq National Market (or which will be so traded or
quoted when issued or exchanged in connection with such change in control),
and, as a result of such transaction or transactions, the securities become
convertible solely into such common stock and associated rights.

 

“Common Stock” means the common stock of the Company, par value $1.00
per share, as it exists on the date of this Indenture and any shares of any
class or classes of capital stock of the Company resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided,

 

2

 

however,
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable on conversion of Securities shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.

 

“Company” means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions
of this Indenture, and thereafter “Company” shall mean such successor Company.

 

“Contingent Interest Period” has the meaning set forth in the
Securities.

 

“Contingent Interest” has the meaning set forth in the paragraph 1 of
the Security.

 

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

 

“Conversion Rate” means initially 25.4863 shares per $1,000 principal
amount of Securities, subject to adjustment as set forth herein.

 

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

 

“Corporate Trust Office” means the office of the Trustee at which at
any particular time the trust created by this Indenture shall be administered
which office at the date of the execution of this Indenture is located at 60
Livingston Avenue, St. Paul, Minnesota 55107-2292, Attention:  Frank Leslie, or at any other time at such
other address as the Trustee may designate from time to time by notice to the
Company.

 

“Current Market Price” means, per share of Common Stock, on any day
means the average of the daily Sale Price for the five consecutive Trading Days
selected by the Company commencing not more than 30 Trading Days before, and
ending not later than, the earlier of the day in question (including upon the
occurrence of a Repurchase Event) and the day before the “ex-dividend trading
date” with respect to the issuance or distribution requiring such computation.

 

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

 

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

 

“Ex-dividend trading date” means, with respect to any issuance or
distribution, the first date on which the Common Stock trades regular way on
the exchange or in the market in which the security trades without the right to
receive such issuance or distribution.

 

“Final Maturity Date” means September 15, 2024.

 

“GAAP” means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including
those set forth in (1) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants, (2)
the statements and pronouncements of the Financial Accounting Standards Board,
(3) such other statements

 

3

 

by such other
entity as approved by a significant segment of the accounting profession and
(4) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in registration
statements filed under the Securities Act and periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written statements
from the accounting staff of the SEC.

 

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

 

“Guarantor” means the party named as such in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture, and thereafter “Guarantor” shall mean such
successor Guarantor.

 

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

 

“Indebtedness” means, with respect to any Person, without duplication,
(a) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person (i) for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or (ii) evidenced
by credit or loan agreements, bonds, debentures, notes or similar instruments
(whether or not the recourse of the lender is to the whole of the assets of
such Person or to only a portion thereof) (other than any accounts payable or
other accrued current liability or obligation incurred in the ordinary course
of business in connection with the obtaining of materials or services), (b) all
reimbursement obligations and other liabilities (contingent or otherwise) of
such Person with respect to letters of credit, bank guarantees or bankers’
acceptances, (c) all obligations and liabilities (contingent or otherwise) of
such Person (i) in respect of leases of such Person required, in conformity
with GAAP, to be accounted for as capitalized lease obligations on the balance
sheet of such Person (as determined by the Company), or (ii) under any lease or
related document (including a purchase agreement, conditional sale or other
title retention agreement) in connection with the lease of real property or
improvement thereon (or any personal property included as part of any such
lease) which provides that such Person is contractually obligated to purchase
or cause a third party to purchase the leased property or pay an agreed upon
residual value of the leased property to the lessor (whether or not such lease
transaction is characterized as an operating lease or a capitalized lease in
accordance with GAAP), (d) all obligations (contingent or otherwise) of such
Person with respect to any interest rate or other swap, cap, floor or collar
agreement, hedge agreement, forward contract, or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument
or agreement, (e) all direct or indirect guaranties, agreements to be jointly
liable or similar agreements by such Person in respect of, and obligations or
liabilities of such Person to purchase or otherwise acquire or otherwise assure
a creditor against loss in respect of, indebtedness, obligations or liabilities
of another Person of the kind described in clauses (a) through (d), and (f) any
and all deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (e).

 

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

 

“Initial Purchasers” means UBS Securities LLC and Bear, Stearns &
Co. Inc.

 

4

 

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

 

“Measurement Period” means the last 30 consecutive Trading Days in a
calendar quarter, beginning with the quarter ending March 31, 2005.

 

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

 

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

 

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

 

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

 

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

 

“Purchase Market Price” means, with respect to any Purchase Date, the
average of the Sale Prices for the 15 consecutive Trading Days ending on the
third Trading Day prior to the Purchase Date, appropriately adjusted to take
into account the occurrence, during the period commencing on the first Trading
Day of such 15 Trading Day period and ending on the Purchase Date of any event
requiring an adjustment of the Conversion Rate as set forth under
Section 4.4; provided that in no event shall the Purchase Market
Price be less than $1.00.

 

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

 

“Redemption Price” when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture,
as set forth in the form of Security annexed as Exhibit A hereto.

 

“Registration Rights Agreement” means the Registration Rights Agreement
dated, as of September 15, 2004, among the Company, the Guarantor and the
Initial Purchasers.

 

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

 

“Repurchase Market Price” means, with respect to any Repurchase Date,
the average of the closing sale prices of Common Stock for the 20 consecutive
Trading Days ending on the third Trading Day prior to the Repurchase Date,
appropriately adjusted to take into account the occurrence, during the period
commencing on the first Trading Day of such 20 Trading Day period and ending on
the Repurchase Date of any event requiring an adjustment of the Conversion Rate
as set forth under Section 4.4; provided that in no event shall the
Repurchase Market Price be less than $1.00.

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

“Securities” means the 3.75% Convertible Senior Notes due 2024 or any
of them (each, a “Security”), as amended or supplemented from time to
time, that are issued under this Indenture.

 

“Significant Subsidiary” means, in respect of any Person, a Subsidiary
of such Person that would constitute a “significant subsidiary” as such term is
defined under Rule 1-02 of Regulation S-X under the Securities Act and the
Exchange Act; provided, that in no event shall Electric Transit, Inc.,
an Ohio corporation, be deemed a “Significant Subsidiary” for purposes of this
Indenture.

 

“Special Interest” has the meaning specified in paragraph 3 of the
Security.

 

“Subsidiary” means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, general partners
or trustees thereof is at the time owned or controlled, directly or indirectly,
by (i) such Person; (ii) such Person and one or more Subsidiaries of such
Person; or (iii) one or more Subsidiaries of such Person.

 

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

 

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

 

6

 

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

 

“Trading Price” means, as of any date of determination, the average of
the secondary market bid quotations per $1,000 principal amount of Securities
obtained by the Bid Solicitation Agent (which shall initially be the Trustee)
for $5,000,000 principal amount of Securities at approximately 4:00 p.m., New
York City time, on such date of determination from three nationally recognized
securities dealers (none of which shall be an Affiliate of the Company)
selected by the Company, which may include any of the Initial Purchasers, provided,
that if at least three such bids cannot be reasonably obtained by the Bid
Solicitation Agent, but two bids are obtained, then the average of the two bids
shall be used, and if only one such bid can be reasonably obtained by the Bid
Solicitation Agent, this one bid will be used; provided, however,
if (a) the Bid Solicitation Agent, through the exercise of reasonable efforts,
is unable to obtain at least one bid for $5,000,000 principal amount of
Securities from an independent nationally recognized securities dealer, or (b)
in the reasonable good faith judgment of the Board of Directors, the bid
quotations are not indicative of the secondary market value of the Securities
as of such date of determination, then the Trading Price of a Security for such
date of determination shall equal 98% of the product of (1) the Conversion Rate
in effect as of such date of determination and (2) the Sale Price of a share of
Common Stock on the day of determination.

 

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

 

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

 

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

 

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

 

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

 

Section 1.2.                                Other Definitions.

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
  “accounting
  event”

  	
   

  	
  3.3(b)(4)

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Aggregate
  Amount”

  	
   

  	
  4.4(e)

  
	
  “Automatic
  Conversion”

  	
   

  	
  4.13(a)

  
	
  “Automatic
  Conversion Date”

  	
   

  	
  4.13(a)

  
	
  “Automatic
  Conversion Notice”

  	
   

  	
  4.13(b)

  
	
  “Bankruptcy Law”

  	
   

  	
  8.1

  
	
  “Cash Settlement
  Averaging Period”

  	
   

  	
  4.3(b)

  
	
  “Cash Settlement
  Notice Period

  	
   

  	
  4.3(b)

  
	
  “Company Order”

  	
   

  	
  2.2

  

 

7

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
  “Conversion
  Agent”

  	
   

  	
  2.3

  
	
  “Conversion
  Date”

  	
   

  	
  4.3(a)

  
	
  “Conversion
  Notice”

  	
   

  	
  4.3(a)

  
	
  “Conversion
  Obligation”

  	
   

  	
  4.3(b)

  
	
  “Conversion
  Retraction Period”

  	
   

  	
  4.3(b)

  
	
  “Conversion
  Settlement Distribution”

  	
   

  	
  4.3(b)

  
	
  “Conversion
  Shares”

  	
   

  	
  4.4(b)

  
	
  “Custodian”

  	
   

  	
  8.1

  
	
  “Depositary”

  	
   

  	
  2.1(a)

  
	
  “Determination
  Date”

  	
   

  	
  4.4(h)

  
	
  “Distribution
  Date”

  	
   

  	
  4.4(c)

  
	
  “Dividend
  Increase”

  	
   

  	
  4.4(d)

  
	
  “Dividend
  Threshold Amount”

  	
   

  	
  4.4(d)

  
	
  “DTC”

  	
   

  	
  2.1(a)

  
	
  “Election
  Amount”

  	
   

  	
  4.3(d)

  
	
  “Election Date”

  	
   

  	
  4.3(d)

  
	
  “Event of Default”

  	
   

  	
  8.1

  
	
  “Expiration
  Date”

  	
   

  	
  4.4(e)

  
	
  “Expiration
  Time”

  	
   

  	
  4.4(e)

  
	
  “Final Notice
  Date”

  	
   

  	
  4.3(b)

  
	
  “Fixed Cash
  Portion”

  	
   

  	
  4.3(b)(3)

  
	
  “indenture
  securities”

  	
   

  	
  1.3

  
	
  “indenture
  securityholder”

  	
   

  	
  1.3

  
	
  “intenture to be
  qualified”

  	
   

  	
  1.3

  
	
  “indenture
  trustee”

  	
   

  	
  1.3

  
	
  “institutional
  trustee”

  	
   

  	
  1.3

  
	
  “Legal Holiday”

  	
   

  	
  13.7

  
	
  “Legend”

  	
   

  	
  2.12(a)

  
	
  “Make-Whole
  Premium Table”

  	
   

  	
  3.3(b)(2)

  
	
  “Non-Electing
  Share”

  	
   

  	
  4.7(c)

  
	
  “Notice of
  Default”

  	
   

  	
  8.1

  
	
  “obligor”

  	
   

  	
  1.3

  
	
  “Optional
  Redemption”

  	
   

  	
  3.1

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
  “Primary
  Registrar”

  	
   

  	
  2.3

  
	
  “Purchase
  Agreement”

  	
   

  	
  2.1

  
	
  “Purchase Date”

  	
   

  	
  3.2(a)(1)

  
	
  “Purchase
  Notice”

  	
   

  	
  3.2(a)(2)

  
	
  “Purchase Offer”

  	
   

  	
  3.2(a)(2)

  
	
  “Purchase Price”

  	
   

  	
  3.2(a)(1)

  
	
  “Purchased
  Shares”

  	
   

  	
  4.4(e)

  
	
  “QIB”

  	
   

  	
  2.1(a)

  
	
  “Redemption
  Price”

  	
   

  	
  3.1

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Regular Record
  Date”

  	
   

  	
  3.1(d)

  
	
  “Repurchase
  Date”

  	
   

  	
  3.3(a)

  
	
  “Repurchase
  Event Company Notice”

  	
   

  	
  3.3(c)

  
	
  “Repurchase
  Event Make -Whole Premium”

  	
   

  	
  3.3(b)(2)

  
	
  “Repurchase
  Event Repurchase Notice”

  	
   

  	
  3.3(c)

  
	
  “Repurchase
  Price”

  	
   

  	
  3.3(a)

  

 

8

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
  “Rights”

  	
   

  	
  4.4(c)

  
	
  “Security
  Measurement Period”

  	
   

  	
  4.1(a)(2)

  
	
  “Stock Price”

  	
   

  	
  3.3(b)(2)

  
	
  “successor
  corporation”

  	
   

  	
  7.1(a)

  
	
  “Third Party
  Aggregate Amount”

  	
   

  	
  4.4(f)

  
	
  “Third Party
  Expiration Date”

  	
   

  	
  4.4(f)

  
	
  “Third Party
  Expiration Time”

  	
   

  	
  4.4(f)

  
	
  “Third Party
  Purchased Shares”

  	
   

  	
  4.4(f)

  
	
  “Underlying
  Shares”

  	
   

  	
  4.4(b)

  
	
   

  	
   

  	
   

  

 

Section 1.3.           Trust
Indenture Act Provisions.

 

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

 

“indenture securities” means the Securities;

 

“indenture security holder” means a Securityholder;

 

“indenture to be qualified” means this Indenture;

 

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

 

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

 

Section 1.4.                                Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

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

 

(d)         provisions
apply to successive events and transactions;

 

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

 

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

 

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

 

9

 

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

 

ARTICLE 2

 

THE
SECURITIES

 

Section 2.1.                                Form and Dating.

 

The Securities and the Trustee’s certificate of authentication shall be
substantially in the respective forms set forth in Exhibit A, which Exhibit is
incorporated in and made part of this Indenture.  The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage. 
The Company shall provide any such notations, legends or endorsements to
the Trustee in writing.  Each Security
shall be dated the date of its authentication. 
The Securities are being offered and sold by the Company pursuant to a
Purchase Agreement, dated September 9, 2004 (the “Purchase Agreement”),
between the Company and the Initial Purchasers, in transactions exempt from, or
not subject to, the registration requirements of the Securities Act.

 

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

 

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

 

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

 

10

 

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

 

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

 

Section 2.2.                                Execution and
Authentication.

 

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

 

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

 

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

 

The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to
$120,000,000 upon receipt of a written order or orders of the Company signed by
an Officer of the Company (a “Company Order”).  The Company Order shall specify the amount of Securities to be
authenticated, shall provide that all such Securities will be represented by a
Restricted Global Security and the date on which each original issue of
Securities is to be authenticated.  The
aggregate principal amount of Securities outstanding at any time may not exceed
$120,000,000 except as provided in Section 2.7.

 

The Trustee shall act as the initial authenticating agent.  Thereafter, the Trustee may appoint an
authenticating agent acceptable to the Company to authenticate Securities.  An authenticating agent may

 

11

 

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

 

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

 

Section 2.3.                                Registrar, Paying Agent
and Conversion Agent.

 

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

 

The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. 
The agreement shall implement the provisions of this Indenture that
relate to such Agent.  The Company shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture.  If the Company fails to
maintain a Registrar, Paying Agent, Conversion Agent or agent for service of
notices and demands in any place required by this Indenture, or fails to give
the foregoing notice, the Trustee shall act as such.  The Company or any Affiliate of the Company may act as Paying
Agent (except for the purposes of Section 6.1 and Article 10).

 

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

 

Section 2.4.                                Paying Agent to Hold
Money in Trust.

 

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

 

12

 

Section 2.5.                                Securityholder Lists.

 

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

 

Section 2.6.                                Transfer and Exchange.

 

(a)          Subject
to compliance with any applicable additional requirements contained in
Section 2.12, when a Security is presented to a Registrar with a request
to register a transfer thereof or to exchange such Security for an equal
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested; provided,
however, that every Security presented or surrendered for registration
of transfer or exchange shall be duly endorsed or accompanied by an assignment
form and, if applicable, a transfer certificate each in the form included in
Exhibit B, and in form satisfactory to the Registrar duly executed by the
Holder thereof or its attorney duly authorized in writing.  To permit registration of transfers and exchanges,
upon surrender of any Security for registration of transfer or exchange at an
office or agency maintained pursuant to Section 2.3, the Company shall
execute and the Trustee shall authenticate Securities of a like aggregate
principal amount at the Registrar’s request. 
Any exchange or transfer shall be without charge, except that the
Company or the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto, and provided,
that this sentence shall not apply to any exchange pursuant to
Section 2.10, 2.12(a), 3.1(f), 3.2(e), 3.3(h) and 11.5.

 

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

 

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

 

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

 

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

 

13

 

Section 2.7.                                Replacement Securities.

 

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

 

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

 

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

 

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

 

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

 

Section 2.8.                                Outstanding Securities.

 

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

 

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

 

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

 

14

 

Subject to the restrictions contained in Section 2.9, a Security
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Security.

 

Section 2.9.                                Treasury Securities.

 

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

 

Section 2.10.                         Temporary Securities.

 

Until definitive Securities are ready for delivery, the Company may
prepare and execute, and, upon receipt of a Company Order, the Trustee shall
authenticate and deliver, temporary Securities.  Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company with the consent
of the Trustee considers appropriate for temporary Securities.  Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate and deliver definitive
Securities in exchange for temporary Securities.

 

Section 2.11.                         Cancellation.

 

The Company at any time may deliver Securities to the Trustee for
cancellation.  The Registrar, the Paying
Agent and the Conversion Agent shall forward to the Trustee or its agent any
Securities surrendered to them for transfer, exchange, redemption, payment or
conversion.  The Trustee and no one else
shall cancel, in accordance with its standard procedures, all Securities
surrendered for transfer, exchange, redemption, payment, conversion or
cancellation and shall deliver the canceled Securities to the Company.  All Securities which are redeemed, purchased
or otherwise acquired by the Company or any of its Subsidiaries prior to the Final
Maturity Date shall be delivered to the Trustee for cancellation, and the
Company may not hold or resell such securities or issue any new Securities to
replace any such Securities or any Securities that any Holder has converted
pursuant to Article 4.  Without
limitation to the foregoing, any Securities acquired by any investment bank or
other purchasers pursuant to Section 2.16 shall be surrendered for
conversion and thereafter cancelled, and may not be reoffered, sold or
otherwise transferred.

 

Section 2.12.                         Legend; Additional Transfer
and Exchange Requirements.

 

(a)          If
Securities are issued upon the transfer, exchange or replacement of Securities
subject to restrictions on transfer and bearing the legends set forth on the
forms of Securities attached hereto as Exhibit A (collectively, the “Legend”),
or if a request is made to remove the Legend on a Security, the Securities so
issued shall bear the Legend, or the Legend shall not be removed, as the case
may be, unless there is delivered to the Company and the Registrar such
satisfactory evidence, which shall include an opinion of counsel if requested
by the Company or such Registrar, as may be reasonably required by the Company
and the Registrar, that neither the Legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with the
provisions of Rule 144A or Rule 144 under the Securities Act or that such
Securities are not “restricted” within the meaning of Rule 144 under the
Securities Act; provided, that no such evidence need be supplied in
connection with the sale of such

 

15

 

Security pursuant
to a registration statement that is effective at the time of such sale.  Upon (i) provision of such satisfactory evidence
if requested, or (ii) notification by the Company to the Trustee and Registrar
of the sale of such Security pursuant to a registration statement that is
effective at the time of such sale, the Trustee, at the written direction of
the Company, shall authenticate and deliver a Security that does not bear the
Legend.  If the Legend is removed from
the face of a Security and the Security is subsequently held by an Affiliate of
the Company, the Legend shall be reinstated.

 

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

 

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

 

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

 

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

 

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

 

(1)          Notwithstanding any
other provisions of this Indenture or the Securities, a Global Security shall
not be exchanged in whole or in part for a Security registered in the name of
any Person other than the Depositary or one or more nominees thereof, provided,
that a Global Security may be exchanged for Securities registered in the names
of any person designated by the

 

16

 

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

 

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

 

(3)          Subject to the
provisions of clause (5) below, the registered Holder may grant proxies and
otherwise authorize any Person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.

 

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

 

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

 

Section 2.13.                         CUSIP Numbers.

 

The Company in issuing the Securities may use one or more “CUSIP”
numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
numbers in notices of redemption or purchase as a convenience to Holders; provided,
that any such notice may state that no representation is made as to the

 

17

 

correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption or purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption or
purchase shall not be affected by any defect in or omission of such
numbers.  The Company will promptly
notify the Trustee of any change in the “CUSIP” numbers.

 

Section 2.14.                         Senior Unsecured Obligations.

 

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

 

Section 2.15.                         Calculations Regarding the
Securities.

 

The Company and its agents shall be responsible for making all
calculations as contemplated under this Indenture and the Securities.  Such calculations include, but are not
limited to, the determination of the Trading Price of the Securities, the
current Sale Price of the Common Stock and any amounts of interest and any
make-whole payments or premiums that are payable on the Securities.  The Company and its agents shall make such
calculations in good faith, and absent manifest error, such calculations shall
be final and binding upon all Holders of the Securities.  The Company shall provide a copy of these
calculations to the Trustee, and, absent manifest error, the Trustee shall be
entitled to rely on the accuracy of such calculations without conducting an
independent verification as to the accuracy thereof.

 

Section 2.16.                         Conversion Arrangement on Call
for Redemption.

 

In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities called for redemption
by an agreement with one or more investment banks or other purchasers to
purchase such Securities by paying to a Paying Agent (other than the Company or
any of its Affiliates) in trust for the Holders, on or before 10:00 a.m.  New York City time on the Redemption Date,
an amount that, together with any amounts deposited with such Paying Agent by
the Company for the redemption of such Securities, is not less than the
Redemption Price, together with interest (including Contingent Interest, if any
and Special Interest, if any), accrued to, but not including, the Redemption
Date, of such Securities. 
Notwithstanding anything to the contrary contained in this
Article 2, the obligation of the Company to pay the Redemption Price of
such Securities, including all accrued and unpaid interest, shall be deemed to
be satisfied and discharged to the extent such amount is so paid by such
purchasers; provided, however, that nothing in this
Section 2.16 shall relieve the Company of its obligation to pay the
Redemption Price, plus accrued and unpaid interest (including Contingent
Interest, if any and Special Interest, if any), to but excluding the relevant
Redemption Date, on Securities called for redemption.  If such an agreement with one or more investment banks or other
purchasers is entered into, any Securities called for redemption and not
surrendered for conversion by the Holders thereof prior to the relevant
Redemption Date may, at the option of the Company upon written notice to the
Trustee, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 4) surrendered by such purchasers for conversion, all
as of 10:00 a.m.  New York City time on
the Redemption Date, subject to payment of the above amount as aforesaid.  The Paying Agent shall hold and pay to the
Holders whose Securities are selected for redemption any such amount paid to it
for purchase in the same manner as it would money deposited with it by the
Company for the redemption of Securities. 
Without the Paying Agent’s prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Paying Agent as set forth in this
Indenture, and the Company agrees to indemnify the Paying Agent from, and hold
it harmless against, any loss, liability or expense arising out of or in

 

18

 

connection with
any such arrangement for the purchase and conversion of any Securities between
the Company and such purchasers, including the costs and expenses incurred by
the Paying Agent in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.

 

ARTICLE
3

 

REDEMPTION,
PURCHASES AND REPURCHASES

 

Section 3.1.                                Optional Redemption.

 

The Securities may be redeemed at the election of the Company (the “Optional
Redemption”), as a whole or from time to time in part, at any time on or
after September 15, 2009, at a redemption price equal to 100% of the
principal amount of those Securities plus accrued and unpaid interest
(including Contingent Interest, if any, and Special Interest, if any) to, but
not including, such Redemption Date (the “Redemption Price”); provided,
that if the Redemption Date falls after an interest payment record date and on
or before an interest payment date, then the interest (including Contingent
Interest, if any, and Special Interest, if any) will be payable to the Holders
in whose name the Securities are registered at the close of business on the
interest payment record date and the Redemption Price shall not include such
interest payment.

 

(a)          Notice
to Trustee.

 

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

 

(b)         Selection
of Securities to be Redeemed.

 

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

 

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

 

19

 

(c)          Notice
of Redemption.

 

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

 

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

 

(1)                                  the
Redemption Date;

 

(2)                                  the
Redemption Price;

 

(3)                                  the
then current Conversion Price;

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)         Effect
of Notice of Redemption.

 

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

 

20

 Interest, if any) will be payable to the
Holders in whose name the Securities are registered at the close of business on
the interest payment record date (each, a “Regular Record Date”).

 

(e)          Deposit
of Redemption Price.

 

Prior to 10:00 a.m. New York City time, on the Redemption Date, the
Company shall deposit with a Paying Agent (or, if the Company acts as Paying
Agent, shall segregate and hold in trust) an amount of money (in immediately
available funds if deposited on such Redemption Date) sufficient to pay the
Redemption Price of and accrued and unpaid interest (including Contingent
Interest, if any, and Special Interest, if any) on all Securities to be
redeemed on that date, other than Securities or portions thereof called for
redemption on that date which have been delivered by the Company to the Trustee
for cancellation or have been converted. 
The Paying Agent shall as promptly as practicable return to the Company
any money not required for that purpose because of the conversion of Securities
pursuant to Article 4 or, if such money is then held by the Company in
trust and is not required for such purpose, it shall be discharged from the
trust.

 

If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the Redemption Date, Cash sufficient to pay
the Redemption Price and accrued and unpaid interest (including Contingent
Interest, if any, and Special Interest, if any) for all Securities to be
redeemed on such date, then, immediately after such Redemption Date, such
Securities shall cease to be outstanding and interest on such Securities will
cease to accrue, whether or not such Securities are delivered to the Paying
Agent, and the rights of the Holders in respect thereof shall terminate (other
than the right to receive the Redemption Price upon delivery of such
Securities).

 

(f)            Securities
Redeemed in Part.

 

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

 

(g)         Compliance
with Securities Laws.

 

When complying with the provisions of Section 3.1 hereof (provided,
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:

 

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

 

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

 

(3)                                  otherwise
comply with all federal and state securities laws so as to permit the rights
and obligations under Section 3.1 to be exercised in the time and in the
manner specified therein.

 

To the extent that the provisions of any securities laws or regulations
conflict with the provisions of Section 3.1, the Company’s compliance with
such laws and regulations shall not in and of itself cause a breach of its
obligations under Section 3.1.

 

21

 

Section 3.2.                                Purchase of Securities
at the Option of Holders on Specific Dates.

 

(a)          Optional
Put.

 

(1)          Securities shall be
purchased by the Company, at the option of the Holder thereof, on
September 15, 2009, September 15, 2014 and September 15, 2019
(each, a “Purchase Date”), at a purchase price equal to 100% of the
principal amount of those Securities plus accrued and unpaid interest
(including Contingent Interest, if any, and Special Interest, if any) to, but
not including, such Purchase Date (the “Purchase Price”), subject to
satisfaction by or on behalf of the Holder of the requirements set forth in
Section 3.2.

 

The Purchase Price may be paid in Cash, shares of Common Stock, or a
combination thereof.  If the Company
elects to pay the Purchase Price, in whole or in part, in shares of Common
Stock, the number of shares of Common Stock to be delivered by the Company will
be equal to the portion of the Purchase Price to be paid in shares of Common
Stock divided by 95% of the Purchase Market Price of such shares Common
Stock.  If the Company elects to pay the
Purchase Price in whole or in part in shares of Common Stock, the Company shall
pay Cash in lieu of fractional shares.

 

The Company shall not be entitled to pay any portion of the Purchase
Price in shares of Common Stock pursuant to Section 3.2 unless all of the
following conditions are satisfied:

 

(i)                                     the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Purchase Price shall be either (1) registered under the Securities Act for
initial issuance, unless such registration is not necessary to permit the
Holders who receive such shares and who are not Affiliates of the Company to
publicly resell such shares or (2) registered for resale pursuant to a shelf
registration statement, that has become effective under the Securities Act and
that is reasonably expected to remain effective and available for use until at
least the 30th day after the Purchase Date, unless the shares may be publicly
sold without restriction pursuant to Rule 144(k) under the Securities Act;

 

(ii)                                  the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Purchase Price shall be duly qualified or registered under applicable state
securities laws or shall be qualified for an available exemption from such
qualification and registration; and

 

(iii)                               the shares of Common
Stock to be delivered as payment, in whole or in part, of the Purchase Price
shall be approved for listing on The Nasdaq National Market or a U.S. national
securities exchange.

 

All shares of Common Stock issued as payment, in whole or in part, of the
Purchase Price shall be deemed, for purposes of the Registration Rights
Agreement, to constitute “Registrable Securities” (as defined in the
Registration Rights Agreement), unless either (i) such shares were registered
under the Securities Act for initial issuance and are able to be publicly
resold by the recipients of such shares without further registration under the
Securities Act or (ii) such registration was and is not necessary to permit the
Holders who receive such shares to publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder
prior to the close of business on the Business Day immediately preceding the
Purchase Date, the Company shall pay the Purchase Price entirely in Cash.

 

22

 

(2)          No later than 20
Business Days prior to each Repurchase Date, the Company shall mail a written
notice of the purchase right under Section 3.2(a) (a “Purchase Offer”)
by first class mail to the Trustee and to each Holder (and to beneficial owners
as required by applicable law).  The
notice shall include a form of notice to be completed by the Holder and
returned to the Company in the event that the Holder elects such right to so
repurchase (the “Purchase Notice”) and shall briefly state, as
applicable:

 

(i)                                     the
amount of Purchase Price;

 

(ii)                                  whether
the Company shall pay the Purchase Price in Cash, shares of Common Stock, or a
combination thereof, specifying the percentage or amount of each;

 

(iii)                               if the Company elects to
pay the Purchase Price, in whole or in part, in shares of Common Stock, the
method of calculating the Purchase Market Price;

 

(iv)                              that
the Securities with respect to which the Holder has delivered a Purchase Notice
may be converted in accordance with the terms of this Indenture, only if such
Holder withdraws such Purchase Notice in accordance with Section 3.2(c);
and

 

(v)                                 the
procedures the Holder must follow in order to exercise its rights under this
Section 3.2(a).

 

At the Company’s
request, the Trustee shall give the Purchase Offer in the Company’s name and at
the Company’s expense; provided, however, that the Company makes
such request at least three Business Days (unless a shorter period shall be
satisfactory to the Trustee) prior to the date by which such Purchase Offer
must be given to the Holder in accordance with Section 3.2(a)(2); provided,
further, that the text of the notice of the Purchase Offer shall be
prepared by the Company.

 

(3)          A Holder may exercise
its rights under Section 3.2(a) upon delivery of a properly completed
Purchase Notice to the Paying Agent at any time during the period beginning at
9:00 a.m., New York City time, on the date that is 20 Business Days immediately
preceding the relevant Purchase Date until 5:00 p.m., New York City time, on
the Business Day immediately preceding such Purchase Date, stating:

 

(i)                                     the
certificate number of the Security which the Holder will deliver to be
purchased or the appropriate Depositary procedures if Certificated Securities
have not been issued;

 

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

 

(iii)                               that such Security shall
be purchased by the Company as of the Purchase Date pursuant to the terms and
conditions specified in the Securities and in this Indenture;

 

(iv)                              if
the Company has elected to pay the Purchase Price in shares of Common Stock but
the Purchase Price is ultimately to be paid to the Holder entirely in Cash
because any of the conditions to payment in shares of Common Stock are not
satisfied in accordance with Section 3.2(a), whether such Holder elects:

 

23

 

(A) to withdraw the Purchase Notice in accordance with
Section 3.2(c); or

 

(B) to receive Cash in respect of the entire Purchase
Price subject to the Purchase Notice.

 

If a Holder fails to indicate its choice with respect to
Section 3.2(a)(3)(iv), such Holder shall be deemed to have elected to receive
Cash in respect of the entire Purchase Price subject to the Purchase Notice.

 

The delivery of such Security to the Paying Agent with, or at any time
after delivery of, the Purchase Notice (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Purchase Price therefor; provided, however,
that such Purchase Price shall be so paid pursuant to this Section 3.2(a)
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof in the related Purchase Notice.

 

The Company shall purchase from the Holder thereof, pursuant to this
Section 3.2(a), a portion of a Security, so long as the principal amount
of such portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the purchase of all of a Security also apply to the purchase of such portion of
a Security.

 

Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.2(a) shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Purchase Date and the time of delivery of the Security.

 

Notwithstanding anything contained herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by
Section 3.2(a)(2) shall have the right to withdraw such Purchase Notice at
any applicable time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.2(c).

 

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

 

(b)                                 Effect
of Purchase Notice.

 

Upon receipt by the Paying Agent of the Purchase Notice specified in
Section 3.2(a)(3), the Holder of the Security in respect of which such
Purchase Notice was given shall (unless such Purchase Notice is withdrawn as
specified in the following paragraph) thereafter be entitled to receive solely
the Purchase Price with respect to such Security.  Such Purchase Price shall be paid to such Holder, subject to
receipts of Cash, shares of Common Stock or a combination thereof, as
applicable, by the Paying Agent, promptly following the later of (a) the
Purchase Date with respect to such Security (provided the conditions in
Section 3.2(a)(3) have been satisfied) and (b) the time of delivery of
such Security to the Paying Agent by the Holder thereof in the manner required
by Section 3.2(a)(3).  Securities
in respect of which a Purchase Notice has been given by the Holder thereof may
not be converted pursuant to Article 4 on or after the date of the delivery
of such Purchase Notice unless such Purchase Notice has first been validly
withdrawn as specified in the following paragraph.

 

24

 

(c)          Withdrawal
of Purchase Notice.

 

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

 

(1)                                  the
name of the Holder;

 

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

 

(3)                                  the
certificate number, if any, of the Security in respect of which such notice of
withdrawal is being submitted;

 

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

 

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

 

(6)                                  if
the Security is not then issued in certificated form, the Purchase Notice must
comply with the Applicable Procedures of the Depositary in effect at that time.

 

(d)         Deposit
of Purchase Price.

 

Prior to 10:00 a.m., New York City time, on the applicable Repurchase
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of any of them is acting as the Paying Agent, shall
segregate and hold in trust as provided in Section 2.4) an amount of Cash
(in immediately available funds if deposited on such Business Day), and, if the
Company determines to pay all or any portion of the Purchase Price in shares of
Common Stock, such shares of Common Stock, sufficient to pay the aggregate
Purchase Price of all the Securities or portions thereof which are to be
purchased on such Repurchase Date.

 

If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the Business Day immediately following the
applicable Purchase Date, Cash, and, if the Company determines to pay all or
any portion of the Purchase Price in shares of Common Stock, such shares of
Common Stock, sufficient to pay the Purchase Price of any Securities for which
a Purchase Notice has been tendered and not withdrawn pursuant to
Section 3.2(c), then, immediately after such Repurchase Date, such
Securities will cease to be outstanding and interest (including, Contingent
Interest, if any, and Special Interest, if any) on such Securities will cease
to accrue, whether or not such Securities are delivered to the Paying Agent,
and the rights of the Holders in respect thereof shall terminate (other than
the right to receive the Purchase Price upon delivery of such Securities).

 

(e)          Securities
Purchased in Part.

 

Any Certificated Security which is to be repurchased only in part shall
be surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount

 

25

 

equal to, and in
exchange for, the portion of the principal amount of the Security so
surrendered which is not repurchased.

 

(f)            Covenant
to Comply With Securities Laws Upon Purchase of Securities.

 

When complying with the provisions of Section 3.2 hereof (provided,
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:

 

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

 

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

 

(3)          otherwise comply with
all federal and state securities laws so as to permit the rights and
obligations under Section 3.2 to be exercised in the time and in the
manner specified therein.

 

To the extent that the provisions of any securities laws or regulations
conflict with the provisions of Section 3.2, the Company’s compliance with
such laws and regulations shall not in and of itself cause a breach of its
obligations under Section 3.2.

 

(g)         Company’s
Right to Elect Method of Payment of Purchase Price.

 

Notwithstanding anything to the contrary in the Indenture, at any time
prior to the Final Maturity Date, the Company may irrevocably elect, in its
sole discretion without the consent of the Holders of the Securities, by
written notice to the Trustee and the Holders of the Securities, to satisfy its
obligation to pay the Purchase Price in accordance with Section 3.2 solely
in Cash.

 

Section 3.3.                                Repurchase of
Securities at Option of the Holder Upon Repurchase Event.

 

(a)          Repurchase
Event Put.

 

If a Repurchase Event occurs, each Holder will have the right to
require the Company to repurchase all of its Securities not previously called
for redemption, or any portion of such Securities, at a purchase price equal to
100% of the principal amount of all such Securities, plus accrued and unpaid
interest (including Contingent Interest, if any and Special Interest, if any)
on such Securities to, but not including, the Repurchase Event Repurchase Date
(the “Repurchase Price”), subject to satisfaction by or on behalf of any
Holder of the requirements set forth in Section 3.3.  The date the Company shall repurchase the
Securities pursuant to this Section 3.3(a) (the “Repurchase Date”)
shall be within 30 Business Days of the date of the mailing of the Repurchase
Event Company Notice under Section 3.3(c).

 

The Repurchase Price may be paid in Cash, shares of Common Stock, or a
combination thereof.  If the Company
elects to pay the Repurchase Price, in whole or in part, in shares of Common
Stock, the number of shares of Common Stock to be delivered by the Company will
be equal to the portion of the Repurchase Price to be paid in shares of Common
Stock divided by 95% of the Repurchase Market Price of such shares of Common
Stock.  If the Company elects to pay the
Repurchase Price in whole or in part in shares of Common Stock, the Company
shall pay Cash in lieu of fractional shares.

 

26

 

The Company shall not be entitled to pay any portion of the Repurchase
Price in shares of Common Stock pursuant to this Section 3.3(a) unless all
of the following conditions are satisfied:

 

(1)          the shares of Common
Stock to be delivered as payment, in whole or in part, of the Repurchase Price
shall be either (i) registered under the Securities Act for initial issuance,
unless such registration is not necessary to permit the Holders who receive
such shares and who are not Affiliates of the Company to publicly resell such
shares or (ii) registered for resale pursuant to a shelf registration
statement, that has become effective under the Securities Act and that is
reasonably expected to remain effective and available for use until at least
the 30th day after the Repurchase Date, unless the shares may be publicly sold
without restriction pursuant to Rule 144(k) under the Securities Act;

 

(2)          the shares of Common
Stock to be delivered as payment, in whole or in part, of the Repurchase Price
shall be duly qualified or registered under applicable state securities laws or
shall be qualified for an available exemption from such qualification and
registration; and

 

(3)          the shares of Common
Stock to be delivered as payment, in whole or in part, of the Repurchase Price
shall be approved for listing on The Nasdaq National Market or a U.S. national
securities exchange.

 

All shares of Common Stock issued as payment, in whole or in part, of
the Repurchase Price shall be deemed, for purposes of the Registration Rights
Agreement, to constitute “Registrable Securities” (as defined in the
Registration Rights Agreement), unless either (i) such shares were registered
under the Securities Act for initial issuance and are able to be publicly
resold by the recipients of such shares without further registration under the
Securities Act or (ii) such registration was and is not necessary to permit the
Holders who receive such shares to publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder
prior to the close of business on the Business Day immediately preceding the
Repurchase Date, the Company shall pay the Repurchase Price entirely in Cash.

 

(b)         Repurchase
Event Make-Whole Premium.

 

(1)          General.  If a Repurchase Event (except solely
pursuant to clause (iv) of the definition of Change of Control) occurs prior to
September 15, 2009, the Company shall pay, in addition to the Repurchase
Price, a Repurchase Event Make-Whole Premium to Holders of Securities who elect
to require the Company to repurchase such Securities in connection with a
Repurchase Event pursuant to Section 3.3(a).  If the Holder surrenders the Securities for conversion in
accordance with Section 4.1(a)(3) in connection with a Repurchase Event,
in lieu of requiring the Company to repurchase such Securities in accordance
with Section 3.3(a), such Holder will receive (i) Cash and, if applicable,
shares of Common Stock in respect of such conversion obligation in accordance
with Section 4.1(a)(3), plus (ii) the applicable Repurchase Event
Make-Whole Premium.

 

The Repurchase Event Make-Whole Premium may be paid in Cash, shares of
Common Stock, or a combination thereof. 
If the Company elects to pay the Repurchase Event Make-Whole Premium, in
whole or in part, in shares of Common Stock, the number of shares of Common
Stock to be delivered by the Company will be equal to the portion of the
Repurchase Event Make-Whole Premium to be paid in shares of Common Stock
divided by 95% of the Repurchase Market Price of such shares Common Stock.  If the Company elects to pay the Repurchase
Event Make-Whole Premium in whole or in part in shares of Common Stock, the
Company shall pay Cash in lieu of any fractional shares.

 

27

 

(2)          Repurchase Event
Make-Whole Premium Amount.  The
Repurchase Event Make-Whole Premium shall equal an amount derived by
multiplying each $1,000 principal amount of Securities by a specified
percentage (the “Repurchase Event Make-Whole Premium”) which shall be
determined by reference to the table in Schedule A hereto (the “Make-Whole
Premium Table”) and is based on the date on which the Repurchase Event
becomes effective (the “effective date”) and the price (the “Stock Price”)
paid per share of the Company’s Common Stock in the transaction constituting
the Repurchase Event.  If a Holder of
Common Stock receives only Cash in the Repurchase Event, the Stock Price shall
be the Cash amount paid per share of Common Stock.  Otherwise, the Stock Price shall equal the average of the Sale
Prices of Common Stock on the five Trading Days up to, but not including, the
Effective Date of the Repurchase Event.

 

The stock prices set forth in the first column of the Make-Whole
Premium Table shall be adjusted in accordance with Section 4.4 as of any
date on which the Conversion Rate is adjusted and shall equal the Stock Prices
applicable immediately prior to such adjustment, multiplied by a fraction, the
numerator of which is the Conversion Rate immediately prior to the adjustment
giving rise to the Stock Price adjustment and the denominator of which is the
Conversion Rate as so adjusted.

 

If the Stock Price is between two Stock Price amounts in the Make-Whole
Premium Table or the repurchase date is between two dates on the Make-Whole
Premium Table, the Repurchase Event Make-Whole Premium shall be determined by
straight-line interpolation between the make-whole premium amounts set forth
for the higher and lower Stock Price amounts and the two dates, as applicable,
based on a 365-day year.

 

If the Stock Price is equal to or in excess of $120.00 per share of
Common Stock (subject to adjustment for any event requiring an adjustment of
the Conversion Rate as set forth under Section 4.4), no Repurchase Event
Make-Whole Premium will be paid.

 

If the Stock Price is less than or equal to $28.64 per share of Common
Stock (subject to adjustment for any event requiring an adjustment of the
Conversion Rate as set forth under Section 4.4), no Repurchase Event
Make-Whole Premium will be paid.

 

(3)          Payment Conditions.  The Company’s right to pay the Repurchase
Event Make-Whole Premium for the Securities, in whole or in part, in shares of
Common Stock is subject to:

 

(i)                                     the
company providing timely written notice, pursuant to Section 3.3(c), of
the Company’s election to pay all or part of the Repurchase Event Make-Whole
Premium in shares of Common Stock;

 

(ii)                                  the
Common Stock being listed on a U.S. national securities exchange or quoted on
the Nasdaq National Market or other similar automated quotation system; and

 

(iii)                               information necessary to
calculate the Current Market Price of Common Stock being published in a daily
newspaper of national circulation or being otherwise readily publicly
available.

 

All shares of Common Stock issued as payment, in whole
or in part, of the Repurchase Event Make-Whole Premium shall be deemed, for
purposes of the Registration Rights Agreement, to constitute “Registrable
Securities” (as defined in the Registration Rights Agreement), unless either
(i) such shares were registered under the Securities Act for initial issuance
and are able to be publicly resold by the recipients of such shares without
further registration under the Securities Act or (ii) such registration

 

28

 

was and is not necessary to permit the Holders who receive such shares
to publicly resell such shares.

 

If the above conditions are not satisfied with respect to a Holder
prior to the close of business on the Business Day immediately preceding the
Repurchase Date, the Company shall pay the Repurchase Event Make-Whole Premium,
if any, for such Holder’s Securities entirely in Cash.

 

(4)          Accounting Events.  From and after the occurrence of an
“accounting event,” the Company shall have the option, in its sole discretion,
to elect, by providing notice to the Trustee and the Holders of the Securities,
to pay any Repurchase Event Make-Whole Premium payable in the future solely in
Cash.  An “accounting event” means that
the Emerging Issues Task Force of the Financial Accounting Standards Board or
its successor has issued an amendment to, change in or clarification of rules
as a result of which the Company is required, under then current generally
accepted accounting principles to include the number of shares of Common Stock
which may be issuable as a Repurchase Event Make-Whole Premium in determining
the number of our shares outstanding for purposes of calculating diluted
earnings per share.

 

(c)          Notice
of Repurchase Event.  No later than
15 days after the occurrence of a Repurchase Event, the Company shall mail a
written notice of Repurchase Event (the “Repurchase Event Company Notice”)
by first class mail to the Trustee and to each Holder (and to beneficial owners
as required by applicable law).  The
Company shall publish the notice in The New York Times, the Wall
Street Journal, or another newspaper of national circulation.  The Company must repurchase the Securities
submitted for repurchase by a Holder in accordance with the terms and
conditions of Section 3.3 no later than 30 Business Days following the
mailing of the Repurchase Event Repurchase Notice.  The Repurchase Event Company Notice shall include a form of
notice to be completed by the Holder in the event the Holder elects such right
to repurchase pursuant to Section 3.3 (the “Repurchase Event Repurchase
Notice”) and shall briefly state, as applicable:

 

(1)          the events causing a
Repurchase Event;

 

(2)          the date of such
Repurchase Event;

 

(3)          the Repurchase Date;

 

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

 

(5)          the amount of the
Repurchase Price;

 

(6)          the amount of the
Repurchase Event Make-Whole Premium, if any;

 

(7)          whether the Company will
pay the Repurchase Price or the Repurchase Event Make-Whole Premium, if any, in
Cash, shares of Common Stock or a combination thereof, specifying the
percentage or amount of each;

 

(8)          if the Company elects to
pay the Repurchase Price or the Repurchase Event Make-Whole Premium, if any, in
whole or in part in shares of Common Stock, the method of calculating the
Repurchase Market Price of Common Stock;

 

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

 

29

 

(10)                            the
procedures for withdrawing a Repurchase Event Repurchase Notice;

 

(11)                            the
Conversion Rate applicable on the Repurchase Event Company Notice Date and any
adjustments to the Conversion Rate that will result from the Repurchase Event;

 

(12)                            that
the Securities with respect to which the Holder has delivered a Repurchase
Event Repurchase Notice may be converted in accordance with the terms of this
Indenture, only if such Holder withdraws such Repurchase Event Repurchase
Notice in accordance with Section 3.3(f); and

 

(13)                            the
procedures the Holder must follow in order to exercise its rights under this
Section 3.3.

 

At the Company’s request, the Trustee shall give the
Repurchase Event Company Notice in the Company’s name and at the Company’s
expense; provided, however, the Company makes such request at
least three Business Days (unless a shorter period shall be satisfactory to the
Trustee) prior to the date by which such Repurchase Event Company Notice must
be given to the Holders in accordance with Section 3.3(c); provided,
further, that the text of the Repurchase Event Company Notice shall be
prepared by the Company.

 

(d)         Repurchase
Event Repurchase Notice.  A Holder
may exercise its rights specified in Section 3.3 upon delivery of a
properly completed Repurchase Event Repurchase Notice to the Paying Agent at
any time from the opening of business on the date of the Repurchase Event
Company Notice until 5:00 p.m., New York City time, on the Business Day
immediately preceding the Repurchase Event Repurchase Date, stating:

 

(1)          the certificate number
of the Security which the Holder will deliver to be repurchased or the
appropriate depositary procedures if Certificated Securities have not been
issued;

 

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

 

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

 

(4)          if the Company has
elected to pay the Repurchase Price or the Repurchase Event Make-Whole Premium,
if any, in shares of Common Stock but the Repurchase Price or the Repurchase
Event Make-Whole Premium, if any, is ultimately to be paid to the Holder
entirely in Cash because any of the conditions to payment in shares of Common
Stock set forth in this Indenture is not satisfied prior to the close of
business on the Business Day immediately preceding the Repurchase Event
Repurchase Date, whether such Holder elects:

 

(i)                                     to
withdraw the Repurchase Event Repurchase Notice for all of the Securities
subject to the Repurchase Event Repurchase Notice; or

 

(ii)                                  to
receive Cash in respect of the entire Repurchase Price and the Repurchase Event
Make-Whole Premium, if any subject to the Repurchase Event Repurchase Notice.

 

30

 

If such Holder fails to indicate their choice with
respect to (i) or (ii) above, such Holder will be deemed to have elected to
receive Cash in respect of the entire Repurchase Price and the Repurchase Event
Make-Whole Premium, if any.

 

The delivery of such Security to the Paying Agent
with, or at any time after delivery of, the Repurchase Event Repurchase Notice
(together with all necessary endorsements) at the offices of the Paying Agent
shall be a condition to the receipt by the Holder of the Repurchase Price
therefor; provided, however, that such Repurchase Price shall be
so paid pursuant to Section 3.3 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth
in the related Repurchase Event Repurchase Notice.

 

The Company shall repurchase from the Holder thereof,
pursuant to Section 3.3, a portion of a Security, so long as the principal
amount of such portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the repurchase of all of a Security also apply to the repurchase of such
portion of such Security.

 

Any repurchase by the Company contemplated pursuant to
the provisions of this Section 3.3 shall be consummated by the delivery of
the consideration to be received by the Holder promptly following the later of
the Repurchase Date and the time of delivery of the Security.

 

Notwithstanding anything contained herein to the
contrary, any Holder delivering to the Paying Agent the Repurchase Event
Repurchase Notice contemplated by this Section 3.3(d) shall have the right
to withdraw such Repurchase Event Repurchase Notice at any time prior to 5:00
p.m., New York City time, on the Business Day immediately preceding the
Repurchase Event Repurchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 3.3(f).

 

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

 

(e)          Effect
of Repurchase Event Repurchase Notice.

 

Upon receipt by the Paying Agent of the Repurchase Event Repurchase
Notice specified in Section 3.3(d), the Holder of the Security in respect
of which such Repurchase Event Repurchase Notice was given shall (unless such
Repurchase Event Repurchase Notice is withdrawn as specified in the following
paragraph) thereafter be entitled to receive solely the Repurchase Price and
the Repurchase Event Make-Whole Premium, if any, with respect to such
Security.  Such Repurchase Price
(including the Repurchase Event Make-Whole Premium) shall be paid to such
Holder, subject to receipt of Cash, shares of Common Stock or a combination
thereof, as applicable, by the Paying Agent, promptly following the later of
(a) the Repurchase Event Repurchase Date with respect to such Security and (b)
the time of delivery of such Security to the Paying Agent by the Holder
thereof.  Securities in respect of which
a Repurchase Event Repurchase Notice has been given by the Holder thereof may
not be converted pursuant to Article 4 on or after the date of the
delivery of such Repurchase Event Repurchase Notice unless such Repurchase
Event Repurchase Notice has first been validly withdrawn as specified in
Section 3.3(f).

 

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

 

31

 

(1)          the name of the Holder;

 

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

 

(3)          the certificate number,
if any, of the Security in respect of which such notice of withdrawal is being
submitted;

 

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

 

(5)          the principal amount, if
any, of such Security which remains subject to the original Repurchase Event
Repurchase Notice and which has been or will be delivered for repurchase by the
Company; and

 

(6)          if the Security is not
then issued in certificated form, the Repurchase Event Repurchase Notice must
comply with the Applicable Procedures of the Depositary in effect at that time.

 

(g)         Deposit
of Repurchase Price.

 

Prior to 10:00 a.m., New York City time, on the applicable Repurchase
Event Repurchase Date, the Company shall deposit with the Paying Agent (or if
the Company or a Subsidiary or an Affiliate of any of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in
Section 2.4) an amount of Cash, and, if all or any portion of the
Repurchase Price ( or the Repurchase Event Make-Whole Premium, if any) is to be
paid in shares of Common Stock, such shares of Common Stock in immediately
available funds if deposited on such Business Day, sufficient to pay the
aggregate Repurchase Price (and the Repurchase Event Make-Whole Premium, if
any) of all the Securities or portions thereof which are to be repurchased on
such Repurchase Date.

 

If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the Business Day immediately following the
applicable Repurchase Date, Cash, and, if all or any portion of the Repurchase
Price (or the Repurchase Event Make-Whole Premium, if any) is to be paid in
shares of Common Stock, such shares of Common Stock, sufficient to pay the
Repurchase Price and the Repurchase Event Make-Whole Premium, if any, of any
Securities for which a Repurchase Event Repurchase Notice has been tendered and
not withdrawn pursuant to Section 3.3(f), then, immediately after such
Repurchase Date, such Securities will cease to be outstanding and interest on
such Securities will cease to accrue, whether or not such Securities are
delivered to the Paying Agent, and the rights of the Holders in respect thereof
shall terminate (other than the right to receive the Repurchase Price and the
Repurchase Event Make-Whole Premium, if any, upon delivery of such Securities).

 

(h)         Securities
Repurchased in Part.

 

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

 

32

 

(i)             Compliance
With Securities Laws Upon Repurchase of Securities.

 

When complying with the provisions of Section 3.3 hereof (provided,
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:

 

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

 

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

 

(3)          otherwise comply with
all federal and state securities laws so as to permit the rights and
obligations under this Section 3.3 to be exercised in the time and in the
manner specified therein.

 

To the extent that the provisions of any securities laws or regulations
conflict with the provisions of Section 3.3, the Company’s compliance with
such laws and regulations shall not in and of itself cause a breach of its
obligations under Section 3.3.

 

(j)             Company’s
Right to Elect Method of Payment of Repurchase Price.

 

Notwithstanding anything to the contrary in the Indenture, at any time
prior to the Final Maturity Date, the Company may irrevocably elect, in its
sole discretion without the consent of the Holders of the Securities, by
written notice to the Trustee and the Holders of the Securities, to satisfy its
obligation to pay the Repurchase Price in accordance with this Section 3.3
solely in Cash.

 

Section 3.4.                                Company Purchases of
Securities.

 

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

 

Section 3.5.                                Repayment to the
Company.

 

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

 

33

ARTICLE 4

 

CONVERSION

 

Section 4.1.           Conversion
Privilege.

 

(a)          Subject
to and upon compliance with the provisions of this Article 4, a Holder of
a Security shall have the right, at such Holder’s option, to convert all or any
portion (if the portion to be converted is $1,000 or an integral multiple of
$1,000) of such Security into shares of Common Stock at the Conversion Price in
effect on the date of conversion only as follows:

 

(1)          Conversion Based on
Sale Price of Common Stock.  The
Securities may be surrendered for conversion during any calendar quarter
(beginning with the quarter ending March 31, 2005) if the Sale Price of
the Common Stock for each of 20 or more consecutive Trading Days in the
Measurement Period of the immediately preceding calendar quarter exceeds 120%
of the Conversion Price in effect on the last Trading Day of the immediately
proceeding calendar quarter (in the event that the Conversion Price on such
last Trading Day of the immediately preceding calendar quarter is not the same
as the Conversion Price in effect for each of the Trading Days in such
Measurement Period, the Board of Directors shall make such adjustments as it,
in its discretion, deems appropriate in determining whether the foregoing
condition has been met).

 

(2)          Conversion Based on
Satisfaction of Trading Price Condition. 
The Securities may be surrendered for conversion during any five
consecutive Business Day period immediately following any five consecutive
Trading Day period (the “Security Measurement Period”) in which the
average Trading Price per $1,000 principal amount of Securities during such
Security Measurement Period was equal to or less than 98% of the average
Conversion Value during such Security Measurement Period; provided that
a Holder may not surrender Securities for conversion pursuant to this
Section 4.1(a)(2) after September 15, 2019 if, on any Trading Day
during the applicable Security Measurement Period, the Sale Price was between
100% and 120% of the Conversion Price in effect on that Trading Day.

 

(3)          Conversion Based on
Redemption.  The Securities may be
surrendered for conversion at any time prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding the Redemption Date, if such Security
has been called for redemption pursuant to Article 3 hereof.

 

(4)          Conversion Upon
Occurrence of Certain Corporate Transactions.  If either: 
(A) the Company is a party to any consolidation or merger of the Company
with or into another Person (or vice versa) pursuant to which all of the
outstanding shares of Common Stock are converted into Cash, securities or other
property; (B) any “person” or “group,” within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act, becomes the “beneficial owner,” as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly of 50% or more of the total voting
power of all classes of the Company’s Voting Stock entitled to vote generally
in the election of directors; (C) the Company sells, transfers, conveys or
otherwise disposes, in one or a series of related transactions, of all or
substantially all of its properties or assets to any “person” or “group” (as
such terms are defined above); or (D) the Company distributes to all or
substantially all holders of shares of its Common Stock, its assets, cash, debt
securities or certain rights to purchase its securities, which distribution has
a per share value

 

34

 

exceeding 10% of the closing price of the Common Stock
on the day preceding the declaration date for such distribution or (E) except
as described in clauses (A) to (D) above, the Company takes any action, or
becomes aware of any event, that would require adjustment to the Conversion
Rate pursuant to Section 4.4(c), (d), (e) and (f), then (x) in the case of
(A), (B) and (C) above, a Holder may surrender Securities for conversion at any
time from and after the date that is 15 Business Days before the date the
Company announces as the anticipated effective date of the transaction or event
until the date that is 15 Business Days after the actual effective date of the
transaction or event, and (y) in the case of (D) and (E) above, the Company
shall mail to Holders written notice of the distribution at least 20 days prior
to the record, effective or expiration date, as the case may be, of the distribution
or transaction and once the Company has given such notice, Holders may
surrender their Securities for conversion beginning on the date that the
Company mails such notice (or, if earlier, the date that the Company is
required to mail such notice pursuant to this Indenture) until the close of
business on the Business Day immediately preceding the “ex-dividend trading
date” of the distribution or the Company’s announcement that such distribution
or transaction shall not take place.

 

(b)         Whenever
any event described in Section 4.1(a) shall occur which shall cause the
Securities to become convertible into shares of Common Stock, the Company shall
(i) promptly deliver written notice of the convertibility of the Securities to
the Trustee and each Holder (provided that if such event would also
constitute a Repurchase Event, such notice shall comply with the provisions set
forth in Section 3.3(c)); and (ii) publicly announce that the Securities
have become convertible.  Such written
notice and public announcement shall include a description of such event, a
description of the periods during which the Securities shall be convertible and
the procedures by which a Holder may convert its Securities.  At the Company’s request, upon reasonable
prior notice agreed to by the Trustee, the Trustee shall, in the Company’s name
and at the Company’s expense, deliver to each Holder the written notice of the
convertibility of the Securities required by this Section 4.1(b); provided,
that the form and content of such notice shall be prepared by the Company.

 

(c)          The
Company shall determine at the end of each applicable period whether the
Securities shall be convertible as a result of the occurrence of an event
specified in Section 4.1(a)(1) and, if the Securities shall be so convertible,
the Company shall promptly deliver to the Trustee written notice thereof.  Upon receipt of reasonable evidence from any
Holder that the Trading Price per $1,000 principal amount of notes is equal to
or less than 98% of the Conversion Value, the Company shall instruct the Bid
Solicitation Agent to determine the Trading Price for each of the next five
Trading Days after receipt of such notice and on each subsequent Trading Day
thereafter until the trading price condition described in Section 4.1(a)(2)
is no longer satisfied.  Notwithstanding
anything contained in this Indenture to the contrary, the Bid Solicitation
Agent shall have no obligation to determine the Trading Price unless the
Company so requests and the Company shall have no obligation to make such
request unless a Holder provides the Company with such reasonable evidence that
the trading price condition has been satisfied.

 

Section 4.2.           Right
to Receive Repurchase Event Make-Whole Premium.

 

If any of the events set forth in Section 4.1(a)(4) occur prior to
September 15, 2009, any Holder that surrenders its Securities within the
timeframe set forth in Section 4.1(a)(4) shall also be entitled to receive
the Repurchase Event Make-Whole Premium in accordance with the terms of Section 3.3(b).

 

Section 4.3.           Conversion
Procedures.

 

(a)          General.

 

35

 

The Company shall not issue any fraction of a share of Common Stock in
connection with any conversion of Securities, but instead shall make a Cash
payment (calculated to the nearest cent) equal to such fraction multiplied by
the Sale Price of the Common Stock on the last Trading Day prior to the date of
conversion.

 

Notwithstanding the foregoing, a Security in respect of which a Holder
has delivered a Purchase Notice or Repurchase Event Purchase Notice exercising
such Holder’s option to require the Company to repurchase such Security may be
converted only if such notice of exercise is withdrawn in accordance with
Sections 3.2(c) or 3.3(f) hereof, as the case may be, prior to the close of
business on the Business Day immediately preceding the applicable Purchase Date
or Repurchase Date, as the case may be, unless the Company defaults in the
payment of the Purchase Price or the Repurchase Price.

 

Before any Holder of a Security shall be entitled to convert such
Security, such Holder shall, in the case of Securities issued in global form,
comply with the Applicable Procedures of the Depositary in effect at that time,
and in the case of Certificated Securities, surrender such Securities, duly
endorsed to the Company or in blank, at the office of the Conversion Agent, and
shall give written notice to the Company at said office or place in the form of
the Conversion Notice attached to the Security (the “Conversion Notice”)
that such Holder elects to convert the same and shall state in writing therein
the principal amount of Security to be converted and the name or names (with
addresses) in which such Holder wishes the certificate or certificates for
Common Stock to be issued.

 

Before any such conversion, a Holder also shall pay all funds required,
if any, relating to interest on the Securities, as provided in
Section 4.10, and all taxes or duties, if any, as provided in
Section 4.9.

 

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 or Cash
which shall be deliverable upon conversion shall be computed on the basis of
the aggregate principal amount of the Security (or specified portions thereof
to the extent permitted thereby) so surrendered.  Subject to the next succeeding sentence, the
Company will, in accordance with the provisions hereof, issue and deliver at
said office or place to such Holder of a Security, or to such Holder’s nominee
or nominees, certificates (other than in the case of Holders of Securities in
book-entry form with the Depositary, which shares shall be delivered in
accordance with the Depositary customary practices) for the number of full
shares of Common Stock to which such Holder shall be entitled as aforesaid,
together with Cash payable as a result of such conversion or in lieu of any
fraction of a share to which such Holder would otherwise be entitled.  The Company shall not be required to deliver
certificates for shares of Common Stock while the stock transfer books for such
stock or the security register are duly closed for any purpose, but
certificates for shares of Common Stock shall be issued and delivered as soon
as practicable after the opening of such books or security register.

 

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

 

A Security shall be deemed to have been converted as of the close of
business on the date of the surrender of such Security for conversion as
provided above (such date, the “Conversion Date”), and the

 

36

 

person or persons
entitled to receive the Common Stock, if any, issuable upon such conversion
shall be treated for all purposes as the record Holder or Holders of such
Common Stock as of the close of business on such date.  Upon conversion, all obligations under the
Securities so converted will be deemed satisfied, including with respect to any
accrued and unpaid interest (including Contingent Interest, if any, and Special
Interest, if any).

 

In case any Certificated Security shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall, upon the written
order of the Company, authenticate and deliver to the Holder of the Security so
surrendered, without charge to such Holder (subject to the provisions of Section 4.8
hereof), a new Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Certificated Securities.

 

(b)         Conversion
on or Before the Final Notice Date.

 

If a Holder elects to convert all or any portion of a Security into
shares of Common Stock as set forth in Section 4.3 and the Company
receives such Holder’s Conversion Notice on or prior to the day that is 10 days
prior to the Final Maturity Date, or with respect to Securities called for
redemption pursuant to Article 3 hereof, the applicable Redemption Date
(the “Final Notice Date”), the Company may choose to satisfy all or any
portion of the Securities surrendered for Conversion (the “Conversion
Obligation”) in Cash.  Upon such
election, the Company will notify such Holder through the Trustee of the dollar
amount to be satisfied in Cash (which must be expressed either as 100% of the
Conversion Obligation or as a fixed dollar amount) at any time on or before the
date that is two Business Days following the Conversion Agent’s receipt of the
Notice of Conversion (such period, the “Cash Settlement Notice Period”).  If the Company elects to pay Cash for any
portion of the shares of Common Stock otherwise issuable to the Holder, the
Holder may retract the Notice of Conversion at any time during the two Business
Day period beginning on the day after the final day of the Cash Settlement
Notice Period (the “Conversion Retraction Period”); provided that
no such retraction can be made (and a Conversion Notice shall be irrevocable)
(i) if the Company does not elect to deliver Cash in lieu of shares of Common
Stock (other than Cash in lieu of fractional shares) or (ii) as provided in
Section 4.1.  If the Company elects
to satisfy all or a portion of its Conversion Obligations in Cash and the
Notice of Conversion has not been retracted, then settlement (in Cash or a
combination of Cash and shares of Common Stock) will occur on the third
Business Day following the 10 Trading Days beginning on the Trading Day
immediately following the final day of the Conversion Retraction Period (the “Cash
Settlement Averaging Period”).  If
the Company elects to satisfy the entire Conversion Obligation in shares of
Common Stock, then settlement will occur on the third Business Day following
the Conversion Date.  With respect to any
Notice of Conversion received by the Company prior to the Final Notice Date and
not retracted pursuant to this Section 4.3(b), the “Conversion
Settlement Distribution” for any Security subject to such Notice of
Conversion shall consist of Cash, Common Stock or a combination thereof, as
selected by the Company as set forth below:

 

(1)          if the Company elects to
satisfy the entire Conversion Obligation in shares of Common Stock, the Conversion
settlement Distribution shall be a number of shares of Common Stock for each
$1,000 principal amount of the Securities to be converted equal to the
Conversion Rate, plus Cash for any fractional shares;

 

(2)          if the Company elects to
satisfy the entire Conversion Obligation in Cash, the Conversion Settlement
Distribution shall be Cash for each $1,000 principal amount of the Securities
in an amount equal to the product of:

 

(i)                                     the
applicable Conversion Rate, and

 

37

 

(ii)                                  the
average of the Sale Price of the Common Stock during the Cash Settlement
Averaging Period; and

 

(3)          If we elect, for each
$1,000 principal amount of the Securities, to satisfy a fixed portion (other
than 100%) of the Conversion Obligation in Cash (the “Fixed Cash Portion’’),
we will deliver to you such Fixed Cash Portion and a number of shares of Common
Stock equal to (A) the then current Conversion Rate, minus (B) the Fixed Cash
Portion divided by the average Sale Price during the Cash Settlement Averaging
Period; provided, however, that the number of shares of Common
Stock shall not be less than zero.

 

(c)          Conversion
After the Final Notice Date.  If a
Holder elects to convert all or any portion of a Security into shares of Common
Stock as set forth in this Section 4.3 and the Company receives such
Holder’s Notice of Conversion after the Final Notice Date, the Company will not
notify such Holder of its election to satisfy all or a portion of the
Conversion Obligation in Cash.  If the Company
elects to satisfy all or any portion of the Conversion Obligation in Cash, the
Company shall send, on or after the Final Notice Date, a single notice to the
Trustee of the dollar amount to be satisfied in Cash (which shall be expressed
as either 100% of the Conversion Obligation or as a fixed dollar amount).  Settlement amounts shall be computed and
settlement dates shall be determined for any Securities with respect to which a
Holder’s Notice of Conversion is received by the Company after the Final Notice
Date in accordance with the procedures set forth in Section 4.3(b); provided
that the “Cash Settlement Averaging Period” shall be the 10 Trading Day Period
beginning on the Trading Day after receipt of such Holder’s Conversion Notice
and settlement (in Cash and/or Common Stock) shall occur on the third business
day following the final day of such Cash Settlement Averaging Period.

 

(d)         Company
Right to Irrevocably Elect Payment. 
Notwithstanding anything to the contrary in the Indenture, at any time
prior to the Final Maturity Date, the Company may irrevocably elect, in its
sole discretion without the consent of the Holders of the Securities, by
written notice to the Trustee and the Holders of the Securities, to satisfy a
portion of the Conversion Obligation for all Securities for conversion after
the date of such election (the “Election Date”) by paying in Cash up to
100% of the principal amount of the Securities so converted.  After making such an election, the Company
shall satisfy the remainder of the Conversion Obligation in Common Stock, to
the extent the Conversion Obligation exceeds the principal amount or the
portion of the principal amount of the Securities the Company elects to pay in
Cash.  In the event that the Company
receives a Notice of Conversion after the Election Date:  the Notice of Conversion will not be
retractable; the Cash Settlement Averaging Period shall be the 10 Trading Day
period beginning on the day after the Company’s receipt of the Conversion
Notice; and the Conversion Settlement Distribution for each $1,000 principal
amount of the Securities shall consist of (i) such Cash amount (“Election
Amount”) equal to the applicable Conversion Rate multiplied by the average
Closing Price of Common Stock during the Cash Settlement Averaging Period (provided,
however, that the Election Amount will not be more than 100% of the
principal amount of a Security) and (ii) a number of shares of Common Stock
equal to (A) the then current Conversion Rate, minus (B) the Fixed Cash Portion
divided by the average Sale Price during the Cash Settlement Averaging Period; provided,
however, that the number of shares of Common Stock shall not be less
than zero.

 

Section 4.4.           Adjustment
of Conversion Rate.

 

The Conversion Rate shall be subject to adjustment from time to time as
follows:

 

(a)          In
case the Company shall (1) pay a dividend in shares of Common Stock to all
holders of Common Stock, (2) make a distribution in shares of Common Stock to
all holders of Common Stock, (3) subdivide the outstanding shares of Common
Stock into a greater number of shares of Common Stock or (4) combine the
outstanding shares of Common Stock into a smaller number of shares of Common

 

38

 

Stock, the
Conversion Rate in effect immediately prior to such action shall be adjusted so
that the Holder of any Security thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock which such Holder
would have owned immediately following such action had such Securities been
converted immediately prior thereto.  Any
adjustment made pursuant to this Section 4.4(a) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision or combination.

 

(b)         In
case the Company shall issue rights or warrants to all or substantially all
holders of Common Stock, entitling them, for a period expiring not more than
sixty (60) days immediately following the record date for the determination of
holders of Common Stock entitled to receive such rights or warrants, to
subscribe for or purchase shares of Common Stock (or securities convertible
into or exchangeable or exercisable for Common Stock), at a price per share (or
having a conversion, exchange or exercise price per share) that is less than
the Current Market Price (as determined pursuant to Section 4.4(h)) of
Common Stock on the record date for the determination of holders of Common Stock
entitled to receive such rights or warrants, the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to
such record date by a fraction of which (i) the numerator shall be the sum of
(A) the number of shares of Common Stock outstanding at the close of business
on such record date and (B) the aggregate number of shares (the “Underlying
Shares”) of Common Stock underlying all such issued rights or warrants
(whether by exercise, conversion, exchange or otherwise), and (ii) the
denominator shall be the sum of (A) the number of shares of Common Stock
outstanding at the close of business on such record date and (B) the number of
shares of Common Stock which the aggregate exercise, conversion, exchange or
other price at which the Underlying Shares may be subscribed for or purchased
pursuant to such rights or warrants would purchase at such Current Market
Price.  Such increase shall become
effective immediately prior to the opening of business on the day following
such record date.  In no event shall the
Conversion Rate be decreased pursuant to this Section 4.4(b).

 

(c)          In
case the Company shall dividend or distribute to all or substantially all
holders of Common Stock shares of Capital Stock of the Company (other than
Common Stock), evidence of Indebtedness or other assets (other than dividends
or distributions requiring an adjustment to the Conversion Rate in accordance
with Sections 4.4(d), 4.4(e) or 4.4(f), or shall dividend or distribute to all
or substantially all holders of Common Stock rights or warrants to subscribe
for or purchase securities (other than those referred to in
Section 4.4(b)), then in each such case the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to the
close of business on the record date for the determination of shareholders
entitled to such dividend or distribution by a fraction of which (i) the
numerator shall be the Current Market Price (as determined pursuant to
Section 4.4(h)) on such record date and (ii) the denominator shall be
amount equal to (A) such Current Market Price less (B) the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and described in a Board Resolution), on such
record date, of the portion of the shares of Common Stock, evidences of
Indebtedness, assets, rights and warrants to be divided or distributed
applicable to one share of Common Stock, such increase to become effective
immediately prior to the opening of business on the day following such record
date; provided, however, that if such denominator is equal to or
less than zero, then in lieu of the foregoing adjustment to the Conversion
Rate, adequate provision shall be made so that each Holder shall have the right
to receive upon conversion of its Securities, in addition to the shares of
Common Stock issuable (and Cash, if any, payable) upon such conversion, an
amount of shares of Capital Stock, evidences of Indebtedness, assets, rights
and/or warrants that such Holder would have received had such Holder converted
all of its Securities on such record date. 
Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants (other than those referred to in
Section 4.4(b)) (collectively, “Rights”) pro rata to holders of
Common Stock, the Company may, in lieu of making any adjustment pursuant to
this Section 4.4(c), make proper provision so that each Holder of a
Security who converts such Security (or

 

39

 

any portion
thereof) on or after the record date for such distribution and prior to the
expiration or redemption of the Rights shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable (and Cash, if
any, payable ) upon such conversion ( the “Conversion Shares”), a number
of Rights to be determined as follows: 
(i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates evidencing such
Rights (the “Distribution Date”), the same number of Rights to which a
holder of a number of shares of Common Stock equal to the number of shares of
Conversion Shares would be entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.  Any distribution of rights or warrants
pursuant to a shareholders’ rights plan complying with the requirements set
forth in the preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants pursuant to this Section 4.4(c).  In no event shall the Conversion Rate be
decreased pursuant to this Section 4.4(c).

 

(d)         In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock Cash, excluding any Cash dividend on its Common Stock to the
extent that the aggregate Cash dividend on its Common Stock in any quarterly
period does not exceed $.10 per share (appropriately adjusted from time to time
for any stock dividends on or subdivisions or combinations of Common Stock)
(the “Dividend Threshold Amount”), the Conversion Rate shall be adjusted
by multiplying (i) the Conversion Rate by (ii) a fraction (A) the numerator of
which shall be the Current Market Price on the Record Date of such distribution
and (B) the denominator of which shall be the same Current Market Price as used
in the numerator minus the amount per share of such Dividend Increase (as
defined below) or distribution.  If an
adjustment is required to be made under this Section 4.4(d) as a result of
a Cash dividend in any quarterly period that exceeds the Dividend Threshold
Amount, the adjustment shall be based upon the amount by which the distribution
exceeds the Dividend Threshold Amount (the “Dividend Increase”). If an
adjustment is otherwise required to be made under this Section 4.4(d), the
adjustment shall be based upon the full amount of the distribution.

 

(e)          In
case the Company or Subsidiary shall distribute cash or other consideration in
respect of a tender offer or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock where the sum of the
aggregate amount of such cash distributed and the aggregate fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and set forth in a Board Resolution), as of
the Expiration Date (as defined below), of such other consideration distributed
(such sum, the “Aggregate Amount”) expressed as an amount per share of
Common Stock validly tendered or exchanged, and not withdrawn, pursuant to such
tender offer or exchange offer as of the Expiration Time (as defined below)
(such tendered or exchanged shares of Common Stock, the “Purchased Shares”)
exceeds the Current Market Price (as determined pursuant to
Section 4.4(h)) on the last date (such last date, the “Expiration Date”)
on which tenders or exchanges could have been made pursuant to such tender
offer or exchange offer (as the same may be amended through the Expiration
Date), then the Conversion Rate shall be increased by multiplying the
Conversion Rate in effect immediately prior to the close of business on the
Expiration Date by a fraction (i) whose numerator is equal to the sum of (A)
the Aggregate Amount and (B) the product of (1) the Current Market Price (as
determined pursuant to Section 4.4(h)) on the Expiration Date and (2) an
amount equal to (a) the number of shares of Common Stock outstanding as of the
last time (the “Expiration Time”) at which tenders or exchanges could
have been made pursuant to such tender offer or exchange offer (including all
Purchased Shares) less (b) the Purchased Shares and (ii) whose denominator is
equal to the product of (A) the number of shares of Common Stock outstanding as
of the Expiration Time (including all Purchased Shares) and (B) the Current
Market Price on the Expiration Date.

 

40

 

An increase, if any, to the Conversion Rate pursuant to this
Section 4.4(e) shall become effective immediately prior to the opening of
business on the Business Day following the Expiration Date.  In the event that the Company or a Subsidiary
is obligated to purchase shares of Common Stock pursuant to any such tender
offer or exchange offer, but the Company or such Subsidiary is permanently
prevented by applicable law from effecting any such purchases, or all such
purchases are rescinded, then the Conversion Rate shall again be adjusted to be
the Conversion Rate which would then be in effect if such tender offer or
exchange offer had not been made.  If the
application of this Section 4.4(e) to any tender offer or exchange offer
would result in a decrease in the Conversion Rate, no adjustment shall be made
for such tender offer or exchange offer under this Section 4.4(e).

 

(f)            If
(i) a person other than the Company or any Subsidiary shall distribute cash or
other consideration in respect of a tender or exchange offer made by such
person for all or any portion of the Common Stock; (ii) as of the last date
(the “Third Party Expiration Date”) on which tenders or exchanges could
have been made pursuant to such tender offer or exchange offer (as the same may
be amended through such date), the Board of Directors does not recommend
rejection of such tender offer or exchange offer; (iii) such person (including
such person’s “affiliates,” within the meaning of Rule 144(a)(1) under the
Securities Act, and including any “syndicate” or “group,” within the meaning of
Section 13(d)(3) of the Exchange Act, that includes such person) would,
assuming that all shares sought for tender or exchange pursuant to such tender
or exchange offer are validly tendered or exchanged pursuant to such tender or
exchange offer, “beneficially own” (within the meaning of Rule 13d-3 under the
Exchange Act) at least 10% of the total shares of Common Stock outstanding
immediately after the Third Party Expiration Time (as defined below); and (iv)
the sum of the aggregate amount of such cash and the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and described in a Board Resolution), as of
the Third Party Expiration Date, of such other consideration (such sum, the “Third
Party Aggregate Amount”), expressed as an amount per share of Common Stock
validly tendered or exchanged, and not withdrawn, pursuant to such tender offer
or exchange offer as of the last time (the “Third Party Expiration Time”)
at which tenders or exchanges could have been make pursuant to such tender
offer or exchange offer (such tendered or exchanged shares of Common Stock, the
“Third Party Purchased Shares”), exceeds the Current Market Price (as
determined pursuant to Section 4.4(h)) on the Expiration Date, then the
Conversion Rate shall be adjusted by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Third Party Expiration Date
by a fraction (A) whose numerator is equal to the sum of (1) the Third Party
Aggregate Amount and (2) the product of (a) the Current Market Price (as
determined pursuant to Section 4.4(h)) on the Third Party Expiration Date
and (b) an amount equal to (i) the number of shares of Common Stock outstanding
as of the Third Party Expiration Time (including all Third Party Purchased
Shares) less (ii) the Third Party Purchased Shares and (B) whose denominator is
equal to the product of (1) the number of shares of Common Stock outstanding as
of the Third Party Expiration Time (including all Third Party Purchased Shares)
and (2) the Current Market Price (as determined pursuant to
Section 4.4(h)) on the Third Party Expiration Date.

 

An adjustment, if any, to the Conversion Rate pursuant to this
Section 4.4(f) shall become effective immediately prior to the opening of
business on the Business Day following the Third Party Expiration Date.  In the event that such tender offer or
exchange offer is permanently prevented by applicable law from being effected,
or all purchases pursuant to such tender offer or exchange offer are rescinded,
then the Conversion Rate shall again be adjusted to be the Conversion Rate
which would then be in effect if such tender offer or exchange offer had not
been made.  If the application of this
Section 4.4(f) to any tender offer or exchange offer would result in a
decrease in the Conversion Rate, no adjustment shall be made for such tender
offer or exchange offer under this Section 4.4(f).

 

(g)         In
addition to the foregoing adjustments in Subsections (a), (b), (c), (d), (e)
and (f) above, the Company, from time to time and to the extent permitted by
law, may increase the Conversion Rate by any

 

41

 

amount for a
period of at least 20 days or such longer period as may be required by law, if
the Board of Directors has made a determination, which determination shall be
conclusive, that such increase would be in the best interests of the Company.  Such Conversion Rate increase shall be
irrevocable during such period.  The
Company shall give notice to the trustee and cause notice of such increase to
be mailed to each Holder of Securities at such Holder’s address as the same
appears on the registry books of the Registrar, at least 15 days prior to the
date on which such increase commences.

 

(h)         For
the purposes of any computation under Subsections (a), (b), (c) or (d) above of
Section 4.4, the Current Market Price on the date fixed for determination
of the shareholders entitled to receive the issuance or distribution requiring
such computation (the “Determination Date”) shall be determined during
the period immediately preceding the Determination Date, and, for the purpose
of any computation under Sections 4.4(e) or 4.4(f), the Current Market Price on
the Expiration Date or Third Party Expiration Date, as the case may be, for the
tender offer or exchange offer requiring such computation shall be determined
during the period immediately preceding the Expiration Date or Third Party Expiration
Date, as the case may be.

 

Section 4.5.           No
Adjustment.

 

No adjustment in the Conversion Rate shall be required if such
adjustment would reduce the Conversion Price below $1.00 or until cumulative
adjustments would result in a change of at least 1% or more of the Conversion
Price as last adjusted (or, if never adjusted, the initial Conversion Price); provided,
however, that any adjustments which by reason of this Section 4.5
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment.  All
calculations under this Article 4 shall be made to the nearest cent or to
the nearest one-millionth of a share, as the case may be.

 

If any rights, options or warrants issued by the Company and requiring
an adjustment to the Conversion Rate in accordance with Section 4.4 are
only exercisable upon the occurrence of certain triggering events, then the
Conversion Rate will not be adjusted as provided in Section 4.4 until the
earliest of such triggering events occurs. 
Upon the expiration or termination of any rights, options or warrants
issued by the Company (which rights, options or warrants require an adjustment
to the Conversion Rate in accordance with Section 4.4) without the
exercise of such rights, options or warrants, the Conversion Rate then in
effect at the time of such expiration or termination shall be adjusted to the
Conversion Rate that would then be in effect had such rights, options or
warrants never been issued.

 

If any dividend or distribution is declared and the Conversion Rate is
adjusted pursuant to Section 4.4 on account of such dividend or
distribution, but such dividend or distribution is thereafter not paid or made,
the Conversion Rate shall again be adjusted to the Conversion Rate which would
then be in effect had such dividend or distribution not been declared.

 

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

 

Section 4.6.           Notice
of Adjustment.

 

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

 

(1)          the Company shall
forthwith place on file with the Trustee and any Conversion Agent for such
securities a certificate of the Treasurer of the Company, stating the adjusted
Conversion

 

42

 

Rate determined as provided herein and setting forth
in reasonable detail such facts as shall be necessary to show the reason for
and the manner of computing such adjustment; and

 

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

 

(b)         If
the Company takes any action, or becomes aware of an event, that would require
an adjustment to the Conversion Rate as described in Section 4.4(b), (c),
(d), (e) and (f), the Company shall mail to Holders a written notice of such
action or event at least 20 days prior to the record, effective or expiration
date, as the case may be, of the transaction.

 

Section 4.7.           Consolidation
or Merger of the Company.

 

If any of the following events occurs, namely:

 

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

 

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

 

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

 

the Company or the
successor or purchasing person, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the TIA as in force
at the date of execution of such supplemental indenture, if such supplemental
indenture is then required to so comply) providing that the Holder’s right to
convert a Security into Common Stock shall be changed to a right to convert a
Security into the kind and amount of shares of stock and other securities or
property or assets (including Cash) which such Holder would have been entitled
to receive upon such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance had such Securities been converted
into Common Stock immediately prior to such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance
assuming such holder of Common Stock did not exercise its rights of election,
if any, as to the kind or amount of securities, Cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance (provided, that if the kind or amount of securities, Cash or
other property receivable upon such merger, consolidation, statutory share
exchange, sale or conveyance is not the same for each share of Common Stock in
respect of which such rights of election shall not have been exercised (“Non-Electing
Share”), then for the purposes of this Section 4.7, the kind and
amount of securities, Cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance for each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares).  Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 4.  If, in the case of any such

 

43

 

reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of Common Stock includes shares of stock or other securities and assets of
a corporation other than the successor or purchasing corporation, as the case
may be, in such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other corporation and shall contain
such additional provisions to protect the interests of the Holders of the
Securities as the Board of Directors shall reasonably consider necessary by
reason of the foregoing.

 

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

 

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

 

If this Section 4.7 applies to any event or occurrence,
Section 4.3 shall not apply.

 

Section 4.8.           Company
to Reserve Stock; Registration; Listing.

 

(a)          The
Company shall at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued shares of Common Stock for the
purpose of effecting the conversion of the Securities, such number of its duly
authorized shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all Securities then outstanding into such Common Stock
at any time (assuming that, at the time of the computation of such number of
shares or securities, all such Securities would be held by a single
Holder).  The Company covenants that all
shares of Common Stock which may be issued upon conversion of Securities will
upon issue be fully paid and nonassessable and free from all liens and charges
and, except as provided in Section 4.9, taxes with respect to the issue
thereof.

 

(b)         If
any shares of Common Stock which would be issuable upon conversion of
Securities hereunder require registration with or approval of any governmental
authority before such shares or securities may be issued upon such conversion,
the Company will use its commercially reasonable efforts to cause such shares
or securities to be duly registered or approved, as the case may be.  The Company further covenants that so long as
the Common Stock shall be listed on the New York Stock Exchange, the Company
will use its commercially reasonable efforts, if permitted by the rules of the
New York Stock Exchange, to have and keep approved for listing on the New York
Stock Exchange (subject to notice of official issuance) all Common Stock
issuable upon conversion of the Securities, and the Company will use its
commercially reasonable efforts to list the shares of Common Stock required to
be delivered upon conversion of the Securities prior to such delivery upon any
other national securities exchange or automated quotation system upon which the
outstanding Common Stock is listed or quoted at the time of such delivery.

 

Section 4.9.           Taxes
on Conversion.

 

The issue of stock certificates on conversion of Securities shall be
made without charge to the converting Holder for any documentary, stamp or
similar issue or transfer taxes in respect of the issue thereof, and the
Company shall pay any and all documentary, stamp or similar issue or transfer
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant hereto.  The Company shall not, however, be required
to pay any such tax which may be payable in respect of any transfer involved in
the issue or delivery of shares of Common Stock or the portion, if

 

44

 

any, of the
Securities which are not so converted in a name other than that in which the
Securities so converted were registered, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of such tax or has established to the satisfaction of the Company
that such tax has been paid.

 

The Company agrees, and each Holder is deemed to agree, that delivery
to such Holder of the full number of shares of Common Stock into which each
Security is convertible, together with any Cash payment of such Holder’s
fractional shares, will be treated as a contingent payment (in an amount equal
to the sum of the then fair market value of such Common Stock and such Cash
payment (as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive and described in a Board Resolution),
if any) on the Securities for purposes of the Contingent Payment Debt
Regulations governing contingent payment debt obligations.

 

Nothing contained herein shall preclude any income tax withholding
required by law or regulation upon conversion of the Securities, and at the
Company’s request, Holders shall be responsible for satisfying any such
withholding.

 

Section 4.10.        Conversion
after Record Date.

 

Except as provided in this Section 4.10, a converting Holder of
Securities shall not be entitled to receive any accrued and unpaid interest
(including Contingent Interest, if any) on any such Securities being converted.  By delivery to the Holder of the number of
shares of Common Stock or other consideration issuable or payable upon
conversion in accordance with this Article 4, any accrued and unpaid
interest (including Contingent Interest, if any and Special Interest, if any),
on such Securities will be deemed to have been paid in full.  If any Securities are surrendered for
conversion subsequent to the Record Date preceding an Interest Payment Date but
prior to such Interest Payment Date, the Holder of such Securities at the close
of business on such Record Date shall receive the interest payable on such
Security on such Interest Payment Date notwithstanding the conversion
thereof.  Securities surrendered for
conversion during the period from the close of business on any Record Date
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date shall (except in the case of Securities which have been called for
redemption on a Redemption Date within such period) be accompanied by payment
from converting Holders, for the account of the Company, in New York Clearing
House funds, or other funds of an amount equal to the interest payable on such
Interest Payment Date (excluding any overdue interest, if applicable) on the
Securities being surrendered for conversion; provided, however,
if the Company elects to redeem Securities on a date that is after the Regular
Record Date but prior to the corresponding Interest Payment Date, and such
Holder elects to convert those Securities, the Holder will not be required to
pay the Company, at the time that Holder surrenders those Securities for
conversion, the amount of interest such Holder will have received on the
Interest Payment Date.

 

Except as provided in this Section 4.10, no adjustments in respect
of payments of interest, including Contingent Interest, if any, and Special
Interest, if any, on Securities surrendered for conversion or any dividends or
distributions or interest on the Common Stock issued upon conversion shall be
made upon the conversion of any Securities.

 

Section 4.11.        Company
Determination Final.

 

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

 

45

 

Section 4.12.        Responsibility
of Trustee for Conversion Provisions.

 

The Trustee has no duty to determine when an adjustment under this
Article 4 should be made, how it should be made or what it should be.  Unless and until a Trust Officer of the
Trustee receives a certificate delivered pursuant to Section 4.6 setting
forth an adjustment of the Conversion Rate, the Trustee may assume without
inquiry that no such adjustment has been made and that the last Conversion Rate
of which the Trustee has knowledge remains in effect.  The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities.  The Trustee shall not be
responsible for any failure of the Company to comply with this
Article 4.  Each Conversion Agent
other than the Company shall have the same protection under this
Section 4.12 as the Trustee.

 

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

 

Section 4.13.        Automatic
Conversion by the Company.

 

(a)          The
Company may elect to automatically convert the Securities (an “Automatic
Conversion”) at any time prior to maturity if the Closing Price of the
Company’s Common Stock has exceeded 150% of the Conversion Price for at least
20 Trading Days during a 30-day Trading Day period, ending within five Trading
Days prior to the date of the Automatic Conversion Notice (as defined below); provided,
however, that, during the two-year period commencing on the date of the
last delivery of the Securities under this Indenture, the Company may only
automatically convert the Securities if, in accordance with the terms of the
Registration Rights Agreement, a registration statement registering the resale
of the Securities and Common Stock issuable upon conversion of the Securities
is declared effective under the Securities Act prior to the date of the
Automatic Conversion Notice and such registration statement remains effective
on the date selected for Automatic Conversion (the “Automatic Conversion
Date”).  In the event that the date
on which the Securities will be automatically converted occurs on or prior to
September 15, 2009, the Company will pay the Make-Whole Interest Payment
on the Automatic Conversion Date.

 

The Make-Whole Interest Payment shall equal five full years of interest
on the Securities, less any interest actually paid or provided for on the
Securities prior to such Automatic Conversion. 
The Company may, at its option, pay the Make-Whole Interest Payment in
Cash or in Common Stock.  In the event
that the Company elects to pay the Make-Whole Interest Payment in Common Stock,
the shares of Common Stock will be valued at 95% of the average Sale Price for
each of the five Trading Days immediately preceding the second Trading Day
prior to the Automatic Conversion Date.

 

(b)         Unless
the Company shall have theretofore called for redemption all of the outstanding
Securities, the Company shall give to all Holders notice (the “Automatic
Conversion Notice”) of the Automatic Conversion not more than 30 days but
not less than 20 days prior to the Automatic Conversion Date.  The Company shall also deliver a copy of such
Automatic Conversion Notice to the Trustee. 
At the Company’s request, the Trustee shall give the Automatic
Conversion Notice in the Company’s name and at the Company’s expense; provided,
however, that the Company makes such request at least three Business
Days (unless a shorter period shall be satisfactory to the Trustee) prior to
the date by which such Automatic Conversion Notice must be given to the Holder
in accordance with this Section 4.13(b); provided, further, that
the text of the Automatic Conversion Notice shall be prepared by the Company.

 

46

 

(c)          Each
Automatic Conversion Notice shall state:

 

(1)          the Automatic Conversion
Date,

 

(2)          whether the Make-Whole
Interest Payment, if any, shall be paid by the Company and, if so, if it shall
be paid in Cash or by delivery of shares of Common Stock,

 

(3)          the place or places
where such Securities are to be surrendered for conversion and accrued and
unpaid Make-Whole Interest Payment, if any, and

 

(4)          the Conversion Price
then in effect.

 

(d)         In
the event of an Automatic Conversion, the Company shall issue and deliver a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion of the Securities and the Make-Whole Interest Payment,
if any, due on such Securities along with any Cash in respect of any fractional
shares of Common Stock otherwise issuable upon conversion or in the event that
the Company elects to pay Make-Whole Interest Payment, if any, in Common Stock
instead of Cash, for payment to the holder as promptly after the Automatic
Conversion Date, as practicable in accordance with the provisions of this
Article 4, but in no event later than the close of business of the next
succeeding third Business Day following such Automatic Conversion Date.

 

(e)          All
Securities subject to the Automatic Conversion shall be delivered to the
Trustee to be cancelled at the direction of the Trustee, which shall dispose of
the same as provided in Section 2.8 hereof.

 

(f)            If
any of the foregoing provisions or other provisions of Section 4.13 are
consistent with applicable law at the time of such Automatic Conversion, such
law shall govern.

 

Section 4.14.        Notification
to Trustee.

 

If the Company is obligated to pay any Make-Whole Interest Payment upon
Automatic Conversion pursuant to Section 4.13(a), it shall deliver to the
Trustee a certificate setting forth (i) the amount of interest actually paid or
provided for by the Company with respect to the affected Securities prior to
the Automatic Conversion Date, and (ii) if such Make-Whole Interest Payment
upon Automatic Conversion is payable in Common Stock, the number of shares of
Common Stock which is equal to the Make-Whole Interest Payment, valued at 95%
of the average of the Closing Price for each of the five Trading Days
immediately preceding the second Trading Day prior to the Automatic Conversion
Date.  Unless and until the Trustee shall
receive such certificate, it shall not be charged with knowledge of the facts
required by this Section 4.14 to be set forth therein.  In no event will the Trustee be required to
inquire into or verify the information required to be set forth in such
certificate, other than the amount of interest actually paid by the Trustee as
paying agent with respect to the affected Securities.  The Trustee need not inquire into or confirm
any amount of interest provided for by the Company, unless such amount has
actually been delivered to the Trustee as paying agent and is being held by the
Trustee as paying agent pending distribution to the affected holders.

 

Section 4.15.        Unconditional
Right of Holders to Convert.

 

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

 

47

 

Section 4.16.        Repayment
to the Company.

 

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

 

ARTICLE 5

 

SUBSIDIARY
GUARANTEE

 

Section 5.1.           Guarantee.

 

Subject to this Article 5, the Guarantor hereby, unconditionally
guarantees to each Holder of a Security authenticated and delivered by the
Trustee, to each holder of shares of Common Stock issued upon conversion of a
Security or issued pursuant to Article 3 and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Securities or the obligations of the Company hereunder or
thereunder, that:  (a) the principal of,
premium, if any, and interest (including Contingent Interest, if any, and
Special Interest, if any) on the Securities will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and premium, if any, and interest or
additional interest, if any, on the Securities or such shares, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder or under the Registration Rights Agreement will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and (b)
in case of any extension of time of payment or renewal of any Securities, any
such shares or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.  Failing payment when due of
any amount so guaranteed or any performance so guaranteed for whatever reason,
Guarantor shall be obligated to pay the same immediately.  Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection. 
For purposes of this Article 5, “Holder” shall be deemed to include
any holder of shares of Common Stock issued upon conversion of a Security or
issued pursuant to Article 3.

 

Subject to this Article 5, Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity, regularity
or enforceability of the Securities or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor.  Notwithstanding
the foregoing, Guarantor shall, with respect to any claim, action or proceeding
against Guarantor relating to this Indenture, the Securities or Guarantor’s
Subsidiary Guarantee, be entitled to assert a defense of prior payment or
performance by Guarantor of the obligations that are the subject of such claim,
action or proceeding.  Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that this Subsidiary Guarantee shall not be discharged
except by complete performance of the obligations contained in the Securities,
this Indenture and the Registration Rights Agreement.  Nothing in the foregoing sentence shall
affect the obligations contained in Section 8.7 of this Indenture.

 

If any Holder or the Trustee is required by any court or otherwise to
return to the Company, Guarantor or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company or Guarantor, any
amount paid by the Company or Guarantor either to the Trustee or to such

 

48

 

Holder, then each
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.

 

Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.  Guarantor further agrees that, as between
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article 8 hereof for the purposes of the Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article 8
hereof, such obligations (whether or not due and payable) shall forthwith
become due and payable by Guarantor for the purpose of the Subsidiary
Guarantee.

 

The Subsidiary Guarantee shall be a senior unsecured obligation of
Guarantor and ranks equally in right of payment with all existing and future unsecured
and unsubordinated indebtedness of Guarantor senior to existing and future
subordinated indebtedness of Guarantor.

 

Section 5.2.           Limitation
on Guarantor Liability.

 

Guarantor, and, by its acceptance of Securities, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of Guarantor not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to Guarantor’s Subsidiary Guarantee. 
To effectuate the foregoing intention, the Trustee, the Holders and
Guarantor hereby irrevocably agree that the obligations of Guarantor shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of Guarantor that are relevant under such
laws, result in the obligations of Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance.

 

Section 5.3.           Execution
and Delivery of Subsidiary Guarantee.

 

To evidence its Subsidiary Guarantee set forth in this Article 5,
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit C shall be endorsed by an Officer
of Guarantor on each security authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of Guarantor by one of its
Officers.

 

Notwithstanding the foregoing, Guarantor hereby agrees that any failure
by Guarantor to endorse on each Security a notation of such Subsidiary
Guarantee shall not affect Guarantor’s obligations under this Article 5 or
the validity of Guarantor’s Subsidiary Guarantee.

 

If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which the Subsidiary Guarantee is endorsed, the Subsidiary
Guarantee shall nevertheless be valid.

 

The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
set forth in this Indenture on behalf of the Guarantors.

 

49

 

ARTICLE 6

 

COVENANTS

 

Section 6.1.           Payment
of Securities.

 

The Company shall promptly make all payments in respect of the
Securities on the dates and in the manner provided in the Securities and this
Indenture.  An installment of principal
or interest or Special Interest, if any, shall be considered paid on the date
it is due if the Paying Agent (other than the Company) holds by 10:00 a.m., New
York City time, on that date money, deposited by the Company or an Affiliate
thereof, sufficient to pay the installment. 
The Company shall, (in immediately available funds) to the fullest
extent permitted by law, pay interest on overdue principal (including premium,
if any) and overdue installments of interest at the rate borne by the
Securities per annum.

 

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

 

Section 6.2.           SEC
Reports.

 

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

 

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

 

Section 6.3.           Compliance
Certificates.

 

The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company (beginning with the fiscal year ending
December 31, 2004), an Officers’ Certificate as to the signer’s knowledge
of the Company’s compliance with all conditions and covenants on its part
contained in this Indenture and stating whether or not the signer knows of any
default or Event of Default.  If such
signer knows of such a default or Event of Default, the Officers’ Certificate
shall describe the default or Event of Default and the efforts to remedy the
same.  For the purposes of this
Section 6.3, compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms of this
Indenture.

 

50

 

Section 6.4.           Further
Instruments and Acts.

 

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

 

Section 6.5.           Maintenance
of Corporate Existence.

 

Subject to Article 7, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.

 

Section 6.6.           Rule
144A Information Requirement.

 

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

 

Section 6.7.           Stay,
Extension and Usury Laws.

 

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

 

Section 6.8.           Payment
of Special Interest.

 

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

 

51

 

Section 6.9.           Payment
of Contingent Interest.

 

If Contingent Interest is payable pursuant to the terms of paragraph 1
of the Security, the Company shall furnish to the Trustee a certificate to that
effect stating (i) the amount of such Contingent Interest per $1,000 principal
amount of the Securities that is payable, (ii) the facts and calculations
supporting the determination of such amount and (iii) the date on which such
interest is payable and pay the Contingent Interest, required by that
paragraph.  Unless and until a Trust
Officer receives the notice required by such paragraph, the Trustee may assume
without inquiry that no Contingent Interest is payable.

 

ARTICLE 7

 

CONSOLIDATION,
MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 7.1.           Company
and Guarantor May Consolidate, Etc, Only On Certain Terms.

 

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

 

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

 

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

 

(c)          the
Company shall have delivered to the Trustee an Officers’ Certificate and, if
requested by the Trustee, an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer, sale, lease or other disposition
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article 7 and
that all conditions precedent herein provided for relating to such transaction
have been satisfied.

 

Section 7.2.           Successor
Substituted.

 

Upon any consolidation of the Company or Guarantor with, or merger of
the Company or Guarantor into, any other Person or any conveyance, transfer or
lease of all or substantially all of the properties and assets of the Company
or Guarantor in accordance with Section 7.1, the successor Person formed
by such consolidation or into which the Company or Guarantor is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company or Guarantor under
this Indenture with the same effect as if such successor Person had been named
as the Company or Guarantor herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

 

52

 

ARTICLE 8

 

DEFAULT
AND REMEDIES

 

Section 8.1.           Events of Default.

 

An “Event of Default” shall occur if:

 

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

 

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

 

(c)          the
Company fails to satisfy its conversion obligation with respect to any portion
of the principal amount of any Security following the exercise by a Holder of
the right to convert such Security into shares of Common Stock (or Cash or a
combination of shares of Common Stock and Cash, if the Company so elects)
pursuant to and in accordance with Article 4;

 

(d)         the
Company defaults in its obligation to pay the Purchase Price or the Repurchase
Price, as applicable, with respect to any Security, or any portion thereof,
upon the exercise by a Holder of such Holder’s right to require the Company to
purchase or repurchase such Securities pursuant to and in accordance with
Section 3.2 or 3.3, as applicable;

 

(e)          the
Company fails to provide a timely Purchase Notice as provided in Section 3.2
of this Indenture or provide a timely Repurchase Event Company Notice as
provided under Section 3.3 of this Indenture.

 

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

 

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

 

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

 

(i)             the
Subsidiary Guarantee of Guarantor shall be held in any judicial proceedings to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect, or the Guarantor or any person acting on Guarantor’s behalf, shall
deny or disaffirm its obligations under the Subsidiary Guarantee;

 

53

 

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

 

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

 

(1)          commences a voluntary
case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

A default under clause (f) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding notify the Company and the
Trustee, in writing of the default, and the Company does not cure the default
within 30 days after receipt of such notice. 
The notice given pursuant to this Section 8.1 must specify the
default, demand that it be remedied and state that the notice is a “Notice
of Default.”  When any default under
this Section 8.1 is cured, it ceases.

 

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

 

54

 

Section 8.2.           Acceleration.

 

If an Event of Default (other than an Event of Default specified in
clause (k) or (l) of Section 8.1 that relates solely to the Company and
not a Significant Subsidiary or group of Subsidiaries that in the aggregate
would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee may, by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding may, by notice to
the Company and the Trustee, declare all unpaid principal to the date of
acceleration on the Securities then outstanding (if not then due and payable)
to be due and payable upon any such declaration, and the same shall become and
be immediately due and payable.  If an
Event of Default specified in clause (k) or (l) of Section 8.1 occurs that
relates to the Company and not a Significant Subsidiary or group of
Subsidiaries that would constitute a Significant Subsidiary, all unpaid
principal of the Securities then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.  The Holders
of a majority in aggregate principal amount of the Securities then outstanding
by notice to the Trustee may rescind or annul such acceleration and its
consequences if (a) all existing Events of Default, other than the nonpayment
of the principal of the Securities which has become due solely by such
declaration of acceleration, have been cured or waived; (b) to the extent the
payment of such interest is lawful, interest (calculated at the rate per annum
borne by the Securities) on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid; (c) the rescission would not conflict with any
judgment, order or decree of a court of competent jurisdiction; and (d) all
payments due to the Trustee and any predecessor Trustee under Section 9.7
have been made.  No such rescission shall
affect any subsequent default or impair any right consequent thereto.

 

Section 8.3.           Other
Remedies.

 

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

 

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

 

Section 8.4.           Waiver
of Defaults and Events of Default.

 

Subject to Sections 8.7 and 11.2, the Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive an existing default or Event of Default and its consequences,
except a default or Event of Default (i) in the payment of the principal of,
premium, if any, or interest (including Contingent Interest, if any, or Special
Interest, if any) on any Security, or the payment of the Redemption Price, the
Repurchase Price, or Repurchase Price, (ii) arising from the Company’s failure
to comply with the conversion procedures provided in Article 4 of this
Indenture, or (iii) in respect of any provision of this Indenture which, under
Section 11.2, cannot be modified or amended without the consent of the
Holder of each Security affected.  When a
default or Event of Default is waived, it is cured and ceases.

 

55

 

Section 8.5.           Waiver
of Compliance.

 

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

 

Section 8.6.           Control
by Majority.

 

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

 

Section 8.7.           Limitations
on Suits.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 8.8.           Rights
of Holders to Receive Payment and to Convert.

 

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

 

56

 

Section 8.9.           Collection
Suit by Trustee.

 

If an Event of Default in the payment of principal or interest
specified in clause (a) or (b)of Section 8.1 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or another obligor on the Securities for the whole amount
of principal and accrued interest remaining unpaid, together with, to the
extent that payment of such interest is lawful, interest on overdue principal
and on overdue installments of interest, in each case at the rate per annum
borne by the Securities and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 8.10.        Trustee
May File Proofs of Claim.

 

The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed in
any judicial proceedings relative to the Company (or any other obligor on the
Securities), its creditors or its property and shall be entitled and empowered
to collect and receive any money or other property payable or deliverable on
any such claims and to distribute the same, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 9.7, and to the extent that such payment of the reasonable
compensation, expenses, disbursements and advances in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other property which the Holders may be entitled to receive in
such proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to,
or, on behalf of any Holder, to authorize, accept or adopt any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

 

Section 8.11.        Priorities.

 

If the Trustee collects any money pursuant to this Article 8, it
shall pay out the money in the following order:

 

(a)          First,
to the Trustee for amounts due under Section 9.7;

 

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

 

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

 

The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 8.11.

 

57

 

Section 8.12.        Undertaking
for Costs.

 

In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable attorneys’
fees and expenses, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant.  This Section 8.12 does
not apply to a suit made by the Trustee, a suit by a Holder pursuant to
Section 8.7, or a suit by Holders of more than 10% in aggregate principal
amount of the Securities then outstanding.

 

ARTICLE 9

 

TRUSTEE

 

Section 9.1.           Duties
of Trustee.

 

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

 

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

 

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

 

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

 

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

 

(1)          this paragraph does not
limit the effect of subsection (b) of this Section 9.1;

 

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

 

(3)          the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 8.6.

 

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

 

(e)          Every
provision of this Indenture that in any way relates to the Trustee is subject
to subsections (a), (b), (c) and (d) of Section 9.1.

 

58

 

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

 

Section 9.2.           Rights
of Trustee.

 

Subject to Section 9.1:

 

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

 

(b)         Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to
Section 13.4(b).  The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion.

 

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

 

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

 

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

 

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

 

(g)         The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, security, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation.

 

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

 

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

 

59

 

Section 9.3.           Individual
Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not
Trustee.  Any Agent may do the same with
like rights.  However, the Trustee is
subject to Sections 9.10 and 9.11.

 

Section 9.4.           Trustee’s
Disclaimer.

 

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

 

Section 9.5.           Notice
of Default or Events of Default.

 

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

 

Section 9.6.           Reports
by Trustee to Holders.

 

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

 

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

 

Section 9.7.           Compensation
and Indemnity.

 

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

 

The Company shall indemnify the Trustee or any predecessor Trustee
(which for purposes of this Section 9.7 shall include its officers,
directors, employees and agents) for, and hold it harmless against, any and all
loss, liability or expense including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee), (including reasonable
legal fees and expenses) incurred by it in connection with the acceptance or
administration of its duties under this Indenture or any action or failure to
act as authorized or within the discretion or rights or powers conferred upon
the Trustee hereunder including the reasonable costs and expenses of the
Trustee and its counsel in defending itself against any

 

60

 

claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder.  The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity.  The Company need not pay for
any settlement without its written consent, which shall not be unreasonably
withheld.

 

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

 

To secure the Company’s payment obligations in this Section 9.7,
the Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of and interest on
the Securities.  The obligations of the
Company under this Section 9.7 shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.

 

When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (k) or (l) of Section 8.1 occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. 
The provisions of this Section shall survive the termination of
this Indenture.

 

Section 9.8.           Replacement
of Trustee.

 

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

 

(a)          the
Trustee fails to comply with Section 9.10;

 

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

 

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

 

(d)         the
Trustee becomes incapable of acting.

 

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

 

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

 

If the Trustee fails to comply with Section 9.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee
shall transfer all property held by it as Trustee to the successor Trustee and
be released from its obligations (exclusive of any liabilities that the
retiring Trustee may have incurred while acting as Trustee) hereunder, the
resignation or removal of the

 

61

 

retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture.  A successor Trustee shall mail notice of its
succession to each Holder.

 

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

 

Notwithstanding replacement of the Trustee pursuant to this
Section 9.8, the Company’s obligations under Section 9.7 shall
continue for the benefit of the retiring Trustee.

 

Section 9.9.           Successor
Trustee by Merger, Etc.

 

If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets (including the
administration of this Indenture) to, another corporation, the resulting,
surviving or transferee corporation, without any further act, shall be the
successor Trustee, provided such transferee corporation shall qualify and be
eligible under Section 9.10.  Such
successor Trustee shall promptly mail notice of its succession to the Company
and each Holder.

 

Section 9.10.        Eligibility;
Disqualification.

 

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

 

Section 9.11.        Preferential
Collection of Claims Against Company.

 

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

 

ARTICLE 10

 

SATISFACTION
AND DISCHARGE OF INDENTURE

 

Section 10.1.        Satisfaction
and Discharge of Indenture.

 

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

 

(a)          either

 

(1)          all Securities
theretofore authenticated and delivered (other than (i) Securities which have
been destroyed, lost or stolen and which have been replaced or paid as provided
in Section 2.7 and (ii) Securities for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Company as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or

 

62

 

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

 

(i)                                     have
become due and payable, or

 

(ii)                                  will
become due and payable at the Final Maturity Date, Purchase Date or Repurchase
Date, or

 

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

 

and the Company, in the case of clause (i), (ii) or
(iii) above, has irrevocably deposited or caused to be irrevocably deposited
with the Trustee or a Paying Agent (other than the Company or any of its
Affiliates) as trust funds in trust for the purpose Cash and/or shares of
Common Stock (as permitted under the Indenture) in an amount sufficient to pay
and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and interest
(including Special Interest, if any) to the date of such deposit (in the case
of Securities which have become due and payable) or to the Final Maturity Date,
Redemption Date, Repurchase Date or Repurchase Event Repurchase Date, as the
case may be; provided, however, that there shall not exist, on
the date of such deposit, a Default or Event of Default; provided, further,
that such deposit shall not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to which the
Company is a party or to which the Company is bound;

 

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

 

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

 

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 9.7 shall survive
and, if money shall have been deposited with the Trustee pursuant to subclause
(2) of clause (a) of this Section, the provisions of Sections 2.3, 2.4, 2.5,
2.6, 2.7, 2.12, 3.2, 3.3, Article 4 and this Article 10, shall
survive until the Securities have been paid in full.

 

Section 10.2.        Application
of Trust Money.

 

Subject to the provisions of Section 10.3, the Trustee or a Paying
Agent shall hold in trust, for the benefit of the Holders, all money deposited
with it pursuant to Section 10.1 and shall apply the deposited money in
accordance with this Indenture and the Securities to the payment of the
principal of and interest on the Securities.

 

Section 10.3.        Repayment
to Company.

 

The Trustee and each Paying Agent shall promptly pay to the Company
upon request any excess money (i) deposited with them pursuant to
Section 10.1 and (ii) held by them at any time.

 

The Trustee and each Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years after a right to such

 

63

 

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

 

Section 10.4.        Reinstatement.

 

If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 10.2 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company’s obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 10.1
until such time as the Trustee or such Paying Agent is permitted to apply all
such money in accordance with Section 10.2; provided, however,
that if the Company has made any payment of the principal of or interest on any
Securities because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive any
such payment from the money held by the Trustee or such Paying Agent.

 

ARTICLE 11

 

AMENDMENTS,
SUPPLEMENTS AND WAIVERS

 

Section 11.1.                         Without Consent of Holders.

 

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

 

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

 

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

 

(c)          provide
for the assumption of the Company’s obligations to the Holders of Securities in
the case of a merger, consolidation, conveyance, transfer, sale, lease or other
disposition of all or substantially all of the Company’s property or assets
pursuant to Article 7;

 

(d)         adjust
the right to convert the Securities upon any of the events set forth in
Section 4.4;

 

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

 

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

 

(g)         secure
the Securities;

 

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

 

64

 

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

 

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

 

Section 11.2.        With
Consent of Holders.

 

The Company and the Trustee may amend or supplement this Indenture or
the Securities with the written consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding.  The Holders of at least a majority in
aggregate principal amount of the Securities then outstanding may waive compliance
in a particular instance by the Company with any provision of this Indenture or
the Securities without notice to any Securityholder.  However, notwithstanding the foregoing but
subject to Section 11.4, without the written consent of each Securityholder
affected, an amendment, supplement or waiver, including a waiver pursuant to
Section 8.4, may not:

 

(a)          change
the stated maturity of the principal of, any premium due on or interest on
(including Contingent Interest) or Special Interest on, any Security;

 

(b)         reduce
the principal amount of, Redemption Price, Repurchase Price, Repurchase Price
or any premium or interest on (including Contingent Interest) or Special
Interest on, any Security;

 

(c)          alter
the manner of calculation or rate of accrual of interest (including Contingent
Interest), Special Interest, Redemption Price, Repurchase Price, Repurchase
Price on any Security;

 

(d)         change
the place or currency of payment of principal of, or any premium or interest on
(including Contingent Interest and Special Interest), any Security;

 

(e)          impair
the right of any Holder to institute suit for the enforcement of any repurchase
of, payment on or with respect to, or conversion of, any Security on or after
the stated maturity of the Securities, in the case of redemption, on or after
the Redemption Date, or in the case of repayment at the option of the Holder,
on or after the Repurchase Date or Repurchase Event Repurchase Date;

 

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

 

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

 

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

 

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

 

65

 

(j)             modify
any of the provisions of this Section 11.2 or Section 8.4, except to
increase any such percentage or to provide that certain provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Security affected thereby.

 

It shall not be necessary for the consent of the Holders under this
Section 11.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.

 

After an amendment, supplement or waiver under this Section 11.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment, supplement or waiver.

 

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

 

Section 11.3.        Compliance
with Trust Indenture Act.

 

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

 

Section 11.4.        Revocation
and Effect of Consents.

 

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

 

After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (j) of Section 11.2.  In
that case the amendment, supplement or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security.

 

Section 11.5.        Notation
on or Exchange of Securities.

 

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

 

Section 11.6.        Trustee
to Sign Amendments, Etc.

 

The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 11 if the amendment or supplemental
indenture does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  If it does,
the Trustee may, in its sole discretion, but need not sign it.  In signing or refusing to sign such amendment
or supplemental indenture, the Trustee shall be entitled

 

66

 

to receive and,
subject to Section 9.1, shall be fully protected in relying upon, an
Opinion of Counsel stating that such amendment or supplemental indenture is
authorized or permitted by this Indenture. 
The Company may not sign an amendment or supplement indenture until the
Board of Directors approves it.

 

Section 11.7.        Effect
of Supplemental Indentures.

 

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

 

ARTICLE 12

 

TAX
TREATMENT

 

Section 12.1.        Tax
Treatment.

 

(a)          The
parties hereto hereby agree, and each Holder and any beneficial holder of a
Security by its purchase of a Security hereby agrees (in the absence of
administrative pronouncement or judicial ruling to the contrary):

 

(1)          to treat the Securities
as indebtedness of the Company for all United States federal income tax
purposes;

 

(2)          to treat the Securities
as debt instruments that are subject to Treasury Regulation
section 1.1275-4(b); and

 

(3)          to treat the delivery of
Common Stock or Cash (including Cash delivered in lieu of a fractional share)
to a Holder of a Security upon conversion of such Security, or upon a purchase
of such Security by the Company at the option of the Holder of a Security where
the Company makes a payment in Cash (including Cash paid in lieu of a
fractional share), as a contingent payment (in an amount equal to the sum of
the fair market value of such Common Stock and any Cash received (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be conclusive and described in a Board Resolution)) under Treasury
Regulation section 1.1275-4(b).

 

Section 12.2.        Comparable
Yield and Projected Payment Schedule.

 

(a)          Solely
for purposes of applying Treasury Regulation section 1.1275-4 to the
Securities:

 

(1)          for United States
federal income tax purposes, the Company shall accrue interest with respect to
outstanding Securities as original issue discount according to the
“noncontingent bond method,” as set forth in Treasury Regulation
section 1.1275-4(b), using a comparable yield of 7.38%, compounded
semiannually, and the projected payment schedule as determined by the
Company;

 

(2)          the Company shall file
with the Trustee promptly following the end of each calendar year (A) a written
notice specifying the amount of original issue discount for United States
federal income tax purposes accrued on outstanding Securities as of the end of
such year and (B) such other specific information relating to such original
issue discount that the Company determines to be relevant under the Internal
Revenue Code of 1986, as amended from time to

 

67

 

time, including the amount of any adjustment made
under the noncontingent bond method to account for the amount of any difference
between the amount of an actual payment and the amount of a projected payment;
and

 

(3)                                  the
Company acknowledges and agrees, and each Holder and any beneficial holder of a
Security, by its purchase of a Security shall be deemed to acknowledge and
agree, that (A) the projected payment schedule is determined on the basis
of an assumption of linear growth of stock price, (B) the comparable yield and
the projected payment schedule are not determined for any purpose other
than for the purpose of applying Treasury Regulation
section 1.1275-4(b)(4) to the Security, (C) the comparable yield and the
projected payment schedule do not constitute a projection or
representation regarding the actual amounts payable on the Securities, and (D)
the Company’s application of Treasury Regulation section 1.1275-4(b),
including the Company’s determination of the comparable yield and the projected
payment schedule shall be binding on each Holder and any beneficial holder
of a Security.

 

(b)                                 Holders
that wish to obtain the projected payment schedule may do so by contacting
the Company (to the attention of the Treasurer) as set forth in
Section 13.2 below.

 

ARTICLE 13

 

MISCELLANEOUS

 

Section 13.1.        Trust
Indenture Act Controls.

 

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

 

Section 13.2.        Notices.

 

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

 

If to the Company or the Guarantor, to:

 

United Industrial Corporation

124 Industry Lane

Hunt Valley, Maryland 21030

Attention: 
General Counsel

Facsimile No.: 
(410) 628-6705

 

with a copy (for informational purposes only) to:

 

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Attention: 
Julie M. Allen

Telecopy No.: (212) 969-2900

 

68

 

if to the Trustee, to:

 

U.S. Bank National Association

60 Livingston Avenue

St. Paul, Minnesota 55107-2292

Attention:  Corporate Trust Services

Internal mail EP-MN-WS3C

(United Industrial Corporation - 3.75% Convertible

Senior Notes due 2024)

Facsimile No.:  (651) 495-8097

 

Such notices or communications shall be effective when received.

 

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

 

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

 

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

 

Section 13.3.        Communications
by Holders with Other Holders.

 

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

 

Section 13.4.        Certificate
and Opinion as to Conditions Precedent.

 

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

 

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

 

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

 

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

 

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

 

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

 

69

 

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

 

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

 

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

 

Section 13.5.        Record
Date for Vote or Consent of Securityholders.

 

The Company (or, in the event deposits have been made pursuant to
Section 10.1, the Trustee) may set a record date for purposes of
determining the identity of Holders entitled to vote or consent to any action
by vote or consent authorized or permitted under this Indenture, which record
date shall not be more than 30 days prior to the date of the commencement of
solicitation of such action. 
Notwithstanding the provisions of Section 11.4, if a record date is
fixed, those persons who were Holders of Securities at the close of business on
such record date (or their duly designated proxies), and only those persons,
shall be entitled to take such action by vote or consent or to revoke any vote
or consent previously given, whether or not such persons continue to be Holders
after such record date.

 

Section 13.6.        Rules by
Trustee, Paying Agent, Registrar and Conversion Agent.

 

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

 

Section 13.7.        Legal
Holidays.

 

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

 

Section 13.8.        Governing
Law.

 

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

 

Section 13.9.        No
Adverse Interpretation of Other Agreements.

 

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

 

Section 13.10.      No Recourse
Against Others.

 

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

 

70

 

Section 13.11.      Successors.

 

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

 

Section 13.12.      Multiple
Counterparts.

 

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

 

Section 13.13.      Separability.

 

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

 

Section 13.14.      Table of
Contents, Headings, Etc.

 

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

 

[SIGNATURE PAGE
FOLLOWS]

 

71

 

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

 

	
   

  	
  United
  Industrial Corporation,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James H.
  Perry

  
	
   

  	
   

  	
  Name: James H.
  Perry

  
	
   

  	
   

  	
  Title: Vice
  President, CFO & Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. Bank
  National Association, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank Leslie

  
	
   

  	
   

  	
  Name: Frank
  Leslie

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  AAI Corporation,
  a Maryland corporation,

  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James H.
  Perry

  
	
   

  	
  Name: James H.
  Perry

  
	
   

  	
  Title:  Vice President, CFO & Treasurer

  

 

Schedule A

 

MAKE-WHOLE
PREMIUM

 

(% of the
principal amount)

 

	
   

  	
   

  	
  effective date

  	
   

  
	
  Stock Price

  	
   

  	
  September 15,

  2004

  	
   

  	
  September 15,

  2005

  	
   

  	
  September 15,

  2006

  	
   

  	
  September 15,

  2007

  	
   

  	
  September 15,

  2008

  	
   

  	
  September 15,

  2009

  	
   

  
	
  $

  	
  28.64

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  35.00

  	
   

  	
  9.8

  	
  %

  	
  7.9

  	
  %

  	
  6.1

  	
  %

  	
  4.2

  	
  %

  	
  2.0

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  40.00

  	
   

  	
  17.4

  	
  %

  	
  15.3

  	
  %

  	
  13.1

  	
  %

  	
  10.6

  	
  %

  	
  7.3

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  45.00

  	
   

  	
  15.1

  	
  %

  	
  12.8

  	
  %

  	
  10.5

  	
  %

  	
  7.7

  	
  %

  	
  4.1

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  50.00

  	
   

  	
  13.3

  	
  %

  	
  11.1

  	
  %

  	
  8.7

  	
  %

  	
  5.9

  	
  %

  	
  2.5

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  55.00

  	
   

  	
  12.0

  	
  %

  	
  9.8

  	
  %

  	
  7.4

  	
  %

  	
  4.8

  	
  %

  	
  1.8

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  60.00

  	
   

  	
  11.0

  	
  %

  	
  8.8

  	
  %

  	
  6.6

  	
  %

  	
  4.2

  	
  %

  	
  1.5

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  65.00

  	
   

  	
  10.2

  	
  %

  	
  8.2

  	
  %

  	
  6.0

  	
  %

  	
  3.7

  	
  %

  	
  1.4

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  70.00

  	
   

  	
  9.6

  	
  %

  	
  7.6

  	
  %

  	
  5.6

  	
  %

  	
  3.5

  	
  %

  	
  1.3

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  75.00

  	
   

  	
  9.1

  	
  %

  	
  7.2

  	
  %

  	
  5.3

  	
  %

  	
  3.3

  	
  %

  	
  1.3

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  80.00

  	
   

  	
  8.7

  	
  %

  	
  6.9

  	
  %

  	
  5.0

  	
  %

  	
  3.2

  	
  %

  	
  1.2

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  85.00

  	
   

  	
  8.3

  	
  %

  	
  6.6

  	
  %

  	
  4.9

  	
  %

  	
  3.1

  	
  %

  	
  1.2

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  90.00

  	
   

  	
  8.0

  	
  %

  	
  6.4

  	
  %

  	
  4.7

  	
  %

  	
  3.0

  	
  %

  	
  1.2

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  95.00

  	
   

  	
  7.7

  	
  %

  	
  6.1

  	
  %

  	
  4.6

  	
  %

  	
  2.9

  	
  %

  	
  1.2

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  100.00

  	
   

  	
  7.5

  	
  %

  	
  6.0

  	
  %

  	
  4.4

  	
  %

  	
  2.9

  	
  %

  	
  1.2

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  105.00

  	
   

  	
  7.2

  	
  %

  	
  5.8

  	
  %

  	
  4.3

  	
  %

  	
  2.8

  	
  %

  	
  1.1

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  110.00

  	
   

  	
  7.0

  	
  %

  	
  5.6

  	
  %

  	
  4.2

  	
  %

  	
  2.7

  	
  %

  	
  1.1

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  115.00

  	
   

  	
  6.8

  	
  %

  	
  5.5

  	
  %

  	
  4.1

  	
  %

  	
  2.7

  	
  %

  	
  1.1

  	
  %

  	
  0.0

  	
  %

  
	
  $

  	
  120.00

  	
   

  	
  6.6

  	
  %

  	
  5.3

  	
  %

  	
  4.0

  	
  %

  	
  2.6

  	
  %

  	
  1.1

  	
  %

  	
  0.0

  	
  %

  

 

1

 

EXHIBIT
A

 

[FORM
OF FACE OF SECURITY]

 

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. 
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(1)

 

THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR AN APPLICABLE
EXEMPTION THEREFROM.  EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.(2)

 

THE HOLDER OF THIS
SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (IV) IN

 

(1)                                  These
paragraphs should be included only if the Security is a Global Security.

(2)                                  These
paragraphs to be included only if the Security is a Transfer Restricted
Security.

 

A-1

 

ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

THE HOLDER OF THIS
SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS
SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND,
BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

 

THIS SECURITY IS
SUBJECT TO REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS.  UNDER SUCH REGULATIONS, THE COMPARABLE YIELD
OF THIS SECURITY IS 7.38%.  THE ISSUER
AGREES, AND BY PURCHASING A BENEFICIAL OWNERSHIP INTEREST IN THE SECURITIES
EACH HOLDER OF SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES (1) TO TREAT THE SECURITIES AS INDEBTEDNESS
THAT IS SUBJECT TO TREAS.  REG. SEC.
1.1275-4 (THE “CONTINGENT PAYMENT REGULATIONS”) AND, FOR PURPOSES OF THE
CONTINGENT PAYMENT REGULATIONS, TO TREAT THE FAIR MARKET VALUE OF ANY STOCK
BENEFICIALLY RECEIVED BY A BENEFICIAL HOLDER UPON ANY CONVERSION OF THE
SECURITIES AS A CONTINGENT PAYMENT AND (2) TO BE BOUND BY THE ISSUER’S
DETERMINATION OF THE “COMPARABLE YIELD” AND “PROJECTED PAYMENT SCHEDULE,”
WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THE
SECURITIES.  THE ISSUER AGREES TO PROVIDE
PROMPTLY TO HOLDER OF SECURITIES, UPON WRITTEN REQUEST, THE ISSUE DATE, YIELD
TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE.  ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO
THE ISSUER AT THE FOLLOWING ADDRESS: 
UNITED INDUSTRIAL CORPORATION, 124 INDUSTRY LANE, HUNT VALLEY, MARYLAND
21030, ATT:  GENERAL COUNSEL.

 

A-2

 

UNITED INDUSTRIAL CORPORATION

 

CUSIP No.:  91067AA4

 

3.75% CONVERTIBLE SENIOR SECURITIES DUE 2024

 

United Industrial
Corporation, a Delaware corporation (the “Company,” which term shall include
any successor corporation under the Indenture referred to on the reverse
hereof), promises to pay to Cede & Co., or registered assigns, the
principal sum of One Hundred Twenty Million Dollars ($120,000,000) on
September 15, 2024, or such greater or lesser amount as is indicated on
the Schedule of Exchanges of Securities on the other side of this Security
to reflect exchanges, redemptions, purchases, repurchases and conversions.

 

Interest Payment
Dates:  March 15 and
September 15, commencing March 15, 2005

 

Record Dates:  March 1 and September 1

 

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

 

SIGNATURE PAGE FOLLOWS

 

A-3

 

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

 

	
   

  	
  UNITED
  INDUSTRIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  Dated:

  
	
   

  
	
  TRUSTEE’S
  CERTIFICATE OF AUTHENTICATION

  
	
   

  
	
  This is one of
  the Securities referred to

  
	
  in the
  within-mentioned Indenture.

  
	
   

  
	
  U.S. Bank National
  Association,

  
	
  as Trustee

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Authorized
  Signatory

  
						

 

A-4

 

[FORM
OF REVERSE SIDE OF SECURITY]

 

UNITED
INDUSTRIAL CORPORATION

 

3.75% CONVERTIBLE SENIOR SECURITIES DUE 2024

 

1.                                       Interest

 

United Industrial
Corporation, a Delaware corporation (the “Company,” which term shall
include any successor corporation under the Indenture hereinafter referred to),
promises to pay interest on the principal amount of this Security at the rate
of 3.75% per annum.  The Company shall
pay interest semiannually on March 15 and September 15 of each year
(each, an “Interest Payment Date”), commencing on March 15,
2005.  Interest on the Securities shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from September 15, 2004, to, but excluding, the
next Interest Payment Date, or the Final Maturity Date, as the case may be; provided,
however, that if there is not an existing default in the payment of
interest and if this Security is authenticated between a Record Date referred
to on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such Interest Payment Date. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.

 

In addition, the
Company shall pay contingent interest (“Contingent Interest”) to the
Holders during any six-month period (a “Contingent Interest Period”)
from March 15 to September 14 and from September 15 to
March 14, commencing with the six-month period beginning
September 15, 2009, if the average Trading Price of a Security for the
five Trading Day period ending on the third Trading Day immediately preceding
the first day of the relevant Contingent Interest Period equals $1,200 (120% of
the principal amount of a Security) or more.

 

Upon a
determination by the Company that Holders will be entitled to receive
Contingent Interest which will become payable during a Contingent Interest
Period, on or prior to the first day of such Contingent Interest Period, the
Company shall deliver an Officer’s Certificate to the Trustee setting forth the
amount of such Contingent Interest per $1,000 principal amount of Securities
and shall issue a press release through a public medium as is customary for
such a press release.

 

The amount of
Contingent Interest payable per $1,000 principal amount of Securities in
respect of any Contingent Interest Period shall equal 0.23% of the average
Trading Price of such Security for the five Trading Day period ending on and
including the third Trading Day immediately preceding the first day of the
relevant six-month period.  Contingent
Interest, if any, will accrue and be payable to Holders in the same manner as
regular Cash interest.  Regular Cash
interest will continue to accrue at the rate of 3.75% per year on the principal
amount of the Securities whether or not Contingent Interest is paid.

 

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

 

Interest
(including Contingent Interest, if any, and Special Interest, if any) on
Securities converted after the close of business on a Regular Record Date but
prior to the opening of business on the

 

A-5

 

corresponding Interest Payment Date will be paid to the Holder of the
Securities on March 1 or September 1 (whether or not a Business Day),
as the case may be, next preceding the corresponding Interest Payment Date (a “Regular
Record Date”) but, upon conversion, the Holder must pay the Company the
interest (including Contingent Interest, if any, and Special Interest, if any)
which has accrued and will be paid on such Interest Payment Date.  No such payment need be made with respect to
Securities which will be converted after a Regular Record Date and prior to the
corresponding Interest Payment Date after being called for redemption by the Company.

 

Any reference
herein to interest accrued or payable as of any date shall include Contingent
Interest and any Special Interest accrued or payable on such date as provided
in Section 3 hereof.

 

2.                                       Maturity

 

The
Securities will mature on September 15, 2024.

 

3.                                       Registration Rights Agreement

 

The holder of this
Security is entitled to the benefits of a Registration Rights Agreement, dated
as of September 15, 2004, among the Company and the Initial Purchasers
(the “Registration Rights Agreement”). 
Pursuant to the Registration Rights Agreement the Company has agreed for
the benefit of the Holders of the Securities, that (i) it will, at its
cost, within 90 days after the closing of the sale of the Securities (the “Closing”),
file a shelf registration statement (the “Shelf Registration Statement”)
with the Securities and Exchange Commission (the “Commission”) with
respect to resales of the Securities and the Common Stock issuable upon
conversion thereof, (ii) it will use its reasonable best efforts to cause
such Shelf Registration Statement to be declared effective within 210 days
after the Closing, and (iii) it will use its reasonable best efforts to
keep such Shelf Registration Statement continuously effective under the
Securities Act of 1933, as amended (the “Securities Act”), subject to
certain exceptions specified in the Registration Rights Agreement, until the
earliest of (A) the date on which there are no outstanding Registrable
Securities (as defined in the Registration Rights Agreement), (B) the first
date on which such Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant thereto, (C) the date on which all
Registrable Securities held by non-affiliates are eligible to be sold pursuant
to Rule 144(k) under the Securities Act, and (D) the second anniversary of
the date of the Closing.  As set forth in
the Registration Rights Agreement, the Company will be permitted to suspend use
of the prospectus that is part of the Shelf Registration Statement during
certain periods of time and in certain circumstances relating to pending
corporate developments and public filings with the SEC and similar events.  If (a) the Company fails to file the
Shelf Registration Statement required by the Registration Rights Agreement on
or before the date specified above for such filing, (b) such Shelf
Registration Statement is not declared effective by the Commission on or prior
to the date specified above for such effectiveness, (c) the Company fails,
with respect to a Holder that supplies it with the questionnaire described in
the Registration Rights Agreement, after the effective date of the Shelf
Registration Statement, to supplement or amend the Shelf Registration
Statement, or filed a new registration statement, in accordance with the terms
of the Registration Rights Agreement, so that such Holder may be added as a
selling securityholder, (d) the Shelf Registration Statement is declared
effective but thereafter ceases to be effective or useable in connection with
resales of Transfer Restricted Securities (as defined in the Registration
Rights Agreement) during the periods specified in the Registration Rights
Agreement or (e) the Company fails to name as a selling securityholder, either
in the Shelf Registration Statement or any amendment thereto, at the time it
becomes effective under the Securities Act, or in any prospectus relating to
the Shelf Registration Statement, at the time the Company files the prospectus
or, if later, the time the related Shelf Registration Statement or amendment becomes
effective under the Securities Act, any Holder that is entitled to be so named
as a selling securityholder (each such event referred to in clauses (a)
through (e) above a “Registration Default”), then the Company will pay
Special Interest to each Holder of

 

A-6

 

Transfer Restricted Securities, with respect to the first 90-day period
immediately following the occurrence of such Registration Default in an amount
equal to an increase in the annual interest rate on the Securities of 0.25% (“Special
Interest”) and with respect to any period thereafter an amount equal to an
annual interest rate of 0.50%.  If a
Holder of Securities converts some or all of its Securities into Common Stock
during a period when a Registration Default exists with respect to the Common
Stock, or if a Registration Default occurs following such conversion, then such
Holder will not be entitled to receive additional interest on such Common
Stock.  All accrued Special Interest
shall be paid by the Company on each Interest Payment Date for which Special
Interest is owed to the holders of Global Securities by wire transfer of
immediately available funds or by federal funds check and to holders of
certificated Securities registered as such as of the preceding Record Date by
mailing checks to their registered addresses. 
If the Company redeems a Security, purchases a Security pursuant to a
Purchase Notice or a Repurchase Event Company Notice, and the Redemption Date,
Purchase Date or Repurchase Date, as the case may be, is after the close of
business on the preceding Record Date and before the related Interest Payment
Date, the Company will then pay the Special Interest to the Holder that
submitted the Security triggering such Redemption Date, Repurchase Date or
Repurchase Date.  Following the cure of
all Registration Defaults, the application of Special Interest will cease.

 

4.                                       Method of Payment

 

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

 

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

 

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

 

6.                                       Indenture, Limitations

 

This Security is
one of a duly authorized issue of Securities of the Company designated as its
3.75% Convertible Senior Securities due 2024 (the “Securities”), issued
under an Indenture dated as of September 15, 2004 (together with any
supplemental indentures thereto, the “Indenture”), between the Company,
the Subsidiary Guarantor and the Trustee. 
The terms of this Security include those stated in

 

A-7

 

the Indenture and those required by or made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture.  This Security is
subject to all such terms, and the Holder of this Security is referred to the
Indenture and said Act for a statement of them. 
The Securities are senior unsecured obligations of the Company limited
to $100,000,000 aggregate principal amount (or $120,000,000 if the option to
purchase additional Securities is exercised in full by the Initial
Purchasers).  The Indenture does not
limit other debt of the Company, secured or unsecured.

 

7.                                       Optional Redemption

 

The Securities are
subject to redemption, at any time on or after September 15, 2009, as a
whole or from time to time in part, at the election of the Company.  The Redemption Price, payable in Cash, is
100% of the principal amount together with accrued and unpaid interest
(including Contingent Interest, if any and Special Interest, if any), up to but
not including the Redemption Date; provided, that if the Redemption Date falls
after a Regular Record Date and on or before an Interest Payment Date, then the
interest (including Contingent Interest, if any and Special Interest, if any), will
be payable to the Holders in whose names the Securities are registered at the
close of business on the relevant Regular Record Date and the Redemption Price
shall not include such interest payment.

 

No sinking fund is
provided for the Securities.

 

8.                                       Notice of Redemption

 

Notice of
redemption will be mailed by first-class mail at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at its registered address. 
Securities in denominations larger than $1,000 may be redeemed in part,
but only in whole multiples of $1,000. 
On and after the Redemption Date, subject to the deposit with the Paying
Agent of funds sufficient to pay the Redemption Price plus accrued interest
(including Contingent Interest, if any and Special Interest, if any), accrued
to, but excluding, the Redemption Date, interest (including Contingent
Interest, if any and Special Interest, if any), shall cease to accrue on
Securities or portions of them called for redemption.

 

9.                                       Purchase of Securities at Option of Holder

 

Subject to the
terms and conditions of the Indenture, Securities shall be purchased by the
Company, at the option of the Holder thereof, on September 15, 2009,
September 15, 2014 and September 15, 2019 (each, a “Purchase Date”),
in integral multiples of $1,000 at a purchase price equal to 100% of the
principal amount of those Securities plus accrued and unpaid interest
(including Contingent Interest, if any and Special Interest, if any), to, but
not including, such Purchase Date (the “Purchase Price”), payable in
Cash, shares of Common Stock or a combination thereof (upon the Company’s
satisfaction of certain conditions) at the Company’s election.

 

The Purchase Price
may be paid in Cash, shares of Common Stock, or a combination thereof.  If the Company elects to pay the Purchase
Price, in whole or in part, in shares of Common Stock, the number of shares of
Common Stock to be delivered by the Company will be equal to the portion of the
Purchase Price to be paid in shares of Common Stock divided by 95% of the
Purchase Market Price of such shares Common Stock.  If the Company elects to pay the Purchase
Price in whole or in part in shares of Common Stock, the Company shall pay Cash
in lieu of fractional shares.

 

The Company shall
not be entitled to pay any portion of the Purchase Price in shares of Common
Stock pursuant to the Indenture unless all of the following conditions are
satisfied:

 

A-8

 

(i)                                     the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Purchase Price shall be either (1) registered under the Securities Act for
initial issuance, unless such registration is not necessary to permit the
Holders who receive such shares and who are not Affiliates of the Company to
publicly resell such shares or (2) registered for resale pursuant to a shelf
registration statement, that has become effective under the Securities Act and
that is reasonably expected to remain effective and available for use until at
least the 30th day after the Redemption Date, unless the shares may be publicly
sold without restriction pursuant to Rule 144(k) under the Securities Act;

 

(ii)                                  the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Purchase Price shall be duly qualified or registered under applicable state
securities laws or shall be qualified for an available exemption from such
qualification and registration;

 

(iii)                               the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Purchase Price shall be approved for listing on The Nasdaq National Market or a
U.S. national securities exchange; and

 

All shares of
Common Stock issued as payment, in whole or in part, of the Purchase Price
shall be deemed, for purposes of the Registration Rights Agreement, to
constitute Registrable Securities, unless either (i) such shares were
registered under the Securities Act for initial issuance and are able to be
publicly resold by the recipients of such shares without further registration under
the Securities Act or (ii) such registration was and is not necessary to permit
the Holders who receive such shares to publicly resell such shares.

 

If the above
conditions are not satisfied with respect to a Holder prior to the close of
business on the Business Day immediately preceding the Purchase Date, the
Company shall pay the Purchase Price entirely in Cash.

 

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

 

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

 

If Cash, and, if
the Company determines to pay all or any portion of the Purchase Price in
shares of Common Stock, such shares of Common stock sufficient to pay the
Purchase Price of all Securities or portions thereof to be purchased with
respect to a Purchase Date, have been deposited with the Paying Agent, at
10:00 a.m., New York City time, on the Business Day immediately following
the Purchase Date, then, immediately after the Purchase Date, such Securities
will cease to be outstanding and interest (including Contingent Interest, if
any and Special Interest, if any), on such Securities will cease to accrue,
whether or not such Securities are delivered to the Paying Agent, and the
Holder thereof shall have no other rights as such other than the right to
receive the Purchase Price upon surrender of such Security.

 

A-9

 

10.                                 Purchase of Securities Upon a Repurchase Event

 

If a Repurchase
Event occurs, each Holder will have the right to require the Company to
repurchase all of its Securities not previously called for redemption, or any
portion of such Securities, in integral multiples of $1,000 at a purchase price
equal to 100% of the principal amount of all such Securities, plus accrued and
unpaid interest, (including Contingent Interest and Special Interest, if any),
on such Securities to, but not including, the Repurchase Event Repurchase Date
(the “Repurchase Price”), subject to satisfaction by or on behalf of any
Holder of the requirements set forth in the Indenture.  The date the Company shall repurchase the
Securities (the “Repurchase Event Repurchase Date”) must be within 30
Business Days of the date of the mailing of the Repurchase Event Company Notice
under the Indenture.

 

The Repurchase
Price may be paid in Cash, shares of Common Stock, or a combination
thereof.  If the Company elects to pay
the Repurchase Price, in whole or in part, in shares of Common Stock, the
number of shares of Common Stock to be delivered by the Company will be equal
to the portion of the Repurchase Price to be paid in shares of Common Stock
divided by 95% of the Purchase Market Price of such shares of Common Stock.  If the Company elects to pay the Repurchase
Price in whole or in part in shares of Common Stock, the Company shall pay Cash
in lieu of fractional shares.

 

The Company shall
not be entitled to pay any portion of the Repurchase Price in shares of Common
Stock under the Indenture unless all of the following conditions are satisfied:

 

(i)                                     the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Repurchase Price shall be either (1) registered under the Securities Act for
initial issuance, unless such registration is not necessary to permit the
Holders who receive such shares and who are not Affiliates of the Company to
publicly resell such shares or (2) registered for resale pursuant to a shelf
registration statement, that has become effective under the Securities Act and
that is reasonably expected to remain effective and available for use until at
least the 30th day after the Repurchase Event Repurchase Date, unless the
shares may be publicly sold without restriction pursuant to Rule 144(k) under
the Securities Act;

 

(ii)                                  the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Repurchase Price shall be duly qualified or registered under applicable state
securities laws or shall be qualified for an available exemption from such
qualification and registration; and

 

(iii)                               the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Repurchase Price shall be approved for listing on The Nasdaq National Market or
a U.S. national securities exchange.

 

All shares of
Common Stock issued as payment, in whole or in part, of the Repurchase Price
shall be deemed, for purposes of the Registration Rights Agreement, to
constitute Registrable Securities, unless either (i) such shares were
registered under the Securities Act for initial issuance and are able to be
publicly resold by the recipients of such shares without further registration
under the Securities Act or (ii) such registration was and is not necessary to
permit the Holders who receive such shares to publicly resell such shares.

 

If the above
conditions are not satisfied with respect to a Holder prior to the close of
business on the Business Day immediately preceding the Repurchase Date, the
Company shall pay the Repurchase Price entirely in Cash.

 

A-10

 

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

 

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

 

(i)                                     any
“person” or “group,” within the meaning of Sections 13(d) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing
of securities within the meaning of Rule 13d-5(b)(1) under the Exchange
Act, becomes the “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, directly or indirectly, of 50% or more of the total voting power
of all classes of the Company’s Voting Stock entitled to vote generally in the
election of directors;

 

(ii)                                  the
sale, transfer, lease, conveyance or other disposition, in one or a series of
related transactions, of all or substantially all of the properties or assets
of the Company to any “person” or “group” (as such terms are defined above);

 

(iii)                               any
consolidation or merger of the Company with or into another Person (or vice
versa) except pursuant to a transaction in which the persons that “beneficially
owned,” directly or indirectly, the shares of the Company’s Voting Stock
immediately prior to such transaction “beneficially own” immediately after such
transaction, directly or indirectly, shares of the continuing or surviving
corporation’s Voting Stock representing at least a majority of the total voting
power of all outstanding classes of Voting Stock of the continuing or surviving
corporation in substantially the same proportion as such ownership prior to the
transaction;

 

(iv)                              the
following persons cease for any reason to constitute a majority of the board of
directors of the Company;

 

(A)                              individuals who on the first issue
date of the Securities constituted the Board of Directors; and

 

(B)                                any new directors whose election to
the Board of Directors or whose nomination for election by the Company’s
shareholders was approved by at least a majority of the directors of the
Company then still in office who were either directors on such first issue date
of the Securities or whose election or nomination for election was previously
so approved;

 

(v)                                 the
Company distributes to all or substantially all holders of shares of its Common
Stock its assets, cash, debt securities or certain rights to purchase its
securities, which distribution has a per share value exceeding 10% of the closing
price of the Common Stock on the day preceding the declaration date for such
distribution; or

 

(vi)                              the
Company is liquidated or dissolved or holders of the Common Stock approve any
plan or proposal for the liquidation or dissolution of the Company.

 

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

 

A-11

 

A Repurchase Event
will not be deemed to have occurred if in the case of a merger or
consolidation, all of the consideration (other than Cash payments for
fractional shares or pursuant to statutory appraisal rights) in the merger or
consolidation constituting the Change in Control consists of common stock and
any associated rights traded on a US national securities exchange or quoted on
The Nasdaq National Market (or which will be so traded or quoted when issued or
exchanged in connection with such change in control), and, as a result of such
transaction or transactions, the securities become convertible solely into such
common stock and associated rights.

 

If a Repurchase
Event (except for any Repurchase Event solely pursuant to clause (iv) of the
definition of “Change of Control”) occurs prior to September 15, 2009, the
Company shall pay, in addition to the Repurchase Price, a Repurchase Event
Make-Whole Premium to Holders of Securities who elect to require the Company to
repurchase such Securities in connection with a Repurchase Event.  If the Holder surrenders the Securities for
conversion in accordance with the Indenture in connection with a Repurchase
Event, in lieu of requiring the Company to repurchase such Securities, such
Holder will receive (i) Cash and, if applicable, shares of Common Stock in
respect of such conversion obligation, plus (ii) the applicable Repurchase
Event Make-Whole Premium.

 

The Repurchase
Event Make-Whole Premium may be paid, subject to the terms of the Indenture, in
Cash, shares of Common Stock, or a combination thereof.  If the Company elects to pay the Repurchase
Event Make-Whole Premium, in whole or in part, in shares of Common Stock, the
number of shares of Common Stock to be delivered by the Company will be equal
to the portion of the Repurchase Event Make-Whole Premium to be paid in shares
of Common Stock divided by 95% of the Repurchase Market Price (as defined
below) of such shares Common Stock.  If
the Company elects to pay the Repurchase Event Make-Whole Premium in whole or
in part in shares of Common Stock, the Company shall pay Cash in lieu of
fractional shares.

 

Subject to the
terms and conditions in the Indenture, the Repurchase Event Make-Whole Premium
shall equal an amount derived by multiplying each $1,000 principal amount of
Securities by a specified percentage (the “Repurchase Event Make-Whole
Premium”) which shall be determined by reference to the table set forth in
the Indenture (the “Make-Whole Premium Table”) and is based on the date
on which the Repurchase Event becomes effective (the “effective date”)
and the price (the “Stock Price”) paid per share of the Company’s Common
Stock in the transaction constituting the Repurchase Event.  If a Holder of Common Stock receives only
Cash in the Repurchase Event, the Stock Price shall be the Cash amount paid per
share of Common Stock.  Otherwise, the
Stock Price shall equal the average of the Sale Prices of Common Stock on the
five Trading Days up to, but not including, the Effective Date of the
Repurchase Event.

 

The stock prices
set forth in the first column of the Make-Whole Premium Table in the Indenture
shall be adjusted in accordance with the Indenture as of any date on which the
Conversion Rate is adjusted and shall equal the Stock Prices applicable
immediately prior to such adjustment, multiplied by a fraction, the numerator
of which is the Conversion Rate immediately prior to the adjustment giving rise
to the Stock Price adjustment and the denominator of which is the Conversion
Rate as so adjusted.

 

If the Stock Price
is between two Stock Price amounts in the Make-Whole Premium Table or the
repurchase date is between two dates on the Make-Whole Premium Table, the
Repurchase Event Make-Whole Premium shall be determined by straight-line
interpolation between the make-whole premium amounts set forth for the higher
and lower Stock Price amounts and the two dates, as applicable, based on a 365
day years.

 

A-12

 

If the Stock Price
is equal to or in excess of $120.00 per share of Common Stock (subject to
adjustment for any event requiring an adjustment of the Conversion Rate as set
forth in the Indenture), no Repurchase Event Make-Whole Premium will be paid.

 

If the Stock Price
is less than or equal to $28.64 per share of Common Stock (subject to
adjustment for any event requiring an adjustment of the Conversion Rate as set
forth in the Indenture), no Repurchase Event Make-Whole Premium will be paid.

 

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

 

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

 

If Cash (including
any Cash constituting any part of the Repurchase Event Make-Whole Premium) and
shares of Common Stock (if all or any portion of the Repurchase Price or the
Repurchase Event Make-Whole Premium is to be paid in shares of Common Stock)
sufficient to pay the Repurchase Price of all Securities or portions thereof to
be repurchased with respect to a Repurchase Event Repurchase Notice, has been
deposited with the Paying Agent, at 10:00 a.m., New York City time, on the
Business Day immediately following the Repurchase Event Repurchase Date, then,
immediately after Repurchase Event Repurchase Date, such Securities will cease
to be outstanding and interest (including Contingent Interest, if any and
Special Interest, if any), on such Securities will cease to accrue, whether or
not such Securities are delivered to the Paying Agent, and the Holder thereof
shall have no other rights as such other than the right to receive the
Repurchase Price upon and the Repurchase Event Make-Whole Premium, if any,
surrender of such Security.

 

11.                                 Conversion

 

Subject
to and upon compliance with the provisions of the Indenture, a Holder of a Security
shall have the right, at such Holder’s option, to convert all or any portion
(if the portion to be converted is $1,000 or an integral multiple of $1,000) of
such Security into shares of Common Stock at the Conversion Price in effect on
the date of conversion only as follows:

 

(i)                                     Conversion
Based on Sale Price of Common Stock. 
The Securities may be surrendered for conversion during any calendar
quarter (beginning with the quarter ending March 31, 2005) if the Sale
Price of the Common Stock for at least 20 consecutive Trading Days in the
Measurement Period of the immediately preceding calendar quarter exceeds 120%
of the Conversion Price in effect on the last Trading Day of the immediately
preceding calendar quarter (in the event that the Conversion Price on such last
Trading Day of the immediately preceding calendar quarter is not the same as
the Conversion Price in effect for each of the Trading Days in such Measurement
Period, the Board of Directors shall make such adjustments as it, in its
discretion, deems appropriate in determining whether the foregoing condition
has been met).

 

(ii)                                  Conversion
Based on Satisfaction of Trading Price Condition.  The Securities may be surrendered for
conversion during any five consecutive Business Day

 

A-13

 

period immediately
following any five consecutive Trading Day period (the “Security Measurement
Period”) in which the average Trading Price per $1,000 principal amount of
Securities during such Security Measurement Period was equal to or less than
98% of the average Conversion Value during such Security Measurement Period; provided
that a Holder may not surrender Securities for conversion pursuant to this
Section 11(ii) after September 15, 2019 if, on any Trading Day during
the applicable Security Measurement Period, the Sale Price of Common Stock was
between 100% and 120% of the Conversion Price of the Securities in effect on
that Trading Day.

 

(iii)                               Conversion
Based on Redemption.  The Securities
may be surrendered for conversion at any time prior to 5:00 p.m., New York
City time, on the Business Day immediately preceding the Redemption Date, if
such Security has been called for redemption pursuant to Article 3 of the
Indenture.

 

(iv)                              Conversion
Upon Occurrence of Certain Corporate Transactions.  If either: (A) the Company is a party to
any consolidation or merger of the Company with or into another Person (or vice
versa) pursuant to which all of the outstanding shares of Common Stock are
converted into cash, securities or other property; (B) any “person” or
“group,” within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act
or any successor provision to either of the foregoing, including any group
acting for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d-5(b)(1) under the Exchange Act, becomes the “beneficial
owner,” as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of 50% or more of the total voting power of all classes of the
Company’s Voting Stock entitled to vote generally in the election of directors;
(C) the Company sells, transfers, conveys or otherwise disposes, in one or
a series of related transactions, of all or substantially all of its properties
or assets to any “person” or “group” (as such terms are defined above); or
(D) the Company distributes to all holders of shares of its Common Stock,
its assets, cash, debt securities or certain rights to purchase its securities,
which distribution has a per share value exceeding 10% of the closing price of
the Common Stock on the day preceding the declaration date for such
distribution or (E) except as described in clauses (A) to (D) above, the
Company takes any action, or becomes aware of any event, that would require
adjustment to the Conversion Rate pursuant to Sections 4.4(b), (c), (d),
(e) and (f) of the Indenture, then (x) in the case of (A), (B) and (C) above, a
Holder may surrender Securities for conversion at any time from and after the
date that is 15 Business Days before the date the Company announces as the
anticipated effective date of the transaction or event until the date that is
15 Business Days after the actual effective date of the transaction or event,
and (y) in the case of (D) and (E) above, the Company shall mail to Holders
written notice of the distribution at least 20 days prior to the record,
effective or expiration date, as the case may be, of the distribution or
transaction and once the Company has given such notice, Holders may surrender
their Securities for conversion beginning on the date that the Company mails
such notice (or, if earlier, the date that the Company is required to mail such
notice pursuant to this Indenture) until the close of business on the Business
Day immediately preceding the “ex-dividend trading date” of the distribution or
the Company’s announcement that such distribution or transaction shall not take
place.

 

The Company will
notify Holders of any event triggering the right to convert the Securities as
specified above in accordance with the Indenture, and will publicly announce
that the Securities have become convertible.

 

A-14

 

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

 

The initial
Conversion Rate is 25.4863 shares per $1,000 principal amount of Securities,
subject to adjustment in certain events described in the Indenture.

 

To surrender a Security
for conversion, a Holder must, in the case of Global Securities, comply with
the Applicable Procedures of the Depositary in effect at that time, and in the
case of Certificated Securities, (1) surrender the Security duly endorsed
to the Company or in blank, at the office of the Conversion Agent,
(2) complete and manually sign the conversion notice below (or complete
and manually sign a facsimile of such notice) and deliver such notice to the
Conversion Agent, (3) furnish appropriate endorsements and transfer
documents and (4) pay all funds required, if any, relating to interest
(including Contingent Interest, if any or Special Interest, if any), and any
withholding, transfer or similar tax, if required.

 

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

 

No payment or
adjustment will be made for accrued and unpaid interest (including Contingent
Interest, if any and Special Interest, if any), or dividends on the shares of
Common Stock, except as provided in the Indenture.

 

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 which shall be deliverable upon conversion
shall be computed on the basis of the aggregate principal amount of the
Security (or specified portions thereof to the extent permitted thereby) so
surrendered.  Subject to the next
succeeding sentence, the Company will, as soon as practicable thereafter, issue
and deliver at said office or place to such Holder of a Security, or to such
Holder’s nominee or nominees, certificates (other than in the case of Holders
of Securities in book-entry form with the Depositary, which shares shall be
delivered in accordance with the Depositary customary practices) for the number
of full shares of Common Stock to which such Holder shall be entitled as
aforesaid, together with Cash in lieu of any fraction of a share to which such
Holder would otherwise be entitled.  The
Company shall not be required to deliver certificates for shares of Common
Stock while the stock transfer books for such stock or the security register
are duly closed for any purpose, but certificates for shares of Common Stock
shall be issued and delivered as soon as practicable after the opening of such
books or security register.

 

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

 

A-15

 

If the Company
(i) reclassifies or changes the shares of Common Stock into another class
of Capital Stock, (ii) is a party to a merger, consolidation, statutory
share exchange or combination of the Company with another corporation and as a
result of which all the holders of the Common Stock shall be entitled to
receive stock, securities or other property or assets (including Cash or a
combination thereof) with respect to or in exchange for all of their Common
Stock, or (iii) sells or conveys all or substantially all of its
properties and assets to any person as a result of which all Holders of Common
Stock shall be entitled to receive stock, securities or other property or
assets (including Cash or any combination thereof) with respect to or in
exchange for all of their Common Stock, the right to convert a Security into
shares of Common Stock may be changed into a right to convert a Security into
the kind and amount of shares of stock and other securities or property or
assets (including Cash) which such Holder would have been entitled to receive
upon such reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Holder converted its Security into
Common Stock immediately prior to such transaction, in each case, in accordance
with the Indenture.

 

In case any
Certificated Security shall be surrendered for partial conversion, the Company
shall execute and the Trustee shall, upon the written order of the Company,
authenticate and deliver to the Holder of the Security so surrendered, without
charge to such Holder (subject to the provisions of Section 4.8 of the
Indenture), a new Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Certificated Securities.

 

Any shares of
Common Stock issued upon conversion of a Security shall bear the Legend until
after the second anniversary of the later of the Issuance Date and the last
date on which the Company or any Affiliate was the owner of such shares of the
Security (or any predecessor security) from which such shares were converted
(or such shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provision thereunder)  (or such longer period of time as may be
required under the Securities Act or applicable state securities laws, as set
forth in an Opinion of Counsel, unless otherwise agreed by the Company and the
Holder hereof.

 

12.                                 Merger or Consolidation

 

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

 

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

 

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

 

(c)                                  the Company shall have delivered to
the Trustee an Officers’ Certificate and, if requested by the Trustee, an
Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer, sale, lease or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with Article 7 of the Indenture and that all conditions precedent
herein provided for relating to such transaction have been satisfied.

 

A-16

 

13.                                 Conversion Arrangement on Call for Redemption

 

Any Securities
called for redemption, unless surrendered for conversion before the close of
business on the Business Day immediately preceding the Redemption Date, may be
deemed, to the fullest extent permitted by law, to be purchased from the
Holders of such Securities at an amount not less than the Redemption Price,
together with accrued interest (including Contingent Interest, if any and
Special Interest, if any), to, but not including, the Redemption Date, by one
or more investment bankers or other purchasers who may agree with the Company
to purchase such Securities from the Holders, to convert them into Common Stock
of the Company and to make payment for such Securities to the Paying Agent in
trust for such Holders.

 

14.                                 Automatic Conversion

 

If at any time the Current Market Price of the
Company’s Common Stock exceeds 150% of the Conversion Price for at least 20
Trading Days during any 30-day Trading Day period ending within five Trading
Days prior to the date of the notice of automatic conversion, the Company may
elect to automatically convert the Securities pursuant to the terms of the
Indenture; provided, however, that, during the two-year period
commencing on the date of the last delivery of the Securities under the
Indenture, the Company may only automatically convert the Securities if, in
accordance with the terms of the Registration Rights Agreement, a registration
statement registering the resale of the Securities and Common Stock issuable
upon conversion of the Securities is declared effective under the Securities
Act prior to the date of the Automatic Conversion Notice and such registration
statement remains effective on the date selected for automatic conversion. In
the event that the date on which the Securities will be automatically converted
occurs on or prior to September 15, 2009, the Company will pay the
Make-Whole Interest Payment on the Automatic Conversion Date.

 

The Make-Whole Interest Payment shall equal five full
years of interest on the Securities, less any interest actually paid or
provided for on the Securities prior to such Automatic Conversion.  The Company may, at its option, pay the
Make-Whole Interest Payment in Cash or in Common Stock.  In the event that the Company elects to pay
the Make-Whole Interest Payment in Common Stock, the shares of Common Stock
will be valued at 95% of the average Sale Price for each of the five Trading
Days immediately preceding the second Trading Day prior to the Automatic
Conversion Date.

 

15.                                 Denominations, Transfer, Exchange

 

The Securities are
in registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000.  A Holder may
register the transfer of or exchange Securities in accordance with the
Indenture.  The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes or other governmental charges that may be
imposed in relation thereto by law or permitted by the Indenture.

 

16.                                 Persons Deemed Owners

 

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

 

17.                                 Unclaimed Money

 

If money for the
payment of principal or interest (including Contingent Interest, if any and
Special Interest, if any), remains unclaimed for two years, the Trustee or
Paying Agent will pay the money back to the Company at its written request,
subject to applicable unclaimed property law. 
After

 

A-17

 

that, Holders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.

 

18.                                 Amendment, Supplement and Waiver

 

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

 

19.                                 Successor Entity

 

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

 

20.                                 Defaults and Remedies

 

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

 

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

 

21.                                 Guaranty

 

To the extent provided in, and in accordance with, the
Indenture, the Securities will be guaranteed by Guarantor. The obligations of
Guarantor under its Subsidiary Guarantee will rank equally in right of

 

A-18

 

payment with all existing and future unsecured and
unsubordinated indebtedness of Guarantor senior to existing and future
subordinated indebtedness of Guarantor.

 

22.                                 Trustee Dealings with the Company

 

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

 

23.                                 No Recourse Against Others

 

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

 

24.                                 Calculations in Respect of Securities

 

The Company and
its agents shall be responsible for making all calculations as contemplated
under this Indenture and the Securities. 
Such calculations include, but are not limited to, the determination of
the trading price of the Securities, the Current Market Price of the Common
Stock and any amounts of interest and any Make-Whole payments that are payable
on the Securities.  Any calculations made
in good faith and without manifest error shall be final and binding upon all
Holders of the Securities.  The Company
shall provide a copy of its calculations to the Trustee, and, absent manifest
error, the Trustee shall be entitled to rely on the accuracy of such
calculations without conducting an independent verification as to their
accuracy.

 

25.                                 Authentication

 

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

 

26.                                 Abbreviations and Definitions

 

Customary
abbreviations may be used in the name of the Holder or an assignee, such
as:  TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and UGMA (=
Uniform Gifts to Minors Act).

 

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

 

27.                                 Indenture to Control; Governing Law

 

In the case of any
conflict between the provisions of this Security and the Indenture, the
provisions of the Indenture shall control. 
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to principals of conflicts of
law.

 

A-19

 

The Company will
furnish to any Holder, upon written request and without charge, a copy of the
Indenture.  Requests may be made to:  United Industrial Corporation, 124 Industry Lane,
Hunt Valley Maryland 21030, Att:  General
Counsel.

 

A-20

 

ASSIGNMENT FORM

 

To assign this
Security, fill in the form below:

 

	
  I or we assign
  and transfer this Security to

  
	
   

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

  

 

 

 

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

 

and irrevocably
appoint

 

 

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

 

	
  Your Signature:

  
	
   

  
	
  Date:

  	
   

  
	
   

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

  

 

 

*                 Signature
guaranteed by:

 

	
  By:

  	
   

  	
   

  

 

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

 

A-21

 

CONVERSION NOTICE

 

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

 

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

 

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

 

	
   

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

  
	
   

  
	
   

  
	
   

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

  

 

Your Signature:

 

	
  Date:

  	
   

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

  

 

 

*                 Signature
guaranteed by:

 

	
  By:

  	
   

  	
   

  

 

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

 

A-22

 

SCHEDULE OF
EXCHANGES OF SECURITIES(3)

 

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

 

	
  Principal Amount of this

  Global Security

  Following Such Decrease

  Date of Exchange (or

  Increase)

  	
   

  	
  Authorized Signatory of

  Securities Custodian

  	
   

  	
  Amount of Decrease in

  Principal Amount of this

  Global Security

  	
   

  	
  Amount of Increase in

  Principal Amount of this

  Global Security

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

(3)                                  This
schedule should be included only if the Security is a Global Security.

 

A-23

 

EXHIBIT
B

 

CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR REGISTRATION

OF TRANSFER OF TRANSFER RESTRICTED SECURITIES(4)

 

Re:        3.75%
Convertible Senior Securities due 2024 (the “Securities”) of United
Industrial Corporation

 

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

 

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

 

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

 

In connection with
such request and in respect of each such Security, the Transferor does hereby
certify that the Transferor is familiar with transfer restrictions relating to
the Securities as provided in Section 2.12 of the Indenture dated as of
September 15, 2004 between United Industrial Corporation and U.S. Bank
National Association, as trustee (the “Indenture”), and the transfer of such
Security is being made pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the “Securities Act”) (check applicable
box) or the transfer or exchange, as the case may be, of such Security does not
require registration under the Securities Act because (check applicable box):

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Insert Name of Transferor)

  	
   

  

 

(4)                                  This
certificate should only be included if this Security is a Transfer Restricted
Security.

 

B-1

 

EXHIBIT C

 

FORM OF NOTATION
OF GUARANTEE

 

For value
received, Guarantor (which term includes any successor Person of Guarantor in
accordance with the Indenture) has unconditionally guaranteed, to the extent
set forth, and subject to the provisions provided, in the Indenture (the
“Indenture;” all capitalized terms used but not defined herein shall have the
meanings assigned to them in the Indenture), dated September 15, 2004,
among United Industrial Corporation, a Delaware corporation (the “Company”),
Guarantor and U.S. Bank, National Association, a national banking association
organized and existing under the laws of the United States, as trustee (the
“Trustee”), (a) the principal of, premium, if any, and interest (including
Contingent Interest, if any, and Special Interest, if any) on the Securities
will be promptly paid in full when due, whether at maturity, by acceleration,
redemption, repurchase or otherwise, and interest on the overdue principal of
and premium, if any, and interest (including Contingent Interest, if any and
Special Interest, if any), on the Securities or such shares, if lawful, and all
other obligations of the Company to the Holders or the Trustee under the
Indenture, the Securities or under the Registration Rights Agreement will be
promptly paid in full or performed, all in accordance with the terms thereof;
and (b) in case of any extension of time of payment or renewal of any
Securities, any such shares or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise.  Failing payment when due
of any amount so guaranteed or any performance so guaranteed for whatever
reason, Guarantor shall be obligated to pay the same immediately.  The obligations of the Guarantor to the
Holders and to the Trustee pursuant to the Subsidiary Guarantee are expressly
set forth in Article 5 of the Indenture, and reference is hereby made to
the Indenture for the precise terms of the Subsidiary Guarantee.

 

Guarantor hereby
confirms that it is the intention of the Guarantor, the Company, Trustee and
the Holders that the Subsidiary Guarantee of Guarantor not constitute a
fraudulent transfer or conveyance for purposes of bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any Subsidiary Guarantee.  To effectuate the foregoing intention, the
Guarantor hereby irrevocably agrees with the Company, the Trustee and the
Guarantors that the obligations of Guarantor shall be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, result in the
obligations of Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.

 

The Subsidiary
Guarantee shall be a senior unsecured obligation of Guarantor and ranks equally
in right of payment with all existing and future unsecured and unsubordinated
indebtedness of Guarantor senior to existing and future subordinated
indebtedness of Guarantor.

 

[THE REMAINDER OF
THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

C-1

 

IN WITNESS
WHEREOF, the Guarantor has caused this Subsidiary Guarantee to be duly executed
as of this      day of
                 ,
2004.

 

 

	
   

  	
  AAI CORPORATION, a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-2Exhibit 10.2

 

EXECUTION COPY

 

REGISTRATION RIGHTS
AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is
made and entered into as of September 15, 2004, by and among United
Industrial Corporation, a Delaware corporation (the “Company”), AAI Corporation,
a Maryland corporation (the “Subsidiary Guarantor”) and UBS
Securities LLC and the other Initial Purchasers named in the Purchase Agreement
referred to below (collectively, the “Initial Purchasers”), for whom UBS
Securities LLC is acting as representative, pursuant to that certain Purchase
Agreement, dated as of September 9, 2004 (the “Purchase Agreement”) among
the Company, the Subsidiary Guarantor and the Initial Purchasers.

 

In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
and the Subsidiary Guarantor have agreed to provide the registration rights set
forth in this Agreement.  The execution
of this Agreement is a condition to the closing under the Purchase Agreement.

 

The Company
and the Subsidiary Guarantor agree with the Initial Purchasers (i) for
their benefit as Initial Purchasers and (ii) for the benefit of the
beneficial owners (including the Initial Purchasers) from time to time of
the Notes (as defined herein) and the Subsidiary Guarantees (as defined
herein) and the beneficial owners from time to time of the Underlying
Common Stock (as defined herein) issued upon conversion of the Notes (each
of the foregoing a “Holder” and together the “Holders”), as
follows:

 

Section 1.               Definitions.  Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement.  As used in this Agreement,
the following terms shall have the following meanings:

 

“Affiliate”
means with respect to any specified person, an “affiliate,” as defined in Rule
144, of such person.

 

“Amendment
Effectiveness Deadline Date” has the meaning set forth in Section
2(d) hereof.

 

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

 

“Common
Stock” means the shares of common stock, par value $1.00 per share, of the
Company and any other shares of capital stock as may constitute “Common
Stock” for purposes of the Indenture, including the Underlying Common
Stock.

 

“Conversion
Rate” has the meaning assigned to such term in the Indenture.

 

“Damages
Accrual Period” has the meaning set forth in Section 2(e) hereof.

 

“Damages
Payment Date” means each interest payment date under the Indenture.

 

“Effectiveness
Deadline Date” has the meaning set forth in Section 2(a) hereof.

 

“Effectiveness
Period” means a period (subject to extension pursuant to Section
3(i) hereof) beginning on the date hereof and ending on the earlier
of (x) the later of two years from (1) the original issuance of the
Notes and (2) the last date that the Company or any of its Affiliates was
the owner of such Notes (or any predecessor thereto), (y)  the date
permitted by Rule 144(k) under the Securities Act or any successor
provisions thereunder or (z)  the date when each of the Registrable
Securities covered by the Shelf Registration Statement ceases to be a
Registrable Security.

 

 

“Event Date”
has the meaning set forth in Section 2(e) hereof.

 

“Event”
has the meaning set forth in Section 2(e) hereof.

 

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

 

“Filing
Deadline Date” has the meaning set forth in Section 2(a) hereof.

 

“Holder”
has the meaning set forth in the third paragraph of this Agreement.

 

“Indenture”
means the Indenture, dated as of September 15, 2004, among the Company and
the Subsidiary Guarantor and U.S. Bank National Association, as trustee,
pursuant to which the Notes and the Subsidiary Guarantees are being issued.

 

“Initial
Purchasers” has the meaning set forth in the preamble hereto.

 

“Initial
Shelf Registration Statement” has the meaning set forth in Section
2(a) hereof.

 

“Issue Date”
means the first date of original issuance of the Notes and the Subsidiary
Guarantees.

 

“Liquidated
Damages Amount” has the meaning set forth in Section 2(e) hereof.

 

“Material
Event” has the meaning set forth in Section 3(i) hereof.

 

“Notes”
means the 3.75% Convertible Senior Notes due 2004 of the Company to be
purchased pursuant to the Purchase Agreement.

 

“Notice and
Questionnaire” means a written notice and questionnaire delivered to the
Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum dated September 10, 2004 relating to the Notes.

 

“Notice
Holder” means, on any date, any Holder that has delivered a Notice and
Questionnaire to the Company on or prior to such date, so long as all of their
Registrable Securities that have been registered for resale pursuant to a
Notice and Questionnaire have not been sold in accordance with a Shelf
Registration Statement.

 

“Purchase
Agreement” has the meaning set forth in the preamble hereof.

 

“Prospectus”
means the prospectus included in any Shelf Registration Statement (including,
without limitation, a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 415 promulgated under the Securities Act), as amended or
supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

 

“Record
Holder” means (i) with respect to any Damages Payment Date relating to
any Notes as to which any such Liquidated Damages Amount has accrued, the
holder of record of such Note on the record date with respect to the interest
payment date under the Indenture on which such Damages Payment Date shall occur
and (ii) with respect to any Damages Payment Date relating to the
Underlying Common Stock as to which any such Liquidated Damages Amount has
accrued, the registered holder of such Underlying Common Stock fifteen
(15) days prior to such Damages Payment Date.

 

2

 

“Registrable
Securities” means the Notes and the Subsidiary Guarantees until the Notes
have been converted into the Underlying Common Stock and, at all times the
Underlying Common Stock and any securities into or for which such Underlying
Common Stock has been converted, and any security issued with respect thereto
upon any stock dividend, split or similar event until, in the case of any such
security, the earliest of (x) the date on which such security has been
effectively registered under the Securities Act and disposed of, whether or not
in accordance with the Shelf Registration Statement and (y) the date that
is two years after the later of (1) the original issuance of the Notes and
(2) the last date that the Company or any of its Affiliates was the owner
of such Notes (or any predecessor thereto), or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor
provisions thereunder.

 

“Registration
Expenses” has the meaning set forth in Section 5 hereof.

 

“Registration
Statement” means any registration statement of the Company that covers any
of the Registrable Securities pursuant to the provisions of this Agreement
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such registration statement.

 

“Rule 144”
means Rule 144 under the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the SEC.

 

“Rule 144A”
means Rule 144A under the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the SEC.

 

“SEC”
means the Securities and Exchange Commission.

 

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

 

“Shelf
Registration Statement” has the meaning set forth in Section
2(a) hereof.

 

“Subsequent
Shelf Registration Statement” has the meaning set forth in Section
2(b) hereof.

 

“Subsidiary
Guarantee” means the unconditional guarantee of the Notes by the Subsidiary
Guarantor pursuant to the terms of the Indenture.

 

“Subsidiary
Guarantor” has the meaning set forth in the preamble hereto.

 

“Suspension
Notice” has the meaning set forth in Section 3(i) hereof.

 

“Suspension
Period” has the meaning set forth in Section 3(i) hereof.

 

“TIA”
means the Trust Indenture Act of 1939, as amended.

 

“Trustee”
means U.S. Bank National Association, the Trustee under the Indenture.

 

“Underlying
Common Stock” means the Common Stock issued or issuable upon conversion,
redemption, purchase or repurchase of the Notes as payment for interest
(including any contingent interest) on the Notes, payment of any premium
due on the Notes or as payment for the Liquidated Damages Amount.

 

3

 

Section 2.               Shelf
Registration.

 

(a)           The Company and the Subsidiary
Guarantor shall prepare and file or cause to be prepared and filed with the
SEC, as soon as practicable but in any event by the date (the “Filing
Deadline Date”) that is ninety (90) days after the Issue Date, a
Registration Statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act (a “Shelf Registration
Statement”) registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the “Initial Shelf Registration
Statement”).  The Initial Shelf
Registration Statement shall be on Form S-1 or S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders in accordance with the reasonable methods of distribution elected by
the Holders, approved by the Company and the Subsidiary Guarantor, and set
forth in the Initial Shelf Registration Statement.  The Company and the Subsidiary Guarantor
shall use their reasonable best efforts to cause the Initial Shelf Registration
Statement to be declared effective under the Securities Act as promptly as is
practicable but in any event by the date (the “Effectiveness Deadline Date”) that
is two hundred ten (210) days after the Issue Date, and shall use their
reasonable best efforts to keep the Initial Shelf Registration Statement (or
any Subsequent Shelf Registration Statement) continuously effective under
the Securities Act until the expiration of the Effectiveness Period.  At the time the Initial Shelf Registration
Statement is declared effective, each Holder that became a Notice Holder on or
prior to the date that is ten (10) Business Days prior to such time of
effectiveness shall be named as a selling securityholder in the Initial Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of Registrable Securities
in accordance with applicable law.

 

(b)           If the Initial Shelf Registration
Statement or any Subsequent Shelf Registration Statement ceases to be effective
for any reason at any time during the Effectiveness Period, the Company and the
Subsidiary Guarantor shall use their reasonable best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness
amend the Shelf Registration Statement in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or
file an additional Shelf Registration Statement covering all of the securities
that as of the date of such filing are Registrable Securities (a “Subsequent
Shelf Registration Statement”).  If a
Subsequent Shelf Registration Statement is filed, the Company and the
Subsidiary Guarantor shall use their reasonable best efforts to cause the
Subsequent Shelf Registration Statement to become effective as promptly as is
practicable after such filing and shall use their reasonable best efforts to
keep such Shelf Registration Statement (or subsequent Shelf Registration
Statement) continuously effective until the end of the Effectiveness
Period.

 

(c)           The Company and the Subsidiary
Guarantor shall supplement and amend the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the
registration form used by the Company and the Subsidiary Guarantor for such
Shelf Registration Statement, if required by the Securities Act or as
reasonably requested by the Initial Purchasers or by the Trustee on behalf of
the Holders of the Registrable Securities covered by such Shelf Registration
Statement.

 

(d)           Each Holder of Registrable Securities
agrees that if such Holder wishes to sell Registrable Securities pursuant to a
Shelf Registration Statement and related Prospectus, it will do so only in
accordance with this Section 2(d) and Section 3(i). Each Holder of
Registrable Securities wishing to sell Registrable Securities pursuant to a
Shelf Registration Statement and related Prospectus agrees to deliver a
completed and executed Notice and Questionnaire to the Company and the
Subsidiary Guarantor prior to any attempted or actual distribution of
Registrable Securities under the Shelf Registration Statement; provided
that Holders of Registrable Securities shall have at least twenty (20) Business
Days from the date on which the Notice and Questionnaire is first sent to such
Holders by the Company to complete and return the Notice and Questionnaire to
the Company and the Subsidiary Guarantor. 
From and after the date the Initial Shelf Registration Statement is
declared effective, the Company and the

 

4

 

Subsidiary Guarantor shall, as promptly as practicable after the date a
Notice and Questionnaire is delivered, and in any event within the later of
(x) five (5) Business Days after such date or (y) five
(5) Business Days after the expiration of any Suspension Period
(1) in effect when the Notice and Questionnaire is delivered or
(2) put into effect within five (5) Business Days of such delivery date,
(i) if required by applicable law, file with the SEC a post-effective
amendment to the Shelf Registration Statement or, if required by applicable
law, prepare and file a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and Questionnaire
is named as a selling securityholder in the Shelf Registration Statement and
the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company and the Subsidiary Guarantor shall file a
post-effective amendment to the Shelf Registration Statement, use their reasonable
best efforts to cause such post-effective amendment to be declared effective
under the Securities Act as promptly as is practicable, but in any event by the
date (the “Amendment Effectiveness Deadline Date”) that is thirty
(30) days after the date such post-effective amendment is required by this
clause to be filed; (ii) provide such Holder a reasonable number of copies
of any documents filed pursuant to Section 2(d)(i); and (iii) notify such
Holder as promptly as practicable after the effectiveness under the Securities
Act of any post-effective amendment filed pursuant to Section 2(d) (i); provided
that if such Notice and Questionnaire is delivered during a Suspension Period,
or a Suspension Period is put into effect within five (5) Business Days
after such delivery date, the Company and the Subsidiary Guarantor shall so
inform the Holder delivering such Notice and Questionnaire and shall take the
actions set forth in clauses (i), (ii) and (iii) above within five
(5) Business Days after expiration of the Suspension Period in accordance
with Section 3(i); provided  further that if under applicable law,
the Company and the Subsidiary Guarantor have more than one option as to the
type or manner of making any such filing, the Company and the Subsidiary Guarantor
shall make the required filing or filings in the manner or of a type that is
reasonably expected to result in the earliest availability of the Prospectus
for effecting resales of Registrable Securities.  Notwithstanding anything contained herein to
the contrary, (i) neither the Company nor the Subsidiary Guarantor shall
be obligated to file more than three (3) post-effective amendments for all
such Holders in any one three-month period, (ii) in no event shall the
Company or the Subsidiary Guarantor be required to file any post-effective
amendment or supplement unless the aggregate principal amount of the Notes
requested to be included therein by all Holders exceeds $1,000,000 and
(iii) neither the Company nor the Subsidiary Guarantor shall be under any
obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Shelf Registration Statement or related Prospectus; provided,
however, that any Holder that becomes a Notice Holder pursuant to the
provisions of this Section 2(d) (whether or not such Holder was a Notice
Holder at the time the Shelf Registration Statement was declared
effective) shall be named as a selling securityholder in the Shelf
Registration Statement or related Prospectus in accordance with the requirements
of this Section 2(d).

 

(e)           The parties hereto agree that the
Holders of Registrable Securities will suffer damages, and that it would not be
feasible to ascertain the extent of such damages with precision, if
(i) the Initial Shelf Registration Statement has not been filed on or
prior to the Filing Deadline Date, (ii) the Initial Shelf Registration
Statement has not been declared effective under the Securities Act on or prior
to the Effectiveness Deadline Date or (iii) the Initial Shelf Registration
Statement is filed and declared effective but shall thereafter cease to be
effective (without being succeeded immediately by an additional registration
statement filed and declared effective) or usable for the offer and sale
of Registrable Securities for a period of time (including any Suspension
Period) which shall exceed forty-five (45) days in the aggregate in
any ninety (90) day period or seventy-five (75) days in the aggregate in
any three hundred sixty (360) day period (each of the events of a type described
in any of the foregoing clauses (i) through (iii) are individually
referred to herein as an “Event,” and the Filing Deadline Date in the
case of clause (i), the Effectiveness Deadline Date in the case of clause (ii),
the date on which the duration of the ineffectiveness or unusability of the
Initial Shelf Registration Statement in any period exceeds the

 

5

 

number of days permitted by clause (iii) hereof in the case of
clause (iii), being referred to herein as an “Event Date”). Events shall
be deemed to continue until the following dates with respect to the respective
types of Events: the date the Initial Shelf Registration Statement is filed in
the case of an Event of the type described in clause (i), the date the Initial
Shelf Registration Statement is declared effective under the Securities Act in
the case of an Event of the type described in clause (ii), and the date the
Initial Shelf Registration Statement becomes effective or usable again in the
case of an Event of the type described in clause (iii).

 

Accordingly,
commencing on (and including) any Event Date and ending on (but
excluding) the next date on which there are no Events that have occurred
and are continuing (a “Damages Accrual Period”), the Company agrees to
pay, as liquidated damages and not as a penalty, an amount (the “Liquidated
Damages Amount”) at the rate described below, payable periodically on
each Damages Payment Date to Record Holders of Notes that are Registrable
Securities to the extent of, for each such Damages Payment Date, accrued and
unpaid Liquidated Damages Amount to (but excluding) such Damages Payment
Date (or, if the Damages Accrual Period shall have ended prior to such Damages
Payment Date, the date of the end of the Damages Accrual Period); provided
that any Liquidated Damages Amount accrued with respect to any Note or portion
thereof called for redemption on a redemption date or converted into Underlying
Common Stock on a conversion date prior to the Damages Payment Date, shall, in
any such event, be paid instead to the Holder who submitted such Note or
portion thereof for redemption or conversion on the applicable redemption date
or conversion date, as the case may be, on such date (or promptly following the
conversion date, in the case of conversion). 
The Liquidated Damages Amount shall accrue at a rate per annum equal to
one-quarter of one percent (0.25%) for the first 90-day period from the
Event Date, and thereafter at a rate per annum equal to one-half of one percent
(0.5%) of the principal amount of such Notes determined as of the Business
Day immediately preceding the next Damages Payment Date.  Notwithstanding the foregoing, no Liquidated
Damages Amounts shall accrue as to any Registrable Security from and after the
earlier of (x) the date such security is no longer a Registrable Security
and (y) expiration of the Effectiveness Period. The rate of accrual of the
Liquidated Damages Amount with respect to any period shall not exceed the rate
provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events.  Following the cure of
all Events requiring the payment by the Company of Liquidated Damages Amounts
to the Holders of Registrable Securities pursuant to this Section, the accrual
of Liquidated Damages Amounts shall cease (without in any way limiting the
effect of any subsequent Event requiring the payment of Liquidated Damages
Amount by the Company).

 

The Trustee
shall be entitled, on behalf of Holders of Notes, to seek any available remedy
for the enforcement of this Agreement, including for the payment of any
Liquidated Damages Amount. Notwithstanding the foregoing, the parties agree
that the sole damages payable for a violation of the terms of this Agreement
with respect to which liquidated damages are expressly provided shall be such
liquidated damages.

 

All of the
Company’s and the Subsidiary Guarantor’s obligations set forth in this Section
2(e) that are outstanding with respect to any Registrable Security at the
time such security ceases to be a Registrable Security shall survive until such
time as all such obligations with respect to such security have been satisfied
in full (notwithstanding termination of this Agreement pursuant to Section
8(k)).

 

The parties
hereto agree that the liquidated damages provided for in this Section
2(e) constitute a reasonable estimate of the damages that may be incurred
by Holders of Registrable Securities by reason of the failure of the Shelf
Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

 

6

 

Section 3.               Registration
Procedures.  In connection
with the registration obligations of the Company and the Subsidiary Guarantor
under Section 2 hereof, the Company and the Subsidiary Guarantor shall:

 

(a)           Prepare and file or cause to be
prepared and filed with the SEC a Shelf Registration Statement or Shelf
Registration Statements on Form S-1 or S-3 or any other appropriate form under
the Securities Act available for the sale of the Registrable Securities by the
Holders thereof in accordance with the intended method or methods of
distribution thereof, and use its reasonable best efforts to cause each such Shelf
Registration Statement to become effective and remain effective as provided
herein; provided that before filing any Shelf Registration Statement or
Prospectus or any amendments or supplements thereto with the SEC, the Company
shall furnish to the Initial Purchasers and counsel for the Holders and for the
Initial Purchasers (or, if applicable, separate counsel for the
Holders) copies of all such documents proposed to be filed and use its
reasonable best efforts to reflect in each such document when so filed with the
SEC such comments as such counsel reasonably shall propose within three
(3) Business Days of the delivery of such copies to the Initial Purchasers
and such counsel.

 

(b)           Prepare and file or cause to be
prepared and filed with the SEC such amendments and post-effective amendments
to each Shelf Registration Statement as may be necessary to keep such Shelf
Registration Statement continuously effective until the expiration of the
Effectiveness Period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities
Act; and use its reasonable best efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Shelf Registration Statement during the
Effectiveness Period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Shelf Registration Statement as so
amended or such Prospectus as so supplemented.

 

(c)           As promptly as practicable give
notice to the Notice Holders, the Initial Purchasers and counsel for the
Holders and for the Initial Purchasers (or, if applicable, separate counsel for
the Holders) (i) when any Prospectus, Prospectus supplement, Shelf
Registration Statement or post-effective amendment to a Shelf Registration
Statement has been filed with the SEC and, with respect to a Shelf Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial
Shelf Registration Statement under the Securities Act, by the SEC or any other
federal or state governmental authority for amendments or supplements to any
Shelf Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
any Shelf Registration Statement or the initiation or threatening of any
proceedings for that purpose, (iv) of the receipt by the Company or the
Subsidiary Guarantor of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) after the effective date of any Shelf
Registration Statement filed pursuant to this Agreement of the occurrence of
(but not the nature of or details concerning) a Material Event and
(vi) of the determination by the Company or the Subsidiary Guarantor that
a post-effective amendment to a Shelf Registration Statement will be filed with
the SEC, which notice may, at the discretion of the Company or the Subsidiary
Guarantor, as the case may be (or as required pursuant to Section 3(i)), state
that it constitutes a Suspension Notice, in which event the provisions of
Section 3(i) shall apply.

 

(d)           Use their reasonable best efforts to
prevent the issuance of, and, if issued, to obtain the withdrawal of any order
suspending the effectiveness of a Shelf Registration Statement or the lifting
of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in either case at the
earliest possible

 

7

 

moment, and provide prompt notice to each Notice Holder and the Initial
Purchasers of the withdrawal of any such order.

 

(e)           If requested by the Initial
Purchasers or any Notice Holder, as promptly as practicable incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement such information as the Initial Purchasers, such Notice Holder or
counsel for the Holders and for the Initial Purchasers (or, if applicable,
separate counsel for the Holders) shall determine to be required to be
included therein by applicable law and make any required filings of such
Prospectus supplement or such post-effective amendment; provided that
neither the Company nor the Subsidiary Guarantor shall be required to take any
actions under this Section 3(e) that, in the written opinion of
counsel for the Company or the Subsidiary Guarantor, are not in compliance with
applicable law.

 

(f)            As promptly as practicable furnish
to each Notice Holder, counsel for the Holders and for the Initial Purchasers
(or, if applicable, separate counsel for the Holders) and the Initial
Purchasers, without charge, at least one (1) conformed copy of the Shelf
Registration Statement and any amendment thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
to the Company and the Subsidiary Guarantor by such Notice Holder, such counsel
or the Initial Purchasers).

 

(g)           During the Effectiveness Period,
deliver to each Notice Holder, counsel for the Holders and for the Initial Purchasers
(or, if applicable, separate counsel for the Holders) and the Initial
Purchasers, in connection with any sale of Registrable Securities pursuant to a
Shelf Registration Statement, without charge, as many copies of the Prospectus
or Prospectuses relating to such Registrable Securities (including each
preliminary prospectus) and any amendment or supplement thereto as such
Notice Holder and the Initial Purchasers may reasonably request; and the
Company and the Subsidiary Guarantor hereby consent (except during such periods
that a Suspension Notice is outstanding and has not been revoked) to the
use of such Prospectus or each amendment or supplement thereto by each Notice
Holder, in connection with any offering and sale of the Registrable Securities
covered by such Prospectus or any amendment or supplement thereto in the manner
set forth therein.

 

(h)           Prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, use their
reasonable best efforts to register or qualify or cooperate with the Notice
Holders in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any Notice Holder reasonably requests in writing
(which request may be included in the Notice and Questionnaire); prior to any
public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, use their reasonable best efforts to keep each such
registration or qualification (or exemption therefrom) effective during
the Effectiveness Period in connection with such Notice Holder’s offer and sale
of Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant Shelf Registration
Statement and the related Prospectus; provided that neither the Company
nor the Subsidiary Guarantor will be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Agreement or (ii) take any
action that would subject it to general service of process in suits or to
taxation in any such jurisdiction where it is not then so subject.

 

(i)            Upon (A) the issuance by the
SEC of a stop order suspending the effectiveness of the Shelf Registration
Statement or the initiation of proceedings with respect to the Shelf
Registration Statement under Section 8(d) or 8(e) of the Securities
Act, (B) the occurrence of any event or the existence of any fact as a
result of which any Shelf Registration Statement shall contain any untrue

 

8

 

statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or any Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (C) the
occurrence or existence of any pending corporate development (a “Material
Event”) that, in the reasonable discretion of the Company or the
Subsidiary Guarantor, makes it appropriate to suspend the availability of the
Shelf Registration Statement and the related Prospectus, (i) in the case
of clause (B) or (C) above, subject to the next sentence, as promptly
as practicable, prepare and file, if necessary pursuant to applicable law, a
post-effective amendment to such Shelf Registration Statement or a supplement
to the related Prospectus or any document incorporated therein by reference or
file any other required document that would be incorporated by reference into
such Shelf Registration Statement and Prospectus so that such Shelf
Registration Statement does not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and such Prospectus does not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that the Company and the Subsidiary Guarantor may rely on information provided
by each Notice Holder with respect to such Notice Holder), as thereafter
delivered to the purchasers of the Registrable Securities being sold
thereunder, and, in the case of a post-effective amendment to a Shelf
Registration Statement, subject to the next sentence, use its best efforts to
cause it to be declared effective as promptly as is practicable, and
(ii) give notice to the Notice Holders and counsel for the Holders and for
the Initial Purchasers (or, if applicable, separate counsel for the Holders) that
the availability of the Shelf Registration Statement is suspended (a “Suspension
Notice”) and, upon receipt of any Suspension Notice, each Notice
Holder agrees not to sell any Registrable Securities pursuant to such Shelf
Registration Statement until such Notice Holder’s receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or
until it is advised in writing by the Company and the Subsidiary Guarantor that
the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus.  The Company and the
Subsidiary Guarantor will use their reasonable best efforts to ensure that the
use of the Prospectus may be resumed (x) in the case of clause
(A) above, as promptly as is practicable, (y) in the case of clause
(B) above, as soon as, in the reasonable judgment of the Company and the
Subsidiary Guarantor, the Shelf Registration Statement does not contain any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and the Prospectus does not contain any untrue statement of a
material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and (z) in the case of clause (C) above, as
soon as, in the reasonable discretion of the Company and the Subsidiary Guarantor,
such suspension is no longer appropriate. The period during which the
availability of the Shelf Registration Statement and any Prospectus may be
suspended (the “Suspension Period”) without the Company incurring
any obligation to pay liquidated damages pursuant to Section 2(e) shall
not exceed forty-five (45) days in any ninety (90) day period and
seventy-five (75) days in any three hundred sixty (360) day period.  The Effectiveness Period shall be extended by
the number of days from and including the date of the giving of the Suspension
Notice to and including the date on which the Notice Holder received copies of
the supplemented or amended Prospectus provided in clause (i) above, or
the date on which it is advised in writing by the Company and the Subsidiary
Guarantor that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus.

 

(j)            Make available for inspection during
normal business hours by representatives for the Notice Holders of such
Registrable Securities, and any broker-dealers, attorneys and accountants
retained by such Notice Holders, all relevant financial and other records and
pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the appropriate officers, directors and

 

9

 

employees of the Company and its subsidiaries to make available for
inspection during normal business hours all relevant information reasonably
requested by such representatives for the Notice Holders, or any such
broker-dealers, attorneys or accountants in connection with such disposition,
in each case as is customary for similar “due diligence” examinations; provided,
however, that such persons shall, at the Company’s request, first agree
in writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights under this
Agreement, unless (i) disclosure of such information is required by court
or administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to federal securities laws in
connection with the filing of any Shelf Registration Statement or the use of
any Prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a
disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company or the Subsidiary Guarantor and such source is not bound by a
confidentiality agreement or is not otherwise under a duty of trust to the
Company or the Subsidiary Guarantor, and provided that the foregoing
inspection and information gathering shall, to the greatest extent possible, be
coordinated on behalf of all the Notice Holders and the other parties entitled
thereto by the counsel referred to in Section 5.

 

(k)           Comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder (or any
similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) commencing on the first day of the
first fiscal quarter of the Company commencing after the effective date of a
Shelf Registration Statement, which statements shall cover said 12-month
periods.

 

(l)            Cooperate with each Notice Holder to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities sold pursuant to a Shelf Registration Statement, which
certificates shall not bear any restrictive legends, and cause such Registrable
Securities to be in such denominations as are permitted by the Indenture and
registered in such names as such Notice Holder may request in writing at least
(2) Business Days prior to any sale of such Registrable Securities.

 

(m)          Provide a CUSIP number for all
Registrable Securities covered by each Shelf Registration Statement not later
than the effective date of such Shelf Registration Statement and provide the
Trustee and the transfer agent for the Common Stock with certificates for the
Registrable Securities that are in a form eligible for deposit with The
Depository Trust Company.

 

(n)           Cooperate and assist in any filings
required to be made with the National Association of Securities Dealers, Inc.

 

(o)           Upon (i) the filing of the
Initial Registration Statement and (ii) the effectiveness of the Initial
Registration Statement, announce the same, in each case by issuing a press
release.

 

(p)           Enter into such customary agreements
and take all such other necessary actions in connection therewith (including
those requested by the holders of a majority of the Registrable Securities
being sold) in order to expedite or facilitate disposition of such
Registrable Securities.

 

(q)           Cause the Indenture to be qualified
under the TIA not later than the effective date of any Shelf Registration
Statement; and in connection therewith, cooperate with the Trustee to effect
such changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the

 

10

 

terms of the TIA and execute, and use its best efforts to cause the
Trustee to execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner.

 

Section 4.               Holder’s
Obligations.  Each Holder
agrees, by acquisition of the Registrable Securities, that no Holder of
Registrable Securities shall be entitled to sell any of such Registrable
Securities pursuant to a Shelf Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company and
the Subsidiary Guarantor with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in
such Notice and Questionnaire) and the information set forth in the next
sentence.  Each Notice Holder agrees
promptly to furnish to the Company and the Subsidiary Guarantor all information
required to be disclosed in order to make the information previously furnished
to the Company and the Subsidiary Guarantor by such Notice Holder not
misleading and any other information regarding such Notice Holder and the
distribution of such Registrable Securities as the Company and the Subsidiary
Guarantor may from time to time reasonably request. Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of
distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not as of the time
of such sale contain any untrue statement of a material fact relating to or provided
by such Holder or its plan of distribution and that such Prospectus does not as
of the time of such sale omit to state any material fact relating to or
provided by such Holder or its plan of distribution necessary in order to make
the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.

 

Section 5.               Registration
Expenses.  The Company and the
Subsidiary Guarantor shall bear all fees and expenses incurred in connection
with the performance by the Company and the Subsidiary Guarantor of their
obligations under Section 2 and 3 of this Agreement whether or not any of the
Shelf Registration Statements are declared effective. Such fees and expenses (“Registration
Expenses”) shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the National
Association of Securities Dealers, Inc. and (y) of compliance with federal
and state securities or Blue Sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the Holders in connection with
Blue Sky qualifications of the Registrable Securities under the laws of such
jurisdictions as the Notice Holders of a majority of the Registrable Securities
being sold pursuant to a Shelf Registration Statement may designate),
(ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company), (iii) duplication and mailing expenses
relating to copies of any Shelf Registration Statement or Prospectus delivered
to any Holders hereunder, (iv) fees and disbursements of counsel for the
Company and the Subsidiary Guarantor and the reasonable fees and disbursements
of one counsel for the Holders in connection with the Shelf Registration
Statement, (v) fees and disbursements of the Trustee and its counsel and
of the registrar and transfer agent for the Common Stock and (vi) Securities
Act liability insurance obtained by the Company or the Subsidiary Guarantor in
their sole discretion.  In addition, the
Company and the Subsidiary Guarantor shall pay the internal expenses of the
Company and the Subsidiary Guarantor (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing by the Company of the Registrable Securities on any
securities exchange on which similar securities of the Company are then listed
and the fees and expenses of any person, including special experts, retained by
the Company or the Subsidiary Guarantor.

 

11

 

Section 6.               Indemnification;
Contribution.

 

(a)           The Company and the Subsidiary
Guarantor, jointly and severally, agree to indemnify, defend and hold harmless
each Holder and each person who controls any Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Holder
Indemnified Party”), from and against any loss, damage, expense, liability
or claim (including the reasonable cost of investigation), which such Holder
Indemnified Party may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in any Shelf Registration Statement or Prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact required to be stated in any Shelf Registration Statement or in any
amendment or supplement thereto or necessary to make the statements therein not
misleading, or arises out of or is based upon any omission or alleged omission
to state a material fact necessary in order to make the statements made in any
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, in the light of the circumstances under which they were made, not
misleading, except insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or omission or
alleged untrue statement or omission of a material fact contained in, or
omitted from any Shelf Registration Statement or Prospectus or in any amendment
or supplement thereto or any preliminary prospectus, in conformity with
information furnished in writing by or on behalf of any Holder to the Company
or the Subsidiary Guarantor expressly for use therein.

 

(b)           Each Holder, severally and not
jointly, agrees to indemnify, defend and hold harmless the Company and the
Subsidiary Guarantor, their directors and officers and any person who controls
the Company and the Subsidiary Guarantor within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, a “Company
Indemnified Party”) from and against any loss, damage, expense, liability
or claim (including the reasonable cost of investigation), which such Company
Indemnified Party may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in information furnished in writing by or on behalf of
such Holder to the Company or the Subsidiary Guarantor expressly for use in any
Shelf Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
any Shelf Registration Statement or in any amendment or supplement thereto or
necessary to make the statements therein not misleading, or arises out of or is
based upon any omission or alleged omission to state a material fact necessary
in order to make the statements in any Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, in the light of the circumstances
under which they were made, not misleading, in connection with such
information.  In no event shall the
liability of any selling Holder of Registrable Securities hereunder be greater
in amount than the dollar amount of the proceeds received by such Holder upon
the sale of the Registrable Securities pursuant to the Shelf Registration
Statement giving rise to such indemnification obligation.

 

(c)           If any action, suit or proceeding
(each, a “Proceeding”) is brought against any person in respect of
which indemnity may be sought pursuant to either subsection (a) or
(b) of this Section 6, such person (the “Indemnified Party”) shall
promptly notify the person against whom such indemnity may be sought (the “Indemnifying
Party”) in writing of the institution of such Proceeding and the
Indemnifying Party shall assume the defense of such Proceeding; provided,
however, that the omission to notify such Indemnifying Party shall not
relieve such Indemnifying Party from any liability which it may have to such
Indemnified Party or otherwise except to the extent such Indemnifying Person
has been materially prejudiced by such failure. 
Such Indemnified Party shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party

 

12

 

unless the employment of such counsel shall have been authorized in
writing by such Indemnifying Party in connection with the defense of such
Proceeding or such Indemnifying Party shall not have employed counsel to take
charge of the defense of such Proceeding within 30 days of the receipt of
notice thereof or such Indemnified Party shall have reasonably concluded upon
the written advice of counsel that there may be one or more defenses available
to it that are different from, additional to or in conflict with those
available to such Indemnifying Party (in which case such Indemnifying Party
shall not have the right to direct that portion of the defense of such
Proceeding on behalf of the Indemnified Party, but such Indemnifying Party may
employ counsel and participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such Indemnifying Party), in any of
which events such reasonable fees and expenses shall be borne by such
Indemnifying Party and paid as incurred (it being understood, however, that
such Indemnifying Party shall not be liable for the expenses of more than one
separate counsel in any one Proceeding or series of related Proceedings
together with reasonably necessary local counsel representing the Indemnified
Parties who are parties to such action). 
An Indemnifying Party shall not be liable for any settlement of such
Proceeding effected without the written consent of such Indemnifying Party, but
if settled with the written consent of such Indemnifying Party, such
Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party from
and against any loss or liability by reason of such settlement.  No Indemnifying Party shall, without the
prior written consent of any Indemnified Party, effect any settlement of any
pending or threatened Proceeding in respect of which such Indemnified Party is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such Indemnified Party.

 

(d)           If the indemnification provided for
in this Section 6 is unavailable to an Indemnified Party under subsections
(a) and (b) of this Section 6 in respect of any losses, damages,
expenses, liabilities or claims referred to therein, then each applicable
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, damages, expenses, liabilities or claims (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Subsidiary Guarantor on the one hand and the Holders on the
other hand from the offering of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company and the Subsidiary Guarantor on the one hand and of the Holders on
the other in connection with the statements or omissions, which resulted in
such losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations.  The
relative fault of the Company and the Subsidiary Guarantor on the one hand and
of the Holders on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company, the Subsidiary Guarantor or by the Holders and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.  The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to above shall be deemed to include any
reasonable legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any Proceeding.

 

(e)           The Company, the Subsidiary Guarantor
and the Holders agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in subsection (d) above.  Notwithstanding the provisions of this
Section 6, no Holder shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities sold by
it were offered to the public exceeds the amount of any damages, which it has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 
No

 

13

 

person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  The Holders’
respective obligations to contribute pursuant to this Section 6 are several in
proportion to the respective amount of Registrable Securities they have sold
pursuant to a Shelf Registration Statement, and not joint.  The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

 

(f)            The indemnity and contribution
provisions contained in this Section 6 shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Holder or any person
controlling any Holder, or the Company, the Subsidiary Guarantor or their
officers or directors or any person controlling the Company or the Subsidiary
Guarantor and (iii) the sale of any Registrable Security by any Holder.

 

Section 7.               Information
Requirements.

 

(a)           The Company covenants that, if at any
time before the end of the Effectiveness Period it is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder
of Registrable Securities and take such further action as any Holder of
Registrable Securities may reasonably request in writing (including, without
limitation, making such representations as any such Holder may reasonably
request), all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144,  Rule 144A, Regulation S and Regulation D
under the Securities Act and customarily taken in connection with sales
pursuant to such exemptions.  Upon the
written request of any Holder of Registrable Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such filing requirements, unless such a statement has been included in the
Company’s most recent report filed with the SEC pursuant to Section 13 or Section
15(d) of Exchange Act. Notwithstanding the foregoing, nothing in this
Section 7 shall be deemed to require the Company to register any of its
securities (other than the Common Stock) under any section of the Exchange
Act.

 

(b)           The Company shall file the reports
required to be filed by it under the Exchange Act and shall comply with all
other requirements set forth in the instructions to Form S-1 or Form S-3, as
the case may be, in order to allow the Company to be eligible to file
registration statements on Form S-1 or Form S-3.

 

Section 8.               Miscellaneous.

 

(a)           No Conflicting Agreements.  Neither the Company nor the Subsidiary
Guarantor is, as of the date hereof, a party to, nor shall they, on or after
the date of this Agreement, enter into, any agreement with respect to their
securities that conflicts with the rights granted to the Holders of Registrable
Securities in this Agreement.  The
Company and the Subsidiary Guarantor represent and warrant that the rights granted
to the Holders of Registrable Securities hereunder do not in any way conflict
with the rights granted to the holders of the Company’s or the Subsidiary
Guarantor’s securities under any other agreements.

 

(b)           Amendments and Waivers.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company and the Subsidiary Guarantor have obtained the
written consent of Holders of a majority of the then outstanding Underlying
Common Stock constituting Registrable Securities (with Holders of Notes deemed
to be the Holders, for purposes of this Section, of the number of outstanding
shares of Underlying Common Stock into which such Notes are or

 

14

 

would be convertible as of the date on which such consent is
requested).  Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a Shelf
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Registrable Securities may be given by Holders of at
least a majority of the Registrable Securities being sold by such Holders
pursuant to such Shelf Registration Statement; provided that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.  Each Holder of Registrable
Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating
such amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

 

(c)           Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery, by
telecopier, by courier guaranteeing overnight delivery or by first-class mail,
return receipt requested, and shall be deemed given (i) when made, if made
by hand delivery, (ii) upon confirmation, if made by telecopier,
(iii) one (1) Business Day after being deposited with such courier,
if made by overnight courier or (iv) on the date indicated on the notice of
receipt, if made by first-class mail, to the parties as follows:

 

(x)           if
to a Holder of Registrable Securities, at the most current address given by
such Holder to the Company and the Subsidiary Guarantor in a Notice and
Questionnaire or any amendment thereto;

 

(y)          if
to the Company and the Subsidiary Guarantor, to:

 

124 Industry
Lane

Hunt Valley, Maryland  21030

Attention: General Counsel

Telecopy No.: (410) 628-6705

 

with a copy
(for informational purposes only):

 

Proskauer Rose
LLP

1585 Broadway

New York, New
York 10036

Attention:  Julie M. Allen

Telecopy No.:
(212) 969-2900

 

(z)           if
to the Initial Purchasers, to:

 

UBS Securities
LLC

299 Park Avenue

New York, New York 10171

Attention: Syndicate Department

Telecopy No.: (212) 713-3460

 

with a copy to
(for informational purposes only):

 

Clifford
Chance US LLC

31 West 52nd Street

 

15

 

New York, New
York 10019

Attention: Jay L. Bernstein

Telecopy No.: (212) 878-8375

 

or to such other address as
such person may have furnished to the other persons identified in this Section
8(c) in writing in accordance herewith.

 

(d)           Approval of Holders.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) (other than the Initial Purchasers or subsequent Holders
of Registrable Securities if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable
Securities) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

 

(e)           Successors and Assigns.
Any person who purchases any Registrable Securities from the Initial Purchasers
or any Holder shall be deemed, for purposes of this Agreement, to be an
assignee of the Initial Purchasers or such Holder, as the case may be.  This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties and shall
inure to the benefit of and be binding upon each Holder of any Registrable
Securities.

 

(f)            Counterparts.
This Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be original and all of which taken together shall constitute one and the
same agreement.

 

(g)           Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(h)           Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.

 

(i)            Severability.  If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, and the parties hereto
shall use its reasonable best efforts to find and employ an alternative means
to achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction, it being intended that all of
the rights and privileges of the parties shall be enforceable to the fullest
extent permitted by law.

 

(j)            Entire Agreement.  This Agreement is intended by the parties as
a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company and the Subsidiary Guarantor with respect to the
Registrable Securities.  Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company and the
Subsidiary Guarantor with respect to the Registrable Securities.  This Agreement supersedes all prior
agreements and undertakings among the parties with respect to such registration
rights.  No party hereto shall have any
rights, duties or obligations other than those specifically set forth in this
Agreement.

 

16

 

(k)           Termination.  This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Section 4, 5 or 6 hereof and
the obligations to make payments of and provide for liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of
the Effectiveness Period, each of which shall remain in effect in accordance
with its terms.

 

17

 

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

 

	
   

  	
  UNITED
  INDUSTRIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James H.
  Perry

  	
   

  
	
   

  	
   

  	
  Name: James H. Perry

  	
   

  
	
   

  	
   

  	
  Title: Vice President, CFO & Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AAI
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James H.
  Perry

  	
   

  
	
   

  	
   

  	
  Name: James H. Perry

  	
   

  
	
   

  	
   

  	
  Title: Vice President, CFO & Treasurer

  	
   

  

 

Confirmed and accepted as of
the date

first above written on behalf of itself

and the other Initial Purchaser:

 

	
  UBS
  SECURITIES LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Omar
  Namoos

  	
   

  
	
   

  	
  Name: Omar
  Namoos

  	
   

  
	
   

  	
  Title:
  Director

  	
   

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Ying Liu

  	
   

  
	
   

  	
  Name: Ying
  Liu

  	
   

  
	
   

  	
  Title:
  Associate Director

  	
   

  

 

18

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