Document:

Exhibit 4.1

 

 

THQ INC.

 

as Issuer

 

 

AND

 

 

Union Bank, N.A.

 

as Trustee

 

 

Indenture

 

Dated as of August 4,
2009

 

 

5.00% Convertible Senior Notes due 2014

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  
	
  Article 1  

  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions

  	
  1

  
	
  Section 1.02.

  	
  Compliance
  Certificates and Opinions

  	
  11

  
	
  Section 1.03.

  	
  Form of
  Documents Delivered to Trustee

  	
  11

  
	
  Section 1.04.

  	
  Acts of
  Holders; Record Dates

  	
  12

  
	
  Section 1.05.

  	
  Notices, Etc.,
  to Trustee and Company

  	
  13

  
	
  Section 1.06.

  	
  Notice to
  Holders; Waiver

  	
  13

  
	
  Section 1.07.

  	
  Effect of
  Headings and Table of Contents

  	
  14

  
	
  Section 1.08.

  	
  Successors and
  Assigns

  	
  14

  
	
  Section 1.09.

  	
  Severability
  Clause

  	
  14

  
	
  Section 1.10.

  	
  Benefits of
  Indenture

  	
  14

  
	
  Section 1.11.

  	
  No Recourse
  Against Others

  	
  14

  
	
   

  
	
  Article 2  

  SECURITY FORMS

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Forms
  Generally

  	
  14

  
	
  Section 2.02.

  	
  Form of
  Face of Security

  	
  15

  
	
  Section 2.03.

  	
  Form of
  Reverse of Security

  	
  20

  
	
  Section 2.04.

  	
  Form of
  Trustee’s Certificate of Authentication

  	
  30

  
	
  Section 2.05.

  	
  Legend on Restricted
  Securities

  	
  30

  
	
   

  
	
  Article 3  

  THE SECURITIES

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Title and
  Terms; Payments

  	
  30

  
	
  Section 3.02.

  	
  Ranking

  	
  31

  
	
  Section 3.03.

  	
  Denominations

  	
  31

  
	
  Section 3.04.

  	
  Execution,
  Authentication, Delivery and Dating

  	
  31

  
	
  Section 3.05.

  	
  Temporary
  Securities

  	
  32

  
	
  Section 3.06.

  	
  Registration;
  Registration of Transfer and Exchange; Restrictions on Transfer

  	
  32

  
	
  Section 3.07.

  	
  Mutilated,
  Destroyed, Lost and Stolen Securities

  	
  35

  
	
  Section 3.08.

  	
  Persons Deemed
  Owners

  	
  36

  
	
  Section 3.09.

  	
  Book-Entry
  Provisions for Global Securities

  	
  36

  
	
  Section 3.10.

  	
  Cancellation
  and Transfer Provisions

  	
  37

  
	
  Section 3.11.

  	
  CUSIP Numbers

  	
  39

  

 

i

 

	
  Article 4 

  PARTICULAR COVENANTS OF THE COMPANY

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Payment of
  Principal and Interest

  	
  39

  
	
  Section 4.02.

  	
  Maintenance of
  Office or Agency

  	
  40

  
	
  Section 4.03.

  	
  Appointments
  to Fill Vacancies in Trustee’s Office

  	
  40

  
	
  Section 4.04.

  	
  Provisions as
  to Paying Agent

  	
  41

  
	
  Section 4.05.

  	
  Existence

  	
  42

  
	
  Section 4.06.

  	
  Rule 144A
  Information Requirement

  	
  42

  
	
  Section 4.07.

  	
  Resale of
  Certain Securities

  	
  42

  
	
  Section 4.08.

  	
  Commission
  Filings and Reports

  	
  43

  
	
  Section 4.09.

  	
  Book-Entry
  System

  	
  43

  
	
  Section 4.10.

  	
  Additional
  Interest

  	
  43

  
	
  Section 4.11.

  	
  Stay;
  Extension and Usury Laws

  	
  43

  
	
  Section 4.12.

  	
  Compliance
  Certificate

  	
  44

  
	
   

  
	
  Article 5 

  OPTIONAL REDEMPTION

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Right to
  Redeem

  	
  44

  
	
  Section 5.02.

  	
  Selection of Securities to be Redeemed

  	
  45

  
	
  Section 5.03.

  	
  Notice of
  Optional Redemption

  	
  45

  
	
  Section 5.04.

  	
  Effect of
  Notice of Optional Redemption

  	
  46

  
	
  Section 5.05.

  	
  Deposit of Redemption Price

  	
  46

  
	
  Section 5.06.

  	
  Securities
  Redeemed in Part

  	
  47

  
	
   

  
	
  Article 6 

  CONVERSION

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Right to
  Convert

  	
  47

  
	
  Section 6.02.

  	
  Conversion Procedure

  	
  48

  
	
  Section 6.03.

  	
  Settlement
  upon Conversion

  	
  49

  
	
  Section 6.04.

  	
  Adjustment of Conversion Rate

  	
  51

  
	
  Section 6.05.

  	
  Recapitalizations,
  Reclassifications and Changes of Shares of Common Stock

  	
  60

  
	
  Section 6.06.

  	
  Adjustments of Prices

  	
  61

  
	
  Section 6.07.

  	
  Adjustment to
  Shares Delivered upon Conversion upon a Fundamental Change

  	
  61

  
	
  Section 6.08.

  	
  Taxes on Shares
  Issued

  	
  63

  
	
  Section 6.09.

  	
  Reservation of
  Shares; Shares to be Fully Paid; Compliance with Governmental Requirements

  	
  63

  
	
  Section 6.10.

  	
  Responsibility
  of Trustee

  	
  63

  
	
  Section 6.11.

  	
  Notice to
  Holders Prior to Certain Actions

  	
  64

  
	
  Section 6.12.

  	
  Stockholder
  Rights Plan

  	
  65

  
	
  Section 6.13.

  	
  Company
  Determination Final

  	
  65

  

 

ii

 

	
  Article 7 

  PURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Purchase at
  Option of Holders upon a Fundamental Change

  	
  65

  
	
  Section 7.02.

  	
  Effect of
  Fundamental Change Purchase Notice

  	
  68

  
	
  Section 7.03.

  	
  Withdrawal of
  Fundamental Change Purchase Notice

  	
  69

  
	
  Section 7.04.

  	
  Deposit of
  Fundamental Change Purchase Price

  	
  69

  
	
  Section 7.05.

  	
  Securities
  Purchased in Whole or in Part

  	
  69

  
	
  Section 7.06.

  	
  Covenant to
  Comply With Securities Laws upon Purchase of Securities

  	
  70

  
	
  Section 7.07.

  	
  Repayment to
  the Company

  	
  70

  
	
  Section 7.08.

  	
  Third Party
  Fundamental Change Purchase Offer

  	
  70

  
	
   

  
	
  Article 8 

  EVENTS OF DEFAULT; REMEDIES

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Events of
  Default

  	
  71

  
	
  Section 8.02.

  	
  Acceleration
  of Maturity; Waiver of Past Defaults and Rescission

  	
  73

  
	
  Section 8.03.

  	
  Additional
  Interest

  	
  74

  
	
  Section 8.04.

  	
  Collection of Indebtedness and Suits for Enforcement by
  Trustee

  	
  76

  
	
  Section 8.05.

  	
  Trustee
  May File Proofs of Claim

  	
  76

  
	
  Section 8.06.

  	
  Application of
  Money Collected

  	
  77

  
	
  Section 8.07.

  	
  Limitation on
  Suits

  	
  77

  
	
  Section 8.08.

  	
  Unconditional
  Right of Holders to Receive Payment

  	
  78

  
	
  Section 8.09.

  	
  Restoration of
  Rights and Remedies

  	
  78

  
	
  Section 8.10.

  	
  Rights and
  Remedies Cumulative

  	
  78

  
	
  Section 8.11.

  	
  Delay or
  Omission Not Waiver

  	
  79

  
	
  Section 8.12.

  	
  Control by
  Holders

  	
  79

  
	
  Section 8.13.

  	
  Undertaking
  for Costs

  	
  79

  
	
   

  
	
  Article 9 

  MERGER, CONSOLIDATION OR SALE OF ASSETS

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Company
  May Consolidate, etc., only on Certain Terms

  	
  80

  
	
  Section 9.02.

  	
  Successor
  Substituted

  	
  80

  
	
   

  
	
  Article 10 

  THE TRUSTEE

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Duties and
  Responsibilities of Trustee

  	
  80

  
	
  Section 10.02.

  	
  Notice of Defaults

  	
  82

  
	
  Section 10.03.

  	
  Reliance on
  Documents, Opinions, Etc.

  	
  82

  
	
  Section 10.04.

  	
  No
  Responsibility for Recitals, Etc.

  	
  84

  

 

iii

 

	
  Section 10.05.

  	
  Trustee,
  Paying Agents, Conversion Agents or Registrar May Own Securities

  	
  84

  
	
  Section 10.06.

  	
  Monies to be
  Held in Trust

  	
  84

  
	
  Section 10.07.

  	
  Compensation
  and Expenses of Trustee

  	
  84

  
	
  Section 10.08.

  	
  Officers’
  Certificate as Evidence

  	
  85

  
	
  Section 10.09.

  	
  Conflicting
  Interests of Trustee

  	
  85

  
	
  Section 10.10.

  	
  Eligibility of
  Trustee

  	
  85

  
	
  Section 10.11.

  	
  Resignation or
  Removal of Trustee

  	
  86

  
	
  Section 10.12.

  	
  Acceptance by
  Successor Trustee

  	
  87

  
	
  Section 10.13.

  	
  Succession by
  Merger, Etc.

  	
  88

  
	
  Section 10.14.

  	
  Preferential
  Collection of Claims

  	
  88

  
	
  Section 10.15.

  	
  Trustee’s
  Application for Instructions from the Company

  	
  89

  
	
   

  
	
  Article 11 

  HOLDERS’ LISTS AND REPORTS BY TRUSTEE

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Company to
  Furnish Trustee Names and Addresses of Holders

  	
  89

  
	
  Section 11.02.

  	
  Preservation
  of Information; Communications to Holders

  	
  89

  
	
  Section 11.03.

  	
  Reports By
  Trustee

  	
  90

  
	
   

  
	
  Article 12 

  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  Section 12.01.

  	
  Discharge of
  Indenture

  	
  90

  
	
  Section 12.02.

  	
  Deposited
  Monies to be Held in Trust by Trustee

  	
  91

  
	
  Section 12.03.

  	
  Paying Agent
  to Repay Monies Held

  	
  91

  
	
  Section 12.04.

  	
  Return of
  Unclaimed Monies

  	
  91

  
	
  Section 12.05.

  	
  Reinstatement

  	
  91

  
	
   

  
	
  Article 13 

  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  
	
  Section 13.01.

  	
  Supplemental
  Indentures without Consent of Holders

  	
  92

  
	
  Section 13.02.

  	
  Supplemental
  Indentures with Consent of Holders

  	
  93

  
	
  Section 13.03.

  	
  Execution of
  Supplemental Indentures

  	
  94

  
	
  Section 13.04.

  	
  Effect of
  Supplemental Indentures

  	
  94

  
	
  Section 13.05.

  	
  Conformity
  with Trust Indenture Act

  	
  95

  
	
  Section 13.06.

  	
  Reference in
  Securities to Supplemental Indentures

  	
  95

  
	
  Section 13.07.

  	
  Notice to
  Holders of Supplemental Indentures

  	
  95

  
	
   

  
	
  Article 14 

  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 14.01.

  	
  Incorporation
  of Trust Indenture Act

  	
  95

  

 

iv

 

	
  Section 14.02.

  	
  Trust
  Indenture Act Controls

  	
  95

  
	
  Section 14.03.

  	
  Notices

  	
  95

  
	
  Section 14.04.

  	
  Communication
  by Holders with other Holders

  	
  96

  
	
  Section 14.05.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  96

  
	
  Section 14.06.

  	
  When
  Securities Are Disregarded

  	
  97

  
	
  Section 14.07.

  	
  Rules by
  Trustee, Paying Agent and Registrar

  	
  97

  
	
  Section 14.08.

  	
  Legal Holidays

  	
  97

  
	
  Section 14.09.

  	
  Governing Law

  	
  97

  
	
  Section 14.10.

  	
  Successors

  	
  97

  
	
  Section 14.11.

  	
  Execution in
  Counterparts

  	
  97

  
	
  Section 14.12.

  	
  [Reserved]

  	
  98

  
	
  Section 14.13.

  	
  Table of
  Contents; Headings

  	
  98

  
	
  Section 14.14.

  	
  Severability
  Clause

  	
  98

  
	
  Section 14.15.

  	
  Calculations

  	
  98

  
	
  Section 14.16.

  	
  Waiver of Jury
  Trial

  	
  98

  
	
  Section 14.17.

  	
  Consent to
  Jurisdiction; Consent to Service of Process

  	
  98

  
	
  Section 14.18.

  	
  Force Majeure

  	
  99

  

 

v

 

INDENTURE,
dated as of August 4, 2009, between THQ Inc., a company duly incorporated
and existing under the laws of the State of Delaware, as Issuer (the “Company”), having its principal office at 29903 Agoura Road,
Agoura Hills, California, 91301 and Union Bank, N.A., a national banking
association, as Trustee (the “Trustee”).

 

RECITALS OF THE COMPANY

 

WHEREAS,
the Company has duly authorized the creation of an issue of  5.00% Convertible Senior Notes due 2014 (each
a “Security” and collectively, the “Securities”) of the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture; and

 

WHEREAS,
all things necessary to make the Securities, when executed by the Company and
authenticated and delivered hereunder and duly issued by the Company, the valid
and legally binding obligations of the Company, and to make this Indenture a
valid and legally binding agreement of the Company, in accordance with the
terms of the Securities and this Indenture, have been done.

 

NOW,
THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of the premises
and the purchases of the Securities by the Holders thereof, it is mutually
agreed, for the benefit of the Company and the equal and proportionate benefit
of all Holders of the Securities, as follows:

 

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.01.          Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise
requires:

 

(i)            the terms
defined in this Article 1 have the meanings assigned to them in this Article and
include the plural as well as the singular;

 

(ii)           all other terms
used herein that are defined in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them therein;

 

(iii)          all accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP; and

 

 

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

 

“Act,” when used with respect to any Holder, has the meaning
specified in Section 1.04.

 

“Additional Interest” means all amounts of additional
interest, if any, payable pursuant to Section 8.03 hereof.

 

“Additional Securities” means any Securities (other than the
Initial Securities) issued under this Indenture in accordance with Section 3.01
hereof, as part of the same series and with the same CUSIP number as the
Initial Securities.

 

“Additional Shares” has the meaning specified in Section 6.07(a).

 

“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 the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

“Agent Members” has the meaning specified in Section 3.09(a).

 

“Applicable  Conversion Price”
means the Conversion Price in effect at any given time.

 

“Applicable  Conversion Rate”
means the Conversion Rate in effect at any given time.

 

“Board of Directors” means, with respect to any Person,
either the board of directors of such Person or any duly authorized committee
of that board.

 

“Board Resolution” means, with respect to any Person, a copy
of a resolution certified by the Secretary or an Assistant Secretary or the
General Counsel of such Person to have been duly adopted by the Board of
Directors of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means any day other than a Saturday, a Sunday
or a day on which the Federal Reserve Bank of New York is authorized or
required by law or executive order to close or be closed.

 

2

 

“Capital Stock” means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock and, with respect to partnerships, partnership interests (whether general
or limited) and any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, such partnership.

 

“Clearstream” means Clearstream Banking S.A.

 

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

 

“Common Stock” means the shares of common stock, par value
$0.01 per share, of the Company as they exist on the date of this Indenture or
any other shares of Capital Stock of the Company into which the Common Stock
shall be reclassified or changed, or, in the event of a merger, consolidation or
other similar transaction involving the Company that is otherwise permitted
hereunder in which the Company is not the surviving corporation, the common
stock, common equity interests or depositary shares or other certificates
representing common equity interests of such surviving corporation or its
direct or indirect parent corporation.

 

“Company” means the Person named as the “Company” in the
first paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter “Company”
shall mean such successor Person.

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by its Chief
Executive Officer, its President, its Chief Financial Officer, its Treasurer,
any Assistant Treasurer, its Secretary, any Assistant Secretary or any of its
Vice Presidents, and delivered to the Trustee.

 

“Conversion Agent” means the Trustee or such other office or
agency designated by the Company where Securities may be presented for
conversion.

 

“Conversion Date” has the meaning specified in Section 6.02(b).

 

“Conversion Notice” has the meaning specified in Section 6.02(b).

 

3

 

“Conversion Price” means, per share of Common Stock, $1,000 divided by
the Applicable Conversion Rate, subject to adjustment as set forth herein.

 

“Conversion Rate” means initially 117.4743 shares of Common Stock per
$1,000 Principal Amount of Securities, subject to adjustment as set forth
herein.

 

“Corporate Trust Office” means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular
time, be principally administered, which office is, at the date as of which
this Indenture is dated, located at Union Bank, N.A., 120 South San Pedro
Street, 4th Floor, Los Angeles, California 90012 (Attn:
THQ Inc., 5.00% Convertible Senior Notes due 2014).

 

“Corporation” means a corporation, association, company,
joint-stock company or business trust.

 

“Custodian” means Union Bank, N.A., as custodian with respect
to the Securities in global form, or any successor entity.

 

“Default” means
any event that is or with the passage of time or the giving of notice or both
would become an Event of Default.

 

“Depositary” means DTC until a successor Depositary shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter “Depositary” shall mean such successor Depositary.

 

“DTC” means The Depository Trust Company.

 

“Effective Date” has the meaning specified in Section 6.07(b).

 

“Euroclear” means Euroclear Bank S.A./N.V., as operator
of  the 
Euroclear System.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Ex-Dividend Date” means, for the purposes of Section 6.04,
the first date on which the shares of Common Stock trade on the applicable
exchange or in the applicable market, regular way, without the right to receive
the issuance or distribution in question.

 

“Exchange Act” means the U.S. Securities Exchange Act of
1934, as amended.

 

“Final Offering Memorandum” means the final offering
memorandum dated July 29, 2009 relating to the Securities.

 

4

 

“Fundamental Change” means the occurrence of any of the
following events at any time after the Issue Date:

 

(1)           a “person” or “group” within the meaning of Section 13(d) of
the Exchange Act other than the Company, Subsidiaries or the Company’s or
Subsidiaries’ employee benefit plans files a Schedule 13D or Schedule TO (or
any successor schedule, form or report) pursuant to the Exchange Act accurately
disclosing that such person has become the direct or indirect “beneficial
owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s
common equity representing more than 50% of the voting power of all outstanding
classes of the Company’s common equity entitled to vote generally in the
election of the Company’s Board of Directors;

 

(2)           the consummation of any share exchange, consolidation
or merger of the Company with or into any other person pursuant to which Common
Stock will be converted into cash, securities, or other property, or the sale,
lease, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the Company’s assets and the
Subsidaries’ assets taken as a whole to any “person” (as this term is used in Section 13(d)(3) of
the Exchange Act), other than:

 

(a)           any transaction pursuant to which the holders of 50%
or more of the total voting power of all shares of the Company’s Capital Stock
entitled to vote generally in elections of the Company’s Board of Directors
immediately prior to such transaction have the right to exercise, directly or
indirectly, 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 of the
continuing or surviving person immediately after giving effect to such
transaction; or

 

(b) any merger
primarily for the purpose of changing the Company’s jurisdiction of incorporation
and resulting in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of common stock of the surviving
entity;

 

(3)           the Company’s stockholders approve any plan or
proposal for the liquidation or dissolution of the Company; or

 

(4)           the Common Stock (or other common stock into which the
Securities are then convertible pursuant to the terms of this Indenture) ceases
to be listed on The Nasdaq Global Select Market or a U.S. national securities
exchange.

 

Notwithstanding
the foregoing, a Fundamental Change as a result of clauses (1) or (2) above
will not be deemed to have occurred, however, if at least 

 

5

 

90% of the consideration received or to be received by
holders of Common Stock (excluding cash payments for fractional shares and cash
payments made pursuant to dissenters’ appraisal rights) in connection with the
transaction or transactions constituting the Fundamental Change consists of
Publicly Traded Securities and, as a result of this transaction or
transactions, the Securities become convertible into such Publicly Traded
Securities, excluding cash payments for fractional shares.

 

“Fundamental Change Company Notice” has the meaning specified
in Section 7.01(b).

 

“Fundamental Change Purchase Date” has the meaning specified
in Section 7.01(a).

 

“Fundamental Change Purchase Notice” has the meaning
specified in Section 7.01(a).

 

“Fundamental Change Purchase Offer” means any purchase offer
pursuant to a Fundamental Change Purchase Notice.

 

“Fundamental Change Purchase Price” has the meaning specified
in Section 7.01(a).

 

“GAAP” means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, in each case, as in effect in the United States
of America on the date hereof.

 

“Global Security” means a Security in global form registered
in the Security Register in the name of a Depositary or a nominee thereof.

 

“Holder” means a Person in whose name a Security is
registered in the Security Register.

 

“Indenture” means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.

 

“Initial Purchaser” means Morgan Stanley & Co.
Incorporated.

 

6

 

“Initial Securities” means Securities in an aggregate
Principal Amount of $100,000,000, initially issued under this Indenture.

 

“Interest Payment Date” means each February 15 and August 15
of each year, beginning February 15, 2010.

 

“Issue Date” means the date the Securities are originally
issued as set forth on the face of the Security under this Indenture.

 

“Last Reported Sale Price” means, on any Trading Day, the
closing sale price per share of the Common Stock (or if no closing sale price
is reported, the average of the bid and ask prices of the Common Stock, or, if
more than one in either case, the average of the average bid and the average
ask prices of the Common Stock) on that Trading Day as reported in composite
transactions for The Nasdaq Global Select Market or, if the Common Stock is not
then listed on The Nasdaq Global Select Market, the principal U.S. national or
regional securities exchange on which the Common Stock is then listed or
admitted for trading.  If the Common
Stock is not listed for trading on a U.S. national or regional securities
exchange on the relevant Trading Day, the “Last Reported Sale Price” will be
the last quoted bid price per share of Common Stock in the over-the-counter
market on the relevant Trading Day as reported by Pink Sheets LLC or a similar
organization selected by the Company for this purpose. If the Common Stock is
not so quoted, the “Last Reported Sale Price” will be the average of the
mid-point of the last bid and ask prices per share for the Common Stock on the
relevant date from each of at least three nationally recognized independent
investment banking firms selected by the Company for this purpose.

 

“Legal Holiday” has the meaning specified in Section 14.08.

 

“Make-Whole Fundamental Change” means any
transaction or event that constitutes a Fundamental Change pursuant to clause (1) or
(2) of the definition of Fundamental Change (subject to the exception set
forth in the paragraph immediately following clause (4) of the definition
thereof).

 

“Merger Event” has the meaning specified in Section 6.05.

 

“Notice of Default” means written notice provided to the
Company by the Trustee or to the Company and the Trustee by the Holders of not
less than 25% in aggregate Principal Amount of Securities outstanding of a
Default by the Company, which notice must specify the Default and expressly
state that such notice is a “Notice of Default.”

 

“Notice
of Optional Redemption” has the meaning specified in Section 5.03.

 

7

 

“Officers’ Certificate” means a certificate signed by the
Chief Executive Officer, the President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary or
any of the Vice Presidents of the Company, and delivered to the Trustee.

 

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

 

“Opinion of Counsel” means a written opinion of counsel, who
may be external or in-house counsel for the Company.

 

“Optional Redemption” has the meaning specified in Section 5.01.

 

“Paying Agent” means any Person (including the Company)
authorized by the Company to pay the Principal Amount of, and interest on
(including Additional Interest), the Redemption Price or the Fundamental Change
Purchase Price of any Securities on behalf of the Company.  Union Bank, N.A., shall initially be the
Paying Agent.

 

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

 

“Physical Securities” means permanent certificated Securities
in registered form issued in denominations of $2,000 Principal Amount and
multiples of $1,000 in excess thereof.

 

“Principal Amount” of a Security means the Principal Amount
as set forth on the face of the Security.

 

“Publicly Traded Securities” means shares of common stock
which are traded on a U.S. national securities exchange, or, with respect to a
transaction that otherwise would be a Fundamental Change, which will be so
traded when issued or exchanged in connection with such transaction.

 

“Purchase Agreement” means the Purchase Agreement, dated July 29,
2009, entered into by the Company and the Initial Purchaser in connection with
the sale of the Securities.

 

“Qualified Institutional Buyer” or “QIB”
shall have the meaning specified in Rule 144A.

 

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

 

“Redemption
Price” means,
when used with respect to any Security to be redeemed, the price at which it is
to be redeemed pursuant to this Indenture.

 

8

 

“Reference Property” has the meaning specified in Section 6.05.

 

“Regular  Record Date”
means, with respect to the payment of interest on the Securities (including
Additional Interest, if any), Close of Business  on the February 1 or August 1, as the case
may be, immediately preceding the relevant Interest Payment Date.

 

“Restricted Global Security” means a Global Security
representing Restricted Securities.

 

“Restricted Security” has the meaning specified in Section 2.05.

 

“Rule 144” means Rule 144 under the Securities Act
(including any successor rule thereto), as the same may be amended from
time to time.

 

“Rule 144A” means Rule 144A under the Securities
Act (including any successor rule thereto), as the same may be amended
from time to time.

 

“Rule 144A Information” has the meaning specified in the
Securities.

 

“Scheduled Trading Day” means a day that is scheduled to be a
Trading Day on The Nasdaq Global Select Market or, if the Common Stock is not
then listed on The Nasdaq Global Select Market, the principal U.S. national or
regional securities exchange or market on which the Common Stock is listed or
admitted for trading or, if the Common Stock is not then listed or admitted for
trading on a U.S. national or regional securities exchange, on the principal
other market on which the Common Stock is then traded.

 

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

 

“Security” has the meaning specified in the first paragraph
of the Recitals of the Company above, and includes any Security or Securities,
as the case may be, authenticated and delivered under this Indenture, including
any Global Security.  The Initial
Securities and the Additional Securities shall be treated as a single class and
have the same CUSIP number for purposes of this Indenture.

 

“Security Register” and “Security Registrar”
have the meanings specified in Section 3.06.

 

“Significant Subsidiary” has the meaning given to such term
in Rule 1-02(w) of Regulation S-X under the Securities Act as in
effect on the Issue Date of the Securities.

 

“Spin-Off” has the meaning specified in Section 6.04(c).

 

9

 

“Stated Maturity” means August 15, 2014.

 

“Stock Price” has the meaning specified in Section 6.07(b).

 

“Subsidiary” means any Person of which more than 50% of the
outstanding voting stock is owned, directly or indirectly, by the Company or
one or more other Subsidiaries, or the Company and one or more
Subsidiaries.  For the purposes of this
definition, “voting stock” means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.

 

“Successor Company” has the meaning specified in Section 9.01.

 

“Trading Day” means a day during which (i) trading in
securities generally occurs on The Nasdaq Global Select Market or, if the
Common Stock is not then listed on The Nasdaq Global Select Market, the
principal U.S. national or regional securities exchange on which the Common
Stock is then listed or admitted for trading or, if the Common Stock is not
then listed or admitted for trading on a U.S. national or regional securities
exchange, on the principal other market on which the Common Stock is then
traded, and (ii) a Last Reported Sale Price is available on such
securities exchange or market.  If the
Common Stock is not so listed or traded, “Trading Day” means a Business Day.

 

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

 

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

 

“Trustee” means the Person named as the “Trustee”
in the first paragraph of this Indenture until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Trustee” shall mean such successor
Trustee.

 

“U.S.” means the United States of America.

 

“Valuation Period” has the meaning set forth in Section 6.04(c).

 

“Vice President” means any vice president, whether or not
designated by a number or a word or words added before or after the title “vice
president.”

 

10

 

Section 1.02.  Compliance Certificates and Opinions.  Upon any application or request by
the Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act.  Each such certificate or opinion shall be
given in the form of an Officers’ Certificate, if to be given by an officer of
the Company, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirement set forth in this Indenture.

 

Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

 

(a)           a statement that each
individual signing such certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;

 

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

 

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

 

(d)           a statement as to whether,
in the opinion of each such individual, such condition or covenant has been
complied with.

 

In giving such Opinion of Counsel, counsel may rely
as to factual matters on an Officers’ Certificate or certificates of public
officials.

 

Section 1.03.  Form of Documents Delivered to
Trustee.  In any case where
several matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

 

Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous.  Any such certificate or Opinion of Counsel
may be based, insofar as it 

 

11

 

relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

 

Where
any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

 

Section 1.04.  Acts of Holders; Record Dates.

 

(a)           Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by their agents duly appointed in writing and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. 
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as an “Act”
of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 10.01) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.

 

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

 

(c)           The Company may, in the
circumstances permitted by the Trust Indenture Act, fix any day as the record
date for the purpose of determining the Holders entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders.  If not set by the Company
prior to the first solicitation of a Holder made by any Person in respect of
any such action, or, in the case of any such vote, prior to such vote, the
record date for any such action 

 

12

 

or vote shall be the 30th day (or, if later, the
date of the most recent list of Holders required to be provided pursuant to Section 11.01)
prior to such first solicitation or vote, as the case may be.  With regard to any record date, only the
Holders on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action.

 

(d)           The ownership of Securities
shall be proved by the Security Register.

 

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

 

Section 1.05.  Notices, Etc., to Trustee and Company.  Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:

 

(i)            the Trustee by
any Holder or by the Company shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the Trustee at its
applicable Corporate Trust Office; or

 

(ii)           the Company by
the Trustee or by any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address of
its principal office specified in the first paragraph of this instrument, with
a copy to the address specified in Section 14.03, or at any other address
previously furnished in writing to the Trustee by the Company, Attention: Chief
Financial Officer.

 

Section 1.06.  Notice to Holders; Waiver.  Where this Indenture provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at such Holder’s
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice.  In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders.  Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice.  Waivers of
notice by Holders shall 

 

13

 

be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.

 

In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

 

Whenever
under this Indenture the Trustee is required to provide any notice by mail, in
all cases the Trustee may alternatively provide notice by overnight courier or
by facsimile, with confirmation of transmission.

 

Section 1.07.  Effect of Headings and Table of
Contents.  The Article and
Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof, and all Article and Section references
are to Articles and Sections, respectively, of this Indenture unless otherwise
expressly stated.

 

Section 1.08.  Successors and Assigns.  All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.

 

Section 1.09.  Severability Clause.  In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

 

Section 1.10.  Benefits of Indenture.  Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their respective successors hereunder and the Holders of
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

 

Section 1.11.  No Recourse Against Others.  None of the Company’s, or of any
successor entity’s, direct or indirect stockholders, employees, officers or
directors, as such, past, present or future, shall have any personal liability
in respect of the obligations of the Company under this Indenture or the
Securities solely by reason of his or its status as such stockholder, employee,
officer or director.  Each Holder by
accepting a Security waives and releases such liability.

 

ARTICLE 2

SECURITY FORMS

 

Section 2.01.  Forms Generally.  The Securities and the Trustee’s
certificates of authentication shall be in substantially the forms set forth in
this 

 

14

 

Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or Depositary therefor, the Code
and regulations thereunder, or as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their execution
thereof.

 

The
Securities shall initially be issued in the form of a permanent Global Security
in registered form in substantially the form set forth in this Article.  The aggregate Principal Amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary, as hereinafter
provided.

 

Section 2.02.  Form of Face of Security.  [THIS SECURITY AND THE
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

 

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR
WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT
DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

 

(2) AGREES FOR THE BENEFIT OF THQ INC. THAT
IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY
BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE
YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME
AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
APPLICABLE LAW, EXCEPT:

 

(A) TO THQ INC. OR ANY SUBSIDIARY THEREOF, OR

 

(B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

 

(C) TO A QUALIFIED INSTITUTIONAL BUYER IN 

 

15

 

COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, OR

 

(D) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES.

 

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN
ACCORDANCE WITH (2)(D) ABOVE, THQ INC. AND THE TRUSTEE RESERVE THE RIGHT
TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER
EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE
PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.]

 

[INCLUDE IF SECURITY IS A
GLOBAL SECURITY — THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (“DTC”), A NEW YORK CORPORATION, TO THQ INC. 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 IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

16

 

THQ INC.

 

5.00%
Convertible Senior Notes due 2014

 

	
  No. [    ]

  	
  U.S. $[    ]

  

 

CUSIP NO. 872443 AA4(1)

 

THQ
Inc., a company duly incorporated 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 [•] United States
Dollars ($[•]) (which amount may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary, in accordance with the rules and procedures of the
Depositary and in accordance with the below referred Indenture) on August 15,
2014.  Payment of the principal of this
Security shall be made by check mailed to the address of the Holder of this
Security specified in the register of Securities, or, at the option of the
Company, by wire transfer in immediately available funds, 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.

 

The
issue date of this Security is August 4, 2009.

 

Reference
is made to the further provisions of this Security set forth on the reverse
hereof, including, without limitation, provisions giving the Company the right
to redeem this Security under certain circumstances, provisions giving the
Holder the right to convert this Security into Common Stock of the Company and
to the ability and obligation of the Company to purchase this Security upon
certain events, in each case, 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.
Capitalized terms used but not defined herein shall have such meanings as are
ascribed to such terms in the Indenture.

 

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

 

(1) Pursuant to Section 3.11 of the
Indenture, at such time as the Company notifies the Trustee to remove the
legend (other than the two paragraphs beginning “INCLUDE IF THIS SECURITY IS A
GLOBAL SECURITY...”), the CUSIP number for this Security shall be deemed to be CUSIP
No. 872443 AB2.

 

17

 

This
Security 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.

 

18

 

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

 

	
   

  	
  THQ INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

19

 

Section 2.03.  Form of Reverse of
Security.

 

THQ
INC.

 

5.00%
Convertible Senior Notes due 2014

 

This Security is one of a duly authorized issue of
Securities of the Company, designated as its 
5.00% Convertible Senior Notes due 2014 (the “Securities”), all issued or to be issued
under and pursuant to an Indenture dated as of August 4, 2009 (the “Indenture”), between the Company and Union Bank, N.A. (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 Securities.  The Indenture provides that Additional
Securities may be issued thereunder, if certain conditions are met.

 

Interest.  The Securities will bear interest at a rate
of 5.00% per year. Interest on the Securities will accrue from and including August 4,
2009, or from the most recent date to which interest has been paid or duly
provided for.  Interest will be payable
semiannually in arrears on each Interest Payment Date, beginning February 15,
2010.  Pursuant to Section 8.03 of
the Indenture, in certain circumstances, the Holders of Securities shall be
entitled to receive Additional Interest.

 

Subject to Section 5.01(b) of the
Indenture, interest (including Additional Interest, if any) will be paid to the
person in whose name a Security is registered at the Close of Business on the February 1
or August 1, as the case may be, immediately preceding the relevant
Interest Payment Date. Interest on the Securities will be computed on the basis
of a 360-day year composed of twelve 30-day months.

 

Ranking. 
The Securities are general unsecured and unsubordinated obligations of
the Company.

 

Redemption at the Option of the Company.  No sinking fund is provided for the Securities.  The Securities are redeemable as a whole, or
from time to time in part at any time after August 20, 2012 at the option
of the Company, if the Last Reported Sale Price has been at least 150% of the
Conversion Price then in effect for at least 20 Trading Days during any 30
consecutive Trading Day period prior to the date on which the Company provides
Notice of Optional Redemption. The Redemption Price for any such Optional
Redemption will be 100% of the Principal Amount of the Securities to be
redeemed, together with accrued and unpaid interest (including Additional
Interest, if any), to, but excluding, the Redemption Date.

 

20

 

Purchase
at the Option of the Holder Upon a Fundamental Change. 
Subject to the terms and conditions of the Indenture, the Company shall
become obligated, at the option of the Holder, to purchase the Securities if a
Fundamental Change occurs at any time prior to the Stated Maturity at 100% of
the Principal Amount plus accrued and unpaid interest (including Additional
Interest, if any) to, but excluding, the Fundamental Change Purchase Date,
which amount will be paid in cash.  The
Company shall be required to purchase any or all of such Holder’s Securities,
or any portion of the Principal Amount thereof, that is equal to $1,000 or a
multiple of $1,000 in excess thereof, provided the portion not so purchased is
in a minimum Principal Amount of $2,000.

 

Withdrawal
of Fundamental Change Purchase Notice.  Holders have
the right to withdraw, in whole or in part, any Fundamental Change Purchase
Notice, as the case may be, by delivering to the Paying Agent a written notice
of withdrawal in accordance with the provisions of the Indenture.

 

Payment
of Redemption Price and Fundamental Change Purchase Price. 
If money sufficient to pay the Redemption Price or Fundamental Change
Purchase Price, as the case may be, of all Securities or portions thereof to be
redeemed or purchased on a Redemption Date or on a Fundamental Change Purchase
Date, respectively, is deposited with the Paying Agent on the Redemption Date
or the Fundamental Change Purchase Date, respectively, such Securities will
cease to be outstanding and interest will cease to accrue on such Securities
(or portions thereof) immediately after such Redemption Date or Fundamental
Change Purchase Date, as the case may be, and the Holder thereof shall have no
other rights as such (other than the right to receive the Redemption Price or Fundamental
Change Purchase Price, as the case may be, upon surrender of such Security).

 

Payment
Obligations Upon Third Party Fundamental Change Purchase Offer

 

If a
third party makes the Fundamental Change Purchase Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in the
Indenture applicable to a Fundamental Change Purchase Offer made by the
Company, and purchases all Securities validly tendered and not withdrawn under
such Fundamental Change Purchase Offer, the Company will not be required to
make a Fundamental Change Purchase Offer.

 

Conversion. 
Subject to and in compliance with the provisions of the Indenture
(including without limitation the conditions of conversion of this Security set
forth in Article 6 thereof), the Holder hereof has the right, at its
option, to convert the Principal Amount hereof or any portion of such principal
which is $1,000 or a multiple thereof (provided that the portion not so
converted is in a minimum Principal Amount of $2,000) into shares of Common
Stock at the 

 

21

 

Applicable Conversion
Rate.  The initial Conversion Rate is
117.4743 shares of Common Stock per $1,000 Principal Amount of Securities
(equivalent to a Conversion Price of approximately $8.51), subject to
adjustment in certain events described in the Indenture.  Upon conversion, the Company will issue
shares of Common Stock as set forth in the Indenture.  No fractional shares will be issued upon any
conversion, but an adjustment and payment in cash will be made, as provided in
the Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Securities for conversion.  Securities in respect of which a Holder is
exercising its right to require repurchase on a Fundamental Change Purchase
Date may be converted only if such Holder withdraws its election to exercise
such right in accordance with the terms of the Indenture.

 

In the
event of a deposit or withdrawal of an interest in this Security, including an
exchange, transfer, repurchase or conversion of this Security in part only, the
Trustee, as custodian of the Depositary, shall make an adjustment on its
records to reflect such deposit or withdrawal in accordance with the rules and
procedures of the Depositary.

 

Rule 144A Information. 
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act,
upon the request of a Holder of a Restricted Security, the Company will
promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder of Restricted Securities, or to a prospective
purchaser of any such security designated by any such Holder, to the extent
required to permit compliance by any such Holder with Rule 144A under the
Securities Act.  “Rule 144A
Information” shall be such information as is specified pursuant to Rule 144A(d)(4) under
the Securities Act (or any successor provision thereto).

 

Acceleration
of Maturity.  If an Event of Default shall occur and be
continuing, the Principal Amount plus interest (including Additional Interest,
if any) through such date on all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.

 

Supplemental
Indentures with Consent of Holders; Waiver of Past Defaults. 
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate Principal Amount of the outstanding
Securities.  The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
Principal Amount of the outstanding Securities, on behalf of the Holders of all
the Securities, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences.  Any such consent or waiver
by the Holder of 

 

22

 

any provision of or applicable to this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.

 

Limitation
on Suits.  As provided in and subject to the provisions
of the Indenture, the Holder of this Security shall not have the right to
institute any proceeding with respect to the Indenture or for the appointment
of a receiver or trustee or for any other remedy thereunder, unless (a) such
Holder shall have previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities, (b) the
Holders of not less than 25% in aggregate Principal Amount of the outstanding
Securities shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee security and indemnity reasonably satisfactory to it, (c) the
Trustee shall have failed to institute any such proceeding for 60 days after
receipt of such request and offer of security or indemnity and (d) the
Trustee shall not have received from the Holders of a majority in aggregate
Principal Amount of outstanding Securities a direction that is, in the opinion
of the Trustee, inconsistent with such request within such 60 day period.  The foregoing shall not apply to any suit
instituted by the Holder of this Security in the case of an Event of Default
under Section 8.01(a) or Section 8.01(b) of the Indenture.

 

Unconditional
Rights of Holders to Receive Payment.  No reference
herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the Principal Amount, Redemption Price or Fundamental Change
Purchase Price of, and interest (including Additional Interest, if any) on,
this Security at the times, place and rate, and in the coin or currency, herein
prescribed.

 

Registration
of Transfer and Exchange.  As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company in
New York City, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate Principal Amount, will be issued to the designated transferee or
transferees.

 

No
service charge shall be made for any such registration of transfer or exchange,
but the Company and the Security Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.

 

23

 

Prior
to due presentment of this Security for registration of transfer, the Company,
the Trustee and the Security Registrar and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as the
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.

 

Denominations. 
The Securities are issuable only in registered form in denominations of
$2,000 and any multiple of $1,000 in excess thereof, as provided in the
Indenture and subject to certain limitations therein set forth.  Securities are exchangeable for a like
aggregate Principal Amount of Securities of a different authorized
denomination, as requested by the Holder surrendering the same.

 

This
Security shall be governed by and construed in accordance with the laws of the
State of New York.

 

All
terms used in this Security that are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

 

24

 

ASSIGNMENT FORM

 

If you
want to assign this Security, fill in the form below and have your signature
guaranteed:

 

I or
we assign and transfer this Security to:

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

(Print or type name, address
and zip code and social security or tax ID number of assignee)

 

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

 

 

	
  Date:                                                          

  	
   

  	
  Signed:                                                          

  

 

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

 

	
  Signature Guarantee:                                                                                                                  

  

 

 

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

 

25

 

In
connection with any transfer of this Security occurring prior to the date which
is the earlier of (i) the date of the declaration by the Commission of the
effectiveness of a registration statement under the Securities Act, as amended
(the “Securities Act”),
covering resales of this Security (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) the first
anniversary of the Issue Date set forth on the face of this Security, the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer and that this Security is
being transferred:

 

[Check One]

 

	
  (1)

  	
   

  	
  o

  	
   

  	
  to
  the Company or a subsidiary thereof; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  o

  	
   

  	
  to
  a “Qualified Institutional Buyer” pursuant to and in compliance with
  Rule 144A under the Securities Act; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  o

  	
   

  	
  pursuant
  to an exemption from registration provided by Rule 144 under the
  Securities Act or any other available exemption from the registration
  requirements of the Securities.

  

 

Unless one of the above
boxes is checked, the Trustee will refuse to register any of the Securities
evidenced by this certificate in the name of any Person other than the
registered Holder thereof, provided
that if box (3) is checked, the Company
may require (and shall deliver to the Trustee and the Security Registrar),
prior to registering any such transfer of the Securities, in its sole
discretion, such legal opinions, certifications and other information as the
Company may reasonably request to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities
laws.

 

If
none of the foregoing boxes is checked, the Trustee or Security Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 3.10 of the Indenture shall
have been satisfied.

 

	
  Date:                                                          

  	
   

  	
  Signed:                                                          

  

 

26

 

(Sign exactly as your name appears 

on the other side of this Security)

 

	
  Signature Guarantee:                                                                                                                  

  

 

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

 

27

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS
CHECKED

 

The
undersigned represents and warrants that it is purchasing this Security for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A
under the Securities Act and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
  Date:                                                          

  	
   

  	
  Signed:                                                          

  

 

NOTICE:  To be executed by an executive officer.

 

28

 

CONVERSION NOTICE

 

If you
want to convert this Security into Common Stock of the Company, check the box: £

 

To
convert only part of this Security, state the Principal Amount to be converted
(which must be $1,000 or a multiple of $1,000, provided that the portion not so
converted is in a minimum Principal Amount of $2,000):

 

	
  $                                                                                    

  

 

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

 

	
   

  
	
  (Insert other person’s social security or tax ID no.)

  
	
   

  
	
   

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

  

 

 

	
  Date:                                                          

  	
   

  	
  Signed:                                                          

  

 

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

 

	
  Signature Guarantee:                                                                                                                  

  

 

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

 

29

 

Section 2.04.  Form of Trustee’s Certificate of
Authentication.  This is one
of the Securities referred to in the within-mentioned Indenture.

 

	
  Dated:

  	
   

  	
   

  	
  Union Bank, N.A., as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

Section 2.05.  Legend on Restricted Securities.  During the period beginning on the
Issue Date and ending on the later of (x) one year after the last
original Issue Date or such shorter period of time as permitted by Rule 144
under the Act or any successor provision thereunder and (y) such later
date, if any, as may be required by applicable laws, any Security, including any Security
issued in exchange therefor or in lieu thereof, shall be deemed a “Restricted Security” and shall be subject to the
restrictions on transfer provided in the legends set forth on the face of the
form of Security in Section 2.02; provided, however,
that the term “Restricted Security” shall not
include any Securities as to which restrictions have been terminated in
accordance with Section 3.06.  All
Securities shall bear the applicable legends set forth on the face of the form
of Security in Section 2.02.  Except
as provided in Section 3.06 and Section 3.10, the Trustee shall not
issue any unlegended Security until it has received an Officers’ Certificate
from the Company directing it to do so.

 

ARTICLE 3

THE SECURITIES

 

Section 3.01.  Title and Terms; Payments.  The aggregate Principal Amount of
Securities that may be authenticated and delivered under this Indenture is
initially limited to $100,000,000, except for Securities authenticated and delivered
upon registration or transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Sections 3.05, 3.06, 3.07, 3.10, 5.06 or 7.05.  The Company may, from time to time after the
execution of this Indenture, execute and deliver to the Trustee for
authentication Additional Securities of an unlimited aggregate Principal
Amount, and the Trustee shall thereupon authenticate and deliver said
Additional Securities to or upon the written order of the Company, without any
further action by the Company hereunder; provided however that the Company may
issue Additional Securities only if (1) such Additional Securities are
fungible with the Initial Securities hereby for U.S. federal income tax
purposes; (2) such Additional Securities have the same CUSIP number as the
Initial Securities; and (3) the Trustee receives an Officers’ Certificate
to the effect 

 

30

 

that such issuance of Additional Securities complies
with the provisions of this Indenture, including each provision of this
paragraph.

 

The
Securities shall be known and designated as the “5.00% Convertible Senior Notes
due 2014” of the Company.  The Principal
Amount shall be payable at the Stated Maturity.

 

The
Principal Amount of and interest on Global Securities registered in the name of
the Depository or its nominee shall be paid by wire transfer in immediately
available funds to the Depository or its nominee, as applicable.

 

The
Principal Amount of Physical Securities shall be payable at the Corporate Trust
Office and at any other office or agency maintained by the Company for such
purpose.  Interest on Physical Securities
will be payable either by check mailed to such Holders or, at the Company’s
option and upon application by a Holder to the Security Registrar not later
than two days prior to the relevant Regular Record Date for such interest
payment, by wire transfer in immediately available funds to such Holder’s
account within the United States of America, which application shall remain in
effect until the Holder notifies the Security Registrar to the contrary in
writing.

 

Section 3.02.  Ranking. 
The Securities are general unsecured and unsubordinated
obligations of the Company.

 

Section 3.03.  Denominations.  The Securities shall be issuable
only in registered form without coupons and in denominations of $2,000 and any
multiple of $1,000 in excess thereof.

 

Section 3.04.  Execution, Authentication, Delivery and
Dating.  The Securities shall
be executed on behalf of the Company by its Chief Executive Officer, its
President, its Chief Financial Officer its Treasurer, any Assistant Treasurer,
the Secretary or any of its Vice Presidents.

 

Securities
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.

 

At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Securities executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities.  The Company
Order shall specify the amount of Securities to be authenticated, and shall
further specify the amount of such Securities to be issued as a Global Security
or as Physical Securities.  The Trustee 

 

31

 

in accordance with such Company Order shall
authenticate and deliver such Securities as in this Indenture provided and not
otherwise.

 

Each
Security shall be dated the date of its authentication.

 

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

 

Section 3.05.  Temporary Securities.  Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of
such Securities; provided, that any such temporary
Securities shall bear legends on the face of such Securities as set forth in Section 2.02.

 

If
temporary Securities are issued, the Company will cause definitive Securities
to be prepared without unreasonable delay. 
After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section 4.02,
without charge to the Holder.  Upon
surrender for cancellation of any one or more temporary Securities, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like Principal Amount of Physical Securities of authorized
denominations.  Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as Physical Securities.

 

Section 3.06.  Registration; Registration of Transfer and
Exchange; Restrictions on Transfer.

 

(a)           The Company shall cause to
be kept at the applicable Corporate Trust Office of the Trustee a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 4.02 being herein sometimes collectively referred to
as the “Security Register”) in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities.  The Trustee is hereby appointed “Security
Registrar” (the “Security Registrar”) for the
purpose of registering Securities and transfers of Securities as herein
provided.

 

32

 

Upon
surrender for registration of transfer of any Security at an office or agency
of the Company designated pursuant to Section 4.02 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denominations and of a like aggregate Principal Amount and
tenor, each such Security bearing such restrictive legends as may be required
by this Indenture (including Sections 2.02, 2.05 and 3.10).

 

At the
option of the Holder and subject to the other provisions of this Section 3.06
and to Section 3.10, Securities may be exchanged for other Securities of
any authorized denominations and of a like aggregate Principal Amount and
tenor, upon surrender of the Securities to be exchanged at such office or
agency.  Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.

 

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

 

Every
Security presented or surrendered for registration of transfer or for exchange
shall (if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.  As
a condition to the registration of transfer of any Restricted Securities, the
Company or the Trustee may require evidence satisfactory to them as to the
compliance with the restrictions set forth in the legend on such Securities.

 

Except
as provided in the following sentence and in Section 3.10, all Securities
originally issued hereunder and all Securities issued upon registration of
transfer or exchange or replacement thereof shall be Restricted Securities and
shall bear the legends required by Sections 2.02 and 2.05, unless the Company
shall have delivered to the Trustee (and the Security Registrar, if other than
the Trustee) a Company Order stating that the Security is not a Restricted
Security and may be issued without such legend thereon.  Securities that are issued upon registration
of transfer of, or in exchange for, Securities that are not Restricted
Securities shall not be Restricted Securities and shall not bear such legend.

 

No
service charge shall be made for any registration of transfer or exchange of
Securities, but the Company and the Security Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of 

 

33

 

Securities, other than exchanges pursuant to Section 3.05
not involving any transfer.

 

Neither
the Company nor the Security Registrar shall be required to exchange or
register a transfer of any Security (i) during a period beginning at the
Open of Business 15 days before any selection for redemption of Securities and
ending at the Close of Business on the earliest date on which the relevant
Notice of Optional Redemption is deemed to have been given to all Holders of
Securities to be redeemed, (ii) after any Notice of Optional Redemption
has been given with respect to such Security until the Redemption Date
specified in such Notice, except that where such notice provides that such
Security is to be redeemed only in part, the Company and the Security Registrar
shall be required to exchange or register a transfer of the portion thereof not
to be redeemed (iii) that has been surrendered for conversion or (iv) as
to which a Fundamental Change Purchase Notice has been delivered and not
withdrawn, except that where such Fundamental Change Purchase Notice provides
that such Security is to be purchased only in part, the Company and the
Security Registrar shall be required to exchange or register a transfer of the
portion thereof not to be purchased.

 

(b)           Beneficial ownership of
every Restricted Security shall be subject to the restrictions on transfer
provided in the legends required to be set forth on the face of each Restricted
Security pursuant to Sections 2.02 and 2.05, unless such restrictions on
transfer shall be terminated in accordance with this Section 3.06(b) or
Section 3.10.  The Holder of each
Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by
such restrictions on transfer.

 

The
restrictions imposed by this Section 3.06 and by Sections 2.02, 2.05
and 3.10 upon the transferability of any particular Restricted Security shall
cease and terminate upon delivery by the Company to the Trustee of an Officers’
Certificate stating that such Restricted Security has been transferred in
compliance with Rule 144 under the Securities Act (or any successor
provision thereto).  Any Restricted
Security as to which the Company has delivered to the Trustee an Officers’
Certificate stating that such restrictions on transfer shall have expired in
accordance with their terms or shall have terminated may, upon surrender of
such Restricted Security for exchange to the Security Registrar in accordance
with the provisions of this Section 3.06, be exchanged for a new Security,
of like tenor and aggregate Principal Amount, which shall not bear the
restrictive legends required by Sections 2.02 and 2.05. The Company shall
inform the Trustee in writing on the effective date of any resale registration
statement registering the Securities under the Securities Act.  The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
aforementioned resale registration statement.

 

34

 

As
used in the preceding two paragraphs of this Section 3.06, the term “transfer” encompasses any sale, pledge, transfer or other
disposition of any Restricted Security.

 

(c)           Neither the Trustee, the
Security Registrar nor any of their respective agents shall (i) have any
duty to monitor compliance with or with respect to any federal or state or
other securities or tax laws or regulations or (ii) have any duty to
obtain documentation relating to any transfers or exchanges other than as
specifically required hereunder.

 

(d)           To the extent that any
Additional Securities issued pursuant to Section 3.01 are not Restricted
Securities, the restrictions on transfer set forth in this Section 3.06
shall not apply to such Additional Securities.

 

Section 3.07.  Mutilated, Destroyed, Lost and Stolen
Securities.  If any mutilated
Security is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of
like tenor and Principal Amount and bearing a number not contemporaneously
outstanding.

 

If
there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and the Trustee shall authenticate and deliver, in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and Principal Amount and bearing a number not contemporaneously
outstanding.

 

In
case any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.

 

Upon
the issuance of any new Security under this Section 3.07, the Company may
require payment by the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every
new Security issued pursuant to this Section 3.07 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

 

35

 

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

 

Section 3.08.  Persons Deemed Owners.  Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee, the Security
Registrar and any agent of the Company, the Trustee or the Security Registrar
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of the principal of such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee, the Security Registrar nor any
agent of the Company, the Trustee or the Security Registrar shall be affected
by notice to the contrary.

 

Section 3.09.  Book-Entry Provisions for Global Securities.

 

(a)           The Global Securities
initially shall (i) be registered in the name of the Depositary or the
nominee of such Depositary, (ii) be delivered to the Trustee as custodian
for the Depositary and (iii) bear legends on the face of the Securities in
the form set forth in Section 2.02.

 

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

 

(b)           Transfers of the Global
Securities shall be limited to transfers in whole, but not in part, to the
Depositary, its successors or their respective nominees.  Interests of beneficial owners in a Global
Security may be transferred or exchanged, in whole or in part, for Physical
Securities in accordance with the rules and procedures of the Depositary
and the provisions of Section 3.10. 
In addition, Physical Securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global Securities if (i) such
Depositary has notified the Company that the Depositary (A) is unwilling
or unable to continue as Depositary for such Global Security or (B) has
ceased to be a clearing agency registered under the Exchange Act when the
Depositary is required to be so registered to act as such Depositary and, in
either such case, no successor Depositary shall have been appointed within 90
days of such 

 

36

 

notification, (ii) there shall have occurred
and be continuing an Event of Default with respect to such Global Security and
the outstanding Securities shall have become due and payable pursuant to Section 8.02
and the Trustee requests that Physical Securities be issued or (iii) the
Company, at its option, notifies the Trustee that it elects to cause the
issuance of Physical Securities, subject to applicable procedures of the
Depositary.

 

(c)           In connection with any
transfer or exchange of a portion of the beneficial interest in the Global
Security to beneficial owners pursuant to paragraph (b) above, the
Security Registrar shall (if one or more Physical Securities are to be issued)
reflect on its books and records the date and a decrease in the Principal
Amount of the Global Security in an amount equal to the Principal Amount of the
beneficial interest in the Global Security to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Securities of like tenor and Principal Amount.

 

(d)           In connection with the
transfer of the entire Global Security to beneficial owners pursuant to
paragraph (b) above, the Global Security shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
the Trustee shall authenticate and deliver, to each beneficial owner identified
by the Depositary in exchange for its beneficial interest in the Global
Security, an equal aggregate Principal Amount of Physical Securities of
authorized denominations and like tenor.

 

(e)           Any Physical Security
constituting a Restricted Security delivered in exchange for an interest in the
Global Security pursuant to paragraph (c) or (d) above shall,
except as otherwise provided by paragraph (c) of Section 3.10, bear
the legend regarding transfer restrictions applicable to the Physical
Securities on its face in the form set forth in Section 2.02.

 

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

 

Section 3.10.  Cancellation and Transfer Provisions.  The Company at any time may
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder that the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Securities
previously authenticated hereunder which the Company has not issued and
sold.  The Trustee shall cancel and
dispose of all Securities surrendered for registration of transfer, exchange,
payment, purchase, repurchase, redemption, conversion (pursuant to Article 6
hereof) or cancellation in accordance with its customary practices.  If the Company shall acquire any of the
Securities, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness 

 

37

 

represented by such Securities unless and until the
same are delivered to the Trustee for cancellation.  The Securities so acquired, while held by or
on behalf of the Company or any of its Subsidiaries, shall not entitle the
Holder thereof to convert the Securities. 
The Company may not issue new Securities to replace Securities it has
paid in full or delivered to the Trustee for cancellation.

 

(a)           Transfers to QIBs.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB:

 

(i)    the Security Registrar shall
register the transfer if such transfer is being made by a proposed transferor
who has checked the box provided for on the form of Security stating, or has
otherwise advised the Company and the Security Registrar in writing, that the
sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Security stating, or has otherwise advised the Company and the Security
Registrar in writing, that it is purchasing the Security for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as it
has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A; and

 

(ii)   if the proposed transferee
is an Agent Member, and the Securities to be transferred consist of Physical
Securities which after transfer are to be evidenced by an interest in the
Global Security, upon receipt by the Security Registrar of instructions given
in accordance with the Depositary’s and the Security Registrar’s procedures,
the Security Registrar shall reflect on its books and records the date and an
increase in the Principal Amount of the Global Security in an amount equal to
the aggregate Principal Amount of the Physical Securities to be transferred,
and the Trustee shall cancel the Physical Securities so transferred.

 

(b)           Private Placement Legend.  Upon the registration of transfer, exchange
or replacement of Securities not bearing the legends required by Sections 2.02
and 2.05, the Security Registrar shall deliver Securities that do not bear such
legends. Upon the registration of transfer, exchange or replacement of
Securities bearing the legends required by Sections 2.02 and 2.05, the Security
Registrar shall deliver only Securities that bear such legends unless there is
delivered to the Security Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the 

 

38

 

related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.

 

(c)           General.  By its acceptance of any Security bearing the
legends required by Sections 2.02 and 2.05, each Holder of such a Security acknowledges
the restrictions on transfer of such Security set forth in this Indenture and
in such legends and agrees that it will transfer such Security only as provided
in this Indenture.

 

The Security Registrar shall retain, in accordance
with its customary procedures, copies of all letters, notices and other written
communications received pursuant to this Section 3.10.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Security Registrar.

 

Section 3.11.  CUSIP Numbers.  In issuing the Securities, the
Company shall use a restricted CUSIP number if then generally in use, and, if
so, the Trustee shall use CUSIP numbers in notices of redemption as a
convenience to Holders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.  At such time as the Company notifies the
Trustee to remove the restrictive legend required by Section 2.02 and Section 2.05
from the Securities, such legend will be deemed removed from any Global
Security and an unrestricted CUSIP number for the Securities will be deemed to
be the CUSIP number for the Securities. 
The Company will promptly notify the Trustee of any change in the CUSIP
numbers.

 

ARTICLE 4

PARTICULAR COVENANTS OF THE COMPANY

 

Section 4.01.  Payment of Principal and Interest.  The Company covenants and agrees
that it shall duly and punctually pay or cause to be paid the principal of and
interest (including Additional Interest, if any), on each of the Securities at
the places, at the respective times and in the manner provided herein and in
the Securities.

 

(a) The Securities will bear interest at a rate
of 5.00% per year. Interest on the Securities will accrue from and including August 4,
2009, or from the most recent date to which interest has been paid or duly
provided for.  Interest will be payable
semiannually in arrears on each Interest Payment Date.  Pursuant to 

 

39

 

Section 8.03 of this
Indenture, in certain circumstances, the Holders of Securities shall be
entitled to receive Additional Interest.

 

(b) Subject to Section 5.01(b) of
this Indenture, interest (including Additional Interest, if any) will be paid
to the person in whose name a Security is registered at the Close of Business
on the February 1 or August 1, as the case may be, immediately
preceding the relevant Interest Payment Date. Interest on the Securities will
be computed on the basis of a 360-day year composed of twelve 30-day months.

 

Section 4.02.  Maintenance of Office or Agency.  The Company shall maintain an
office or agency where the Securities may be surrendered for registration of
transfer or exchange or for presentation for payment or for conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served.  The
Company shall 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, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.

 

The
Company may also from time to time designate co-registrars and one or more
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.

 

The
Company will give prompt written notice of any such designation or rescission
and of any change in the location of any such other office or agency.

 

The
Company hereby initially designates the Trustee as Paying Agent, Security
Registrar, Custodian and Conversion Agent and the Corporate Trust Office.

 

So
long as the Trustee is the Security Registrar, the Trustee agrees to mail, or
cause to be mailed, the notices set forth in Section 10.11(a) and the
third paragraph of Section 10.12. 
If co-registrars have been appointed in accordance with this Section,
the Trustee shall mail such notices only to the Company and the Holders of
Securities it can identify from its records.

 

Section 4.03.  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 10.12, a Trustee, so that there shall at
all times be a Trustee hereunder.

 

40

 

Section 4.04.  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 Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 4.04 that such Paying Agent will
:

 

(i)    comply with the duties
applicable to a paying agent under the Trust Indenture Act; and

 

(ii)   during the continuance of
any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.

 

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

 

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

 

(c)           Anything in this Section 4.04
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 4.04,
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.

 

41

 

(d)           Anything in this Section 4.04
to the contrary notwithstanding, the agreement to hold sums in trust as
provided in this Section 4.04 is subject to Section 12.03 and Section 12.04.

 

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

 

Section 4.05.  Existence. 
Subject to Article 9, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and rights (charter and statutory); provided,
however, that the Company shall not be required to preserve any such
right if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders of the
Securities.

 

Section 4.06.  Rule 144A Information Requirement.  Within the period prior to the
expiration of the holding period applicable to sales thereof under Rule 144(d) under
the Securities Act (or any successor provision), the Company covenants and
agrees that it shall, during any period in which it is not subject to Section 13
or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Securities or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Securities or such Common Stock
designated by such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request
of any holder or beneficial holder of the Securities or such Common Stock and
it will take such further action as any holder or beneficial holder of such
Securities or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial holder to sell
its Securities or Common Stock without registration under the Securities Act
within the limitation of the exemption provided by Rule 144A, as such rule may
be amended from time to time.  Upon the
request of any holder or any beneficial holder of the Securities or such Common
Stock, the Company will deliver to such holder a written statement within a
reasonable time as to whether it has complied with such requirements.

 

Section 4.07.  Resale of Certain Securities.  During the period beginning on the
Issue Date and ending on the date that is one year thereafter, the Company
shall not, and shall not permit any of its “affiliates” (as defined in Rule 144
or any successor provision thereto), to resell any Securities which constitute “restricted
securities” (as defined in Rule 144 or any successor provision thereto)
that have been reacquired by any of them. 
The Trustee shall have no responsibility in respect of the Company’s
performance of its agreement in the preceding sentence.

 

42

 

Section 4.08.  Commission Filings and Reports.  The Company covenants to comply
with Section 314(a) of the Trust Indenture Act as it relates to
reports, information and documents that the Company may be required to file
with the Trustee pursuant to such Section 314(a) and with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act or
otherwise by the Exchange Act, the Trust Indenture Act or other rules and
regulations of the Commission.  The
Company covenants that any documents or reports that the Company may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act shall be filed by the Company with the Trustee within 15
calendar days after the same is filed with the Commission (giving effect to any
grace period provided by Rule 12b-25 under the Exchange Act); provided that in each case the delivery of materials to the
Trustee by electronic means or filing of documents pursuant to the Commission’s
“EDGAR” or the “IDEA” system (or any successor electronic filing system) shall
be deemed to constitute “filing” with the Trustee for purposes of this Section 4.08.  Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

Section 4.09.  Book-Entry System.  If the Securities cease to trade
in the Depositary’s book-entry settlement system, the Company covenants and
agrees that it shall use reasonable efforts to make such other book entry
arrangements that it determines are reasonable for the Securities.

 

Section 4.10.  Additional Interest.  If at any time Additional Interest
becomes payable by the Company pursuant to Section 8.03, the Company shall
promptly deliver to the Trustee a certificate to that effect and stating (i) the
amount of such Additional Interest that is payable and (ii) the date on
which such Additional Interest is payable. 
Unless and until a Trust Officer of the Trustee receives such a
certificate, the Trustee may assume without inquiry that no Additional Interest
is payable.  If the Company has paid
Additional Interest directly to the Persons entitled to such Additional
Interest, the Company shall deliver to the Trustee a certificate setting forth
the particulars of such payment.

 

Section 4.11.  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
(including Additional Interest, if any) on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture, and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, 

 

43

 

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 4.12.  Compliance Certificate.  The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, an Officers’ Certificate, stating whether or not to the
knowledge of the signer thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and the status thereof of which the signer may have
knowledge.

 

Any
notice required to be given under this Section 4.12 shall be delivered to
a Trust Officer of the Trustee at its Corporate Trust Office.

 

ARTICLE 5

OPTIONAL REDEMPTION

 

Section 5.01.  Right to Redeem.

 

(a)           The Securities may be
redeemed in whole or in part at the option of the Company at any time after August 20,
2012, if the Last Reported Sale Price has been greater than or equal to 150% of
the Conversion Price then in effect for at least 20 Trading Days during any 30
consecutive Trading Day period (such redemption, an “Optional
Redemption”).

 

(b)           If the Company elects to
redeem Securities pursuant to an Optional Redemption, the Redemption Price
shall be payable in cash and shall be equal to 100% of the Principal Amount of
Securities redeemed, together with accrued and unpaid interest (including
Additional Interest, if any) to, but excluding, the Redemption Date; provided, however, that if Securities are redeemed on a date
that is after a Regular Record Date and prior to the corresponding Interest
Payment Date, the interest payable in respect of such Interest Payment Date
shall be payable to Holders to whom the Principal Amount of the Securities
being redeemed pursuant to the Optional Redemption is paid without regard to
the Holders of record on the relevant Regular Record Date for the corresponding
Interest Payment Date.

 

(c)           The Company may not redeem
any Securities pursuant to an Optional Redemption unless all accrued and unpaid
interest thereon (including Additional Interest, if any) has been or is
simultaneously paid for all semi-annual 

 

44

 

periods or portions thereof terminating prior to the
Redemption Date.  No Securities of a
Principal Amount of $2,000 or less shall be redeemed in part.

 

(d)           No Securities may be
redeemed by the Company pursuant to an Optional Redemption if the Principal
Amount of the Securities has been accelerated, and such acceleration has not
been rescinded, on or prior to the Redemption Date.

 

(e)           Except as provided in this Section 5.01,
the Securities shall not be redeemable at the option of the Company.

 

Section 5.02.  Selection of Securities to be Redeemed.  If less than all the Securities are to be redeemed
pursuant to an Optional Redemption, the Trustee shall select the Securities to
be redeemed (in Principal Amounts of $1,000 or multiples of $1,000 in excess
thereof, provided that the portion not so redeemed is in a minimum Principal
Amount of $2,000), by lot, or on a pro rata basis or by any other method the
Trustee considers fair and appropriate (so long as such method is not
prohibited by the rules of The Nasdaq Global Select Market or any  exchange on which the Common Stock or other
shares of Capital Stock of the Company are then listed, as applicable).

 

The Trustee shall make the selection from outstanding
Securities not previously called for redemption within 7 days from its receipt
of the Notice of Optional Redemption from the Company delivered pursuant to Section 5.03.

 

Section 5.03.  Notice of Optional Redemption.  At least 30 days but not more than
60 days before a Redemption Date in connection with an Optional Redemption, the
Company shall mail a notice of redemption (a “Notice of
Optional Redemption”) by first-class mail, postage prepaid, to the
Trustee, the Paying Agent and each Holder of Securities to be redeemed.

 

The
Notice of Optional Redemption shall specify the Securities to be redeemed and
shall state:

 

(a)           the Redemption Date;

 

(b)           the Redemption Price;

 

(c)           the Applicable Conversion
Rate and approximate Conversion Price;

 

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

 

(e)           that Securities called for
redemption may be converted at any time before the Close of Business on the
Trading Day immediately preceding the Redemption Date unless the Company fails
to pay the Redemption Price;

 

45

 

(f)            that Holders who want to
convert Securities must satisfy the requirements set forth therein and in this
Indenture;

 

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

 

(h)           if fewer than all the
outstanding Securities are to be redeemed, the certificate numbers (if such
Securities are held other than in global form) and Principal Amounts of the
particular Securities to be redeemed;

 

(i)            that, unless the Company
defaults in making payment of such Redemption Price, interest will cease to
accrue on and after the Redemption Date; and

 

(j)            the CUSIP number of the
Securities.

 

At the
Company’s written request delivered at least 30 days prior to the date such
Notice of Optional Redemption is to be given (unless a shorter time period
shall be acceptable to the Trustee), the Trustee shall give the Notice of
Optional Redemption to each Holder of Securities to be redeemed in the Company’s
name and at the Company’s expense.

 

Section 5.04.  Effect of Notice of Optional Redemption.  Once a Notice of Optional
Redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price stated in the Notice of
Optional Redemption except for Securities that are converted in accordance with
the terms of this Indenture.  Upon surrender
to the Paying Agent, such Securities shall be paid at the Redemption Price
stated in the Notice of Optional Redemption.

 

Section 5.05. 
Deposit of Redemption Price.  Prior to 10:00 a.m. (New York City
time) on a Redemption Date in connection with an Optional Redemption, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the Redemption Price of all Securities to be
redeemed on that date other than Securities or portions of Securities called
for redemption which on or prior thereto have been delivered by the Company to
the Trustee for cancellation or have been converted.  The Paying Agent shall as promptly as
practicable return to the Company any money not required for that purpose
because of conversion of Securities pursuant to Article 6.  If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.

 

If the
Paying Agent holds money sufficient to pay the Redemption Price with respect to
any Securities for which a Notice of Optional Redemption has 

 

46

 

been given, then, immediately on and after the
Redemption Date, interest on such Securities shall cease to accrue, whether or
not the Securities are delivered to the Paying Agent, and all other rights of
the Holders of such Securities shall terminate, other than the right to receive
the Redemption Price of such Security. 
Nothing herein shall preclude the withholding of any taxes required by
law to be withheld or deducted.

 

Section 5.06.  Securities Redeemed in Part.  Upon surrender of a Security that
is redeemed in part pursuant to an Optional Redemption, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder a new
Security in an authorized denomination, which shall be $2,000 or a multiple of
$1,000 in excess thereof, equal in Principal Amount to the unredeemed portion
of the Security surrendered. The Company shall not be required to (i) issue,
register the transfer of or exchange any Securities during a period beginning
at the Open of Business 15 days before any selection for redemption of
Securities and ending at the Close of Business on the earliest date on which
the relevant Notice of Optional Redemption is deemed to have been given to all
Holders of Securities to be redeemed or (ii) register the transfer of or
exchange any Securities so selected for redemption, in whole or in part, except
the unredeemed portion of any Securities being redeemed in part.

 

If the
Trustee selects a portion of a Holder’s Securities for Optional Redemption and
the Holder converts a portion of such Holder’s Securities, the converted
portion of such Holder’s Securities shall be deemed to be from the portion of
the Holder’s Securities selected for redemption.

 

ARTICLE 6

CONVERSION

 

Section 6.01.  Right to Convert.

 

(a)           Subject to and upon
compliance with the provisions of this Indenture, each Holder shall have the
right, at such Holder’s option, at any time prior to the Close of Business on
the Trading Day immediately preceding the Stated Maturity, to convert the
Principal Amount of any such Securities, or any portion of such Principal
Amount which is $1,000 or a multiple thereof, into Common Stock, provided that
the amount not so converted is in a minimum Principal Amount of $2,000.

 

(b)           Notwithstanding the
foregoing, if such Security is called for redemption under Section 5.01,
such conversion right shall terminate at the Close of Business on the Trading
Day immediately prior to the Redemption Date for such Security (unless the
Company shall default on payment of the Redemption Price, when due, in which
case the conversion right shall terminate at the Close of 

 

47

 

Business on the date such default is cured and such
Security is redeemed). If a Holder of Securities has submitted Securities for
purchase under Section 7.01, the Holder may convert such Securities only
if the Holder first withdraws its Fundamental Change Purchase Notice pursuant
to Section 7.03.

 

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

 

(d)           A Holder of Securities is
not entitled to any rights of a holder of Common Stock until such Holder has
converted its Securities, and only to the extent such Securities are deemed to
have been converted into Common Stock pursuant to this Article 6.

 

Section 6.02.  Conversion Procedure.

 

(a)           Each Security shall be
convertible at the office of the Conversion Agent.

 

(b)           In order to exercise the
conversion right with respect to any interest in Global Securities, the Holder
must complete the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, furnish appropriate endorsements
and transfer documents if required by the Company or the Trustee or Conversion
Agent, and pay the funds, if any, required by Section 6.03 and any
transfer taxes if required pursuant to Section 6.08.  In order to exercise the conversion right
with respect to any Physical Securities, the Holder of any such Securities to
be converted, in whole or in part, shall:

 

(i)    complete and manually sign
the conversion notice provided on the back of the Security (the “Conversion Notice”) or facsimile of the
conversion notice and deliver such notice, which is irrevocable, to the
Conversion Agent;

 

(ii)   surrender the Security to
the Conversion Agent;

 

(iii)  if required,
furnish appropriate endorsements and transfer documents,

 

(iv)  if required, pay any
transfer or similar tax; and

 

(v)   if required, pay funds equal
to interest payable (including Additional Interest, if any) on the Next
Interest Payment Date to which the Holder is not entitled as required by Section 6.03(b).

 

The date
on which the Holder satisfies all of the applicable requirements set forth
above is the “Conversion Date.”

 

48

 

(c)           On the third Business Day
immediately following the Conversion Date, the Company shall issue and shall
deliver to the Holder at the office of the Conversion Agent, a certificate or
certificates for the number of full shares of Common Stock issuable in respect
of such conversion in accordance with the provisions of this Article 6.  In case any Securities of a denomination
greater than $2,000 shall be surrendered for partial conversion, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
the Securities so surrendered, without charge to him, new Securities in
authorized denominations in an aggregate Principal Amount equal to the
unconverted portion of the surrendered Securities, provided that the portion
not so converted must be in a minimum Principal Amount of $2,000.

 

Each conversion shall be deemed to have been effected
as to any such Securities (or portion thereof) on the date on which the
requirements set forth above in Section 6.01(b) have been satisfied
as to such Securities (or portion thereof); provided, however,
that the person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become as of the relevant Conversion Date the Holder of record of the shares of
Common Stock represented thereby; provided further,
that in case of any such surrender on any date when the share transfer books of
the Company shall be closed, the person or persons in whose name the
certificate or certificates for such shares are to be issued shall be deemed to
have become the record Holder thereof for all purposes on the next day on which
such share transfer books are open, but such conversion shall be at the
Conversion Rate in effect on the date upon which such Securities shall be
surrendered.

 

(d)           Upon the conversion of an
interest in Global Securities, the Trustee (or other Conversion Agent appointed
by the Company) shall make a notation on such Global Securities as to the
reduction in the Principal Amount represented thereby. The Company shall notify
the Trustee in writing of any conversions of Securities effected through any
Conversion Agent other than the Trustee.

 

(e)           Each share certificate
representing shares of Common Stock issued upon conversion of the Securities
that are Restricted Securities shall bear the legend in substantially the form
of Exhibit B hereto.

 

Section 6.03.  Settlement upon Conversion.

 

(a)           With respect to any
conversion of Securities, if any, the Company shall, subject to the provisions
of this Article 6, deliver to converting Holders a number of shares of
Common Stock equal to the Applicable Conversion Rate multiplied by the
Principal Amount of Securities being converted divided by $1,000.

 

49

 

(b)           Upon conversion, Holders
shall not receive any separate cash payment for accrued and unpaid interest
(including Additional Interest, if any), except as described in this Section 6.03(b).  If Securities are converted after the Close
of Business on a Regular Record Date for the payment of interest, Holders of
such Securities at the Close of Business on such Regular Record Date will
receive the interest (including Additional Interest, if any) payable on such
Securities on the corresponding Interest Payment Date notwithstanding the
conversion.  Securities surrendered for
conversion during the period from the Close of Business on any Regular Record
Date to the Open of Business on the immediately following Interest Payment Date
must be accompanied by funds equal to the amount of interest (including
Additional Interest, if any) payable on such Interest Payment Date for the
Securities so converted; provided that
no such payment need be made (i) for conversions following the Regular
Record Date immediately preceding the Stated Maturity; (ii) if the Company
has specified a Redemption Date that is after a Regular Record Date on or prior
to the corresponding Interest Payment Date; (iii) if the Company has
specified a Fundamental Change Purchase Date that is after a Regular Record
Date and on or prior to the corresponding Interest Payment Date; or (iv) to
the extent of any overdue interest, if any overdue interest exists at the time
of conversion with respect to such Security.

 

(c)           The Company shall not issue
fractional shares upon conversion of the Securities.  If multiple Securities shall be surrendered
for conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion (and the number of fractional shares, if any,
for which cash shall be delivered) shall be computed on the basis of the
aggregate Principal Amount of the Securities (or specified portions thereof to
the extent permitted hereby) so surrendered. 
If any fractional share would be issuable upon the conversion of any
Securities, the Company shall make payment an amount in cash for the current
market value of the fractional shares. 
The current market value of a fractional share shall be determined
(calculated to the nearest 1/1000th of a share) by multiplying the Last
Reported Sale Price on the relevant Conversion Date by such fractional share
and rounding the product to the nearest whole cent.

 

(d)           By delivery to the Holder of
the full number of shares of Common Stock, together with any cash payment for
fractional shares, issuable upon conversion, the Company will be deemed to
satisfy in full its obligation to pay the Principal Amount of the Securities
and all accrued and unpaid interest (and Additional Interest, if any) to, but
not including, the Conversion Date. Upon conversion of the Securities, all
accrued and unpaid interest (and Additional Interest, if any) to, but not
including, the Conversion Date will be deemed to be paid in full rather than
canceled, extinguished or forfeited, unless such conversion occurs between a
Regular Record Date and the Interest Payment Date to which it relates, in which
case such payment shall be made to the Holder of the converted Securities as of
the Close of Business on the Regular Record Date.

 

50

 

Section 6.04. 
Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted
from time to time by the Company if any of the following events occurs as
described below, except that the Company will not make any adjustment to the Conversion
Rate if Holders of Securities participate, at the same time as holders of the
Common Stock, as a result of holding the Securities, in any of the transactions
described in this Section 6.04 without having to convert their Securities
as if such Holders held a number of shares of Common Stock equal to the
Applicable Conversion Rate multiplied by the aggregate Principal Amount of
Securities held by such Holders divided by $1,000.   For the purpose of this Section 6.04, “effective date” means the first date on which the shares
trade on the applicable exchange or in the applicable market, regular way,
reflecting the transaction.

 

(a)           If the Company issues shares
of Common Stock as a dividend or distribution on the Common Stock, or the
Company effects a share split or share combination, the Conversion Rate will be
adjusted based on the following formula:

 

 

where

 

	
  CR0

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CR1

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OS0

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OS1

  	
   

  	
  =

  	
   

  	
  the number of the shares of Common Stock
  outstanding immediately after the Open of Business on such Ex-Dividend Date
  or effective date, as applicable.

  

 

Such adjustment shall become
effective immediately after the Open of Business on the Ex-Dividend Date for
such dividend or distribution, or the effective date for such share split or
share combination. If any dividend or distribution of the type described in
this Section 6.04(a) is declared that results in an adjustment 

 

51

 

pursuant to this Section 6.04(a) but
is not so paid or made, or the outstanding shares of Common Stock are not split
or combined, as the case may be, the Conversion Rate shall be immediately
readjusted, effective as of the date the Company’s Board of Directors
determines not to pay such dividend or distribution, or to effect such split or
combination to the Conversion Rate that would then be in effect if such
dividend, distribution or share split or share combination had not been
declared or announced.

 

(b)           If the Company distributes
to all or substantially all Holders of the Common Stock any rights or warrants
(other than pursuant to the Company’s Rights Agreement (as amended) or any
successor plan thereto (the “Rights Plan”))
entitling them for a period of not more than 45 calendar days after the
announcement date of such distribution to subscribe for or purchase shares of
Common Stock, at a price per share less than the average of the Last Reported
Sale Prices for the 10 consecutive Trading-Day period ending on the Trading Day
immediately preceding the date of announcement of such distribution, the
Conversion Rate will be adjusted based on the following formula:

 

 

where

 

	
  CR0

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CR1

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately after the Open of Business on such Ex-Dividend Date;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OS0

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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 such rights or warrants divided by the
  average of the Last Reported Sale Prices of the Common Stock over the 10
  consecutive Trading Day period ending on the Trading Day immediately
  preceding the date of announcement of the issuance of such rights or
  warrants.

  

 

52

 

Such adjustment shall be
successively made whenever any such rights or warrants are distributed and
shall become effective immediately after the Open of Business on the
Ex-Dividend Date for such distribution. If such rights or warrants are not so
issued, the Conversion Rate will remain the Conversion Rate that would then be
in effect if such Ex-Dividend Date for such distribution had not been fixed. In
addition, to the extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate that would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered.

 

For purposes of this clause
(b), in determining whether any rights or warrants entitle the Holders to
subscribe for or purchase shares of Common Stock at less than such average of
the Last Reported Sale Prices, and in determining the aggregate offering price
of such 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 Company’s Board of Directors.

 

(c)           If the Company distributes
shares of its Capital Stock, evidences of its indebtedness, other assets or
property of the Company or rights or warrants to acquire the Company’s Capital
Stock or other securities, to all or substantially all Holders of Common Stock,
excluding

 

(i)    dividends or distributions
and rights or warrants described in Section 6.04(a) or Section 6.04(b) above
or Section 6.04(e);

 

(ii)   except as otherwise
described below, rights issued pursuant to the Company’s Rights Plan, or the
detachment of such rights under the terms of such Rights Plan;

 

(iii)  dividends or
distributions paid exclusively in cash, including as described in Section 6.04(d) below;
and

 

(iv)  dividends or distributions
in connection with a Merger Event, provided that any such dividend or
distribution becomes Reference Property upon such transaction; and

 

(v)   Spin-Offs to which the
provisions set forth below in this Section 6.04(c) apply;

 

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

 

53

 

 

where

 

	
  CR0

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CR1

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately after the Open of Business on such Ex-Dividend Date;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SP0

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FMV

  	
   

  	
  =

  	
   

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

  

 

provided that if “FMV” as set forth above is
equal to or greater than “SP0” as set
forth above, in lieu of the foregoing adjustment, adequate provision will be
made so that each Holder of Securities shall receive on the date on which the
distributed property is distributed to Holders of the Common Stock, for each
$1,000 Principal Amount of the Securities, 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 for such distribution; provided further that if the Company’s Board of Directors
determines “FMV” for purposes of the foregoing adjustment by reference to the
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the average of the Last
Reported Sale Prices of the Common Stock over the ten consecutive Trading-Day
period ending on the Trading Day immediately preceding the Ex-Dividend Date for
such distribution.

 

Such adjustment shall
become effective immediately prior to the Open of Business on the Ex-Dividend
Date for such distribution.

 

With
respect to an adjustment pursuant to this Section 6.04(c) where there
has been a payment of a dividend or other distribution on Common Stock in
shares of Capital Stock of any class or series, or similar equity interest, of
or 

 

54

 

relating to a Subsidiary or other business unit ( “Spin-Off”), the Conversion Rate will be increased based on
the following formula:

 

 

where

 

	
  CR0

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately prior to the end of the Valuation Period (as defined
  below);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CR1

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately after the end of the Valuation Period (as defined below);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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 immediately
  following, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”), where such last reported sale prices
  are determined pursuant to the definition of “Last Reported Sale Price” in
  Section 1.01 as if such Capital Stock or similar equity interest were
  Common Stock; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MP0

  	
   

  	
  =

  	
   

  	
  the average of the Last Reported Sale Prices over
  the Valuation Period.

  

 

Such adjustment to the Conversion Rate shall become
effective on the last day of the Valuation Period; provided
that in respect of any conversion during the Valuation Period, references
within this clause (c) to 10 Trading Days shall be deemed replaced with
such lesser number of Trading Days as have elapsed between the Ex-Dividend Date
of such Spin-Off and the Conversion Date in determining the Applicable
Conversion Rate.

 

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

 

 

where

 

55

 

	
  CR0

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately prior to the Open of Business on the Ex-Dividend date for
  such dividend or distribution;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CR1

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately after the Open of Business on the Ex-Dividend Date for
  such dividend or distribution;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SP0

  	
   

  	
  =

  	
   

  	
  the Last Reported Sale
  Price on the Trading Day immediately preceding the Ex-Dividend Date for such
  dividend or distribution; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C

  	
   

  	
  =

  	
   

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

  

 

Such adjustment to the Conversion Rate shall become
effective immediately after the Open of Business on the Ex-Dividend Date for
such dividend or distribution. If such dividend or distribution results in an
adjustment to the Conversion Rate under this Clause (d) and 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.

 

(e)           If the Company or any
Subsidiary makes a payment in respect of a tender offer or exchange offer for
Common Stock, to the extent that the cash and value of any other consideration
included in the payment per share of Common Stock exceeds the Last Reported
Sale Price on the Trading Day next succeeding the last date on which tenders or
exchanges may be made pursuant to such tender or exchange offer, the Conversion
Rate will be increased based on the following formula:

 

 

where

 

	
  CR0

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately prior to the Close of Business on the 10th Trading Day
  immediately following, and including, the Trading Day next succeeding the
  date such tender or exchange offer expires;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CR1

  	
   

  	
  =

  	
   

  	
  the Conversion Rate in
  effect immediately after the Close of Business on the 10th Trading Day
  immediately following, and including, the Trading Day next succeeding the
  date such tender or exchange offer expires;

  

 

56

 

	
  AC

  	
   

  	
  =

  	
   

  	
  the aggregate value of
  all cash and any other consideration (as determined by the Company’s 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 (including any shares purchased or to be purchased
  pursuant to the tender or exchange offer);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OS1

  	
   

  	
  =

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SP1

  	
   

  	
  =

  	
   

  	
  the average of the Last Reported Sale Prices over
  the 10 consecutive trading-day period commencing on, and including, the
  Trading Day next succeeding the date such tender or exchange offer expires.

  

 

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

 

(f)            If  any distribution or transaction described in Section 6.04(a),
Section 6.04(b), Section 6.04(c), Section 6.04(d), or Section 6.04(e) above
has not yet resulted in an adjustment to the Applicable Conversion Rate on the
Trading Day in question, and the shares the Holder will receive on settlement
are not entitled to participate in the relevant distribution or transaction
(because they were not held on a related record date or otherwise), then
promptly after such distribution or transaction has occurred, the Company will
adjust the number of shares of Common Stock that it delivers to the Holder as
it determines is appropriate to reflect the relevant distribution or
transaction.

 

(g)           Notwithstanding the above,
certain listing standards of The Nasdaq Global Select Market may limit the
amount by which the Company may increase the Conversion Rate pursuant to the
events described in Section 6.04(b), Section 6.04(c), Section 6.04(d),
Section 6.04(e) and Section 6.07. These standards 

 

57

 

generally require the Company to obtain the approval
of its stockholders before entering into certain transactions that potentially
result in the issuance of 20% or more of Common Stock outstanding at an
effective price less than the greater of book or market value at the time the
Securities are issued unless the Company obtains stockholder approval of
issuances in excess of such limitations. 
In accordance with these listing standards, these restrictions will
apply at any time when the Securities are outstanding, regardless of whether
the Company then has a class of securities quoted on The Nasdaq Global Select
Market. Accordingly, without prior stockholder approval (or confirmation from
The Nasdaq Global Select Market that such approval is not required), the
Company shall take no action that would increase the Conversion Rate above that
which would result in the Securities, in the aggregate, becoming convertible
into shares of Common Stock in excess of such limitations.

 

(h)           If the application of the
formulas provided in Section 6.04(a), Section 6.04(b), Section 6.04(c),
Section 6.04(d), or Section 6.04(e) would result in a decrease
in the Conversion Rate, no adjustment to the Conversion Rate will be made
(other than as a result of a reverse share split or share combination). In
addition, provided that the Company has not increased the par value per share
of Common Stock, the Company shall not be required to adjust the Conversion
Rate to the extent that such adjustment would reduce the Conversion Price below
the par value per share of Common Stock.

 

(i)            The Company is permitted, to
the extent permitted by law and the rules of The Nasdaq Global Select
Stock Market or any other securities exchange on which the Common Stock is then
listed, to increase the Conversion Rate of the Securities by any amount for a
period of at least 20 business days if the Company’s Board of Directors
determines that such increase would be in the Company’s best interest.  The Company may also (but is not required to)
increase the Conversion Rate to avoid or diminish income tax to holders of
Common Stock or rights to purchase shares of Common Stock in connection with a
dividend or distribution of shares of Common Stock (or rights to acquire shares
of Common Stock) or similar event.

 

(j)            Except as described in this Section 6.04
or in Section 6.07, the Company will not adjust the Conversion Rate.
Without limiting the foregoing, the Conversion Rate will not be adjusted, among
other things:

 

(i)               upon the issuance of any
shares of Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of Common Stock under
any plan;

 

58

 

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

 

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

 

(iv)             for any dividend or
distribution solely in shares of common stock effected pursuant to a merger,
sale or conveyance where such dividend or distribution becomes Reference
Property and is effected solely for the purpose of changing the Company’s
jurisdiction of incorporation as permitted under this Indenture;

 

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

 

(vi)             for accrued and unpaid
interest and Additional Interest, if any.

 

(k)           Adjustments to the
Conversion Rate under this Article 6 shall be calculated to the nearest
one ten-thousandth (1/10,000th) of a share.  The Company will
not be required to make an adjustment in the Conversion Rate unless such
adjustment would require a change of at least 1% in the Applicable Conversion
Rate.  Any adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment of the Conversion Rate and the Company
shall make such adjustment immediately prior to any conversion of the
Securities during the 30 days preceding an Optional Redemption date or the
maturity date.

 

(l)            Whenever the Conversion Rate
is adjusted as herein provided, the Company shall promptly file with the
Trustee and any Conversion Agent an Officers’ Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. 
Unless and until a Trust 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 became effective and shall mail such notice of such adjustment of
the Conversion Rate to each Holder at such Holder’s last address appearing on
the list of Holders provided for in Section 3.06, within 20 days after
execution of 

 

59

 

such certificate. 
Failure to deliver such notice shall not affect the legality or validity
of any such adjustment.

 

Section 6.05.  Recapitalizations, Reclassifications and
Changes of Shares of Common Stock. 
In the case of (i) any recapitalization, reclassification or change
of the Common Stock (other than changes resulting from a subdivision or
combination), (ii) any consolidation, merger or combination involving the
Company, (iii) any sale, lease or other transfer to a third party of the
consolidated assets of the Company and its Subsidiaries substantially as an
entirety or (iv) any statutory share exchange, in each case as a result of
which the Common Stock would be converted into, or exchanged for, stock, other
securities, other property or assets (including cash or any combination
thereof) (any such event, a “Merger Event”),
then, at the effective time of the Merger Event, the Company shall execute with
the Trustee a supplemental indenture permitted under Section 13.01
providing that the right to convert a Security will be changed into a right to
convert such Security into the kind and amount of shares of stock, other
securities or other property or assets (including cash or any combination
thereof) that a holder of a number of shares of Common Stock equal to the
Conversion Rate multiplied by the Principal Amount of such Security divided by
$1,000 immediately prior to such Merger Event would have owned or been entitled
to receive upon such Merger Event (the “Reference
Property”).  In such a case,
any increase in the Conversion Rate by the Additional Shares as provided under Section 6.07
below shall not be payable in Additional Shares of Common Stock, but will
represent a right to receive the aggregate amount of cash, securities or other
property into which the Additional Shares would convert in the transaction from
the surviving entity (or a direct or indirect parent thereof).  If such Merger Event causes 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),
the Reference Property into which the Securities will be convertible will be
deemed to be the weighted average of the types and amounts of consideration
received by the Holders of the Common Stock that affirmatively make such an
election.  If such Merger Event also
constitutes a Fundamental Change, a Holder may require the Company to
repurchase all or a portion of its Securities as provided in Section 7.01.  The Company shall not become a party to a
transaction unless its terms are consistent with the foregoing.

 

The Company shall cause
notice of the execution of such supplemental indenture to be mailed to each
Holder, at the address of such Holder as it appears on the register of the
Securities maintained by the Registrar, within 20 days after execution
thereof.  Failure to deliver such notice
shall not affect the legality or validity of such supplemental indenture.  The above provisions of this Section shall
similarly apply to successive Merger Events. 
If this Section 6.05 applies to any event or occurrence, Section 6.04
shall not apply.

 

60

 

Section 6.06.  Adjustments of Prices.  Whenever any provision of this Indenture requires a
calculation of the Last Reported Sale Prices over a span of multiple days, the
Company will make appropriate adjustments to preserve the economic interests of
the Holders to account for any adjustment to the Conversion Rate that becomes
effective, or any event requiring an adjustment to the Conversion Rate where the
Ex-Dividend Date of the event occurs, at any time during the period from which
such prices are to be calculated. Such adjustments will be effective as of the
effective date of the adjustment to the Conversion Rate.

 

Section 6.07.  Adjustment to Shares Delivered
upon Conversion upon a Fundamental Change.

 

(a)           If a Make-Whole Fundamental
Change occurs and a Holder elects to convert its Securities in connection with
such Make-Whole Fundamental Change, the Company shall increase the Conversion
Rate for the Securities so surrendered for conversion by a number of additional
shares of Common Stock (the “Additional
Shares”) as described below. 
A conversion of Securities shall be deemed for these purposes to be “in
connection with” such Make-Whole Fundamental Change if the notice of conversion
of the Securities is received by the Conversion Agent from, and including, the
Effective Date of the Make-Whole Fundamental Change up to, and including, the
Business Day immediately prior to the related Fundamental Change Purchase Date,
or, in the case of a Make-Whole Fundamental Change that does not also
constitute a Fundamental Change as described under Article 7, the 30th Trading Day immediately following the
Effective Date of such Make-Whole Fundamental Change.  The Company shall notify Holders and the
Trustee of the anticipated Effective Date of such Make-Whole Fundamental Change
and issue a press release or provide other disclosure in compliance with
Regulation FD as soon as practicable after the Company determines the anticipated
Effective Date of such Make-Whole Fundamental Change.

 

(b)           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 Make-Whole Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the “Stock Price”)
paid (or deemed paid) per share of Common Stock in the Make-Whole Fundamental
Change.  If the Holders of Common Stock
receive only cash in a Make-Whole Fundamental Change described in clause (2) of
the definition of Fundamental Change, the Stock Price shall be the cash amount
paid per share. Otherwise, the Stock Price shall be the average of the Last
Reported Sale Price of the Common Stock over the five Trading-Day period ending
on, and including, the Trading Day immediately preceding the Effective Date of
the Make-Whole Fundamental Change.

 

61

 

(c)           The Stock Prices set forth
in the column headings of the table in Schedule A hereto shall be
adjusted as of any date on which the Conversion Rate of the Securities is
otherwise adjusted.  The adjusted Stock
Prices shall equal the Stock Prices immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate
immediately prior to such 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 set forth in such table shall be adjusted in the same
manner as the Conversion Rate as set forth in Section 6.04.

 

(d)           The exact Stock Prices and
Effective Dates may not be set forth in the table in Schedule A, in
which case:

 

(i)    If the Stock Price is
between two adjacent Stock Price amounts in the table or the Effective Date is
between two adjacent Effective Dates in the table, the number of Additional
Shares by which the Conversion Rate will be increased will be determined by a straight-line
interpolation between the number of Additional Shares set forth for the higher
and lower stock price amounts and the two dates, as applicable, based on a
365-day year.

 

(ii)   If the Stock Price is
greater than $45.00 per share (subject to adjustment in the same manner as the
Stock Prices as set forth in the column headings of the table in Schedule A),
no Additional Shares will be added to the Conversion Rate.

 

(iii)  If the Stock
Price is less than $6.81 per share (subject to adjustment in the same manner as
the Stock Prices as set forth in the column headings of the table in Schedule
A), no Additional Shares will be added to the Conversion Rate.

 

Notwithstanding
the foregoing, in no event shall the Conversion Rate exceed 146.8429 per $1,000
Principal Amount of Securities, subject to adjustments in the same manner as
the Conversion Rate as set forth in Section 6.04.

 

(e)           If a Holder of Securities
elects to convert its Securities prior to the Effective Date of any Fundamental
Change, such Holder shall not be entitled to an increased Conversion Rate in
connection with such conversion.

 

(f)            The Company will notify
Holders of the Effective Date of any Make-Whole Fundamental Change and issue a
press release or provide other disclosure in compliance with Regulation FD
announcing such Effective Date no later than 20 days after such Effective Date.

 

62

 

Section 6.08. Taxes on Shares
Issued.  Any issue of share
certificates on conversions of Securities shall be made without charge to the
converting Holder for any documentary, transfer, stamp or any similar tax in
respect of the issue thereof, and the Company shall pay any and all
documentary, stamp or similar issue or transfer taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto.  The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issue and delivery of shares in any name other than
that of the Holder of any Securities converted, and the Company shall not be
required to issue or deliver any such share certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.

 

Section 6.09.  Reservation of Shares; Shares to be Fully
Paid; Compliance with Governmental Requirements.  The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or shares held in
treasury, sufficient Common Stock to provide for the conversion of the
Securities from time to time as such Securities are presented for conversion.

 

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

 

The Company covenants
that all shares of Common Stock that may be issued upon conversion of
Securities shall be newly issued shares or treasury shares, shall be duly
authorized, validly issued, fully paid and non-assessable and shall be free
from preemptive rights and free from any lien or adverse claim.

 

The Company shall use its
reasonable efforts to list or cause to have quoted any shares of Common Stock
to be issued upon conversion of Securities on each national securities exchange
or over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.

 

Section 6.10.  Responsibility of Trustee.  The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder 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 

 

63

 

shall not be accountable with respect to the validity
or value (or the kind or amount) of any Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Securities; and the Trustee and any other Conversion Agent make no
representations with respect thereto. 
Neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Company to issue, transfer or deliver any Common Stock or
share certificates or other securities or property or cash upon the surrender
of any Securities for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article 6.  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 6.05 relating
either to the kind or amount of shares of stock or securities or property
(including cash) receivable by Holders upon the conversion of their Securities
after any event referred to in such Section 6.05 or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section 10.01,
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 6.11.  Notice to Holders Prior to Certain Actions.  In case:

 

(a)           the Company shall declare a
dividend (or any other distribution) on Common Stock that would require an
adjustment in the Conversion Rate pursuant to Section 6.04; or

 

(b)           the Company shall authorize
the granting to the holders of all or substantially all of the 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 (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale, lease 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 or any of its
Significant Subsidiaries;

 

then, in each case, the
Company shall cause to be filed with the Trustee and the Conversion Agent and
to be mailed to each Holder at such Holder’s address appearing on the list of
Holders provided for in Section 3.06 of this Indenture, as promptly as
practicable but in any event at least 15 days prior to the applicable 

 

64

 

date hereinafter
specified, a notice stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of shares 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, lease, 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 shares of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.

 

Section 6.12.  Stockholder Rights Plan. Each
share of Common Stock issued upon conversion of Securities pursuant to this Article 6
shall be entitled to receive the appropriate number of rights, if any, and the
certificates representing the shares of Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of any subsequent stockholder rights agreement adopted by the
Company, as any such agreement may be amended from time to time.  Notwithstanding the foregoing, if prior to
any conversion such rights have separated from the shares of Common Stock in
accordance with the provisions of the applicable stockholder rights agreement,
the Conversion Rate shall be adjusted at the time of separation as if the
Company had distributed to all Holders of the Common Stock, shares of the
Company’s Capital Stock, evidences of indebtedness, assets, property, rights or
warrants as described in Section 6.04(c) above, subject to
readjustment in the event of the expiration, termination or redemption of such
rights.  Any distribution of rights or
warrants pursuant to a rights plan that would allow a Holder to receive upon
conversion, in addition to shares of Common Stock, the rights described therein
with respect to such Common Stock (unless such rights or warrants have
separated from the Common Stock) shall not constitute a distribution of rights
or warrants that would entitle the Holder to an adjustment to the Conversion
Rate.

 

Section 6.13.  Company Determination Final.  Any determination that the Company
or its Board of Directors must make pursuant to this Article 6 shall be
conclusive if made in good faith, absent manifest error.

 

ARTICLE 7

PURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE

 

Section 7.01.  Purchase at Option of Holders upon a
Fundamental Change.

 

65

 

(a)           Generally.  If a Fundamental Change occurs at any time
prior to the Stated Maturity of the Securities, then each Holder shall have the
right, at such Holder’s option, to require the Company to purchase any or all
of such Holder’s Securities or any portion thereof that is equal to $1,000 or a
multiple of $1,000 Principal Amount in excess thereof, provided that the
portion not so purchased is in a minimum Principle Amount of $2,000, on a
Business Day specified by the Company that is no earlier than the 20th and not
later than the 35th calendar day following the date of the Fundamental Change
Company Notice (as defined below), subject to extension to comply with
applicable law (the “Fundamental Change
Purchase Date”), at a purchase price to be paid in cash equal to
100% of the Principal Amount thereof, together with accrued and unpaid interest
thereon (including Additional Interest, if any) to, but excluding, the
Fundamental Change Purchase Date (the “Fundamental Change
Purchase Price”); provided, however,
if the Fundamental Change Purchase Date is between a Regular Record Date and
the Interest Payment Date to which it relates, the Company will instead pay
such accrued and unpaid interest (including Additional Interest, if any)  to
the Holder of record as of the corresponding Regular Record Date.

 

Purchases
of Securities under this Section 7.01 shall be made upon:

 

(i)    delivery to the Paying Agent
of a duly completed notice (the “Fundamental Change
Purchase Notice”) in the form specified in Section 7.01(c) on
or prior to the Business Day immediately preceding the Fundamental Change
Purchase Date, subject to extension to comply with applicable law, which must
specify:

 

(A)          if the Securities are Physical Securities, the
certificate numbers of the Holder’s Securities to be delivered for purchase, or
if such Securities are not Physical Securities, the Holder’s notice must comply
with the appropriate procedures of the Depositary and its direct and indirect
participants, including Clearstream and/or Euroclear;

 

(B)           the portion of the Principal Amount of the Holder’s
Securities to be purchased, which must be $1,000 or a multiple thereof,
provided the portion not to be purchased is in a minimum Principal Amount of
$2,000; and

 

(C)           that the Holder’s Securities are to be purchased by
the Company pursuant to the applicable provisions of the Securities and this
Indenture; and

 

(ii)   delivery or book-entry
transfer of the Securities to the Trustee (or other Paying Agent appointed by
the Company) at any time after delivery of the Fundamental Change Purchase
Notice (together with 

 

66

 

all
necessary endorsements) at the applicable Corporate Trust Office of the Trustee
(or other Paying Agent appointed by the Company), such delivery being a
condition to receipt by the Holder of the Fundamental Change Purchase Price
therefor; provided that such Fundamental Change
Purchase Price shall be so paid pursuant to this Section 7.01 only if the
Securities 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 Fundamental Change Purchase Notice.

 

Any purchase
by the Company contemplated pursuant to the provisions of this Section 7.01
shall be consummated by the delivery of the Fundamental Change Purchase Price
to be received by the Holder promptly following the later of (i) the
Fundamental Change Purchase Date and (ii) the time of the book-entry
transfer or delivery of the Securities.

 

Notwithstanding
anything herein to the contrary, any Holder delivering to the Trustee (or other
Paying Agent appointed by the Company) the Fundamental Change Purchase Notice
contemplated by this Section 7.01 shall have the right to withdraw such
Fundamental Change Purchase Notice at any time prior to the Close of Business
on the Business Day prior to the Fundamental Change Purchase Date by delivery
of a written notice of withdrawal to the Trustee (or other Paying Agent
appointed by the Company) in accordance with Section 7.03 below.

 

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

 

(b)           Fundamental Change Company Notice.  On or before the 20th day after the
occurrence of a Fundamental Change, the Company shall provide to all Holders of
record of the Securities and the Trustee and Paying Agent a notice (the “Fundamental Change Company Notice”) of the occurrence of
such Fundamental Change and of the purchase right at the option of the Holders
arising as a result thereof.  Such
mailing shall be by first class mail.  Simultaneously
with providing such Fundamental Change Company Notice, the Company shall
publish a notice containing the information included therein once in a
newspaper of general circulation in New York City or publish such information
on the Company’s website or through such other public medium as the Company may
use at such time.

 

Each
Fundamental Change Company Notice shall specify:

 

(i)    the events causing the
Fundamental Change;

 

(ii)   the date of the Fundamental
Change;

 

67

 

(iii)  the last date
on which a Holder may exercise the purchase right;

 

(iv)  the Fundamental Change
Purchase Price;

 

(v)   the Fundamental Change
Purchase Date;

 

(vi)  the name and address of the
Paying Agent and the Conversion Agent, if applicable;

 

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

 

(viii)  if applicable, that the
Securities with respect to which a Fundamental Change Purchase Notice has been
delivered by a Holder may be converted only if the Holder withdraws its
Fundamental Change Purchase Notice in accordance with Section 7.03; and

 

(ix)   the procedures that Holders
must follow to require the Company to purchase their Securities.

 

No
failure of the Company to give the foregoing notices and no defect therein
shall limit any Holder’s purchase rights or affect the validity of the
proceedings for the purchase of the Securities pursuant to this Section 7.01.

 

(c)           Form of Fundamental Change
Purchase Notice. To exercise the purchase right, a Holder must
deliver, on or before the Business Day immediately preceding the Fundamental
Change Purchase Date, subject to extension to comply with applicable law, the
Securities to be Purchased, duly endorsed for transfer, together with a written
purchase notice in the form entitled “Form of Fundamental Change Purchase
Notice” in substantially the form of Exhibit A
hereto.

 

(d)           No Payment During Acceleration.  Notwithstanding the foregoing, no Securities
may be purchased by the Company at the option of the Holders pursuant to this Section 7.01
if the Principal Amount of the Securities has been accelerated, and such
acceleration has not been rescinded, on or prior to the Fundamental Change
Purchase Date

 

Section 7.02.  Effect of Fundamental Change Purchase
Notice.  Upon receipt by the
Paying Agent of the Fundamental Change Purchase Notice specified in Section 7.01(a),
the Holder of the Security in respect of which such Fundamental Change Purchase
Notice was given shall (unless such Fundamental Change Purchase Notice is
withdrawn as specified in Section 7.03) thereafter be entitled to receive
solely the Fundamental Change Purchase Price with respect to such Security.

 

68

 

Section 7.03.  Withdrawal of Fundamental Change Purchase
Notice.

 

(a)           A Fundamental Change
Purchase Notice may be withdrawn (in whole or in part) by means of a written
notice of withdrawal delivered to the Paying Agent in accordance with the
Fundamental Change Company Notice at any time prior to the Close of Business on
the Business Day immediately preceding the Fundamental Change Purchase Date,
specifying:

 

(i)    the Principal Amount of the
withdrawn Securities;

 

(ii)   if the Securities are
Physical Securities, the certificate numbers of the withdrawn Securities, or if
such securities are not Physical Securities, the notice must comply with
appropriate procedures of the Depositary; and

 

(iii)  the Principal
Amount of such Securities, if any, that remains subject to the original
Fundamental Change Purchase Notice.

 

Section 7.04.  Deposit of Fundamental Change Purchase
Price.  Prior to 10:00 a.m.
(local time in New York City) on the Fundamental Change Purchase Date, the
Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary
or an Affiliate of either of them is acting as the Paying Agent, shall
segregate and hold in trust as provided herein) an amount of money (in
immediately available funds if deposited on such Business Day) sufficient to
pay the Fundamental Change Purchase Price, of all the Securities or portions
thereof that are to be purchased as of the Fundamental Change Purchase
Date.  The Company shall promptly notify
the Trustee in writing of the amount of any deposits of cash made pursuant to
this Section 7.04.  If the Paying
Agent holds money sufficient to pay the Fundamental Change Purchase Price of
any Security for which a Fundamental Change Purchase Notice has been tendered
and not withdrawn in accordance with this Indenture as of the Close of Business
on the second Business Day following the Fundamental Change Purchase Date, then
the following shall occur: (a) any such Security will cease to be
outstanding and interest, including Additional Interest if any, will cease to
accrue thereon on the Fundamental Change Purchase Date (whether or not
book-entry transfer of the Securities is made or whether or not the Securities
are delivered to the Paying Agent) and (b) all other rights of the Holder
in respect thereof will terminate (other than the right to receive the
Fundamental Change Purchase Price and previously accrued and unpaid interest
(including Additional Interest, if any) upon delivery or transfer of such
Security).

 

Section 7.05.  Securities Purchased in Whole or in
Part.  Any Security that is to
be purchased, whether in whole or in part, shall be surrendered at the office
of the Paying Agent (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the

 

69

 

Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount of
the Security so surrendered which is not purchased; provided that
in no event shall a Security of a Principal Amount of $2,000 or less be
redeemed in part.

 

Section 7.06.  Covenant to Comply With Securities Laws upon
Purchase of Securities.  In
connection with any offer to purchase Securities under Section 7.01 (a “Fundamental
Change Purchase Offer”) (provided that such
offer or purchase constitutes an “issuer tender offer” for purposes of Rule 13e-4
(which term, as used herein, includes any successor provision thereto) under
the Exchange Act at the time of such offer or purchase), the Company shall (i) comply
with Rule 13e-4 and Rule 14e-1 under the Exchange Act, (ii) file
the related Schedule TO (or any successor schedule, form or report) under the
Exchange Act and (iii) otherwise comply with all federal and state
securities laws so as to permit the rights and obligations under Section 7.01
to be exercised in the time and in the manner specified in Section 7.01.

 

Section 7.07.  Repayment to the Company.  The Paying Agent shall return to
the Company any cash that remains unclaimed, together with interest (including
Additional Interest, if any) or dividends, if any, thereon, held by them for
the payment of the Fundamental Change Purchase Price; provided
that to the extent that the aggregate amount of cash deposited by the Company
pursuant to Section 7.04 exceeds the aggregate Fundamental Change Purchase
Price of the Securities or portions thereof which the Company is obligated to
purchase as of the Fundamental Change Purchase Date, then as soon as
practicable following the Fundamental Change Purchase Date, the Paying Agent
shall return any such excess to the Company.

 

Section 7.08. 
Third Party Fundamental Change Purchase Offer.  The Company shall not be required
to make an offer to purchase the Securities upon a Fundamental Change if a
third party makes the offer in the manner, at the times, and otherwise in
compliance with the requirements set forth in this Article 7 applicable to
an offer by the Company to purchase the Securities upon a Fundamental Change
and such third party purchases all Securities validly tendered and not
withdrawn upon such offer.

 

70

 

ARTICLE
8

EVENTS OF DEFAULT; REMEDIES

 

Section 8.01.  Events of Default.  “Event of
Default,” wherever used herein, means any one of the following
events (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):

 

(a)        default by the Company in any payment of interest (including
Additional Interest, if any) on any Securities, when due and payable and such
default continues for a period of 30 days;

 

(b)        default by the Company in the payment of the Principal Amount
of any Security when due and payable at the Stated Maturity, Redemption Date,
Fundamental Change Purchase Date or otherwise;

 

(c)        failure by the Company to comply with its obligation to
convert the Securities in accordance with this Indenture upon exercise of a
Holder’s conversion right hereof and such failure continues for a period of 5
calendar days;

 

(d)        failure by the Company to provide the Fundamental Change
Company Notice to Holders required pursuant to Section 7.01(b) hereof
when due;

 

(e)        failure by the Company to comply with its obligations under Article 9
hereof;

 

(f)         failure by the Company in the performance of any other
covenant or agreement of the Company in the Securities or in this Indenture
other than those referred to in other clauses of this Section 8.01, and
such default continues for a period of 60 days after written receipt by the
Company of a Notice of Default;

 

(g)        default by the Company or any of its Significant Subsidiaries
with respect to any mortgage, agreement or other instrument under which there
may be outstanding, or by which there may be secured or evidenced, any indebtedness
for money borrowed having a principal amount in excess of $10,000,000 in the
aggregate of the Company and/or any Significant Subsidiary of the Company,
whether such indebtedness now exists or shall hereafter be created (i) resulting
in such indebtedness becoming or being declared due and payable prior to its
express maturity date or (ii) constituting a failure to pay at least
$10,000,000 of such indebtedness when due and payable (after the expiration of
any applicable grace period) at its stated maturity, upon required repurchase,
upon declaration or otherwise; provided, that any such event of default shall
be deemed cured and not continuing upon payment of such indebtedness or
rescission of such declaration;

 

71

 

(h)        a final judgment for the payment of $1,000,000 or more
(excluding any amounts covered by insurance) rendered against the Company or
any Significant Subsidiary of the Company, which judgment is not discharged or
stayed within 60 days after (i) the date on which the right to appeal
thereof has expired if no such appeal has commenced, or (ii) the date on
which all rights to appeal have been extinguished.

 

(i)         the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company of a voluntary case or
proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law, (ii) a decree or order
adjudging the Company or a Significant Subsidiary of the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under
any applicable federal, state or foreign law or (iii) an appointment of a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of a Significant Subsidiary of the Company
of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or

 

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

 

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

 

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Section 8.02.  Acceleration of Maturity; Waiver of Past
Defaults and Rescission.

 

(a)        If an Event of Default involving the Company occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate Principal Amount of the outstanding Securities may (and
the Trustee at the request of such Holders shall) declare 100% of the Principal
Amount plus accrued and unpaid interest (including Additional Interest, if any)
on all the outstanding Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such Principal Amount plus accrued and unpaid
interest (including Additional Interest, if any) shall become immediately due
and payable.

 

Notwithstanding
the foregoing, the sole remedy for an Event of Default relating to the failure
to comply with the reporting obligations in this Indenture (including any
requirement to file reports or documents with the Commission pursuant to Section 13
or 15(d) of the Exchange Act) and for any failure to comply with the
requirements of Section 314(a)(1) of the Trust Indenture Act,
including, in each case, as set forth in Section 4.08, will for the first
180 days after the occurrence of such an Event of Default consist exclusively
of the right to receive Additional Interest on the Securities as set forth in Section 8.03(b) if
the Company so elects pursuant to the terms of such Section.

 

On the
180th day following the Event of Default relating to the reporting obligations
under this Indenture (including any requirement to file reports or documents
with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act) or the failure to comply with the requirements of Section 314(a)(1) of
the Trust Indenture Act, including, in each case, as set forth in Section 4.08,
if such Event of Default has not been cured or waived prior to such 180th day,
the Securities will be subject to acceleration as provided above. The
provisions of the Indenture described in this paragraph will not affect the
rights of Holders in the event of the occurrence of any other Event of Default,
and are separate and distinct from, and in addition to, the obligation to pay
Additional Interest in the circumstances described in Section 8.03
hereunder.  If the Company does not elect
to pay Additional Interest during the continuance of such an Event of Default,
as applicable, in accordance with this paragraph, the Securities will be subject
to acceleration as provided above.

 

(b)        The Holders of a majority in aggregate Principal Amount of
the outstanding Securities, by written notice to the Company and the Trustee,
may (x) waive any past Default and its consequences and (y) at any
time after a declaration of acceleration has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article 8 provided, rescind any such acceleration with
respect to the Securities

 

73

 

and its consequences,
except, in each case, an uncured Default described in Section 8.01(a) or
Section 8.01(b), if:

 

(i)    such
rescission will not conflict with any judgment or decree of a court of
competent jurisdiction; and

 

(ii)   all
existing Events of Default, other than the non-payment of the Principal Amount
plus accrued and unpaid interest (including Additional Interest, if any) on
Securities that have become due solely by such declaration of acceleration,
have been cured or waived.

 

Upon
any such waiver, the Default which has been waived shall cease to exist and any
Event arising therefrom shall be deemed to have been cured, for every other
purpose of this Indenture; but such waiver shall not extend to any subsequent
or other Default or impair any right consequent.

 

No
such rescission shall affect any subsequent default or impair any right
consequent thereon.

 

Section 8.03. Additional Interest.

 

(a)        If, at any time during the six-month period beginning on, and
including, the date which is six months after the last date on which any of the
Securities are originally issued, the Company fails to timely file any document
or report that the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act, as applicable (after giving effect to all
applicable grace periods thereunder and other than current reports on Form 8-K),
and the Company has not cured such failure to timely file within 14 days after
such failure, or the Securities are not otherwise freely tradable, including
pursuant to Rule 144, by Holders other than the Company’s Affiliates  (as a result of restrictions pursuant to U.S.
securities law or the terms of this Indenture or the Securities), the Company
shall pay Additional Interest on the Securities which shall accrue on the
Securities (i) at the rate of 0.25% per annum of the Principal Amount of
Securities outstanding for each day during the first 90 days of such period for
which the Company’s failure to file has occurred and is continuing or for which
the restrictions on transfer are applicable and (ii) at the rate of 0.50%
per annum of the Principal Amount of Securities outstanding for each day after
the first 90 days of the period for which the Company’s failure to file has
occurred and is continuing or for which the restrictions on transfer are
applicable (in the case of either clause (i) or clause (ii) of this Section 8.03(a),
ending on the date that is one year from the last date on which any of the
Securities are originally issued). 
Further, if, and for so long as, the restrictive legend on the
Securities has not been removed or the Securities are not otherwise freely
tradable, including pursuant to Rule 144, by Holders other than the
Company’s Affiliates (without restrictions pursuant to U.S. securities law or
the terms of this

 

74

 

Indenture or the Securities)
as of the date that is one year after the last date on which any of the
Securities are originally issued, we will pay additional interest on the
Securities until the Securities are freely tradable at a rate (i) equal to
0.25% per annum of the Principal Amount of Securities outstanding for the first
90 days of such period and (ii) at a rate equal to 0.50% per annum of the
Principal Amount of Securities outstanding after the first 90 days of such
period.  The Additional Interest payable
pursuant to this Section 8.03(a) will be in additional to any
Additional Interest that may accrue pursuant to Section 8.03(b).  Any Additional Interest payable pursuant to
this Section 8.03(a) will be payable at the same time, in the same
manner and to the same Persons as ordinary interest is payable pursuant to Section 2.03.

 

(b)        Notwithstanding anything to the contrary in this Indenture,
if so elected by the Company, the sole remedy for an Event of Default relating
to the failure to comply with the reporting obligations in this Indenture
(including any requirement to file reports or documents with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act) and for any
failure to comply with the requirements of Section 314(a)(1) of the
Trust Indenture Act, each to the extent and as required by Section 4.08
hereof will (i) for the first 90 days after the occurrence of such an Event
of Default consist exclusively of the right to receive Additional Interest on
the Securities at an annual rate equal to 0.25% of the Principal Amount of
outstanding Securities and (ii) from the 91st day until the 180th day
following the occurrence of such an Event of Default consist exclusively of the
right to receive Additional Interest on the Securities at an annual rate equal
to 0.50% of the Principal Amount of outstanding Securities. The Additional
Interest payable pursuant to this Section 8.03(b) will be in addition
to any Additional Interest that may accrue pursuant to Section 8.03(a).  If the Company so elects, the Additional
Interest payable under this Section 8.03(b) will be payable on all
outstanding Securities from and including the date on which such Event of
Default first occurs to, but excluding, the 180th day thereafter, or such
earlier date on which such Event of Default has been cured or waived or ceases
to exist.  On the 181st day after such
Event of Default, if such Event of Default has not been cured or waived prior
to such 181st day, Additional Interest payable pursuant to this Section 8.03(b) will
cease to accrue and the Securities will be subject to acceleration as provided
in Section 8.02(a).  In the event
the Company does not elect to pay the Additional Interest payable pursuant to
this Section 8.03(b) upon an Event of Default in accordance with this
paragraph, the Securities will be subject to acceleration as provided in Section 8.02(a).  Any Additional Interest payable pursuant to
this Section 8.03(b) will be payable at the same time, in the same
manner and to the same persons as ordinary interest is payable pursuant to Section 2.03.

 

In order to elect to pay the Additional
Interest payable pursuant to this Section 8.03(b) as the sole remedy
during the first 180 days after the occurrence of an Event of Default relating
to the failure to comply with Section 4.08 in

 

75

 

accordance with the immediately preceding paragraph,
the Company must (i) notify all record Holders, the Trustee and Paying
Agent of such election before the Close of Business on the fifth Business Day
after which such Event of Default first occurs and before the Close of Business
on the 91st day after the date on which such Event of Default first occurs, as
applicable.  Upon the failure to timely
give all Holders, the Trustee and Paying Agent such notice, the Securities will
be immediately subject to acceleration as provided in Section 8.02(a).

 

Section 8.04. 
Collection of Indebtedness and Suits for Enforcement by Trustee.  The Company covenants that if a Default is made in the
payment of the Principal Amount plus accrued and unpaid interest (including
Additional Interest, if any) at the Stated Maturity thereof or in the payment
of the Fundamental Change Purchase Price or Redemption Price in respect of any
Security, the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.  If an
Event of Default occurs and is continuing, the Trustee may, but shall not be
obligated to, pursue any available remedy to collect the payment of the
Principal Amount plus accrued but unpaid interest (including Additional
Interest, if any) on the Securities or to enforce the performance of any
provision of the Securities or this Indenture. 
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding.  A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. 
No remedy is exclusive of any other remedy.  All available remedies are cumulative.

 

Section 8.05.  Trustee May File Proofs of Claim.  In case of any judicial proceeding
relative to the Company (or any other obligor upon the Securities), its
property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. 
In particular, the Trustee shall be authorized to collect and receive
any moneys or other property payable or deliverable on any such claims and to
distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under Section 10.07.

 

76

 

No
provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

 

Section 8.06.  Application of Money Collected.  Any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money to Holders, upon presentation of the Securities and the notation thereon
of 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 10.07;

 

SECOND:  To the payment of the amounts then due and
unpaid on the Securities for the Principal Amount, Fundamental Change Purchase
Price , Redemption Price or interest (including Additional Interest, if any) as
the case may be, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities; and

 

THIRD:  To the payment of the remainder, if any, to
the Company or any other Person lawfully entitled thereto.

 

Section 8.07.  Limitation on Suits.  No Holder of any Security shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder (other than in the case of an Event of Default specified
in Section 8.01(a) or Section 8.01(b)), unless:

 

(i)            such
Holder has previously given written notice to the Trustee of a continuing Event
of Default;

 

(ii)           the
Holder or Holders of not less than 25% in aggregate Principal Amount of the
outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;

 

(iii)          such
Holder or Holders have offered to the Trustee security or indemnity reasonably
satisfactory to it against any loss, liability or expense;

 

77

 

(iv)          the
Trustee for 60 days after its receipt of such request and offer of security or
indemnity has failed to institute any such proceeding; and

 

(v)           no
direction, in the opinion of the Trustee, inconsistent with such written
request has been given to the Trustee during such 60-day period by the Holders
of a majority in aggregate Principal Amount of the outstanding Securities;

 

it being understood and
intended that no one or more Holders shall have any right in any manner
whatever by virtue of, or by availing itself of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holders, or
to obtain or to seek to obtain priority or preference over any other Holders or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders.

 

Section 8.08.  Unconditional Right of Holders to Receive
Payment.  Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment
of the Principal Amount, Fundamental Change Purchase Price, Redemption Price or
interest in respect of the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, any Fundamental Change
Purchase Date, any Redemption Date or otherwise, as applicable, and to convert
the Securities in accordance with Article 6, or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall not be impaired or affected adversely without the consent of
such Holder.

 

Section 8.09.  Restoration of Rights and Remedies.  If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.

 

Section 8.10.  Rights and Remedies Cumulative.  Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities in the last paragraph of Section 3.07, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.  The assertion or
employment of any right or remedy hereunder shall 

 

78

 

not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

 

Section 8.11.  Delay or Omission Not Waiver.  No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders, as the case may be.

 

Section 8.12.  Control by Holders.  The Holders of a majority in
aggregate Principal Amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee.  However, if an event of default has occurred
and is continuing, the Trustee will be required in the exercise of its powers
to use the degree of care that a prudent person would use in the conduct of its
own affairs.  Furthermore, the Trustee
may refuse to follow any direction that conflicts with applicable law or this
Indenture or that the Trustee determines is unduly prejudicial to the rights of
any other Holder or that would involve the Trustee in personal liability.  Prior to taking any action under this
Indenture, the Trustee will be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.

 

Section 8.13.  Undertaking for Costs.  In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, in either case in respect of the
Securities, a court may require any party litigant in such suit to file an
undertaking to pay the costs of the suit, and the court may assess reasonable
costs, including reasonable attorney’s fees and expenses, against any party
litigant in the suit having due regard to the merits and good faith of the
claims or defenses made by the party litigant; but the provisions of this Section 8.13
shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in Principal Amount of the outstanding
Securities, or to any suit instituted by any Holder for the enforcement of the
payment of the Principal Amount on any Security on or after the Stated Maturity
of such Security or the Fundamental Change Purchase Date.

 

79

 

ARTICLE
9

MERGER, CONSOLIDATION OR SALE OF ASSETS

 

Section 9.01.  Company May Consolidate, etc., only on
Certain Terms.  The Company
shall not, in a single transaction or through a series of related transactions,
consolidate or merge with or into any other Person, or, directly or indirectly,
sell, convey, transfer or lease all or substantially all of Company’s assets to
another Person or group of affiliated Persons, except that the Company may
consolidate or merge with, or sell, convey, transfer or lease all or
substantially all of its assets to another Person if:

 

(i)            the continuing Person or the successor Person (if other
than the Company) (the “Successor Company”)
is a Corporation organized and existing under the laws of the United States of
America, any State of the United States of America or the District of Columbia
and such Successor Company expressly assumes by an Indenture supplemental
hereto all obligations of the Company under this Indenture, including payment
of the Principal Amount and interest (including Additional Interest, if any) on
the Securities, and the performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company; and

 

(ii)           immediately after giving effect to such transaction, no
Default under this Indenture has occurred and is continuing.

 

Section 9.02.  Successor Substituted.  Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any sale,
conveyance, transfer or lease of substantially all of the Company’s assets to
another Person in accordance with Section 9.01, the Successor Company
formed by such consolidation or into which the Company is merged or to which
such sale, conveyance, transfer or lease is made shall succeed to, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such Successor Company had been named as the Company herein,
and thereafter. If the predecessor is still in existence after such
transaction, it will be released from its obligations and covenants under this
indenture and the Securities, except in the case of a lease of all or
substantially all of its properties and assets.

 

ARTICLE
10

THE TRUSTEE

 

Section 10.01.  Duties and Responsibilities of Trustee.

 

80

 

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

 

(b)        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:

 

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

 

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

 

(B)         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
(but need not confirm or investigate the accuracy of any mathematical
calculations or other facts stated therein);

 

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

 

(iii)         the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the Holders of not less than a majority in Principal Amount of the
Securities at the time outstanding determined as provided in Section 1.04
relating to the time, method and place of conducting any 

 

81

 

proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture;

 

(iv)          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;

 

(v)           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 Securities; and

 

(c)        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.

 

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

 

Section 10.02.  Notice of Defaults. 
The Trustee shall give the Holders notice of
any Default hereunder within 90 days after the occurrence thereof so long as
such Default is continuing; provided, that (except in the case of any Default
in the payment of Principal Amount or interest on any of the Securities), the
Trustee may withhold, and shall be protected in withholding, such notice if and
so long as the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.

 

Section 10.03.  Reliance on Documents, Opinions, Etc.  Except as otherwise provided in Section 10.01:

 

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

 

(b)        any request, direction, order or demand
of the Company mentioned herein shall be sufficiently evidenced by an Officers’
Certificate (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution 

 

82

 

of the Company’s
Board of Directors may be evidenced to the Trustee by a copy thereof certified
by the Secretary, any Assistant Secretary or the General Counsel of the
Company;

 

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

 

(d)        the Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against any loss, 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
(at the reasonable expense of the Company and shall incur no liability of any
kind by reason of such inquiry or investigation);

 

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

 

(g)        the Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture;

 

(h)        in no event shall the Trustee be
responsible or liable for special, indirect, or consequential loss or damage of
any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action;

 

(i)         the Trustee shall not be deemed to have
notice of any Default or Event of Default unless a Trust Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a default is

 

83

 

received by
the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Securities and this Indenture; and

 

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

 

Section 10.04.  No Responsibility for
Recitals, Etc.  The recitals
contained herein and in the Securities (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 Securities.  The Trustee shall not be accountable for the
use or application by the Company of any Securities or the proceeds of any
Securities authenticated and delivered by the Trustee in conformity with the
provisions of this Indenture.

 

Section 10.05.  Trustee, Paying Agents, Conversion Agents or
Registrar May Own Securities.  The
Trustee, any Paying Agent, any Conversion Agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not Trustee, Paying Agent,
Conversion Agent or Security Registrar.

 

Section 10.06.  Monies to be Held in Trust.  Subject to the provisions of Section 12.04,
all monies and properties received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received.  Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law.  The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.

 

Section 10.07.  Compensation and Expenses of Trustee.  The Company covenants and agrees
to pay to the Trustee from time to time, and the Trustee shall be entitled to,
reasonable compensation for all services rendered by it hereunder in any
capacity (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as mutually agreed to from time
to time in writing between the Company and the Trustee, and the Company will
pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its gross negligence, willful
misconduct or bad faith.  The Company
also covenants to indemnify the Trustee (or any officer,

 

84

 

director or employee of the Trustee), in any capacity under this
Indenture and its agents and any authenticating agent for, and to hold them
harmless against, any and all loss, liability, claim or expense incurred
without gross negligence, willful misconduct or bad faith on the part of the
Trustee or such officers, directors, employees and agent or authenticating
agent, as the case may be, and arising out of or in connection with the
acceptance or administration of this trust or in any other capacity hereunder,
including the costs and expenses of defending themselves against any claim of
liability in the premises.  The
obligations of the Company under this Section 10.07 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
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Securities.  The obligation of the
Company under this Section shall survive the satisfaction and discharge of
this Indenture.

 

When
the Trustee and its agents and any authenticating agent incur expenses or
render services after an Event of Default specified in Section 8.01(j) with
respect to the Company occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.

 

Section 10.08.  Officers’ Certificate as Evidence.  Except as otherwise provided in Section 10.01,
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 negligence or willful misconduct on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers’ Certificate
delivered to the Trustee.

 

Section 10.09.  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 10.10.  Eligibility of Trustee.  There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000 (or if such Person is a member of a bank holding company
system, its bank holding company shall have a combined capital and surplus of
at least $50,000,000).  If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority, then for the purposes
of this Section the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its

 

85

 

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 10.10, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.

 

Section 10.11.  Resignation or Removal of Trustee.

 

(a)        The Trustee may at any time resign by
giving written notice of such resignation to the Company and to the Holders of
Securities.  Upon receiving such notice
of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Company’s 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 Holders, the resigning Trustee may, upon ten (10) Business Days’
notice to the Company and the Holders, appoint a successor identified in such
notice or may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor trustee, or, if any Holder who
has been a bona fide Holder of a Security or Securities for at least six (6) months
may, subject to the provisions of Section 8.13, 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 10.09
after written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security or Securities for at least six (6) months;
or

 

(ii)          the Trustee shall cease to be eligible in accordance with
the provisions of Section 10.10 and shall fail to resign after written
request therefor by the Company or by any such Holder; or

 

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

 

then, in any such case, the Company may
remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Company’s 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 8.13, any
Holder who has been a bona fide Holder of a

 

86

 

Security or Securities for at least six (6) months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor trustee; provided, however,
that if no successor Trustee shall have been appointed and have accepted
appointment sixty (60) days after either the Company or the Holders has removed
the Trustee, the Trustee so removed may petition at its own expense any court
of competent jurisdiction for an appointment of a successor trustee.  Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.

 

(c)        The Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may at any time
remove the Trustee and nominate a successor trustee which shall be deemed
appointed as successor trustee unless, within ten (10) days after notice
to the Company of such nomination, the Company objects thereto, in which case
the Trustee so removed or any Holder, or if such Trustee so removed or any
Holder fails to act, the Company, upon the terms and conditions and otherwise
as in Section 10.11(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 8.11 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 10.12.

 

Section 10.12.  Acceptance by Successor Trustee.  Any successor trustee appointed as
provided in Section 10.11 shall execute, acknowledge and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amount then due it pursuant to the provisions of Section 10.07,
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 Securities, to secure any amounts then due it
pursuant to the provisions of Section 10.07.

 

87

 

No
successor trustee shall accept appointment as provided in this Section 10.12
unless, at the time of such acceptance, such successor trustee shall be
qualified under the provisions of Section 10.09 and be eligible under the
provisions of Section 10.10.

 

Upon
acceptance of appointment by a successor trustee as provided in this Section 10.12,
the Company (or the former trustee, at the written direction of the Company)
shall mail or cause to be mailed notice of the succession of such trustee
hereunder to the Holders of Securities at their addresses as they shall appear
on the Security 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 10.13.  Succession by Merger, Etc.  Any Corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, such Corporation shall be qualified under the
provisions of Section 10.09 and eligible under the provisions of Section 10.10.

 

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

 

Section 10.14.  Preferential Collection of Claims.  If and when the Trustee shall be
or become a creditor of the Company (or any other obligor upon the Securities),
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).

 

88

 

Section 10.15.  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 Securities 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 date shall not be less than three (3) Business Days
after the date any officer of the Company actually receives such application,
unless any such officer shall have consented in writing to any earlier date)
unless prior to taking any such action (or the effective date in the case of an
omission), the Trustee shall have received written instructions in response to
such application specifying the action to be taken or omitted.

 

ARTICLE
11

HOLDERS’ LISTS AND REPORTS BY TRUSTEE

 

Section 11.01.  Company to Furnish Trustee Names and
Addresses of Holders.  The
Company will furnish or cause to be furnished to the Trustee:

 

(i)            semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and

 

(ii)           at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;

 

excluding from
any such list names and addresses received by the Trustee in its capacity as
Security Registrar; provided, however,
that no such list need be furnished so long as the Trustee is acting as
Security Registrar.

 

Section 11.02.  Preservation of Information; Communications
to Holders.

 

(a)        The Trustee shall preserve, in as
current a form as is reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee as provided in Section 11.01
and the names and addresses of Holders received by the Trustee in its capacity
as Security Registrar.  The Trustee may
destroy any list furnished to it as provided in Section 11.01 upon receipt
of a new list so furnished.

 

89

 

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

 

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

 

Section 11.03.  Reports By Trustee.  The Trustee shall transmit to
Holders such reports 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.

 

(a)        A copy of each such report shall, at the
time of such transmission to Holders, be filed by the Trustee with each stock
exchange, if any, upon which the Securities are listed, with the Commission and
with the Company.  The Company will
notify the Trustee when the Securities are listed on any stock exchange or of
any delisting thereof.

 

ARTICLE 12

SATISFACTION AND DISCHARGE

 

Section 12.01.  Discharge of Indenture. When (a) the
Company shall deliver to the Trustee for cancellation all Securities
theretofore authenticated (other than any Securities that have been destroyed,
lost or stolen and in lieu of or in substitution for which other Securities
shall have been authenticated and delivered) and not theretofore canceled, or (b) all
the Securities not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, and the Company shall deposit
with the Trustee, in trust, cash or shares of Common Stock sufficient to pay at
Stated Maturity upon conversion (assuming the maximum number of Additional
Shares that the Company would be obligated to issue at Stated Maturity based
upon the Applicable Conversion Rate in effect at the time of such deposit),
upon any Redemption Date or Fundamental Change Date or upon redemption of all
of the Securities (other than any Securities that shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which other
Securities shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
interest (including Additional Interest, if any) due or to become due to such
Stated Maturity, Redemption Date of Fundamental Change Purchase Date, as the case
may be, 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 

 

90

 

further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Securities, (ii) rights
hereunder of Holders to receive payments of principal of and interest
(including Additional Interest, if any) on, the Securities and the other
rights, duties and obligations of Holders, as beneficiaries hereof with respect
to the amounts, if any, so deposited with the Trustee and (iii) the
rights, obligations and immunities of the Trustee hereunder), and the Trustee,
on written demand of the Company accompanied by an Officers’ Certificate and an
Opinion of Counsel as required by Section 1.02 and at the reasonable 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 Securities.

 

Section 12.02.  Deposited Monies to be Held in Trust by
Trustee.  Subject to Section 12.04,
all monies deposited with the Trustee pursuant to Section 12.01 shall be
held in trust for the sole benefit of the Holders, and such monies shall be
applied by the Trustee to the payment, either directly or through any Paying
Agent (including the Company if acting as its own Paying Agent), to the Holders
of the particular Securities for the payment or redemption of which such monies
have been deposited with the Trustee, of all sums due and to become due thereon
for principal and interest (including Additional Interest, if any).

 

Section 12.03. 
Paying Agent to Repay Monies Held.  Upon the satisfaction and
discharge of this Indenture, all monies then held by any Paying Agent of the
Securities (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 12.04. 
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 interest (including Additional Interest, if any) on Securities and
not applied but remaining unclaimed by the Holders of Securities for two years
after the date upon which the principal of or interest (including Additional Interest, if any) on such
Securities, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee on demand and all liability of the Trustee
shall thereupon cease with respect to such monies; and the Holder of any of the
Securities shall thereafter look only to the Company for any payment that such
Holder may be entitled to collect unless an applicable abandoned property law
designates another Person.

 

Section 12.05. 
Reinstatement.  If the Trustee or the Paying
Agent is unable to apply any money in accordance with Section 12.02 by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or 

 

91

 

otherwise prohibiting such application, the
Company’s obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 12.01
until such time as the Trustee or the Paying Agent is permitted to apply all
such money in accordance with Section 12.02; provided,
however, that if the Company makes any payment of interest on or
principal of any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.

 

ARTICLE 13

SUPPLEMENTAL INDENTURES

 

Section 13.01         Supplemental Indentures without Consent of Holders.  Without the consent of any Holder,
the Company and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form reasonably satisfactory to
the Trustee and the Company, for any of the following purposes:

 

(i)            to
cure any ambiguity or correct any inconsistent or otherwise defective provision
contained herein, so long as such action will not materially adversely affect
the interest of the Holders;

 

(ii)           to
provide for the assumption by a Successor Company of the obligations of the
Company contained herein or evidence and provide for the acceptance or
appointment of a successor trustee pursuant to this Indenture;

 

(iii)          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 Internal Revenue Code or in a
manner such that the uncertificated notes are described in Section 163(f)(2)(B) of
the Internal Revenue Code);

 

(iv)          to
add guarantees with respect to the Securities;

 

(v)           to
secure the Securities;

 

(vi)          to
add to the covenants of the Company for the benefit of the Holders, or to
surrender any right or power herein conferred upon the Company;

 

(vii)         to
add or modify any provision herein which modification or addition does not
materially adversely affect the rights of any Holder;

 

92

 

(viii)        to
modify, eliminate or add to the provisions of this Indenture in order to comply
with any requirement of the Commission in connection with the qualification of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted;

 

(ix)           to
provide for the issuance of Additional Securities in accordance with the
provisions of Section 3.01 hereof, to the extent that the Company deems
such amendment or supplement to be necessary or advisable in connection with
such issuance; provided that, no such amendment
or supplement may impair the rights or interests of any Holder;

 

(x)            to
comply with the provisions of any clearing agency, clearing corporation or
clearing system, the Trustee or the Security Registrar with respect to the
provisions of this Indenture or the Securities relating to transfers and
exchanges of Securities; or

 

(xi)           to
conform the provisions of this Indenture to the “Description of Notes” section
in the Final Offering Memorandum.

 

Section 13.02.        Supplemental Indentures with Consent of Holders.  With the consent of the Holders of
not less than a majority in Principal Amount of the outstanding Securities, by
Act of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may 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 of modifying in any manner the rights of the Holders under this
Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
outstanding Security affected thereby, among other things:

 

(i)            reduce
the percentage in Principal Amount of Securities whose Holders must consent to
an amendment of this Indenture or to waive any past default;

 

(ii)           reduce the rate or extend the time of
payment of any interest (including Additional Interest, if any) on any Security or reduce the amount or
extend the stated time for payment of Additional Interest;

 

(iii)          reduce the Principal Amount of, or extend
the Stated Maturity of, any Security;

 

(iv)          make any change that adversely affects the
conversion rights of any Security;

 

93

 

(v)           reduce the Redemption Price or the
Fundamental Change Purchase Price of any Security or amend or modify in any
manner adverse to the Holders of Securities the Company’s obligation to make
such payments, whether through an amendment or waiver of provisions in the
covenants, definitions or otherwise;

 

(vi)          make any principal or interest payable in a
currency other than that stated in the Securities;

 

(vii)         impair
the right of any Holder to receive payment of principal of and interest,
including Additional Interest, on such Holder’s Securities 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 Securities;

 

(viii)        change
the ranking of the Securities; or

 

(ix)           modify any of the provisions of this Section 13.02
or Section 8.02(b) which require each Holder’s consent.

 

It
shall not be necessary for any Act of Holders under this Section 13.02 to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.

 

Section 13.03.        Execution of Supplemental Indentures.  In executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this Article 13
or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be provided with, and (subject to Section 10.01) shall be
fully protected in relying upon, in addition to the documents required by Section 1.02,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. 
Subject to the preceding sentence, the Trustee shall sign such
supplemental indenture if the same does not adversely affect the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.  The Trustee may, but shall not be obligated
to, enter into any such supplemental indenture that adversely affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 13.04.        Effect of Supplemental Indentures.  Upon the execution of any
supplemental indenture under this Article 13, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

94

 

Section 13.05.  Conformity with Trust Indenture Act.  Every supplemental indenture
executed pursuant to this Article shall conform to the applicable
requirements of the Trust Indenture Act.

 

Section 13.06.  Reference in Securities to Supplemental
Indentures.  Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 13 shall bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.

 

Section 13.07.   Notice to Holders of
Supplemental Indentures.  The Company shall cause notice of the execution of any supplemental
indenture to be mailed to each Holder, at his address appearing on the Security
Register provided for in this Indenture, within 20 days after execution thereof. Failure to deliver
such notice, or any defect in such notice, shall not impair or affect the
legality or validity of such supplemental indenture.

 

ARTICLE 14

MISCELLANEOUS

 

Section 14.01.  Incorporation of Trust Indenture Act.  The provisions of the Trust
Indenture Act applicable to indentures qualified under the Trust Indenture Act
are hereby incorporated into this Indenture and shall be deemed applicable
regardless of whether or not this Indenture is so qualified.

 

Section 14.02.  Trust Indenture Act Controls.  If any provision of this Indenture
limits, qualifies or conflicts with another provision which is required to be
included in this Indenture by the Trust Indenture Act, the provision required
by the Trust Indenture Act shall control.

 

Section 14.03.  Notices. 
Any notice or communication shall be in writing (including
telecopy promptly confirmed in writing) and delivered in person or by overnight
courier or mailed by first-class mail addressed as follows:

 

if to the Company:

 

THQ Inc.

29903 Agoura Road 

Agoura Hills, California 91301

Attention: General
Counsel

 

95

 

if to the Trustee:

 

Union Bank, N.A. 

120 South San Pedro Street, 4th Floor

Los Angeles, California 90012

Attention: Corporate Trust Services 

(THQ Inc. 5.00% Convertible Senior Notes due 2014)

Fax: (213) 972-5694

 

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

 

Any
notice or communication mailed to a registered Holder shall be mailed to the
Holder at the Holder’s address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.

 

Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it, except that notices to the Trustee shall be effective only upon receipt.

 

The
Trustee agrees to accept and act upon facsimile transmission of written
instructions and/or directions pursuant to this Indenture given by the Company,
provided, however, that (i) the
Company, subsequent to such facsimile transmission of written instructions
and/or directions, shall provide the originally executed instructions and/or
directions to the Trustee in a timely manner and (ii) such originally
executed instructions and/or directions shall be signed by an authorized
officer of the Company.

 

Section 14.04.  Communication by Holders with other
Holders.  Holders may
communicate pursuant to § 312(b) of the Trust Indenture Act with other
Holders with respect to their rights under this Indenture or the
Securities.  The Company, the Trustee,
the Registrar and anyone else shall have the protection of § 312(c) of the
Trust Indenture Act.

 

Section 14.05.  Certificate and Opinion as to Conditions
Precedent.  Upon any request
or application by the Company to the Trustee to take or refrain from taking any
action under this Indenture, the Company shall furnish to the Trustee:

 

96

 

(a)        an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been complied with; and

 

(b)        if
requested by the Trustee, an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.

 

Section 14.06.  When Securities Are Disregarded.  In determining whether the Holders
of the required Principal Amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or by any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that, for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities which a Trust Officer of
the Trustee actually knows are so owned shall be so disregarded.  Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.

 

Section 14.07.  Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for
action by, or a meeting of, Holders.  The
Registrar and the Paying Agent may make reasonable rules for their
functions.

 

Section 14.08.  Legal Holidays.  A “Legal
Holiday” is a Saturday, Sunday or other day on which commercial
banking institutions are authorized or required to be closed in New York
City.  If an Interest Payment Date is a
Legal Holiday, payment shall be made on the next succeeding day that is not a
Legal Holiday, and no interest (including Additional Interest, if any) shall
accrue for the intervening period.  If a
Regular Record Date is a Legal Holiday, the Regular Record Date shall not be
affected.  In any case where the Stated
Maturity of any Security is a Legal Holiday, then (notwithstanding any other
provision of this Indenture or of the Securities) payment of principal need not
be made on such date, but may be made on the next succeeding day that is not a
Legal Holiday, with the same force and effect as if made on at the Stated
Maturity.

 

Section 14.09.  Governing Law.  THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

Section 14.10.  Successors. 
All agreements of the Company in this Indenture and the
Securities shall bind their respective successors.  All agreements of the Trustee in this
Indenture shall bind its successors.

 

Section 14.11.  Execution in Counterparts.  This Indenture may be executed in two or more
counterparts, which when so executed shall constitute 

 

97

 

one and the same agreement.  The
exchange of copies of this Indenture and of signature pages by facsimile
or Portable Document Format (PDF) transmission shall constitute effective
execution and delivery of this Indenture as to the parties hereto and may be
used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted
by facsimile or PDF shall be deemed to be their original signatures for all
purposes.

 

Section 14.12.  [Reserved].

 

Section 14.13.  Table of Contents; Headings.  The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.

 

Section 14.14.  Severability Clause.  In case any provision in this
Indenture shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and such provision shall be ineffective only to the extent
of such invalidity, illegality or unenforceability.

 

Section 14.15. 
Calculations.  Except as otherwise expressly provided
herein, the Company (or its agents) will be responsible for making all
calculations and determinations called for under this Indenture or the
Securities, including, without limitation, determinations of the Last Reported
Sales Price, accrued interest payable on the Securities and the Conversion
Rate. The Company (or its agents) will make all such calculations in good faith
and, absent manifest error, its calculations and determinations will be final
and binding on Holders. The Company (or its agents) upon request will provide a
schedule of its calculations to each of the Trustee and the Conversion Agent,
and each of the Trustee and Conversion Agent is entitled to rely conclusively
upon the accuracy of such calculations without independent verification. The
Trustee will deliver a copy of such schedule to any Holder upon the written
request of such Holder.

 

Section 14.16.  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 AGREEMENT, THE SECURITIES OR THE TRANSACTION
CONTEMPLATED THEREBY.

 

Section 14.17.  Consent to Jurisdiction; Consent to Service
of Process.

 

(a)        The
Company hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in the State and City

 

98

 

of New York, County and Borough of Manhattan, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Indenture or the Securities, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such state court sitting in the State and City of New York,
County and Borough of Manhattan or, to the extent permitted by law, in such
federal court sitting in the State and City of New York, County and Borough of
Manhattan.  The Company further
irrevocably consents to the service of process in any action or proceeding in
such courts by the mailing thereof by any parties thereto by registered or
certified mail, postage prepaid, to the Company at CT Corporation System,
111 Eighth Avenue, 13th Floor, New York, NY 10011.  Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

 

(b)        The
Company hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any suit, action proceeding arising out of or
relating to this Indenture or the Securities in any New York State or federal
court.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

Section 14.18.  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 or 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.

 

[Remainder of the page intentionally
left blank]

 

99

 

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

 

 

	
   

  	
  By:

  	
  /s / Paul J. Pucino

  
	
   

  	
  Name:

  	
  Paul J. Pucino

  
	
   

  	
  Title:

  	
  Executive Vice
  President and 

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James M. Kennedy

  
	
   

  	
  Name:

  	
  James M. Kennedy

  
	
   

  	
  Title:

  	
  Executive Vice
  President, 

  Business and Legal Affairs

  and Corporate Secretary

  

 

[Trustee
Signature Follows]

 

 

	
   

  	
  UNION BANK, N.A., as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

 

SCHEDULE
A

 

The following table sets
forth the number of Additional Shares to be received per $1,000 Principal
Amount of Securities for each Stock price and Effective Date set forth below:

 

Stock Price

 

	
  Effective date

  	
   

  	
  $6.81

  	
   

  	
  $7.00

  	
   

  	
  $8.00

  	
   

  	
  $9.00

  	
   

  	
  $10.00

  	
   

  	
  $12.50

  	
   

  	
  $15.00

  	
   

  	
  $17.50

  	
   

  	
  $20.00

  	
   

  	
  $25.00

  	
   

  	
  $30.00

  	
   

  	
  $35.00

  	
   

  	
  $40.00

  	
   

  	
  $45.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 4,
  2009

  	
   

  	
  29.3686

  	
   

  	
  28.5714

  	
   

  	
  24.8466

  	
   

  	
  20.0394

  	
   

  	
  16.5916

  	
   

  	
  11.3273

  	
   

  	
  8.4969

  	
   

  	
  6.7800

  	
   

  	
  5.6346

  	
   

  	
  4.1962

  	
   

  	
  3.3116

  	
   

  	
  2.7019

  	
   

  	
  2.2522

  	
   

  	
  1.9051

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 15,
  2010

  	
   

  	
  29.3686

  	
   

  	
  28.5714

  	
   

  	
  23.6322

  	
   

  	
  18.9617

  	
   

  	
  15.6660

  	
   

  	
  10.7293

  	
   

  	
  8.1038

  	
   

  	
  6.5112

  	
   

  	
  5.4386

  	
   

  	
  4.0731

  	
   

  	
  3.2204

  	
   

  	
  2.6277

  	
   

  	
  2.1886

  	
   

  	
  1.8492

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 15,
  2011

  	
   

  	
  29.3686

  	
   

  	
  28.5714

  	
   

  	
  22.1395

  	
   

  	
  17.5615

  	
   

  	
  14.4294

  	
   

  	
  9.9211

  	
   

  	
  7.5982

  	
   

  	
  6.1861

  	
   

  	
  5.2196

  	
   

  	
  3.9545

  	
   

  	
  3.1414

  	
   

  	
  2.5674

  	
   

  	
  2.1389

  	
   

  	
  1.8064

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 15,
  2012

  	
   

  	
  29.3686

  	
   

  	
  26.7760

  	
   

  	
  19.0365

  	
   

  	
  14.2276

  	
   

  	
  11.1449

  	
   

  	
  7.1614

  	
   

  	
  5.3749

  	
   

  	
  4.3675

  	
   

  	
  3.6953

  	
   

  	
  2.8180

  	
   

  	
  2.2492

  	
   

  	
  1.8452

  	
   

  	
  1.5427

  	
   

  	
  1.3075

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 15,
  2013

  	
   

  	
  29.3686

  	
   

  	
  25.3828

  	
   

  	
  15.1162

  	
   

  	
  9.7884

  	
   

  	
  6.7994

  	
   

  	
  3.7784

  	
   

  	
  2.8001

  	
   

  	
  2.3048

  	
   

  	
  1.9690

  	
   

  	
  1.5154

  	
   

  	
  1.2147

  	
   

  	
  1.0000

  	
   

  	
  0.8389

  	
   

  	
  0.7137

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 15,
  2014

  	
   

  	
  29.3686

  	
   

  	
  25.3828

  	
   

  	
  7.5257

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  	
  0.0000

  	
   

  

 

 

 

EXHIBIT A

 

Form of Fundamental
Change Purchase Notice

 

	
   

  	
   

  	
  ,

  	
   

  

 

Union Bank, N.A. 

120 S. San Pedro Street, Suite 400

Los Angeles, CA 90012

Attention: Corporate Trust Services

(THQ Inc. 5.00%
Convertible Senior Notes due 2014)

Fax: (213) 972-5694

 

Re:                               THQ Inc. (the “Company”)

5.00% Convertible Senior Notes due 2014

 

This
is a Fundamental Change Purchase Notice as defined in Section 7.01(a) of
the Indenture dated as of August 4, 2009 (the “Indenture”)
between the Company and Union Bank, N.A. as Trustee.  Terms used but not defined herein shall have
the meanings ascribed to them in the Indenture.

 

	
  Certificate No(s). of
  Securities:

  	
   

  	
   

  

(if certificated)

 

I
intend to deliver the following aggregate Principal Amount of Securities for
purchase by the Company pursuant to Section 7.01 of the Indenture
(multiples of $1,000 with a minimum of $2,000):

 

	
  $

  	
   

  	
   

  

 

I
hereby agree that the Securities will be purchased as of the Fundamental Change
Purchase Date pursuant to the terms and conditions thereof and of the
Indenture.

 

	
  Signed:

  	
   

  	
   

  

 

 

EXHIBIT B

 

[THIS SECURITY AND THE SHARES OF COMMON STOCK  ISSUABLE UPON CONVERSION OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER: (1) REPRESENTS THAT IT AND
ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND (2) AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE
DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE
HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND (Y) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT: (A) TO THQ INC.
OR ANY SUBSIDIARY THEREOF, OR (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR (C) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (D) PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES.

 

PRIOR TO
THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE
COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL
OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED
IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE
WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION
IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.]Exhibit 10.26

 

QUICKLOGIC CORPORATION

 

2009 STOCK PLAN

 

NOTICE OF GRANT OF STOCK OPTIONS

 

Unless otherwise
defined herein, the terms defined in the 2009 Stock Plan (the “Plan”) will have
the same defined meanings in this Notice of Grant of Stock Options (the “Notice
of Grant”) and the Stock Option Agreement, attached hereto as Exhibit A
(the “Stock Option Agreement” or “Agreement”).

 

QuickLogic Corporation is
pleased to inform you that you, the undersigned Optionee, have been granted an
option (“Option”) to purchase common stock (hereinafter referred to as the “Shares”)
of the Company, subject to the terms and conditions of the Plan and this
Agreement, as follows:

 

	
  Optionee:

  	
   

  	
   

  	
   

  	
   

  
	
  Grant Number:

  	
   

  	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
   

  	
   

  	
   

  
	
  Vesting Commencement Date:

  	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price, per Share:

  	
   

  	
   

  	
   

  	
   

  
	
  Number of Shares Granted:

  	
   

  	
   

  	
   

  	
   

  
	
  Term of Option:

  	
   

  	
   

  	
   

  	
   

  

 

	
  Type of
  Option:

  	
   

  	
  Incentive
  Stock Option

  	
   

  	
  Nonstatutory
  Stock Option

  

 

Vesting Schedule: The option may be exercised as it
vests.  The options will vest in
accordance with the following vesting schedule, so long as a Vesting Cessation
Date (as defined herein) has not occurred.

 

       25%
of the Shares subject to the Option shall vest twelve months after the Vesting
Commencement Date, and 1/48 of the Shares subject to the Option shall vest each
month thereafter.  Fully vested in four
years.

 

       25%
of the Shares subject to the Option shall vest twelve months after the Vesting
Commencement Date, and 1/8 of the Shares subject to the Option shall vest
fifteen months after the Vesting Commencement Date and each six months
thereafter.  Fully vested in 15 quarters.

 

       1/12
th of the Shares subject to the Option shall vest
for each full month of Service after the Vesting Commencement Date.  Fully vested in one year.

 

 

       l/24th of the Shares subject to the Option shall vest
for each full month of Service after the Vesting Commencement Date.  Fully vested in two years.

 

       1/
       of the Shares subject to the Option shall
vest              
after the Vesting Commencement Date. 
Thereafter, 1/       of the Shares shall
vest for each full          of
Service.  Fully vested in       
          .

 

       1/
      of the Shares subject to the Option shall
vest for each full          of Service
after the Vesting Commencement Date.

 

       100%
of the Shares subject to the Option shall be fully vested on the grant date.

 

Termination of Relationship as a Service Provider or Provision of
Notice of Employment Termination; Vesting Cessation Date.  If Optionee (i) ceases to provide ongoing
service as a Service Provider (for any reason and regardless of any appropriate
court finding such termination unfair or irregular on any basis whatsoever), or
(ii) is provided with notice of termination of employment (for any reason
and regardless of any appropriate court finding the related termination unfair
or irregular on any basis whatsoever) and ceases to provide ongoing service
during the notice period, the Optionee may exercise his or her Option for a
three month period beginning (a) the earlier of the date of such cessation
as a Service Provider or the last date of ongoing service after receiving a
notice of termination of employment, or (b) such later date as required by
Applicable Law (the earlier of these dates or such later date required by Applicable
Law is referred to herein as the “Vesting Cessation Date,” as reasonably fixed
and determined by the Administrator). 
Such exercise period shall automatically extend from three to twelve
months in the event Optionee ceases to be a Service Provider as a result of
Optionee’s death or Disability.  In no
event shall this Option be exercised later than the expiration of the term of
such Option as set forth in the Option Agreement.  Optionee further acknowledges and agrees that
this Agreement, the transactions contemplated hereunder and the vesting
schedule set forth herein do not constitute an express or implied promise of
continued engagement as a Service Provider for the vesting period or for any
other period and shall not interfere with Optionee’s right or the Company’s
right to terminate Optionee’s relationship as a Service Provider at any time,
with or without notice, except as otherwise required by Applicable Law. At the
sole discretion of Company, subject to Applicable Law, Optionee may be paid a
lump sum for their cash compensation in lieu of notice. Options which do not
vest by the Vesting Cessation Date shall automatically become void and without
further effect.  In such event, the
underlying Shares shall be returned to the Plan.

 

The Stock Option Agreement
included as Exhibit A and the Plan are incorporated herein by
reference.  The Plan, Stock Option
Agreement and this Notice of Grant constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and the
Optionee.  The Company will administer
the Plan from the United States of America, and any disputes will be settled in
the U.S. according to U.S. law.  This
Notice of Grant, Stock Option Agreement, Plan and all awards are governed by
the internal substantive laws,

 

2

 

but
not the choice of law principles, of the State of California, United States of
America.

 

By
Optionee’s signature and the signature of the Company’s representative below,
Optionee and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan, the Stock Option Agreement and this
Notice of Grant.  Optionee has reviewed
the Plan, the Stock Option Agreement and this Notice of Grant in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of the Plan, the
Stock Option Agreement and this Notice of Grant.  Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions relating to the Plan, the Stock Option Agreement and this Notice
of Grant.

 

	
  OPTIONEE:

  	
   

  	
  QUICKLOGIC
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  Print Name

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
					

 

 

	
  OPTIONEE
  ADDRESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

BENEFICIARY:

 

	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

Consent
of spouse required if beneficiary is
someone other than spouse:

 

	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
					

 

Please return this Notice of Grant of Stock Options to the Stock
Administrator of the Company.

 

3

 

EXHIBIT A

 

STOCK OPTION AGREEMENT

 

1.             Grant of Option.  The Plan
Administrator of the Company hereby grants to the person named in the Notice of
Grant under the Plan (the “Optionee”) an option (the “Option”) to purchase the
number of Shares, as set forth in the Notice of Grant, at the exercise price
per share set forth in the Notice of Grant (the “Exercise Price”), subject to
the terms and conditions of the Notice of Grant, this Stock Option Agreement
and the Plan, which is incorporated by reference.  In the event of a conflict between the terms
and conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.  If designated in the Notice of Grant as an
Incentive Stock Option (“ISO”), this Option is intended to qualify as an ISO
under Section 422 of the Code. 
However, any Option that exceeds the $100,000 rule of Code Section 422(d) shall
be treated as a Nonstatutory Stock Option (“NSO”).

 

2.             Exercise of Option.  This Option
is exercisable during its term in accordance with the Vesting Schedule set
out in the Notice of Grant and the applicable provisions of the Plan and this
Stock Option Agreement.  This Option
shall be deemed exercised when the Company receives:  (i) written or electronic notice of
exercise from the person entitled to exercise the Option; and (ii) full
payment of the Exercise Price, as defined herein, for Shares exercised.  The form of written notice of exercise is
attached as Exhibit A-1. The forms of consideration acceptable for the
payment of the aggregate Exercise Price are described in the Plan, Section 9(c).

 

3.             Term of Option.  This Option
may be exercised only within the Term of Option set out in the Notice of Grant,
and in accordance with the terms of the Plan and this Option Agreement.

 

4.             Tax Withholding and Consequences. 
Regardless of any action the Company takes with respect to any or all
income tax, social insurance, payroll tax, or other tax-related withholding,
fringe benefit tax (“FBT”)
or National Insurance Contribution (“NIC”)
tax paid or payable in respect of the grant, vesting, exercise, cancellation,
transfer of the Options or issuance of the Shares (“Tax-Related Items”), Optionee acknowledges
that the ultimate liability for all Tax-Related Items legally due by Optionee
are and remain Optionee’s responsibility and that the Company (a) makes no
representations or undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of the grant, vesting, exercise or delivery
of options or related Shares, the subsequent sale of Shares and/or the receipt
of any dividends; and (b) does not commit to structure the terms of a
option grant to reduce or eliminate Optionee’s liability for Tax-Related
Items.  Optionee should consult a tax
adviser and the Plan in order to determine the tax consequences before
exercising this Option or disposing of the Shares.

 

5.             Tax Matters.  If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition, and shall promptly provide any information that
may be requested by the Company and/or the Company’s consultant regarding such
sale or other disposition of the Shares. 
The Optionee agrees that he or she may be subject to income tax
withholding by the Company on the compensation

 

4

 

income recognized from
such early disposition of ISO Shares by payment in cash or out of the current
earnings paid to the Optionee.

 

6.             Tax Obligations.  Optionee agrees to make appropriate
arrangements with the Company (or the Parent or Subsidiary employing or
retaining Optionee) in accordance with the procedures offered by the Company
for the satisfaction of all federal, state, local and foreign income and
employment tax withholding requirements, FBT and NIC applicable to the grant,
vesting or exercise of the Options and issuance of the Shares.  Optionee also agrees to reimburse or pay the
Company (including its Subsidiaries) in
full, any liability that the Company incurs towards any FBT or NIC paid or payable in respect of the grant, vesting,
exercise or cancellation of the Option or transfer or delivery of the Shares,
within the time and in the manner
prescribed by the Company.  The
Administrator may in its sole discretion determine amounts and whether the
withholding taxes and/or FBT and/or NIC with respect to such Option and related
Shares will be paid by cash, exercising and selling a portion of a vested
Option, electing to
have the Company withhold otherwise deliverable Shares having a value equal to
the minimum amount statutorily required to be withheld, selling a sufficient number of such
Shares otherwise deliverable to Optionee through such means as the Company may
determine in its sole discretion (whether through a broker or otherwise) having
a Fair Market Value equal to the amount required, by directing of a portion of
the proceeds to the Company, by payroll withholding, by delivering already
vested and owned Shares to the Company, by delivering net shares, by direct
payment from the Optionee to the Company, by some other method, or by some
combination thereof.  Optionee agrees to execute any additional
documents requested by the Company for such reimbursement of such taxes to the
Company.

 

Optionee
grants to the Company the irrevocable authority, as agent of Optionee and on
Optionee’s behalf, to sell or procure the sale of sufficient Shares subject to
this Option so that the net proceeds receivable by the Company are as far as
possible equal to but not less than the amount of any withholding tax, FBT or
NIC the Optionee is liable for (including pursuant to the preceding paragraph)
and the Company will account to Optionee for any balance.

 

Optionee
acknowledges and agrees that the Company may refuse to allow the exercise of
Options or the delivery of Shares if Optionee has not made appropriate
arrangements with the Company to satisfy tax withholding requirements, FBT or
NIC.

 

7.             No Guarantee of Continued Service.  OPTIONEE
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING
SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL
OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR
PURCHASING SHARES HEREUNDER).  OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE
WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S SERVICE
PROVIDER STATUS AT ANY TIME, WITH OR WITHOUT CAUSE, EXCEPT AS OTHERWISE
REQUIRED BY APPLICABLE LAW.  ACCORDINGLY,
OPTIONEE DOES NOT HAVE ANY ENTITLEMENT TO AN OPTION IF

 

5

 

OPTIONEE RESIGNS OR IF
THERE IS A VESTING CESSATION DATE FOR ANY REASON PRIOR TO THE DATE THAT THE
OPTION VESTS.

 

8.             Data Privacy.  By accepting
this Stock Option Agreement or any Shares upon exercise thereof, Optionee
explicitly and unambiguously consents to the collection, use and transfer, in
electronic or other form, of Optionee’s personal data as described in this
document by and among, as applicable, the Company, its subsidiaries and
affiliates for the exclusive purpose of implementing, administering and
managing Optionee’s participation in the Plan. 
For the purpose of implementing, administering and managing the Plan,
Optionee understands that the Company holds certain personal information about
Optionee, including, but not limited to, Optionee’s name, home address and
telephone number, date of birth, Tax ID or other identification number, salary,
nationality, job title, any equity or directorships held in the Company,
details of all equity awards or any entitlement to Shares awarded, canceled,
exercised, vested, unvested or outstanding in Optionee’s favor, for the purpose
of implementing, administering and managing the Plan (“Data”).  Optionee understands that Data may be
transferred to any third parties assisting in the implementation,
administration and management of the Plan, that these recipients may be located
in Optionee’s country or elsewhere.  The
Company, as a global company, may transfer Optionee’s personal data to
countries that may not provide an adequate level of protection.  The Company, however, is committed to
providing a suitable and consistent level of protection for Optionee’s personal
data regardless of the country in which it resides.  Optionee understands that Optionee may
request information regarding the Company’s stock plan administration by
contacting Human Resources, the Chief Financial Officer or their designee.  Optionee authorizes the recipients to
receive, possess, use, retain and transfer the Data, in electronic or other form,
for the purposes of implementing, administering and managing Optionee’s
participation in the Plan, including any requisite transfer of such Data as may
be required to a broker or other third party with whom Optionee deposits any
Shares issued at exercise of an option. 
Optionee understands that Data will be held as long as is necessary to
implement, administer and manage the Plan. 
Optionee understands that Optionee may, at any time, view Data, request
additional information about the storage and processing of Data, require any
necessary amendments to Data or refuse or withdraw the consents herein, in any
case without cost, by contacting in writing Human Resources or the Chief
Financial Officer.  Optionee understands,
however, that refusing or withdrawing Optionee’s consent may affect Optionee’s
ability to participate in the Plan.  For
more information on the consequences of Optionee’s refusal to consent or
withdrawal of consent, Optionee understands that he or she may contact Human
Resources, the Chief Financial Officer or their designee.

 

9.             Electronic Delivery. 
The Company may, in its sole discretion, decide to deliver any documents
related to the Option or issuance of Shares and participation in the Plan or
future Stock Option Agreements that may be awarded under the Plan by electronic
means or to request Optionee’s consent to participate in the Plan by electronic
means.  Optionee hereby consents to
receive such documents by electronic delivery and, if requested, to agree to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company.

 

10.           Payments after Death.  Any
distribution or delivery to be made to the Optionee under this Agreement will,
if the Optionee is then deceased, be made to the administrator or executor of
the Optionee’s estate or, if none, to the persons entitled to receive such
distribution or delivery under the

 

6

 

Optionee’s
will or the laws of descent or distribution.  Any such
recipient must furnish the Company with (a) written notice of his or her
status as transferee, and (b) evidence satisfactory to the Company to
establish the validity of the transfer and compliance with any laws or
regulations pertaining to said transfer.

 

11.           Option is Not Transferable. 
Except to the limited extent provided in paragraph 10 of this
Agreement, this Option and the rights and privileges conferred hereby will not
be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process.  Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
Option, or any right or privilege conferred hereby, or upon any attempted sale
under any execution, attachment or similar process, this Option and the rights
and privileges conferred hereby immediately will become null and void.

 

12.           Rights as Stockholder.  Neither the
Optionee nor any person claiming under or through the Optionee will have any of
the rights or privileges of a stockholder of the Company in respect of any
Shares deliverable hereunder unless and until certificates representing such
Shares will have been issued, recorded on the records of the Company or its
transfer agents or registrars, and delivered to the Optionee or Optionee’s
broker or had the Shares electronically transferred to Optionee’s account.

 

13.           Acknowledgments.  The Optionee
expressly acknowledges the following:

 

(a)           The Company (whether or not Optionee’s employer) is
granting the Option.  That the Option,
future grants of Options, and benefits and rights provided under the Plan are
at the complete discretion of the Company and do not constitute regular or
periodic payments, or remuneration under the terms of employment.  No grant of Options will be deemed to create
any obligation to grant any further options, whether or not such a reservation
is explicitly stated at the time of such a grant.  The benefits and rights provided under the
Plan are not to be considered part of Optionee’s salary or total compensation
for purposes of determining Optionee’s entitlement upon termination and will
not be included for purposes of calculating any severance, resignation, termination,
redundancy or other end of service payments, vacation, bonuses, long-term
service awards, indemnification, pension or retirement benefits, life
insurance, 401(k) profit sharing or any other payments, benefits or rights
of any kind.  Optionee waives any and all
rights to compensation or damages as a result of the termination of employment
with the Company or its subsidiaries and the administration of the Plan and
this grant for any reason whatsoever insofar as those rights result or may
result from:

 

(i)            the loss or diminution in
value of such rights under the Plan, or

 

(ii)           Optionee
ceasing to have any rights under, or ceasing to be entitled to any rights under
the Plan as a result of such termination or administration.

 

(b)           The Company has the right, at any time to amend,
suspend or terminate the Plan.  The Plan
will not be deemed to constitute, and will not be construed by Optionee to
constitute, part of the terms and conditions of employment, and that the Company
will not incur any liability of

 

7

 

any kind to Optionee as a result of any change or
amendment, or any cancellation, of the Plan at any time.

 

(c)           The Optionee’s employment with the Company and its
Subsidiaries is not affected at all by any grant and it is agreed by the
Optionee not to create an entitlement and will not be included in the Optionee’s
entitlement at common law for damages during any reasonable notice period.  Accordingly, the terms of the Optionee’s
employment with the Company and its Subsidiaries will be determined from time
to time by the Company or the Subsidiary employing the Optionee (as the case
may be), and the Company or the Subsidiary will have the right, which is hereby
expressly reserved, to terminate or change the terms of the employment of the
Optionee at any time for any reason whatsoever, with or without good cause or
notice, and to determine when Optionee is no longer providing ongoing service
to the Company for purposes of administering Optionee’s Option, except as may
be expressly prohibited by the laws of the jurisdiction in which the Optionee
is employed.

 

(d)           The future value of the Shares is unknown and cannot
be predicted with certainty.

 

(e)           Choice
of Language.

 

(i)            For Employees of Canadian Locations:  The undersigned agrees that it is his or her
express wish that this form and all documents relating to his or her
participation in the scheme be drawn in the English language only.  Le soussigné convient que sa
volonté expresse est que ce formulaire ainsi que tous les documents se
rapportant à sa participation au régime soient rédigés en langue anglaise
seulement.

 

(ii)           For
Employees of Locations Other than Canada: 
Optionee has received this Agreement and any other related
communications and consents to having received these documents solely in
English.

 

14.           Binding Agreement.  Subject to
the limitation on the transferability of this grant contained herein, this
Agreement will be binding upon and inure to the benefit of the heirs, legatees,
legal representatives, successors and assigns of the parties hereto.

 

15.           Additional Conditions to
Issuance of Stock.  If at any
time the Company will determine, in its discretion, that the listing,
registration or qualification of the Shares upon any securities exchange or under
any state or federal law, or the consent or approval of any governmental
regulatory authority is necessary or desirable as a condition to the issuance
of Shares to the Optionee (or Optionee’s estate), such issuance will not occur
unless and until such listing, registration, qualification, consent or approval
will have been effected or obtained free of any conditions not acceptable to
the Company.  The Company will make all
reasonable efforts to meet the requirements of any such state or federal law or
securities exchange and to obtain any such consent or approval of any such
governmental authority.

 

16.           Administrator Authority.  The Administrator has the power to interpret
the Plan, the Notice of Grant and this Agreement and to adopt such rules for
the administration, interpretation and

 

8

 

application
thereof as are consistent therewith and to interpret or revoke any such
rules.  Any dispute regarding the interpretation of this
Agreement will be submitted by Optionee or by the Company forthwith to the
Administrator which will review such dispute at its next regular meeting.  All actions taken and all
interpretations and determinations made by the Administrator in good faith will
be final and binding upon Optionee, the Company and all other interested
persons.  No member of the Administrator
will be personally liable for any action, determination or interpretation made
in good faith with respect to the Plan, the Notice of Grant or this Agreement.

 

17.           Address for Notices.  Any notice to
be given to the Company under the terms of this Agreement will be made in
writing and deemed effective: (i) upon delivery when delivered in person;
or (iii) when delivered by registered or certified mail, postage prepaid,
return receipt requested, addressed to the Company at 1277 Orleans Drive,
Sunnyvale, CA 94089, Attn: Stock Administrator, or at such other address
as the Company may hereafter designate in writing or electronically.

 

18.           Captions.  Captions provided herein are for convenience
only and are not to serve as a basis for interpretation or construction of this
Agreement.

 

19.           Agreement
Severable.  In the
event that any provision in this Agreement will be held invalid or
unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining
provisions of this Agreement.

 

20.           Modifications
to the Agreement.  This
Agreement constitutes the entire understanding of the parties on the subjects covered.  Optionee expressly warrants that he or she is
not accepting this Agreement in reliance on any promises, representations, or
inducements other than those contained herein. 
Modifications to this Agreement or the Plan can be made only in an
express written contract executed by a duly authorized officer of the
Company.  Notwithstanding anything to the
contrary in the Plan or this Agreement, the Company reserves the right to
revise this Agreement as it deems necessary or advisable, in its sole discretion
and without the consent of Optionee, to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) or to otherwise avoid
imposition of any additional tax or income recognition under Section 409A
of the Code in connection with this Option.

 

21.           No Waiver.  Either party’s
failure to enforce any provision or provisions of this Agreement will not in
any way be construed as a waiver of any such provision or provisions, nor
prevent that party from thereafter enforcing each and every other provision of
this Agreement.  The rights granted both
parties herein are cumulative and will not constitute a waiver of either party’s
right to assert all other legal remedies available to it under the
circumstances.

 

9

 

Exhibit A-1

 

QUICKLOGIC
CORPORATION

2009
STOCK PLAN

STOCK
OPTION EXERCISE FORM

 

Your completed form should be returned by fax or
mail to:  Stock Administration.  Phone: (408) 990-4120.

Fax:  (408)
990-4276.  Incomplete forms may cause
a delay in processing/receipt of funds.

 

	
  Date:

  	
   

  	
   Country in Which You Work:

  	
   

  	
   Dept. #:

  	
   

  	
   Emp. ID:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   SS#:

  	
   

  	
   Work Phone:

  	
   

  
	
   

  
	
  Home Address:

  	
   

  
	
  (Number and Street)

  
	
   

  	
   

  
	
  (City, State, Zip Code/Postal Code, Country)

  
														

 

1.     I hereby
elect to exercise the following stock option(s):

 

	
  Grant #

  	
   

  	
  Grant 

  Date

  	
   

  	
  Grant Type

  (ISO/NQ)

  	
   

  	
  Grant Price

  Per Share

  	
   

  	
  # of Shares

  to Exercise

  	
   

  	
  Amount Due

  For Stock

  	
   

  	
  Amount Due

  For Taxes **

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TOTALS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2.     Method
of Exercise (Please Check One):

 

             Cash
Exercise (Exercise-and-Hold)

             Same-Day-Sale
(Exercise and sell all shares)

 

It is your responsibility to contact a broker to
sell your stock option shares.

Stock Administration will not contact a broker for you.

 

**Tax Due: (U.S. employees ONLY) For NQ
option exercise - We are required to collect Federal Income Tax, Applicable
State Income Tax, Medicare, Social Security, and SDI.

 

3.     Please deliver all shares to: (If
shares are to be delivered to a broker, you must establish an account prior to
delivery.)

 

	
               Broker
  Name:

  	
   

  	
   Acct.#:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
               Broker
  DTC#:

  	
   

  	
   Broker Phone:

  	
   

  
					

 

 

             Mail
stock certificate to my home address as listed above (make sure the address is
legible.)

 

4.     I understand that Stock
Administration will not process my exercise until all information has been
provided.

 

I
understand that I should read a current copy of the Company’s Prospectus prior
to making any investment; and that, if necessary, I can contact the Company
directly to obtain one.

 

I
understand that, if I am an officer or director of the Company, I may be
subject to additional requirements under Federal securities regulation which
pertain to this type of transaction.

 

 

	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Print Name

  

 

2

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