Document:

exv4w1

Exhibit 4.1

 

SANDISK CORPORATION

as Issuer

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

INDENTURE

Dated as of August ___, 2010

___% Convertible Senior Notes due 2017

 

 

 

SANDISK CORPORATION

Reconciliation and tie between Trust Indenture Act of 1939 and

Indenture, dated as of August __, 2010

	 	 	 
	Trust Indenture Act Section	 	Indenture Section
	§310(a)(1)
	 	6.09
	(a)(2)
	 	6.09
	(a)(3)
	 	Not Applicable
	(a)(4)
	 	Not Applicable
	(a)(5)
	 	6.09
	(b)
	 	6.08; 6.10; 6.11
	(c)
	 	Not Applicable
	§311(a)
	 	6.13
	(b)
	 	6.13
	§312(a)
	 	4.01; 4.02(a)
	(b)
	 	4.02(b)
	(c)
	 	4.02(c)
	§313(a)
	 	4.03(a)
	(b)
	 	4.03(a)
	(c)
	 	4.03(a)
	(d)
	 	4.03(b)
	§314(a)
	 	4.04(a)
	(b)
	 	Not Applicable
	(c)(1)
	 	3.07
	(c)(2)
	 	3.07
	(c)(3)
	 	Not Applicable
	(d)
	 	Not Applicable
	(e)
	 	3.07
	§315(a)
	 	6.01
	(b)
	 	5.08
	(c)
	 	6.01
	(d)
	 	6.01
	(e)
	 	5.09
	§316(a)
	 	1.01
	(a)(1)(A)
	 	7.01; 5.01
	(a)(1)(B)
	 	5.07
	(a)(2)
	 	Not Applicable
	(b)
	 	5.04
	(c)
	 	7.01
	§317(a)(1)
	 	5.03; 5.02; 5.05
	(a)(2)
	 	5.02
	(b)
	 	6.05; 11.01
	§318(a)
	 	1.02
	(c)
	 	1.02

 

			
	Note:	 	This reconciliation and tie shall not, for any purpose, be deemed to be part of the
Indenture.

i

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I

DEFINITIONS
	 
	 	 	 	 
	Section
1.01.   Definitions
	 	 	1	 
	 
	 	 	 	 
	Section
1.02.   Incorporation by reference of Trust Indenture Act
	 	 	11	 
	 
	 	 	 	 
	Section
1.03.   References to Interest
	 	 	11	 
	ARTICLE II

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
	 
	 	 	 	 
	Section 2.01.   Designation and Amount
	 	 	11	 
	 
	 	 	 	 
	Section
2.02.   Form of Notes
	 	 	11	 
	 
	 	 	 	 
	Section 2.03.   Date and Denomination of Notes; Payments of Interest
	 	 	12	 
	 
	 	 	 	 
	Section 2.04.   Date and Denomination of Notes
	 	 	13	 
	 
	 	 	 	 
	Section
2.05.   Execution, Authentication and Delivery of Notes
	 	 	13	 
	 
	 	 	 	 
	Section 2.06.   Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary
	 	 	14	 
	 
	 	 	 	 
	Section
2.07.   Mutilated, Destroyed, Lost or Stolen Notes
	 	 	17	 
	 
	 	 	 	 
	Section
2.08.   Temporary Notes
	 	 	17	 
	 
	 	 	 	 
	Section
2.09.   Cancellation of Notes Paid, Etc
	 	 	18	 
	 
	 	 	 	 
	Section
2.10.   CUSIP Numbers
	 	 	18	 
	 
	 	 	 	 
	Section
2.11.   Additional Notes, Repurchases
	 	 	18	 
	 
	 	 	 	 
	ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY
	 
	 	 	 	 
	Section
3.01.   Payment of Principal and Interest
	 	 	19	 
	 
	 	 	 	 
	Section
3.02.   Maintenance of Office or Agency
	 	 	19	 
	 
	 	 	 	 
	Section
3.03.   Appointments to Fill Vacancies in Trustee’s Office
	 	 	20	 
	 
	 	 	 	 
	Section 3.04.   Provisions as to Paying Agent
	 	 	20	 
	 
	 	 	 	 
	Section
3.05.   Existence
	 	 	21	 

i

 

	 	 	 	 	 
	 	 	Page	 
	Section
3.06.   Stay, Extension and Usury Laws
	 	 	21	 
	 
	 	 	 	 
	Section
3.07.   Compliance Certificate; Statements as to Defaults
	 	 	21	 
	 
	 	 	 	 
	Section
3.08.   Further Instruments and Acts
	 	 	21	 
	 
	 	 	 	 
	ARTICLE IV

LISTS OF NOTEHOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE
	 
	 	 	 	 
	Section
4.01.   Lists of Noteholders
	 	 	21	 
	 
	 	 	 	 
	Section 4.02.   Preservation and Disclosure of Lists
	 	 	22	 
	 
	 	 	 	 
	Section 4.03.   Reports by Trustee
	 	 	22	 
	 
	 	 	 	 
	Section 4.04.   Reports by Company
	 	 	22	 
	 
	 	 	 	 
	ARTICLE V

DEFAULTS AND REMEDIES
	 
	 	 	 	 
	Section
5.01.   Events of Default
	 	 	23	 
	 
	 	 	 	 
	Section
5.02.   Payments of Notes on Default; Suit Therefor
	 	 	25	 
	 
	 	 	 	 
	Section
5.03.   Application of Monies Collected by Trustee
	 	 	26	 
	 
	 	 	 	 
	Section
5.04.   Proceedings by Noteholders
	 	 	27	 
	 
	 	 	 	 
	Section
5.05.   Proceedings by Trustee
	 	 	27	 
	 
	 	 	 	 
	Section
5.06.   Remedies Cumulative and Continuing
	 	 	28	 
	 
	 	 	 	 
	Section
5.07.   Direction of Proceedings and Waiver of Defaults by Majority of Noteholders
	 	 	28	 
	 
	 	 	 	 
	Section
5.08.   Notice of Defaults
	 	 	28	 
	 
	 	 	 	 
	Section
5.09.  Undertaking to Pay Costs
	 	 	29	 
	 
	 	 	 	 
	Section
5.10.   Additional Interest
	 	 	29	 
	 
	 	 	 	 
	ARTICLE VI

CONCERNING THE TRUSTEE
	 
	 	 	 	 
	Section
6.01.   Duties and Responsibilities of Trustee
	 	 	29	 
	 
	 	 	 	 
	Section
6.02.   Reliance on Documents, Opinions, Etc.
	 	 	31	 
	 
	 	 	 	 
	Section
6.03.   No Responsibility for Recitals, Etc.
	 	 	32	 
	 
	 	 	 	 
	Section
6.04.   Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes
	 	 	33	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Section
6.05.   Monies to Be Held in Trust
	 	 	33	 
	 
	 	 	 	 
	Section
6.06.   Compensation and Expenses of Trustee
	 	 	33	 
	 
	 	 	 	 
	Section
6.07.   Officers’ Certificate as Evidence
	 	 	34	 
	 
	 	 	 	 
	Section
6.08.   Conflicting Interests of Trustee
	 	 	34	 
	 
	 	 	 	 
	Section
6.09.   Eligibility of Trustee
	 	 	34	 
	 
	 	 	 	 
	Section 6.10.   Resignation or Removal of Trustee
	 	 	34	 
	 
	 	 	 	 
	Section
6.11.   Acceptance by Successor Trustee
	 	 	35	 
	 
	 	 	 	 
	Section
6.12.   Succession by Merger, Etc
	 	 	36	 
	 
	 	 	 	 
	Section
6.13.   Limitation on Rights of Trustee as Creditor
	 	 	36	 
	 
	 	 	 	 
	Section
6.14.   Trustee’s Application for Instructions from the Company
	 	 	36	 
	 
	 	 	 	 
	ARTICLE VII

CONCERNING THE NOTEHOLDERS
	 
	 	 	 	 
	Section
7.01.   Action by Noteholders
	 	 	37	 
	 
	 	 	 	 
	Section
7.02.   Proof of Execution by Noteholders
	 	 	37	 
	 
	 	 	 	 
	Section
7.03.   Who Are Deemed Absolute Owners
	 	 	37	 
	 
	 	 	 	 
	Section
7.04.   Company-Owned Notes Disregarded
	 	 	38	 
	 
	 	 	 	 
	Section
7.05.   Revocation of Consents; Future Holders Bound
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VIII

NOTEHOLDERS’ MEETINGS
	 
	 	 	 	 
	Section
8.01.   Purpose of Meetings
	 	 	39	 
	 
	 	 	 	 
	Section
8.02.   Call of Meetings by Trustee
	 	 	39	 
	 
	 	 	 	 
	Section
8.03.   Call of Meetings by Company or Noteholders
	 	 	39	 
	 
	 	 	 	 
	Section
8.04.   Qualifications for Voting
	 	 	40	 
	 
	 	 	 	 
	Section
8.05.   Regulations
	 	 	40	 
	 
	 	 	 	 
	Section
8.06.   Voting
	 	 	40	 
	 
	 	 	 	 
	Section
8.07.   No Delay of Rights by Meeting
	 	 	41	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE IX

SUPPLEMENTAL INDENTURES
	 
	 	 	 	 
	Section
9.01.   Supplemental Indentures Without Consent of Noteholders
	 	 	41	 
	 
	 	 	 	 
	Section
9.02.   Supplemental Indentures With Consent of Noteholders
	 	 	42	 
	 
	 	 	 	 
	Section
9.03.   Effect of Supplemental Indentures
	 	 	43	 
	 
	 	 	 	 
	Section
9.04.   Notation on Notes
	 	 	43	 
	 
	 	 	 	 
	Section
9.05.   Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee
	 	 	43	 
	 
	 	 	 	 
	ARTICLE X

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
	 
	 	 	 	 
	Section
10.01.   Company May Consolidate, etc.  on Certain Terms
	 	 	44	 
	 
	 	 	 	 
	Section
10.02.   Successor Corporation to be Substituted
	 	 	44	 
	 
	 	 	 	 
	Section
10.03.   Officers’ Certificate and Opinion of Counsel to Be Given Trustee
	 	 	45	 
	 
	 	 	 	 
	ARTICLE XI

SATISFACTION AND DISCHARGE OF INDENTURE
	 
	 	 	 	 
	Section
11.01.   Discharge of Indenture
	 	 	45	 
	 
	 	 	 	 
	Section
11.02.   Deposited Monies to Be Held in Trust by Trustee
	 	 	45	 
	 
	 	 	 	 
	Section
11.03.   Paying Agent to Repay Monies Held
	 	 	46	 
	 
	 	 	 	 
	Section
11.04.   Return of Unclaimed Monies
	 	 	46	 
	 
	 	 	 	 
	Section
11.05.   Reinstatement
	 	 	46	 
	 
	 	 	 	 
	ARTICLE XII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
	 
	 	 	 	 
	Section
12.01.   Indenture and Notes Solely Corporate Obligations
	 	 	46	 
	 
	 	 	 	 
	ARTICLE XIII

CONVERSION OF NOTES
	 
	 	 	 	 
	Section
13.01.   Conversion Privilege
	 	 	47	 
	 
	 	 	 	 
	Section 13.02.   Conversion Procedure
	 	 	50	 
	 
	 	 	 	 
	Section 13.03.   [Intentionally Omitted]
	 	 	53	 

iv

 

	 	 	 	 	 
	 	 	Page	 
	Section
13.04.   Adjustment of Conversion Rate
	 	 	53	 
	 
	 	 	 	 
	Section
13.05.   Shares to Be Fully Paid
	 	 	61	 
	 
	 	 	 	 
	Section
13.06.   Effect of Reclassification, Consolidation, Merger or Sale
	 	 	61	 
	 
	 	 	 	 
	Section
13.07.   Certain Covenants
	 	 	63	 
	 
	 	 	 	 
	Section
13.08.   Responsibility of Trustee
	 	 	63	 
	 
	 	 	 	 
	Section
13.09.   Notice to Holders Prior to Certain Actions
	 	 	64	 
	 
	 	 	 	 
	Section
13.10.   Shareholder Rights Plans
	 	 	65	 
	 
	 	 	 	 
	ARTICLE XIV

REPURCHASE OF NOTES AT OPTION OF HOLDERS
	 
	 	 	 	 
	Section 14.01.   Repurchase at Option of Holders Upon a Designated Event
	 	 	65	 
	 
	 	 	 	 
	ARTICLE XV

MISCELLANEOUS PROVISIONS
	 
	 	 	 	 
	Section
15.01.   Provisions Binding on Company’s Successors
	 	 	68	 
	 
	 	 	 	 
	Section
15.02.   Official Acts by Successor Corporation
	 	 	68	 
	 
	 	 	 	 
	Section
15.03.   Addresses for Notices, Etc.
	 	 	68	 
	 
	 	 	 	 
	Section
15.04.   Governing Law
	 	 	69	 
	 
	 	 	 	 
	Section
15.05.   Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee
	 	 	69	 
	 
	 	 	 	 
	Section
15.06.   Legal Holidays
	 	 	70	 
	 
	 	 	 	 
	Section
15.07.   No Security Interest Created
	 	 	70	 
	 
	 	 	 	 
	Section
15.08.   Benefits of Indenture
	 	 	70	 
	 
	 	 	 	 
	Section
15.09.   Table of Contents, Headings, Etc.
	 	 	70	 
	 
	 	 	 	 
	Section
15.10.   Authenticating Agent
	 	 	70	 
	 
	 	 	 	 
	Section
15.11.   Execution in Counterparts
	 	 	71	 
	 
	 	 	 	 
	Section
15.12.   Waiver of Jury Trial
	 	 	71	 
	 
	 	 	 	 
	Section
15.13.   Force Majeure
	 	 	71	 
	 
	 	 	 	 

v

 

	 	 	 	 	 
	 	 	Page	 

Schedule A — Additional Shares

Exhibit A — Form of Note

vi

 

     INDENTURE dated as of August ___, 2010 between SanDisk Corporation, a Delaware corporation, as
issuer (hereinafter sometimes called the “Company,” as more fully set forth in Section 1.01), and
The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee
(hereinafter sometimes called the “Trustee,” as more fully set forth in Section 1.01).

WITNESSETH:

     WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of its
___% Convertible Senior Notes due 2017 (hereinafter sometimes called the “Notes”), initially in an
aggregate principal amount not to exceed $1,000,000,000 (or $1,150,000,000 if the Underwriters
exercise their option to purchase additional Notes in full as set forth in the Underwriting
Agreement), and in order to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly authorized the execution and delivery of
this Indenture; and

     WHEREAS, the Notes, the certificate of authentication to be borne by the Notes, a form of
assignment, a form of the Designated Event Repurchase Notice, a form of conversion notice are to be
substantially in the forms hereinafter provided for; and

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

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE I

DEFINITIONS

          Section 1.01. Definitions.

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

 

 

Indenture. If any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control. The words “herein,” “hereof,” “hereunder,”
and words of similar import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision. The terms defined in this Article include the plural as well as the
singular.

     “Additional
Interest” shall have the meaning specified in
Section 5.10.

     “Additional Shares” shall have the meaning specified in Section 13.01(e).

     “Adjustment Determination Date” shall have the meaning specified in Section 13.04(j).

     “Adjustment Event” shall have the meaning specified in Section 13.04(j).

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

     “Beneficial Owner” and “Beneficial Ownership” means as determined in accordance with Rule
13d-3 under the Exchange Act.

     “Bid Solicitation Agent” means the Company or such other person (including the Trustee) as may
be appointed, from time to time, by the Company to solicit bids for the Trading Price of the Notes
in accordance with Section 13.01(a)(i). The Trustee shall initially act as the Bid Solicitation
Agent.

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

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors, or duly authorized
committee thereof (to the extent permitted by applicable law), and to be in full force and effect
on the date of such certification, and delivered to the Trustee.

     “Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking
institutions in The City of New York or the city in which the Corporate Trust Office is located are
authorized or obligated by law or executive order to close.

     “Capital Lease” means a lease that, in accordance with accounting principles generally
accepted in the United States of America, would be recorded as a capital lease on the balance sheet
of the lessee.

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

2

 

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

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

     “Commission” means the Securities and Exchange Commission.

     “Common Stock” means, subject to Section 13.06, shares of common stock of the Company, par
value $0.001 per share, at the date of this Indenture or shares of any class or classes resulting
from any reclassification or reclassifications thereof and that have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and that are not subject to redemption by the Company;
provided that if at any time there shall be more than one such resulting class, the shares of each
such class then so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.

     “Company” means SanDisk Corporation, a Delaware corporation, and subject to the provisions of
Article X, shall include its successors and assigns and, to the extent the obligations hereunder
shall be to more than one entity pursuant to Section 13.06, shall include each of such entities.

     “Company Order” means a written order of the Company, signed by (a) the Company’s Chief
Executive Officer, President, Executive or Senior Vice President, Managing Director or any Vice
President (whether or not designated by a number or numbers or word or words added before or after
the title “Vice President”) and (b) any such other officer designated in (a) or the Company’s
Treasurer or Assistant Treasurer or Secretary or any Assistant Secretary, and delivered to the
Trustee.

     “Conversion Agent” shall have the meaning specified in Section 3.02.

     “Conversion Date” shall have the meaning specified in Section 13.02(c).

     “Conversion Obligation” shall have the meaning specified in Section 13.01(a).

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

     “Conversion Rate” shall have the meaning specified in Section 13.01(a).

     “Corporate Trust Office” or other similar term means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall be principally
administered, which office is, at the date as of which this Indenture is dated, located at 700 S.
Flower Street, Suite 500, Los Angeles, California 90017, Attention: Corporate Unit; SanDisk
Corporation.

     “Custodian” means The Bank of New York Mellon Trust Company, N.A., as custodian for The
Depository Trust Company, with respect to the Notes in global form, or any successor entity
thereto.

3

 

     “Daily Conversion Value” means, for each of the 20 consecutive Trading Days during the
Observation Period, one-twentieth (1/20) of the product of (a) the applicable Conversion Rate and
(b) the Daily VWAP of the Common Stock (or the Reference Property pursuant to Section 13.06) on
such day, as determined by the Company. Any such determination by the Company will be conclusive
absent manifest error.

     “Daily Settlement Amount,” for each of the 20 Trading Days during the Observation Period,
shall consist of:

(a) cash equal to the lesser of $50 and the Daily Conversion Value relating to such
day; and

(b) if such Daily Conversion Value exceeds $50, a number of shares of Common Stock
equal to (i) the difference between such Daily Conversion Value and $50, divided by
(ii) the Daily VWAP of the Common Stock for such day.

     “Daily VWAP” for the Common Stock means, for each of the 20 consecutive Trading Days during
the Observation Period, the per share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page [SNDK <equity> AQR] in respect of the period from 9:30
a.m. to 4:00 p.m. (New York City time) on such Trading Day (or if such volume-weighted average
price is unavailable, the market value of one share of Common Stock on such Trading Day as the
Board of Directors determines in good faith using a volume-weighted method).

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

     “Defaulted Interest” shall have the meaning specified in Section 2.03.

     “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, the person specified in Section 2.06(d) as the Depositary with respect to such Notes, until a
successor shall have been appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, “Depositary” shall mean or include such successor.

     “Designated Event” means the occurrence of either a Fundamental Change or a Termination of
Trading.

     “Designated Event Company Notice” shall have the meaning specified in Section 14.02(b).

     “Designated Event Expiration Time” shall have the meaning specified in Section 14.02(b).

     “Designated Event Repurchase Date” shall have the meaning specified in Section 14.02(a).

     “Designated Event Repurchase Notice” shall have the meaning specified in Section 14.02(a)(i).

4

 

     “Designated Event Repurchase Price” shall have the meaning specified in Section 14.02(a).

     “Distributed Property” shall have the meaning specified in Section 13.04(c).

     “Effective Date” shall have the meaning specified in Section 13.01(e)(ii).

     “Event of Default” means, with respect to the Notes, any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of notice, if any, therein
designated.

     “Ex-Dividend Date” means, (a) with respect to Section 13.01(b), the first date upon which a
sale of the Common Stock does not automatically transfer the right to receive the relevant dividend
from the seller of the Common Stock to its buyer, and (b) in all other cases, with respect to any
issuance or distribution on the Common Stock or any other equity security, the first date on which
the shares of Common Stock or such other equity security trade on the applicable exchange or in the
applicable market, regular way, without the right to receive such issuance or distribution.

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

     “Fundamental Change” will be deemed to have occurred at the time after the Notes are
originally issued that any of the following occurs:

	 	(1)	 	any Person acquires Beneficial Ownership, directly or indirectly, through a
purchase, merger or other acquisition transaction or series of transactions, of shares
of the Company’s Capital Stock entitling the person to exercise 50% or more of the
total voting power of all shares of the Company’s Capital Stock entitled to vote
generally in elections of directors, other than an acquisition by the Company, any of
the Company’s Subsidiaries or any of the Company’s employee benefit plans;
	 
	 	(2)	 	the Company merges or consolidates with or into any other Person (other than
a Subsidiary), another Person merges with or into the Company, or the Company conveys,
sells, transfers or leases all or substantially all of Company’s assets to another
Person, other than any transaction:

	 	§ 	 	that does not result in a reclassification, conversion, exchange or
cancellation of Company’s outstanding Common Stock;
	 
	 	§	 	pursuant to which the holders of 50% or more of the voting power of
all shares of Capital Stock entitled to vote generally in the election of
directors of the Company immediately prior to the transaction have the
entitlement to exercise, directly or indirectly, 50% or more of the voting
power of all shares of Capital Stock entitled to vote generally in the election
of directors of the continuing or surviving corporation immediately after the
transaction; or

5

 

	 	§	 	which is effected solely to change the Company’s jurisdiction of
incorporation and results in a reclassification, conversion or exchange of
outstanding shares of the Company’s Common Stock solely into shares of common
stock of the surviving entity.

However, notwithstanding the foregoing, Noteholders will not have the right to require the Company
to repurchase any Notes under clauses (1) or (2) above (and the Company will not be required to
deliver the Designated Event Repurchase Notice incidental thereto) if at least 90% of the
consideration paid for the Company’s Common Stock (excluding cash payments for fractional shares
and cash payments made pursuant to dissenters’ appraisal rights) in a merger or consolidation or a
conveyance, sale, transfer or lease otherwise constituting a Fundamental Change under clause (2)
above consists of shares of common stock traded on the New York Stock Exchange, the NASDAQ Global
Select Market, the NASDAQ Global Market or another U.S. national securities exchange or quoted on
an established automated over-the-counter trading market in the United States (or will be so traded
or quoted immediately following the merger or consolidation) and, as a result of the merger or
consolidation, the Notes become convertible into such shares of such common stock, excluding cash
payments for fractional shares.

     “Global Note” shall have the meaning specified in Section 2.06(b).

     “Indebtedness” as applied to any Person, means (a) obligations, contingent or otherwise, for
money borrowed (other than unamortized debt discount or premium); (b) reimbursement and other
obligations pertaining to letters of credit issued for the account of such Person; (c) obligations
under any swap, cap, collar, forward purchase contract, derivatives contract or other similar
agreement pursuant to which such Person hedges risks related to interest rates, currency exchange
rates, commodity prices, financial market conditions or other risks incurred by such Person in the
operation of its business; (d) obligations evidenced by bonds, debentures, promissory notes or
other instruments or arrangements; (e) obligations as lessee under a Capital Lease; and (f)
obligations of such Person under any amendments, renewals, extensions, modifications and refundings
of any such Indebtedness or obligations listed in clause (a), (b), (c), (d) or (e) above. All
indebtedness of any type described in the immediately preceding sentence which is secured by a lien
upon property owned by such Person, although such Person has not assumed or become liable for the
payment of such Indebtedness, shall for all purposes be deemed to be Indebtedness of such Person.
All indebtedness for borrowed money incurred by any other Persons which is directly guaranteed as
to payment of principal by such Person shall for all purposes be deemed to be Indebtedness of such
Person, but no other contingent obligation of such Person in respect of indebtedness incurred by
any other Persons shall for any purpose be deemed to be indebtedness of such Person.

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

     “Interest Payment Date” means February 15 and August 15 of each year, beginning on February
15, 2011.

     “Last Reported Sale Price” means, with respect to the Common Stock or any other security for
which a Last Reported Sale Price must be determined, on any date, the closing sale

6

 

price per share of the Common Stock or unit of such other security (or, if no closing sale
price is reported, the average of the last bid and last ask prices or, if more than one in either
case, the average of the average last bid and the average last ask prices) on such date as reported
by NASDAQ Global Select Market, or if the Common Stock is not then traded on NASDAQ Global Select
Market, on the principal U.S. national or regional securities exchange on which it is then listed,
if any. If the Common Stock or such other security is not listed for trading on a United States
national or regional securities exchange and not reported by NASDAQ Global Select Market on the
relevant date, the Last Reported Sale Price shall be the last quoted bid price per share of Common
Stock or such other security in the over-the-counter market on the relevant date, as reported by
the National Quotation Bureau or similar organization. In absence of such quotation, the Last
Reported Sale Price shall be the average of the mid-point of the last bid and asked prices for the
Common Stock or such other security on the relevant date from each of at least three nationally
recognized independent investment banking firms selected from time to time by the Board of
Directors of the Company for that purpose. The Last Reported Sale Price shall be determined
without reference to extended or after hours trading. Any such determination by the Company will
be conclusive absent manifest error.

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

     “Maturity Date” means August 15, 2017.

     “Measurement Period” shall have the meaning specified in Section 13.01(a)(i).

     “Merger Event” shall have the meaning specified in Section 13.06.

     “NASDAQ Global Market” shall mean the NASDAQ Global Market of The NASDAQ Stock Market, Inc.
and any successor market or exchange.

     “NASDAQ Global Select Market” shall mean the NASDAQ Global Select Market of The NASDAQ Stock
Market, Inc. and any successor market or exchange.

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

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

     “Note register” shall have the meaning specified in Section 2.06(a).

     “Note Registrar” shall have the meaning specified in Section 2.06(a).

     “Notice of Conversion” shall have the meaning specified in Section 13.02(c).

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     “Observation Period” with respect to any Note means (a) if the relevant Conversion Date occurs
prior to the 25th scheduled Trading Day preceding August 15, 2017, the 20 consecutive Trading Day
period beginning on and including the second Trading Day after such Conversion Date, and (b) if the
relevant Conversion Date occurs on or after the 25th scheduled Trading Day preceding August 15,
2017, the 20 consecutive Trading Days period beginning on the 22nd scheduled Trading Day
immediately preceding August 15, 2017.

     “Officers’ Certificate,” when used with respect to the Company, means a certificate signed by
(a) one of the President, the Chief Executive Officer, any Executive or Senior Vice President,
Managing Director or any Vice President (whether or not designated by a number or numbers or word
added before or after the title “Vice President”) and (b) by any such other officer designated in
(a) or by one of the Treasurer or any Assistant Treasurer, Secretary or any Assistant Secretary or
Controller of the Company, which is delivered to the Trustee. Each such certificate shall include
the statements provided for in Section 15.05 if and to the extent required by the provisions of
such Section. One of the officers giving an Officers’ Certificate pursuant to Section 5.08 shall
be the principal executive, financial or accounting officer of the Company.

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

     “Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an
employee of or counsel to the Company, which is delivered to the Trustee. Each such opinion shall
include the statements provided for in Section 15.05 if and to the extent required by the
provisions of such Section.

     “outstanding,” when used with reference to Notes, shall, subject to the provisions of
Section 7.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee
under this Indenture, except:

(a) Notes theretofore canceled by the Trustee or accepted by the Trustee for
cancellation,

(b) Notes, or portions thereof, for the payment or repurchase of which monies in the
necessary amount shall have been deposited in trust with the Trustee or with any
Paying Agent (other than the Company) or shall have been set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent);

(c) Notes in lieu of which, or in substitution for which, other Notes shall have
been authenticated and delivered pursuant to the terms of Section 2.07 unless proof
satisfactory to the Trustee is presented that any such Notes are held by protected
purchasers in due course; and

(d) Notes converted pursuant to Article XIII.

     “Paying Agent” shall have the meaning specified in Section 3.02.

     “Person” means an individual, a corporation, a limited liability company, an association, a
partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a

8

 

government or an agency or a political subdivision thereof, including any syndicate or group
that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

     “Predecessor Note” of any particular Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or stolen Note that it
replaces.

     “record date,” with respect to the payment of interest on any Interest Payment Date, shall
have the meaning specified in Section 2.03.

     “Record Date” shall have the meaning specified in Section 13.04(f).

     “Reference Property” shall have the meaning specified in Section 13.06(b).

     “Responsible Officer,” when used with respect to the Trustee, shall mean an officer of the
Trustee in the Corporate Trust Office, having direct responsibility for the administration of this
Indenture, 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.

     “Rights Plan” means that certain Rights Agreement dated September 15, 2003 between the Company
and Computershare Trust Company, Inc., as rights agent, as amended from time to time.

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

     “Spin-Off” shall have the meaning specified in Section 13.04(c).

     “Significant Subsidiary” means such Subsidiary of the Company as meets the definition of
“significant subsidiary” in Rule 1-02 of Regulation S-X promulgated by the Commission as in effect
on the original date of issuance of the Notes.

     “Stock Price” means the price paid per share of Common Stock in connection with a Fundamental
Change pursuant to which Additional Shares shall be added to the Conversion Rate as set forth in
Section 13.01(d), which shall be equal to (a) if holders of Common Stock receive only cash in such
Fundamental Change, the cash amount paid per share of Common Stock and (b) in all other cases, the
average of the Last Reported Sale Prices of the Common Stock over the five consecutive Trading Day
period ending on the Trading Day preceding the Effective Date of the Fundamental Change.

     “Subsidiary” of the Company means (a) a corporation a majority of whose Capital Stock with
voting power, under ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by the Company, by the Company and one or more Subsidiaries of the Company or by
one or more Subsidiaries of the Company or (b) any other Person (other than a corporation) in which
the Company, one or more Subsidiaries of the Company or the Company

9

 

and one or more Subsidiaries of the Company, directly or indirectly, at the date of
determination thereof, has greater than a 50% ownership interest.

     “Successor Company” shall have the meaning specified in Section 10.01(a).

     “Termination of Trading” means the Common Stock is neither listed for trading on the New York
Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or another U.S. national
securities exchange.

     “Trading Day” means a day during which (a) trading in Common Stock generally occurs, (b) there
is no Market Disruption Event and (c) a Last Reported Sale Price for Common Stock (other than a
Last Reported Sale Price referred to in the next to last sentence of such definition) is available
for such day; provided that if the Common Stock is not admitted for trading or quotation on or by
any exchange, bureau or other organization referred to in the definition of Last Reported Sale
Price (excluding the next to last sentence of that definition), Trading Date shall mean any
Business Day.

     “Trading Price” with respect to the Notes, on any date of determination, means the average of
the secondary market bid quotations obtained by the Bid Solicitation Agent for $2.0 million
principal amount of Notes at approximately 3:30 p.m., New York City time, on such determination
date from three independent nationally recognized securities dealers selected by the Company;
provided that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent, but
two such bids are obtained, then the average of the two bids shall be used, and if only one such
bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used. If the
Bid Solicitation Agent cannot reasonably obtain at least one bid for $2.0 million principal amount
of Notes from a nationally recognized securities dealer, then the Trading Price per $1,000
principal amount of Notes will be deemed to be less than 98% of the product of the Last Reported Sale Price
of the Common Stock and the applicable Conversion Rate on such determination date. Any such
determination by the Trustee will be conclusive absent manifest error. If (a) the Company is not
acting as Bid Solicitation Agent, and the Company does not, when it is required to, instruct the
Bid Solicitation Agent to obtain bids, or if the Company gives such instruction to the Bid
Solicitation Agent, and the Bid Solicitation Agent fails to make such determination, or (b) the
Company is acting as Bid Solicitation Agent and the Company fails to make such determination, then,
in either case, the “Trading Price” per $1,000 principal amount of Notes shall be deemed to be less
than 98% of the product of the last reported sale price of our common stock and the conversion rate
on each trading day of such failure.

     “Trigger Event” shall have the meaning specified in Section 13.04(c).

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

     “Trustee” means The Bank of New York Mellon Trust Company, N.A., and its successors and any
corporation resulting from or surviving any consolidation or merger to which

10

 

it or its successors may be a party and any successor trustee at the time serving as successor
trustee hereunder.

     “Underwriters” means Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.

     “Underwriting Agreement” means that certain Underwriting Agreement, dated August___, 2010,
among the Company and the Underwriters.

          Section 1.02. Incorporation by reference of Trust Indenture Act.

     This Indenture is subject to the mandatory provisions of the Trust Indenture Act, which are
incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act
terms have the following meanings:

     “indenture securities” means the Notes.

     “indenture security holder” means a Holder.

     “indenture to be qualified” means this Indenture.

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

     “obligor” on the indenture securities means the Company and any other obligor on the indenture
securities.

     All other terms in this Indenture that are defined by the Trust Indenture Act, defined by it
by reference to another statute or defined by Commission rule have the meanings assigned to them by
such definitions. If any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this Indenture by the Trust Indenture Act, such required
provision shall control.

          Section 1.03.
References to Interest.

     Any
reference to interest on, or in respect of, any Note in the Indenture
shall be deemed to include Additional Interest if, in such context,
Additional Interest is, was or would be payable pursuant to Section
5.10.  Any express mention of the payment of Additional Interest in
any provision hereof shall not be construed as excluding Additional
Interest in those provisions hereof where such express mention is not
made.

ARTICLE II

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

          Section 2.01. Designation and Amount. The Notes shall be designated as the “___%
Convertible Senior Notes due 2017.” The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is initially limited to $1,000,000,000 (or
$1,150,000,000 if the Underwriters exercise their option to purchase additional Notes in full as
set forth in the Underwriting Agreement), subject to Section 2.11 and except for Notes
authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of
other Notes pursuant to Section 2.06, Section 2.07, Section 9.04 and Section 13.02.

          Section 2.02. Form of Notes. The Notes and the Trustee’s certificate of authentication to
be borne by such Notes shall be substantially in the form set forth in Exhibit A.

     Any of the Notes may have such letters, numbers or other marks of identification and such
notations, legends or endorsements as the officers executing the same may approve

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(execution thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Indenture, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange
or automated quotation system on which the Notes may be listed or designated for issuance, or to
conform to usage or to indicate any special limitations or restrictions to which any particular
Notes are subject.

     The Global Note shall represent such principal amount of the outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of
outstanding Notes represented thereby may from time to time be increased or reduced to reflect
repurchases, conversions, transfers or exchanges permitted hereby. Any endorsement of the Global
Note to reflect the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal and accrued and unpaid interest on the Global Note shall be made
to the holder of such Note on the date of payment, unless a record date or other means of
determining holders eligible to receive payment is provided for herein.

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

          Section 2.03. Date and Denomination of Notes; Payments of Interest. The Notes shall be
issuable in registered form without coupons in denominations of $2,000 principal amount and
integral multiples of $1,000 in excess thereof. Each Note shall be dated the date of its
authentication and shall bear interest from the date specified on the face of the form of Note
attached as Exhibit A hereto. Interest on the Notes shall be computed on the basis of a 360-day
year comprised of twelve 30 day months.

     The Person in whose name any Note (or its Predecessor Note) is registered on the Note register
at the close of business on any record date with respect to any Interest Payment Date shall be
entitled to receive the interest payable on such Interest Payment Date. Interest shall be payable
at the office of the Company maintained by the Company for such purposes in the Borough of
Manhattan, City of New York, which shall initially be an office or agency of the Trustee. The
Company shall pay interest (i) on any Notes in certificated form by check mailed to the address of
the Person entitled thereto as it appears in the Note register (or upon written application by such
Person to the Note Registrar not later than the relevant record date, by wire transfer in
immediately available funds to such Person’s account within the United States, if such Person is
entitled to interest on an aggregate principal in excess of $1,000,000) or (ii) on any Global Note
by wire transfer of immediately available funds to the account of the Depositary or its nominee.
The term “record date” with respect to any Interest Payment Date shall mean the February 1 or
August 1 preceding the applicable February 15 or August 15 Interest Payment Date, respectively.

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     Any interest on any Note which is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable
to the Noteholder on the relevant record date by virtue of his having been such Noteholder, and
such Defaulted Interest shall be paid by the Company, at its election in each case, as provided in
clause (1) or (2) below:

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

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

          Section 2.04. Date and Denomination of Notes. The Notes shall be issuable in fully
registered form without coupons in denominations of $2,000 principal amount and integral multiples
of $1,000 in excess thereof. Every Note shall be dated the date of its authentication.

          Section 2.05. Execution, Authentication and Delivery of Notes. The Notes shall be signed in
the name and on behalf of the Company by the manual or facsimile signature of its Chairman or
Vice-Chairman of the Board of Directors, Chief Executive Officer, President, any of its Executive
or Senior Vice Presidents, Managing Director, or any of its Vice Presidents (whether or not
designated by a number or numbers or word or words added before or after the title “Vice
President”).

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     At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Notes executed by the Company to the Trustee for authentication, together with
a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Notes, without any further action by
the Company hereunder.

     Only such Notes as shall bear thereon a certificate of authentication substantially in the
form set forth on the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by Section 15.11), shall be
entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company
shall be conclusive evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this indenture.

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

     The Trustee shall have the right to decline to authenticate and deliver any Notes under this
Section if the Trustee, being advised by counsel, determines that such action may not lawfully be
taken or if the Trustee in good faith shall determine that such action would expose the Trustee to
personal liability to existing Noteholders.

          Section 2.06. Exchange and Registration of Transfer of Notes; Restrictions on Transfer;
Depositary.

     (a) The Company shall cause to be kept at the Corporate Trust Office a register (the register
maintained in such office and in any other office or agency of the Company designated pursuant to
Section 3.02 being herein sometimes collectively referred to as the “Note register”) in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. Such register shall be in written form or in any
form capable of being converted into written form within a reasonable period of time. The Trustee
is hereby appointed “Note Registrar” for the purpose of registering Notes and transfers of Notes as
herein provided. The Company may appoint one or more co-registrars in accordance with
Section 3.02.

     Upon surrender for registration of transfer of any Note to the Note Registrar or any
co-registrar, and satisfaction of the requirements for such transfer set forth in this
Section 2.06, the Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such restrictive legends as may
be required by this Indenture.

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     Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at any such office or agency
maintained by the Company pursuant to Section 3.02. Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes
which the Noteholder making the exchange is entitled to receive, bearing registration numbers not
contemporaneously outstanding.

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

     No service charge shall be charged to the Noteholder for any exchange or registration of
transfer of Notes, but the Company or the Trustee may require payment of a sum sufficient to cover
any tax, assessments or other governmental charges that may be imposed in connection therewith.

     None of the Company, the Trustee, the Note Registrar or any co-registrar shall be required to
exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any
Note is surrendered for conversion, such portion thereof surrendered for conversion or (ii) any
Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) except in
accordance with Article XIII for conversion and Article XIV for repurchase hereof, respectively.

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

     (b) So long as the Notes are eligible for book-entry settlement with the Depositary, unless
otherwise required by law, all Notes shall be represented by one or more Notes in global form
(each, a “Global Note”) registered in the name of the Depositary or the nominee of the Depositary.
The transfer and exchange of beneficial interests in a Global Note, which does not involve the
issuance of a definitive Note, shall be effected through the Depositary (but not the Trustee or the
Custodian) in accordance with this Indenture (including the restrictions on transfer set forth
herein) and the procedures of the Depositary therefor.

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

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     Notwithstanding any other provisions of this Indenture, a Global Note may not be transferred
as a whole or in part except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor Depositary.

     (d) The Depositary shall be a clearing agency registered under the Exchange Act. The Company
initially appoints The Depository Trust Company to act as Depositary with respect to the Global
Note. Initially, the Global Note shall be issued to the Depositary, registered in the name of Cede
& Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.

     If at any time the Depositary for a Global Note (i) notifies the Company that it is unwilling
or unable to continue as Depositary for such Note or (ii) ceases to be registered as a clearing
agency under the Exchange Act, the Company may appoint a successor Depositary with respect to such
Note. If (1) a successor Depositary for such Global Note is not appointed by the Company within
ninety (90) days after the Company receives such notice or the Depositary ceasing to be a
registered clearing agency, (2) the Company, at its option, notifies the Trustee that it elects to
cause the issuance of Notes in definitive form in exchange for all or any part of the Notes
represented by a Global Note, subject to the procedures of the Depositary, or (3) an Event of
Default has occurred and is continuing and the Note Registrar has received a request from the
Depositary for the issuance of Notes in definitive form in exchange for a Global Note, the Company
will execute, and the Trustee, upon receipt of an Officers’ Certificate for the authentication and
delivery of Notes, will authenticate and deliver Notes in definitive form in an aggregate principal
amount equal to the principal amount of such Global Note, in exchange for such Global Note, and
upon delivery of the Global Note to the Trustee such Global Note shall be canceled.

     Definitive Notes issued in exchange for all or a part of the Global Note pursuant to this
Section 2.06(d) shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such definitive
Notes to the persons in whose names such definitive Notes are so registered.

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

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          Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become
mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its
written request the Trustee or an authenticating agent appointed by the Trustee shall authenticate
and deliver, a new Note, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed,
lost or stolen. In every case the applicant for a substituted Note shall furnish to the Company,
to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may
be required by them to save each of them harmless from any loss, liability, cost or expense caused
by or connected with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.

     The Trustee or such authenticating agent may authenticate any such substituted Note and
deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if
applicable, such authenticating agent may require. Upon the issuance of any substituted Note, the
Company or the Trustee may require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about to mature or has been
tendered for repurchase upon a Designated Event or is about to be converted into Common Stock shall
become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead
of issuing a substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a mutilated Note), as the
case may be, if the applicant for such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in every case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent
evidence of their satisfaction of the destruction, loss or theft of such Note and of the ownership
thereof.

     Every substitute Note issued pursuant to the provisions of this Section 2.07 by virtue of the
fact that any Note is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other Notes duly issued
hereunder. To the extent permitted by law, all Notes shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the replacement or payment or
conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment or conversion of negotiable instruments or
other securities without their surrender.

          Section 2.08. Temporary Notes. Pending the preparation of Notes in certificated form, the
Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon
written request of the Company, authenticate and deliver temporary Notes (printed or lithographed).
Temporary Notes shall be issuable in any authorized denomination, and

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substantially in the form of the Notes in certificated form but with such omissions,
insertions and variations as may be appropriate for temporary Notes, all as may be determined by
the Company. Every such temporary Note shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in substantially the same manner,
and with the same effect, as the Notes in certificated form. Without unreasonable delay the
Company will execute and deliver to the Trustee or such authenticating agent Notes in certificated
form (other than in the case of Notes in global form) and thereupon any or all temporary Notes
(other than any Global Note) may be surrendered in exchange therefor, at each office or agency
maintained by the Company pursuant to Section 3.02 and the Trustee or such authenticating agent
shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal
amount of Notes in certificated form. Such exchange shall be made by the Company at its own
expense and without any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations under this Indenture
as Notes in certificated form authenticated and delivered hereunder.

          Section 2.09. Cancellation of Notes Paid, Etc. All Notes surrendered for the purpose of
payment, repurchase, conversion, exchange or registration of transfer, shall, if surrendered to the
Company or any Paying Agent or any Note Registrar or any Conversion Agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be promptly canceled
by it, and no Notes shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall dispose of canceled Notes in accordance with its
customary procedures and, after such destruction, shall deliver a certificate confirming such
disposal to the Company, at the Company’s written request. If the Company shall acquire any of the
Notes, such acquisition shall not operate as satisfaction of the Indebtedness represented by such
Notes unless and until the same are delivered to the Trustee for cancellation.

          Section 2.10. CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers (if
then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in Company Notices as a
convenience to holders of the Notes; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the Notes or Company Notice and
that reliance may be placed only on the other identification numbers printed on the Notes. The
Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

          Section 2.11. Additional Notes, Repurchases. The Company may, from time to time, without
prior notice to or the consent of the Noteholders and notwithstanding Section 2.01, reopen the
Notes and issue additional Notes hereunder with the same terms and with the same CUSIP number as
the Notes initially issued hereunder in an unlimited aggregate principal amount, which will form
the same series with the Notes initially issued hereunder so long as such additional Notes are
fungible with the Notes initially issued hereunder for U.S. federal income tax purposes. The
Company may also from time to time repurchase the Notes in tender offers, open market purchases or
negotiated transactions without prior notice to Noteholders.

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ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY

          Section 3.01. Payment of Principal and Interest. The Company covenants and agrees that it
will cause to be paid the principal of, and accrued and unpaid interest on, each of the Notes and
if applicable, payment of the Conversion Obligation and Additional Shares, at the places, at the
respective times and in the manner provided herein and in the Notes. Each installment of accrued
and unpaid interest on the Notes due on any Interest Payment Date may be paid by mailing checks for
the amount payable to or upon the written order of the Noteholders entitled thereto as they shall
appear on the registry books of the Company, provided that, with respect to any Noteholder with an
aggregate principal amount in excess of $1,000,000, at the application of such holder in writing to
the Note Registrar not later than the relevant record date, accrued and unpaid interest on such
holder’s Notes shall be paid by wire transfer in immediately available funds to such holder’s
account in the United States supplied by such holder from time to time to the Trustee and Paying
Agent (if different from Trustee); provided, further, that payment of accrued and unpaid interest
made to the Depositary shall be paid by wire transfer in immediately available funds in accordance
with such wire transfer instructions and other procedures provided by the Depositary from time to
time.

          Section 3.02. Maintenance of Office or Agency. The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where the Notes may be surrendered for
registration of transfer or exchange or for presentation for payment, redemptions or repurchase
(“Paying Agent”) or for conversion (“Conversion Agent”) and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate
Trust Office or the office or agency of the Trustee in the Borough of Manhattan, The City of New
York.

     The Company may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location of any such other
office or agency. The terms Paying Agent and Conversion Agent include any such additional or other
offices or agencies, as applicable.

     The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar,
Custodian and Conversion Agent and the Corporate Trust Office and the office or agency of the
Trustee in the Borough of Manhattan shall be considered as one such office or agency of the Company
for each of the aforesaid purposes.

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     So long as the Trustee is the Note Registrar, the Trustee agrees to mail, or cause to be
mailed, the notices set forth in Section 6.10(a) and the third paragraph of Section 6.11.

          Section 3.03. Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever
necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided
in Section 6.10, a Trustee, so that there shall at all times be a Trustee hereunder.

          Section 3.04. Provisions as to Paying Agent.

     (a) If the Company shall appoint a Paying Agent other than the Trustee or if the Trustee shall
appoint such a Paying Agent, the Company will cause such Paying Agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions
of this Section 3.04.

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

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

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

     The Company shall, on or before each due date of the principal of, or accrued and unpaid
interest on the Notes, deposit with the Paying Agent a sum sufficient to pay such principal or
accrued and unpaid interest and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee in writing of any failure to take such action, provided that if such deposit is
made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York
City time, on such date.

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

     (c) Anything in this Section 3.04 to the contrary notwithstanding, the Company may, at any
time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying
Agent hereunder as required by this Section 3.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee,
the Company or such Paying Agent shall be released from all further liability with respect to such
sums.

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     (d) Anything in this Section 3.04 to the contrary notwithstanding, the agreement to hold sums
in trust as provided in this Section 3.04 is subject to Section 11.03 and Section 11.04.

          Section 3.05. Existence. Subject to Article XII, 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 3.06. 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, or
interest on, the Notes as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of this Indenture; and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

          Section 3.07. Compliance Certificate; Statements as to Defaults. The Company shall deliver
to the Trustee within 120 calendar days after the end of each fiscal year of the Company (beginning
with the fiscal year ending on December [___], 2010) an Officers’ Certificate stating whether or not
the signer thereof has knowledge of any failure by the Company to comply with all conditions and
covenants then required to be performed under this Indenture and, if so, specifying each such
failure and the nature thereof.

     In addition, the Company shall deliver to the Trustee, as soon as possible and in any event
within 30 days after the Company becomes aware of the occurrence of any Event of Default or
Default, an Officers’ Certificate setting forth the details of such Event of Default or Default,
its status and the action which the Company proposes to take with respect thereto.

          Section 3.08. Further Instruments and Acts. 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.

ARTICLE IV

LISTS OF NOTEHOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE

          Section 4.01. Lists of Noteholders. The Company covenants and agrees that it will furnish or
cause to be furnished to the Trustee, semi-annually, not more than fifteen (15) days after each
February 1 and August 1 in each year beginning with February 1, 2011, and at such other times as
the Trustee may request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order to enable it to
timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may
reasonably require of the names and addresses of the Noteholders as of a date not more than fifteen
(15) days (or such other date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such list need be
furnished so long as the Trustee is acting as Note Registrar.

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          Section 4.02. Preservation and Disclosure of Lists.

     (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Noteholders contained in the most recent list
furnished to it as provided in Section 4.01 or maintained by the Trustee in its capacity as Note
Registrar, if so acting. The Trustee may destroy any list furnished to it as provided in
Section 4.01 upon receipt of a new list so furnished.

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

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

          Section 4.03. Reports by Trustee.

     (a) Within sixty (60) days after August 15 of each year commencing with the year 2011, the
Trustee shall transmit to Noteholders such reports dated as of August 15 of each year in which such
reports are made concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

     (b) A copy of such report shall, at the time of such transmission to Noteholders, be filed by
the Trustee with each stock exchange and automated quotation system upon which the Notes are listed
and with the Company. The Company will notify the Trustee in writing within a reasonable time when
the Notes are listed on any stock exchange or automated quotation system and when any such listing
is discontinued.

          Section 4.04. Reports by Company.

     (a) The Company shall file with the Trustee and the Commission, and transmit to Noteholders,
such information, documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act;
provided that any such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days
after the same is filed with the Commission.

     (b) 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
conclusively rely exclusively on an Officers’ Certificate).

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ARTICLE V

DEFAULTS AND REMEDIES

          Section 5.01. Events of Default. The following events shall be Events of Default with
respect to the Notes:

     (a) default in any payment of interest, on any Note when due and payable and the default
continues for a period of 30 days;

     (b) default in the payment of principal of any Note when due and payable on the Maturity Date,
upon required repurchase, upon declaration or otherwise;

     (c) failure by the Company to comply with its obligation to convert the Notes in accordance
with the terms hereof upon exercise of a holder’s conversion right and the default continues for a
period of three Business Days;

     (d) failure by the Company to comply with its obligations under Article X;

     (e) failure by the Company to issue a Designated Event Company Notice in accordance with
Section 14.01(b) when due;

     (f) failure by the Company for 60 days to comply with any of its other agreements (other than
a covenant or warranty or default in whose performance or whose breach is elsewhere in this
Section specifically provided for) contained in the Notes or the Indenture after written notice of
such default from the Trustee or the holders of at least 25% in principal amount of the Notes then
outstanding has been received by the Company;

     (g) default by the Company or any Subsidiary of the Company in the payment of the principal or
interest on any mortgage, agreement or other instrument under which there may be outstanding, or by
which there may be secured or evidenced, any debt for money borrowed in excess of $75 million in
the aggregate of the Company and/or any such Subsidiary, whether such debt now exists or shall
hereafter be created, which default results in such debt becoming or being declared due and
payable, and such acceleration shall not have been rescinded or annulled within 30 days after
written notice of such acceleration has been received by the Company or such Subsidiary;

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

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     (i) an involuntary case or other proceeding shall be commenced against the Company or any of
its Significant Subsidiaries seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar
official of the Company or any of its Significant Subsidiaries or any substantial part of its
property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a
period of ninety (90) consecutive days.

     In case one or more Events of Default shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body), then, and in each and every such case
(other than an Event of Default specified in Section 5.01(h) or Section 5.01(i) with respect to the
Company), unless the principal of all of the Notes shall have already become due and payable,
either the Trustee or the holders of at least 25% in aggregate principal amount of the Notes then
outstanding determined in accordance with Section 7.04, by notice in writing to the Company (and to
the Trustee if given by Noteholders), may declare 100% of the principal of, and accrued and unpaid
interest on, all the Notes to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. If an Event of Default specified in
Section 5.01(h) or Section 5.01(i) occurs and is continuing with respect to the Company, the
principal of all the Notes and accrued and unpaid interest shall be immediately due and payable.
This provision, however, is subject to the conditions that if, at any time after the principal of
the Notes shall have been so declared due and payable, and before any judgment or decree for the
payment of the monies due shall have been obtained or entered as hereinafter provided, the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and
unpaid interest upon all Notes and the principal of any and all Notes that shall have become due
otherwise than by acceleration (with interest on overdue installments of accrued and unpaid
interest (to the extent that payment of such interest is enforceable under applicable law) and on
such principal at the rate borne by the Notes during the period of such Default) and amounts due to
the Trustee pursuant to Section 6.06, and if (1) rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (2) any and all Events of Defaults under this
Indenture, other than the nonpayment of principal of and accrued and unpaid interest on Notes that
shall have become due solely by such acceleration, shall have been cured or waived pursuant to
Section 5.07, then and in every such case the holders of a majority in aggregate principal amount
of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default with respect to the Notes and rescind and annul such declaration and
its consequences and such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon. The Company shall notify the Responsible
Officer of the Trustee in writing, promptly upon becoming aware thereof, of any Event of Default by
delivering to the Trustee a statement specifying such Event of Default and any action the Company
has taken, is taking or proposes to take with respect thereto.

24

 

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

          Section 5.02. Payments of Notes on Default; Suit Therefor. In the event that the Trustee or
the holders of not less than 25% in aggregate principal amount of the Notes then outstanding
hereunder have declared the principal of and accrued and unpaid interest on, the Notes, to be due
and payable immediately in accordance with Section 5.01, and the Company shall have failed
forthwith to pay such amounts, the Trustee, in its own name and as trustee of an express trust,
after being furnished suitable indemnity pursuant to Section 6.01, shall be entitled and empowered
to institute any actions or proceedings at law or in equity for the collection of the sums so due
and unpaid (including such further amounts as shall be sufficient to cover the reasonable costs and
expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any expenses or liabilities incurred by the Trustee hereunder other than through its
negligence or bad faith), and may prosecute any such action or proceeding to judgment or final
degree, and may enforce any such judgment or final decree against the Company or any other obligor
on the Notes and collect in the manner provided by law out of the property of the Company or any
other obligor on the Notes wherever situated the monies adjudged or decreed to be payable.

     In case there shall be pending proceedings for the bankruptcy or for the reorganization of the
Company or any other obligor on the Notes under title 11 of the United States Code, or any other
applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or taken possession of
the Company or such other obligor, the property of the Company or such other obligor, or in the
case of any other judicial proceedings relative to the Company or such other obligor upon the
Notes, or to the creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 5.02, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and accrued and unpaid interest in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents and to take such
other actions as it may deem 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 of the Noteholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or deliverable on any
such claims, and to distribute the same after the deduction of any amounts due the Trustee under
Section 6.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
custodian or similar official is hereby authorized by each of the Noteholders to make such payments
to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the
making of such payments directly to the Noteholders, to pay to the Trustee any

25

 

amount due it for reasonable compensation, expenses, advances and disbursements, including
agents and counsel fees, and including any other amounts due to the Trustee under Section 6.06
hereof, incurred by it up to the date of such distribution. To the extent that such payment of
reasonable compensation, expenses, advances and disbursements out of the estate in any such
proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.

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

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

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

          Section 5.03. Application of Monies Collected by Trustee. Any monies collected by the
Trustee pursuant to this Article V with respect to the Notes shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of such monies, upon
presentation of the several Notes, and stamping thereon the payment, if only partially paid, and
upon surrender thereof, if fully paid:

     First, to the payment of all amounts due the Trustee under Section 6.06;

     Second, in case the principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of interest on the Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such interest has been collected
by the Trustee) upon the overdue installments of interest at the rate borne by the Notes, such
payments to be made ratably to the Persons entitled thereto;

     Third, in case the principal of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid to the payment of the whole amount (including, if applicable, payments in
respect of the Conversion Obligation and Additional Shares) then owing and unpaid upon the Notes
for principal and interest, with interest on the overdue principal (to the extent that such
interest has been collected by the Trustee) upon overdue installments of interest at the rate borne
by the Notes, and in case such monies shall be insufficient to pay in full

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the whole amounts so due and unpaid upon the Notes, then to the payment of such principal and
interest without preference or priority of principal over interest, or of interest over principal
or of any installment of interest over any other installment of interest, or of any Note over any
other Note, ratably to the aggregate of such principal and accrued and unpaid interest; and

     Fourth, to the payment of the remainder, if any, to the Company or as a court of competent
jurisdiction shall direct in writing.

          Section 5.04. Proceedings by Noteholders. No holder of any Note shall have any right by
virtue of or by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture, or for the
appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless
also the holders of not less than 25% in aggregate principal amount of the Notes then outstanding
shall have made written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such security or indemnity
satisfactory to it against any loss, liability or expense to be incurred therein or thereby, and
the Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or proceeding and no direction
that, in the opinion of the Trustee, is inconsistent with such written request shall have been
given to the Trustee by the holders of a majority in principal amount of the Notes outstanding
pursuant to Section 5.07; it being understood and intended, and being expressly covenanted by the
taker and holder of every Note with every other taker and holder and the Trustee, that no one or
more Noteholders shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholder, or
to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Noteholders (except as otherwise provided herein). For the protection and
enforcement of this Section 5.04, each and every Noteholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

     Notwithstanding any other provision of this Indenture and any provision of any Note, the right
of any Noteholder to receive payment of the principal of and accrued and unpaid interest on such
Note, on or after the respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such Noteholder.

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

          Section 5.05. Proceedings by Trustee. In case of an Event of Default the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either
by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the

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specific enforcement of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

          Section 5.06. Remedies Cumulative and Continuing. Except as provided in the last paragraph
of Section 2.07, all powers and remedies given by this Article V to the Trustee or to the
Noteholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any
thereof or of any other powers and remedies available to the Trustee or the holders of the Notes,
by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of
any of the Notes to exercise any right or power accruing upon any default or Event of Default shall
impair any such right or power, or shall be construed to be a waiver of any such default or any
acquiescence therein; and, subject to the provisions of Section 5.04, every power and remedy given
by this Article V or by law to the Trustee or to the Noteholders may be exercised from time to
time, and as often as shall be deemed expedient by the Trustee or by the Noteholders.

          Section 5.07. Direction of Proceedings and Waiver of Defaults by Majority of Noteholders.
The holders of a majority in aggregate principal amount of the Notes at the time outstanding
determined in accordance with Section 7.04 shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to Notes; provided, however, that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such direction. The
Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights
of any other holder or that would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 7.04 may, on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default in the payment of
and accrued and unpaid interest on, or the principal of, the Notes when due which has not been
cured pursuant to the provisions of Section 5.01, (ii) a failure by the Company to deliver cash
and, if applicable, shares of Common Stock (and cash in lieu of fractional shares) upon conversion
of the Notes, or (iii) a default in respect of a covenant or provisions hereof which under Article
IX cannot be modified or amended without the consent of each holder of an outstanding Note affected
thereby. Upon any such waiver the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent thereon. Whenever
any default or Event of Default hereunder shall have been waived as permitted by this Section 5.07,
said default or Event of Default shall for all purposes of the Notes and this Indenture be deemed
to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

          Section 5.08. Notice of Defaults. The Trustee shall, within ninety (90) days after the
occurrence and continuance of a Default of which a Responsible Officer has actual knowledge, mail
to all Noteholders as the names and addresses of such holders appear upon the Note register, notice
of all Defaults known to a Responsible Officer, unless such Defaults shall have

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been cured or waived before the giving of such notice; and provided that, except in the case
of a Default in the payment of the principal of and accrued and unpaid interest on any of the
Notes, then in any such event the Trustee shall be protected in withholding such notice if and so
long as a committee of trust officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Noteholders.

          Section 5.09. Undertaking to Pay Costs. All parties to this Indenture agree, and each holder
of any Note by his acceptance thereof shall be deemed to have agreed, that any court may, in its
discretion, require, in any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this Section 5.09 (to the
extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than 10% in
principal amount of the Notes at the time outstanding determined in accordance with Section 7.04,
or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of
and accrued and unpaid interest on any Note on or after the due date expressed in such Note or to
any suit for the enforcement of the right to convert any Note in accordance with the provisions of
Article XIII.

          Section 5.10. Additional Interest. Notwithstanding any provisions of the Indenture to the
contrary, to the extent the Company elects, the sole remedy for an Event of Default relating to
(i) its failure to file with the Trustee pursuant to Section 314(a)(1) of the Trust Indenture Act
any documents or reports that it is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act or (ii) its failure to comply with its obligations in Section 4.04 shall
for the 364 days after the occurrence of such an Event of Default consist exclusively of the right
to receive additional interest on the Notes at a rate equal to 0.25% per annum of the principal
amount of the Notes Outstanding (“Additional Interest”) for each day during the 180-day period
beginning on, and including, the occurrence of such an Event of Default during which such Event of
Default is continuing, which such Additional Interest shall be increased by an additional 0.25% per
annum, on the 181st day after such Event of Default (if such Event of Default is not cured or
waived prior to such 181st day), provided that the rate at which such Additional Interest accrues
may in no event exceed 0.50% per annum. If the Company so elects, such Additional Interest shall
be payable in the same manner and on the same dates as the stated interest payable on the Notes.
On the 365th day after such Event of Default occurs (if such Event of Default is not cured or
waived prior to such 365th day), such Additional Interest shall cease to accrue and the Notes shall
be subject to acceleration as provided in Section 5.01. This Section 5.10 shall not affect the
rights of Holders of Notes in the event of the occurrence of any other Event of Default. In the
event the Company does not elect to pay Additional Interest following an Event of Default in
accordance with this Section 5.10, the Notes shall be subject to acceleration as provided in
Section 5.01.

          In order to elect to pay Additional Interest as the sole remedy during the first 364 days
after the occurrence of an Event of Default described in the immediately preceding paragraph, the
Company must give notice to Holders of the Notes, the Trustee and the Paying Agent of such election
prior to the beginning of such 364-day period. Upon the failure to timely give all Holders, the
Trustee and the Paying Agent such notice, the Notes shall be immediately subject to acceleration as
provided in Section 5.01.

ARTICLE VI

CONCERNING THE TRUSTEE

          Section 6.01. Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing or waiver of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are specifically set forth in
this Indenture. In case an Event of Default has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs; provided that if an Event of Default
occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or
powers under this Indenture at the request or direction of any of the holders unless such holders
have offered to the Trustee indemnity or security satisfactory to it against loss, liability or
expense.

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

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

     (i) the duties and obligations of the Trustee shall be determined solely by the express
provisions of this Indenture and, after it has been qualified thereunder, the Trust

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

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

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

     (c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith and either (i) believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture or (ii) in accordance with the direction of the
holders of not less than a majority in principal amount of the Notes at the time outstanding
determined as provided in Section 7.04 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture;

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

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

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

     (g) in the absence of written investment direction from the Company, all cash received by the
Trustee shall be placed in a non-interest bearing trust account. In no event shall the Trustee be
liable for the selection of investments or for investment losses incurred thereon or for losses
incurred as a result of the liquidation of any such investments prior to its stated maturity or the
failure of the party directing such investments prior to its stated maturity or the failure of the
party directing such investment to provide timely written investment direction, and the Trustee
shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such
written investment direction from the Company; and

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     (h) in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent,
Conversion Agent, Bid Solicitation Agent or transfer agent hereunder, the rights and protections afforded to the Trustee
under this Indenture shall also be afforded to it in its capacity as such.

     None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers.

          Section 6.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in
Section 6.01:

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

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

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

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

     (e) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent or attorney;
provided, however, that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require indemnity satisfactory to the Trustee from the
Noteholders against such expenses or liability as a condition to so proceeding; the expenses of
every such examination shall be paid by the Company or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Company upon demand;

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

     (g) the permissive rights of the Trustee enumerated herein shall not be construed as duties.

     (h) 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 Officers’
Certificates or Opinions of Counsel furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such Certificates or Opinions which by any provisions hereof
are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of this Indenture
(but need not confirm or investigate the accuracy of mathematical calculations or other facts
stated therein); and

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

     In no event shall the Trustee be liable for any consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action other than through the
Trustee’s willful misconduct or gross negligence. The Trustee shall not be charged with knowledge
of any default or Event of Default with respect to the Notes, unless either (1) a Responsible
Officer shall have actual knowledge of such default or Event of Default or (2) written notice of
such default or Event of Default shall have been given to the Trustee by the Company or by any
holder of the Notes at the Corporate Trust Office of the Trustee, and such notice references the
Notes and this Indenture. The permissive rights of the Trustee enumerated herein shall not be
construed as duties.

          Section 6.03. No Responsibility for Recitals, Etc. The recitals contained herein and in the
Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes
or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the
provisions of this Indenture. The Trustee shall not be responsible or liable for any loss suffered
in connection with any investment of funds made by it in accordance with this Indenture or at the
direction of the Company. Except for information provided by the Trustee concerning the Trustee,
the Trustee shall have no responsibility for any information in any offering memorandum, prospectus
or other disclosure material distributed with respect to the Notes.

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          Section 6.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes. The
Trustee, any Paying Agent, any Conversion Agent or Note Registrar, in its individual or any other
capacity, may become the owner or pledgee of Notes with the same rights it would have if it were
not Trustee, Paying Agent, Conversion Agent or Note Registrar.

          Section 6.05. Monies to Be Held in Trust. Subject to the provisions of Section 11.04, all
monies received by the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received. Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as may be agreed from
time to time by the Company and the Trustee.

          Section 6.06. Compensation and Expenses of Trustee. The Company covenants and agrees to pay
to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for
all services rendered by it hereunder in any capacity (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in
writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon
its request for all expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as shall be determined to have been
caused by its own gross negligence or willful misconduct. The Company also covenants to indemnify
the Trustee in any capacity under this Indenture and any other document or transaction entered into
in connection herewith and its agents and any authenticating agent for, and to hold them harmless
against, any loss, liability or expense incurred without gross negligence or willful misconduct on
the part of the Trustee, its officers, directors, agents or employees, or such agent or
authenticating agent, as the case may be, and arising out of or in connection with the acceptance
or administration of this trust or in any other capacity hereunder, including the costs and
expenses of defending themselves against any claim of liability in the premises. The obligations
of the Company under this Section 6.06 to compensate or indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to
that of the Notes upon all property and funds held or collected by the Trustee as such, except,
subject to the effect of Section 5.03, funds held in trust herewith for the benefit of the holders
of particular Notes prior to the date of the accrual of such unpaid compensation or identifiable
claim. The Trustee’s right to receive payment of any amounts due under this Section 6.06 shall not
be subordinate to any other liability or Indebtedness of the Company. The obligation of the
Company under this Section 6.06 shall survive the satisfaction and discharge of this Indenture and
the earlier resignation or removal or the Trustee. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld. The indemnification
provided in this Section 6.06 shall extend to the officers, directors, agents and employees of the
Trustee.

     When the Trustee and its agents and any authenticating agent incur expenses or render services
after an Event of Default specified in Section 5.01(h) or Section 5.01(i) occurs, the expenses and
the compensation for the services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.

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          Section 6.07. Officers’ Certificate as Evidence. Except as otherwise provided in
Section 8.01, whenever in the administration of the provisions of this Indenture the Trustee shall
deem it necessary or desirable that a matter be proved or established prior to taking or omitting
any action hereunder, such matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence, willful misconduct, recklessness and bad faith
on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’
Certificate delivered to the Trustee, and such Officers’ Certificate, in the absence of gross
negligence, willful misconduct, recklessness and bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.

          Section 6.08. Conflicting Interests of Trustee. If the Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.

          Section 6.09. Eligibility of Trustee. There shall at all times be a Trustee hereunder which
shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

          Section 6.10. Resignation or Removal of Trustee.

     (a) The Trustee may at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof to the Noteholders at their addresses as they shall appear on
the Note register. Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have accepted
appointment sixty (60) days after the mailing of such notice of resignation to the Noteholders, the
resigning Trustee may petition at the expense of the Company any court of competent jurisdiction
for the appointment of a successor trustee, or any Noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, subject to the provisions of Section 5.09, on behalf of
himself and all others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.

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

     (i) the Trustee shall fail to comply with Section 6.08 within a reasonable time after
written request therefor by the Company or by any Noteholder who has been a bona fide holder
of a Note or Notes for at least six (6) months, or

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          (ii) the Trustee shall cease to be eligible in accordance with the provisions of
Section 6.09 and shall fail to resign after written request therefor by the Company or by
any such Noteholder, or

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

then, in any such case, the Company may by a Board Resolution remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 5.09, any Noteholder who has been a
bona fide holder of a Note or Notes for at least six (6) months, on behalf of himself and all
others similarly situated, or the Trustee, at the expense of the Company, may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove
the Trustee and appoint a successor trustee.

     (c) The holders of a majority in aggregate principal amount of the Notes at the time
outstanding, as determined in accordance with Section 7.04, may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor trustee unless within ten
(10) days after notice to the Company of such nomination the Company objects thereto, in which case
the Trustee so removed or any Noteholder, upon the terms and conditions and otherwise as in
Section 6.10(a) provided, may petition any court of competent jurisdiction for an appointment of a
successor trustee.

     (d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant
to any of the provisions of this Section 6.10 shall become effective upon acceptance of appointment
by the successor trustee as provided in Section 6.11.

          Section 6.11. Acceptance by Successor Trustee. Any successor trustee appointed as provided
in Section 6.10 shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Company or of the successor trustee, the
trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of
Section 6.06, execute and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee,
the Company shall execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as
such, except for funds held in trust for the benefit of holders of particular Notes, to secure any
amounts then due it pursuant to the provisions of Section 6.06.

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     No successor trustee shall accept appointment as provided in this Section 6.11 unless at the
time of such acceptance such successor trustee shall be qualified under the provisions of
Section 6.08 and be eligible under the provisions of Section 6.09.

     Upon acceptance of appointment by a successor trustee as provided in this Section 6.11, each
of the Company and the successor trustee, at the written direction and at the expense of the
Company shall mail or cause to be mailed notice of the succession of such trustee hereunder to the
Noteholders at their addresses as they shall appear on the Note register. If the Company fails to
mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the Company.

          Section 6.12. Succession by Merger, Etc. Any corporation or other entity into which the
Trustee may be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation or other entity succeeding to all or substantially all of the corporate trust
business of the Trustee (including the administration of this Indenture), shall be the successor to
the Trustee hereunder without the execution or filing of any paper or any further act on the part
of any of the parties hereto, provided that in the case of any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee such corporation shall be
qualified under the provisions of Section 6.08 and eligible under the provisions of Section 6.09.

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

          Section 6.13. Limitation on Rights of Trustee as Creditor. If and when the Trustee shall be
or become a creditor of the Company (or any other obligor upon the Notes), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of the claims against
the Company (or any such other obligor).

          Section 6.14. Trustee’s Application for Instructions from the Company. Any application by
the Trustee for written instructions from the Company (other than with regard to any action
proposed to be taken or omitted to be taken by the Trustee that affects the rights of the holders
of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such omission shall be effective. The Trustee shall not
be liable for any action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application (which

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date shall not be less than three (3) Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented in writing to any
earlier date), unless, prior to taking any such action (or the effective date in the case of any
omission), the Trustee shall have received written instructions in response to such proposal
specifying the action to be taken or omitted.

ARTICLE VII

CONCERNING THE NOTEHOLDERS

          Section 7.01. Action by Noteholders. Whenever in this Indenture it is provided that the
holders of a specified percentage in aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any instrument or any number
of instruments of similar tenor executed by Noteholders in person or by agent or proxy appointed in
writing, or (b) by the record of the Noteholders voting in favor thereof at any meeting of
Noteholders duly called and held in accordance with the provisions of Article VIII, or (c) by a
combination of such instrument or instruments and any such record of such a meeting of Noteholders
and, except as herein otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Notes, the Company or the Trustee
may fix, but shall not be required to, in advance of such solicitation, a date as the record date
for determining Noteholders entitled to take such action. The record date if one is selected shall
be not more than fifteen (15) days prior to the date of commencement of solicitation of such
action. Any request, demand, authorization, direction, notice consent, waiver or other action by a
Holder of any Note shall bind every future Holder of the same Note, and the holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted, or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.

          Section 7.02. Proof of Execution by Noteholders. Subject to the provisions of Section 6.01,
Section 6.02 and Section 8.05, proof of the execution of any instrument by a Noteholder or his
agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations
as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the Note register or by a certificate of the Note Registrar.
The record of any Noteholders’ meeting shall be proved in the manner provided in Section 8.06.

          Section 7.03. Who Are Deemed Absolute Owners. The Company, the Trustee, any authenticating
agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the person in whose
name such Note shall be registered upon the Note register to be, and may treat him as, the absolute
owner of such Note (whether or not such Note shall be overdue

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and notwithstanding any notation of ownership or other writing thereon made by any Person
other than the Company or any Note Registrar) for the purpose of receiving payment of or on account
of the principal of and accrued and unpaid interest on such Note, for conversion of such Note and
for all other purposes; and neither the Company nor the Trustee nor any Paying Agent nor any
Conversion Agent nor any Note Registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies
payable upon any such Note. Notwithstanding anything to the contrary in this Indenture or the
Notes following an Event of Default, any holder of a beneficial interest in a Global Note may
directly enforce against the Company, without the consent, solicitation, proxy, authorization or
any other action of the Depositary or any other person, such holder’s right to exchange such
beneficial interest for a Note in certificated form in accordance with the provisions of this
Indenture.

          Section 7.04. Company-Owned Notes Disregarded. In determining whether the holders of the
requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or
other action under this Indenture, Notes that are owned by the Company or any other obligor on the
Notes or by any person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any other obligor on such Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any such direction,
consent, waiver or other action only Notes that a Responsible Officer knows are so owned shall be
so disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding
for the purposes of this Section 7.04 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee’s right to vote such Notes and that the pledgee is not the Company, any other
obligor on the Notes or a person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In the case of a
dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee. Upon request of the Trustee, the Company shall furnish to the
Trustee promptly an Officers’ Certificate listing and identifying all Notes, if any, known by the
Company to be owned or held by or for the account of any of the above described persons; and,
subject to Section 6.01, the Trustee shall be entitled to accept such Officers’ Certificate as
conclusive evidence of the facts therein set forth and of the fact that all Notes not listed
therein are outstanding for the purpose of any such determination.

          Section 7.05. Revocation of Consents; Future Holders Bound. At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 9.01, of the taking of any action by
the holders of the percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any holder of a Note that is shown by the evidence to be
included in the Notes the holders of which have consented to such action may, by filing written
notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in
Section 7.02, revoke such action so far as concerns such Note. Except as aforesaid, any such
action taken by the holder of any Note shall be conclusive and binding upon such holder and upon
all future holders and owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon such Note or any Note
issued in exchange or substitution therefor.

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ARTICLE VIII

NOTEHOLDERS’ MEETINGS

          Section 8.01. Purpose of Meetings. A meeting of Noteholders may be called at any time and
from time to time pursuant to the provisions of this Article VIII for any of the following
purposes:

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

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

     (c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to
the provisions of Section 9.02; or

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

          Section 8.02. Call of Meetings by Trustee. The Trustee may at any time call a meeting of
Noteholders to take any action specified in Section 8.01, to be held at such time and at such place
as the Trustee shall determine. Notice of every meeting of the Noteholders, setting forth the time
and the place of such meeting and in general terms the action proposed to be taken at such meeting
and the establishment of any record date pursuant to Section 7.01, shall be mailed to holders of
such Notes at their addresses as they shall appear on the Note register. Such notice shall also be
mailed to the Company. Such notices shall be mailed not less than twenty (20) nor more than ninety
(90) days prior to the date fixed for the meeting.

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

          Section 8.03. Call of Meetings by Company or Noteholders. In case at any time the Company,
pursuant to a resolution of its Board of Directors, or the holders of at least 10% in aggregate
principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting
of Noteholders, by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within
twenty (20) days after receipt of such request, then the Company or such Noteholders may determine
the time and the place for such meeting and may call such meeting to take any action authorized in
Section 8.01, by mailing notice thereof as provided in Section 8.02.

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          Section 8.04. Qualifications for Voting. To be entitled to vote at any meeting of
Noteholders a person shall (a) be a holder of one or more Notes on the record date pertaining to
such meeting or (b) be a person appointed by an instrument in writing as proxy by a holder of one
or more Notes. The only persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the Company and its
counsel.

          Section 8.05. Regulations. Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any meeting of
Noteholders, in regard to proof of the holding of Notes and of the appointment of proxies, and in
regard to the appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other matters concerning
the conduct of the meeting as it shall think fit.

     The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the Company or by Noteholders as provided in
Section 8.03, in which case the Company or the Noteholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the holders of a majority in principal amount of the
Notes represented at the meeting and entitled to vote at the meeting.

     Subject to the provisions of Section 7.04, at any meeting of Noteholders each Noteholder or
proxyholder shall be entitled to one vote for each $1,000 principal amount of Notes held or
represented by him; provided, however, that no vote shall be cast or counted at any meeting in
respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of
Notes held by him or instruments in writing as aforesaid duly designating him as the proxy to vote
on behalf of other Noteholders. Any meeting of Noteholders duly called pursuant to the provisions
of Section 8.02 or Section 8.03 may be adjourned from time to time by the holders of a majority of
the aggregate principal amount of Notes represented at the meeting, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.

          Section 8.06. Voting. The vote upon any resolution submitted to any meeting of Noteholders
shall be by written ballot on which shall be subscribed the signatures of the Noteholders or of
their representatives by proxy and the principal amount of the Notes held or represented by them.
The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all
votes cast at the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Noteholders shall be prepared
by the secretary of the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting and showing that
said notice was mailed as provided in Section 8.02. The record shall show the principal amount of
the Notes voting in favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates
shall be delivered to the Company and the other to the

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Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.

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

          Section 8.07. No Delay of Rights by Meeting. Nothing contained in this Article VIII shall be
deemed or construed to authorize or permit, by reason of any call of a meeting of Noteholders or
any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to the Trustee or to the Noteholders
under any of the provisions of this Indenture or of the Notes.

ARTICLE IX

SUPPLEMENTAL INDENTURES

          Section 9.01. Supplemental Indentures Without Consent of Noteholders. The Company, when
authorized by the resolutions of the Board of Directors, and the Trustee, at the Company’s expense,
may from time to time and at any time enter into an indenture or indentures supplemental hereto for
one or more of the following purposes:

     (a) to cure any ambiguity, omission, defect or inconsistency or to conform this Indenture to
the “Description of the Notes” section of the prospectus supplement filed with the Commission
relating to the Notes;

     (b) to provide for the assumption by a Successor Company of the obligations of the Company
under the Indenture pursuant to Article X;

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

     (d) to add guarantees with respect to the Notes;

     (e) to secure the Notes;

     (f) to add to the covenants of the Company for the benefit of the holders or surrender any
right or power conferred upon the Company;

     (g) to make any change that does not materially adversely affect the rights of any holder; or

     (h) to comply with any requirements of the Commission in connection with the qualification of
the Indenture under the Trust Indenture Act.

     Upon the written request of the Company, accompanied by a Board Resolution authorizing the
execution of such supplemental indenture, the Trustee is hereby authorized to

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join with the Company in the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture which affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.

     Any supplemental indenture authorized by the provisions of this Section 9.01 may be executed
by the Company and the Trustee without the consent of the holders of any of the Notes at the time
outstanding.

          Section 9.02. Supplemental Indentures With Consent of Noteholders. With the consent
(evidenced as provided in Article VII) of the holders of at least a majority in aggregate principal
amount of the Notes at the time outstanding (determined in accordance with Article VII and
including, without limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes), the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of
modifying in any manner the rights of the holders of the Notes; provided, however, that no such
supplemental indenture shall:

     (a) reduce the percentage in aggregate principal amount of Notes the holders of which must
consent to an amendment;

     (b) reduce the rate, or extend the stated time for payment, of interest on any Note;

     (c) reduce the principal, or extend the Maturity Date, of any Note;

     (d) make any change that adversely affects the conversion rights of any Notes;

     (e) reduce the Designated Event Repurchase Price of any Note or amend or modify in any manner
adverse to the holders of the Notes the Company’s obligation to make such payments, whether through
an amendment or waiver of provisions in the covenants, definitions or otherwise;

     (f) change the place or currency of payment of principal or interest in respect of any Note;

     (g) impair the right of any holder to receive payment of principal of, and interest, on, such
holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such holder’s Note; or

     (h) make any change in the provisions of this Article IX that require each holder’s consent or
in the waiver provisions in Section 5.01 and Section 5.07,

in each case without the consent of each holder of an outstanding Note affected.

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

     It shall not be necessary for the consent of the Noteholders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof. After an amendment under the Indenture becomes
effective, the Company shall mail to the holders a notice briefly describing such amendment.
However, the failure to give such notice to all the holders, or any defect in the notice, will not
impair or affect the validity of the amendment.

          Section 9.03. Effect of Supplemental Indentures. Any supplemental indenture executed
pursuant to the provisions of this Article IX shall comply with the Trust Indenture Act, as then in
effect, provided that this Section 9.03 shall not require such supplemental indenture or the
Trustee to be qualified under the Trust Indenture Act prior to the time such qualification is in
fact required under the terms of the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such qualification is required
prior to the time such qualification is in fact required under the terms of the Trust Indenture
Act. Upon the execution of any supplemental indenture pursuant to the provisions of this Article
IX, this Indenture shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitation of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Noteholders shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and amendments and all the
terms and conditions of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

          Section 9.04. Notation on Notes. Notes authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article IX may bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of
the Trustee and the Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Company’s expense, be prepared and executed by the Company,
authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to
Section 15.11) and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.

          Section 9.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee. In
addition to the documents required by Section 15.05, the Trustee shall receive an Officers’
Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this Article IX.

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ARTICLE X

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

          Section 10.01. Company May Consolidate, etc. on Certain Terms. Subject to the provisions of
Section 10.02, the Company shall not consolidate with, merge with or into, or convey, transfer or
lease all or substantially all of its assets and properties to another Person, unless:

     (a) the resulting, surviving or transferee Person (the “Successor Company”) if not the Company
shall be a Person organized and existing under the laws of the United States of America, any State
thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly
assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Notes, this Indenture and, to the extent
that it is otherwise still operative, shall expressly assume all the obligations of the Company
under the Registration Rights Agreement; and

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

     For purposes of this Section 10.01, the sale, lease, conveyance, assignment, transfer, or
other disposition of all or substantially all of the properties and assets of one or more
Subsidiaries of the Company, which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and assets of the Company
on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.

          Section 10.02. Successor Corporation to be Substituted. In case of any such consolidation,
merger, conveyance, transfer or lease and upon the assumption by the Successor Company, by
supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of and accrued and unpaid interest on all
of the Notes, the due and punctual conversion of the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the Company, such
Successor Company shall succeed to and be substituted for the Company and the Company shall be
released from those obligations, with the same effect as if it had been named herein as the party
of the first part. Such Successor Company thereupon may cause to be signed, and may issue either
in its own name or in the name of the Company any or all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the
order of such Successor Company instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or
cause to be authenticated and delivered, any Notes which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication, and any Notes which
such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under
this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Notes had been issued at the date of the execution hereof. In the
event of any such consolidation, merger,

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conveyance, transfer or lease, the person named as the “Company” in the first paragraph of
this Indenture or any successor which shall thereafter have become such in the manner prescribed in
this Article X may be dissolved, wound up and liquidated at any time thereafter and such person
shall be released from its liabilities as obligor and maker of the Notes and from its obligations
under this Indenture.

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

          Section 10.03. Officers’ Certificate and Opinion of Counsel to Be Given Trustee. No merger,
consolidation, sale transfer or lease shall be effective unless the Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, conveyance, transfer or lease and any such assumption complies with the provisions of this
Article X.

ARTICLE XI

SATISFACTION AND DISCHARGE OF INDENTURE

          Section 11.01. Discharge of Indenture. When (a) the Company shall deliver to the Note
Registrar for cancellation all Notes theretofore authenticated (other than any Notes that have been
destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been
authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Notes Registrar for cancellation shall have become due and payable,
whether on the Maturity Date or on any earlier Designated Event Repurchase Date or otherwise, and
the Company shall deposit with the Trustee, in trust, cash or shares of Common Stock, as
applicable, sufficient to pay at maturity all of the Notes (other than any Notes that shall have
been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes
shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee
for cancellation, including principal and accrued and unpaid interest due thereon, and if the
Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then
this Indenture shall cease to be of further effect except as to (i) the right of holders to receive
payments of principal of and accrued and unpaid interest, and any unpaid Conversion Obligation and
Additional Shares, if any, on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee (ii) the rights, obligations and immunities of the Trustee hereunder and (iii) the
obligations of the Company under Section 6.06, and the Trustee, on written demand of the Company
accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 15.05 and
at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction
of and discharging this Indenture; the Company, however, hereby agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee and to compensate
the Trustee for any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Notes.

          Section 11.02. Deposited Monies to Be Held in Trust by Trustee. Subject to Section 11.04,
all monies deposited with the Trustee pursuant to Section 11.01 shall be held in

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trust and applied by it to the payment, either directly or through any Paying Agent (including
the Company if acting as its own Paying Agent), to the holders of the particular Notes for the
payment of which such monies have been deposited with the Trustee, of all sums due thereon for
principal and accrued and unpaid interest.

          Section 11.03. Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of
this Indenture, all monies then held by any Paying Agent of the Notes (other than the Trustee)
shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon
such Paying Agent shall be released from all further liability with respect to such monies.

          Section 11.04. Return of Unclaimed Monies. Subject to the requirements of applicable law,
any monies deposited with or paid to the Trustee for payment of the principal of or accrued and
unpaid interest on, Notes and not applied but remaining unclaimed by the Noteholders for two years
after the date upon which the principal of or accrued and unpaid interest on such Notes, as the
case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on
written request and all liability of the Trustee shall thereupon cease with respect to such monies;
and the holder of any of the Notes shall thereafter look only to the Company for any payment which
such holder may be entitled to collect unless an applicable abandoned property law designates
another person. The Trustee shall, promptly after such payment of the principal of, and any
accrued and unpaid interest, on Notes, as described in this Section 11.04 and upon written request
of the Company, return to the Company any funds in excess of the amount required for such payment.

          Section 11.05. Reinstatement. If (a) the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 11.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application and (b) the
holders of at least a majority in principal amount of the then outstanding Notes so request by
written notice to the Trustee, the Company’s obligations under this Indenture shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.01 until such time as the
Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 11.02;
provided, however, that if the Company makes any payment of interest on or principal of any Note
following the reinstatement of its obligations, the Company shall be subrogated to the rights of
the Noteholders to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE XII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

          Section 12.01. Indenture and Notes Solely Corporate Obligations. No recourse for the payment
of the principal of, or accrued and unpaid interest on, any Note, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement
of the Company in this Indenture or in any supplemental indenture or in any Note, or because of the
creation of any Indebtedness represented thereby, shall be had against any past, present or future
incorporator, stockholder, employee, agent, officer or director or Subsidiary of the Company as
such or of any successor corporation, either directly or through

46

 

the Company or any successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a condition of, and
as a consideration for, the execution of this Indenture and the issue of the Notes.

ARTICLE XIII

CONVERSION OF NOTES

          Section 13.01. Conversion Privilege.

     (a) Subject to the conditions described in clause (i), (ii), and (iii) below, and upon
compliance with the provisions of this Article XIII, a Noteholder shall have the right, at such
holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal
amount or an integral multiple thereof; provided that the remaining principal amount of any Note so
converted is $2,000 or an integral multiple of $1,000 in excess thereof) of such Note at any time
prior to the close of business on the scheduled Trading Day immediately preceding May 15, 2017 at a
rate (the “Conversion Rate”) of ___ shares of Common Stock (subject to adjustment by the Company
as provided in Section 13.04) per $1,000 principal amount Note (the “Conversion Obligation”) under
the circumstances and during the periods set forth below. On and after May 15, 2017, regardless of
the conditions described in clause (i), (ii) and (iii) below, and upon compliance with the
provisions of this Article XIII, a Noteholder shall have the right, at such holder’s option, to
convert all or any portion (if the portion to be converted is $1,000 principal amount or an
integral multiple thereof; provided that the remaining principal amount of any Note so converted is
$2,000 or an integral multiple of $1,000 in excess thereof) of such Note at any time prior to the
close of business on the second scheduled Trading Day immediately preceding the Maturity Date.

          (i) The Notes shall be convertible prior to the close of business on the Business Day
immediately prior to May 15, 2017, during the five Business Day period immediately after any
five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price
per $1,000 principal amount of Notes for each day of such Measurement Period was less than
98% of the product of the Last Reported Sale Price of the Common Stock on such date and the
Conversion Rate on such date, all as determined by the Bid Solicitation Agent. The Bid
Solicitation Agent shall have no obligation to determine the Trading Price of the Notes
unless requested by the Company to do so in writing. The Company shall have no obligation
to make such a determination unless a Noteholder of at least $1,000,000 aggregate principal
amount of Notes provides the Company with reasonable evidence that the Trading Price of the
Notes would be less than 98% of the product of (a) the then-applicable Conversion Rate of
the Notes and (b) the Last Reported Sale Price at such time, at which time the Company shall
instruct the Bid Solicitation Agent to determine the Trading Price of the Notes beginning on
the next Trading Day and on each successive Trading Day until the Trading Price per Note is
greater than or equal to 98% of the product of (a) the then-applicable Conversion Rate of
the Notes and (b) the Last Reported Sale Price on such date. If the Trading Price condition
set forth above has been met, the Company shall so notify the Noteholders. If, at any time
after the Trading Price condition set forth above has been met, the Trading

47

 

Price per $1,000 principal amount of Notes is greater than 98% of the product of (a)
the then-applicable Conversion Rate of the Notes and (b) the Last Reported Sale Price on
such date, the Company shall so notify the Noteholders.

     (ii) The Notes shall be convertible prior to the close of business on the Business Day
immediately prior to May 15, 2017, during any calendar quarter after the calendar quarter
ending September 30, 2010, if the Last Reported Sale Price of the Common Stock for twenty
(20) or more Trading Days (whether or not consecutive) in a period of thirty (30)
consecutive Trading Days ending on the last Trading Day of the immediately preceding
calendar quarter exceeds 130% of the applicable Conversion Price in effect on the last
Trading Day of the immediately preceding calendar quarter.

     (iii) The Notes shall be convertible prior to the close of business on the Business Day
immediately prior to May 15, 2017 as provided in Section 13.01(b), Section 13.01(c) and
Section 13.01(d).

     (b) In the event that the Company elects to:

     (i) distribute to all or substantially all holders of Common Stock rights entitling
them to purchase, for a period expiring within 60 days after the record date for such
distribution, Common Stock at a price less than the average of the Last Reported Sale Prices
of the Common Stock for the ten consecutive Trading Day period ending on the Trading Day
immediately preceding the declaration date of such distribution; or

     (ii) distribute to all or substantially all holders of Common Stock, assets or debt
securities of the Company or rights to purchase the Company’s securities, which distribution
has a per share value (as determined by the Board of Directors) exceeding 10% of the average
of the Last Reported Sale Prices of the Common Stock for the ten consecutive Trading Day
period ending on the day immediately preceding the date of declaration of such distribution,

then, in either case, holders may surrender the Notes for conversion at any time on and after the
date that the Company provides notice to holders referred to in the next sentence until the earlier
of the close of business on the Business Day immediately preceding the Ex-Dividend Date for such
distribution or the date the Company announces that such distribution will not take place. The
Company shall notify holders of any distribution referred to in either clause (i) or clause (ii)
above and of the resulting conversion right no later than the 20th Business Day prior to the
Ex-Dividend Date for such distribution. Holders may not exercise this right if such Holder
participates in the distribution without conversion.

     (c) If the Company consolidates with or merges with or into another Person or is a party to a
binding share exchange or conveys, transfers, sells, leases or otherwise disposes of all or
substantially all of its properties and assets in each case pursuant to which the Common Stock
would be converted into cash, securities and/or other property, then the holders shall have the
right to convert Notes at any time beginning fifteen calendar days prior to the date announced by
the Company as the anticipated effective date of the transaction and until and including the date
that is fifteen calendar days after the date that is the effective date of such transaction;
provided

48

 

such transaction does not otherwise constitute a Designated Event to which the provisions of
Section 13.01(d) shall apply. The Company will notify holders of Notes at least 20 calendar days
prior to the anticipated effective date of such transaction. The Board of Directors shall
determine the anticipated effective date of the transaction, and such determination shall be
conclusive and binding on the holders and shall be publicly announced by the Company and posted on
its web site not later than two Business Day prior to such 15th day.

     (d) If the Company is a party to any transaction or event that constitutes a Designated Event,
a holder may surrender Notes for conversion at any time from and after the 30th scheduled Trading
Day prior to the anticipated effective date of such transaction or event until the related
Designated Event Repurchase Date and, upon such surrender, if such Designated Event also
constitutes a Fundamental Change, the holder shall be entitled to the increase in the Conversion
Rate, if any, specified in Section 13.01(e). The Company shall give notice in writing to all
record Noteholders and the Trustee of the Designated Event no later than 30 scheduled Trading Days
prior to the anticipated effective date of the Designated Event.

     (e) (i) If a Noteholder elects to convert Notes in connection with a Fundamental Change that
occurs prior to August 15, 2017, the Conversion Rate applicable to each $1,000 principal amount of
Notes so converted shall be increased by an additional number of shares of Common Stock (the
“Additional Shares”) as described below; provided, however, that no increase will be made in the
case of Fundamental Change if at least 90% of the consideration paid for the Company’s Common Stock
(excluding cash payments for fractional shares and cash payments made pursuant to dissenters’
appraisal rights) in such Fundamental Change transaction consists of shares of capital stock traded
on the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or
another U.S. national securities exchange or quoted on an established automated over-the-counter
trading market in the United States (or that will be so traded or quoted immediately following the
transaction) and, as a result of such transaction or transactions. the notes become convertible
solely into such common stock. Settlement of Notes tendered for conversion to which Additional
Shares shall be added to the Conversion Rate as provided in this subsection shall be settled
pursuant to Section 13.02(d) below. For purposes of this Section 13.01(e), a conversion shall be
deemed to be “in connection” with a Fundamental Change to the extent that such conversion is
effected during the time period specified in Section 13.01(d) (regardless of whether the provisions
of clause (a)(i), (a)(ii), (b) or (c) of this Section 13.01 shall apply to such conversion).

     (ii) The number of Additional Shares by which the Conversion Rate will be increased
shall be determined by reference to the table attached as Schedule A hereto, based on the
date on which the Fundamental Change occurs or becomes effective (the “Effective Date”), and
the Stock Price; provided that if the actual Stock Price is between two Stock Price amounts
in the table or the Effective Date is between two Effective Dates in the table, the number
of Additional Shares shall be determined by a straight-line interpolation between the number
of Additional Shares set forth for the next higher and next lower Stock Price amounts and
the two nearest Effective Dates, as applicable, based on a 365-day year; provided, further,
that if (1) the Stock Price is greater than $____ per share of Common Stock (subject to
adjustment in the same manner as set forth in Section 13.04), no Additional Shares will be
added to the Conversion Rate, and (2) the Stock Price is less
than $____ per share (subject
to adjustment in the same manner as set

49

 

forth in Section 13.04), no Additional Shares will be added to the Conversion Rate.
Notwithstanding the foregoing, in no event will the total number of shares of Common Stock
issuable upon conversion exceed___  per $1,000 principal amount of Notes (subject to
adjustment in the same manner as set forth in Section 13.04).

          (iii) The Stock Prices set forth in the first row of the table in Schedule A hereto
shall be adjusted by the Company as of any date on which the Conversion Rate of the Notes is
adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately
prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion
Rate in effect immediately prior to the adjustment giving rise to the Stock Price adjustment
and the denominator of which is the Conversion Rate as so adjusted. The number of
Additional Shares within the table shall be adjusted in the same manner as the Conversion
Rate as set forth in Section 13.04 (other than by operation of an adjustment to the
Conversion Rate by adding Additional Shares).

     Section 13.02. Conversion Procedure.

     (a) Subject to Section 13.02(b), the Company will satisfy the Conversion Obligation with
respect to each $1,000 principal amount of Notes tendered for conversion in cash and shares of
fully paid Common Stock, if applicable, by delivering, on the third Trading Day immediately
following the last day of the related Observation Period, cash and shares of Common Stock, if any,
equal to the sum of the Daily Settlement Amounts for each of the 20 Trading Days during the related
Observation Period; provided that the Company will deliver cash in lieu of fractional shares of
Common Stock as set forth pursuant to clause (k) below. The Daily Settlement Amounts shall be
determined by the Company promptly following the last day of the Observation Period.

     (b) Notwithstanding Section 13.02(a), the Company shall satisfy the Conversion Obligation with
respect to each $1,000 principal amount of Notes tendered for conversion to which Additional Shares
shall be added to the Conversion Rate as set forth in Section 13.01(e) pursuant to this clause (b).

     (A) If the last day of the applicable Observation Period related to Notes
surrendered for conversion is prior to the third Trading Day preceding the Effective
Date of the Fundamental Change, the Company will satisfy the related Conversion
Obligation with respect to each $1,000 principal amount of Notes tendered for
conversion as described in Section 13.02(b) by delivering the cash and shares of
Common Stock (based on the Conversion Rate, but without regard to the number of
Additional Shares to be added to the Conversion Rate pursuant to Section 13.01(e))
on the third Trading Day immediately following the last day of the applicable
Observation Period. As soon as practicable following the Effective Date of the
Fundamental Change, the Company will deliver the increase in such amount of cash and
Reference Property in lieu of shares of Common Stock, if any, as if the Conversion
Rate had been increased by such number of Additional Shares during the related
Observation Period (and based upon the related Daily VWAP prices during such
Observation Period). If such increased amount of cash and shares, if any, results
in an increase to the amount of cash to

50

 

be paid to holders, the Company will pay such increase in cash, and if such
increased amount results in an increase to the number of shares of Common Stock, the
Company will deliver such increase by delivering Reference Property based on such
increased number of shares.

     (B) If the last day of the applicable Observation Period related to Notes
surrendered for conversion is on or following the third scheduled Trading Day
preceding the Effective Date of such Fundamental Change, the Company will satisfy
the Conversion Obligation with respect to each $1,000 principal amount of Notes
tendered for conversion as described in Section 13.01(b) (based on the Conversion
Rate as increased by the Additional Shares pursuant to Section 13.01(e) above) on
the later to occur of (1) the Effective Date of the Fundamental Change and (2) the
third Trading Day immediately following the last day of the applicable Observation
Period.

     (c) Before any holder of a Note shall be entitled to convert the same as set forth above, such
holder shall (1) in the case of a Global Note, comply with the procedures of the Depositary in
effect at that time and, if required, pay funds equal to interest payable on the next Interest
Payment Date to which such holder is not entitled as set forth in Section 13.02(i) and, if
required, pay all taxes or duties, if any, and (2) in the case of a Note issued in certificated
form, (A) complete and manually sign and deliver an irrevocable written notice to the Conversion
Agent in the form on the reverse of such certificated Note (or a facsimile thereof) (a “Notice of
Conversion”) at the office of the Conversion Agent and shall state in writing therein the principal
amount of Notes to be converted and the name or names (with addresses) in which such holder wishes
the certificate or certificates for any shares of Common Stock, if any, to be delivered upon
settlement of the Conversion Obligation to be registered, (B) surrender such Notes, duly endorsed
to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at
the office of the Conversion Agent, (C) if required, pay funds equal to interest payable on the
next Interest Payment Date to which such holder is not entitled as set forth in Section 13.02(i),
and (D) if required, pay all taxes or duties, if any. A Note shall be deemed to have been
converted immediately prior to the close of business on the date (the “Conversion Date”) that the
holder has complied with the requirements set forth in this Section 13.02(c).

     No Notice of Conversion with respect to any Notes may be tendered by a holder thereof if such
holder has also tendered a Designated Event Repurchase Notice and not validly withdrawn such
Designated Event Repurchase Notice in accordance with the applicable provisions of Section 14.01 or
14.02, as the case may be, except with respect to any portion of such Note that is not subject to
the Designated Event Repurchase Notice.

     If more than one Note shall be surrendered for conversion at one time by the same holder, the
Conversion Obligation with respect to such Notes, if any, that shall be payable upon conversion
shall be computed on the basis of the aggregate principal amount of the Notes (or specified
portions thereof to the extent permitted thereby) so surrendered.

     (d) Delivery of the amounts owing in satisfaction of the Conversion Obligation shall be made
by the Company in no event later than the date specified in Section 13.02(a), except to

51

 

the extent specified in Section 13.02(b). The Company shall make such delivery by paying the
cash amount owed to the Conversion Agent or to the holder of the Note surrendered for conversion,
or such holder’s nominee or nominees, and by issuing, or causing to be issued, and delivering to
the Conversion Agent or to such holder, or such holder’s nominee or nominees, certificates or a
book-entry transfer through the Depositary for the number of full shares of Common Stock, if any,
to which such holder shall be entitled as part of such Conversion Obligation (together with any
cash in lieu of fractional shares).

     (e) In case any Note shall be surrendered for partial conversion, the Company shall execute
and the Trustee shall authenticate and deliver to or upon the written order of the holder of the
Note so surrendered, without charge to such holder, a new Note or Notes in authorized denominations
in an aggregate principal amount equal to the unconverted portion of the surrendered Notes.

     (f) If a holder submits a Note for conversion, the Company shall pay all stamp and other
duties, if any, which may be imposed by the United States or any political subdivision thereof or
taxing authority thereof or therein with respect to the issuance of shares of Common Stock, if any,
upon the conversion. However, the holder shall pay any such tax which is due because the holder
requests any shares of Common Stock to be issued in a name other than the holder’s name. The
Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock
being issued in a name other than the holder’s name until the Trustee receives a sum sufficient to
pay any tax which will be due because the shares are to be issued in a name other than the holder’s
name. Nothing herein shall preclude any tax withholding required by law or regulations.

     (g) Except as provided in Section 13.04, no adjustment shall be made for dividends on any
shares issued upon the conversion of any Note as provided in this Article.

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

     (i) Upon conversion, a Noteholder will not receive any separate cash payment for accrued and
unpaid interest except as set forth below. The Company’s settlement of the Conversion Obligations
as described above shall be deemed to satisfy its obligation to pay the principal amount of the
Note and accrued and unpaid interest to, but not including, the Conversion Date. As a result,
accrued and unpaid interest to, but not including, the Conversion Date shall be deemed to be paid
in full rather than cancelled, extinguished or forfeited. Notwithstanding the preceding sentence,
if Notes are converted after the close of business on a record date, holders of such Notes as of
the close of business on the record date will receive the interest payable on such Notes on the
corresponding Interest Payment Date notwithstanding the conversion. Notes surrendered for
conversion during the period from the close of business on any regular record date to the opening
of business on the corresponding Interest Payment Date must be accompanied by payment of an amount
equal to the interest payable on the Notes so converted; provided, however, that no such payment
need be made (i) if the Company has specified a Designated Event Purchase Date that is after a
record date and on or prior to the

52

 

corresponding Interest Payment Date; (ii) to the extent of any overdue interest existing at
the time of conversion with respect to such Note; or (iii) for conversions following the regular
record date immediately preceding the Maturity Date. Except as described above, no payment or
adjustment will be made for accrued interest on converted Notes.

     (j) The Person in whose name the certificate for any shares of Common Stock issued upon
conversion is registered shall be treated as a stockholder of record on and after the Conversion
Date; provided, however, that no surrender of Notes on any date when the stock transfer books of
the Company shall be closed shall be effective to constitute the Person or Persons entitled to
receive the shares of Common Stock upon such conversion as the record holder or holders of such
shares of Common Stock on such date, but such surrender shall be effective to constitute the Person
or Persons entitled to receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which such stock transfer
books are open; such conversion shall be at the Conversion Rate in effect on the date that such
Notes shall have been surrendered for conversion, as if the stock transfer books of the Company had
not been closed. Upon conversion of Notes, such Person shall no longer be a Noteholder.

     (k) No fractional shares of Common Stock shall be issued upon conversion of any Note or Notes.
If more than one Note shall be surrendered for conversion at one time by the same holder, the
number of full shares that shall be issued upon conversion thereof shall be computed on the basis
of the aggregate principal amount of the Notes (or specified portions thereof) so surrendered.
Instead of any fractional share of Common Stock that would otherwise be issued upon conversion of
any Note or Notes (or specified portions thereof), the Company shall pay a cash adjustment in
respect of such fraction (calculated to the nearest one-100th of a share) in an amount equal to the
same fraction of the Last Reported Sale Price of the Common Stock on the last day of the applicable
Observation Period.

          Section 13.03. [Intentionally Omitted].

          Section 13.04. Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from
time to time by the Company as follows:

     (a) In case the Company shall issue shares of Common Stock as a dividend or distribution to
holders of all or substantially all of the outstanding Common Stock, or shall effect a subdivision
into a greater number of shares of Common Stock or combination into a lesser number of shares of
Common Stock, the Conversion Rate shall be adjusted based on the following formula:

where

CR0 = the Conversion Rate in effect immediately prior to the Ex-Dividend
Date for such event;

53

 

CR’ = the Conversion Rate in effect immediately after the Ex-Dividend Date for such
event;

OS0 = the number of shares of Common Stock outstanding immediately prior
to the Ex-Dividend Date for such event;

OS’ = the number of shares of Common Stock outstanding immediately after the
Ex-Dividend Date for such event.

Such adjustment shall become effective immediately after 9:00 a.m., New York City time, on the
Business Day following the Record Date fixed for such determination. If any dividend or
distribution of the type described in this Section 13.04(a) is declared but not so paid or made, or
the outstanding shares of Common Stock are not subdivided or combined, as the case may be, the
Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors
determines not to pay such dividend or distribution, or subdivide or combine the outstanding shares
of Common Stock, as the case may be, to the Conversion Rate that would then be in effect if such
dividend, distribution, subdivision or combination had not been declared.

     (b) In case the Company shall issue to all or substantially all holders of its outstanding
shares of Common Stock rights or warrants entitling them (for a period expiring within sixty (60)
calendar days after the issuance thereof) to subscribe for or purchase shares of Common Stock at a
price per share less than the average of the Last Reported Sale Prices of the Common Stock over the
ten consecutive Trading Day period ending on the Business Day immediately preceding the date of
announcement of such issuance, the Conversion Rate shall be adjusted based on the following
formula:

where

	 	CR0 	=	 the Conversion Rate in effect immediately prior to the Ex-Dividend Date for
such event;
	 
	 	CR’ 	=	 the Conversion Rate in effect immediately after the Ex-Dividend Date for such
event;
	 
	 	OS0 	=	 the number of shares of Common Stock outstanding immediately prior to the
Ex-Dividend Date for such event;
	 
	 	X 	=	 the total number of shares of Common Stock issuable pursuant to such rights
or warrants; and
	 
	 	Y	= 	  the number of shares of Common Stock equal to the aggregate price payable to
exercise or convert such rights or warrants divided by the average of the Last Reported
Sale Prices of Common Stock over the ten consecutive Trading Day period ending on the
Business Day immediately

54

 

	 	 	 	preceding the Ex-Dividend Date relating to such distribution for the
issuance of such rights or warrants.

Such adjustment shall be successively made whenever any such rights, warrants or convertible
securities are issued and shall become effective immediately after 9:00 a.m., New York City time,
on the Business Day following the date fixed for such determination. If such rights, warrants or
convertible securities are not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such Record Date for such distribution had not been
fixed. To the extent that shares of Common Stock are not delivered after the expiration of such
rights, warrants or convertible securities, the Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of shares of Common Stock
actually delivered.

In determining whether any rights, warrants or convertible securities entitle the holders to
subscribe for or purchase shares of Common Stock at less than such Last Reported Sale Price, and in
determining the aggregate offering price of such shares of Common Stock, there shall be taken into
account any consideration received by the Company for such rights or warrants and any amount
payable on exercise or conversion thereof, the value of such consideration, if other than cash, to
be determined by the Board of Directors.

     (c) In case the Company shall, by dividend or otherwise, distribute to all or substantially
all holders of its Common Stock shares of any class of Capital Stock of the Company (other than
Common Stock as covered by Section 13.04(a)), evidences of its Indebtedness or other assets or
property of the Company (including securities, but excluding dividends and distributions covered by
Section 13.04(a), Section 13.04(b) or Section 13.04(d) and distributions described below in this
paragraph (c) with respect to Spin-Offs) (any of such shares of Capital Stock, Indebtedness, or
other asset or property hereinafter in this Section 13.04(c) called the “Distributed Property”),
then, in each such case the Conversion Rate shall be adjusted based on the following formula:

where

	 	CR0	= 	  the Conversion Rate in effect immediately prior to the Ex-Dividend Date for
such distribution;
	 
	 	CR’ 	= 	  the Conversion Rate in effect immediately after the Ex-Dividend Date for such
distribution;
	 
	 	SP0 	= 	  the average of the Last Reported Sale Prices of the Common Stock over the
ten consecutive Trading Day period ending on the Business Day immediately preceding the
Ex-Dividend Date relating to such distribution; and

55

 

	 	FMV 	= 	  the fair market value (as determined by the Board of Directors) of the shares
of Capital Stock, evidences of Indebtedness, assets or property distributed with
respect to each outstanding share of Common Stock on the Ex-Dividend Date relating to
such distribution.

Such adjustment shall become effective immediately prior to 4:00 a.m., New York City time, on the
Business Day following the date fixed for the determination of stockholders entitled to receive
such distribution; provided that if the then fair market value (as so determined) of the portion of
the Distributed Property so distributed applicable to one share of Common Stock is equal to or
greater than SP0 as set forth above, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Noteholder shall have the right to receive, for each $1,000
principal amount of Notes upon conversion, the amount of Distributed Property such holder would
have received had such holder owned a number of shares of Common Stock equal to the Conversion Rate
on the Record Date. If such dividend or distribution is not so paid or made, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the fair market value of
any distribution for purposes of this Section 13.04(c) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in such market over the
same period used in determining SP0 above.

With respect to an adjustment pursuant to this Section 13.04(c) where there has been a payment of a
dividend or other distribution on the Common Stock or shares of Capital Stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other business unit (a
“Spin-Off”), the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the
Record Date fixed for determination of stockholders entitled to receive the distribution will be
increased based on the following formula:

where

	 	CR0 	= 	  the Conversion Rate in effect immediately prior to such distribution;
	 
	 	CR’ 	= 	  the Conversion Rate in effect immediately after such distribution;
	 
	 	FMV0 	= 	 the average of the Last Reported Sale Prices of the Capital Stock or
similar equity interest distributed to holders of Common Stock applicable to one share
of Common Stock over the first ten consecutive Trading Day period from, and including,
the effective date of the Spin-Off; and
	 
	 	MP0 	= 	  the average of the Last Reported Sale Prices of Common Stock over the first
ten consecutive Trading Day period from, and including, the effective date of the
Spin-Off.

Such adjustment shall occur on the tenth Trading Day from, and including, the effective date of the
Spin-Off; provided that in respect of any conversion within the ten Trading Days from, and
including, the effective date of such Spin-Off, references within this paragraph (c) to ten days

56

 

shall be deemed replaced with such lesser number of trading days as have elapsed between such
Spin-Off and the conversion date in determining the applicable Conversion Rate.

     Rights or warrants distributed by the Company to all holders of Common Stock, entitling the
holders thereof to subscribe for or purchase shares of the Company’s Capital Stock, including
Common Stock (either initially or under certain circumstances), which rights or warrants, until the
occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with
such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of
future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this
Section 13.04 (and no adjustment to the Conversion Rate under this Section 13.04 will be required)
until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 13.04(c). If any such right or warrant, including
any such existing rights or warrants distributed prior to the date of this Indenture, are subject
to events, upon the occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of Indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and record date with respect
to new rights or warrants with such rights (and a termination or expiration of the existing rights
or warrants without exercise by any of the holders thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto that was counted for
purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under
this Section 13.04 was made, (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be
readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to the per share redemption
or repurchase price received by a holder or holders of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any holders thereof, the
Conversion Rate shall be readjusted as if such rights and warrants had not been issued.

     For purposes of this Section 13.04(c), Section 13.04(a) and Section 13.04(b), any dividend or
distribution to which this Section 13.04(c) is applicable that also includes shares of Common Stock
to which Section 13.04(a) applies or rights or warrants to subscribe for or purchase shares of
Common Stock to which Section 13.04(a) or Section 13.04(b) applies (or both), shall be deemed
instead to be (1) a dividend or distribution of the evidences of Indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants to which
Section 13.04(b) applies (and any Conversion Rate adjustment required by this Section 13.04(c) with
respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend
or distribution of such shares of Common Stock or such rights or warrants (and any further
Conversion Rate adjustment required by Section 13.04(a) and Section 13.04(b) with respect to such
dividend or distribution shall then be made), except (A) the record date of such dividend or
distribution shall be substituted as “the Record Date” and “the date fixed for such determination”
within the meaning of Section 13.04(a) and Section 13.04(b)

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and (B) any shares of Common Stock included in such dividend or distribution shall not be
deemed “outstanding immediately prior to such event” within the meaning of Section 13.04(a).

     (d) In case the Company shall pay a dividend or make a distribution consisting exclusively of
cash to all or substantially all holders of its Common Stock, the Conversion Rate shall be adjusted
based on the following formula:

where

	 	CR0 	= 	  the Conversion Rate in effect immediately prior to the Ex-Dividend Date for
such distribution;
	 
	 	CR’ 	= 	  the Conversion Rate in effect immediately after the Ex-Dividend Date for such
distribution;
	 
	 	SP0	= 	  the Last Reported Sale Prices of the Common Stock on the Trading Day
immediately preceding the Ex-Dividend Date relating to such distribution; and
	 
	 	C	= 	the amount in cash per share the Company distributes to holders of Common
Stock.

Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the
Record Date for such dividend or distribution; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than SP0 as
above, in lieu of the foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion of a Note (or any portion thereof) the
amount of cash such holder would have received had such holder owned a number of shares equal to
the Conversion Rate on the Record Date. If such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect
if such dividend or distribution had not been declared.

     For the avoidance of doubt, for purposes of this Section 13.04(d), in the event of any
reclassification of the Common Stock, as a result of which the Notes become convertible into more
than one class of Common Stock, if an adjustment to the Conversion Rate is required pursuant to
this Section 13.04(d), references in this Section to one share of Common Stock or Last Reported
Sale Price of one share of Common Stock shall be deemed to refer to a unit or to the price of a
unit consisting of the number of shares of each class of Common Stock into which the Notes are then
convertible equal to the numbers of shares of such class issued in respect of one share of Common
Stock in such reclassification. The above provisions of this paragraph shall similarly apply to
successive reclassifications.

     (e) In case the Company or any of its Subsidiaries makes a payment in respect of a tender
offer or exchange offer for all or any portion of the Common Stock, to the extent that the cash and
value of any other consideration included in the payment per share of Common Stock

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exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding
the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer
(as it may be amended), the Conversion Rate shall be increased based on the following formula:

where

	 	CR0 	= 	  the Conversion Rate in effect on the date such tender or exchange offer
expires;
	 
	 	CR’ 	= 	  the Conversion Rate in effect on the day next succeeding the date such tender
or exchange offer expires;
	 
	 	AC 	= 	the aggregate value of all cash and any other consideration (as determined by
the Board of Directors) paid or payable for shares purchased in such tender or exchange
offer;
	 
	 	OS0 	= 	  the number of shares of Common Stock outstanding immediately prior to the
date such tender or exchange offer expires;
	 
	 	OS’ 	= 	  the number of shares of Common Stock outstanding immediately after the date
such tender or exchange offer expires; and
	 
	 	SP’ 	= 	  the average of the Last Reported Sale Prices of Common Stock over the ten
consecutive Trading Day period commencing on the Trading Day next succeeding the date
such tender or exchange offer expires,

such adjustment to become effective immediately prior to the opening of business on the day
following the last date on which tenders or exchanges may be made pursuant to such tender or
exchange offer. If the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law from effecting all or
any such purchases or all or any portion of such purchases are rescinded, the Conversion Rate shall
again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made or had only been made in respect of the purchases that had been effected.
No adjustment to the Conversion Rate will be made if the application of the foregoing formula would
result in a decrease in the Conversion Rate.

     (f) For purposes of this Section 13.04 the term “Record Date” shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of Common Stock have the
right to receive any cash, securities or other property or in which the Common Stock (or other
applicable security) is exchanged for or converted into any combination of cash, securities or
other property, the date fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).

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     (g) In addition to those required by clauses (a), (b), (c), (d), and (e) of this
Section 13.04, and to the extent permitted by applicable law, the Company from time to time may
increase the Conversion Rate by any amount for a period of at least 20 calendar days if the Board
of Directors determines that such increase would be in the Company’s best interest. In addition,
the Company may also (but is not required to) increase the Conversion Rate to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock in connection with any
dividend or distribution of shares (or rights to acquire shares) or similar event. Whenever the
Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to the
holder of each Note at his last address appearing on the Note register provided for in Section 2.06
a notice of the increase at least fifteen days prior to the date the increased Conversion Rate
takes effect, and such notice shall state the increased Conversion Rate and the period during which
it will be in effect.

     (h) All calculations and other determinations under this Article XIII shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a
share, as the case may be. No adjustment shall be made for the Company’s issuance of Common Stock
or convertible or exchangeable securities or rights to purchase Common Stock or convertible or
exchangeable securities, other than as provided in this Section 13.04. No adjustment shall be made
to the Conversion Rate unless such adjustment would require a change of at least 1% in the
Conversion Rate then in effect at such time. The Company shall carry forward any adjustments that
are less than 1% of the Conversion Rate and make such carried forward adjustments, regardless of
whether the aggregate adjustment is less than 1% within one year of the first such adjustment
carried forward, upon a Fundamental Change, or upon maturity.

     (i) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate
setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. The Trustee and Conversion Agent may conclusively rely on the
accuracy of the Conversion Rate adjustment provided by the Company. Unless and until a Responsible
Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be
deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry
that the last Conversion Rate of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such adjustment of the
Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment
becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the
holder of each Note at his last address appearing on the Note register provided for in
Section 2.06, within twenty (20) days of the effective date of such adjustment. Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.

     (j) In any case in which this Section 13.04 provides that an adjustment shall become effective
immediately after (1) a record date or Record Date for an event, (2) the date fixed for the
determination of stockholders entitled to receive a dividend or distribution pursuant to
Section 13.04(a), (3) a date fixed for the determination of stockholders entitled to receive rights
or warrants pursuant to Section 13.04(b), or (4) the last date on which tenders or exchanges may be
made pursuant to any tender or exchange offer pursuant to Section 13.04(e) (each an

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“Adjustment Determination Date”), the Company may elect to defer until the occurrence of the
applicable Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Note
converted after such Adjustment Determination Date and before the occurrence of such Adjustment
Event, the additional cash and, if applicable, shares of Common Stock or other securities issuable
upon such conversion by reason of the adjustment required by such Adjustment Event over and above
the amounts deliverable upon such conversion before giving effect to such adjustment and (y) paying
to such holder any amount in cash in lieu of any fraction pursuant to Section 13.04. For purposes
of this Section 13.04(j), the term “Adjustment Event” shall mean:

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

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

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

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

     (k) For purposes of this Section 13.04, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

     (l) For the avoidance of doubt, if a holder converts Notes prior to the effective date of a
Fundamental Change, and the Fundamental Change does not occur, the holder will not be entitled to
an increased Conversion Rate in connection with such conversion.

          Section 13.05. Shares to Be Fully Paid. The Company shall provide, free from preemptive
rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of
Common Stock to provide for conversion of the Notes from time to time as such Notes are presented
for conversion.

          Section 13.06. Effect of Reclassification, Consolidation, Merger or Sale.

     If any of the following events occur, namely (i) any reclassification or change of the
outstanding shares of Common Stock (other than a 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 split, subdivision or combination),
(ii) any consolidation, merger or combination of the Company with another Person, or (iii) any sale
or conveyance of all or substantially all of the property and assets of the Company to any other
Person, in each case as a result of which holders of Common Stock shall be entitled to receive
cash, securities or other property or assets with respect to or in exchange for such Common Stock
(any such event a “Merger Event”), then:

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     (a) the Company or the successor or purchasing Person, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force
at the date of execution of such supplemental indenture if such supplemental indenture is then
required to so comply) permitted under Section 9.01(a) providing for the conversion and settlement
of the Notes as set forth in this Indenture. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article and the Trustee may conclusively rely on the determination by the Company of
the equivalency of such adjustments. If, in the case of any Merger Event, the Reference Property
includes shares of stock or other securities and assets of a corporation other than the successor
or purchasing corporation, as the case may be, in such reclassification, change, consolidation,
merger, 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 Notes as the Board of Directors shall reasonably consider necessary by reason of the
foregoing, including to the extent required by the Board of Directors and practicable the
provisions providing for the repurchase rights set forth in Article XIV herein.

     In the event the Company shall execute a supplemental indenture pursuant to this
Section 13.06, the Company shall promptly file with the Trustee an Officers’ Certificate briefly
stating the reasons therefore, the kind or amount of cash, securities or property or asset that
will constitute the Reference Property after any such Merger Event, any adjustment to be made with
respect thereto and that all conditions precedent have been complied with, and shall promptly mail
notice thereof to all Noteholders.

     (b) Notwithstanding the provisions of Section 13.02(a) and Section 13.02(b), and subject to
the provisions of Section 13.01, at the effective time of such Merger Event, the right to convert
each $1,000 principal amount of Notes will be changed to a right to convert such Note by reference
to the kind and amount of cash, securities or other property or assets that a holder of a number of
shares of Common Stock equal to the Conversion Rate immediately prior to such transaction would
have owned or been entitled to receive (the “Reference Property”) such that from and after the
effective time of such transaction, a Noteholder will be entitled thereafter to convert its Notes
into cash (up to the aggregate principal amount thereof) and the same type (and in the same
proportion) of Reference Property, based on the Daily Settlement Amounts of Reference Property in
an amount equal to the applicable Conversion Rate, as described under Section 13.02(b). For
purposes of determining the constitution of Reference Property, the type and amount of
consideration that a holder of Common Stock would have been entitled to in the case of
reclassifications, consolidations, mergers, sales or conveyance of assets or other transactions
that cause the Common Stock to be converted into the right to receive more than a single type of
consideration (determined based in part upon any form of stockholder election) will be deemed to be
the weighted average of the types and amounts of consideration received by the holders of Common
Stock that affirmatively make such an election. The Company shall not become a party to any such
transaction unless its terms are consistent with the preceding. None of the foregoing provisions
shall affect the right of a holder of Notes to convert its Notes in accordance with the provisions
of Article XIII hereof prior to the effective date.

     (c) The Company shall cause notice of the execution of such supplemental indenture to be
mailed to each Noteholder, at his address appearing on the Note register provided for in this

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Indenture, within twenty (20) days after execution thereof Failure to deliver such notice
shall not affect the legality or validity of such supplemental indenture.

     (d) The above provisions of this Section shall similarly apply to successive Merger Events.

          Section 13.07. Certain Covenants.

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

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

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

     (c) The Company further covenants that if at any time the Common Stock shall be listed on any
other national securities exchange or automated quotation system the Company will, if permitted and
required by the rules of such exchange or automated quotation system, list and keep listed, so long
as the Common Stock shall be so listed on such exchange or automated quotation system, all Common
Stock issuable upon conversion of the Notes.

     (d) The Company covenants that it will take no corporate action which would result in the
Conversion Rate being adjusted pursuant to Section 13.04 during the period beginning on the
25th scheduled Trading Day preceding August 15, 2017 until August 15, 2017, other than
any such corporate action that may cause the Conversion Rate to adjust as a result of the payment
of regular recurring cash dividends; provided that such dividends are not established or increased
during the period beginning on the 25th scheduled Trading Day preceding August 15, 2017 until
August 15, 2017.

          Section 13.08. Responsibility of Trustee. Notwithstanding any provision of this Indenture to
the contrary, the Trustee and any other Conversion Agent shall not at any time be under any duty or
responsibility to any Noteholder to determine the Conversion Rate or whether any facts exist which
may require any adjustment of the Conversion Rate, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method employed, or herein or
in any supplemental indenture provided to be employed, in making the same. The Trustee and any
other Conversion Agent shall not be accountable with respect to the validity or value (or the kind
or amount) of any shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the

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Trustee and any other Conversion Agent make no representations with respect thereto. Neither
the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion or to comply with any
of the duties, responsibilities or covenants of the Company contained in this Article.

     Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent
shall be under any responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 13.06 relating either to the kind or amount
of shares of stock or securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 13.06 or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section 6.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be protected in relying
upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee
prior to the execution of any such supplemental indenture) with respect thereto.

          Section 13.09. Notice to Holders Prior to Certain Actions.

     In case:

     (a) the Company shall declare a dividend (or any other distribution) on its Common Stock that
would require an adjustment in the Conversion Rate pursuant to Section 13.04; or

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

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

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

the Company shall cause to be filed with the Trustee and to be mailed to each Noteholder at his
address appearing on the Note register, provided for in Section 2.06, as promptly as possible but
in any event at least twenty days prior to the applicable date specified in clause (x) or (y)
below, as the case may be, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become
effective or occur, and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or
winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or
validity of such

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dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up.

          Section 13.10. Shareholder Rights Plans. Upon conversion of the Notes, the holders shall
receive, in addition to any shares of Common Stock issuable upon such conversion, the associated
rights issued under the Rights Plan or under any future shareholder rights plan the Company adopts
unless, prior to conversion, the rights have separated from the Common Stock, expired, terminated
or been redeemed or exchanged in accordance with the Rights Plan. If, and only if, the holders
receive rights under such shareholder rights plans as described in the preceding sentence upon
conversion of their Notes, then no other adjustment pursuant to this Article XIII shall be made in
connection with such shareholder rights plans.

ARTICLE XIV

REPURCHASE OF NOTES AT OPTION OF HOLDERS

          Section 14.01. Repurchase at Option of Holders Upon a Designated Event.

     (a) If a Designated Event occurs at any time prior to the Maturity Date, then each Noteholder
shall have the right, at such holder’s option, to require the Company to repurchase all of such
holder’s Notes or any portion thereof that is a multiple of $1,000 principal amount (provided that
the principal amount of any portion of such Note not purchased will be $2,000 or an integral
multiple of $1,000 in excess thereof), for cash on the date (the “Designated Event Repurchase
Date”) specified by the Company that is not less than twenty (20) days and not more than thirty
five (35) calendar days after the date of the Designated Event Company Notice (as defined below) at
a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid
interest thereon, if any, to but excluding, the Designated Event Repurchase Date (unless the
Designated Event Repurchase Date is between a regular record date and the corresponding Interest
Payment Date) (the “Designated Event Repurchase Price”).

     Repurchases of Notes under this Section 14.01 shall be made, at the option of the holder
thereof, upon:

          (i) delivery to the Trustee (or other Paying Agent appointed by the Company) by a
holder of a duly completed notice (the “Designated Event Repurchase Notice”) in the form set
forth on the reverse of the Note prior to the close of business on the Designated Event
Repurchase Date; and

          (ii) delivery or book-entry transfer of the Notes to the Trustee (or other Paying Agent
appointed by the Company) at any time after delivery of the Designated Event Repurchase
Notice (together with all necessary endorsements) at the Corporate Trust Office of the
Trustee (or other Paying Agent appointed by the Company) in the Borough of Manhattan, such
delivery being a condition to receipt by the holder of the Designated Event Repurchase Price
therefor; provided that such Designated Event Repurchase Price shall be so paid pursuant to
this Section 14.01 only if the Note so delivered to the Trustee (or other Paying Agent
appointed by the Company) shall conform in all respects to the description thereof in the
related Designated Event Repurchase Notice.

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     The Designated Event Repurchase Notice shall state:

     (A) if certificated, the certificate numbers of Notes to be delivered for
repurchase;

     (B) the portion of the principal amount of Notes to be repurchased, which must
be $1,000 or an integral multiple thereof (provided that the principal amount of any
portion of such Note not purchased will be $2,000 or an integral multiple of $1,000
in excess thereof), and

     (C) that the Notes are to be repurchased by the Company pursuant to the
applicable provisions of the Notes and the Indenture.

     Any purchase by the Company contemplated pursuant to the provisions of this Section 14.01
shall be consummated by the delivery of the consideration to be received by the holder promptly
following the later of the Designated Event Repurchase Date and the time of the book-entry transfer
or delivery of the Note.

     The Trustee (or other Paying Agent appointed by the Company) shall promptly notify the Company
of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal
thereof in accordance with the provisions of Section 14.01(c).

     Any Note that is to be repurchased only in part shall be surrendered to the Trustee (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 his
attorney duly authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the holder of such Note without service charge, a
new Note or Notes, containing identical terms and conditions, each in an authorized denomination in
aggregate principal amount equal to and in exchange for the unrepurchased portion of the principal
of the Note so surrendered.

     (b) On or before the 20th day after the Effective Date of any Designated Event, the Company
shall provide to all holders of record of the Notes and the Trustee and Paying Agent a notice (the
“Designated Event Company Notice”) of the occurrence of such Designated Event and of the repurchase
right at the option of the holders arising as a result thereof. Such mailing shall be by first
class mail. Simultaneously with providing such Designated Event Company Notice, the Company shall
publish a notice containing the information included therein on the Company’s website or through
such other public medium as the Company may use at such time.

     Each Designated Event Company Notice shall specify:

     (i) the events causing the Designated Event and whether such Designated Event also
constituted a Fundamental Change;

     (ii) the date of the Designated Event;

     (iii) the Designated Event Repurchase Date and the last date on which a holder may
exercise the repurchase right;

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     (iv) the Designated Event Repurchase Price;

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

     (vi) if applicable, the applicable Conversion Rate and any adjustments to the
applicable Conversion Rate;

     (vii) if applicable, that the Notes with respect to which a Designated Event Repurchase
Notice has been delivered by a holder may be converted only if the holder withdraws the
Designated Event Repurchase Notice in accordance with the terms of the indenture;

     (viii) that the holder must exercise the repurchase right on or prior to the close of
business on the Business Day immediately preceding the Designated Event Repurchase Date,
subject to extension to comply with applicable law (the “Designated Event Expiration Time”);

     (ix) that the holder shall have the right to withdraw any Notes surrendered prior to
the Designated Event Expiration Time, and

     (x) the procedures that holders must follow to require the Company to repurchase their
Notes.

     No failure of the Company to give the foregoing notices and no defect therein shall limit the
Noteholders’ repurchase rights or affect the validity of the proceedings for the repurchase of the
Notes pursuant to this Section 14.02.

     (c) A Designated Event Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the Paying Agent in accordance with the Designated Event Company Notice at
any time prior to the close of business on the Business Day prior to the Designated Event
Repurchase Date, specifying:

     (i) if certificated Notes have been issued, the certificate numbers of the withdrawn
Notes,

     (ii) the principal amount of the Note with respect to which such notice of withdrawal
is being submitted, and

     (iii) the principal amount, if any, of such Note that remains subject to the original
Designated Event Repurchase Notice, which portion must be in principal amounts of $2,000 or
an integral multiple of $1,000 in excess thereof;

provided, however, that if the Notes are not in certificated form, the notice must comply with
appropriate procedures of the Depositary.

     (d) On or prior to 11:00 a.m. (local time in The City of New York) on the Business Day
following the Designated Event Repurchase Date, the Company will deposit with the Trustee (or other
Paying Agent appointed by the Company or if the Company is acting as its own

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Paying Agent, set aside, segregate and hold in trust as provided in Section 5.04) an amount of
money sufficient to repurchase on the Designated Event Repurchase Date all of the Notes to be
repurchased on such date at the Designated Event Repurchase Price. Subject to receipt of funds
and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes
surrendered for repurchase (and not withdrawn) prior to the Designated Event Expiration Time will
be made promptly after the later of (x) the Designated Event Repurchase Date with respect to such
Note (provided the holder has satisfied the conditions to the payment of the Designated Event
Repurchase Price in Section 14.02), and (y) the time of book-entry transfer or the delivery of such
Note to the Trustee (or other Paying Agent appointed by the Company) by the holder thereof in the
manner required by Section 14.01 by mailing checks for the amount payable to the holders of such
Notes entitled thereto as they shall appear in the Note register, provided, however, that payments
to the Depositary shall be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written
demand by the Company, return to the Company any funds in excess of the Designated Event Repurchase
Price.

     (e) If the Trustee (or other Paying Agent appointed by the Company) holds money or securities
sufficient to repurchase on the Designated Event Repurchase Date all the Notes or portions thereof
that are to be purchased as of the Business Day following the Designated Event Repurchase Date,
then on and after the Designated Event Repurchase Date (i) such Notes validly tendered for purchase
and not validly withdrawn will cease to be outstanding and interest will cease to accrue on such
Notes, whether or not book-entry transfer of the Notes has been made or the Notes have been
delivered to the Trustee or Paying Agent, and (ii) all other rights of the holders of such Notes
will terminate other than the right to receive the Designated Event Repurchase Price upon delivery
of the Notes.

ARTICLE XV

MISCELLANEOUS PROVISIONS

          Section 15.01. Provisions Binding on Company’s Successors. All the covenants, stipulations,
promises and agreements of the Company contained in this Indenture shall bind its successors and
assigns whether so expressed or not.

          Section 15.02. Official Acts by Successor Corporation. Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be the lawful sole
successor of the Company.

          Section 15.03. Addresses for Notices, Etc. Any notice or demand which by any provision of
this Indenture is required or permitted to be given or served by the Trustee or by the Noteholders
on the Company shall be deemed to have been sufficiently given or made, for all purposes if given
or served by being deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the Trustee) to SanDisk
Corporation, 601 McCarthy Blvd., Milpitas, California 95035, Attention: Chief Legal Officer. Any
notice, direction, request or demand hereunder to or upon the Trustee

68

 

shall be deemed to have been sufficiently given or made, for all purposes, if given or served
by being deposited postage prepaid by registered or certified mail in a post office letter box
addressed to the Corporate Trust Office.

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

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

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

     The Trustee agrees to accept and act upon instructions or directions pursuant to this
Indenture sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured
electronic methods; provided, however, that (a) the party providing such written instructions,
subsequent to such transmission of written instructions, shall provide the originally executed
instructions or directions to the Trustee in a timely manner, and (b) such originally executed
instructions or directions shall be signed by an authorized representative of the party providing
such instructions or directions. If the party elects to give the Trustee e-mail or facsimile
instructions (or instructions by a similar electronic method) and the Trustee in its discretion
elects to act upon such instructions, the Trustee’s understanding of such instructions shall be
deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising
directly or indirectly from the Trustee’s reliance upon and compliance with such instructions
notwithstanding such instructions conflict or are inconsistent with a subsequent written
instruction. The party providing electronic instructions agrees to assume all risks arising out of
the use of such electronic methods to submit instructions and directions to the Trustee, including
without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or
interception and misuse by third parties.

          Section 15.04. Governing Law. THIS INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO AND TO BE PERFORMED
THEREIN.

          Section 15.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions
of Counsel to Trustee. Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an
Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, and an Opinion of Counsel stating that, in
the opinion of such counsel, all such conditions precedent have been complied with.

69

 

     Each certificate or opinion provided for by or on behalf of the Company in this Indenture and
delivered to the Trustee 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 statement or opinion contained in such certificate or
opinion is based; (3) a statement that, in the opinion of such person, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (4) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been complied with.

          Section 15.06. Legal Holidays. In any case where any Interest Payment Date, Designated Event
Purchase Date, Conversion Date or Maturity Date will not be a Business Day, then any action to be
taken on such date need not be taken on such date, but may be taken on the next succeeding Business
Day with the same force and effect as if taken on such date, and no interest shall accrue for the
period from and after such date to the next succeeding Business Day.

          Section 15.07. No Security Interest Created. Nothing in this Indenture or in the Notes,
expressed or implied, shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any
jurisdiction.

          Section 15.08. Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed
or implied, shall give to any person, other than the parties hereto, any Paying Agent, any
authenticating agent, any Note Registrar and their successors hereunder, the Noteholders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.

          Section 15.09. Table of Contents, Headings, Etc. The table of contents and the titles and
headings of the articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way modify or restrict any
of the terms or provisions hereof.

          Section 15.10. Authenticating Agent. The Trustee may appoint an authenticating agent which
shall be authorized to act on its behalf and subject to its direction in the authentication and
delivery of Notes in connection with the original issuance thereof and transfers and exchanges of
Notes hereunder, including under Section 2.05, Section 2.06, Section 2.07 and Section 2.08, as
fully to all intents and purposes as though the authenticating agent had been expressly authorized
by this Indenture and those Sections to authenticate and deliver Notes. For all purposes of this
Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to
be authentication and delivery of such Notes “by the Trustee” and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee’s certificate of authentication. Such
authenticating agent shall at all times be a person eligible to serve as trustee hereunder pursuant
to Section 6.09.

     Any corporation into which any authenticating agent may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, consolidation or

70

 

conversion to which any authenticating agent shall be a party, or any corporation succeeding
to the corporate trust business of any authenticating agent, shall be the successor of the
authenticating agent hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the part of the parties
hereto or the authenticating agent or such successor corporation.

     Any authenticating agent may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time terminate the agency of any authenticating
agent by giving written notice of termination to such authenticating agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee shall promptly
appoint a successor authenticating agent (which may be the Trustee), shall give written notice of
such appointment to the Company and shall mail notice of such appointment to all Noteholders as the
names and addresses of such holders appear on the Note register.

     The Company agrees to pay to the authenticating agent from time to time reasonable
compensation for its services although the Company may terminate the authenticating agent, if it
determines such agent’s fees to be unreasonable.

     The provisions of Section 6.02, Section 6.03, Section 6.04, Section 7.03 and this
Section 15.11 shall be applicable to any authenticating agent.

          Section 15.11. Execution in Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall together constitute
but one and the same instrument.

          Section 15.12. Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.Section 15.13. Force Majeure. In no event shall the Trustee be responsible
or liable for any failure or delay in the performance of its obligations hereunder arising out of
or caused by, directly or indirectly, forces beyond its control, including, without limitation,
strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; it being understood that
the Trustee shall use reasonable efforts which are consistent with accepted practices in the
banking industry to resume performance as soon as practicable under the circumstances.

71

 

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

	 	 	 	 	 	 	 

	 	 	SANDISK CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK MELLON TRUST 	 	 
	 	 	COMPANY, N.A., as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

72

 

SCHEDULE A

Stock Price

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Price
	     Date	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___	 	$___
	08/15/2010
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	08/15/2011
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	08/15/2012
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	08/15/2013
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	08/15/2014
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	08/15/2015
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	08/15/2016
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	08/15/2017
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT A

[FORM OF FACE OF NOTE]

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

A-1

 

SANDISK CORPORATION

___% Convertible Senior Notes due 2017

			
	 	 	 
	No.                     
	 	$                                        

CUSIP No. [      ]

     SanDisk Corporation, a corporation duly organized and validly existing under the laws of the
State of Delaware (herein called the “Company,” which term includes any successor corporation under
the Indenture referred to on the reverse hereof), for value received hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of                      Dollars or such other principal
amount as shall be set forth on the Schedule I hereto on August 15, 2017.

     This Note shall bear interest at the rate of ___% per year from August ___, 2010, or from the
most recent date to which interest had been paid or provided. Interest is payable semi-annually in
arrears on each February 15 and August 15, commencing February 15, 2011, to holders of record at
the close of business on the preceding February 1 and August 1, respectively. Interest payable on
each Interest Payment Date shall equal the amount of interest accrued from and including the
immediately preceding Interest Payment Date (or from and including August ___, 2010 if no interest
has been paid hereon) to but excluding such Interest Payment Date.

Additional Interest will be payable at the option of the Company on the terms set forth in
Section 5.10 of the Indenture, and any reference to interest on, or in respect of, any Note therein
shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or
would be payable pursuant to such Section 5.10 and any express mention of the payment of Additional
Interest in any provision therein shall not be construed as excluding Additional Interest in those
provisions thereof where such express mention is not made.

     Payment of the principal of and interest accrued on this Note shall be made at the office or
agency off the Company maintained for that purpose in the Borough of Manhattan, The City of New
York, or, at the option of the holder of this Note, at the Corporate Trust Office, in such lawful
money of the United States of America as at the time of payment shall be legal tender for the
payment of public and private debts; provided, however, interest may be paid by check mailed to
such holder’s address as it appears in the Note register; provided, further, however, that, with
respect to any Noteholder with an aggregate principal amount in excess of $1,000,000, at the
application of such holder in writing to the Company, interest on such holder’s Notes shall be paid
by wire transfer in immediately available funds to such holder’s account in the United States
supplied by such holder from time to time to the Trustee and Paying Agent (if different from the
Trustee) not later than the applicable record date; provided that any payment to the Depositary or
its nominee shall be paid by wire transfer in immediately available funds in accordance with the
wire transfer instruction supplied by the Depositary or its nominee from time to time to the
Trustee and Paying Agent (if different from Trustee).

     Reference is made to the further provisions of this Note set forth on the reverse hereof,
including, without limitation, provisions giving the holder of this Note the right to convert this
Note into cash and Common Stock, if any, of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth at this place.

     This Note shall be deemed to be a contract made under the laws of the State of New York, and
for all purposes shall be construed in accordance with the laws of the State of New York applicable
to contracts entered into and to be performed therein.

A-2

 

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

[Remainder of page intentionally left blank]

A-3

 

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

	 	 	 	 	 	 	 

	 	 	SANDISK CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

A-4

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

as Trustee, certifies that this is one of the Notes described

in the within-named Indenture.

	 	 	 	 	 

	By: 

Name:

	 	 
 

	 	 
	Authorized Officer	 	 

A-5

 

[FORM OF REVERSE OF NOTE]

SANDISK CORPORATION

___% Convertible Senior Notes due 2017

     This Note is one of a duly authorized issue of Notes of the Company, designated as its ___%
Convertible Senior Notes due 2017 (herein called the “Notes”), issued under and pursuant to an
Indenture dated as of August ___, 2010 (herein called the “Indenture”), between the Company and The
Bank of New York Mellon Trust Company, N.A. (herein called the “Trustee”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company
and the holders of the Notes. Additional Notes may be issued in an unlimited aggregate principal
amount, subject to certain conditions specified in the Indenture.

     In case an Event of Default, as defined in the Indenture, shall have occurred and be
continuing, the principal of, and accrued and unpaid interest on, all Notes, may be declared, and
upon said declaration shall become, due and payable, in the manner, with the effect and subject to
the conditions provided in the Indenture.

     Subject to the terms and conditions of the Indenture, the Company will make all payments and
deliveries in respect of the Designated Event Repurchase Price and the principal amount on the
Maturity Date, as the case may be, to the holder who surrenders a Note to a Paying Agent to collect
such payments in respect of the Note. The Company will pay cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and private debts.

     The Indenture contains provisions permitting the Company and the Trustee in certain
circumstances, without the consent of the holders of the Notes, and in other circumstances, with
the consent of the holders of not less than a majority in aggregate principal amount of the Notes
at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of
the Notes; provided, however, that no such supplemental indenture shall make any of the changes set
forth in Section 9.02 of the Indenture, without the consent of each holder of an outstanding Note
affected thereby. It is also provided in the Indenture that, prior to any declaration accelerating
the maturity of the Notes, the holders of a majority in aggregate principal amount of the Notes at
the time outstanding may on behalf of the holders of all of the Notes waive any past default or
Event of Default under the Indenture and its consequences except as provided in the Indenture. Any
such consent or waiver by the holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitution hereof, irrespective of whether
or not any notation thereof is made upon this Note or such other Notes.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay

A-6

 

the principal of, and accrued and unpaid interest on, this Note, at the place, at the
respective times, at the rate and in the lawful money herein prescribed.

     The Notes are issuable in registered form without coupons in denominations of $2,000 principal
amount and integral multiples of $1,000 in excess thereof. At the office or agency of the Company
referred to on the face hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount of Notes of other
authorized denominations.

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

     Upon the occurrence of a Designated Event, the holder has the right, at such holder’s option,
to require the Company to repurchase all of such holder’s Notes or any portion thereof (in
principal amounts of $1,000 or integral multiples thereof; provided that the remaining principal
amount of any note so converted is $2,000 or an integral multiple of $1,000 in excess thereof) on
the Designated Event Repurchase Date at a price equal to 100% of the principal amount of the Notes
such holder elects to require the Company to repurchase, together with accrued and unpaid interest
to but excluding the Designated Event Repurchase Date. The Company or, at the written request of
the Company, the Trustee shall mail to all holders of record of the Notes a notice of the
occurrence of a Designated Event and of the repurchase right arising as a result thereof on or
before the tenth day after the occurrence of any Designated Event.

     Subject to the provisions of the Indenture, the holder hereof has the right, at its option, on
and after May 15, 2017, or earlier upon the occurrence of certain conditions specified in the
Indenture and prior to the close of business on the Trading Day immediately preceding the Maturity
Date, to convert any Notes or portion thereof which is $1,000 or an integral multiple of $1,000 in
excess thereof, into cash and, if applicable, shares of Common Stock, in each case at the
Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the
Indenture, upon surrender of this Note, together with a Notice of Conversion, a form of which is
attached to the Note, as provided in the Indenture and this Note, to the Company at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New
York, or at the option of such holder, the Corporate Trust Office, and, unless the shares issuable
on conversion are to be issued in the same name as this Note, duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by, the holder or by his
duly authorized attorney. The initial Conversion Rate shall be
___ shares for each $1,000
principal amount of Notes. No fractional shares of Common Stock will be issued upon any
conversion, but an adjustment in cash will be paid to the holder, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the surrender of any Note
or Notes for conversion. No adjustment shall be made for dividends or any shares issued upon
conversion of such Note except as provided in the Indenture.

     Upon due presentment for registration of transfer of this Note at the office or agency of the
Company in the Borough of Manhattan, The City of New York, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the

A-7

 

transferee in exchange thereof, subject to the limitations provided in the Indenture, without
charge except for any tax, assessments or other governmental charge imposed in connection
therewith.

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

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

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

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

A-8

 

[FORM OF CONVERSION NOTICE]

To: SANDISK CORPORATION

     The undersigned registered owner of this Note hereby exercises the option to convert this
Note, or the portion hereof (which is $1,000 principal amount or an integral multiple of $1,000 in
excess thereof; provided that any remaining portion thereof not so converted shall be $2,000
principal amount or an integral multiple of $1,000 in excess thereof) below designated, into cash
and shares of Common Stock, if any, in accordance with the terms of the Indenture referred to in
this Note, and directs that the cash and shares, if any, issuable and deliverable upon such
conversion, together with any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been indicated below. If
shares or any portion of this Note not converted are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto.
Any amount required to be paid to the undersigned on account of interest accompanies this Note.

Dated:                     

	 	 	 	 	 

	 

	 	 

Signature(s)
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

Signature Guarantee
	 	 

Signature(s) must be guaranteed by an eligible

Guarantor Institution (banks, stock brokers, savings

and loan associations and credit unions)

with membership in an approved signature guarantee

medallion program pursuant to Rule 17Ad-15 under

the Securities Exchange Act of 1934, as amended, if

shares of Common Stock are to be issued, or Notes

to be delivered, other than to and in the name of the

registered holder.

A-9

 

Fill in for registration of shares if

to be issued, and Notes if to

be delivered, other than to and in the

name of the registered holder:

	 	 	 

	 

(Name)

	 	 
	 
	 	 
	 

(Street Address)

	 	 
	 
	 	 
	 

(City, State and Zip Code)

	 	 
	Please print name and address
	 	 

	 	 	 	 	 

	 

	 	Principal amount to be converted	 	 
	 

	 	(if less than all): $___,000	 	 
	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Social Security or Other Taxpayer	 	 
	 

	 	Identification Number:                     	 	 

A-10

 

[FORM OF DESIGNATED EVENT REPURCHASE NOTICE]

To: SanDisk Corporation

     The undersigned registered owner of this Note hereby acknowledges receipt of a notice from
SanDisk Corporation (the “Company”) as to the occurrence of a Designated Event with respect to the
Company and requests and instructs the Company to repay the entire principal amount of this Note,
or the portion thereof (which is $1,000 principal amount or an integral multiple of $1,000 in
excess thereof; provided that any remaining portion thereof not so designated shall be $2,000
principal amount or an integral multiple of $1,000 in excess thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note, to the registered holder
hereof.

Dated:                     

	 	 	 	 	 

	 

	 	 

Signature(s)
	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	Social Security or Other Taxpayer Identification

Number Principal amount to be repaid (if less than 

all): $_,000	 	 
	 

	 	NOTICE: The above signatures of the holder(s)

 hereof must correspond with the name as written 

upon the face of the Note in every particular 

without alteration or enlargement or any change 

whatever.	 	 

A-11

 

Schedule l

SANDISK CORPORATION

___% Convertible Senior Notes due 2017

No.                     

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Notation Explaining	 	 	Authorized	 
	 	 	 	 	 	 	Principal Amount	 	 	Signature of Trustee	 
	Date	 	Principal Amount	 	 	Recorded	 	 	or Custodianexhibits.htm

Exhibit 10.1

 

EXECUTION COPY

 

 

 

EXCHANGE AGREEMENT

 

by and between

 

HAMPTON ROADS BANKSHARES, INC.

 

and

 

THE UNITED STATES DEPARTMENT OF THE TREASURY

 

Dated as of August 12, 2010

 

 

 

 

  

  

  

TABLE OF CONTENTS

 

	  	  	  	  	  
	  	
  

	  	
  

	
Page

	
ARTICLE I

 

THE CLOSING; THE EXCHANGE OF CAPITAL SECURITIES FOR SERIES C

PREFERRED STOCK

	  	  	  
	
Section 1.1

	
  

	
The Capital Securities

	
  

	
2

	
Section 1.2

	
  

	
The Closing

	
  

	
2

	
Section 1.3

	
  

	
Interpretation

	
  

	
4

	  
	
ARTICLE II

 

EXCHANGE

	  	  	  
	
Section 2.1

	
  

	
Exchange

	
  

	
5

	
Section 2.2

	
  

	
Exchange Documentation

	
  

	
5

	  
	
ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

	  	  	  
	
Section 3.1

	
  

	
Existence and Power

	
  

	
5

	
Section 3.2

	
  

	
Authorization and Enforceability

	
  

	
6

	
Section 3.3

	
  

	
Capital Securities and Underlying Common Shares

	
  

	
6

	
Section 3.4

	
  

	
Amended Warrant and Warrant Shares

	
  

	
7

	
Section 3.5

	
  

	
Non-Contravention

	
  

	
7

	
Section 3.6

	
  

	
Anti-Takeover Provisions and Rights Plan

	
  

	
8

	
Section 3.7

	
  

	
No Company Material Adverse Effect

	
  

	
8

	
Section 3.8

	
  

	
Offering of Securities

	
  

	
8

	
Section 3.9

	
  

	
Brokers and Finders

	
  

	
8

	  
	
ARTICLE IV

 

COVENANTS

	  	  	  
	
Section 4.1

	
  

	
Commercially Reasonable Efforts

	
  

	
9

	
Section 4.2

	
  

	
Expenses

	
  

	
9

	
Section 4.3

	
  

	
Exchange Listing

	
  

	
9

	
Section 4.4

	
  

	
Access, Information and Confidentiality

	
  

	
9

	
Section 4.5

	
  

	
Executive Compensation

	
  

	
10

	
Section 4.6

	
  

	
Certain Notifications Until Closing

	
  

	
11

	
Section 4.7

	
  

	
Sufficiency of Authorized Common Stock

	
  

	
12

 

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Section 4.8

	
  

	
Monthly Lending Reports

	
  

	
12

	
Section 4.9

	
  

	
Status Reports

	
  

	
12

	  
	
ARTICLE V

 

ADDITIONAL AGREEMENTS

	  	  	  
	
Section 5.1

	
  

	
Unregistered Capital Securities

	
  

	
13

	
Section 5.2

	
  

	
Legend

	
  

	
13

	
Section 5.3

	
  

	
Certain Transactions

	
  

	
14

	
Section 5.4

	
  

	
Transfer of Capital Securities; Underlying Common Shares and Warrant Shares

	
  

	
15

	
Section 5.5

	
  

	
Registration Rights

	
  

	
15

	
Section 5.6

	
  

	
Voting Matters

	
  

	
15

	
Section 5.7

	
  

	
Restriction on Dividends and Repurchases

	
  

	
16

	
Section 5.8

	
  

	
Repurchase of Investor Securities

	
  

	
17

	
Section 5.9

	
  

	
[Reserved]

	
  

	
17

	
Section 5.10

	
  

	
Bank or Thrift Holding Company Status

	
  

	
17

	
Section 5.11

	
  

	
Compliance with Employ American Workers Act

	
  

	
17

	  
	
ARTICLE VI

 

MISCELLANEOUS

	  	  	  
	
Section 6.1

	
  

	
Termination

	
  

	
18

	
Section 6.2

	
  

	
Survival of Representations and Warranties

	
  

	
18

	
Section 6.3

	
  

	
Amendment

	
  

	
18

	
Section 6.4

	
  

	
Waiver of Conditions

	
  

	
19

	
Section 6.5

	
  

	
Governing Law; Submission to Jurisdiction, etc

	
  

	
19

	
Section 6.6

	
  

	
Notices

	
  

	
19

	
Section 6.7

	
  

	
Definitions

	
  

	
20

	
Section 6.8

	
  

	
Assignment

	
  

	
22

	
Section 6.9

	
  

	
Severability

	
  

	
22

	
Section 6.10

	
  

	
No Third-Party Beneficiaries

	
  

	
23

	
Section 6.11

	
  

	
Entire Agreement, etc

	
  

	
23

	
Section 6.12

	
  

	
Counterparts and Facsimile

	
  

	
23

	
Section 6.13

	
  

	
Specific Performance

	
  

	
23

 

LIST OF ANNEXES

 

ANNEX A: FORM OF AMENDED WARRANT

 

ANNEX B: FORM OF NEW CERTIFICATE OF DESIGNATIONS

 

ANNEX C: FORM OF OPINION

 

ANNEX D: FORM OF WAIVER

 

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LIST OF SCHEDULES

 

SCHEDULE A: CAPITALIZATION

 

SCHEDULE B: COMPANY MATERIAL ADVERSE EFFECT

 

SCHEDULE C: PREFERRED STOCK AMENDMENTS

 

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Defined Terms

	
  

	  
	  	  
	
A/B Preferred Exchange

	
  

	
Recitals

	
Affiliate

	
  

	
Section 6.7(b)

	
Agreement

	
  

	
Preamble

	
Amended Warrant

	
  

	
Recitals

	
Benefit Plans

	
  

	
Section 1.2(d)(viii)

	
Business Combination

	
  

	
Section 6.7(c)

	
Capital Securities

	
  

	
Recitals

	
Capitalization Date

	
  

	
Section 3.1(b)

	
Charter

	
  

	
Section 1.2(d)(iv)

	
Closing

	
  

	
Section 1.2(a)

	
Closing Date

	
  

	
Section 1.2(a)

	
Code

	
  

	
Section 3.5(c)

	
Common Stock

	
  

	
Recitals

	
Company

	
  

	
Preamble

	
Company Material Adverse Effect

	
  

	
Section 6.7(d)

	
Company Subsidiaries

	
  

	
Section 4.4(a)

	
Compensation Regulations

	
  

	
Section 1.2(d)(viii)

	
Designated Matters

	
  

	
Section 6.7(e)

	
EAWA

	
  

	
Section 6.7(f)

	
EESA

	
  

	
Section 1.2(d)(viii)

	
Equity Investor

	
  

	
Recitals

	
Exchange

	
  

	
Recitals

	
Exchange Act

	
  

	
Section 5.3(b)

	
GAAP

	
  

	
Section 5.7(a)(ii)

	
Governmental Entities

	
  

	
Section 1.2(c)

	
Information

	
  

	
Section 4.4(c)

	
Investor

	
  

	
Preamble

	
Junior Stock

	
  

	
Section 6.7(g)

	
New Certificate of Designations

	
  

	
Section 1.2(d)(iv)

	
Old Warrant

	
  

	
Recitals

	
Other Transactions

	
  

	
Section 4.9

	
Parity Stock

	
  

	
Section 6.7(h)

	
Permitted Repurchases

	
  

	
Section 5.7(a)(ii)

	
Preferred Stock Amendments

	
  

	
Recitals

	
Preferred Stock

	
  

	
Section 6.7(i)

	
Previously Disclosed

	
  

	
Section 6.7(j)

	
Private Placement

	
  

	
Recitals

	
Purchase Price

	
  

	
Recitals

	
Relevant Period

	
  

	
Section 1.2(d)(viii)

	
Rights Offering

	
  

	
Recitals

	
SEC

	
  

	
Section 3.5(b)

	
Section 4.5 Employee

	
  

	
Section 4.5(b)

	
Securities Purchase Agreement

	
  

	
Recitals

	
Senior Executive Officers

	
  

	
Section 1.2(d)(viii)

	
Series A Preferred Stock

	
  

	
Recitals

 

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Series B Preferred Stock

	
  

	
Recitals

	
Series C Preferred Stock

	
  

	
Recitals

	
Series C Shares

	
  

	
Recitals

	
Share Dilution Amount

	
  

	
Section 5.7(a)(ii)

	
Status Report

	
  

	
Section 4.9

	
subsidiary

	
  

	
Section 6.7(a)

	
Targeted Completion Date

	
  

	
Section 4.9

	
Transfer

	
  

	
Section 5.4

	
Underlying Common Shares

	
  

	
Section 1.2(d)(i)

	
Warrant Shares

	
  

	
Section 3.2(a)

 

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EXCHANGE AGREEMENT, dated as of August 12, 2010 (this “Agreement”) by and between Hampton Roads Bankshares, Inc., a Virginia corporation (the “Company”), and the United States Department of the Treasury (the “Investor”). All capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to them in the Securities Purchase Agreement.

 

BACKGROUND

 

WHEREAS, the Investor is, as of the date hereof, the beneficial owner of 80,347 shares of the Company’s preferred stock designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series C”, having a liquidation amount of $1,000 per share (the “Series C Preferred Stock”);

 

WHEREAS, the Company issued the Series C Preferred Stock pursuant to that certain Securities Purchase Agreement – Standard Terms incorporated into a Letter Agreement, dated as of December 31, 2008, as amended from time to time, between the Company and the Investor (the “Securities Purchase Agreement”);

 

WHEREAS, during the fourth quarter of 2009, the Company elected to defer regularly scheduled quarterly dividend payments on the Series C Preferred Stock;

 

WHEREAS, the Company intends to sell up to $255,000,000 worth of newly issued equity in the form of shares of common stock, par value $0.625 per share (“Common Stock”), to new investors other than Investor (each, an “Equity Investor”) in a private placement exempt from registration under the Securities Act (the “Private Placement”);

 

WHEREAS, the Company has entered into certain binding agreements, and intends to enter into other binding agreements, with various Equity Investors providing for the Company to sell shares of Common Stock to the Equity Investors at $0.40 per share before expenses or fees (“Purchase Price”), subject to various conditions precedent, at two separate closings;

 

WHEREAS, prior to the initial closing of the Private Placement, the Company intends to conduct exchange offers pursuant to which the Company will offer to exchange each share of the Non-Convertible Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”), and each share of the Non-Convertible Non-Cumulative Perpetual Preferred Stock, Series B (“Series B Preferred Stock”), for 375 shares of Common Stock having an value equivalent to $150 at the Purchase Price, representing 15% of each share’s liquidation amount of $1,000 per share (the “A/B Preferred Exchange”);

 

WHEREAS, in connection with the Private Placement, the Company will call a special meeting of stockholders, for the purpose of approving amendments to the terms of the Series A Preferred Stock and of the Series B Preferred Stock (“Preferred Stock Amendments”) having the effect set forth in Schedule C to this Agreement, among other reasons;

 

  

  

  

 

 

WHEREAS, following the initial closing of the Private Placement, the Company intends to commence a rights offering providing holders of record of the Common Stock prior to such closing with the right to invest in Common Stock at the Purchase Price (the “Rights Offering”), with such rights being non-transferable and providing for the purchase of a maximum of $20,000,000 worth of Common Stock by such existing stockholders;

 

WHEREAS, one of the Equity Investors in the Private Placement has covenanted to purchase any unsubscribed shares of Common Stock in the Rights Offering; and

 

WHEREAS, the Company and the Investor desire (i) to exchange (the “Preferred Exchange”) all 80,347 shares of the Series C Preferred Stock beneficially owned and held by the Investor (the “Series C Shares”) for 80,347 newly issued shares of Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, Series C-1, of the Company (the “Capital Securities”), with a liquidation amount of $1,000 per share, and (ii) to amend the terms of that certain warrant, dated December 31, 2008, to purchase 1,325,858 shares of Common Stock granted by the Company for the benefit of the Investor (the “Old Warrant”) pursuant to an amended and restated warrant to purchase 1,325,858 shares of Common Stock, in substantially the form attached hereto as Annex A (the “Amended Warrant”), on the terms and subject to the conditions set forth herein (the “Warrant Exchange” and together with the Preferred Exchange, the “Exchange”).

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

 

ARTICLE I

 

THE CLOSING; THE EXCHANGE OF CAPITAL SECURITIES FOR SERIES C

PREFERRED STOCK

 

Section 1.1 The Capital Securities. The Capital Securities are being issued to the Investor in the Exchange pursuant to Article II hereof. The shares of Series C Preferred Stock exchanged for the Capital Securities pursuant to Article II hereof are being reacquired by the Company and shall have the status of authorized but unissued shares of Preferred Stock of the Company undesignated as to series and may be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Company; provided that such shares shall not be reissued as shares of Series C Preferred Stock.

 

Section 1.2 The Closing.

 

(a) The closing of the Exchange (the “Closing”) will take place at the offices of Cadwalader, Wickersham & Taft LLP, One World Financial Center, New York, New York 10281, at 9:00 a.m., EST on the first business day immediately following the day on which all of the conditions set forth in Sections 1.2(c) and (d) are satisfied or waived (other than those conditions that by their terms must be satisfied on the Closing Date, but subject to the satisfaction or waiver of those conditions), or at such other place, time and date as shall be agreed between the Company and the Investor. The time and date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.

 

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(b) Subject to the fulfillment or waiver of the conditions to the Closing in this Section 1.2, at the Closing (i) the Company will deliver the Amended Warrant and the Capital Securities to the Investor, as evidenced by one or more certificates dated the Closing Date and registered in the name of the Investor or its designee(s) and (ii) the Investor will deliver the certificate representing the Series C Shares and the original Old Warrant to the Company.

 

(c) The respective obligations of each of the Investor and the Company to consummate the Exchange are subject to the fulfillment (or waiver by the Company and the Investor, as applicable) prior to the Closing of the conditions that (i) any approvals or authorizations of all United States and other governmental, regulatory or judicial authorities (collectively, “Governmental Entities”) required for the consummation of the Exchange shall have been obtained or made in form and substance reasonably satisfactory to each party and shall be in full force and effect and all waiting periods required by United States and other applicable law, if any, shall have expired and (ii) no provision of any applicable United States or other law and no judgment, injunction, order or decree of any Governmental Entity shall prohibit consummation of the Exchange as contemplated by this Agreement.

 

(d) The obligation of the Investor to consummate the Exchange is also subject to the fulfillment (or waiver by the Investor) at or prior to the Closing of each of the following conditions:

 

(i) the holders of the Common Stock shall have duly approved, by proxy vote or otherwise, (A) the increase of the number of authorized shares of Common Stock from 100 million to one billion and (B) the issuance of the shares of Common Stock issuable upon conversion of the Capital Securities (the “Underlying Common Shares”) to the Investor upon the conversion of the Capital Securities to shares of Common Stock;

 

(ii) (A) the representations and warranties of the Company set forth in Article III of this Agreement shall be true and correct in all respects as though made on and as of the Closing Date (other than representations and warranties that by their terms speak as of another date, which representations and warranties shall be true and correct in all respects as of such other date) and (B) the Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing;

 

(iii) the Investor shall have received a certificate signed on behalf of the Company by a senior executive officer certifying to the effect that the conditions set forth in Section 1.2(d)(ii) have been satisfied;

 

(iv) the Company shall have duly adopted and filed with the Commonwealth of Virginia the amendment to its articles of incorporation (“Charter”) in substantially the form attached hereto as Annex B (the “New Certificate of Designations”) and such filing shall have been accepted;

 

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(v) the Company shall have executed the Amended Warrant and delivered such executed Amended Warrant to the Investor or its designee(s);

 

(vi) the Company shall have delivered certificates in proper form or, with the prior consent of the Investor, evidence in book-entry form, evidencing the Capital Securities to the Investor or its designee(s);

 

(vii) the Company shall have delivered to the Investor written opinions from counsel to the Company, addressed to the Investor and dated as of the Closing Date, in substantially the form attached hereto as Annex C; and

 

(viii) (A) the Company shall have effected such changes to its compensation, bonus, incentive and other benefit plans, arrangements and agreements (including golden parachute, severance and employment agreements) (collectively, “Benefit Plans”) with respect to its Senior Executive Officers and any other employee of the Company or its Affiliates subject to Section 111 of the Emergency Economic Stabilization Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009, or otherwise from time to time (“EESA”), as implemented by any guidance, rule or regulation thereunder, as the same shall be in effect from time to time (collectively, the “Compensation Regulations”) (and to the extent necessary for such changes to be legally enforceable, each of its Senior Executive Officers and other employees shall have duly consented in writing to such changes), as may be necessary, during the period in which any obligation of the Company arising from financial assistance under the Troubled Asset Relief Program remains outstanding (such period, as it may be further described in the Compensation Regulations, the “Relevant Period”), in order to comply with Section 111 of EESA or the Compensation Regulations and (B) the Investor shall have received a certificate signed on behalf of the Company by a Senior Executive Officer certifying to the effect that the condition set forth in Section 1.2(d)(viii)(A) has been satisfied; “Senior Executive Officers” means the Company’s “senior executive officers” as defined in Section 111 of the EESA and the Compensation Regulations.

 

(e) If the Closing has not occurred on or before October 3, 2010, then the obligation of the Company to consummate the Exchange is also subject to the fulfillment (or waiver by the Company and the Investor) at or prior to the Closing of those conditions set forth in Section 7(b) of the Standard Provisions of the New Certificate of Designations and the agreement of the Investor and the Company to cause the conversion of the Capital Securities on their date of issuance.

 

Section 1.3 Interpretation. When a reference is made in this Agreement to “Recitals,” “Articles,” “Sections,” “Annexes” or “Schedules” such reference shall be to a Recital, Article or Section of, or Annex or Schedule to, this Agreement, unless otherwise indicated. The terms defined in the singular have a comparable meaning when used in the plural, and vice versa. References to “herein”, “hereof”, “hereunder” and the like refer to this Agreement as a whole and not to any particular section or provision, unless the context requires otherwise. The table of contents and headings contained in this Agreement are for reference purposes only and are not part of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed followed by the words “without limitation.” No rule of

 

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construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement, as this Agreement is the product of negotiation between sophisticated parties advised by counsel. All references to “$” or “dollars” mean the lawful currency of the United States of America. Except as expressly stated in this Agreement, all references to any statute, rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under the statute) and to any section of any statute, rule or regulation include any successor to the section. References to a “business day” shall mean any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

 

ARTICLE II

 

EXCHANGE

 

Section 2.1 Exchange.

 

On the terms and subject to the conditions set forth in this Agreement, (i) the Company agrees to issue the Capital Securities to the Investor in exchange for 80,347 shares of the Series C Shares, and the Investor agrees to deliver to the Company the Series C Shares in exchange for the Capital Securities, and (ii) the Company and the Investor mutually agree to amend and restate the Old Warrant to reflect the terms and conditions of the Amended Warrant.

 

Section 2.2 Exchange Documentation. Settlement of the Exchange will take place on the Closing Date, at which time the Investor will cause delivery of the Series C Shares and the Old Warrant to the Company or its designated agent and the Company will cause delivery of the Capital Securities and the Amended Warrant to the Investor or its designated agent.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as Previously Disclosed, the Company represents and warrants to the Investor as of the date hereof and as of the Closing Date that:

 

Section 3.1 Existence and Power.

 

(a) Organization, Authority and Significant Subsidiaries. The Company is duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia and has all necessary power and authority to own, operate and lease its properties and to carry on its business in all material respects as it is being currently conducted, and except as has not, individually or in the aggregate, had and would not reasonably be expected to have a Company Material Adverse Effect, has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification; each subsidiary of the Company that is a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the Securities Act, including, without limitation, Bank of Hampton

 

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Roads and Shore Bank, has been duly organized and is validly existing in good standing under the laws of its jurisdiction of organization. The Charter and bylaws of the Company, copies of which have been provided to the Investor prior to the date hereof, are true, complete and correct copies of such documents as in full force and effect as of the date hereof.

 

(b) Capitalization. The authorized capital stock of the Company, and the outstanding capital stock of the Company (including securities convertible into, or exercisable or exchangeable for, capital stock of the Company) as of the most recent fiscal month-end preceding the date hereof (the “Capitalization Date”) is set forth on Schedule A. The outstanding shares of capital stock of the Company have been duly authorized and are validly issued and outstanding, fully paid and nonassessable, and subject to no preemptive rights (and were not issued in violation of any preemptive rights). Except as provided in the Old Warrant, as of the date hereof, the Company does not have outstanding any securities or other obligations providing the holder the right to acquire Common Stock that is not reserved for issuance as specified on Schedule A, and the Company has not made any other commitment to authorize, issue or sell any Common Stock. Since the Capitalization Date, the Company has not issued any shares of Common Stock other than (i) shares issued upon the exercise of stock options or delivered under other equity-based awards or other convertible securities or warrants which were issued and outstanding on the Capitalization Date and disclosed on Schedule A and (ii) shares disclosed on Schedule A.

 

Section 3.2 Authorization and Enforceability.

 

(a) The Company has the corporate power and authority to execute and deliver this Agreement and the Amended Warrant and to carry out its obligations hereunder and thereunder (which includes the issuance of the Capital Securities, the Underlying Common Shares, the Amended Warrant and the shares of Common Stock issuable upon exercise of the Amended Warrant (the “Warrant Shares”)).

 

(b) The execution, delivery and performance by the Company of this Agreement and the Amended Warrant and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and its stockholders, and no further approval or authorization is required on the part of the Company or its stockholders. This Agreement is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the Bankruptcy Exceptions.

 

Section 3.3 Capital Securities and Underlying Common Shares. The Capital Securities have been duly and validly authorized by all necessary action, and, when issued and delivered pursuant to this Agreement, such Capital Securities will be duly and validly issued and fully paid and nonassessable, will not be issued in violation of any preemptive rights, will represent nonassessable undivided beneficial interests in the assets of the Company, will not subject the holder thereof to personal liability and will rank pari passu with or senior to all other series or classes of Preferred Stock, whether or not issued or outstanding. The shares of Underlying Common Stock have been duly authorized and reserved for issuance upon conversion of the Capital Securities and when so issued in accordance with the terms of the New Certificate of Designations will be validly issued, fully paid and nonassessable.

 

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Section 3.4 Amended Warrant and Warrant Shares. The Amended Warrant has been duly and validly authorized and, when executed and delivered as contemplated hereby, will constitute a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, except as the same may be limited by applicable Bankruptcy Exceptions. The Warrant Shares have been duly authorized and reserved for issuance by the Company and when so issued and delivered in accordance with the terms of the Amended Warrant will be validly issued, fully paid and non-assessable, without the necessity of any approval of its stockholders.

 

Section 3.5 Non-Contravention.

 

(a) The execution, delivery and performance by the Company of this Agreement, the Amended Warrant, and the consummation of the transactions contemplated hereby and thereby, and compliance by the Company with the provisions hereof and thereof, will not (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any Company Subsidiary under any of the terms, conditions or provisions of (i) its organizational documents or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any Company Subsidiary is a party or by which it or any Company Subsidiary may be bound, or to which the Company or any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary may be subject, or (B) subject to compliance with the statutes and regulations referred to in the next paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable to the Company or any Company Subsidiary or any of their respective properties or assets except, in the case of clauses (A)(ii) and (B), for those occurrences that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.

 

(b) Other than the filing of the New Certificate of Designations with the Commonwealth of Virginia, any current report on Form 8-K required to be filed with the Securities and Exchange Commission (“SEC”), such filings and approvals as are required to be made or obtained under any state “blue sky” laws and such consents and approvals that have been made or obtained, no notice to, filing with or review by, or authorization, consent or approval of, any Governmental Entity is required to be made or obtained by the Company in connection with the consummation by the Company of the Exchange except for any such notices, filings, reviews, authorizations, consents and approvals the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, (A) the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby (including for this purpose the consummation of the Exchange) and compliance by the Company with the provisions hereof will not (1) result in any payment (including any severance payment, payment of unemployment compensation, “excess parachute payment” (within the meaning of

 

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the Internal Revenue Code of 1986, as amended (the “Code”)), “golden parachute payment” (as defined in the EESA, as implemented by the Compensation Regulations) or forgiveness of indebtedness or otherwise) becoming due to any current or former employee, officer or director of the Company or any Company Subsidiary from the Company or any Company Subsidiary under any benefit plan or otherwise, (2) increase any benefits otherwise payable under any benefit plan, (3) result in any acceleration of the time of payment or vesting of any such benefits, (4) require the funding or increase in the funding of any such benefits or (5) result in any limitation on the right of the Company or any Company Subsidiary to amend, merge, terminate or receive a reversion of assets from any benefit plan or related trust and (B) neither the Company nor any Company Subsidiary has taken, or permitted to be taken, any action that required, and no circumstances exist that will require the funding, or increase in the funding, of any benefits or resulted, or will result, in any limitation on the right of the Company or any Company Subsidiary to amend, merge, terminate or receive a reversion of assets from any benefit plan or related trust.

 

Section 3.6 Anti-Takeover Provisions and Rights Plan. The Board of Directors has taken all necessary action to ensure that the transactions contemplated by this Agreement and the Amended Warrant and the consummation of the transactions contemplated hereby and thereby, including the conversion of the Capital Securities in accordance with the terms of the New Certificate of Designations and the exercise of the Amended Warrant in accordance with its terms, will be exempt from any anti-takeover or similar provisions of the Company’s Charter and bylaws, and any other provisions of any applicable “moratorium”, “control share”, “fair price”, “interested stockholder” or other anti-takeover laws and regulations of any jurisdiction. The Company has taken all actions necessary to render any stockholders’ rights plan of the Company inapplicable to this Agreement, the Capital Securities and the Amended Warrant and the consummation of the transactions contemplated hereby and thereby, including the conversion of the Capital Securities in accordance with the terms of the New Certificate of Designations and the exercise of the Amended Warrant by the Investor in accordance with its terms.

 

Section 3.7 No Company Material Adverse Effect. Since December 31, 2009, no fact, circumstance, event, change, occurrence, condition or development has occurred that, individually or in the aggregate, has had or would reasonably be likely to have a Company Material Adverse Effect, except as disclosed on Schedule B.

 

Section 3.8 Offering of Securities. Neither the Company nor any person acting on its behalf has taken any action (including any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of the Capital Securities under the Securities Act and the rules and regulations of the SEC promulgated thereunder), which might subject the offering, issuance or sale of the Capital Securities to the Investor pursuant to this Agreement to the registration requirements of the Securities Act.

 

Section 3.9 Brokers and Finders. No broker, finder or investment banker is entitled to any financial advisory, brokerage, finder’s or other fee or commission in connection with this Agreement or the transactions contemplated hereby based upon arrangements made by or on behalf of the Company or any Company Subsidiary for which the Investor could have any liability.

 

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ARTICLE IV

 

COVENANTS

 

Section4.1 Commercially Reasonable Efforts. Subject to the terms and conditions of this Agreement, each of the parties will use its commercially reasonable efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws, so as to permit consummation of the Exchange as promptly as practicable and otherwise to enable consummation of the transactions contemplated hereby and shall use commercially reasonable efforts to cooperate with the other party to that end.

 

Section 4.2 Expenses. If requested by the Investor, the Company shall pay all reasonable out of pocket and documented costs and expenses associated with the Exchange, including, but not limited to, the reasonable fees, disbursements and other charges of the Investor’s legal counsel and financial advisors.

 

Section 4.3 Exchange Listing. If requested by the Investor, the Company shall, at the Company’s expense, cause the Capital Securities and the Amended Warrant, to the extent the Capital Securities and the Amended Warrant comply with applicable listing requirements, to be listed on the Nasdaq Global Select Market or other national stock exchange, subject to official notice of issuance, and shall maintain such listing for so long as any Common Stock is listed on such exchange. At the Investor’s request, the Company agrees to take such action as may be necessary to change the minimum denominations of the Capital Securities to $25 or such other amount as the Investor shall reasonably request. As soon as reasonably practicable following the Closing, the Company shall, at its expense, cause the Underlying Common Shares and the Warrant Shares to be listed on the same national securities exchange on which the Common Stock is listed, subject to official notice of issuance, and shall maintain such listing for so long as any Common Stock is listed on such exchange.

 

Section 4.4 Access, Information and Confidentiality.

 

(a) From the date hereof until the date when the Investor no longer holds any debt or equity securities of the Company or an Affiliate of the Company acquired pursuant to this Agreement or the Amended Warrant, the Company will permit the Investor and its agents, consultants, contractors and advisors (i) acting through the Company’s Appropriate Federal Banking Agency, to examine the corporate books and make copies thereof and to discuss the affairs, finances and accounts of the Company and the subsidiaries of the Company (the “Company Subsidiaries”) with the principal officers of the Company, all upon reasonable notice and at such reasonable times and as often as the Investor may reasonably request and (ii) to review any information material to the Investor’s investment in the Company provided by the Company to its Appropriate Federal Banking Agency.

 

(b) From the date hereof until the date when the Investor no longer holds any debt or equity securities of the Company or an Affiliate of the Company acquired pursuant to this Agreement or the Amended Warrant, the Company shall permit, and shall cause each of the Company’s Subsidiaries to permit (A) the Investor and its agents, consultants, contractors, (B)

 

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the Special Inspector General of the Troubled Asset Relief Program, and (C) the Comptroller General of the United States access to personnel and any books, papers, records or other data, in each case, to the extent relevant to ascertaining compliance with the financing terms and conditions; provided that prior to disclosing any information pursuant to clause (B) or (C), the Special Inspector General of the Troubled Asset Relief Program and the Comptroller General of the United States shall have agreed, with respect to documents obtained under this Agreement in furtherance of its function, to follow applicable law and regulation (and the applicable customary policies and procedures) regarding the dissemination of confidential materials, including redacting confidential information from the public version of its reports and soliciting the input from the Company as to information that should be afforded confidentiality, as appropriate.

 

(c) The Investor will use reasonable best efforts to hold, and will use reasonable best efforts to cause its agents, consultants, contractors, advisors, and United States executive branch officials and employees, to hold, in confidence all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the Company furnished or made available to it by the Company or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (i) previously known by such party on a non-confidential basis, (ii) in the public domain through no fault of such party or (iii) later lawfully acquired from other sources by the party to which it was furnished (and without violation of any other confidentiality obligation)); provided that nothing herein shall prevent the Investor from disclosing any Information to the extent required by applicable laws or regulations or by any subpoena or similar legal process. The Investor understands that the Information may contain commercially sensitive confidential information entitled to an exception from a Freedom of Information Act request.

 

(d) Nothing in this Section shall be construed to limit the authority that the Special Inspector General of the Troubled Asset Relief Program, the Comptroller General of the United States or any other applicable regulatory authority has under law.

 

Section 4.5 Executive Compensation.

 

(a) Benefit Plans. During the Relevant Period, the Company shall take all necessary action to ensure that the Benefit Plans of the Company and its Affiliates comply in all respects with, and shall take all other actions necessary to comply with, Section 111 of the EESA, as implemented by the Compensation Regulations, and neither the Company nor any Affiliate shall adopt any new Benefit Plan (i) that does not comply therewith or (ii) that does not expressly state and require that such Benefit Plan and any compensation thereunder shall be subject to any relevant Compensation Regulations adopted, issued or released on or after the date any such Benefit Plan is adopted. To the extent that EESA and/or the Compensation Regulations are amended or otherwise change during the Relevant Period in a manner that requires changes to then-existing Benefit Plans, or that requires other actions, the Company and its Affiliates shall effect such changes to its or their Benefit Plans, and take such other actions, as promptly as practicable after it has actual knowledge of such amendments or changes in order to be in compliance with this Section 4.5(a) (and shall be deemed to be in compliance for a reasonable period to effect such changes). In addition, the Company and its Affiliates shall take all necessary action, other than to the extent prohibited by applicable law or regulation applicable outside of the United States, to ensure that the consummation of the transactions contemplated

 

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by this Agreement will not accelerate the vesting, payment or distribution of any equity-based awards, deferred cash awards or any nonqualified deferred compensation payable by the Company or any of its Affiliates.

 

(b) Additional Waivers. After the Closing Date, in connection with the hiring or promotion of a Section 4.5 Employee and/or the promulgation of applicable Compensation Regulations or otherwise, to the extent any Section 4.5 Employee shall not have executed a waiver with respect to the application to such Section 4.5 Employee of the Compensation Regulations, the Company shall use its best efforts to (i) obtain from such Section 4.5 Employee a waiver in substantially the form attached hereto as Annex D and (ii) deliver such waiver to the Investor as promptly as possible, in each case, within sixty days of the Closing Date or, if later, within sixty days of such Section 4.5 Employee becoming subject to the requirements of this Section. “Section 4.5 Employee” means (A) each Senior Executive Officer and (B) any other employee of the Company or its Affiliates determined at any time to be subject to Section 111 of EESA and the Compensation Regulations.

 

(c) Clawback. In the event that any Section 4.5 Employee receives a payment in contravention of the provisions of this Section 4.5, the Company shall promptly provide such individual with written notice that the amount of such payment must be repaid to the Company in full within fifteen business days following receipt of such notice or such earlier time as may be required by the Compensation Regulations and shall promptly inform the Investor (i) upon discovering that a payment in contravention of this Section 4.5 has been made and (ii) following the repayment to the Company of such amount and shall take such other actions as may be necessary to comply with the Compensation Regulations.

 

(d) Limitation on Deductions. During the Relevant Period, the Company agrees that it shall not claim a deduction for remuneration for federal income tax purposes in excess of $500,000 for each Senior Executive Officer that would not be deductible if Section 162(m)(5) of the Code applied to the Company.

 

(e) Amendment to Prior Agreement. The parties agree that, effective as of the date hereof, Section 4.10 of the Securities Purchase Agreement shall be amended in its entirety by replacing such Section 4.10 with the provisions set forth in this Section 4.5 and any terms included in this Section 4.5 that are not otherwise defined in the Securities Purchase Agreement shall have the meanings ascribed to such terms in this Agreement.

 

Section 4.6 Certain Notifications Until Closing. From the date hereof until the Closing, the Company shall promptly notify the Investor of (i) any fact, event or circumstance of which it is aware and which would reasonably be likely to cause any representation or warranty of the Company contained in this Agreement to be untrue or inaccurate in any material respect or to cause any covenant or agreement of the Company contained in this Agreement not to be complied with or satisfied in any material respect and (ii) except as Previously Disclosed, any fact, circumstance, event, change, occurrence, condition or development of which the Company is aware and which, individually or in the aggregate, has had or would reasonably be likely to have a Company Material Adverse Effect; provided, however, that delivery of any notice pursuant to this Section 4.6 shall not limit or affect any rights of or remedies available to the Investor; provided, further, that a failure to comply with this Section 4.6 shall not constitute a

 

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breach of this Agreement or the failure of any condition set forth in Section 1.2 to be satisfied unless the underlying Company Material Adverse Effect or material breach would independently result in the failure of a condition set forth in Section 1.2 to be satisfied.

 

Section 4.7 Sufficiency of Authorized Common Stock. During the period from the Closing Date until the date on which all the Capital Securities have been converted and the Amended Warrant has been fully exercised, the Company shall at all times have reserved for issuance, free of preemptive or similar rights, a sufficient number of authorized and unissued shares of Common Stock to effectuate such conversion and exercise. Nothing in this Section 4.7 shall preclude the Company from satisfying its obligations in respect of the conversion of Capital Securities or the exercise of the Amended Warrant by delivery of shares of Common Stock which are held in the treasury of the Company.

 

Section 4.8 Monthly Lending Reports. During the Relevant Period, the Company will detail in monthly reports submitted to the Investor the information required by the CPP Monthly Lending Reports, as published on www.financialstability.gov from time to time.

 

Section 4.9 Status Reports. The Company has informed the Investor that the Company intends to pursue certain other transactions described below (the “Other Transactions”) each with a target date for consummation as indicated (a “Targeted Completion Date”):

 

(a) Amend the Company’s Charter changing the par value of the Common Stock to $0.01 per share, prior to the closing specified in Section 4.9(c) below;

 

(b) The A/B Preferred Exchange and, upon receipt of requisite shareholder approval, the filing of the Preferred Stock Amendments with the Commonwealth of Virginia State Corporation Commission, prior to the date specified in Section 4.9(c) below; and

 

(c) The initial closing on the Private Placement in which Equity Investors have provided a minimum aggregate amount of $235 million in gross cash proceeds to the Company in exchange for Common Stock on or before September 30, 2010.

 

The Company will use its commercially reasonable efforts to consummate each of the Other Transactions by its applicable Targeted Completion Date. Until all of the Other Transactions have been consummated (or the Company and the Investor agree that one or more of the Other Transactions is no longer susceptible to consummation on terms and conditions that are in the Company’s best interest), the Company shall provide the Investor with a reasonably detailed written report regarding the status of each of the Other Transactions at least once every two weeks and more frequently if reasonably requested by the Investor; provided, however, that if any one or more of the Other Transactions is not consummated by the time of its Targeted Completion Date, the Company shall, with respect to any such non-consummated Other Transaction, (x) within five business days after the Targeted Completion Date for such Other Transaction provide to the Investor a reasonably detailed written description of the status of such Other Transaction including the Company’s best estimate of the steps and timeline to complete such Other Transaction (the “Status Report”) and (y) thereafter, no less frequently than monthly and more frequently if reasonably requested by the Investor until such Other Transactions have been consummated, provide to the Investor an updated version of the Status Report.

 

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ARTICLE V

 

ADDITIONAL AGREEMENTS

 

Section 5.1 Unregistered Capital Securities. The Investor acknowledges that the Capital Securities, the Underlying Common Shares and the Warrant Shares have not been registered under the Securities Act or under any state securities laws. The Investor (a) is acquiring the Capital Securities pursuant to an exemption from registration under the Securities Act solely for investment with no present intention to distribute them to any person in violation of the Securities Act or any applicable U.S. state securities laws, (b) will not sell or otherwise dispose of any of the Capital Securities, the Underlying Common Shares or the Warrant Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any applicable U.S. state securities laws, and (c) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of the Exchange and of making an informed investment decision.

 

Section 5.2 Legend.

 

(a) The Investor agrees that all certificates or other instruments representing the Amended Warrant, the Underlying Common Shares and the Warrant Shares will bear a legend substantially to the following effect:

 

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”

 

(b) The Investor agrees that all certificates or other instruments representing the Capital Securities will bear a legend substantially to the following effect:

 

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. EACH PURCHASER OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM SECTION 5 OF THE

 

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SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.”

 

(c) In the event that any Capital Securities, Underlying Common Shares or Warrant Shares (i) become registered under the Securities Act or (ii) are eligible to be transferred without restriction in accordance with Rule 144 or another exemption from registration under the Securities Act (other than Rule 144A), the Company shall issue new certificates or other instruments representing such Capital Securities, Underlying Common Shares or Warrant Shares, which shall not contain the applicable legend in Section 5.2(a) above; provided that the Investor surrenders to the Company the previously issued certificates or other instruments.

 

Section 5.3 Certain Transactions.

 

(a) The Company will not merge or consolidate with, or sell, transfer or lease all or substantially all of its property or assets to, any other party unless the successor, transferee or lessee party (or its ultimate parent entity), as the case may be (if not the Company), expressly assumes the due and punctual performance and observance of each and every covenant, agreement and condition of this Agreement and the Amended Warrant to be performed and observed by the Company.

 

(b) Without the prior written consent of the Investor, until such time as the Investor shall cease to own any debt or equity securities of the Company acquired pursuant to this Agreement or the Amended Warrant (including, for the avoidance of doubt, the Capital Securities, the Underlying Common Shares and the Warrant Shares), the Company shall not permit any of its “significant subsidiaries” (as such term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) to (i) engage in any merger, consolidation, statutory share exchange or similar transaction following the consummation of which such significant subsidiary is not wholly-owned by the Company, (ii) dissolve or sell all or substantially all of its assets or property other than in connection with an internal reorganization or consolidation involving wholly-owned subsidiaries of the Company or (iii) issue or sell any shares of its capital stock or any securities convertible or exercisable for any such shares, other than issuances or sales in connection with an internal reorganization or consolidation involving wholly-owned subsidiaries of the Company.

 

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Section 5.4 Transfer of Capital Securities; Underlying Common Shares and Warrant Shares. Subject to compliance with applicable securities laws, the Investor shall be permitted to transfer, sell, assign or otherwise dispose of (“Transfer”) all or a portion of the Capital Securities, Amended Warrant, Underlying Common Shares or Warrant Shares at any time, and the Company shall take all steps as may be reasonably requested by the Investor to facilitate the Transfer of the Capital Securities, the Underlying Common Shares and the Warrant Shares.

 

Section 5.5 Registration Rights. The Capital Securities, Amended Warrant, Underlying Common Shares and Warrant Shares shall be Registrable Securities under the Securities Purchase Agreement and the Capital Securities shall be Preferred Shares under the Securities Purchase Agreement and, upon their issuance, the provisions of Section 4.5 of the Securities Purchase Agreement shall be applicable to them, including with the benefit, to the extent available, of the tacking of any holding period from the date of issuance of the Series C Preferred Stock. The Investor acknowledges that, on the date hereof, the Company is not eligible to file a registration statement on Form S-3 covering all of the Capital Securities, Amended Warrant, Underlying Common Shares and Warrant Shares, and the Company shall not be obligated to file a Shelf Registration Statement (as defined in Section 4.5 of the Securities Purchase Agreement) unless and until requested to do so in writing by the Investor.

 

Section 5.6 Voting Matters.

 

(a) The Investor agrees that it will vote, or cause to be voted, or exercise its right to consent (or cause its right to consent to be exercised) with respect to, all Underlying Common Shares and Warrant Shares beneficially owned by it and its controlled Affiliates (and which are entitled to vote on such matter) with respect to each matter on which holders of Common Stock are entitled to vote or consent, other than a Designated Matter, in the same proportion (for, against or abstain) as all other shares of the Company’s Common Stock (other than those shares held by holders of greater than 20% of the Company’s Common Stock) are voted or consents are given with respect to each such matter. The Investor agrees to attend all meetings of the Company’s stockholders in person or by proxy for purposes of obtaining a quorum. In order to effectuate the foregoing agreements, to the maximum extent permitted by applicable law, the Investor hereby grants a proxy appointing each of the Chief Executive Officer and Chairman of the Company attorney-in-fact and proxy for it and its controlled Affiliates with full power of substitution, for and in the name of it and its controlled Affiliates, to vote, express consent or dissent, or otherwise to utilize such voting power in the manner and solely on the terms provided by this Section 5.6 with respect to the Underlying Common Shares and the Warrant Shares and the Investor hereby revokes any and all previous proxies granted with respect to the Underlying Common Shares and the Warrant Shares for purposes of the matters contemplated in this Section 5.6; provided that such proxy may only be exercised if the Investor fails to comply with the terms of this Section 5.6. The proxy granted hereby is irrevocable prior to the termination of this Agreement, is coupled with an interest and is granted in consideration of the Company entering into this Agreement and issuing the Capital Securities and Amended Warrant to the Investor.

 

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(b) The Investor shall retain the right to vote in its sole discretion all Underlying Common Shares and Warrant Shares beneficially owned by it and its controlled Affiliates (and which are entitled to vote on such matter) on any Designated Matter.

 

Section 5.7 Restriction on Dividends and Repurchases.

 

(a) Until the earlier of (i) December 31, 2011 or (ii) such time as the Investor ceases to own any debt or equity securities of the Company or an Affiliate of the Company acquired pursuant to this Agreement or the Amended Warrant, neither the Company nor any Company Subsidiary shall, without the consent of the Investor:

 

(i) declare or pay any dividend or make any distribution on the Common Stock (other than (A) regular quarterly cash dividends of not more than the amount of the last quarterly cash dividend per share declared or, if lower, publicly announced an intention to declare, on the Common Stock prior to October 14, 2008, as adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction, (B) dividends payable solely in shares of Common Stock and (C) dividends or distributions of rights or Junior Stock in connection with a stockholders’ rights plan); or

 

(ii) redeem, purchase or acquire any shares of Common Stock or other capital stock or other equity securities of any kind of the Company, or any trust preferred securities issued by the Company or any Affiliate of the Company, other than (A) redemptions, purchases or other acquisitions of the Capital Securities (which purchases shall be made on a pro rata basis, as provided in Section 5.7(b)), (B) redemptions, purchases or other acquisitions of shares of Common Stock or other Junior Stock, in each case in this clause (B) in connection with the administration of any employee benefit plan in the ordinary course of business (including purchases to offset the Share Dilution Amount (as defined below) pursuant to a publicly announced repurchase plan) and consistent with past practice; provided that any purchases to offset the Share Dilution Amount shall in no event exceed the Share Dilution Amount, (C) purchases or other acquisitions by a broker-dealer subsidiary of the Company solely for the purpose of market-making, stabilization or customer facilitation transactions in trust preferred securities of the Company or an Affiliate of the Company, Junior Stock or Parity Stock in the ordinary course of its business, (D) purchases by a broker-dealer subsidiary of the Company of trust preferred securities or capital stock of the Company or an Affiliate of the Company for resale pursuant to an offering by the Company of such trust preferred securities or capital stock underwritten by such broker-dealer subsidiary, (E) any redemption or repurchase of rights pursuant to any stockholders’ rights plan, (F) the acquisition by the Company or any of the Company Subsidiaries of record ownership in Junior Stock, Parity Stock or trust preferred securities of the Company or an Affiliate of the Company for the beneficial ownership of any other persons (other than the Company or any other Company Subsidiary), including as trustees or custodians, (G) the Other Transactions, and (H) the exchange or conversion of Junior Stock for or into other Junior Stock or of Parity Stock or of trust preferred securities of the Company or an Affiliate of the Company for or into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case set forth in this clause (H), solely to the extent required pursuant to binding contractual agreements entered into prior

 

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to the date hereof or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for Common Stock (clauses (C) and (F), collectively, the “Permitted Repurchases”). “Share Dilution Amount” means the increase in the number of diluted shares outstanding (determined in accordance with United States generally accepted accounting principles (“GAAP”), and as measured from the date of the Company’s most recently filed consolidated financial statements prior to the Closing Date) resulting from the grant, vesting or exercise of equity-based compensation to employees and equitably adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction.

 

(b) Until such time as the Investor ceases to own any Capital Securities, the Company shall not repurchase any Capital Securities from any holder thereof, whether by means of open market purchase, negotiated transaction, or otherwise, other than Permitted Repurchases, unless it offers to repurchase a ratable portion of the Capital Securities then held by the Investor on the same terms and conditions.

 

(c) The parties agree that, effective as of the date hereof, Section 4.8 of the Securities Purchase Agreement shall be amended in its entirety by replacing such Section 4.8 with the provisions set forth in this Section 5.7 and any terms included in this Section 5.7 that are not otherwise defined in the Securities Purchase Agreement shall have the meanings ascribed to such terms in this Agreement.

 

Section 5.8 Repurchase of Investor Securities. From and after the date of this Agreement, the agreements set forth in Section 4.9 of the Securities Purchase Agreement shall be applicable (including to the Amended Warrant) following the redemption in whole of the Capital Securities held by the Investor or the Transfer by the Investor of all of the Capital Securities held by the Investor to one or more third parties not affiliated with the Investor. For the avoidance of doubt, the Underlying Common Shares may not be repurchased by the Company pursuant to this Section 5.8 or Section 4.9 of the Securities Purchase Agreement.

 

Section 5.9 [Reserved].

 

Section 5.10 Bank or Thrift Holding Company Status.

 

(a) The Company shall maintain its status as a Bank Holding Company (or, if permitted to become a Savings and Loan Holding Company in accordance with Subsection (b) below, such status) for as long as the Investor owns any debt or equity securities of the Company or an Affiliate of the Company acquired pursuant to this Agreement.

 

(b) The Company may become a Savings and Loan Holding Company in accordance with the requirements of the Home Owners’ Loan Act and applicable regulations, provided that it has duly fulfilled any commitments to or other requirements or obligations imposed by the Board of Governors of the Federal Reserve System.

 

Section 5.11 Compliance with Employ American Workers Act. Until the Company is no longer deemed a recipient of funding under Title I of EESA or Section 13 of the Federal Reserve Act for purposes of the EAWA, as the same may be determined pursuant to any regulations or other legally binding guidance promulgated under EAWA, the Company shall

 

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comply, and the Company shall take all necessary action to ensure that its subsidiaries comply, in all respects with the provisions of the EAWA and any regulations or other legally binding guidance promulgated under the EAWA.

 

ARTICLE VI

 

MISCELLANEOUS

 

Section 6.1 Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a) by either the Investor or the Company if the Closing shall not have occurred by September 30, 2010; provided, however, that in the event the Closing has not occurred by such date, the parties will consult in good faith to determine whether to extend the term of this Agreement, it being understood that the parties shall be required to consult only until the fifth day after such date and not be under any obligation to extend the term of this Agreement thereafter; provided, further, that the right to terminate this Agreement under this Section 6.1(a) shall not be available to any party whose breach of any representation or warranty or failure to perform any obligation under this Agreement shall have caused or resulted in the failure of the Closing to occur on or prior to such date;

 

(b) by either the Investor or the Company in the event that any Governmental Entity shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or

 

(c) by the mutual written consent of the Investor and the Company.

 

In the event of termination of this Agreement as provided in this Section 6.1, this Agreement shall forthwith become void and there shall be no liability on the part of either party hereto except that nothing herein shall relieve either party from liability for any breach of this Agreement.

 

Section 6.2 Survival of Representations and Warranties. The representations and warranties of the Company made herein or in any certificates delivered in connection with the Closing shall survive the Closing without limitation.

 

Section 6.3 Amendment. No amendment of any provision of this Agreement will be effective unless made in writing and signed by an officer or a duly authorized representative of each of the Company and the Investor; provided that the Investor may unilaterally amend any provision of this Agreement to the extent required to comply with any changes after the date hereof in applicable federal statutes. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative of any rights or remedies provided by law.

 

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Section 6.4 Waiver of Conditions. The conditions to each party’s obligation to consummate the Exchange are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law. No waiver will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver.

 

Section 6.5 Governing Law; Submission to Jurisdiction, etc. This Agreement and any claim, controversy or dispute arising under or related to this Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties shall be enforced, governed, and construed in all respects (whether in contract or in tort) in accordance with the federal law of the United States if and to the extent such law is applicable, and otherwise in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State. Each of the parties hereto agrees (a) to submit to the exclusive jurisdiction and venue of the United States District Court for the District of Columbia and the United States Court of Federal Claims for any and all civil actions, suits or proceedings arising out of or relating to this Agreement or the Amended Warrant or the Exchange contemplated hereby and (b) that notice may be served upon (i) the Company at the address and in the manner set forth for notices to the Company in Section 6.6 and (ii) the Investor at the address and in the manner set forth for notices to the Company in Section 6.6, but otherwise in accordance with federal law. To the extent permitted by applicable law, each of the parties hereto hereby unconditionally waives trial by jury in any civil legal action or proceeding relating to this Agreement or the Amended Warrant or the Exchange contemplated hereby.

 

Section 6.6 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on the second business day following the date of dispatch if delivered by a recognized next day courier service. All notices hereunder shall be delivered as set forth below or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

 

If to the Company:

 

Hampton Roads Bankshares, Inc.

999 Waterside Drive, Suite 200

Norfolk, Virginia 23510

Attention: Douglas J. Glenn, EVP and General Counsel

Facsimile: (757) 217-3656

Email: dglenn@bofhr.com

Telephone: (757) 217-1000

 

With a copy to:

 

Williams Mullen

Dominion Tower

999 Waterside Drive, Suite 1700

 

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Norfolk, Virginia 23510

Attention: William A. Old, Jr.

Facsimile: (757) 629-0660

Email: wold@williamsmullen.com

Telephone: (757) 629-0613

 

If to the Investor:

 

United States Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, DC 20220

Attention: Chief Counsel Office of Financial Stability

Facsimile: (202) 927-9225

Email: OFSChiefCounselNotices@do.treas.gov

 

With a copy to:

 

Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, New York 10281

Attention: Patrick T. Quinn

Facsimile: (212) 504-6666

Email: pat.quinn@cwt.com

Telephone: (212) 504-6067

Attention: William P. Mills

Facsimile: (212) 504-6666

Email: william.mills@cwt.com

Telephone: (212) 504-6436

 

Section 6.7 Definitions.

 

(a) When a reference is made in this Agreement to a subsidiary of a person, the term “subsidiary” means any corporation, partnership, joint venture, limited liability company or other entity (x) of which such person or a subsidiary of such person is a general partner or (y) of which a majority of the voting securities or other voting interests, or a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or persons performing similar functions with respect to such entity, is directly or indirectly owned by such person and/or one or more subsidiaries thereof.

 

(b) The term “Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such person, whether through the ownership of voting securities by contract or otherwise.

 

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(c) The term “Business Combination” means a merger, consolidation, statutory share exchange or similar transaction that requires the approval of the Company’s stockholders.

 

(d) The term “Company Material Adverse Effect” means a material adverse effect on the business, results of operation or financial condition of the Company and its consolidated subsidiaries taken as a whole; provided, however, that Company Material Adverse Effect shall not be deemed to include: (i) the effects of (A) changes after the date hereof in general business, economic or market conditions (including changes generally in prevailing interest rates, credit availability and liquidity, currency exchange rates and price levels or trading volumes in the United States or foreign securities or credit markets), or any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism, in each case generally affecting the industries or geographic areas in which the Company and its subsidiaries operate, (B) changes or proposed changes after the date hereof in GAAP or regulatory accounting requirements, or authoritative interpretations thereof, (C) changes or proposed changes after June 30, 2010 in securities, banking and other laws of general applicability or related policies or interpretations of Governmental Entities (in the case of each of these clauses (A), (B) and (C), other than changes or occurrences to the extent that such changes or occurrences have or would reasonably be expected to have a materially disproportionate adverse effect on the Company and its consolidated subsidiaries taken as a whole relative to comparable U.S. banking or financial services organizations), (D) changes in the market price or trading volume of the Common Stock or any other equity, equity-related or debt securities of the Company or its consolidated subsidiaries (it being understood and agreed that the exception set forth in this clause (D) does not apply to the underlying reason giving rise to or contributing to any such change); (E) actions or omissions of the Company or any Company Subsidiary expressly required by the terms of the Exchange; or (ii) the ability of the Company to consummate the Exchange and the other transactions contemplated by this Agreement and perform its obligations hereunder on a timely basis.

 

(e) “Designated Matters” means (i) the election and removal of directors, (ii) the approval of any Business Combination, (iii) the approval of a sale of all or substantially all of the assets or property of the Company, (iv) the approval of a dissolution of the Company, (v) the approval of any issuance of any securities of the Company on which holders of Common Stock are entitled to vote, (vi) the approval of any amendment to the Charter or bylaws of the Company on which holders of Common Stock are entitled to vote and (vii) the approval of any other matters reasonably incidental to the foregoing subclauses (i) through (vi) as determined by the Investor.

 

(f) The term “EAWA” means the Employ American Workers Act (Section 1611 of Division A, Title XVI of the American Recovery and Reinvestment Act of 2009), Public Law No. 111-5, effective as of February 17, 2009, as may be amended and in effect from time to time.

 

(g) The term “Junior Stock” means the Common Stock and any other class or series of stock of the Company the terms of which expressly provide that it ranks junior to the Capital Securities as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company.

 

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(h) The term “Parity Stock” means any class or series of stock of the Company the terms of which do not expressly provide that such class or series will rank senior or junior to the Capital Securities as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Company (in each case without regard to whether dividends accrue cumulatively or non-cumulatively).

 

(i) The term “Preferred Stock” means any and all series of preferred stock of the Company, including the Capital Securities.

 

(j) The term “Previously Disclosed” means information set forth or incorporated in the Company’s Annual Report on Form 10-K for the most recently completed fiscal year of the Company filed with the SEC prior to the date hereof or in its other reports and forms filed with or furnished to the SEC under Section 13(a), 14(a) or 15(d) of the Exchange Act on or after the last day of the most recently completed fiscal year of the Company and prior to the date hereof.

 

(k) To the extent any securities issued pursuant to this Agreement or the transactions contemplated hereby are registered in the name of a designee of the Investor pursuant to Section 1.2 or 6.8(c) or transferred to an Affiliate of the Investor, all references herein to the Investor holding or owning any debt or equity securities of the Company, Capital Securities or Registrable Securities (and any like variations thereof) shall be deemed to refer to the Investor, together with such designees and/or Affiliates, holding or owning any debt or equity securities, Capital Securities or Registrable Securities (and any like variations thereof), as applicable.

 

Section 6.8 Assignment. Neither this Agreement nor any right, remedy, obligation nor liability arising hereunder or by reason hereof shall be assignable by any party hereto without the prior written consent of each other party, and any attempt to assign any right, remedy, obligation or liability hereunder without such consent shall be void, except (a) an assignment, in the case of a Business Combination where such party is not the surviving entity, or a sale of substantially all of its assets, to the entity which is the survivor of such Business Combination or the purchaser in such sale, (b) as provided in Sections 5.4 and 5.5 and (c) an assignment by the Investor of this Agreement to an Affiliate of the Investor; provided that if the Investor assigns this Agreement to an Affiliate, the Investor shall be relieved of its obligations under this Agreement but (i) all rights, remedies and obligations of the Investor hereunder shall continue and be enforceable and exercisable by such Affiliate, and (ii) the Company’s obligations and liabilities hereunder shall continue to be outstanding.

 

Section 6.9 Severability. If any provision of this Agreement, or the application thereof to any person or circumstance, is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

 

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Section 6.10 No Third-Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person or entity other than the Company and the Investor any benefit, right or remedies, except that (i) the provisions of Section 4.4 shall inure to the benefit of the persons referred to in that Section and (ii) the provisions of Section 5.5 shall inure to the benefit of the persons holding Capital Securities during any tacked holding period, as contemplated by that Section.

 

Section 6.11 Entire Agreement, etc. This Agreement (including the Annexes and Schedules hereto) constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, between the parties, with respect to the subject matter hereof. For the avoidance of doubt, the Securities Purchase Agreement shall remain in full force and effect, but shall be deemed amended hereby, and any provisions in this Agreement that supplement, duplicate or contradict any provision of the Securities Purchase Agreement shall be deemed to supersede the corresponding provision of the Securities Purchase Agreement from and after the effective date hereof.

 

Section 6.12 Counterparts and Facsimile. For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been delivered.

 

Section 6.13 Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled (without the necessity of posting a bond) to specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	 	  	  	  
	 	
HAMPTON ROADS BANKSHARES, INC.

	 	  	  
	 	
By:

	  	  
	 	  	  	
Name:

	 	  	  	
Title:

	 	  
	 	
UNITED STATES DEPARTMENT OF THE TREASURY

	 	  	  
	 	
By:

	  	  
	 	  	  	
Name:

	 	  	  	
Title:

 

[Signature Page to Exchange Agreement]

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